-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UHlXsuBv0ymov3hgk8QkOkKnbo8txy3nvfHFjnIlvJHBpmY2RJevKaEyvhzW9iCV 5R6P/BS281oTJaw2v0YThQ== 0000950129-08-001036.txt : 20080219 0000950129-08-001036.hdr.sgml : 20080218 20080219164237 ACCESSION NUMBER: 0000950129-08-001036 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20080219 DATE AS OF CHANGE: 20080219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS CENTRAL INDEX KEY: 0000880859 IRS NUMBER: 760352823 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-44611 FILM NUMBER: 08627001 BUSINESS ADDRESS: STREET 1: 11 GREENWAY PLAZA STE 100 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7136261919 MAIL ADDRESS: STREET 1: AIM INTERNATIONAL FUNDS INC STREET 2: 11 GREENWAY PLAZA SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC /MD/ DATE OF NAME CHANGE: 20000620 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS DATE OF NAME CHANGE: 20000323 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC DATE OF NAME CHANGE: 19920909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS CENTRAL INDEX KEY: 0000880859 IRS NUMBER: 760352823 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06463 FILM NUMBER: 08627002 BUSINESS ADDRESS: STREET 1: 11 GREENWAY PLAZA STE 100 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7136261919 MAIL ADDRESS: STREET 1: AIM INTERNATIONAL FUNDS INC STREET 2: 11 GREENWAY PLAZA SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC /MD/ DATE OF NAME CHANGE: 20000620 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS DATE OF NAME CHANGE: 20000323 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC DATE OF NAME CHANGE: 19920909 0000880859 S000000226 AIM Asia Pacific Growth Fund C000000537 Class A ASIAX C000000538 Class B ASIBX C000000539 Class C ASICX 0000880859 S000000227 AIM European Growth Fund C000000540 Class A AEDAX C000000541 Class B AEDBX C000000542 Class C AEDCX C000000543 Class R AEDRX C000000544 Investor Class EGINX 0000880859 S000000228 AIM Global Aggressive Growth Fund C000000545 Class A AGAAX C000000546 Class B AGABX C000000547 Class C AGACX C000053091 INSTITUTIONAL CLASS 0000880859 S000000229 AIM Global Growth Fund C000000548 Class A AGGAX C000000549 Class B AGGBX C000000550 Class C AGGCX C000053092 INSTITUTIONAL CLASS 0000880859 S000000230 AIM International Growth Fund C000000551 Class A AIIEX C000000552 Class B AIEBX C000000553 Class C AIECX C000000554 Class R AIERX C000023043 Institutional Class AIEVX 0000880859 S000000231 AIM International Core Equity Fund C000000555 Class A IBVAX C000000556 Class B IBVBX C000000557 Class C IBVCX C000000558 Class R IIBRX C000000559 Investor Class IIBCX C000023044 Institutional Class IBVIX 485APOS 1 h53872ae485apos.txt POST-EFFECTIVE AMENDMENT TO 485(A) As filed with the United States Securities and Exchange Commission on February 19, 2008 1933 Act Reg. No. 33-44611 1940 Act Reg. No. 811-6463 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. __ [ ] Post-Effective Amendment No. 40 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 42 [X] AIM INTERNATIONAL MUTUAL FUNDS (Exact Name of Registrant as Specified in Charter) 11 Greenway Plaza, Suite 100, Houston, TX 77046 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (713) 626-1919 John M. Zerr, Esquire 11 Greenway Plaza, Suite 100, Houston, TX 77046 (Name and Address of Agent for Service) Copy to: Margaret Gallardo-Cortez, Esquire Christian Szautner, Esquire A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP 11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Amendment. It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [X] on May 1, 2008 pursuant to paragraph (a)(1) [ ] 75 days after filing pursuant to paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. AIM ASIA PACIFIC GROWTH FUND PROSPECTUS May 1, 2008 AIM Asia Pacific Growth Fund's investment objective is long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B and C shares of the fund. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 2 - ------------------------------------------------------ Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 7 - ------------------------------------------------------ Sales Charges 7 Dividends and Distributions 7 FINANCIAL HIGHLIGHTS 8 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investment Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in securities of companies in the Asia Pacific region (except Japanese companies). The fund considers various factors when determining whether a company is in the Asia Pacific region, including whether (1) it is organized under the laws of a country in the Asia Pacific region, (2) it has a principal office in a country in the Asia Pacific region, (3) it derives 50% or more of its total revenues from business in a country in the Asia Pacific region, or (4) its equity securities are traded principally on a stock exchange, or in an over-the-counter market, in a country in the Asia Pacific region. In complying with the 80% investment requirement, the fund will invest primarily in marketable equity securities, but its investments may include synthetic instruments. Synthetic instruments are investments that have economic characteristics similar to the fund's direct investments, and may include exchange-traded funds and American Depositary Receipts. The fund will normally invest in companies located in at least three countries in the Asia Pacific region. The fund may also invest up to 100% of its total assets in companies in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund may also invest up to 20% of its assets in securities of non-Asia Pacific companies. The fund's investments may include investments in companies with market capitalizations of less than one billion. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to the assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. When suitable opportunities are available, the fund may invest in initial public offerings (IPOs) of securities. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. This is especially true with respect to equity securities of small and micro-cap companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. 1 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- PRINCIPAL RISKS OF INVESTING IN THE FUND (CONTINUED) - -------------------------------------------------------------------------------- These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. The prices of IPO securities may go up and down more than prices of equity securities of companies with longer trading histories. In addition, companies offering securities in IPOs may have less experienced management or limited operating histories. There can be no assurance that the fund will have favorable IPO investment opportunities. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS(1) - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS(1) - ----------- ---------- 1998................................................................... -8.54% 1999................................................................... 67.98% 2000................................................................... -22.44% 2001................................................................... -5.77% 2002................................................................... -10.80% 2003................................................................... 49.82% 2004................................................................... 18.18% 2005................................................................... 20.71% 2006................................................................... 38.21% 2007................................................................... 32.82%
(1) The fund's return during certain periods was positively impacted by its investments in IPOs. There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the fund's performance, please see the "Financial Highlights" section of this prospectus. The Class A shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 40.89% (quarter ended June 30, 1999) and the lowest quarterly return was -25.67% (quarter ended June 30, 1998). 2 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS(1) - -------------------------------------------------------------------------- (for the periods ended INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS DATE - -------------------------------------------------------------------------- Class A 11/03/97 Return Before Taxes 25.53% 29.96% 14.02% Return After Taxes on Distributions 22.99 29.26 13.69 Return After Taxes on Distributions and Sale of Fund Shares 19.00 26.83 12.61 Class B 11/03/97 Return Before Taxes 26.84 30.41 14.04 Class C 11/03/97 Return Before Taxes 30.83 30.51 13.82 - -------------------------------------------------------------------------- MSCI EAFE--Registered Trademark-- Index(2) 11.17 21.59 8.66 10/31/97 MSCI All Country Asia Pacific Ex-Japan Index(2,3) 36.46 31.40 --(5) Lipper Pacific Region Ex-Japan Funds Index(2,4) 39.37 33.66 14.29 10/31/97 - --------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A only and after-tax returns for Class B and C will vary. (1) The fund's return during certain periods was positively impacted by its investments in IPOs. There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the fund's performance, please see the "Financial Highlights" section of this prospectus. (2) The Morgan Stanley Capital International Europe, Australasia and Far East Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The fund has also included the MSCI All Country Asia Pacific Ex-Japan Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper Pacific Region Ex-Japan Funds Index (which may or may not include the fund) is included for comparison to a peer group. (3) The Morgan Stanley Capital International All Country Asia Pacific Ex-Japan Index measures the performance of securities listed on stock exchanges of 12 countries in the Asia-Pacific region including developed and emerging countries, but excluding Japan. (4) The Lipper Pacific Region Ex-Japan Funds Index is an equally weighted representation of the largest funds in the Lipper Pacific Region Ex-Japan Funds category. These funds seek to concentrate their investments in equity securities with primary trading markets or operations concentrated in the Pacific region (including Asian countries) and that specifically do not invest in Japan. (5) Index performance is not provided because the inception date of the MSCI All Country Asia Pacific ex-Japan Index was December 31, 1998. 3 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - ---------------------------------------------------------------------------------------------------- (fees paid directly from your investment) CLASS A CLASS B CLASS C - ---------------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% - ----------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - ---------------------------------------------------------------------------------------------------- (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C - ---------------------------------------------------------------------------------------------------- Management Fees(4) 0.92% 0.92% 0.92% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 Other Expenses 0.44 0.44 0.44 Acquired Fund Fees and Expenses 0.01 0.01 0.01 Total Annual Fund Operating Expenses 1.62 2.37 2.37 - ----------------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)." (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B and Class C shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. (4) Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the fund. Pursuant to the new fee schedule, the fund's maximum annual advisory fee rate ranges from 0.935% (for average net assets up to $250 million) to 0.76% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedule. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii)earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ----------------------------------------------------------------------------------------------------- Class A $706 $1,033 $1,383 $2,366 Class B 740 1,039 1,465 2,520(1) Class C 340 739 1,265 2,706 - -----------------------------------------------------------------------------------------------------
4 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ----------------------------------------------------------------------------------------------------- Class A $706 $1,033 $1,383 $2,366 Class B 240 739 1,265 2,520(1) Class C 240 739 1,265 2,706 - -----------------------------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 - ----------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.62% 1.62% 1.62% 1.62% 1.62% 1.62% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% Cumulative Return After Expenses (2.31)% 1.00% 4.41% 7.94% 11.59% 15.36% End of Year Balance $9,769.41 $10,099.62 $10,440.98 $10,793.89 $11,158.72 $11,535.89 Estimated Annual Expenses $ 705.68 $ 160.94 $ 166.38 $ 172.00 $ 177.82 $ 183.83 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.62% 1.62% 1.62% 1.62% Cumulative Return Before Expenses 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 19.26% 23.29% 27.46% 31.76% End of Year Balance $11,925.80 $12,328.89 $12,745.61 $13,176.41 Estimated Annual Expenses $ 190.04 $ 196.46 $ 203.10 $ 209.97 - --------------------------------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.62% 1.62% 1.62% 1.62% 1.62% 1.62% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% Cumulative Return After Expenses 3.38% 6.87% 10.49% 14.22% 18.08% 22.07% End of Year Balance $10,338.00 $10,687.42 $11,048.66 $11,422.10 $11,808.17 $12,207.29 Estimated Annual Expenses $ 164.74 $ 170.31 $ 176.06 $ 182.01 $ 188.17 $ 194.53 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.62% 1.62% 1.62% 1.62% Cumulative Return Before Expenses 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 26.20% 30.46% 34.87% 39.43% End of Year Balance $12,619.89 $13,046.45 $13,487.42 $13,943.29 Estimated Annual Expenses $ 201.10 $ 207.90 $ 214.92 $ 222.19 - ----------------------------------------------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.37% 2.37% 2.37% 2.37% 2.37% 2.37% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% Cumulative Return After Expenses 2.63% 5.33% 8.10% 10.94% 13.86% 16.85% End of Year Balance $10,263.00 $10,532.92 $10,809.93 $11,094.23 $11,386.01 $11,685.46 Estimated Annual Expenses $ 240.12 $ 246.43 $ 252.91 $ 259.56 $ 266.39 $ 273.40 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B(2) YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.37% 2.37% 1.62% 1.62% Cumulative Return Before Expenses 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 19.93% 23.08% 27.24% 31.54% End of Year Balance $11,992.79 $12,308.20 $12,724.22 $13,154.30 Estimated Annual Expenses $ 280.59 $ 287.97 $ 202.76 $ 209.62 - ----------------------------------------------------------------------------------------------------------------------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.37% 2.37% 2.37% 2.37% 2.37% 2.37% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% 34.01% Cumulative Return After Expenses 2.63% 5.33% 8.10% 10.94% 13.86% 16.85% End of Year Balance $10,263.00 $10,532.92 $10,809.93 $11,094.23 $11,386.01 $11,685.46 Estimated Annual Expenses $ 240.12 $ 246.43 $ 252.91 $ 259.56 $ 266.39 $ 273.40 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS C(2) YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.37% 2.37% 2.37% 2.37% Cumulative Return Before Expenses 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 19.93% 23.08% 26.32% 29.64% End of Year Balance $11,992.79 $12,308.20 $12,631.91 $12,964.13 Estimated Annual Expenses $ 280.59 $ 287.97 $ 295.54 $ 303.31 - ----------------------------------------------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. 5 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. 6 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.91% of average daily net assets after fee waivers. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Barrett K. Sides, Senior Portfolio Manager, who has been responsible for the fund since its inception in 1997 and has been associated with Invesco Aim and/or its affiliates since 1990. - - Shuxin Cao, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1997. - - Mark Jason, Portfolio Manager, who has been responsible for the fund since 2007 and has been associated with Invesco Aim and/or its affiliates since 2001. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM Asia Pacific Growth Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 7 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request. For a discussion of how investments in IPOs affected the fund's performance, see the "Performance Information" section of this prospectus.
CLASS A ---------------------------------------------------------- YEAR ENDED OCTOBER 31, ---------------------------------------------------------- 2007 2006 2005 2004 2003 - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 22.82 $ 16.41 $ 13.72 $ 12.07 $ 8.53 - ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss)(a) 0.24 0.14 0.14 (0.01) (0.01) - ------------------------------------------------------------------------------------------------------------------------ Net gains on securities (both realized and unrealized) 13.00 6.39 2.55 1.66 3.55 ======================================================================================================================== Total from investment operations 13.24 6.53 2.69 1.65 3.54 ======================================================================================================================== Less distributions: Dividends from net investment income (0.10) (0.12) -- -- -- - ------------------------------------------------------------------------------------------------------------------------ Distributions from net realized gains (0.80) -- -- -- -- ======================================================================================================================== Total distributions (0.90) (0.12) -- -- -- ======================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ======================================================================================================================== Net asset value, end of period $ 35.16 $ 22.82 $ 16.41 $ 13.72 $ 12.07 ________________________________________________________________________________________________________________________ ======================================================================================================================== Total return(b) 59.90% 39.97% 19.61% 13.67% 41.50% ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $646,720 $292,771 $156,379 $106,129 $97,192 ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.61%(c) 1.83% 2.01% 2.23% 2.26% - ------------------------------------------------------------------------------------------------------------------------ Without fee waivers and/or expense reimbursements 1.63%(c) 1.85% 2.03% 2.25% 2.41% ======================================================================================================================== Ratio of net investment income (loss) to average net assets 0.84%(c) 0.68% 0.85% (0.09)% (0.11)% ________________________________________________________________________________________________________________________ ======================================================================================================================== Portfolio turnover rate 41% 58% 36% 68% 100% ________________________________________________________________________________________________________________________ ========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $451,166,520. 8 ---------------------------- AIM ASIA PACIFIC GROWTH FUND ---------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B ------------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------------ 2007 2006 2005 2004 2003 - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 21.65 $ 15.61 $ 13.14 $ 11.64 $ 8.27 - -------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.02 (0.01) 0.03 (0.09) (0.07) - -------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 12.32 6.08 2.44 1.59 3.44 ==================================================================================================================== Total from investment operations 12.34 6.07 2.47 1.50 3.37 ==================================================================================================================== Less distributions: Dividends from net investment income -- (0.03) -- -- -- - -------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.80) -- -- -- -- ==================================================================================================================== Total distributions (0.80) (0.03) -- -- -- ==================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ==================================================================================================================== Net asset value, end of period $ 33.19 $ 21.65 $ 15.61 $ 13.14 $ 11.64 ____________________________________________________________________________________________________________________ ==================================================================================================================== Total return(b) 58.70% 38.96% 18.80% 12.89% 40.75% ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $92,295 $53,936 $35,600 $29,174 $24,599 ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.36%(c) 2.58% 2.69% 2.88% 2.91% - -------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.38%(c) 2.60% 2.71% 2.90% 3.06% ==================================================================================================================== Ratio of net investment income (loss) to average net assets 0.09%(c) (0.07)% 0.17% (0.74)% (0.76)% ____________________________________________________________________________________________________________________ ==================================================================================================================== Portfolio turnover rate 41% 58% 36% 68% 100% ____________________________________________________________________________________________________________________ ====================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $71,296,646.
CLASS C ------------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------------ 2007 2006 2005 2004 2003 - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 21.56 $ 15.55 $ 13.09 $ 11.60 $ 8.25 - -------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.02 (0.01) 0.03 (0.09) (0.07) - -------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 12.28 6.05 2.43 1.58 3.42 ==================================================================================================================== Total from investment operations 12.30 6.04 2.46 1.49 3.35 ==================================================================================================================== Less distributions: Dividends from net investment income -- (0.03) -- -- -- - -------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.80) -- -- -- -- ==================================================================================================================== Total distributions (0.80) (0.03) -- -- -- ==================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ==================================================================================================================== Net asset value, end of period $ 33.06 $ 21.56 $ 15.55 $ 13.09 $11.60 ____________________________________________________________________________________________________________________ ==================================================================================================================== Total return(b) 58.77% 38.92% 18.79% 12.84% 40.61% ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $130,965 $54,898 $26,626 $11,220 $8,763 ____________________________________________________________________________________________________________________ ==================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.36%(c) 2.58% 2.69% 2.88% 2.91% - -------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.38%(c) 2.60% 2.71% 2.90% 3.06% ==================================================================================================================== Ratio of net investment income (loss) to average net assets 0.09%(c) (0.07)% 0.17% (0.74)% (0.76)% ____________________________________________________________________________________________________________________ ==================================================================================================================== Portfolio turnover rate 41% 58% 36% 68% 100% ____________________________________________________________________________________________________________________ ====================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $85,866,721. 9 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM Asia Pacific Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com APG-PRO-1 AIM EUROPEAN GROWTH FUND PROSPECTUS MAY 1, 2008 AIM European Growth Fund's investment objective is long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B, C, R and Investor Class shares of the fund. Please read it before investing and keep it for future reference. Investor Class shares offered by this prospectus are offered only to grandfathered investors. Please see the section of the prospectus entitled "General Information--Share Class Eligibility--Investor Class Shares." As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 2 - ------------------------------------------------------ Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 8 - ------------------------------------------------------ Sales Charges 8 Dividends and Distributions 8 FINANCIAL HIGHLIGHTS 9 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investment Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in securities of European companies. The fund considers various factors when determining whether a company is in Europe, including whether (1) it is organized under the laws of a country in Europe; (2) it has a principal office in a country in Europe; (3) it derives 50% or more of its total revenues from business in a country in Europe; or (4) its equity securities are traded principally on a stock exchange, or in an over-the-counter market, in a country in Europe. In complying with the 80% investment requirement, the fund will invest primarily in marketable equity securities, but its investments may include synthetic instruments. Synthetic instruments are investments that have economic characteristics similar to the fund's direct investments, and may include exchange-traded funds and American Depositary Receipts. The fund will normally invest in the securities of companies located in at least three European countries. The fund may invest up to 35% of its total assets in European companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund may invest up to 20% of its assets in securities of non-European companies. The fund's investments may include investments in companies with market capitalizations of less than one billion. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. This is especially true with respect to equity securities of small and micro-cap companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their 1 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND (CONTINUED) - -------------------------------------------------------------------------------- currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS(1) - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998................................................................... 40.62% 1999................................................................... 66.62% 2000................................................................... -3.28% 2001................................................................... -24.72% 2002................................................................... -9.71% 2003................................................................... 43.20% 2004................................................................... 32.93% 2005................................................................... 13.06% 2006................................................................... 39.38% 2007................................................................... 14.19%
(1) The fund's return during certain periods was positively impacted by its investments in initial public offerings (IPOs). There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the fund's performance, please see the "Financial Highlights" section of this prospectus. The Class A shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 54.69% (quarter ended December 31, 1999) and the lowest quarterly return was - -21.50% (quarter ended March 31, 2001). 2 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS(1) - -------------------------------------------------------------------------------------------------------------- (for the periods ended INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS DATE - -------------------------------------------------------------------------------------------------------------- Class A 11/03/97 Return Before Taxes 7.91% 26.48% 17.43% Return After Taxes on Distributions 6.62 25.70 17.06 Return After Taxes on Distributions and Sale of Fund Shares 7.07 23.66 15.90 Class B 11/03/97 Return Before Taxes 8.33 26.89 17.44 Class C 11/03/97 Return Before Taxes 12.33 27.03 17.27 Class R(2) 11/03/97(2) Return Before Taxes 13.90 27.66 17.88 Investor Class(3) 11/03/97(3) Return Before Taxes 14.22 27.97 18.12 - -------------------------------------------------------------------------------------------------------------- MSCI EAFE--Registered Trademark-- Index(4) 11.17 21.59 8.66 MSCI Europe Growth Index(4,5) 19.54 20.88 7.33 Lipper European Funds Index(4,6) 16.93 24.83 11.52 - --------------------------------------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A only and after-tax returns for Class B, C, R and Investor Class will vary. (1) The fund's return during certain periods was positively impacted by its investments in IPOs. There can be no assurance that the fund will have favorable IPO investment opportunities in the future. For additional information regarding the fund's performance, please see the "Financial Highlights" section of this prospectus. (2) The returns shown for the one year and five year periods are the historical performance of the fund's Class R shares. The return shown for the ten year period is the blended return of the historical performance of the fund's Class R shares since their inception and the restated historical performance of the fund's Class A shares (for periods prior to the inception of the Class R shares) at net asset value, adjusted to reflect the higher Rule 12b-1 fees applicable to Class R shares. The inception date shown in the table is that of the fund's Class A shares. The inception date of the fund's Class R shares is June 3, 2002. (3) The return shown for the one year period is the historical performance of the fund's Investor Class shares. The returns shown for other periods are the blended returns of the historical performance of the fund's Investor Class Shares since their inception and the restated historical performance of the fund's Class A shares (for the periods prior to inception of the Investor Class shares) at net asset value, which restated performance will reflect the Rule 12b-1 fees applicable to Class A shares. The inception date shown in the table is that of the fund's Class A shares. The inception date of the fund's Investor Class shares is September 30, 2003. (4) The Morgan Stanley Capital International Europe, Australasia and Far East Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The fund has also included the MSCI Europe Growth Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper European Funds Index (which may or may not include the fund) is included for comparison to a peer group. (5) The Morgan Stanley Capital International Europe Growth Index is a free float-adjusted market capitalization index that represents the growth segment in developed equity markets in Europe. (6) The Lipper European Funds Index is an equally weighted representation of the largest funds in the Lipper European Funds category. These funds concentrate their investments in equity securities whose primary trading markets or operations are concentrated in the European region or a single country within this region. 3 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - ----------------------------------------------------------------------------------------------- INVESTOR (paid directly from your investment) CLASS A CLASS B CLASS C CLASS R CLASS - ----------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% None(1) None Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% 2.00% 2.00% - -----------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - -------------------------------------------------------------------------------------------- INVESTOR (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C CLASS R CLASS - -------------------------------------------------------------------------------------------------------- Management Fees(4) 0.89% 0.89% 0.89% 0.89% 0.89% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 0.50 0.25 Other Expenses 0.33 0.33 0.33 0.33 0.33 Acquired Fund Fees and Expenses 0.01 0.01 0.01 0.01 0.01 Total Annual Fund Operating Expenses 1.48 2.23 2.23 1.73 1.48 - --------------------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)." (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B, Class C, Class R and Investor Class shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. (4) Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the fund. Pursuant to the new fee schedule, the fund's maximum annual advisory fee rate ranges from 0.935% (for average net assets up to $250 million) to 0.76% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedule. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii) earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $692 $992 $1,313 $2,221 Class B 726 997 1,395 2,376(1) Class C 326 697 1,195 2,565 Class R 176 545 939 2,041 Investor Class 151 468 808 1,768 - --------------------------------------------------------------------------------
4 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $692 $992 $1,313 $2,221 Class B 226 697 1,195 2,376(1) Class C 226 697 1,195 2,565 Class R 176 545 939 2,041 Investor Class 151 468 808 1,768 - --------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses (2.17)% 1.27% 4.83% 8.52% 12.34% End of Year Balance $9,782.64 $10,126.99 $10,483.46 $10,852.48 $11,234.48 Estimated Annual Expenses $ 692.32 $ 147.33 $ 152.52 $ 157.89 $ 163.44 - -------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 16.30% 20.39% 24.63% 29.02% 33.56% End of Year Balance $11,629.94 $12,039.31 $12,463.10 $12,901.80 $13,355.94 Estimated Annual Expenses $ 169.20 $ 175.15 $ 181.32 $ 187.70 $ 194.31 - --------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.52% 7.16% 10.94% 14.84% 18.88% End of Year Balance $10,352.00 $10,716.39 $11,093.61 $11,484.10 $11,888.34 Estimated Annual Expenses $ 150.60 $ 155.91 $ 161.39 $ 167.08 $ 172.96 - -------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.07% 27.40% 31.88% 36.53% 41.33% End of Year Balance $12,306.81 $12,740.01 $13,188.46 $13,652.69 $14,133.27 Estimated Annual Expenses $ 179.04 $ 185.35 $ 191.87 $ 198.62 $ 205.62 - --------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.23% 2.23% 2.23% 2.23% 2.23% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.77% 5.62% 8.54% 11.55% 14.64% End of Year Balance $10,277.00 $10,561.67 $10,854.23 $11,154.89 $11,463.88 Estimated Annual Expenses $ 226.09 $ 232.35 $ 238.79 $ 245.40 $ 252.20 - -------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.23% 2.23% 2.23% 1.48% 1.48% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 17.81% 21.08% 24.43% 28.81% 33.35% End of Year Balance $11,781.43 $12,107.78 $12,443.16 $12,881.16 $13,334.58 Estimated Annual Expenses $ 259.19 $ 266.36 $ 273.74 $ 187.40 $ 194.00 - --------------------------------------------------------------------------------------------
5 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.23% 2.23% 2.23% 2.23% 2.23% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.77% 5.62% 8.54% 11.55% 14.64% End of Year Balance $10,277.00 $10,561.67 $10,854.23 $11,154.89 $11,463.88 Estimated Annual Expenses $ 226.09 $ 232.35 $ 238.79 $ 245.40 $ 252.20 - -------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.23% 2.23% 2.23% 2.23% 2.23% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 17.81% 21.08% 24.43% 27.88% 31.42% End of Year Balance $11,781.43 $12,107.78 $12,443.16 $12,787.84 $13,142.06 Estimated Annual Expenses $ 259.19 $ 266.36 $ 273.74 $ 281.33 $ 289.12 - --------------------------------------------------------------------------------------------
CLASS R YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.73% 1.73% 1.73% 1.73% 1.73% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.27% 6.65% 10.13% 13.74% 17.45% End of Year Balance $10,327.00 $10,664.69 $11,013.43 $11,373.57 $11,745.48 Estimated Annual Expenses $ 175.83 $ 181.58 $ 187.52 $ 193.65 $ 199.98 - -------------------------------------------------------------------------------------------- CLASS R YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.73% 1.73% 1.73% 1.73% 1.73% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 21.30% 25.26% 29.36% 33.59% 37.96% End of Year Balance $12,129.56 $12,526.20 $12,935.80 $13,358.80 $13,795.64 Estimated Annual Expenses $ 206.52 $ 213.27 $ 220.25 $ 227.45 $ 234.89 - --------------------------------------------------------------------------------------------
INVESTOR CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.52% 7.16% 10.94% 14.84% 18.88% End of Year Balance $10,352.00 $10,716.39 $11,093.61 $11,484.10 $11,888.34 Estimated Annual Expenses $ 150.60 $ 155.91 $ 161.39 $ 167.08 $ 172.96 - -------------------------------------------------------------------------------------------- INVESTOR CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.48% 1.48% 1.48% 1.48% 1.48% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.07% 27.40% 31.88% 36.53% 41.33% End of Year Balance $12,306.81 $12,740.01 $13,188.46 $13,652.69 $14,133.27 Estimated Annual Expenses $ 179.04 $ 185.35 $ 191.87 $ 198.62 $ 205.62 - --------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. 6 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.88% of average daily net assets after fee waivers. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Jason T. Holzer (lead manager with respect to the fund's small and mid-cap investments), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1996. - - Clas G. Olsson (lead manager with respect to the fund's large cap investments), Senior Portfolio Manager, who has been responsible for the fund since its inception in 1997 and has been associated with Invesco Aim and/or its affiliates since 1994. - - Matthew W. Dennis, Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Borge Endresen, Portfolio Manager, who has been responsible for the fund since 2002 and has been associated with Invesco Aim and/or its affiliates since 1999. - - Richard Nield, Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. A lead manager generally has final authority over all aspects of a portion of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which a lead manager may perform these functions, and the nature of these functions, may change from time to time. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. 7 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM European Growth Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. Certain purchases of Class R shares may be subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 8 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request. For a discussion of how investments in IPOs affected the fund's performance, see the "Performance Information" section of this prospectus.
CLASS A ------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------- 2007 2006 2005 2004 2003 - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 39.83 $ 31.11 $ 26.23 $ 20.02 $ 15.60 - --------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.56 0.31 0.21 0.05 (0.01) - --------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 11.52 10.70 4.70 6.17 4.43 =========================================================================================================================== Total from investment operations 12.08 11.01 4.91 6.22 4.42 =========================================================================================================================== Less distributions: Dividends from net investment income (0.31) (0.21) (0.03) (0.01) -- - --------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (2.38) (2.08) -- -- -- =========================================================================================================================== Total distributions (2.69) (2.29) (0.03) (0.01) -- =========================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- =========================================================================================================================== Net asset value, end of period $ 49.22 $ 39.83 $ 31.11 $ 26.23 $ 20.02 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Total return(b) 31.84% 37.44% 18.74% 31.06% 28.33% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $1,095,988 $768,769 $496,328 $407,566 $301,659 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.47%(c) 1.58% 1.70% 1.87% 2.01% - --------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.49%(c) 1.60% 1.72% 1.87% 2.02% =========================================================================================================================== Ratio of net investment income (loss) to average net assets 1.28%(c) 0.87% 0.71% 0.19% (0.04)% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Portfolio turnover rate 20% 28% 48% 60% 81% ___________________________________________________________________________________________________________________________ ===========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $985,743,579. 9 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B ----------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------- 2007 2006 2005 2004 2003 - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 37.63 $ 29.53 $ 25.03 $ 19.23 $ 15.08 - ------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.22 0.04 0.01 (0.10) (0.11) - ------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 10.87 10.15 4.49 5.90 4.26 ========================================================================================================================= Total from investment operations 11.09 10.19 4.50 5.80 4.15 ========================================================================================================================= Less distributions: Dividends from net investment income (0.05) (0.01) -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (2.38) (2.08) -- -- -- ========================================================================================================================= Total distributions (2.43) (2.09) -- -- -- ========================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ========================================================================================================================= Net asset value, end of period $ 46.29 $ 37.63 $ 29.53 $ 25.03 $ 19.23 _________________________________________________________________________________________________________________________ ========================================================================================================================= Total return(b) 30.87% 36.39% 17.98% 30.16% 27.52% ========================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $177,053 $161,405 $144,211 $130,863 $107,959 _________________________________________________________________________________________________________________________ ========================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.39% 2.52% 2.66% - ------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.24%(c) 2.35% 2.41% 2.52% 2.67% ========================================================================================================================= Ratio of net investment income (loss) to average net assets 0.53%(c) 0.12% 0.02% (0.46)% (0.69)% _________________________________________________________________________________________________________________________ ========================================================================================================================= Portfolio turnover rate 20% 28% 48% 60% 81% _________________________________________________________________________________________________________________________ =========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $172,471,231.
CLASS C -------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------- 2007 2006 2005 2004 2003 - ---------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 37.65 $ 29.54 $ 25.05 $ 19.24 $ 15.09 - ---------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.22 0.04 0.01 (0.10) (0.11) - ---------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 10.87 10.16 4.48 5.91 4.26 ====================================================================================================================== Total from investment operations 11.09 10.20 4.49 5.81 4.15 ====================================================================================================================== Less distributions: Dividends from net investment income (0.05) (0.01) -- -- -- - ---------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (2.38) (2.08) -- -- -- ====================================================================================================================== Total distributions (2.43) (2.09) -- -- -- ====================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ====================================================================================================================== Net asset value, end of period $ 46.31 $ 37.65 $ 29.54 $ 25.05 $ 19.24 ______________________________________________________________________________________________________________________ ====================================================================================================================== Total return(b) 30.84% 36.41% 17.92% 30.20% 27.50% ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $182,178 $103,675 $63,806 $45,222 $31,509 ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.39% 2.52% 2.66% - ---------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.24%(c) 2.35% 2.41% 2.52% 2.67% ====================================================================================================================== Ratio of net investment income (loss) to average net assets 0.53%(c) 0.12% 0.02% (0.46)% (0.69)% ______________________________________________________________________________________________________________________ ====================================================================================================================== Portfolio turnover rate 20% 28% 48% 60% 81% ______________________________________________________________________________________________________________________ ======================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $144,579,301. 10 ------------------------ AIM EUROPEAN GROWTH FUND ------------------------ FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS R --------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------- 2007 2006 2005 2004 2003 - ----------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 39.60 $ 30.96 $26.13 $19.98 $15.59 - ----------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.45 0.22 0.16 0.01 (0.03) - ----------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 11.45 10.66 4.68 6.14 4.42 ================================================================================================================= Total from investment operations 11.90 10.88 4.84 6.15 4.39 ================================================================================================================= Less distributions: Dividends from net investment income (0.22) (0.16) (0.01) -- -- - ----------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (2.38) (2.08) -- -- -- ================================================================================================================= Total distributions (2.60) (2.24) (0.01) -- -- ================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================= Net asset value, end of period $ 48.90 $ 39.60 $30.96 $26.13 $19.98 _________________________________________________________________________________________________________________ ================================================================================================================= Total return(b) 31.53% 37.11% 18.52% 30.78% 28.16% _________________________________________________________________________________________________________________ ================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $25,129 $11,081 $4,767 $2,131 $ 660 _________________________________________________________________________________________________________________ ================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.72%(c) 1.83% 1.89% 2.02% 2.16% - ----------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.74%(c) 1.85% 1.91% 2.02% 2.17% ================================================================================================================= Ratio of net investment income (loss) to average net assets 1.03%(c) 0.62% 0.52% 0.04% (0.19)% _________________________________________________________________________________________________________________ ================================================================================================================= Portfolio turnover rate 20% 28% 48% 60% 81% _________________________________________________________________________________________________________________ =================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. (c) Ratios are based on average daily net assets of $17,920,972.
INVESTOR CLASS --------------------------------------------------------------------- SEPTEMBER 30, 2003 (COMMENCEMENT YEAR ENDED OCTOBER 31, DATE) TO ----------------------------------------------- OCTOBER 31, 2007 2006 2005 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 39.78 $ 31.08 $ 26.22 $ 20.01 $18.84 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.56 0.32 0.24 0.09 0.00 - --------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 11.50 10.69 4.69 6.15 1.17 ================================================================================================================================= Total from investment operations 12.06 11.01 4.93 6.24 1.17 ================================================================================================================================= Less distributions: Dividends from net investment income (0.32) (0.23) (0.07) (0.03) -- - --------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (2.38) (2.08) -- -- -- ================================================================================================================================= Total distributions (2.70) (2.31) (0.07) (0.03) -- ================================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================================= Net asset value, end of period $ 49.14 $ 39.78 $ 31.08 $ 26.22 $20.01 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 31.80% 37.50% 18.82% 31.20% 6.21% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $376,835 $266,510 $202,323 $184,832 $ 163 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.47%(c) 1.55% 1.63% 1.71% 1.79%(d) - --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.49%(c) 1.57% 1.65% 1.74% 1.79%(d) ================================================================================================================================= Ratio of net investment income to average net assets 1.28%(c) 0.91% 0.78% 0.35% 0.18%(d) _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate(e) 20% 28% 48% 60% 81% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $336,779,833. (d) Annualized. (e) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. 11 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM European Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com EGR-PRO-1 AIM GLOBAL GROWTH FUND PROSPECTUS May 1, 2008 AIM Global Growth Fund's investment objective is long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B and C shares of the fund. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ---------------------- AIM GLOBAL GROWTH FUND ---------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 2 - ------------------------------------------------------ Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 7 - ------------------------------------------------------ Sales Charges 7 Dividends and Distributions 7 FINANCIAL HIGHLIGHTS 8 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investments Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ---------------------- AIM GLOBAL GROWTH FUND ---------------------- INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 65% of its total assets in marketable equity securities of domestic and foreign issuers. The fund will normally invest in the securities of medium- and large-sized growth companies located in at least three countries outside the United States, and will usually maintain at least 20% of its total assets in U.S. dollar-denominated securities. The fund emphasizes investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin. The fund may also invest up to 20% of its total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998................................................................... 22.08% 1999................................................................... 52.20% 2000................................................................... -22.15% 2001................................................................... -30.05% 2002................................................................... -19.87% 2003................................................................... 26.89% 2004................................................................... 15.61% 2005................................................................... 11.64% 2006................................................................... 20.73% 2007................................................................... 10.11%
The Class A shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 38.05% (quarter ended December 31, 1999) and the lowest quarterly return was - -25.90% (quarter ended March 31, 2001). 2 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS - ------------------------------------------------------------------------------- (for the periods ended INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS DATE - ------------------------------------------------------------------------------- Class A 09/15/94 Return Before Taxes 4.07% 15.53% 5.25% Return After Taxes on Distributions 4.03 15.48 5.06 Return After Taxes on Distributions and Sale of Fund Shares 2.69 13.68 4.53 Class B 09/15/94 Return Before Taxes 4.31 15.87 5.38 Class C 08/04/97 Return Before Taxes 8.30 16.08 5.23 - ------------------------------------------------------------------------------- MSCI World Index(SM1) 9.04 16.96 7.00 MSCI World Growth Index(1,2) 14.76 15.48 5.73 Lipper Global Large-Cap Growth Funds Index(1,3) 14.50 16.96 --(4) - -------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A only and after-tax returns for Class B and C will vary. (1) The Morgan Stanley Capital International World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. The fund has also included the MSCI World Growth Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper Global Large-Cap Growth Funds Index (which may or may not include the fund) is included for a comparison to a peer group. (2) The MSCI World Growth Index is a free float-adjusted market capitalization index that represents the growth segment in global developed market equity performance. (3) The Lipper Global Large-Cap Growth Funds Index is an equally weighted representation of the largest funds in the Lipper Global Large-Cap Growth Funds category. These funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P/Citigroup Broad Market Index World. The S&P/Citigroup BMI World is a subset of the developed markets portion of the S&P/Citigroup BMI Global. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflect the stock markets of all countries that meet certain capitalization criteria. (4) Index performance is not provided because the inception date of the Lipper Global Large-Cap Growth Funds Index was June 30, 1998. 3 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - -------------------------------------------------------------------------------------------------------- (fees paid directly from your investment) CLASS A CLASS B CLASS C - -------------------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% - --------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - -------------------------------------------------------------------------------------------------------- (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C - -------------------------------------------------------------------------------------------------------- Management Fees(4) 0.79% 0.79% 0.79% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 Other Expenses 0.49 0.49 0.49 Acquired Fund Fees and Expenses 0.01 0.01 0.01 Total Annual Fund Operating Expenses 1.54 2.29 2.29 - --------------------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)." (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B and Class C shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. (4) Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the fund. Pursuant to the new fee schedule, the fund's maximum annual advisory fee rate ranges from 0.80% (for average net assets up to $250 million) to 0.66% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedule. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii)earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------------- Class A $698 $1,010 $1,343 $2,284 Class B $732 1,015 1,425 2,438(1) Class C $332 715 1,225 2,626 - -------------------------------------------------------------------------------------------------------------
4 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------------- Class A $698 $1,010 $1,343 $2,284 Class B 232 715 1,225 2,438(1) Class C 232 715 1,225 2,626 - -------------------------------------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ----------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.54% 1.54% 1.54% 1.54% 1.54% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses (2.23)% 1.15% 4.65% 8.27% 12.02% End of Year Balance $9,776.97 $10,115.25 $10,465.24 $10,827.34 $11,201.96 Estimated Annual Expenses $ 698.05 $ 153.17 $ 158.47 $ 163.95 $ 169.63 - ----------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.54% 1.54% 1.54% 1.54% 1.54% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 15.90% 19.91% 24.05% 28.35% 32.79% End of Year Balance $11,589.55 $11,990.55 $12,405.42 $12,834.65 $13,278.73 Estimated Annual Expenses $ 175.49 $ 181.57 $ 187.85 $ 194.35 $ 201.07 - -----------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.54% 1.54% 1.54% 1.54% 1.54% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.46% 7.04% 10.74% 14.58% 18.54% End of Year Balance $10,346.00 $10,703.97 $11,074.33 $11,457.50 $11,853.93 Estimated Annual Expenses $ 156.66 $ 162.08 $ 167.69 $ 173.50 $ 179.50 - ---------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.54% 1.54% 1.54% 1.54% 1.54% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 22.64% 26.88% 31.27% 35.82% 40.52% End of Year Balance $12,264.08 $12,688.41 $13,127.43 $13,581.64 $14,051.57 Estimated Annual Expenses $ 185.71 $ 192.13 $ 198.78 $ 205.66 $ 212.78 - ----------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.29% 2.29% 2.29% 2.29% 2.29% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.71% 5.49% 8.35% 11.29% 14.30% End of Year Balance $10,271.00 $10,549.34 $10,835.23 $11,128.87 $11,430.46 Estimated Annual Expenses $ 232.10 $ 238.39 $ 244.85 $ 251.49 $ 258.30 - ---------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.29% 2.29% 2.29% 1.54% 1.54% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 17.40% 20.58% 23.85% 28.14% 32.57% End of Year Balance $11,740.22 $12,058.38 $12,385.17 $12,813.69 $13,257.05 Estimated Annual Expenses $ 265.30 $ 272.49 $ 279.88 $ 194.03 $ 200.74 - ----------------------------------------------------------------------------------------------
5 ---------------------- AIM GLOBAL GROWTH FUND ----------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.29% 2.29% 2.29% 2.29% 2.29% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.71% 5.49% 8.35% 11.29% 14.30% End of Year Balance $10,271.00 $10,549.34 $10,835.23 $11,128.87 $11,430.46 Estimated Annual Expenses $ 232.10 $ 238.39 $ 244.85 $ 251.49 $ 258.30 - ---------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 2.29% 2.29% 2.29% 2.29% 2.29% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 17.40% 20.58% 23.85% 27.21% 30.66% End of Year Balance $11,740.22 $12,058.38 $12,385.17 $12,720.80 $13,065.54 Estimated Annual Expenses $ 265.30 $ 272.49 $ 279.88 $ 287.46 $ 295.25 - ----------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. 6 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.79% of average daily net assets after fee waivers. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Robert J. Lloyd, (lead manager with respect to the domestic portion of the fund's portfolio), Senior Portfolio Manager, who has been responsible for the fund since 2008 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Matthew W. Dennis, (lead manager with respect to the fund's investments in Europe and Canada), Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Barrett K. Sides, (lead manager with respect to the fund's investments in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1990. - - Clas G. Olsson, Senior Portfolio Manager, who has been responsible for the fund since 1997 and has been associated with Invesco Aim and/or its affiliates since 1994. A lead manager generally has final authority over all aspects of a portion of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which a lead manager may perform these functions, and the nature of these functions, may change from time to time. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM Global Growth Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 7 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A ----------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------------- 2007 2006 2005 2004 2003 -------- -------- -------- -------- -------- Net asset value, beginning of period $ 22.94 $ 19.02 $ 16.65 $ 14.91 $ 12.66 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.12(a) 0.06(a) 0.08(a)(b) (0.04)(a) (0.08) - --------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 5.22 3.99 2.29 1.78 2.33 ================================================================================================================================= Total from investment operations 5.34 4.05 2.37 1.74 2.25 ================================================================================================================================= Less dividends from net investment income (0.10) (0.13) -- -- -- ================================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================================= Net asset value, end of period $ 28.18 $ 22.94 $ 19.02 $ 16.65 $ 14.91 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(c) 23.35% 21.39% 14.23% 11.67% 17.77% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $355,538 $310,028 $284,122 $286,068 $329,739 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.53%(d) 1.62% 1.77% 1.96% 2.04% - --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.57%(d) 1.68% 1.82% 1.97% 2.04% ================================================================================================================================= Ratio of net investment income (loss) to average net assets 0.47%(d) 0.28% 0.44%(b) (0.24)% (0.58)% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 38% 42% 51% 56% 75% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $3.00 per share owned of Microsoft Corp. on December 2, 2004. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $0.05 and 0.27%, respectively. (c) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (d) Ratios are based on average daily net assets of $337,401,714. 8 ---------------------- AIM GLOBAL GROWTH FUND ---------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B --------------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- -------- -------- -------- Net asset value, beginning of period $ 21.54 $ 17.87 $ 15.76 $ 14.18 $ 12.09 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.09)(a) (0.04)(a)(b) (0.11)(a) (0.15) - --------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 4.90 3.76 2.15 1.69 2.24 ================================================================================================================================= Total from investment operations 4.83 3.67 2.11 1.58 2.09 ================================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================================= Net asset value, end of period $ 26.37 $ 21.54 $ 17.87 $ 15.76 $ 14.18 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(c) 22.42% 20.54% 13.39% 11.14% 17.29% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $79,333 $90,571 $105,368 $139,061 $181,891 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.28%(d) 2.37% 2.43% 2.46% 2.54% - --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.32%(d) 2.43% 2.48% 2.47% 2.54% ================================================================================================================================= Ratio of net investment income (loss) to average net assets (0.28)%(d) (0.47)% (0.22)%(b) (0.74)% (1.08)% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 38% 42% 51% 56% 75% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $3.00 per share owned of Microsoft Corp. on December 2, 2004. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $(0.07) and (0.39)%, respectively. (c) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (d) Ratios are based on average daily net assets of $86,780,203.
CLASS C ------------------------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------------------------ 2007 2006 2005 2004 2003 ------- ------- ------- ------- ------- Net asset value, beginning of period $ 21.55 $ 17.88 $ 15.77 $ 14.18 $ 12.10 - -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.09)(a) (0.04)(a)(b) (0.11)(a) (0.15) - -------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 4.90 3.76 2.15 1.70 2.23 ================================================================================================================================ Total from investment operations 4.83 3.67 2.11 1.59 2.08 ================================================================================================================================ Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================================ Net asset value, end of period $ 26.38 $ 21.55 $ 17.88 $ 15.77 $ 14.18 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Total return(c) 22.41% 20.52% 13.38% 11.21% 17.19% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $27,878 $24,565 $23,619 $27,649 $32,844 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.28%(d) 2.37% 2.43% 2.46% 2.54% - -------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.32%(d) 2.43% 2.48% 2.47% 2.54% ================================================================================================================================ Ratio of net investment income (loss) to average net assets (0.28)%(d) (0.47)% (0.22)%(b) (0.74)% (1.08)% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Portfolio turnover rate 38% 42% 51% 56% 75% ________________________________________________________________________________________________________________________________ ================================================================================================================================
(a) Calculated using average shares outstanding. (b) Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $3.00 per share owned of Microsoft Corp. on December 2, 2004. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $(0.07) and (0.39)%, respectively. (c) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (d) Ratios are based on average daily net assets of $26,179,596. 9 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM Global Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com GLG-PRO-1 AIM GLOBAL SMALL & MID CAP GROWTH FUND PROSPECTUS MAY 1, 2008 AIM Global Small & Mid Cap Growth Fund's investment objective is above-average long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B and C shares of the fund. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 3 - ------------------------------------------------------ Annual Total Returns 3 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 7 - ------------------------------------------------------ Sales Charges 7 Dividends and Distributions 7 FINANCIAL HIGHLIGHTS 8 - ------------------------------------------------------ SHAREHOLDER INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investment Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is above-average long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in marketable equity securities of small- and mid-capitalization growth companies. In complying with this 80% investment requirement, the fund will invest primarily in marketable equity securities, but its investments may include other securities, such as synthetic instruments. Synthetic instruments are investments that have economic characteristics similar to the fund's direct investments, and may include the use of warrants, futures, options, exchange-traded funds and American Depository Receipts. The fund will normally invest in companies located in at least three countries outside the United States and will usually maintain at least 20% of its total assets in U.S. dollar-denominated securities. The fund emphasizes investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin. The fund may also invest up to 35% of its total assets in companies located in developing countries, i.e., those that are identified as being in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The fund considers a company to be a small-capitalization company if it has a market capitalization, at the time of purchase, no larger than the largest capitalized company included in the Russell 2000--Registered Trademark-- Index during the most recent 11-month period (based on month-end data) plus the most recent data during the current month. The Russell 2000--Registered Trademark-- Index measures the performance of the 2,000 smallest companies in the Russell 3000--Registered Trademark--Index, which measures the performance of the 3,000 largest U.S. companies. The Russell 2000--Registered Trademark-- Index is widely regarding as representative of small cap stocks. The fund considers a company to be a mid-capitalization company if it has a market capitalization, at the time of purchase, within the range of the largest and smallest capitalized companies included in the Russell--Registered Trademark-- Midcap Index during the most recent 11-month period (based on the month-end data) plus the most recent data during the current month. The Russell--Registered Trademark-- Midcap Index measures the performance of the 800 smallest companies in the Russell 1000--Registered Trademark-- Index. The Russell 1000--Registered Trademark-- Index measures the performance of the 1,000 largest companies domiciled in the United States. The companies in the Russell--Registered Trademark-- Midcap Index represent approximately 25% of the total market capitalization of the Russell 1000--Registered Trademark-- Index. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. This is especially true with respect to equity securities of small- and medium-sized companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of small- and medium-sized companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. 1 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 2 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998.................................................................. 3.93% 1999.................................................................. 70.58% 2000.................................................................. -21.98% 2001.................................................................. -25.59% 2002.................................................................. -16.55% 2003.................................................................. 39.22% 2004.................................................................. 24.40% 2005.................................................................. 17.37% 2006.................................................................. 26.17% 2007.................................................................. 18.61%
The Class A shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 49.33% (quarter ended December 31, 1999) and the lowest quarterly return was - -21.50% (quarter ended September 30, 2001). PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS - ------------------------------------------------------------------------------------- (for the periods ended INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS DATE - ------------------------------------------------------------------------------------- Class A 09/15/94 Return Before Taxes 12.11% 23.52% 9.46% Return After Taxes on Distributions 9.81 22.33 8.37 Return After Taxes on Distributions and Sale of Fund Shares 10.77 20.82 8.05 Class B 09/15/94 Return Before Taxes 12.69 23.96 9.60 Class C 08/04/97 Return Before Taxes 16.68 24.11 9.44 - ------------------------------------------------------------------------------------- MSCI World Index--Service Mark--(1) 9.04 16.96 7.00 MSCI World Growth Index(1,2) 14.76 15.48 5.73 Lipper Global Small/Mid-Cap Growth Category Average(1,3) 11.83 22.64 12.58 - -------------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A only and after-tax returns for Class B and C will vary. (1) The Morgan Stanley Capital International World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. The fund has also included the MSCI World Growth Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper Global Small/Mid-Cap Growth Category Average (which may or may not include the fund) is included for comparison to a peer group. (2) The MSCI World Growth Index is a free float-adjusted market capitalization index that represents the growth segment in global development market equity performance. (3) The Lipper Global Small/Mid-Cap Growth Category Average represents an average of all the funds in the Lipper Global Small/Mid-Cap Growth Funds category. These funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P/Citigroup Broad Market Index World. The S&P/Citigroup BMI World is a subset of the developed markets portion of the S&P/Citigroup BMI Global. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflect the stock markets of all countries that meet certain capitalization criteria. 3 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - ---------------------------------------------------------------------------------------------------- (fees paid directly from your investment) CLASS A CLASS B CLASS C - ---------------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% - ----------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - ---------------------------------------------------------------------------------------------------- (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C - ---------------------------------------------------------------------------------------------------- Management Fees(4) 0.77% 0.77% 0.77% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 Other Expenses 0.40 0.40 0.40 Acquired Fund Fees and Expenses 0.01 0.01 0.01 Total Annual Fund Operating Expenses 1.43 2.18 2.18 - ----------------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)." (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B and Class C shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. (4) Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the fund. Pursuant to the new fee schedule, the fund's maximum annual advisory rates range from 0.80% (for average net assets up to $250 million) to 0.66% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedule. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii) earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------------- Class A $688 $978 $1,289 $2,169 Class B 721 982 1,369 2,323(1) Class C 321 682 1,169 2,513 - -------------------------------------------------------------------------------------------------------------
4 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------------- Class A $688 $978 $1,289 $2,169 Class B 221 682 1,169 2,323(1) Class C 221 682 1,169 2,513 - -------------------------------------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.43% 1.43% 1.43% 1.43% 1.43% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses (2.13)% 1.37% 4.99% 8.73% 12.62% End of Year Balance $ 9,787.37 $10,136.77 $10,498.66 $10,873.46 $11,261.64 Estimated Annual Expenses $ 687.55 $ 142.46 $ 147.54 $ 152.81 $ 158.27 - ---------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.43% 1.43% 1.43% 1.43% 1.43% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 16.64% 20.80% 25.11% 29.58% 34.21% End of Year Balance $11,663.68 $12,080.08 $12,511.33 $12,957.99 $13,420.59 Estimated Annual Expenses $ 163.92 $ 169.77 $ 175.83 $ 182.11 $ 188.61 - ----------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.43% 1.43% 1.43% 1.43% 1.43% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.57% 7.27% 11.10% 15.06% 19.17% End of Year Balance $10,357.00 $10,726.74 $11,109.69 $11,506.31 $11,917.08 Estimated Annual Expenses $ 145.55 $ 150.75 $ 156.13 $ 161.70 $ 167.48 - ---------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.43% 1.43% 1.43% 1.43% 1.43% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.43% 27.83% 32.40% 37.12% 42.02% End of Year Balance $12,342.52 $12,783.15 $13,239.51 $13,712.16 $14,201.68 Estimated Annual Expenses $ 173.46 $ 179.65 $ 186.06 $ 192.70 $ 199.58 - ----------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.18% 2.18% 2.18% 2.18% 2.18% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.82% 5.72% 8.70% 11.77% 14.92% End of Year Balance $10,282.00 $10,571.95 $10,870.08 $11,176.62 $11,491.80 Estimated Annual Expenses $ 221.07 $ 227.31 $ 233.72 $ 240.31 $ 247.09 - ---------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.18% 2.18% 2.18% 1.43% 1.43% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.16% 21.49% 24.92% 29.38% 34.00% End of Year Balance $11,815.87 $12,149.07 $12,491.68 $12,937.63 $13,399.50 Estimated Annual Expenses $ 254.05 $ 261.22 $ 268.58 $ 181.82 $ 188.31 - ----------------------------------------------------------------------------------------------
5 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND ---------------------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.18% 2.18% 2.18% 2.18% 2.18% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.82% 5.72% 8.70% 11.77% 14.92% End of Year Balance $10,282.00 $10,571.95 $10,870.08 $11,176.62 $11,491.80 Estimated Annual Expenses $ 221.07 $ 227.31 $ 233.72 $ 240.31 $ 247.09 - ---------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.18% 2.18% 2.18% 2.18% 2.18% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.16% 21.49% 24.92% 28.44% 32.06% End of Year Balance $11,815.87 $12,149.07 $12,491.68 $12,843.94 $13,206.14 Estimated Annual Expenses $ 254.05 $ 261.22 $ 268.58 $ 276.16 $ 283.95 - ----------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. 6 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.77% of the average daily net assets after fee waivers. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Paul J. Rasplicka, (lead manager with respect to the domestic portion of the fund's portfolio), Senior Portfolio Manager, who has been responsible for the fund since 2008 and has been associated with Invesco Aim and/or its affiliates since 1994. - - Jason T. Holzer, (lead manager with respect to the fund's investments in Europe and Canada), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1996. - - Shuxin Cao, (lead manager with respect to the fund's investments in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1997. - - Borge Endresen, Portfolio Manager, who has been responsible for the fund since 2002 and has been associated with Invesco Aim and/or its affiliates since 1999. A lead manager generally has final authority over all aspects of a portion of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which a lead manager may perform these functions, and the nature of these functions, may change from time to time. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM Global Aggressive Growth Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 7 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2007 2006 2005 2004 2003 ---------- -------- ---------- ---------- -------- Net asset value, beginning of period $ 25.10 $ 20.60 $ 16.99 $ 14.28 $ 11.00 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.12 0.13(a) (0.00)(a) (0.13)(a) (0.13) - ------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 7.68 5.39 3.61 2.84 3.41 =============================================================================================================================== Total from investment operations 7.80 5.52 3.61 2.71 3.28 =============================================================================================================================== Less distributions: Dividends from net investment income (0.04) (0.07) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (3.35) (0.95) -- -- -- =============================================================================================================================== Total distributions (3.39) (1.02) -- -- -- =============================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- =============================================================================================================================== Net asset value, end of period $ 29.51 $ 25.10 $ 20.60 $ 16.99 $ 14.28 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 34.57% 27.71% 21.25% 18.98% 29.82% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $1,022,682 $809,309 $676,291 $566,573 $465,855 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.42%(c) 1.51% 1.65% 2.02% 2.10% - ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.50%(c) 1.64% 1.76% 2.03% 2.11% =============================================================================================================================== Ratio of net investment income (loss) to average net assets 0.47%(c) 0.56% (0.02)% (0.81)% (0.97)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 43% 64% 67% 68% 64% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $902,945,941. 8 -------------------------------------- AIM GLOBAL SMALL & MID CAP GROWTH FUND --------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2007 2006 2005 2004 2003 Net asset value, beginning of period $ 23.15 $ 19.18 $ 15.93 $ 13.45 $ 10.42 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07) (0.04)(a) (0.12)(a) (0.19)(a) (0.19) - ------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 7.00 5.01 3.37 2.67 3.22 =============================================================================================================================== Total from investment operations 6.93 4.97 3.25 2.48 3.03 =============================================================================================================================== Less distributions: Dividends from net investment income -- (0.05) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (3.35) (0.95) -- -- -- =============================================================================================================================== Total distributions (3.35) (1.00) -- -- -- =============================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- =============================================================================================================================== Net asset value, end of period $ 26.73 $ 23.15 $ 19.18 $ 15.93 $ 13.45 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 33.58% 26.80% 20.40% 18.44% 29.08% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $136,818 $132,391 $152,878 $257,230 $374,027 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.17%(c) 2.26% 2.31% 2.52% 2.60% - ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.25%(c) 2.39% 2.42% 2.53% 2.61% =============================================================================================================================== Ratio of net investment income (loss) to average net assets (0.28)%(c) (0.19)% (0.68)% (1.31)% (1.47)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 43% 64% 67% 68% 64% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $133,283,701.
CLASS C --------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------------- 2007 2006 2005 2004 2003 Net asset value, beginning of period $ 23.16 $ 19.19 $ 15.93 $ 13.46 $ 10.42 - ----------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07) (0.04)(a) (0.12)(a) (0.19)(a) (0.19) - ----------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 7.00 5.01 3.38 2.66 3.23 ============================================================================================================================= Total from investment operations 6.93 4.97 3.26 2.47 3.04 ============================================================================================================================= Less distributions: Dividends from net investment income -- (0.05) -- -- -- - ----------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (3.35) (0.95) -- -- -- ============================================================================================================================= Total distributions (3.35) (1.00) -- -- -- ============================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ============================================================================================================================= Net asset value, end of period $ 26.74 $ 23.16 $ 19.19 $ 15.93 $ 13.46 _____________________________________________________________________________________________________________________________ ============================================================================================================================= Total return(b) 33.56% 26.79% 20.47% 18.35% 29.17% _____________________________________________________________________________________________________________________________ ============================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $43,760 $28,619 $22,488 $21,059 $20,153 _____________________________________________________________________________________________________________________________ ============================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.17%(c) 2.26% 2.31% 2.52% 2.60% - ----------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.25%(c) 2.39% 2.42% 2.53% 2.61% ============================================================================================================================= Ratio of net investment income (loss) to average net assets (0.28)%(c) (0.19)% (0.68)% (1.31)% (1.47)% _____________________________________________________________________________________________________________________________ ============================================================================================================================= Portfolio turnover rate 43% 64% 67% 68% 64% _____________________________________________________________________________________________________________________________ =============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $34,996,696. 9 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM Global Small & Mid Cap Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com GSMG-PRO-1 AIM INTERNATIONAL CORE EQUITY FUND PROSPECTUS May 1, 2008 AIM International Core Equity Fund's investment objective is total return. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B, C, R and Investor Class shares of the fund. Please read it before investing and keep it for future reference. Investor Class shares offered by this prospectus are offered only to grandfathered investors. Please see the section of the prospectus entitled "General Information--Share Class Eligibility--Investor Class Shares." As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 2 - ------------------------------------------------------ Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 8 - ------------------------------------------------------ Sales Charges 8 Dividends and Distributions 8 FINANCIAL HIGHLIGHTS 9 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is total return. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in equity securities. The fund invests in a diversified portfolio that consists primarily of equity securities of foreign issuers that are, in the portfolio managers' view, attractively valued relative to current or projected earnings, or the current market value of assets owned by the company. The fund focuses its investments in marketable equity securities of foreign companies that are listed on a recognized foreign or U.S. securities exchange or traded in a foreign or U.S. over-the-counter market. The fund will invest in the securities of companies located in at least four countries outside of the U.S., emphasizing investment in companies in the developed countries of Western Europe and the Pacific Basin. The fund may invest up to 100% of its assets in foreign securities. At the present time, the fund's portfolio managers intend to invest no more than 20% of the fund's total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. In selecting investments for the fund, the portfolio managers seek to identify attractively valued companies with market capitalization in excess of $1 billion. Initial factors considered by the portfolio managers when evaluating potential investments include a company's return on equity, amount of shareholders' capital and the percentage of earnings paid in dividends, as well as a company's historic earnings stability and overall debt levels. In analyzing potential investments, the portfolio managers conduct research on companies meeting their criteria and may communicate directly with company management. The fund's portfolio managers consider selling a security when (1) its share price increases and its internal valuation ranking deteriorates relative to other companies, (2) if the security's fundamentals deteriorate or (3) if a security causes the portfolio's sector or regional weighting relative to its benchmark to fall outside acceptable risk parameters. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Investor Class shares from year to year. Investor Class shares are not subject to front- end or back-end sales loads.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1999................................................................... 23.43% 2000................................................................... -12.11% 2001................................................................... -16.32% 2002................................................................... -11.80% 2003................................................................... 30.21% 2004................................................................... 19.31% 2005................................................................... 10.30% 2006................................................................... 24.47% 2007................................................................... 8.93%
The Investor Class shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 21.27% (quarter ended December 31, 1999) and the lowest quarterly return was - -20.69% (quarter ended September 30, 2002). 2 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS - ------------------------------------------------------------------------------ (for the periods ended SINCE INCEPTION December 31, 2007) 1 YEAR 5 YEARS INCEPTION DATE - ------------------------------------------------------------------------------ Investor Class 10/28/98 Return Before Taxes 8.93% 18.36% 7.74% Return After Taxes on Distributions 7.39 17.74 7.04 Return After Taxes on Distributions and Sale of Fund Shares 7.63 16.22 6.55 Class A Return Before Taxes 2.93 16.93 11.07 03/28/02 Class B Return Before Taxes 3.18 17.28 11.41 03/28/02 Class C Return Before Taxes 7.12 17.52 5.21 02/14/00 Class R Return Before Taxes 8.65 -- 17.37 11/24/03 - ------------------------------------------------------------------------------ MSCI EAFE--Registered Trademark-- Index(1) 11.17 21.59 8.37(3) 10/31/98(3) Lipper International Large-Cap Core Funds Index(1,2) 12.51 20.03 9.30(3) 10/31/98(3) - ------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor Class only and after-tax returns for Class A, B, C and R will vary. (1) The Morgan Stanley Capital International Europe, Australasia and Far East Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The Lipper International Large-Cap Core Funds Index (which may or may not include the fund) is included for comparison to a peer group. (2) Lipper International Large-Cap Core Funds Index is an equally weighted representation of the largest funds in the Lipper International Large Cap Core Funds category. These funds typically have an average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value compared to the S&P/Citigroup Broad Market Index World ex-U.S. The S&P/Citigroup BMI World ex-U.S. is a subset of the developed markets portion of the S&P/Citigroup BMI Global, excluding the United States. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. (3) The average annual total return given is since the month-end closest to the inception date of the class with the longest performance history. 3 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - ----------------------------------------------------------------------------------------------- INVESTOR (paid directly from your investment) CLASS A CLASS B CLASS C CLASS R CLASS - ----------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% None(1) None Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% 2.00% 2.00% - -----------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - ----------------------------------------------------------------------------------------------- (expenses that are deducted from fund INVESTOR assets) CLASS A CLASS B CLASS C CLASS R CLASS - ----------------------------------------------------------------------------------------------- Management Fees 0.74% 0.74% 0.74% 0.74% 0.74% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 0.50 0.25 Other Expenses 0.42 0.42 0.42 0.42 0.42 Acquired Fund Fees and Expenses 0.00 0.00 0.00 0.00 0.00 Total Annual Fund Operating Expenses 1.41 2.16 2.16 1.66 1.41 - -----------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)." (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B, Class C, Class R and Investor Class shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii) earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $686 $972 $1,279 $2,148 Class B 719 976 1,359 2,303(1) Class C 319 676 1,159 2,493 Class R 169 523 902 1,965 Investor Class 144 446 771 1,691 - --------------------------------------------------------------------------------
4 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $686 $972 $1,279 $2,148 Class B 219 676 1,159 2,303(1) Class C 219 676 1,159 2,493 Class R 169 523 902 1,965 Investor Class 144 446 771 1,691 - --------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses (2.11)% 1.41% 5.05% 8.82% 12.73% End of Year Balance $ 9,789.26 $10,140.69 $10,504.74 $10,881.86 $11,272.52 Estimated Annual Expenses $ 685.64 $ 140.51 $ 145.55 $ 150.78 $ 156.19 - -------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 16.77% 20.96% 25.31% 29.81% 34.47% End of Year Balance $11,677.20 $12,096.41 $12,530.68 $12,980.53 $13,446.53 Estimated Annual Expenses $ 161.80 $ 167.60 $ 173.62 $ 179.85 $ 186.31 - --------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.59% 7.31% 11.16% 15.15% 19.29% End of Year Balance $10,359.00 $10,730.89 $11,116.13 $11,515.20 $11,928.59 Estimated Annual Expenses $ 143.53 $ 148.68 $ 154.02 $ 159.55 $ 165.28 - -------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.57% 28.00% 32.60% 37.36% 42.29% End of Year Balance $12,356.83 $12,800.44 $13,259.97 $13,736.01 $14,229.13 Estimated Annual Expenses $ 171.21 $ 177.36 $ 183.73 $ 190.32 $ 197.15 - --------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.16% 2.16% 2.16% 2.16% 2.16% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.84% 5.76% 8.76% 11.85% 15.03% End of Year Balance $10,284.00 $10,576.07 $10,876.43 $11,185.32 $11,502.98 Estimated Annual Expenses $ 219.07 $ 225.29 $ 231.69 $ 238.27 $ 245.03 - -------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.16% 2.16% 2.16% 1.41% 1.41% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.30% 21.66% 25.11% 29.60% 34.26% End of Year Balance $11,829.66 $12,165.63 $12,511.13 $12,960.28 $13,425.55 Estimated Annual Expenses $ 251.99 $ 259.15 $ 266.51 $ 179.57 $ 186.02 - --------------------------------------------------------------------------------------------
5 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ----------------------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.16% 2.16% 2.16% 2.16% 2.16% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.84% 5.76% 8.76% 11.85% 15.03% End of Year Balance $10,284.00 $10,576.07 $10,876.43 $11,185.32 $11,502.98 Estimated Annual Expenses $ 219.07 $ 225.29 $ 231.69 $ 238.27 $ 245.03 - -------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.16% 2.16% 2.16% 2.16% 2.16% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.30% 21.66% 25.11% 28.66% 32.32% End of Year Balance $11,829.66 $12,165.63 $12,511.13 $12,866.45 $13,231.85 Estimated Annual Expenses $ 251.99 $ 259.15 $ 266.51 $ 274.08 $ 281.86 - --------------------------------------------------------------------------------------------
CLASS R YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.66% 1.66% 1.66% 1.66% 1.66% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.34% 6.79% 10.36% 14.04% 17.85% End of Year Balance $10,334.00 $10,679.16 $11,035.84 $11,404.44 $11,785.34 Estimated Annual Expenses $ 168.77 $ 174.41 $ 180.23 $ 186.25 $ 192.48 - -------------------------------------------------------------------------------------------- CLASS R YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.66% 1.66% 1.66% 1.66% 1.66% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 21.79% 25.86% 30.06% 34.41% 38.89% End of Year Balance $12,178.98 $12,585.75 $13,006.12 $13,440.52 $13,889.43 Estimated Annual Expenses $ 198.90 $ 205.55 $ 212.41 $ 219.51 $ 226.84 - --------------------------------------------------------------------------------------------
INVESTOR CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.59% 7.31% 11.16% 15.15% 19.29% End of Year Balance $10,359.00 $10,730.89 $11,116.13 $11,515.20 $11,928.59 Estimated Annual Expenses $ 143.53 $ 148.68 $ 154.02 $ 159.55 $ 165.28 - -------------------------------------------------------------------------------------------- INVESTOR CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.41% 1.41% 1.41% 1.41% 1.41% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.57% 28.00% 32.60% 37.36% 42.29% End of Year Balance $12,356.83 $12,800.44 $13,259.97 $13,736.01 $14,229.13 Estimated Annual Expenses $ 171.21 $ 177.36 $ 183.73 $ 190.32 $ 197.15 - --------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. 6 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors Inc. (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.74% of average daily net assets. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The fund is managed by Invesco Global's investment team, which is comprised of portfolio managers, some of whom also have research responsibilities, who collectively make decisions about investments in the fund under the direction of the Chief Investment Officer. The five most senior members of the team with the most significant responsibility within the investment team are: - - Erik B. Granade, Portfolio Manager, Chief Investment Officer, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1996. - - Ingrid E. Baker, Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Global and/or its affiliates since 1999. - - W. Lindsay Davidson, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1984. - - Michele T. Garren, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1997. - - Kent A. Starke, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1992. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. 7 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM International Core Equity Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. Certain purchases of Class R shares may be subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 8 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A --------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------- 2007 2006 2005 2004 2003 ------- -------- ------- ------- ------ Net asset value, beginning of period $ 14.44 $ 11.90 $ 10.52 $ 8.74 $ 7.31 - ----------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.22 0.25 0.14 0.09 0.07 - ----------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 2.75 2.77 1.32 1.72 1.39 ======================================================================================================================= Total from investment operations 2.97 3.02 1.46 1.81 1.46 ======================================================================================================================= Less distributions: Dividends from net investment income (0.22) (0.10) (0.08) (0.03) (0.03) - ----------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.42) (0.38) -- -- -- ======================================================================================================================= Total distributions (0.64) (0.48) (0.08) (0.03) (0.03) ======================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00 ======================================================================================================================= Net asset value, end of period $ 16.77 $ 14.44 $ 11.90 $ 10.52 $ 8.74 _______________________________________________________________________________________________________________________ ======================================================================================================================= Total return(b) 21.26% 26.12% 13.89% 20.78% 19.96% _______________________________________________________________________________________________________________________ ======================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $96,961 $118,943 $90,022 $60,603 $2,033 ======================================================================================================================= Ratio of expenses to average net assets 1.41%(c) 1.52% 1.56% 1.84%(d) 1.87% ======================================================================================================================= Ratio of net investment income to average net assets 1.46%(c) 1.88% 1.20% 0.94% 0.91% _______________________________________________________________________________________________________________________ ======================================================================================================================= Portfolio turnover rate 27% 21% 21% 69% 51% _______________________________________________________________________________________________________________________ =======================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $104,266,532. (d) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.86% for the year ended October 31, 2004. 9 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B -------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- ------- ------- ------ Net asset value, beginning of period $ 14.30 $ 11.79 $ 10.43 $ 8.72 $ 7.31 - ---------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.11 0.14 0.06 0.02 0.00 - ---------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 2.71 2.76 1.31 1.71 1.43 ====================================================================================================================== Total from investment operations 2.82 2.90 1.37 1.73 1.43 ====================================================================================================================== Less distributions: Dividends from net investment income (0.12) (0.01) (0.01) (0.02) (0.02) - ---------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.42) (0.38) -- -- -- ====================================================================================================================== Total distributions (0.54) (0.39) (0.01) (0.02) (0.02) ====================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00 ====================================================================================================================== Net asset value, end of period $ 16.58 $ 14.30 $ 11.79 $ 10.43 $ 8.72 ______________________________________________________________________________________________________________________ ====================================================================================================================== Total return(b) 20.25% 25.28% 13.11% 19.92% 19.50% ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $32,592 $31,818 $28,785 $23,812 $ 573 ====================================================================================================================== Ratio of expenses to average net assets: 2.16%(c) 2.27% 2.25% 2.53%(d) 2.75%(d) ====================================================================================================================== Ratio of net investment income to average net assets 0.71%(c) 1.13% 0.51% 0.25% 0.03% ______________________________________________________________________________________________________________________ ====================================================================================================================== Portfolio turnover rate 27% 21% 21% 69% 51% ______________________________________________________________________________________________________________________ ======================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $32,029,932. (d) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.57% and 4.13% for the years ended October 31, 2004 and October 31, 2003, respectively.
CLASS C -------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- ------- ------- ------ Net asset value, beginning of period $ 13.98 $ 11.54 $ 10.22 $ 8.53 $ 7.16 - ---------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.11 0.14 0.06 0.04 0.00 - ---------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 2.66 2.69 1.28 1.67 1.37 ====================================================================================================================== Total from investment operations 2.77 2.83 1.34 1.71 1.37 ====================================================================================================================== Less distributions: Dividends from net investment income (0.12) (0.01) (0.02) (0.02) -- - ---------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.42) (0.38) -- -- -- ====================================================================================================================== Total distributions (0.54) (0.39) (0.02) (0.02) -- ====================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00 ====================================================================================================================== Net asset value, end of period $ 16.21 $ 13.98 $ 11.54 $ 10.22 $ 8.53 ______________________________________________________________________________________________________________________ ====================================================================================================================== Total return(b) 20.36% 25.22% 13.11% 20.13% 19.13% ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $50,234 $42,906 $38,108 $36,490 $2,608 ______________________________________________________________________________________________________________________ ====================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.16%(c) 2.27% 2.25% 2.41% 2.75% - ---------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.16%(c) 2.27% 2.25% 2.46% 4.14% ====================================================================================================================== Ratio of net investment income to average net assets 0.71%(c) 1.13% 0.51% 0.37% 0.03% ______________________________________________________________________________________________________________________ ====================================================================================================================== Portfolio turnover rate 27% 21% 21% 69% 51% ______________________________________________________________________________________________________________________ ======================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $45,816,282 10 ---------------------------------- AIM INTERNATIONAL CORE EQUITY FUND ---------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS R -------------------------------------------------- NOVEMBER 24, 2003 (COMMENCEMENT YEAR ENDED OCTOBER 31, DATE) TO ----------------------------- OCTOBER 31, 2007 2006 2005 2004 ------ ------ ------ ----------------- Net asset value, beginning of period $14.40 $11.87 $10.51 $ 8.90 - ---------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.18 0.21 0.12 0.08 - ---------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 2.74 2.77 1.31 1.56 ================================================================================================================ Total from investment operations 2.92 2.98 1.43 1.64 ================================================================================================================ Less distributions: Dividends from net investment income (0.18) (0.07) (0.07) (0.03) - ---------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.42) (0.38) -- -- ================================================================================================================ Total distributions (0.60) (0.45) (0.07) (0.03) ================================================================================================================ Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ================================================================================================================ Net asset value, end of period $16.72 $14.40 $11.87 $ 10.51 ________________________________________________________________________________________________________________ ================================================================================================================ Total return(b) 20.97% 25.86% 13.64% 18.49% ________________________________________________________________________________________________________________ ================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $4,286 $3,560 $2,622 $ 2,118 ================================================================================================================ Ratio of expenses to average net assets 1.66%(c) 1.77% 1.75% 1.91%(d)(e) ================================================================================================================ Ratio of net investment income to average net assets 1.21%(c) 1.63% 1.01% 0.87%(d) ________________________________________________________________________________________________________________ ================================================================================================================ Portfolio turnover rate(f) 27% 21% 21% 69% ________________________________________________________________________________________________________________ ================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $3,859,343. (d) Annualized. (e) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.93% (annualized) for the period ended October 31, 2004. (f) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year.
INVESTOR CLASS --------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- ------- ------- ------- Net asset value, beginning of period $ 14.61 $ 12.04 $ 10.64 $ 8.83 $ 7.35 - ----------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.23 0.25 0.15 0.09 0.06 - ----------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 2.78 2.80 1.33 1.75 1.44 ======================================================================================================================= Total from investment operations 3.01 3.05 1.48 1.84 1.50 ======================================================================================================================= Less distributions: Dividends from net investment income (0.22) (0.10) (0.08) (0.03) (0.02) - ----------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.42) (0.38) -- -- -- ======================================================================================================================= Total distributions (0.64) (0.48) (0.08) (0.03) (0.02) ======================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00 ======================================================================================================================= Net asset value, end of period $ 16.98 $ 14.61 $ 12.04 $ 10.64 $ 8.83 _______________________________________________________________________________________________________________________ ======================================================================================================================= Total return(b) 21.29% 26.11% 13.92% 20.84% 20.42% _______________________________________________________________________________________________________________________ ======================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $44,428 $44,674 $46,988 $44,345 $46,920 ======================================================================================================================= Ratio of expenses to average net assets 1.41%(c) 1.52% 1.50% 1.84%(d) 2.00%(d) ======================================================================================================================= Ratio of net investment income to average net assets 1.46%(c) 1.88% 1.26% 0.94% 0.78% _______________________________________________________________________________________________________________________ ======================================================================================================================= Portfolio turnover rate 27% 21% 21% 69% 51% _______________________________________________________________________________________________________________________ =======================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. (c) Ratio are based on average daily net assets of $44,391,679 (d) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.89% and 2.26% for the years ended October 31, 2004 and October 31, 2003, respectively. 11 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM International Core Equity Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com I-ICE-PRO-1 AIM INTERNATIONAL GROWTH FUND PROSPECTUS MAY 1, 2008 AIM International Growth Fund's investment objective is long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Class A, B, C and R shares of the fund. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the fund: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND STRATEGIES 1 - ------------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - ------------------------------------------------------ PERFORMANCE INFORMATION 2 - ------------------------------------------------------ Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - ------------------------------------------------------ Fee Table 4 Expense Example 4 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 5 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 6 - ------------------------------------------------------ FUND MANAGEMENT 6 - ------------------------------------------------------ The Advisors 6 Advisor Compensation 7 Portfolio Managers 7 OTHER INFORMATION 8 - ------------------------------------------------------ Sales Charges 8 Dividends and Distributions 8 FINANCIAL HIGHLIGHTS 9 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investment Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- INVESTMENT OBJECTIVE AND STRATEGIES - -------------------------------------------------------------------------------- The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing in a diversified portfolio of international equity securities whose issuers are considered by the fund's portfolio managers to have strong earnings growth. The fund focuses its investments in marketable equity securities of foreign companies that are listed on a recognized foreign or U.S. securities exchange or traded in a foreign or U.S. over-the-counter market. The fund will normally invest in the securities of companies located in at least four countries outside of the U.S., emphasizing investment in companies in the developed countries of Western Europe and the Pacific Basin. At the present time, the fund's portfolio managers intend to invest no more than 20% of the fund's total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's advisor. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective. PRINCIPAL RISKS OF INVESTING IN THE FUND - -------------------------------------------------------------------------------- There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance (before and after taxes) is not necessarily an indication of its future performance. ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------------- The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998................................................................... 13.42% 1999................................................................... 55.08% 2000................................................................... -25.69% 2001................................................................... -22.36% 2002................................................................... -14.23% 2003................................................................... 27.80% 2004................................................................... 23.42% 2005................................................................... 17.52% 2006................................................................... 27.89% 2007................................................................... 14.58%
The Class A shares' year-to-date return as of March 31, 2008 was %. During the periods shown in the bar chart, the highest quarterly return was 43.09% (quarter ended December 31, 1999) and the lowest quarterly return was - -19.18% (quarter ended September 30, 2002). 2 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares the fund's performance to that of a broad-based securities market index, a style specific index and a peer group index. The fund's performance reflects payment of sales loads, if applicable. The indices may not reflect payment of fees, expenses or taxes. The fund is not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the fund may deviate significantly from the performance of the indices shown below.
AVERAGE ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------- (for the periods ended INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS DATE - -------------------------------------------------------------------------- Class A 04/07/92 Return Before Taxes 8.28% 20.76% 8.37% Return After Taxes on Distributions 7.31 20.47 7.96 Return After Taxes on Distributions and Sale of Fund Shares 6.65 18.44 7.27 Class B 09/15/94 Return Before Taxes 8.70 21.05 8.35 Class C 08/04/97 Return Before Taxes 12.69 21.24 8.20 Class R(1) 04/07/92(1) Return Before Taxes 14.28 21.74 8.71 - -------------------------------------------------------------------------- MSCI EAFE--Registered Trademark-- Index(2) 11.17 21.59 8.66 MSCI EAFE--Registered Trademark-- Growth Index(2,3) 16.45 19.85 6.46 Lipper International Multi-Cap Growth Funds Index(2,4) 17.09 23.16 9.56 - --------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A only and after-tax returns for Class B, C and R will vary. (1) The returns shown for the one year and five year periods are the historical performance of the fund's Class R shares. The return shown for the ten year period is the blended return of the historical performance of the fund's Class R shares since their inception and the restated historical performance of the fund's Class A shares (for periods prior to inception of the Class R shares) at net asset value, adjusted to reflect the higher Rule 12b-1 fees applicable to Class R shares. The inception date shown in the table is that of the fund's Class A shares. The inception date of the fund's Class R shares is June 3, 2002. (2) The Morgan Stanley Capital International Europe, Australasia and Far East Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding U.S. & Canada. The fund has also included the MSCI EAFE--Registered Trademark-- Growth Index, which the fund believes more closely reflects the performance of the types of securities in which the fund invests. In addition, the Lipper International Multi-Cap Growth Funds Index (which may or may not include the fund) is included for comparison to a peer group. (3) The MSCI EAFE--Registered Trademark-- Growth Index is an unmanaged index considered representative of growth stocks of Europe, Australasia and the Far East. (4) The Lipper International Multi-Cap Growth Funds Index is an equally weighted representation of the largest funds in the Lipper International Multi-Cap Growth Funds category. These funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value compared to the S&P/Citigroup Broad Market Index World ex-U.S. is a subset of the developed markets portion of the S&P/Citigroup BMI Global, excluding the United States. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. 3 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES - --------------------------------------------------------------------------------------------------------------- (fees paid directly from your investment) CLASS A CLASS B CLASS C CLASS R - --------------------------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% None(1) Redemption/Exchange Fee(2) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% 2.00% - ---------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) - --------------------------------------------------------------------------------------------------------------- (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C CLASS R - --------------------------------------------------------------------------------------------------------------- Management Fees(4) 0.87% 0.87% 0.87% 0.87% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 0.50 Other Expenses 0.32 0.32 0.32 0.32 Acquired Fund Fees 0.01 0.01 0.01 0.01 Total Annual Fund Operating Expenses 1.45 2.20 2.20 1.70 - ---------------------------------------------------------------------------------------------------------------
(1) A contingent deferred sales charge may apply in some cases. See "General Information--Contingent Deferred Sales Charges (CDSCs)" (2) You may be charged a 2.00% fee on redemptions or exchanges of Class A, Class B, Class C and Class R shares held 30 days or less. See "General Information--Redemption Fees" for more information. (3) There is no guarantee that actual expenses will be the same as those shown in the table. (4) Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the fund. Pursuant to the new fee schedule, the fund's maximum annual advisory fee rates range from 0.935% (for average net assets up to $250 million) to 0.76% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedule. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge. EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii)earn a 5% return on your investment before operating expenses each year; (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and (v) incur applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $689 $983 $1,299 $2,190 Class B 723 988 1,380 2,344(1) Class C 323 688 1,180 2,534 Class R 173 536 923 2,009 - --------------------------------------------------------------------------------
4 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Class A $689 $983 $1,299 $2,190 Class B 223 688 1,180 2,344(1) Class C 223 688 1,180 2,534 Class R 173 536 923 2,009 - --------------------------------------------------------------------------------
(1) Assumes conversion of Class B shares to Class A shares, which occurs on or about the end of the month which is at least 8 years after the date on which shares were purchased, lowering your annual fund operating expenses from that time on. HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; - Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and - There is no sales charge on reinvested dividends. There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.45% 1.45% 1.45% 1.45% 1.45% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses (2.15)% 1.33% 4.93% 8.65% 12.51% End of Year Balance $ 9,785.48 $10,132.86 $10,492.58 $10,865.06 $11,250.77 Estimated Annual Expenses $ 689.46 $ 144.41 $ 149.53 $ 154.84 $ 160.34 - ---------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.45% 1.45% 1.45% 1.45% 1.45% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 16.50% 20.64% 24.92% 29.35% 33.95% End of Year Balance $11,650.17 $12,063.76 $12,492.02 $12,935.49 $13,394.70 Estimated Annual Expenses $ 166.03 $ 171.93 $ 178.03 $ 184.35 $ 190.89 - ----------------------------------------------------------------------------------------------
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.45% 1.45% 1.45% 1.45% 1.45% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.55% 7.23% 11.03% 14.97% 19.06% End of Year Balance $10,355.00 $10,722.60 $11,103.25 $11,497.42 $11,905.58 Estimated Annual Expenses $ 147.57 $ 152.81 $ 158.24 $ 163.85 $ 169.67 - ---------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.45% 1.45% 1.45% 1.45% 1.45% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 23.28% 27.66% 32.19% 36.88% 41.74% End of Year Balance $12,328.23 $12,765.88 $13,219.07 $13,688.34 $14,174.28 Estimated Annual Expenses $ 175.70 $ 181.93 $ 188.39 $ 195.08 $ 202.00 - ----------------------------------------------------------------------------------------------
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.20% 2.20% 2.20% 2.20% 2.20% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.80% 5.68% 8.64% 11.68% 14.81% End of Year Balance $10,280.00 $10,567.84 $10,863.74 $11,167.92 $11,480.63 Estimated Annual Expenses $ 223.08 $ 229.33 $ 235.75 $ 242.35 $ 249.13 - ---------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.20% 2.20% 2.20% 1.45% 1.45% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.02% 21.33% 24.72% 29.15% 33.74% End of Year Balance $11,802.08 $12,132.54 $12,472.25 $12,915.02 $13,373.50 Estimated Annual Expenses $ 256.11 $ 263.28 $ 270.65 $ 184.06 $ 190.59 - ----------------------------------------------------------------------------------------------
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.20% 2.20% 2.20% 2.20% 2.20% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 2.80% 5.68% 8.64% 11.68% 14.81% End of Year Balance $10,280.00 $10,567.84 $10,863.74 $11,167.92 $11,480.63 Estimated Annual Expenses $ 223.08 $ 229.33 $ 235.75 $ 242.35 $ 249.13 - ---------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 2.20% 2.20% 2.20% 2.20% 2.20% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 18.02% 21.33% 24.72% 28.21% 31.80% End of Year Balance $11,802.08 $12,132.54 $12,472.25 $12,821.48 $13,180.48 Estimated Annual Expenses $ 256.11 $ 263.28 $ 270.65 $ 278.23 $ 286.02 - ----------------------------------------------------------------------------------------------
5 ----------------------------- AIM INTERNATIONAL GROWTH FUND -----------------------------
CLASS R YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.70% 1.70% 1.70% 1.70% 1.70% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.30% 6.71% 10.23% 13.87% 17.63% End of Year Balance $10,330.00 $10,670.89 $11,023.03 $11,386.79 $11,762.55 Estimated Annual Expenses $ 172.81 $ 178.51 $ 184.40 $ 190.48 $ 196.77 - ---------------------------------------------------------------------------------------------- CLASS R YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.70% 1.70% 1.70% 1.70% 1.70% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 21.51% 25.52% 29.66% 33.94% 38.36% End of Year Balance $12,150.72 $12,551.69 $12,965.90 $13,393.77 $13,835.77 Estimated Annual Expenses $ 203.26 $ 209.97 $ 216.90 $ 224.06 $ 231.45 - ----------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. (2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C has not been deducted. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange for the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the fund and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the fund: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain of the AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. (Invesco Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among 6 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against the AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the fund's Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.86% of average daily net assets after fee waivers. Invesco Aim, not the fund, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements of the fund is available in the fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Clas G. Olsson (lead manager with respect to the fund's investments in Europe and Canada), Senior Portfolio Manager, who has been responsible for the fund since 1997 and has been associated with Invesco Aim and/or its affiliates since 1994. - - Barrett K. Sides (lead manager with respect to the fund's investments in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1995 and has been associated with Invesco Aim and/or its affiliates since 1990. - - Shuxin Cao, Senior Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 1997. - - Matthew W. Dennis, Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Jason T. Holzer, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1996. A lead manager generally has final authority over all aspects of a portion of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which a lead manager may perform these functions, and the nature of these functions, may change from time to time. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage. 7 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- OTHER INFORMATION - -------------------------------------------------------------------------------- SALES CHARGES Purchases of Class A shares of AIM International Growth Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to a contingent deferred sales charge. Purchases of Class B and Class C shares are subject to a contingent deferred sales charge. Certain purchases of Class R shares may be subject to a contingent deferred sales charge. For more information on contingent deferred sales charges, see "General Information--Contingent Deferred Sales Charges (CDSCs)" section in this prospectus. DIVIDENDS AND DISTRIBUTIONS The fund expects that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The fund generally declares and pays dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The fund generally distributes long-term and short-term capital gains, if any, annually. 8 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A --------------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------------------- 2007 2006 2005 2004 2003 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period $ 27.85 $ 21.63 $ 18.16 $ 15.23 $ 12.69 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.28 0.14 0.11 0.05 0.01 - --------------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 8.72 6.26 3.36 2.90 2.53 ================================================================================================================================= Total from investment operations 9.00 6.40 3.47 2.95 2.54 ================================================================================================================================= Less distributions: Dividends from net investment income (0.19) (0.18) -- (0.02) -- - --------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.09) -- -- -- -- ================================================================================================================================= Total distributions (0.28) (0.18) -- (0.02) -- ================================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================================= Net asset value, end of period $ 36.57 $ 27.85 $ 21.63 $ 18.16 $ 15.23 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 32.55% 29.73% 19.11% 19.40% 20.02% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $2,899,666 $1,908,453 $1,447,049 $1,288,548 $1,117,420 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.44%(c) 1.54% 1.69% 1.70% 1.74% - --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.47%(c) 1.58% 1.74% 1.74% 1.82% ================================================================================================================================= Ratio of net investment income to average net assets 0.87%(c) 0.53% 0.54% 0.27% 0.09% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 22% 37% 37% 54% 77% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $2,315,111,849. 9 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS B ----------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------- 2007 2006 2005 2004 2003 -------- -------- -------- -------- -------- Net asset value, beginning of period $ 25.84 $ 20.08 $ 16.99 $ 14.32 $ 12.02 - ------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.03 (0.05) (0.03) (0.07) (0.08) - ------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 8.10 5.83 3.12 2.74 2.38 ========================================================================================================================= Total from investment operations 8.13 5.78 3.09 2.67 2.30 ========================================================================================================================= Less distributions: Dividends from net investment income -- (0.02) -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.09) -- -- -- -- ========================================================================================================================= Total distributions (0.09) (0.02) -- -- -- ========================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ========================================================================================================================= Net asset value, end of period $ 33.88 $ 25.84 $ 20.08 $ 16.99 $ 14.32 _________________________________________________________________________________________________________________________ ========================================================================================================================= Total return(b) 31.55% 28.80% 18.19% 18.64% 19.14% _________________________________________________________________________________________________________________________ ========================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $252,203 $247,939 $250,056 $301,380 $360,671 _________________________________________________________________________________________________________________________ ========================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.19%(c) 2.29% 2.41% 2.40% 2.44% - ------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.46% 2.44% 2.52% ========================================================================================================================= Ratio of net investment income (loss) to average net assets 0.12%(c) (0.22)% (0.18)% (0.43)% (0.61)% _________________________________________________________________________________________________________________________ ========================================================================================================================= Portfolio turnover rate 22% 37% 37% 54% 77% _________________________________________________________________________________________________________________________ =========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $249,921,455.
CLASS C ----------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------- 2007 2006 2005 2004 2003 -------- -------- -------- -------- -------- Net asset value, beginning of period $ 25.86 $ 20.10 $ 17.00 $ 14.33 $ 12.03 - ------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.03 (0.05) (0.03) (0.07) (0.08) - ------------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 8.11 5.83 3.13 2.74 2.38 ========================================================================================================================= Total from investment operations 8.14 5.78 3.10 2.67 2.30 ========================================================================================================================= Less distributions: Dividends from net investment income -- (0.02) -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.09) -- -- -- -- ========================================================================================================================= Total distributions (0.09) (0.02) -- -- -- ========================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ========================================================================================================================= Net asset value, end of period $ 33.91 $ 25.86 $ 20.10 $ 17.00 $ 14.33 _________________________________________________________________________________________________________________________ ========================================================================================================================= Total return(b) 31.57% 28.78% 18.24% 18.63% 19.12% _________________________________________________________________________________________________________________________ ========================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $274,266 $183,360 $132,387 $116,136 $113,965 _________________________________________________________________________________________________________________________ ========================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 2.19%(c) 2.29% 2.41% 2.40% 2.44% - ------------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.46% 2.44% 2.52% ========================================================================================================================= Ratio of net investment income (loss) to average net assets 0.12%(c) (0.22)% (0.18)% (0.43)% (0.61)% _________________________________________________________________________________________________________________________ ========================================================================================================================= Portfolio turnover rate 22% 37% 37% 54% 77% _________________________________________________________________________________________________________________________ =========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges. (c) Ratios are based on average daily net assets of $222,480,198. 10 ----------------------------- AIM INTERNATIONAL GROWTH FUND ----------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
CLASS R --------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------- 2007 2006 2005 2004 2003 ------- ------- ------ ------ ------ Net asset value, beginning of period $ 27.58 $ 21.43 $18.04 $15.14 $12.69 - ----------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss)(a) 0.20 0.07 0.07 0.01 (0.01) - ----------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 8.63 6.21 3.32 2.89 2.46 ================================================================================================================= Total from investment operations 8.83 6.28 3.39 2.90 2.45 ================================================================================================================= Less distributions: Dividends from net investment income (0.14) (0.13) -- -- -- - ----------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.09) -- -- -- -- ================================================================================================================= Total distributions (0.23) (0.13) -- -- -- ================================================================================================================= Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ================================================================================================================= Net asset value, end of period $ 36.18 $ 27.58 $21.43 $18.04 $15.14 _________________________________________________________________________________________________________________ ================================================================================================================= Total return(b) 32.21% 29.41% 18.79% 19.15% 19.31% _________________________________________________________________________________________________________________ ================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $48,321 $19,070 $8,700 $2,450 $ 867 _________________________________________________________________________________________________________________ ================================================================================================================= Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.69%(c) 1.79% 1.91% 1.90% 1.94% - ----------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.72%(c) 1.83% 1.96% 1.94% 2.02% ================================================================================================================= Ratio of net investment income (loss) to average net assets 0.62%(c) 0.28% 0.32% 0.07% (0.11)% _________________________________________________________________________________________________________________ ================================================================================================================= Portfolio turnover rate 22% 37% 37% 54% 77% _________________________________________________________________________________________________________________ =================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. (c) Ratios are based on average daily net assets of $31,466,888. 11 THE AIM FUNDS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds that are offered to retail investors. The following information is about all the AIM funds that offer retail share classes. CHOOSING A SHARE CLASS Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments. Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS - ----------------------- -------------------- --------------------- -------------------- -------------------- --------------------- - - Initial sales - No initial - No initial - No initial - No initial - No initial charge which may sales charge sales charge sales charge sales charge sales charge be waived or reduced - - Contingent - No contingent - Contingent - Contingent - Contingent - No contingent deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales charge on certain charge charge on charge on charge on charge redemptions redemptions redemptions certain within six years within one redemptions year(3) - - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of - 12b-1 fee of 0.25%(1) 0.25% 1.00% 1.00%(4) 0.50% 0.25%(1) - Does not - Converts to - Does not - Does not - Does not convert to Class A shares convert to convert to convert to Class A shares on or about the Class A shares Class A shares Class A shares end of the month which is at least eight years after the date on which shares were purchased along with a pro rata portion of reinvested dividends and distributions(2) - - Generally more - Available - Purchase orders - Generally more - Generally, - Generally closed appropriate for only through a limited to appropriate for available only to new investors long-term limited number amount less short-term to employee investors of funds than $100,000 investors benefit plans - Purchase orders limited to amounts less than $1,000,000
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1 fee. (2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares. (3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from another AIM Fund that is still subject to a CDSC. (4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%. SHARE CLASS ELIGIBILITY CLASS A, A3, B, C AND AIM CASH RESERVE SHARES Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts, corporations and other business and charitable organizations and employee benefit plans. The share classes offer different fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of shares and continued maintenance of the customer relationship. You should consider the services provided by your financial advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class. Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases. CLASS P SHARES In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically sold only through the AIM Summit Investors Plans I and II (each a Plan and, collectively, the Summit Plans). Class P shares are sold with no initial sales charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006 may purchase Class P shares and only until the total of their combined investments in the Summit Plans and in Class P shares directly equals the face amount of their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount would have been $36,000.00 under the 30 year extended investment option. MCF--5/08 A-1 THE AIM FUNDS CLASS R SHARES Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401 generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs. INVESTOR CLASS SHARES Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum 12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may purchase Investor Class shares: - - Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered investors." - - Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These intermediaries are referred to as "grandfathered intermediaries." - - Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is considered a grandfathered investor or the account is opened through a grandfathered intermediary. - - Any trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any employee benefit plan maintained by any of them (this includes any immediate family members of such persons). DISTRIBUTION AND SERVICE (12B-1) FEES Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to pay distribution fees to Invesco Aim Distributors, Inc. (Invesco Aim Distributors) to compensate or reimburse, as applicable, Invesco Aim Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of their assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The following funds and share classes do not have 12b-1 plans: - - AIM Tax-Free Intermediate Fund, Class A shares. - - AIM Money Market Fund, Investor Class shares. - - AIM Tax-Exempt Cash Fund, Investor Class shares. - - Premier Portfolio, Investor Class shares. - - Premier U.S. Government Money Portfolio, Investor Class shares. - - Premier Tax-Exempt Portfolio, Investor Class shares. INITIAL SALES CHARGES (CLASS A SHARES ONLY) The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge. CATEGORY I INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 25,000 5.50% 5.82% $ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
CATEGORY II INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 50,000 4.75% 4.99% $ 50,000 but less than $ 100,000 4.00 4.17 $100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56 $500,000 but less than $1,000,000 2.00 2.04
A-2 THE AIM FUNDS CATEGORY III INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 1.00% 1.01% $100,000 but less than $ 250,000 0.75 0.76 $250,000 but less than $1,000,000 0.50 0.50
CATEGORY IV INITIAL SALES CHARGES
INVESTOR'S SALES CHARGE ----------------------- AS A % OF AMOUNT INVESTED OFFERING AS A % OF IN A SINGLE TRANSACTION PRICE INVESTMENT - --------------------------------- --------- ---------- Less than $ 100,000 2.50% 2.56% $100,000 but less than $ 250,000 2.00 2.04 $250,000 but less than $ 500,000 1.50 1.52 $500,000 but less than $1,000,000 1.25 1.27
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of the funds without an initial sales charge because their transactions involve little or no expense. The investors who are entitled to purchase Class A shares without paying an initial sales charge include the following: - - Any current or retired trustee, director, officer or employee of any fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate family members of such persons). - - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the funds (this includes any immediate family members of such persons). - - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship). - - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account. - - Employee benefit plans; provided, however, that they meet at least one of the following requirements: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. - - Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons). - - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code. - - Insurance company separate accounts. No investor will pay an initial sales charge in the following circumstances: - - When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund. - - When reinvesting dividends and distributions. - - When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund. - - As a result of a fund's merger, consolidation, or acquisition of the assets of another fund. Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of Additional Information for details. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights of Accumulation or Letters of Intent. A-3 THE AIM FUNDS RIGHTS OF ACCUMULATION You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R) and investments in the AIM College Savings Plan(R) for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the public offering price of all other shares you own. The transfer agent may automatically link certain accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be responsible for identifying all accounts that may be eligible to be linked. LETTERS OF INTENT Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial sales charge that would normally be applicable to the amount actually invested. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or - - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject to a CDSC of 1%. If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject to an 18-month, 1% CDSC. If Invesco Aim Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
CDSC APPLICABLE UPON REDEMPTION OF SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE SHARES - ------------------------------ ----------------------------------------------- ----------------------------------------- - - Class A shares of any - Class A shares of any Category I, - 1% if shares are redeemed within Category I, II or IV fund II or IV fund 18 months of initial purchase of any Category I, II or IV Fund - AIM Cash Reserve Shares of AIM Money Market Fund - Class A Shares of AIM Tax-Exempt Cash Fund - Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions outlined below:
YEAR SINCE PURCHASE MADE: CLASS B CLASS C - ------------------------- ------- ------- First 5% 1% Second 4 None Third 3 None Fourth 3 None Fifth 2 None Sixth 1 None Seventh and following None None
A-4 THE AIM FUNDS CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC. CDSCS ON CLASS R SHARES Class R shares are not normally subject to a CDSC. However, if Invesco Aim Distributors pays a concession to the dealer of record in connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase. COMPUTING A CDSC The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares in the order of their purchase. CDSC EXCEPTIONS Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances: - - If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject to a CDSC in any twelve-month period. - - If you redeem shares to pay account fees. - - If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem those shares. There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information regarding CDSC exceptions is available on the Internet at www.invescoaim.com, then click on the link for My Account, then Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon request free of charge. Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs. The following share classes are sold with no CDSC: - - Class A shares of any Category III Fund. - - Class A shares of AIM Tax-Exempt Cash Fund. - - Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund. - - AIM Cash Reserve Shares of AIM Money Market Fund. - - Investor Class shares of any fund. - - Class P shares of AIM Summit Fund. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM Asia Pacific Growth Fund AIM China Fund AIM Developing Markets Fund AIM European Growth Fund AIM European Small Company Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their purchase. A-5 THE AIM FUNDS Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired through systematic purchase plans. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan to the trustee or custodian of another employee benefit plan. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares also may be subject to a CDSC in addition to the redemption fee. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. MINIMUM INVESTMENTS There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C, and Investor Class shares for fund accounts are as follows:
ADDITIONAL INITIAL INVESTMENT INVESTMENTS TYPE OF ACCOUNT PER FUND PER FUND - -------------------------------------------------------- ------------------ ----------- Wrap-fee accounts managed by your financial advisor None None Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None Any type of account if the investor is purchasing shares through a systematic purchase plan $ 50 $50 IRAs, Roth IRAs and Coverdell ESAs 250 25 All other accounts 1,000 50 Invesco Aim Distributors has the discretion to accept orders for lesser amounts.
A-6 THE AIM FUNDS HOW TO PURCHASE SHARES
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor. Contact your financial advisor. Advisor By Mail Mail completed account application and check to Mail your check and the remittance slip from your the transfer agent, Invesco Aim Investment confirmation statement to the transfer agent. Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. By Wire Mail completed account application to the Call the transfer agent to receive a reference transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided 959-4246 to receive a reference number. Then, use below. the wire instructions provided below. Wire Instructions Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366807 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone Open your account using one of the methods Select the AIM Bank ConnectionSM option on your described above. completed account application or complete a Special Account Options Form. Mail the application or form to the transfer agent. Once the transfer agent has received the form, call the transfer agent at the number below to place your purchase order. Automated Investor Line Open your account using one of the methods Call the Invesco Aim 24-hour Automated Investor described above. Line at 1-800-246-5463. You may place your order after you have provided the bank instructions that will be requested. By Internet Open your account using one of the methods Access your account at www.invescoaim.com. The described above. proper bank instructions must have been provided on your account. You may not purchase shares in retirement accounts on the internet.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. SYSTEMATIC PURCHASE PLAN You can arrange for periodic investments in any of the funds by authorizing the transfer agent to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50 per fund. You may stop the Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal. Certain financial advisors and other intermediaries may also offer systematic purchase plans. DOLLAR COST AVERAGING Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or multiple other funds. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the day of the month you specify, in the amount you specify. Dollar Cost Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is $50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in one of these programs and it is the same or similar to Invesco Aim's Dollar Cost Averaging program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact the transfer agent to change your distribution option, and your request to do so must be received by the transfer agent before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks. You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another fund: - - Your account balance in the fund paying the dividend or distribution must be at least $5,000; and - - Your account balance in the fund receiving the dividend or distribution must be at least $500. A-7 THE AIM FUNDS PORTFOLIO REBALANCING PROGRAM If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your fund holdings should be rebalanced, on a percentage basis, between two and ten of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not occur if your portfolio is within 2% of your stated allocation. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice to participating investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you participate in one of these programs and it is the same as or similar to Invesco Aim's program, exchanges made under the program generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below. RETIREMENT PLANS SPONSORED BY INVESCO AIM DISTRIBUTORS Invesco Aim Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms, conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details. REDEEMING SHARES For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call during the hours of the customary trading session of the New York Stock Exchange (NYSE) in order to effect the redemption at that day's net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value determination in order to effect the redemption that day. HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including your Advisor or Other retirement plan administrator). Intermediary By Mail Send a written request to the transfer agent which includes: - Original signatures of all registered owners/trustees; - The dollar value or number of shares that you wish to redeem; - The name of the fund(s) and your account number; and - Signature guarantees, if necessary (see below). The transfer agent may require that you provide additional documentation, or information, such as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA or other type of retirement account, you must complete the appropriate distribution form. By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if: - Your redemption proceeds are to be mailed to your address on record (and there has been no change in your address of record within the last 30 days) or transferred electronically to a pre-authorized checking account; - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have not previously declined the telephone redemption privilege. You may, in limited circumstances, initiate a redemption from an Invesco Aim IRA account by telephone. Redemptions from other types of retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form. Automated Investor Line Call the Invesco Aim 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption order after you have provided the bank instructions that will be requested. By Internet Place your redemption request at www.invescoaim.com. You will be allowed to redeem by Internet if: - You do not hold physical share certificates; - You can provide proper identification information; - Your redemption proceeds do not exceed $250,000 per fund; and - You have already provided proper bank information. Redemptions from most retirement plan accounts may be initiated only in writing and require the completion of the appropriate distribution form.
A-8 THE AIM FUNDS TIMING AND METHOD OF PAYMENT We normally will send out checks within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE. Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with the transfer agent. We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. SYSTEMATIC WITHDRAWALS You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must have an account balance of at least $5,000 in order to establish a Systematic Redemption Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent. EXPEDITED REDEMPTIONS (AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND ONLY) If you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit payment of redemption proceeds on that same day via federal wire to a bank of record on your account. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we will transmit payment on the next business day. CHECK WRITING The transfer agent provides check writing privileges for accounts in the following funds and share classes: - - AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares - - AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares - - Premier Portfolio, Investor Class shares - - Premier Tax-Exempt Portfolio, Investor Class shares - - Premier U.S. Government Money Portfolio, Investor Class shares You may redeem shares of these funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts. Checks are not eligible to be converted to ACH by the payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee. SIGNATURE GUARANTEES We require a signature guarantee in the following circumstances: - - When your redemption proceeds will equal or exceed $250,000 per fund. - - When you request that redemption proceeds be paid to someone other than the registered owner of the account. - - When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the account. - - When you request that redemption proceeds be sent to a new address or an address that changed in the last 30 days. The transfer agent will accept a guarantee of your signature by a number of different types of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution to determine whether the signature guarantee offered will be sufficient to cover the value of your transaction request. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If your account (Class A, A3, B, C, P and Investor Class shares only) has been open at least one year, you have not made an additional purchase in the account during the past six calendar months, and the value of your account falls below $500 for three consecutive months, the funds have the right to redeem the account after giving you 60 days' prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to $500 or by initiating a Systematic Purchase Plan. If the fund determines that you have not provided a correct Social Security or other tax identification number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. EXCHANGING SHARES You may, under certain circumstances, exchange shares in one fund for those of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Accordingly, the procedures and processes A-9 THE AIM FUNDS applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. PERMITTED EXCHANGES Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the same class of another fund. The following below shows permitted exchanges:
EXCHANGE FROM EXCHANGE TO - ------------- ----------- AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class Class A Class A, A3, Investor Class, AIM Cash Reserve Shares Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares Investor Class Class A, A3, Investor Class Class P Class A, A3, AIM Cash Reserve Shares Class B Class B Class C Class C Class R Class R
EXCHANGES NOT PERMITTED The following exchanges are not permitted: - - Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares. - - Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as the Category III funds) are not permitted. - - Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3 Shares of those funds. - - AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by exchange from Class A shares of any fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds); provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and insurance company separate accounts which use the funds as underlying investments. - - Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES You may be required to pay an initial sales charge when exchanging from a fund with a lower initial sales charge than the one into which you are exchanging. If you exchange into shares that are subject to a CDSC, we will begin the holding period for purposes of calculating the CDSC on the date you made your initial purchase. A-10 THE AIM FUNDS RIGHTS RESERVED BY THE FUNDS Each fund and its agents reserve the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio Rebalancing Program. - - Suspend, change or withdraw all or any part of the offering made by this prospectus. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. A-11 THE AIM FUNDS Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S. Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will occur as of the time of such closing. From time to time and in circumstances deemed appropriate by Invesco Aim in its sole discretion, each of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to purchase or redeem shares of such funds and net asset values will be calculated for such funds. TIMING OF ORDERS For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier NYSE closing time on a business day generally are processed that day and settled on the next business day. For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day, your order generally will be processed on the next business day and settled on the second business day following the receipt and acceptance of your order. For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any earlier NYSE closing time on a particular day, even though these funds remain open after such closing time. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Special Tax Information Regarding the Fund" in the applicable fund's prospectus. A-12 THE AIM FUNDS The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing. PAYMENTS TO FINANCIAL ADVISORS The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales charges and distribution fees discussed above. In addition to those payments, Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make additional cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of initial sales charges and from payments to Invesco Aim Distributors made by the funds under their 12b-1 plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the Board. You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. The Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds A-13 THE AIM FUNDS will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds for the following reasons: - - The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently. - - One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds. - - The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain a constant net asset value. As a result, there are no price arbitrage opportunities. - - Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor expectations. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money market fund. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity Treasury Fund), or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. A-14 THE AIM FUNDS The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. A-15 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM International Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com IGR-PRO-1 AIM GLOBAL GROWTH FUND AIM GLOBAL SMALL & MID CAP GROWTH FUND AIM INTERNATIONAL CORE EQUITY FUND AIM INTERNATIONAL GROWTH FUND PROSPECTUS May 1, 2008 INSTITUTIONAL CLASSES AIM Global Growth Fund's investment objective is long-term growth of capital. AIM Global Small & Mid Cap Growth Fund's investment objective is above-average long-term growth of capital. AIM International Core Equity Fund's investment objective is total return. AIM International Growth Fund's investment objective is long-term growth of capital. - -------------------------------------------------------------------------------- This prospectus contains important information about the Institutional Class shares of the funds. Please read it before investing and keep it for future reference. As with all other mutual fund securities, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is adequate or accurate. Anyone who tells you otherwise is committing a crime. An investment in the funds: - - is not FDIC insured; - - may lose value; and - - is not guaranteed by a bank. ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES AND STRATEGIES 1 - ------------------------------------------------------ AIM Global Growth Fund 1 AIM Global Small & Mid Cap Growth Fund 1 AIM International Core Equity Fund 2 AIM International Growth Fund 2 All Funds 2 PRINCIPAL RISKS OF INVESTING IN THE FUNDS 3 - ------------------------------------------------------ Global Small & Mid Cap Growth 3 All Funds 3 PERFORMANCE INFORMATION 4 - ------------------------------------------------------ Annual Total Returns 4 Performance Table 6 FEE TABLE AND EXPENSE EXAMPLE 7 - ------------------------------------------------------ Fee Table 7 Expense Example 8 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 8 - ------------------------------------------------------ DISCLOSURE OF PORTFOLIO HOLDINGS 9 - ------------------------------------------------------ FUND MANAGEMENT 9 - ------------------------------------------------------ The Advisors 9 Advisor Compensation 10 Portfolio Managers 10 OTHER INFORMATION 11 - ------------------------------------------------------ Dividends and Distributions 11 Suitability for Investors 11 FINANCIAL HIGHLIGHTS 12 - ------------------------------------------------------ GENERAL INFORMATION A-1 - ------------------------------------------------------ Purchasing Shares A-1 Redeeming Shares A-1 Exchanging Shares A-3 Rights Reserved by the Funds A-3 Payments to Financial Advisors A-3 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-4 Pricing of Shares A-5 Taxes A-6 OBTAINING ADDITIONAL INFORMATION Back Cover - ------------------------------------------------------
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of Invesco Aim Management Group, Inc. AIM Trimark is a registered service mark of Invesco Aim Management Group, Inc. and Invesco Trimark Investment Management Inc. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations. ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ INVESTMENT OBJECTIVES AND STRATEGIES - -------------------------------------------------------------------------------- AIM GLOBAL GROWTH FUND (GLOBAL GROWTH) The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 65% of its total assets in marketable equity securities of domestic and foreign issuers. The fund will normally invest in the securities of medium- and large-sized growth companies located in at least three countries outside the United States, and will usually maintain at least 20% of its total assets in U.S. dollar-denominated securities. The fund emphasizes investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin. The fund may also invest up to 20% of its total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. AIM GLOBAL SMALL & MID CAP GROWTH FUND (GLOBAL SMALL & MID CAP GROWTH) The fund's investment objective is above-average long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in marketable equity securities of small- and mid-capitalization growth companies. In complying with this 80% investment requirement, the fund will invest primarily in marketable equity securities, but its investments may include the use of other securities, such as synthetic instruments. Synthetic instruments are investments that have economic characteristics similar to the fund's direct investments, and may include the use of warrants, futures, options, exchange-traded funds and American Depository Receipts. The fund will normally invest in companies located in at least three countries outside the United States and will usually maintain at least 20% of its total assets in U.S. dollar-denominated securities. The fund emphasizes investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin. The fund may also invest 35% of its total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The fund considers a company to be a small-capitalization company if it has a market capitalization, at the time of purchase, no larger than the largest capitalized company included in the Russell 2000--Registered Trademark-- Index during the most recent 11-month period (based on month-end data) plus the most recent data during the current month. The Russell 2000--Registered Trademark-- Index measures the performance of the 2,000 smallest companies in the Russell 3000--Registered Trademark--Index, which measures the performance of the 3,000 largest U.S. companies. The Russell 2000--Registered Trademark-- Index is widely regarding as representative of small cap stocks. The fund considers a company to be a mid-capitalization company if it has a market capitalization, at the time of purchase, within the range of the largest and smallest capitalized companies included in the Russell--Registered Trademark-- Midcap Index during the most recent 11-month period (based on the month-end data) plus the most recent data during the current month. The Russell--Registered Trademark-- Midcap Index measures the performance of the 800 smallest companies in the Russell 1000--Registered Trademark-- Index. The Russell 1000--Registered Trademark-- Index measures the performance of the 1,000 largest companies domiciled in the United States. The companies in the Russell--Registered Trademark-- Midcap Index represent approximately 25% of the total market capitalization of the Russell 1000--Registered Trademark-- Index. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. 1 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ AIM INTERNATIONAL CORE EQUITY FUND (INTERNATIONAL CORE EQUITY) The fund's investment objective is total return. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in equity securities. The fund invests in a diversified portfolio that consists primarily of equity securities of foreign issuers that are, in the portfolio managers' view, attractively valued relative to current or projected earnings, or the current market value of assets owned by the company. The fund focuses its investments in marketable equity securities of foreign companies that are listed on a recognized foreign or U.S. securities exchange or traded in a foreign or U.S. over-the-counter market. The fund will invest in the securities of companies located in at least four countries outside of the U.S., emphasizing investment in companies in the developed countries of Western Europe and the Pacific Basin. The fund may invest up to 100% of its assets in foreign securities. At the present time, the fund's portfolio managers intend to invest no more than 20% of the fund's total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. In selecting investments for the fund, the portfolio managers seek to identify attractively valued companies with market capitalization in excess of $1 billion. Initial factors considered by the portfolio managers when evaluating potential investments include a company's return on equity, amount of shareholders' capital and the percentage of earnings paid in dividends, as well as a company's historic earnings stability and overall debt levels. In analyzing potential investments, the portfolio managers conduct research on companies meeting their criteria and may communicate directly with company management. The fund's portfolio managers consider selling a security when (1) its share price increases and its internal valuation ranking deteriorates relative to other companies, (2) if the security's fundamentals deteriorate or (3) if a security causes the portfolio's sector or regional weighting relative to its benchmark to fall outside acceptable risk parameters. AIM INTERNATIONAL GROWTH FUND (INTERNATIONAL GROWTH) The fund's investment objective is long-term growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval. The fund seeks to meet its objective by investing in a diversified portfolio of international equity securities whose issuers are considered by the fund's portfolio managers to have strong earnings growth. The fund focuses its investments in marketable equity securities of foreign companies that are listed on a recognized foreign or U.S. securities exchange or traded in a foreign or U.S. over-the-counter market. The fund will normally invest in the securities of companies located in at least four countries outside of the United States, emphasizing investment in companies in the developed countries of Western Europe and the Pacific Basin. At the present time, the fund's portfolio managers intend to invest no more than 20% of the fund's total assets in companies located in developing countries, i.e., those that are identified as in the initial stages of their industrial cycles. The fund's investments in the types of securities described in the prospectus vary from time to time, and at any time, the fund may not be invested in all types of securities described in this prospectus. Any percentage limitations with respect to assets of the fund are applied at the time of purchase. The portfolio managers employ a disciplined investment strategy that emphasizes fundamental research, supported by quantitative analysis and portfolio construction techniques. The strategy primarily focuses on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose prices do not fully reflect these attributes. Investments for the portfolio are selected "bottom-up" on a stock-by-stock basis. The focus is on the strengths of individual companies, rather than sector or country trends. The fund's portfolio managers may consider selling a security for several reasons, including when (1) its fundamentals deteriorate or it posts disappointing earnings, (2) its stock price appears to be overvalued, or (3) a more attractive opportunity is identified. ALL FUNDS Each fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the funds' advisor. Each fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by each fund may increase if the fund takes a temporary defensive position. Each fund may take a temporary defensive position when it receives unusually large redemption requests, or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect a fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of a fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, a fund may not achieve its investment objective. 2 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ PRINCIPAL RISKS OF INVESTING IN THE FUNDS - -------------------------------------------------------------------------------- GLOBAL SMALL & MID CAP GROWTH The prices of equity securities of small- and medium-sized companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of small- and medium-sized companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price. ALL FUNDS There is a risk that you could lose all or a portion of your investment in the fund. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. The prices of foreign securities may be further affected by other factors, including: - - Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. - - Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries. - - Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies. - - Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities. These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures. An investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 3 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The bar charts and tables shown below provide an indication of the risks of investing in each fund. A fund's past performance (before and after taxes) is not necessarily an indication of its future performance. The returns shown for Global Growth and Global Small & Mid Cap Growth are those of the funds' respective Class A shares, which are not offered in this prospectus. Institutional Class shares would have higher annual returns because, although the shares are invested in the same portfolio of securities, Institutional Class shares have lower expenses. ANNUAL TOTAL RETURNS - -------------------------------------------------------------------------------- The following bar charts show changes in the performance of Global Growth Class A shares, Global Small & Mid Cap Growth Class A shares, International Core Equity Institutional Class shares and International Growth Institutional Class shares from year to year. The bar charts do not reflect sales loads. If they did, the annual total returns shown for Class A shares would be lower. Institutional Class shares are not subject to front-end or back-end sales loads. GLOBAL GROWTH--CLASS A
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998................................................................... 22.08% 1999................................................................... 52.20% 2000................................................................... -22.15% 2001................................................................... -30.05% 2002................................................................... -19.87% 2003................................................................... 26.89% 2004................................................................... 15.61% 2005................................................................... 11.64% 2006................................................................... 20.73% 2007................................................................... 10.11%
GLOBAL SMALL & MID CAP GROWTH--CLASS A
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 1998................................................................... 3.93% 1999................................................................... 70.58% 2000................................................................... -21.98% 2001................................................................... -25.59% 2002................................................................... -16.55% 2003................................................................... 39.22% 2004................................................................... 24.40% 2005................................................................... 17.37% 2006................................................................... 26.17% 2007................................................................... 18.61%
INTERNATIONAL CORE EQUITY--INSTITUTIONAL CLASS
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 2005................................................................... 10.90% 2006................................................................... 25.07% 2007................................................................... 9.50%
4 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- INTERNATIONAL GROWTH--INSTITUTIONAL CLASS
ANNUAL YEAR ENDED TOTAL DECEMBER 31 RETURNS - ----------- ------- 2003................................................................... 28.53% 2004................................................................... 24.10% 2005................................................................... 18.25% 2006................................................................... 28.48% 2007................................................................... 15.03%
The year-to-date total return for each fund as of March 31, 2008 was as follows: Global Growth--Institutional Class % Global Small & Mid Cap Growth--Institutional Class % International Core Equity--Institutional Class % International Growth--Institutional Class %
During the periods shown in the bar charts, the highest quarterly returns and the lowest quarterly returns were as follows:
HIGHEST QUARTERLY RETURN LOWEST QUARTERLY RETURN FUND (QUARTER ENDED) (QUARTER ENDED) - ------------------------------------------------------------------------------------------------------ Global Growth--Class A 38.05% (December 31, 1999) -25.90% (March 31, 2001) Global Small & Mid Cap Growth--Class A 49.33% (December 31, 1999) -21.50% (September 30, 2001) International Core Equity--Institutional 8.96% (September 30, 2005) -2.45% (December 31, 2007) Class International Growth--Institutional 15.37% (December 31, 2004) -6.46% (March 31, 2003) Class - ------------------------------------------------------------------------------------------------------
5 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- PERFORMANCE TABLE The following performance table compares performance to that of a broad-based securities market index, a style specific index and a peer group index, as applicable. The indices may not reflect payment of fees, expenses or taxes. The funds are not managed to track the performance of any particular index, including the indices shown below, and consequently, the performance of the funds may deviate significantly from the performance of the indices shown below.
AVERAGE TOTAL RETURNS - ----------------------------------------------------------------------------------------- (for the periods ended SINCE INCEPTION December 31, 2007) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE - ----------------------------------------------------------------------------------------- GLOBAL GROWTH--INSTITUTIONAL CLASS(1) 09/15/94(1) Return Before Taxes 10.69% 16.96% 5.90% -- Return After Taxes on Distributions 10.59 16.90 5.70 -- Return After Taxes on Distributions and Sale of Fund Shares 6.95 14.97 5.11 -- - ----------------------------------------------------------------------------------------- MSCI World Index(SM)(2) 9.04 16.96 7.00 -- MSCI World Growth Index(2,3) 14.76 15.48 5.73 -- Lipper Global Large-Cap Growth Funds Index(4) 14.50 16.96 --(5) -- - ----------------------------------------------------------------------------------------- GLOBAL SMALL & MID CAP GROWTH--INSTITUTIONAL CLASS(1) 09/15/94(1) Return Before Taxes 18.87 24.97 10.10 -- Return After Taxes on Distributions 16.20 23.72 8.98 -- Return After Taxes on Distributions and Sale of Fund Shares 15.11 22.10 8.61 -- - ----------------------------------------------------------------------------------------- MSCI World Index(SM)(2) 9.04 16.96 7.00 -- MSCI World Growth Index(2,3) 14.76 15.48 5.73 -- Lipper Global Small/Mid-Cap Growth Category Average(6) 11.83 22.64 12.58 -- - ----------------------------------------------------------------------------------------- INTERNATIONAL CORE EQUITY--INSTITUTIONAL CLASS 04/30/04 Return Before Taxes 9.50 -- -- 17.39% Return After Taxes on Distributions 7.39 -- -- 16.35 Return After Taxes on Distributions and Sale of Fund Shares 7.67 -- -- 15.00 - ----------------------------------------------------------------------------------------- MSCI EAFE(R) Index(7) 11.17 -- -- 18.79(12) 04/30/04(12) Lipper International Large-Cap Core Funds Index(8) 12.51 -- -- 18.34(12) 04/30/04(12) - ----------------------------------------------------------------------------------------- INTERNATIONAL GROWTH--INSTITUTIONAL CLASS 03/15/02 Return Before Taxes 15.03 22.75 -- 16.06 Return After Taxes on Distributions 13.74 22.36 -- 15.74 Return After Taxes on Distributions and Sale of Fund Shares 10.98 20.21 -- 14.19 - ----------------------------------------------------------------------------------------- MSCI EAFE(R) Index(7) 11.17 21.59 -- 15.71(12) 02/28/02(12) MSCI EAFE(R) Growth Index(9,10) 16.45 19.85 -- 14.17(12) 02/28/02(12) Lipper International Multi-Cap Growth Funds Index(9,11) 17.09 23.16 -- 15.70(12) 02/28/02(12) - -----------------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. (1) The returns shown for these periods are the blended returns of the historical performance of the funds' Institutional Class shares since inception and the restated historical performance of the funds' Class A shares at net asset value, which restated performance will reflect the Rule 12b-1 fee applicable to Class A shares. The inception date shown in the table is that of the funds' Class A shares. The inception date of the funds' Institutional Class shares is September 28, 2007. (2) The Morgan Stanley Capital International World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. The funds have also included the MSCI World Growth Index, which the funds believe more closely reflects the performance of the types of securities in which the fund invests. (3) The MSCI World Growth Index is a free float-adjusted market capitalization index that represents the growth segment in global developed market equity performance. (4) In addition, the fund has included the Lipper Global Large-Cap Growth Funds Index (which may or may not include the fund) for comparison to a peer group. The Lipper Global Large-Cap Growth Funds Index is an equally weighted representation of the largest funds in the Lipper Global Large-Cap Growth Funds category. These funds typically have an above- average price-to-cash-flow ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P/Citigroup World Broad Market Index World. The S&P/Citigroup BMI World is a subset of the developed markets portion of the S&P/Citigroup BMI Global. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. 6 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ PERFORMANCE INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- (5) Index performance is not provided because the inception date of the Lipper Global Large-Cap Growth Funds Index was June 30, 1998. (6) In addition, the fund has included the Lipper Global Small/Mid-Cap Growth Category Average (which may or may not include the fund) for comparison to a peer group. The Lipper Global Small/Mid-Cap Growth Category Average represents an average of all the funds in the Lipper Global Small/Mid-Cap Growth Funds category. These funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P/Citigroup Broad Market Index World. The S&P/Citigroup BMI World is a subset of the developed markets portion of the S&P/Citigroup BMI Global. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. (7) The MSCI Europe, Australasia and Far East Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. (8) In addition, the fund has included the Lipper International Large-Cap Core Funds Index (which may or may not include the fund) for comparison to a peer group. The Lipper International Large-Cap Core Funds Index is an equally weighted representation of the largest funds in the Lipper International Large Cap Core Funds category. These funds typically have an average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P/Citigroup Broad Market Index World ex-U.S. The S&P/Citigroup BMI World ex-U.S. is a subset of the developed markets portion of the S&P/Citigroup BMI Global, excluding the United States. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. (9) The fund has also included the MSCI EAFE(R) Growth Index, which the fund believes more closely reflects the performance of the securities in which the fund invests. In addition, the Lipper International Multi-Cap Growth Funds Index (which may or may not include the fund) is included for comparison to a peer group. (10) The MSCI EAFE(R) Growth Index is an unmanaged index considered representation of growth stocks of Europe, Australasia, and the Far East. (11) The Lipper International Multi-Cap Growth Funds Index is an equally weighted representation of the largest funds in the Lipper International Multi-Cap Growth Funds category. These funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-growth value, compared to S&P/Citigroup Broad Market Index World ex-U.S. The S&P/Citigroup BMI World ex-U.S. is a subset of the developed markets portion of the S&P/Citigroup BMI Global, excluding the United States. The S&P/Citigroup BMI Global is an unmanaged float adjusted index that reflects the stock markets of all countries that meet certain market capitalization criteria. (12) The average annual total return given is since the month-end closest to the inception date of the Institutional Class shares. FEE TABLE AND EXPENSE EXAMPLE - -------------------------------------------------------------------------------- FEE TABLE This table describes the fees and expenses that you may pay if you buy and hold Institutional Class shares of the funds:
SHAREHOLDER FEES - ---------------------------------------------------------------------------------------------- GLOBAL SMALL & MID (fees paid directly from your GLOBAL CAP INTERNATIONAL INTERNATIONAL investment) GROWTH GROWTH CORE EQUITY GROWTH - ---------------------------------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price None None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None None None None Redemption/Exchange Fee(1) (as a percentage of amount redeemed/exchanged) 2.00% 2.00% 2.00% 2.00% - ----------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSE(2) - ---------------------------------------------------------------------------------------------- GLOBAL SMALL & MID (expenses that are deducted from GLOBAL CAP INTERNATIONAL INTERNATIONAL fund assets) GROWTH GROWTH CORE EQUITY GROWTH - ---------------------------------------------------------------------------------------------- Management Fees(3) 0.79% 0.77% 0.74% 0.87% Distribution and/or Service (12b-1) Fees None None None None Other Expenses(4) 0.24 0.24 0.13 0.15 Acquired Fund Fees and Expenses 0.01 0.01 0.00 0.01 Total Annual Fund Operating Expenses 1.04 1.02 0.87 1.03 - ----------------------------------------------------------------------------------------------
(1) You may be charged a 2.00% fee on redemptions or exchanges of Institutional Class shares held 30 days or less. See "General Information--Redemption Fees" for more information. (2) There is no guarantee that actual expenses will be the same as those shown in the table. (3) Effective July 1, 2007, the Board of Trustees approved reduced contractual advisory fee schedules for Global Growth, Global Small & Mid Cap Growth and International Growth. Pursuant to the new fee schedules, Global Growth's and Global Small & Mid Cap Growth's maximum annual advisory fee rate ranges from 0.80% (for average net assets up to $250 million) to 0.66% (for average net assets over $10 billion); and International Growth's maximum annual advisory fee rate ranges from 0.935% (for average net assets up to $250 million) to 0.76% (for average net assets over $10 billion). Management Fees have been restated to reflect the new fee schedules. (4) Other Expenses of Global Growth and Global Small & Mid Cap Growth are based on estimated amounts for the current fiscal year. If a financial institution is managing your account, you may also be charged a transaction or other fee by such financial institution. 7 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ EXPENSE EXAMPLE This example is intended to help you compare the costs of investing in the funds with the cost of investing in other mutual funds. The expense example assumes you: (i) invest $10,000 in the fund for the time periods indicated; (ii) redeem all of your shares at the end of the periods indicated; (iii) earn a 5% return on your investment before operating expenses each year; and (iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements). To the extent fees are waived and/or expenses are reimbursed voluntarily, your expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------- Global Growth $106 $331 $574 $1,271 Global Small & Mid Cap Growth 104 325 563 1,248 International Core Equity 89 278 482 1,073 International Growth 105 328 569 1,259 - --------------------------------------------------------------------------------
HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION - -------------------------------------------------------------------------------- The settlement agreement between Invesco Aim Advisors, Inc. and certain of its affiliates and the New York Attorney General requires Invesco Aim Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of each fund's expenses, including investment advisory fees and other fund costs, on each fund's returns over a 10-year period. The example reflects the following: - You invest $10,000 in the fund and hold it for the entire 10 year period; - Your investment has a 5% return before expenses each year; and - The fund's current annual expense ratio includes any applicable contractual fee waiver or expense reimbursement for the period committed. There is no assurance that the annual expense ratio will be the expense ratio for each fund's Institutional Class for any of the years shown. To the extent that Invesco Aim Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios; your actual returns and expenses are likely to differ (higher or lower) from those shown below.
GLOBAL GROWTH -- INSTITUTIONAL CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - ---------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.04% 1.04% 1.04% 1.04% 1.04% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.96% 8.08% 12.36% 16.81% 21.43% End of Year Balance $10,396.00 $10,807.68 $11,235.67 $11,680.60 $12,143.15 Estimated Annual Expenses $ 106.06 $ 110.26 $ 114.63 $ 119.16 $ 123.88 - ---------------------------------------------------------------------------------------------- GLOBAL GROWTH -- INSTITUTIONAL CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) 1.04% 1.04% 1.04% 1.04% 1.04% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 26.24% 31.24% 36.44% 41.84% 47.46% End of Year Balance $12,624.02 $13,123.93 $13,643.64 $14,183.93 $14,745.61 Estimated Annual Expenses $ 128.79 $ 133.89 $ 139.19 $ 144.70 $ 150.43 - ----------------------------------------------------------------------------------------------
GLOBAL SMALL & MID CAP GROWTH -- INSTITUTIONAL CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - --------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.02% 1.02% 1.02% 1.02% 1.02% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.98% 8.12% 12.42% 16.90% 21.55% End of Year Balance $10,398.00 $10,811.84 $11,242.15 $11,689.59 $12,154.83 Estimated Annual Expenses $ 104.03 $ 108.17 $ 112.48 $ 116.95 $ 121.61 - --------------------------------------------------------------------------------------------- GLOBAL SMALL & MID CAP GROWTH -- INSTITUTIONAL CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - --------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.02% 1.02% 1.02% 1.02% 1.02% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 26.39% 31.42% 36.65% 42.09% 47.74% End of Year Balance $12,638.60 $13,141.61 $13,664.65 $14,208.50 $14,774.00 Estimated Annual Expenses $ 126.45 $ 131.48 $ 136.71 $ 142.15 $ 147.81 - ---------------------------------------------------------------------------------------------
INTERNATIONAL CORE EQUITY -- INSTITUTIONAL CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 0.87% 0.87% 0.87% 0.87% 0.87% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 4.13% 8.43% 12.91% 17.57% 22.43% End of Year Balance $10,413.00 $10,843.06 $11,290.88 $11,757.19 $12,242.76 Estimated Annual Expenses $ 88.80 $ 92.46 $ 96.28 $ 100.26 $ 104.40 - -------------------------------------------------------------------------------------------- INTERNATIONAL CORE EQUITY -- INSTITUTIONAL CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 0.87% 0.87% 0.87% 0.87% 0.87% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 27.48% 32.75% 38.23% 43.94% 49.89% End of Year Balance $12,748.39 $13,274.89 $13,823.15 $14,394.04 $14,988.52 Estimated Annual Expenses $ 108.71 $ 113.20 $ 117.88 $ 122.74 $ 127.81 - --------------------------------------------------------------------------------------------
8 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------
INTERNATIONAL GROWTH -- INSTITUTIONAL CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.03% 1.03% 1.03% 1.03% 1.03% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.97% 8.10% 12.39% 16.85% 21.49% End of Year Balance $10,397.00 $10,809.76 $11,238.91 $11,685.09 $12,148.99 Estimated Annual Expenses $ 105.04 $ 109.21 $ 113.55 $ 118.06 $ 122.75 - -------------------------------------------------------------------------------------------- INTERNATIONAL GROWTH -- INSTITUTIONAL CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 - -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.03% 1.03% 1.03% 1.03% 1.03% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses 26.31% 31.33% 36.54% 41.96% 47.60% End of Year Balance $12,631.31 $13,132.77 $13,654.14 $14,196.21 $14,759.80 Estimated Annual Expenses $ 127.62 $ 132.68 $ 137.95 $ 143.43 $ 149.12 - --------------------------------------------------------------------------------------------
(1) Your actual expenses may be higher or lower than those shown. DISCLOSURE OF PORTFOLIO HOLDINGS - -------------------------------------------------------------------------------- Each fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for each fund is available at http://www.invescoaim.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
- --------------------------------------------------------------------------------------------------------------------------------- APPROXIMATE DATE OF INFORMATION REMAINS INFORMATION WEBSITE POSTING POSTED ON WEBSITE - --------------------------------------------------------------------------------------------------------------------------------- Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top ten holdings - --------------------------------------------------------------------------------------------------------------------------------- Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end - ---------------------------------------------------------------------------------------------------------------------------------
A description of the funds' policies and procedures with respect to the disclosure of the funds' portfolio holdings is available in the funds' Statement of Additional Information, which is available at http://www.invescoaim.com. FUND MANAGEMENT - -------------------------------------------------------------------------------- THE ADVISORS Invesco Aim Advisors, Inc. (the advisor or Invesco Aim) serves as the funds' investment advisor and manages the investment operations of the funds and has agreed to perform or arrange for the performance of the funds' day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the funds, encompassing a broad range of investment objectives. The following affiliates of the advisor serve as sub-advisors to the funds and may be appointed by the advisor from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the funds: Invesco Asset Management Deutschland GmbH (Invesco Deutschland), located at Bleichstrasse 60-62, Frankfurt, Germany 60313, which has acted as an investment advisor since 1998. Invesco Asset Management Limited (Invesco Asset Management), located at 30 Finsbury Square, London, EC2A 1AG, United Kingdom, which has acted as an investment advisor since 2001. Invesco Asset Management (Japan) Limited (Invesco Japan), located at 25th Floor, Shiroyama Trust Tower, 3-1, Toranomon 4-chome, Minato-ku, Tokyo 105-6025, Japan, which has acted as an investment advisor since 1996. Invesco Australia Limited (Invesco Australia), located at 333 Collins Street, Level 26, Melbourne Vic 3000, Australia, which has acted as an investment advisor since 1983. Invesco Global Asset Management (N.A.), Inc. (Invesco Global), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1997. Invesco Hong Kong Limited (Invesco Hong Kong), located at 32nd Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong, which has acted as an investment advisor since 1994. Invesco Institutional (N.A.), Inc. (Invesco Institutional), located at One Midtown Plaza, 1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia 30309, which has acted as an investment advisor since 1988. Invesco Senior Secured Management, Inc. (Invesco Senior Secured), located at 1166 Avenue of the Americas, New York, New York 10036, which has acted as an investment advisor since 1992. Invesco Trimark Investment Management Inc. (Invesco Trimark), located at 5140 Yonge Street, Suite 900, Toronto, Ontario, Canada M2N 6X7, which has acted as an investment advisor since 1994. (collectively, the affiliated sub-advisors). Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), Invesco Aim, Invesco Aim Distributors, Inc. (Invesco 9 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ Aim Distributors) (the distributor of the AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain fund inadequately employed fair value pricing. Additional civil lawsuits related to the above or other matters may be filed by regulators or private litigants against AIM funds, IFG, Invesco Aim, Invesco Aim Distributors and/or related entities and individuals in the future. You can find more detailed information concerning all of the above matters, including the parties to the civil lawsuits and summaries of the various allegations and remedies sought in such lawsuits, in the funds' Statement of Additional Information. As a result of the matters discussed above, investors in the AIM funds might react by redeeming their investments. This might require the funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the funds. ADVISOR COMPENSATION During the fiscal year ended October 31, 2007, the advisor received compensation of 0.79%, 0.77%, 0.74% and 0.86% of average daily net assets after fee waivers for Global Growth, Global Small & Mid Cap Growth, International Core Equity and International Growth, respectively. Invesco Aim, not the funds, pays the sub-advisory fees. A discussion regarding the basis for the Board of Trustees' approval of the investment advisory and sub-advisory agreements is available in each fund's most recent report to shareholders for the twelve-month period ended October 31st. PORTFOLIO MANAGERS GLOBAL GROWTH The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Robert J. Lloyd, (lead manager with respect to the domestic portion of the fund's portfolio), Senior Portfolio Manager, who has been responsible for the fund since 2008 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Matthew W. Dennis, (lead manager with respect to the fund's investments in Europe and Canada), Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Barrett K. Sides, (lead manager with respect to the fund's investments in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1990. - - Clas G. Olsson, Senior Portfolio Manager, who has been responsible for the fund since 1997 and has been associated with Invesco Aim and/or its affiliates since 1994. GLOBAL SMALL & MID CAP GROWTH The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Paul J. Rasplicka, (lead manager with respect to the domestic portion of the fund's portfolio), Senior Portfolio Manager, who has been responsible for the fund since 2008 and has been associated with Invesco Aim and/or its affiliates since 1994. - - Jason T. Holzer, (lead manager with respect to the fund's investments in Europe and Canada), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1996. - - Shuxin Cao, (lead manager with respect to the fund's investment in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1997. - - Borge Endresen, Portfolio Manager, who has been responsible for the fund since 2002 and has been associated with Invesco Aim and/or its affiliates since 1999. INTERNATIONAL CORE EQUITY The fund is managed by Invesco Global's investment team, which is comprised of portfolio managers, some of whom also have research responsibilities, who collectively make decisions about investments in the fund under the direction of the Chief Investment Officer. The five most senior members of the team with the most significant responsibility within the investment team are: - - Erik B. Granade, Portfolio Manager, Chief Investment Officer, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1996. - - Ingrid E. Baker, Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Global and/or its affiliates since 1999. 10 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ - - W. Lindsay Davidson, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1984. - - Michele T. Garren, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1997. - - Kent A. Starke, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with Invesco Global and/or its affiliates since 1992. INTERNATIONAL GROWTH The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio: - - Clas G. Olsson, (lead manager with respect to the fund's investments in Europe and Canada), Senior Portfolio Manager, who has been responsible for the fund since 1997 and has been associated with Invesco Aim and/or its affiliates since 1994. - - Barrett K. Sides (lead manager with respect to the fund's investments in Asia Pacific and Latin America), Senior Portfolio Manager, who has been responsible for the fund since 1995 and has been associated with Invesco Aim and/or its affiliates since 1990. - - Shuxin Cao, Senior Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 1997. - - Matthew W. Dennis, Portfolio Manager, who has been responsible for the fund since 2003 and has been associated with Invesco Aim and/or its affiliates since 2000. - - Jason T. Holzer, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with Invesco Aim and/or its affiliates since 1996. ALL FUNDS A lead manager generally has final authority over all aspects of a portion of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which a lead manager may perform these functions, and the nature of these functions, may change from time to time. More information on the portfolio managers may be found on the advisor's website http://www.invescoaim.com. The website is not part of this prospectus. The funds' Statement of Additional Information provides additional information about the portfolio managers' investments in the funds, a description of their compensation structure, and information regarding other accounts they manage. OTHER INFORMATION - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS Each of the funds expect that its distributions, if any, will consist primarily of capital gains. DIVIDENDS The funds generally declare and pay dividends, if any, annually. CAPITAL GAINS DISTRIBUTIONS The funds generally distribute long-term and short-term capital gains, if any, annually. SUITABILITY FOR INVESTORS The Institutional Classes of the funds are intended for use by institutional investors. Shares of the Institutional Classes of the funds are available for banks and trust companies acting in a fiduciary or similar capacity, bank and trust company common and collective trust funds, banks and trust companies investing for their own account, entities acting for the account of a public entity (e.g. Taft-Hartley funds, states, cities or government agencies), defined benefit plans, endowments, foundations and defined contribution plans offered pursuant to Sections 401, 457, 403(a), or 403(b) or (c) (defined contribution plans offered pursuant to Section 403(b) must be sponsored by a Section 501(c)(3) organization). For defined contribution plans for which the sponsor has combined defined contribution and defined benefit assets of at least $100 million there is no minimum initial investment requirement, otherwise the minimum initial investment requirement for defined contribution plans is $10 million. There is no minimum initial investment requirement for defined benefit plans, and the minimum initial investment requirement for all other investors for which the Institutional Classes of the funds are available is $1 million. 11 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ The Institutional Classes of the funds are designed to be a convenient and economical vehicle in which institutions can invest in a portfolio of equity securities. An investment in the funds may relieve the institution of many of the investment and administrative burdens encountered when investing in equity securities directly. These include: selection and diversification of portfolio investments; surveying the market for the best price at which to buy and sell; valuation of portfolio securities; receipt, delivery and safekeeping of securities; and portfolio recordkeeping. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The financial highlights tables are intended to help you understand each fund's financial performance. Certain information reflects financial results for a single fund share. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in each fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, whose report, along with each fund's financial statements, is included in each fund's annual report, which is available upon request.
GLOBAL GROWTH- INSTITUTIONAL CLASS ------------------ SEPTEMBER 28, 2007 (COMMENCEMENT DATE) TO OCTOBER 31, 2007 ------------------ Net asset value, beginning of period $27.11 - -------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.02(a) - -------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 1.06 ================================================================================ Total from investment operations 1.08 ================================================================================ Redemption fees added to shares of beneficial interest 0.00 ================================================================================ Net asset value, end of period $28.19 ________________________________________________________________________________ ================================================================================ Total return(b) 3.98% ________________________________________________________________________________ ================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $ 10 ________________________________________________________________________________ ================================================================================ Ratio of expenses to average net assets: 1.05%(c) ================================================================================ Ratio of net investment income to average net assets 0.94%(c) ________________________________________________________________________________ ================================================================================ Portfolio turnover rate(d) 38% ________________________________________________________________________________ ================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $10,181. (d) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. 12 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
GLOBAL SMALL & MID CAP GROWTH- INSTITUTIONAL CLASS ------------------- SEPTEMBER 28, 2007 (COMMENCEMENT DATE) THROUGH OCTOBER 31, 2007 ------------------- Net asset value, beginning of period $27.82 - ----------------------------------------------------------------------------------- Income from investment operations: Net investment income 0.02 - ----------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 1.69 =================================================================================== Total from investment operations 1.71 =================================================================================== Net asset value, end of period $29.53 ___________________________________________________________________________________ =================================================================================== Total return(a) 6.15% ___________________________________________________________________________________ =================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $ 11 ___________________________________________________________________________________ =================================================================================== Ratio of expenses to average net assets 1.00%(b) =================================================================================== Ratio of net investment income to average net assets 0.90%(b) ___________________________________________________________________________________ =================================================================================== Portfolio turnover rate(c) 43% ___________________________________________________________________________________ ===================================================================================
(a) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year. (b) Ratios are annualized and based on average daily net assets of $10,233. (c) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. 13 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
INTERNATIONAL CORE EQUITY- INSTITUTIONAL CLASS ---------------------------------------------------- APRIL 30, 2004 (COMMENCEMENT YEAR ENDED OCTOBER 31, DATE) TO ---------------------------------- OCTOBER 31, 2007 2006 2005 2004 -------- -------- ------- -------------- Net asset value, beginning of period $ 14.54 $ 11.97 $ 10.56 $ 9.78 - ------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income(a) 0.31 0.33 0.21 0.09 - ------------------------------------------------------------------------------------------------------------------ Net gains on securities (both realized and unrealized) 2.75 2.78 1.32 0.69 ================================================================================================================== Total from investment operations 3.06 3.11 1.53 0.78 ================================================================================================================== Less distributions: Dividends from net investment income (0.29) (0.16) (0.12) -- - ------------------------------------------------------------------------------------------------------------------ Distributions from net realized gains (0.42) (0.38) -- -- ================================================================================================================== Total distributions (0.71) (0.54) (0.12) -- ================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 ================================================================================================================== Net asset value, end of period $ 16.89 $ 14.54 $ 11.97 $ 10.56 __________________________________________________________________________________________________________________ ================================================================================================================== Total return(b) 21.89% 26.86% 14.53% 7.97% __________________________________________________________________________________________________________________ ================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $405,507 $193,959 $73,018 $16,421 __________________________________________________________________________________________________________________ ================================================================================================================== Ratio of expenses to average net assets 0.88%(c) 0.95% 0.98% 1.07%(d) ================================================================================================================== Ratio of net investment income to average net assets 1.99%(c) 2.45% 1.78% 1.71%(d) __________________________________________________________________________________________________________________ ================================================================================================================== Portfolio turnover rate(e) 27% 21% 21% 69% __________________________________________________________________________________________________________________ ==================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns of shareholder transactions. Not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $304,245,877. (d) Annualized. (e) Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. 14 ------------------------------------------------ GLOBAL GROWTH - GLOBAL SMALL & MID CAP GROWTH INTERNATIONAL CORE EQUITY - INTERNATIONAL GROWTH ------------------------------------------------ FINANCIAL HIGHLIGHTS (CONTINUED) - --------------------------------------------------------------------------------
INTERNATIONAL GROWTH- INSTITUTIONAL CLASS ------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 -------- -------- ------- ------- ------ Net asset value, beginning of period $ 28.26 $ 21.97 $ 18.34 $ 15.37 $12.73 - --------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income(a) 0.42 0.25 0.25 0.15 0.09 - --------------------------------------------------------------------------------------------------------------------- Net gains on securities (both realized and unrealized) 8.84 6.35 3.38 2.93 2.55 ===================================================================================================================== Total from investment operations 9.26 6.60 3.63 3.08 2.64 ===================================================================================================================== Less distributions: Dividends from net investment income (0.29) (0.31) -- (0.11) -- - --------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains (0.09) -- -- -- -- ===================================================================================================================== Total distributions (0.38) (0.31) -- (0.11) -- ===================================================================================================================== Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 -- ===================================================================================================================== Net asset value, end of period $ 37.14 $ 28.26 $ 21.97 $ 18.34 $15.37 _____________________________________________________________________________________________________________________ ===================================================================================================================== Total return(b) 33.13% 30.32% 19.79% 20.15% 20.74% _____________________________________________________________________________________________________________________ ===================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $833,977 $288,408 $98,912 $13,345 $ 79 _____________________________________________________________________________________________________________________ ===================================================================================================================== Ratio of expenses to average net assets: With fee waivers and/or expense reimbursements 1.02%(c) 1.08% 1.07% 1.13% 1.17% - --------------------------------------------------------------------------------------------------------------------- Without fee waivers and/or expense reimbursements 1.05%(c) 1.12% 1.12% 1.17% 1.21% ===================================================================================================================== Ratio of net investment income to average net assets 1.30%(c) 0.99% 1.16% 0.84% 0.66% _____________________________________________________________________________________________________________________ ===================================================================================================================== Portfolio turnover rate 22% 37% 37% 54% 77% _____________________________________________________________________________________________________________________ =====================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. (c) Ratios are based on average daily net assets of $484,885,379. 15 THE AIM FUNDS - INSTITUTIONAL CLASS General Information In addition to the fund, Invesco Aim serves as investment advisor to many other mutual funds. The following information is about the Institutional Classes of these funds, which are offered to certain eligible institutional investors. PURCHASING SHARES If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies. SHARES SOLD WITHOUT SALES CHARGES You will not pay an initial or contingent deferred sales charge on purchases of any Institutional Class shares. MINIMUM INVESTMENTS The minimum investments for Institutional Class accounts are as follows:
INITIAL ADDITIONAL TYPE OF ACCOUNT INVESTMENTS INVESTMENTS - ------------------------------------------------------ ----------- ----------- Defined Benefit Plans or Platform Sponsors for Defined Contribution Plans $ 0 no minimum Banks acting in a fiduciary or similar capacity, Collective and Common Trust Funds, Banks and Broker-Dealers acting for their own account or Foundations and Endowments 1 million no minimum Defined Contribution Plans (Corporate, Non-profit or Governmental) 10 million no minimum
HOW TO PURCHASE SHARES PURCHASE OPTIONS
OPENING AN ACCOUNT ADDING TO AN ACCOUNT ------------------ -------------------- Through a Financial Contact your financial advisor or intermediary. Contact your financial advisor or Advisor or other The financial advisor or intermediary should mail your intermediary. Intermediary completed account application to the transfer agent, Invesco Aim Investment Services, Inc., P.O. Box 0843, Houston, TX 77210-0843. The financial advisor or intermediary should call the transfer agent at (800) 659-1005 to receive a reference number. Then, use the following wire instructions: Beneficiary Bank ABA/Routing #: 021000021 Beneficiary Account Number: 00100366732 Beneficiary Account Name: Invesco Aim Investment Services, Inc. RFB: Fund Name, Reference # OBI: Your Name, Account # By Telephone and Wire Open your account through a financial advisor or intermediary Call the transfer agent at (800) as described above. 659-1005 and wire payment for your purchase order in accordance with the wire instructions listed above.
Purchase orders will not be processed unless the account application and purchase payment are received in good order. In accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record your identifying information. AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT All of your dividends and distributions may be paid in cash or reinvested in the same fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same fund. REDEEMING SHARES HOW TO REDEEM SHARES Through a Financial Contact your financial advisor or intermediary (including Advisor or Other your retirement plan administrator). Redemption proceeds Intermediary will be sent in accordance with the wire instructions specified in the account application provided to the transfer agent. The transfer agent must receive your financial advisor's or intermediary's call before the close of the customary trading session of the New York Stock Exchange (NYSE) on days the NYSE is open for business in order to effect the redemption at that day's closing price. By Telephone A person who has been authorized in the account application to effect transactions may make redemptions by telephone. You must call the transfer agent before the close of the customary trading session of the NYSE on days the NYSE is open for business in order to effect the redemption at that day's closing price.
INSTCL-5/08 A-1 THE AIM FUNDS - INSTITUTIONAL CLASS TIMING AND METHOD OF PAYMENT We normally will send out redemption proceeds within one business day, and in any event no more than seven days, after your redemption request is received in good order (meaning that all necessary information and documentation related to the redemption request have been provided to the transfer agent). If your request is not in good order, we may require additional documentation in order to redeem your shares. Payment may be postponed in cases where the Securities and Exchange Commission (SEC) declares an emergency or normal trading is halted on the NYSE. If you redeem by telephone, we will transmit the amount of redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated via telephone are genuine, and we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be genuine. REDEMPTIONS IN KIND Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). REDEMPTIONS INITIATED BY THE FUNDS If the fund determines that you have not provided a correct Social Security or other tax ID number on your account application, or the fund is not able to verify your identity as required by law, the fund may, at its discretion, redeem the account and distribute the proceeds to you. REDEMPTION FEES Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the date of this prospectus, the following funds impose redemption fees: AIM China Fund AIM Developing Markets Fund AIM Floating Rate Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM High Yield Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM International Total Return Fund AIM Japan Fund AIM S&P 500 Index Fund AIM Trimark Fund The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund. The redemption fee is imposed on a first-in, first-out basis which means that you will redeem shares in the order of their purchase. Redemption fees generally will not be charged in the following circumstances: - - Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to assess the redemption fees. - - Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and variable insurance contracts which use the funds as underlying investments. - - Redemptions and exchanges effectuated pursuant to an intermediary's automatic investment rebalancing or dollar cost averaging programs or systematic withdrawal plans. - - Redemptions requested within 31 days following the death or post-purchase disability of an account owner. - - Redemptions or exchanges initiated by a fund. The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with any of the exceptions set forth above: - - Shares acquired through the reinvestment of dividends and distributions. - - Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan or individual retirement account (IRA) to the trustee or custodian of another employee benefit plan or IRA. Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange and are redeemed by exchange within 31 days of purchase. Some investments in the funds are made through accounts that are maintained by intermediaries (rather that the funds' transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle. If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules intended to limit short-term money movements in and out of the A-2 THE AIM FUNDS - INSTITUTIONAL CLASS funds which differ from those described in this prospectus. In such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for details. The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered investment company qualification for tax purposes. Your financial advisor or other intermediary may charge service fees for handling redemption transactions. EXCHANGING SHARES You may, under most circumstances, exchange Institutional Class shares in one fund for Institutional Class shares of another fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Before requesting an exchange, review the prospectus of the fund you wish to acquire. All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund. EXCHANGE CONDITIONS The following conditions apply to all exchanges: - - Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions that are reinvested; and - - If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange. Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege at any time. The fund or Invesco Aim Distributors, Inc. ("Invesco Aim Distributors") will provide you with notice of such modification or termination if it is required to do so by law. LIMIT ON THE NUMBER OF EXCHANGES You will generally be limited to four exchanges out of a fund per calendar year; provided, however, that the following transactions will not count toward the exchange limitation: - - Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply the exchange limitation. - - Exchanges of shares held by funds of funds and insurance company separate accounts which use the funds as underlying investments. - - Exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs. - - Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in response to distribution or exchange instructions received from a plan participant). - - If you acquire shares in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit plan or IRA to the trustee or custodian of a new employee benefit plan or IRA, your first reallocation of those assets will not count toward the exchange limitation. Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund, or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders. If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction is counted as one exchange out of a fund. RIGHTS RESERVED BY THE FUNDS Each fund and its agent reserves the right at any time to: - - Reject or cancel all or any part of any purchase or exchange order. - - Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund. - - Suspend, change or withdraw all or any part of the offering made by this Prospectus. PAYMENTS TO FINANCIAL ADVISORS Invesco Aim Distributors or one or more of its corporate affiliates (collectively, Invesco Aim Affiliates) may make cash payments to financial advisors in connection with the promotion and sale of shares of the funds. These cash payments may include cash payments and other payments for certain marketing and support services. Invesco Aim Affiliates make these payments from their own resources. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Affiliates. Invesco Aim Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The benefits Invesco Aim Affiliates receive when they make these payments include, among other things, placing the fund on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for A-3 THE AIM FUNDS - INSTITUTIONAL CLASS including the funds in its fund sales system (on its "sales shelf"). Invesco Aim Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. The payments Invesco Aim Affiliates make may be calculated based on sales of shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.10% of the public offering price of all shares sold by the financial advisor during the particular period. Payments may also be calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor (Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. Invesco Aim Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. Invesco Aim Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares of the funds in their clients' accounts, Invesco Aim Affiliates benefit from the incremental management and other fees paid to Invesco Aim Affiliates by the funds with respect to those assets. Invesco Aim Affiliates also may make payments to certain financial advisors for certain administrative services, including record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency or sub-accounting agreement. All fees payable by Invesco Aim Affiliates under this category of services are charged back to the funds, subject to certain limitations approved by the funds' Boards of Trustees (collectively, the Board). You can find further details in the fund's Statement of Additional Information about these payments and the services provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Affiliates or the funds, as well as about fees and/or commissions it charges. EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and procedures designed to discourage excessive or short-term trading of fund shares for all funds. However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to shareholders if the advisor believes the change would be in the best interests of long-term shareholders. Invesco Aim Affiliates currently use the following tools designed to discourage excessive short-term trading in the funds: - - Trade activity monitoring. - - Trading guidelines. - - Redemption fees on trades in certain funds. - - The use of fair value pricing consistent with procedures approved by the Board. Each of these tools is described in more detail below. Although these tools are designed to discourage excessive short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the possibility that excessive short-term trading activity in the funds will occur. Moreover, each of these tools involves judgments that are inherently subjective. Invesco Aim Affiliates seek to make these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder interests. AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal. Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited Maturity Treasury Fund's yield could be negatively impacted. The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the following reasons: - - Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to purchase and redeem shares regularly and frequently. - - One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing operations of such fund. TRADE ACTIVITY MONITORING Invesco Aim Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, Invesco Aim Affiliates believe that a shareholder has engaged in excessive short-term trading, they will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may include taking steps such as (i) asking the shareholder to take action to A-4 THE AIM FUNDS - INSTITUTIONAL CLASS stop such activities or (ii) refusing to process future purchases or exchanges related to such activities in the shareholder's accounts. Invesco Aim Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical limitations described above. The ability of Invesco Aim Affiliates to monitor trades that are made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. TRADING GUIDELINES If you exceed four exchanges out of a fund per calendar year, or a fund or an Invesco Aim Affiliate determines, in its sole discretion, that your short-term trading activity is excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional purchase and exchange orders. The ability of Invesco Aim Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions initiated by investors who have invested in the funds through the conduit investment vehicle. REDEMPTION FEES You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days of purchase. For more information on this redemption fee, see "Redeeming Shares--Redemption Fees" section of this prospectus. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. FAIR VALUE PRICING Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other securities and assets of a fund for which market quotations are not readily available are to be valued at fair value determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. PRICING OF SHARES DETERMINATION OF NET ASSET VALUE The price of each fund's shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value all other securities and assets for which market quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Board. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where Invesco Aim determines that the closing price of the security is unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading. Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair value requires consideration of all appropriate factors, including indications of fair value available from pricing services. A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset values. Invesco Aim may use indications of fair value from pricing services approved by the Board. In other circumstances, the Invesco Aim valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating its fair value process, Invesco Aim routinely compares closing market prices, the next day's opening prices for the security in its primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing services can change from time to time as approved by the Board. Specific types of securities are valued as follows: Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data. Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange traded equity securities. If market quotations are not available or are unreliable, Invesco Aim will value the security at fair value in good faith using procedures approved by the Board. A-5 THE AIM FUNDS - INSTITUTIONAL CLASS Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE events occur that are significant and may make the closing price unreliable, the fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Invesco Aim also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing service to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the fund. Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if the price provided by the pricing service and independent quoted prices are unreliable, the Invesco Aim valuation committee will fair value the security using procedures approved by the Board. Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or less to maturity. AIM High Income Municipal Fund and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities. Futures and Options. Futures contracts are valued at the final settlement price set by the exchange on which they are principally traded. Options are valued on the basis of market quotations, if available. Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values, spreads, ratings, industry and company performance. Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it invests. Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of the close of the customary trading session, or earlier NYSE closing time that day. For financial reporting purposes and shareholder transactions on the last day of the fiscal quarter, transactions are normally accounted for on a trade date basis. For purposes of executing shareholder transactions in the normal course of business (other than shareholder transactions at a fiscal period-end), each fund's portfolio securities transactions are recorded no later than the first business day following the trade date. TIMING OF ORDERS You can purchase, exchange or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE closing time that day. The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good order. Any applicable sales charges are applied at the time an order is processed. A fund may postpone the right of redemption only under unusual circumstances, as allowed by the SEC, such as when the NYSE restricts or suspends trading. TAXES In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets and the type of income that the fund earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions. Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during the prior year. Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax. Exchanges of shares for shares of another fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax. Investors in tax-exempt funds should read the information under the heading "Other Information--Suitability of Investors" in the applicable fund's prospectus. The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code, IRAs and Roth IRAs. You should consult your tax advisor before investing. A-6 OBTAINING ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the funds and is incorporated by reference into the prospectus (is legally a part of the prospectus). Annual and semiannual reports to shareholders contain additional information about the funds' investments. Each fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. Each fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. Each fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.invescoaim.com. If you have questions about the funds, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the funds' current SAI or annual or semiannual reports, please contact us by mail at Invesco Aim Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or BY TELEPHONE: (800) 959-4246 ON THE INTERNET: You can send us a request by e-mail or download prospectuses, SAI, annual or semiannual reports via our website: http://www.invescoaim.com
You can also review and obtain copies of each fund's SAI, financial reports, each fund's Forms N-Q and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplicating fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room. - ---------------------------------------- AIM Global Growth Fund AIM Global Small & Mid Cap Growth Fund AIM International Core Equity Fund AIM International Growth Fund SEC 1940 Act file number: 811-06463 - ---------------------------------------- invescoaim.com AIMF-PRO-1 STATEMENT OF ADDITIONAL INFORMATION AIM INTERNATIONAL MUTUAL FUNDS 11 GREENWAY PLAZA SUITE 100 HOUSTON, TEXAS 77046-1173 (713) 626-1919 ---------- THIS STATEMENT OF ADDITIONAL INFORMATION RELATES TO EACH PORTFOLIO (EACH A "FUND", COLLECTIVELY THE "FUNDS") OF AIM INTERNATIONAL MUTUAL FUNDS LISTED BELOW. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUSES FOR THE FUNDS LISTED BELOW. PORTIONS OF EACH FUND'S FINANCIAL STATEMENTS ARE INCORPORATED INTO THIS STATEMENT OF ADDITIONAL INFORMATION BY REFERENCE TO SUCH FUND'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS. YOU MAY OBTAIN, WITHOUT CHARGE, A COPY OF ANY PROSPECTUS AND/OR ANNUAL REPORT FOR ANY FUND LISTED BELOW FROM AN AUTHORIZED DEALER OR BY WRITING TO: INVESCO AIM INVESTMENT SERVICES, INC. P.O. BOX 4739 HOUSTON, TEXAS 77210-4739 OR BY CALLING (800) 959-4246 OR ON THE INTERNET: www.invescoaim.com ---------- THIS STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 2008, RELATES TO THE CLASS A, CLASS B, CLASS C, CLASS R AND INVESTOR CLASS SHARES, AS APPLICABLE, OF THE FOLLOWING PROSPECTUSES:
FUND DATED - -------------------------------------- ----------- AIM ASIA PACIFIC GROWTH FUND MAY 1, 2008 AIM EUROPEAN GROWTH FUND MAY 1, 2008 AIM GLOBAL GROWTH FUND MAY 1, 2008 AIM GLOBAL SMALL & MID CAP GROWTH FUND MAY 1, 2008 AIM INTERNATIONAL CORE EQUITY FUND MAY 1, 2008 AIM INTERNATIONAL GROWTH FUND MAY 1, 2008
THIS STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 2008, ALSO RELATES TO THE INSTITUTIONAL CLASS SHARES OF THE FOLLOWING PROSPECTUS:
FUND DATED - -------------------------------------- ----------- AIM GLOBAL GROWTH FUND MAY 1, 2008 AIM GLOBAL SMALL & MID CAP GROWTH FUND MAY 1, 2008 AIM INTERNATIONAL CORE EQUITY FUND MAY 1, 2008 AIM INTERNATIONAL GROWTH FUND MAY 1, 2008
AIM INTERNATIONAL MUTUAL FUNDS STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
PAGE ---- GENERAL INFORMATION ABOUT THE TRUST..................................................................... 1 Fund History....................................................................................... 1 Shares of Beneficial Interest...................................................................... 1 DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS................................................ 3 Classification..................................................................................... 3 Investment Strategies and Risks.................................................................... 3 Equity Investments............................................................................ 4 Foreign Investments........................................................................... 5 Debt Investments.............................................................................. 7 Other Investments............................................................................. 8 Investment Techniques......................................................................... 9 Derivatives................................................................................... 13 Additional Securities or Investment Techniques................................................ 20 Fund Policies...................................................................................... 20 Temporary Defensive Positions...................................................................... 24 Portfolio Turnover................................................................................. 24 Policies and Procedures for Disclosure of Fund Holdings............................................ 24 MANAGEMENT OF THE TRUST................................................................................. 27 Board of Trustees.................................................................................. 27 Management Information............................................................................. 27 Trustee Ownership of Fund Shares.............................................................. 31 Compensation....................................................................................... 31 Retirement Plan For Trustees.................................................................. 31 Deferred Compensation Agreements.............................................................. 32 Purchases of Class A Shares of the Funds at Net Asset Value................................... 32 Codes of Ethics.................................................................................... 32 [Proxy Voting Policies............................................................................. 32 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..................................................... 33 INVESTMENT ADVISORY AND OTHER SERVICES.................................................................. 33 Investment Advisor................................................................................. 33 Investment Sub-Advisors............................................................................ 34 Portfolio Managers................................................................................. 35 Security Lending Arrangements...................................................................... 35 Service Agreements................................................................................. 36 Other Service Providers............................................................................ 36 BROKERAGE ALLOCATION AND OTHER PRACTICES................................................................ 37 Brokerage Transactions............................................................................. 37 Commissions........................................................................................ 38 Broker Selection................................................................................... 38 Directed Brokerage (Research Services)............................................................. 41 Regular Brokers.................................................................................... 41 Allocation of Portfolio Transactions............................................................... 41 Allocation of Initial Public Offering ("IPO") Transactions......................................... 42 PURCHASE, REDEMPTION AND PRICING OF SHARES.............................................................. 42 Transactions through Financial Intermediaries...................................................... 42 Purchase and Redemption of Shares.................................................................. 42 Institutional Class Shares......................................................................... 60
i Offering Price..................................................................................... 61 Redemptions In Kind................................................................................ 63 Backup Withholding................................................................................. 63 DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS................................................................ 64 Dividends and Distributions........................................................................ 64 Tax Matters........................................................................................ 64 DISTRIBUTION OF SECURITIES.............................................................................. 72 Distribution Plans................................................................................. 72 Distributor........................................................................................ 74 FINANCIAL STATEMENTS.................................................................................... 75 PENDING LITIGATION...................................................................................... 76 APPENDICES: RATINGS OF DEBT SECURITIES.............................................................................. A-1 PERSONS TO WHOM INVESCO AIM PROVIDES NON-PUBLIC PORTFOLIO HOLDINGS ON AN ONGOING BASIS.................. B-1 TRUSTEES AND OFFICERS................................................................................... C-1 TRUSTEE COMPENSATION TABLE.............................................................................. D-1 PROXY POLICIES AND PROCEDURES........................................................................... E-1 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..................................................... F-1 MANAGEMENT FEES......................................................................................... G-1 PORTFOLIO MANAGERS...................................................................................... H-1 ADMINISTRATIVE SERVICES FEES............................................................................ I-1 BROKERAGE COMMISSIONS................................................................................... J-1 DIRECTED BROKERAGE (RESEARCH SERVICES) AND PURCHASES OF SECURITIES OF REGULAR BROKERS OR DEALERS........ K-1 CERTAIN FINANCIAL ADVISORS THAT RECEIVE ONE OR MORE TYPES OF PAYMENTS................................... L-1 AMOUNTS PAID TO INVESCO AIM DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS........................... M-1 ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS........................................... N-1 TOTAL SALES CHARGES..................................................................................... O-1 PENDING LITIGATION...................................................................................... P-1
ii GENERAL INFORMATION ABOUT THE TRUST FUND HISTORY AIM International Mutual Funds (the "Trust") is a Delaware statutory trust which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company. The Trust currently consists of six separate portfolios: AIM Asia Pacific Growth Fund, AIM European Growth Fund, AIM Global Small & Mid Cap Growth Fund, AIM Global Growth Fund, AIM International Core Equity Fund (formerly, INVESCO International Core Equity Fund), and AIM International Growth Fund (each a "Fund" and collectively, the "Funds"). Under the Amended and Restated Agreement and Declaration of Trust, dated September 14, 2005, as amended (the "Trust Agreement"), the Board of Trustees of the Trust (the "Board") is authorized to create new series of shares without the necessity of a vote of shareholders of the Trust. The Trust was originally incorporated on October 30, 1991 as AIM International Funds, Inc., a Maryland corporation. Pursuant to an Agreement and Plan of Reorganization, the Trust was reorganized as a Delaware statutory trust on November 25, 2003. The following funds were included in the reorganization: AIM Asia Pacific Growth Fund, AIM European Growth Fund, AIM Global Small & Mid Cap Growth Fund, AIM Global Growth Fund and AIM International Growth Fund. All historical financial and other information contained in this Statement of Additional Information for periods prior to November 25, 2003 relating to these Funds (or a class thereof) is that of the predecessor funds (or the corresponding class thereof). Prior to November 25, 2003, INVESCO International Core Equity Fund (formerly known as INVESCO International Blue Chip Value Fund) was a portfolio of AIM International Funds, Inc. II (formerly, INVESCO International Funds, Inc. ("IIFI")), a Maryland corporation. Pursuant to another Agreement and Plan of Reorganization, INVESCO International Core Equity Fund was redomesticated as a portfolio of the Trust. On October 15, 2004, INVESCO International Core Equity Fund changed its name to AIM International Core Equity Fund. Prior to July 1, 2002, AIM Asia Pacific Growth Fund, AIM European Growth Fund and AIM International Growth Fund were known as AIM Asian Growth Fund, AIM European Development Fund and AIM International Equity Fund, respectively. On May 1, 2008, AIM Global Aggressive Growth Fund changed its name to AIM Global Small & Mid Cap Growth Fund. SHARES OF BENEFICIAL INTEREST Shares of beneficial interest of the Trust are redeemable at their net asset value (subject, in certain circumstances, to a contingent deferred sales charge or redemption fee) at the option of the shareholder or at the option of the Trust in certain circumstances. The Trust allocates moneys and other property it receives from the issue or sale of shares of each of its series of shares, and all income, earnings and profits from such issuance and sales, subject only to the rights of creditors, to the appropriate Fund. These assets constitute the underlying assets of each Fund, are segregated on the Trust's books of account, and are charged with the expenses of such Fund and its respective classes. The Trust allocates any general expenses of the Trust not readily identifiable as belonging to a particular Fund by or under the direction of the Board, primarily on the basis of relative net assets, or other relevant factors. Each share of each Fund represents an equal proportionate interest in that Fund with each other share and is entitled to such dividends and distributions out of the income belonging to such Fund as are declared by the Board. Each Fund offers separate classes of shares as follows: 1
INSTITUTIONAL INVESTOR FUND CLASS A CLASS B CLASS C CLASS R CLASS CLASS - -------------------------------------- ------- ------- ------- ------- ------------- -------- AIM Asia Pacific Growth Fund X X X AIM European Growth Fund X X X X X AIM Global Growth Fund X X X X AIM Global Small & Mid Cap Growth Fund X X X X AIM International Core Equity Fund X X X X X X AIM International Growth Fund X X X X X
This Statement of Additional Information relates solely to the Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, if applicable, of the Funds. The Institutional Class shares of AIM Global Small & Mid Cap Growth Fund, AIM Global Growth Fund, AIM International Core Equity Fund and AIM International Growth Fund are intended for use by certain eligible institutional investors, including the following: - banks and trust companies acting in a fiduciary or similar capacity; - bank and trust company common and collective trust funds; - banks and trust companies investing for their own account; - entities acting for the account of a public entity (e.g. Taft-Hartley funds, states, cities or government agencies); - retirement plans; - platform sponsors with which Invesco Aim Distributors, Inc. ("Invesco Aim Distributors") has entered into an agreement; - proprietary asset allocation funds; and - Invesco Aim Management Group, Inc. ("Invesco Aim Management")and its affiliates. Each class of shares represents interests in the same portfolio of investments. Differing sales charges and expenses will result in differing net asset values and dividends and distributions. Upon any liquidation of the Trust, shareholders of each class are entitled to share pro rata in the net assets belonging to the applicable Fund allocable to such class available for distribution after satisfaction of outstanding liabilities of the Fund allocable to such class. Each share of a Fund generally has the same voting, dividend, liquidation and other rights; however, each class of shares of a Fund is subject to different sales loads, conversion features, exchange privileges and class-specific expenses. Only shareholders of a specific class may vote on matters relating to that class' distribution plan. Because Class B shares automatically convert to Class A shares on or about month-end which is at least eight years after the date of purchase, the Funds' requires that Class B shareholders must also approve any material increase in distribution fees submitted to Class A shareholders of that Fund. A pro rata portion of shares from reinvested dividends and distributions convert along with the Class B shares. Except as specifically noted above, shareholders of each Fund are entitled to one vote per share (with proportionate voting for fractional shares), irrespective of the relative net asset value of the shares of a Fund. However, on matters affecting an individual Fund or class of shares, a separate vote of shareholders of that Fund or class is required. Shareholders of a Fund or class are not entitled to vote on any matter which does not affect that Fund or class but that requires a separate vote of another Fund or class. An example of a matter that would be voted on separately by shareholders of each Fund is the 2 approval of the advisory agreement with Invesco Aim Advisors, Inc. ("Invesco Aim"), and an example of a matter that would be voted on separately by shareholders of each class of shares is approval of the distribution plans. When issued, shares of each Fund are fully paid and nonassessable, have no preemptive or subscription rights, and are freely transferable. Other than the automatic conversion of Class B shares to Class A shares, there are no conversion rights. Shares do not have cumulative voting rights, which means that in situations in which shareholders elect trustees, holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees of the Trust, and the holders of less than 50% of the shares voting for the election of trustees will not be able to elect any trustees. Under Delaware law, shareholders of a Delaware statutory trust shall be entitled to the same limitations of liability extended to shareholders of private for-profit corporations. There is a remote possibility, however, that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. The Trust Agreement disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders of the Trust. The Trust Agreement provides for indemnification out of the property of a Fund for all losses and expenses of any shareholder of such Fund held liable on account of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss due to shareholder liability is limited to circumstances in which a Fund is unable to meet its obligations and the complaining party is not held to be bound by the disclaimer. The trustees and officers of the Trust will not be liable for any act, omission or obligation of the Trust or any trustee or officer; however, a trustee or officer is not protected against any liability to the Trust or to the shareholders to which a trustee or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office with the Trust ("Disabling Conduct"). The Trust's Bylaws generally provide for indemnification by the Trust of the trustees, the officers and employees or agents of the Trust, provided that such persons have not engaged in Disabling Conduct. Indemnification does not extend to judgments or amounts paid in settlement in any actions by or in the right of the Trust. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers. The Trust's Bylaws provide for the advancement of payments of expenses to current and former trustees, officers and employees or agents of the Trust, or anyone serving at their request, in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding, for which such person would be entitled to indemnification; provided that any advancement of payments would be reimbursed unless it is ultimately determined that such person is entitled to indemnification for such expenses. SHARE CERTIFICATES. Shareholders of the Funds do not have the right to demand or require the Trust to issue share certificates and share certificates are not issued. DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS CLASSIFICATION The Trust is an open-end management investment company. Each of the Funds is "diversified" for purposes of the 1940 Act. INVESTMENT STRATEGIES AND RISKS Set forth below are detailed descriptions of the various types of securities and investment techniques that Invesco Aim and/or the Sub-Advisors (defined herein) may use in managing the Funds, as well as the risks associated with those types of securities and investment techniques. The descriptions of the types of securities and investment techniques below supplement the discussion of principal investment strategies and risks contained in each Fund's Prospectus; where a particular type of 3 security or investment technique is not discussed in a Fund's Prospectus, that security or investment technique is not a principal investment strategy. Not all of the Funds invest in all of the types of securities or use all of the investment techniques described below, and a Fund may not invest in all of these types of securities or use all of these techniques at any one time. A Fund's transactions in a particular type of security or use of a particular technique is subject to limitations imposed by a Fund's investment objective, policies and restrictions described in that Fund's Prospectus and/or this Statement of Additional Information, as well as the federal securities laws. Invesco Aim and/or the Sub-Advisors may invest in other types of securities and may use other investment techniques in managing the Funds, including those described below for Funds not specifically mentioned as investing in the security or using the investment technique, as well as securities and techniques not described, subject to limitations imposed by a Fund's investment objective, policies and restrictions described in that Fund's Prospectus and/or this Statement of Additional Information, as well as the federal securities laws. The Funds' investment objectives, policies, strategies and practices described below are non-fundamental unless otherwise indicated. Equity Investments Each Fund may invest in all of the following types of equity investments: COMMON STOCK. Common stock is issued by companies principally to raise cash for business purposes and represents a residual equity interest in the issuing company. Owners of stock, such as a Fund, share in a corporation's earnings through dividends which may be declared by the corporation although the receipt of dividends is generally not the principal benefit that a Fund seeks when it invests in stocks and similar investments. A Fund participates in the success or failure of any company in which it holds stock. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. PREFERRED STOCK. Preferred stock, unlike common stock, often offers a stated dividend rate payable from a corporation's earnings. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, which is a negative feature when interest rates decline. Dividends on some preferred stock may be "cumulative," requiring all or a portion of prior unpaid dividends to be paid before dividends are paid on the issuer's common stock. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. In some cases an issuer may offer auction rate preferred stock, which means that the interest to be paid is set by auction and will often be reset at stated intervals. The rights of preferred stocks on the distribution of a corporation's assets in the event of a liquidation are generally subordinate to the rights associated with a corporation's debt securities. CONVERTIBLE SECURITIES. AIM Asia Pacific Growth Fund may invest up to 20% of its total assets in securities exchangeable for or convertible into equity securities of Asia Pacific issuers. Each of AIM Global Growth Fund and AIM Global Small & Mid Cap Growth Fund may invest up to 20% of its total assets in securities exchangeable for or convertible into equity securities of foreign and domestic issuers. AIM European Growth Fund may invest up to 20% of its total assets in securities exchangeable for or convertible into equity securities of European issuers. Each of AIM International Growth Fund and AIM International Core Equity Fund may invest up to 20% of its total assets in securities exchangeable for or convertible into marketable equity securities of foreign issuers. For a discussion of the risks of investments in foreign issuers, please see "Foreign Securities" below in this section. 4 Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into a prescribed amount of common stock or other equity securities at a specified price and time. The holder of convertible securities is entitled to receive interest paid or accrued on debt, or dividends paid or accrued on preferred stock, until the security matures or is converted. The value of a convertible security depends on interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. Convertible securities may be illiquid, and may be required to convert at a time and at a price that is unfavorable to a Fund. ALTERNATIVE ENTITY SECURITIES. Companies that are formed as limited partnerships, limited liability companies, business trusts or other non-corporate entities, which may issue equity securities that are similar to common or preferred stock of corporations. Foreign Investments FOREIGN SECURITIES. Each Fund may invest in foreign securities. Foreign securities are equity or debt securities issued by issuers outside the United States, and include securities in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), or other securities representing underlying securities of foreign issuers. For a discussion of ADRs and EDRs, please refer to "Description of the Funds and Their Investments and Risks - Investment Strategies and Risks - Foreign Investments - ADRs and EDRs" below. Each of AIM Asia Pacific Growth Fund, AIM European Growth Fund, AIM International Core Equity Fund and AIM International Growth Fund may invest all of its total assets in foreign securities. Each of AIM Global Growth Fund and AIM Global Small & Mid Cap Growth Fund may invest a significant amount of its total assets in foreign securities. Investments by a Fund in foreign securities, whether denominated in U.S. dollars or foreign currencies, may entail all of the risks set forth below in addition to those accompanying an investment in U.S. issued securities. Investments by a Fund in ADRs, EDRs or similar securities also may entail some or all of the risks described below, as well as the risks set forth below under "Description of the Funds and Their Investments and Risks - Investment Strategies and Risks - Foreign Investments - ADRs and EDRs." Currency Risk. The value of the Funds' foreign investments will be affected by changes in currency exchange rates. The U.S. dollar value of a foreign security decreases when the value of the U.S. dollar rises against the foreign currency in which the security is denominated, and increases when the value of the U.S. dollar falls against such currency. Political and Economic Risk. The economies of many of the countries in which the Funds may invest may not be as developed as the United States' economy and may be subject to significantly different forces. Political or social instability and developments, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets could also adversely affect the value of the Funds' investments. Regulatory Risk. Foreign companies are not registered with the Securities and Exchange Commission ("SEC") and are generally not subject to the regulatory controls imposed on United States issuers and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic securities. Foreign companies are not subject to uniform accounting, auditing and financial reporting standards, corporate governance practices and requirements comparable to those applicable to domestic companies. Therefore, financial information about foreign companies may be incomplete, or may not be comparable to the information available on U.S. companies. Income from foreign securities owned by the Funds may be reduced by a withholding tax at the source, which tax would reduce dividend income payable to the Funds' shareholders. 5 Market Risk. The securities markets in many of the countries in which the Funds invest often have substantially less trading volume than the major United States markets. As a result, the securities of some foreign companies may be less liquid and experience more price volatility than comparable domestic securities. Increased custodian costs as well as administrative costs (such as the need to use foreign custodians) may be associated with the maintenance of assets in foreign jurisdictions. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. In addition, transaction costs in foreign securities markets are likely to be higher, since brokerage commission rates in foreign countries are likely to be higher than in the United States. Risks of Developing Countries. AIM Asia Pacific Growth Fund may invest without limit in securities of companies located in developing countries. AIM European Growth Fund and AIM Global Small & Mid Cap Growth Fund may each invest up to 35%, and AIM Global Growth Fund and AIM International Core Equity Fund may each invest up to 20%, of their respective total assets in securities of companies located in developing countries. AIM International Growth Fund may invest without limit, but does not intend to invest more than 20% of its total assets in securities of companies located in developing countries. Developing countries are those countries which are not included in the MSCI World Index. The Funds consider various factors when determining whether a company is in a developing country, including whether (1) it is organized under the laws of a developing country; (2) it has a principal office in a developing country; (3) it derives 50% or more of its total revenues from business in developing markets countries; or (4) its securities are traded principally on a stock exchange, or in an over-the-counter market, in a developing country. Investments in developing countries present risks greater than, and in addition to, those presented by investments in foreign issuers in general. A number of developing countries restrict, to varying degrees, foreign investment in stocks. Repatriation of investment income, capital, and the proceeds of sales by foreign investors may require governmental registration and/or approval in some developing countries. A number of the currencies of developing countries have experienced significant declines against the U.S. dollar in recent years, and devaluation may occur subsequent to investments in these currencies by the Funds. Inflation and rapid fluctuations in inflation rates have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries. Many of the developing securities markets are relatively small or less diverse, have low trading volumes, suffer periods of relative illiquidity, and are characterized by significant price volatility. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, seizure, nationalization, or creation of government monopolies, any of which may have a detrimental effect on the Funds' investments. FOREIGN EXCHANGE TRANSACTIONS. Each Fund has authority to deal in foreign exchange between currencies of the different countries in which it will invest as a hedge against possible variations in the foreign exchange rates between those currencies. A Fund may commit the same percentage of its assets to foreign exchange transactions as it can invest in foreign securities. Foreign exchange transactions include direct purchases of futures contracts with respect to foreign currency, and contractual agreements to purchase or sell a specified currency at a specified future date (up to one year) at a price set at the time of the contract. Such contractual commitments may be forward contracts entered into directly with another party or exchange traded futures contracts. Foreign exchange transactions also include transactions conducted on a cash or "spot" basis at the spot rate for purchasing or selling currency in the foreign currency exchange markets. The Funds may utilize either specific transactions ("transaction hedging") or portfolio positions ("position hedging") to hedge foreign currency exposure through foreign exchange transactions. Transaction hedging is the purchase or sale of foreign currency with respect to specific receivables or payables of a Fund accruing in connection with the purchase or sale of its portfolio securities, the sale and redemption of shares of the Fund, or the payment of dividends and distributions by the Fund. Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions (or underlying portfolio security positions, such as in an ADR) denominated or quoted in a foreign currency. There can be no guarantee that these investments will be successful. Additionally, foreign exchange transactions may involve some of the risks of investments in foreign securities. 6 ADRS AND EDRS. ADRs are receipts typically issued by U.S. banks. ADRs are receipts for the shares of foreign corporations that are held by the bank issuing the receipt. An ADR entitles its holder to all dividends and capital gains on the underlying foreign securities, less any fees paid to the bank. Purchasing ADRs gives a Fund the ability to purchase the functional equivalent of foreign securities without going to the foreign securities markets to do so. ADRs are bought and sold in U.S. dollars, not foreign currencies. An ADR that is "sponsored" means that the foreign corporation whose shares are represented by the ADR is actively involved in the issuance of the ADR, and generally provides material information about the corporation to the U.S. market. An "unsponsored" ADR program means that the foreign corporation whose shares are held by the bank is not obligated to disclose material information in the United States, and, therefore, the market value of the ADR may not reflect important facts known only to the foreign company. Since they mirror their underlying foreign securities, ADRs generally have the same risks as investing directly in the underlying foreign securities. EDRs are similar to ADRs, except they are typically issued by European banks or trust companies. Debt Investments Each of AIM Asia Pacific Growth Fund, AIM European Growth Fund, AIM International Core Equity Fund and AIM International Growth Fund may also invest up to 20% of its assets in high-grade short-term securities and debt securities including U.S. Government obligations and investment grade corporate bonds, whether denominated in U.S. dollars or foreign currencies. Each of AIM Global Small & Mid Cap Growth Fund and AIM Global Growth Fund may also invest up to 35% of its assets in high-grade short-term securities and debt securities, including U.S. Government obligations and investment grade corporate bonds, whether denominated in U.S. dollars or foreign currencies. U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest, subject to the limitations set forth above, in U.S. Government Obligations. Obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities include bills, notes and bonds issued by the U.S. Treasury, as well as "stripped" or "zero coupon" U.S. Treasury obligations representing future interest or principal payments on U.S. Treasury notes or bonds. Stripped securities are sold at a discount to their "face value," and may exhibit greater price volatility than interest-bearing securities since investors receive no payment until maturity. Obligations of certain agencies and instrumentalities of the U.S. Government, such as the Government National Mortgage Association ("GNMA"), are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal National Mortgage Association ("FNMA"), are supported by the right of the issuer to borrow from the U.S. Treasury; others, such as those of the former Student Loan Marketing Association ("SLMA"), are supported by the discretionary authority of the U.S. Government to purchase the agency's obligations; still others, though issued by an instrumentality chartered by the U.S. Government, like the Federal Farm Credit Bureau ("FFCB"), are supported only by the credit of the instrumentality. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so. INVESTMENT GRADE CORPORATE DEBT OBLIGATIONS. Each Fund may invest, subject to the limitations set forth above, in U.S. dollar-denominated debt obligations issued or guaranteed by U.S. corporations or U.S. commercial banks, U.S. dollar-denominated obligations of foreign issuers and debt obligations of foreign issuers denominated in foreign currencies. Such debt obligations include, among others, bonds, notes, debentures and variable rate demand notes. In choosing corporate debt securities on behalf of a Fund, its portfolio managers may consider (i) general economic and financial conditions; (ii) the specific issuer's (a) business and management, (b) cash flow, (c) earnings coverage of interest and dividends, (d) ability to operate under adverse economic conditions, (e) fair market value of assets, and (f) in the case of foreign issuers, unique political, economic or social conditions applicable to such issuer's country; and, (iii) other considerations deemed appropriate. The Funds will purchase only investment grade corporate debt securities. Descriptions of debt securities ratings are found in Appendix A. 7 LIQUID ASSETS. For cash management purposes, each Fund may hold a portion of its assets in cash or cash equivalents, including shares of affiliated money market funds. In anticipation of or in response to adverse market or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions, each Fund may temporarily hold all or a portion of its assets in cash, cash equivalents (including shares of affiliated money market funds) or high-quality debt instruments. As a result, a Fund may not achieve its investment objective. Cash equivalents include money market instruments (such as certificates of deposit, time deposits, bankers' acceptances from U.S. or foreign banks, and repurchase agreements), shares of affiliated money market funds or high-quality debt obligations (such as U.S. Government obligations, commercial paper, master notes and other short-term corporate instruments and municipal obligations). Other Investments REAL ESTATE INVESTMENT TRUSTS ("REITS"). To the extent consistent with their respective investment objectives and policies, each Fund may invest up to 15% of its total assets in equity and/or debt securities issued by REITs. REITs are trusts that sell equity or debt securities to investors and use the proceeds to invest in real estate or interests therein. A REIT may focus on particular projects, such as apartment complexes, or geographic regions, such as the southeastern United States, or both. To the extent that a Fund has the ability to invest in REITs, the Fund could conceivably own real estate directly as a result of a default on the securities it owns. A Fund, therefore, may be subject to certain risks associated with the direct ownership of real estate including difficulties in valuing and trading real estate, declines in the value of real estate, risks related to general and local economic conditions, adverse changes in the climate for real estate, environmental liability risks, increases in property taxes and operating expenses, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates. In addition to the risks described above, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are dependent upon management skill, are not diversified, and are therefore subject to the risk of financing single or a limited number of projects. Such trusts are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to maintain an exemption from the 1940 Act. Changes in interest rates may also affect the value of debt securities held by a Fund. By investing in REITs indirectly through a Fund, a shareholder will bear not only his/her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. OTHER INVESTMENT COMPANIES. Each Fund may purchase shares of other investment companies. For each Fund, the 1940 Act imposes the following restrictions on investments in other investment companies: (i) a Fund may not purchase more than 3% of the total outstanding voting stock of another investment company; (ii) a Fund may not invest more than 5% of its total assets in securities issued by another investment company; and (iii) a Fund may not invest more than 10% of its total assets in securities issued by other investment companies. These restrictions do not apply to investments by the Funds in investment companies that are money market funds, including money market funds that have Invesco Aim or an affiliate of Invesco Aim as an investment advisor (the "Affiliated Money Market Funds"). With respect to a Fund's purchase of shares of another investment company, including an Affiliated Money Market Fund, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company. EXCHANGE-TRADED FUNDS. Each Fund may purchase shares of exchange-traded funds ("ETFs"). Most ETFs are registered under the 1940 Act as investment companies. Therefore, a Fund's purchase of shares of an ETF may be subject to the restrictions on investments in other investment companies discussed above under "Other Investment Companies." 8 ETFs hold portfolios of securities, commodities and/or currencies that are designed to replicate, as closely as possible before expenses, the price and/or yield of (i) a specified market or other index, (ii) a basket of securities, commodities or currencies, or (iii) a particular commodity or currency. The performance results of ETFs will not replicate exactly the performance of the pertinent index, basket, commodity or currency due to transaction and other expenses, including fees to service providers, borne by ETFs. ETF shares are sold and redeemed at net asset value only in large blocks called creation units and redemption units, respectively. ETF shares also may be purchased and sold in secondary market trading on national securities exchanges, which allows investors to purchase and sell ETF shares at their market price throughout the day. Investments in ETFs involve the same risks associated with a direct investment in the commodity or currency, or in the types of securities, commodities and/or currencies included in the indices or baskets the ETFs are designed to replicate. In addition, shares of an ETF may trade at a market price that is higher or lower than their net asset value and an active trading market in such shares may not develop or continue. Moreover, trading of an ETF's shares may be halted if the listing exchange's officials deem such action to be appropriate, the shares are de-listed from the exchange, or the activation of market-wide "circuit breakers" (which are tied to large decreases in stock prices) halts stock trading generally. Finally, there can be no assurance that the portfolio of securities, commodities and/or currencies purchased by an ETF to replicate (i) a particular index or basket will replicate such index or basket, or (ii) a commodity or currency will replicate the prices of such commodity or currency. Investment Techniques DELAYED DELIVERY TRANSACTIONS. Each Fund may engage in delayed delivery transactions. Delayed delivery transactions, also referred to as forward commitments, involve commitments by a Fund to dealers or issuers to acquire or sell securities at a specified future date beyond the customary settlement for such securities. These commitments may fix the payment price and interest rate to be received or paid on the investment. A Fund may purchase securities on a delayed delivery basis to the extent it can anticipate having available cash on settlement date. Delayed delivery agreements will not be used as a speculative or leverage technique. Investment in securities on a delayed delivery basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a delayed delivery commitment. Until the settlement date, a Fund will segregate liquid assets of a dollar value sufficient at all times to make payment for the delayed delivery transactions. Such segregated liquid assets will be marked-to-market daily, and the amount segregated will be increased if necessary to maintain adequate coverage of the delayed delivery commitments. No additional delayed delivery agreements or when-issued commitments (as described below) will be made by a Fund if, as a result, more than 25% of the Fund's total assets would become so committed. The delayed delivery securities, which will not begin to accrue interest or dividends until the settlement date, will be recorded as an asset of a Fund and will be subject to the risk of market fluctuation. The purchase price of the delayed delivery securities is a liability of a Fund until settlement. Absent extraordinary circumstances, a Fund will not sell or otherwise transfer the delayed delivery basis securities prior to settlement. The Funds may enter into buy/sell back transactions (a form of delayed delivery agreement). In a buy/sell back transaction, a Fund enters a trade to sell securities at one price and simultaneously enters a trade to buy the same securities at another price for settlement at a future date. WHEN-ISSUED SECURITIES. Each Fund may purchase when-issued securities. Purchasing securities on a "when-issued" basis means that the date for delivery of and payment for the securities is not fixed at the date of purchase, but is set after the securities are issued. The payment obligation and, if applicable, the interest rate that will be received on the securities are fixed at the time the buyer enters 9 into the commitment. A Fund will only make commitments to purchase such securities with the intention of actually acquiring such securities, but the Fund may sell these securities before the settlement date if it is deemed advisable. If a Fund purchases a when-issued security, the Fund will segregate liquid assets in an amount equal to the when-issued commitment. If the market value of such segregated assets declines, additional liquid assets will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued commitments. No additional delayed delivery agreements (as described above) or when-issued commitments will be made by a Fund if, as a result, more than 25% of the Fund's total assets would become so committed. Securities purchased on a when-issued basis and the securities held in a Fund's portfolio are subject to changes in market value based upon the public's perception of the creditworthiness of the issuer and, if applicable, changes in the level of interest rates. Therefore, if a Fund is to remain substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be a possibility that the market value of the Fund's assets will fluctuate to a greater degree. Furthermore, when the time comes for the Fund to meet its obligations under when-issued commitments, the Fund will do so by using then available cash flow, by sale of the segregated liquid assets, by sale of other securities or, although it would not normally expect to do so, by directing the sale of the when-issued securities themselves (which may have a market value greater or less than the Fund's payment obligation). Investment in securities on a when-issued basis may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must sell another security in order to honor a when-issued commitment. SHORT SALES. Each Fund may engage in short sales. The Funds will only make short sales "against the box," meaning that at all times when a short position is open a Fund owns an equal amount of such securities or securities convertible into, or exchangeable without payment of any further consideration for, securities of the same issue as, and in an amount equal to, the securities sold short. To secure its obligation to deliver the securities sold short against the box, a Fund will segregate with its custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. A Fund will not sell a security short if, as a result of such short sale, the aggregate market value of all securities sold short exceeds 10% of the Funds' total assets. A Fund will make a short sale, as a hedge, when it believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund or a security convertible into or exchangeable for such security, or when the Fund does not want to sell the security it owns, because it wishes to defer recognition of gain or loss for federal income tax purposes. In such case, any future losses in the Fund's long position should be reduced by a gain in the short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced will depend upon the amount of the security sold short relative to the amount a Fund owns, either directly or indirectly, and, in the case where a Fund owns convertible securities, changes in the conversion premium. In determining the number of shares to be sold short against a Fund's position in a convertible security, the anticipated fluctuation in the conversion premium is considered. Short sales against the box may afford a Fund an opportunity to earn additional current income to the extent it is able to enter into arrangements with broker-dealers through which the short sales are executed to receive income with respect to the proceeds of the short sales during the period the Fund's short positions remain open. There is no assurance that a Fund will be able to enter into such arrangements. Short sales against the box may be subject to special tax treatment as "constructive sales" and require the Fund to recognize any taxable gain unless an exception to the constructive sale rule applies. See "Dividends, Distributions and Tax Matters - Tax Matters - Determination of Taxable Income of a Regulated Investment Company." 10 SWAP AGREEMENTS. Each Fund may enter into swap agreements to hedge against fluctuations in the price of portfolio securities, to enhance total return or to attempt to obtain a particular desired return at a lower cost to the Fund than if it had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are calculated based on a notional amount. The notional amount is a predetermined amount which is used to calculate the exchanged amounts of a particular instrument. For example, an interest rate swap would multiply each interest rate to be swapped against a notional principal amount to determine the amount of each party's payment. Swaps are generally governed by a single master agreement for each counterparty. The agreements may allow for netting of the counterparties' obligations on specific transactions in which case a Fund's obligation or rights will be the net amount owed to or by the counterparty. Commonly used swap agreements include: - interest rate swaps (the parties exchange a floating rate payment for a fixed rate payment), - currency swaps (the parties exchange a U.S. dollar-denominated payment for a payment denominated in a different currency), - index swaps (the parties exchange a payment tied to the price of one index for a payment tied to the price of another index), - total return swaps (the parties exchange a fixed payment for the total return of a reference security, investment or index), and - swaptions (an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date). A Fund's current obligations under a swap agreement will be accrued daily (on a net basis), and the Fund will maintain cash or liquid assets in an amount equal to amounts owed to a swap counterparty less the value of any collateral segregated to secure the swap counterparty. A Fund will not enter into a transaction with any single counterparty if the net amount owed or to be received under existing transactions under the swap agreements with that counterparty would exceed 5% of the Fund's net assets determined on the date the transaction is entered into. The use of swap agreements by a Fund entails certain risks. Swaps may be subject to liquidity risk, which exists when a particular swap is difficult to sell or liquidate. If a swap transaction is particularly large or if the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses. Swaps may be subject to pricing risk, which exists when a particular swap becomes extraordinarily expensive (or cheap) relative to historical prices or the prices of corresponding cash instruments. Swap counterparties may default on their obligations. Interest rate and currency swaps could result in losses if interest rate or currency changes are not correctly anticipated by the Fund. Total return swaps could result in losses if the reference index, security or investments do not perform as anticipated by the Fund. Although this will not guarantee that the counterparty does not default, the Fund will not enter into a transaction with any counterparty that Invesco Aim and/or the Sub-Advisors believe does not have the financial resources to honor its obligation under the transaction. Further, Invesco Aim will monitor the financial stability of a counterparty to a transaction in an effort to protect the Fund's investments. Where the obligations of the counterparty are guaranteed, Invesco Aim monitors the financial stability of 11 the guarantor instead of the counterparty. For a discussion of the tax considerations relating to swap agreements, see "Dividends, Distributions and Tax Matters - Swap Agreements." INTERFUND LOANS. Each Fund may lend uninvested cash up to 15% of its net assets to other funds advised by Invesco Aim (the "AIM Funds") and each Fund may borrow from other AIM Funds to the extent permitted under such Fund's investment restrictions. During temporary or emergency periods, the percentage of a Fund's net assets that may be loaned to other AIM Funds may be increased as permitted by the SEC. If any interfund borrowings are outstanding, a Fund cannot make any additional investments. If a Fund has borrowed from other AIM Funds and has aggregate borrowings from all sources that exceed 10% of such Fund's total assets, such Fund will secure all of its loans from other AIM Funds. The ability of a Fund to lend its securities to other AIM Funds is subject to certain other terms and conditions. BORROWING. Each Fund may borrow money to a limited extent for temporary or emergency purposes. If there are unusually heavy redemptions because of changes in interest rates or for any other reason, a Fund may have to sell a portion of its investment portfolio at a time when it may be disadvantageous to do so. Selling fund securities under these circumstances may result in a lower net asset value per share or decreased dividend income, or both. The Trust believes that, in the event of abnormally heavy redemption requests, a Fund's borrowing ability would help to mitigate any such effects and could make the forced sale of their portfolio securities less likely. LENDING PORTFOLIO SECURITIES. The Funds may each lend their portfolio securities (principally to broker-dealers) where such loans are callable at any time and are continuously secured by segregated collateral equal to no less than the market value, determined daily, of the loaned securities. Such collateral will be cash, letters of credit, or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Each Fund may lend portfolio securities to the extent of one-third of its total assets. A Fund will not have the right to vote securities while they are being lent, but it can call a loan in anticipation of an important vote. The Fund would receive income in lieu of dividends on loaned securities and may, at the same time, generate income on the loan collateral or on the investment of any cash collateral. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the loaned securities increases and the collateral is not increased accordingly, or in the event of a default by the borrower. The Fund could also experience delays and costs in gaining access to the collateral. Any cash received as collateral for loaned securities will be invested, in accordance with a Fund's investment guidelines, in short-term money market instruments or Affiliated Money Market Funds. For purposes of determining whether a Fund is complying with its investment policies, strategies and restrictions, the Fund will consider the loaned securities as assets of the Fund, but will not consider any collateral received as a Fund asset. REPURCHASE AGREEMENTS. Each of the Funds may engage in repurchase agreement transactions. Repurchase agreements are agreements under which a Fund acquires ownership of a security from a broker-dealer or bank that agrees to repurchase the security at a mutually agreed upon time and price (which is higher than the purchase price), thereby determining the yield during a Fund's holding period. A Fund may, however, enter into a "continuing contract" or "open" repurchase agreement under which the seller is under a continuing obligation to repurchase the underlying obligation from the Fund on demand and the effective interest rate is negotiated on a daily basis. Repurchase agreements are considered loans by a Fund under the 1940 Act. If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, a Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the underlying security and loss of income. The securities underlying a repurchase agreement will be marked-to-market every business day so that the value of such securities is at least equal to the investment value of the repurchase agreement, including any accrued interest thereon. 12 The Funds may invest their cash balances in joint accounts with other AIM Funds for the purpose of investing in repurchase agreements with maturities not to exceed 60 days, and in certain other money market instruments with remaining maturities not to exceed 90 days. ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in securities that are illiquid including repurchase agreements with, in the absence of certain demand features, remaining maturities in excess of seven (7) days. Illiquid securities are securities that cannot be disposed of within seven days in the normal course of business at the price at which they are valued. Illiquid securities may include securities that are subject to restrictions on resale because they have not been registered under the Securities Act of 1933 (the "1933 Act"). Restricted securities may, in certain circumstances, be resold pursuant to Rule 144A under the 1933 Act, and thus may or may not constitute illiquid securities. Limitations on the resale of restricted securities may have an adverse effect on their marketability, which may prevent a Fund from disposing of them promptly at reasonable prices. A Fund may have to bear the expense and incur the delays associated with registering such securities for resale. RULE 144A SECURITIES. Each Fund may invest in Rule 144A securities. Rule 144A securities are securities which, while privately placed, are eligible for purchase and resale pursuant to Rule 144A under the 1933 Act. This Rule permits certain qualified institutional buyers, such as the Funds, to trade in privately placed securities even though such securities are not registered under the 1933 Act. Invesco Aim, under the supervision of the Board, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the Funds' restriction on investment in illiquid securities. Determination of whether a Rule 144A security is liquid or not is a question of fact. In making this determination Invesco Aim will consider the trading markets for the specific security taking into account the unregistered nature of a Rule 144A security. In addition, Invesco Aim could consider the (i) frequency of trades and quotes; (ii) number of dealers and potential purchasers; (iii) dealer undertakings to make a market; and (iv) nature of the security and of market place trades (for example, the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Invesco Aim will also monitor the liquidity of Rule 144A securities and, if as a result of changed conditions, Invesco Aim determines that a Rule 144A security is no longer liquid, Invesco Aim will review a Fund's holdings of illiquid securities to determine what, if any, action is required to assure that such Fund complies with its restriction on investment in illiquid securities. Investing in Rule 144A securities could increase the amount of each Fund's investments in illiquid securities if qualified institutional buyers are unwilling to purchase such securities. UNSEASONED ISSUERS. Each Fund may invest in the securities of unseasoned issuers. Investments in the equity securities of companies having less than three years' continuous operations (including operations of any predecessor) involve more risk than investments in the securities of more established companies because unseasoned issuers have only a brief operating history and may have more limited markets and financial resources. As a result, securities of unseasoned issuers tend to be more volatile than securities of more established companies. Derivatives The Funds may each invest in forward currency contracts, futures contracts, options on securities, options on indices, options on currencies, and options on futures contracts. The Funds may, as applicable, invest in such instruments to attempt to hedge against the overall level of investment and currency risk normally associated with each Fund's investments, and to increase the Fund's return. These instruments are often referred to as "derivatives," which may be defined as financial instruments whose performance is derived, at least in part, from the performance of another asset (such as a security, currency or an index of securities). PUT AND CALL OPTIONS. The Funds may engage in certain strategies involving options to attempt to manage the risk of their investments or, in certain circumstances, for investment (e.g., as a substitute for investing in securities). Options transactions present the possibility of large amounts of exposure, 13 which may result in a Fund's net asset value being more sensitive to changes in the value of the related investment. Each Fund may purchase and sell put and call options. A call option gives the purchaser the right to buy the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be at the time of exercise. If the purchaser exercises the call option, the writer of a call option is obligated to sell the underlying security, contract or foreign currency. A put option gives the purchaser the right to sell the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration date of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be at the time of exercise. If the purchaser exercises the put option, the writer of a put option is obligated to buy the underlying security, contract or foreign currency. The premium paid to the writer is consideration for undertaking the obligations under the option contract. Until an option expires or is offset, the option is said to be "open." When an option expires or is offset, the option is said to be "closed." A Fund will not write (sell) options if, immediately after such sale, the aggregate value of securities or obligations underlying the outstanding options exceeds 20% of the Fund's total assets. A Fund will not purchase options if, at the time of the investment, the aggregate premiums paid for the options will exceed 5% of the Fund's total assets. Pursuant to federal securities rules and regulations, if a Fund writes options it may be required to set aside assets to reduce the risks associated with writing those options. This process is described in more detail below in the section "Cover." The value of an option position will reflect, among other things, the current market value of the underlying investment, the time remaining until expiration, the relationship of the exercise price to the market price of the underlying investment, the price volatility of the underlying investment and general market and interest rate conditions. Options that expire unexercised have no value. A Fund may effectively terminate its right or obligation under an option by entering into a closing transaction. For example, a Fund may terminate its obligation under a call or put option that it had written by purchasing an identical call or put option; which is known as a closing purchase transaction. Conversely, a Fund may terminate a position in a put or call option it had purchased by writing an identical put or call option, which is known as a closing sale transaction. Closing transactions permit a Fund to realize profits or limit losses on an option position prior to its exercise or expiration. Writing Options. A Fund may write put and call options in an attempt to realize, through the receipt of premiums, a greater current return than would be realized on the underlying security, contract, or foreign currency alone. A Fund may only write a call option on a security if it owns an equal amount of such securities or securities convertible into, or exchangeable, without payment of any further consideration, for securities of the same issue as, and equal in amount to, the securities subject to the call option. In return for the premium received for writing a call option, the Fund foregoes the opportunity for profit from a price increase in the underlying security, contract, or foreign currency above the exercise price so long as the option remains open, but retains the risk of loss should the price of the security, contract, or foreign currency decline. A Fund may write a put option without owning the underlying security if it covers the option as described below in the section "Cover." A Fund may only write a put option on a security as part of an investment strategy, and not for speculative purposes. In return for the premium received for writing a put option, the Fund assumes the risk that the price of the underlying security, contract, or foreign currency will decline below the exercise price, in which case the put would be exercised and the Fund would suffer a loss. If an option that a Fund has written expires, it will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security, contract or 14 currency during the option period. If the call option is exercised, a Fund will realize a gain or loss from the sale of the underlying security, contract or currency, which will be increased or offset by the premium received. A Fund would write a put option at an exercise price that, reduced by the premium received on the option, reflects the price it is willing to pay for the underlying security, contract or currency. The obligation imposed upon the writer of an option is terminated upon the expiration of the option, or such earlier time at which a Fund effects a closing purchase transaction by purchasing an option (put or call as the case may be) identical to that previously sold. Writing call options can serve as a limited hedge because declines in the value of the hedged investment would be offset to the extent of the premium received for writing the option. Closing transactions may be effected in order to realize a profit on an outstanding call option, to prevent an underlying security, contract or currency from being called or to permit the sale of the underlying security, contract or currency. Furthermore, effecting a closing transaction will permit a Fund to write another call option on the underlying security, contract or currency with either a different exercise price or expiration date, or both. Purchasing Options. A Fund may purchase a call option for the purpose of acquiring the underlying security, contract or currency for its portfolio. The Fund is not required to own the underlying security in order to purchase a call option, and may only cover this transaction with cash, liquid assets and/or short-term debt securities. Utilized in this fashion, the purchase of call options would enable a Fund to acquire the security, contract or currency at the exercise price of the call option plus the premium paid. So long as it holds such a call option, rather than the underlying security or currency itself, the Fund is partially protected from any unexpected increase in the market price of the underlying security, contract or currency. If the market price does not exceed the exercise price, the Fund could purchase the security on the open market and could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option. Each of the Funds may also purchase call options on underlying securities, contracts or currencies against which it has written other call options. For example, where a Fund has written a call option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a call option with a different exercise strike and/or expiration date that would eliminate some or all of the risk associated with the written call. Used in combinations, these strategies are commonly referred to as "call spreads." A Fund may only purchase a put option on an underlying security, contract or currency ("protective put") owned by the Fund in order to protect against an anticipated decline in the value of the security, contract or currency. Such hedge protection is provided only during the life of the put option. The premium paid for the put option and any transaction costs would reduce any profit realized when the security, contract or currency is delivered upon the exercise of the put option. Conversely, if the underlying security, contract or currency does not decline in value, the option may expire worthless and the premium paid for the protective put would be lost. A Fund may also purchase put options on underlying securities, contracts or currencies against which it has written other put options. For example, where a Fund has written a put option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a put option with a different exercise price and/or expiration date that would eliminate some or all of the risk associated with the written put. Used in combinations, these strategies are commonly referred to as "put spreads." Likewise, a Fund may write call options on underlying securities, contracts or currencies against which it has purchased protective put options. This strategy is commonly referred to as a "collar." Over-The-Counter Options. Options may be either listed on an exchange or traded in over-the-counter ("OTC") markets. Listed options are third-party contracts (i.e., performance of the obligations of the purchaser and seller is guaranteed by the exchange or clearing corporation) and have standardized strike prices and expiration dates. OTC options are two-party contracts with negotiated strike prices and expiration dates. A Fund will not purchase an OTC option unless it believes that daily valuations for such options are readily obtainable. OTC options differ from exchange-traded options in that OTC options are transacted with dealers directly and not through a clearing corporation (which guarantees performance). Consequently, there is a risk of non-performance by the dealerwhich would result in the loss of any premium paid by a Fund as well as the loss of any expected benefit from the 15 transaction. Since no exchange is involved, OTC options are valued on the basis of an average of the last bid prices obtained from dealers, unless a quotation from only one dealer is available, in which case only that dealer's price will be used. In the case of OTC options, there can be no assurance that a liquid secondary market will exist for any particular option at any specific time. Because purchased OTC options in certain cases may be difficult to dispose of in a timely manner, the Fund may be required to treat some or all of these options (i.e., the market value) as illiquid securities. Although a Fund will enter into OTC options only with dealers that are expected to be capable of entering into closing transactions with it, there is no assurance that the Fund will in fact be able to close out an OTC option position at a favorable price prior to expiration. In the event of insolvency of the dealer, a Fund might be unable to close out an OTC option position at any time prior to its expiration. Index Options. Index options (or options on securities indices) are similar in many respects to options on securities, except that an index option gives the holder the right to receive, upon exercise, cash instead of securities, if the closing level of the securities index upon which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. The amount of cash is equal to the difference between the closing price of the index and the exercise price of the call or put times a specified multiple (the "multiplier"), which determines the total dollar value for each point of such difference. The risks of investment in index options may be greater than options on securities. Because index options are settled in cash, when a Fund writes a call on an index it cannot provide in advance for its potential settlement obligations by acquiring and holding the underlying securities. A Fund can offset some of the risk of writing a call index option position by holding a diversified portfolio of securities similar to those on which the underlying index is based. However, the Fund cannot, as a practical matter, acquire and hold a portfolio containing exactly the same securities as underlie the index and, as a result, bears a risk that the value of the securities held will not be perfectly correlated with the value of the index. Pursuant to federal securities rules and regulations, if a Fund writes index options it may be required to set aside assets to reduce the risks associated with writing those options. This process is described in more detail below in the section "Cover". STRADDLES. Each Fund, for hedging purposes, may write straddles (combinations of put and call options on the same underlying security) to adjust the risk and return characteristics of the Funds' overall position. A possible combined position would involve writing a covered call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written covered call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. WARRANTS. Each Fund may purchase warrants. Warrants are, in effect, longer-term call options. They give the holder the right to purchase a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving him a profit. Since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather than exercised. Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of the warrant, the current market value of the underlying security, the life of the warrant and various other investment factors. FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Each Fund may purchase futures contracts and options on futures contracts. A futures contract is a two party agreement to buy or sell a specified amount of a specified security or currency (or delivery of a cash settlement price, in the case of an index future) for a specified price at a designated date, time and place (collectively, "Futures Contracts"). A stock index Futures Contract provides for the delivery, at a designated date, time and place, of an amount of cash equal to a specified dollar amount times the difference between the stock 16 index value at the close of trading on the contract and the price agreed upon in the Futures Contract; no physical delivery of stocks comprising the index is made. Brokerage fees are incurred when a Futures Contract is bought or sold, and margin deposits must be maintained at all times when a Futures Contract is outstanding. A Fund will enter into Futures Contracts for hedging purposes only; that is, Futures Contracts will be sold to protect against a decline in the price of securities or currencies that the Fund owns, or Futures Contracts will be purchased to protect the Fund against an increase in the price of securities or currencies it has committed to purchase or expects to purchase. A Fund's hedging may include sales of Futures Contracts as an offset against the effect of expected increases in interest rates, and decreases in currency exchange rates and stock prices, and purchases of Futures Contracts as an offset against the effect of expected declines in interest rates, and increases in currency exchange rates or stock prices. The Funds currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities. The Funds will only enter into Futures Contracts that are traded (either domestically or internationally) on futures exchanges and are standardized as to maturity date and underlying financial instrument. Futures exchanges and trading thereon in the United States are regulated under the Commodity Exchange Act and by the Commodity Futures Trading Commission ("CFTC"). Foreign futures exchanges and trading thereon are not regulated by the CFTC and are not subject to the same regulatory controls. For a further discussion of the risks associated with investments in foreign securities, see "Foreign Investments" in this Statement of Additional Information. The Trust, on behalf of each Fund, has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a pool operator under that Act with respect to the Funds. Pursuant to federal securities rules and regulations, a Fund's use of Futures Contracts and options on Futures Contracts may require that Fund to set aside assets to reduce the risks associated with using Futures Contracts and options on Futures Contracts. This process is described in more detail below in the section "Cover." Closing out an open Futures Contract is effected by entering into an offsetting Futures Contract for the same aggregate amount of the identical financial instrument or currency and the same delivery date. There can be no assurance, however, that a Fund will be able to enter into an offsetting transaction with respect to a particular Futures Contract at a particular time. If a Fund is not able to enter into an offsetting transaction, it will continue to be required to maintain the margin deposits on the Futures Contract. "Margin" with respect to Futures Contracts is the amount of funds that must be deposited by a Fund in order to initiate Futures Contracts trading and maintain its open positions in Futures Contracts. A margin deposit made when the Futures Contract is entered ("initial margin") is intended to ensure the Fund's performance under the Futures Contract. The margin required for a particular Futures Contract is set by the exchange on which the Futures Contract is traded and may be significantly modified from time to time by the exchange during the term of the Futures Contract. Subsequent payments, called "variation margin," received from or paid to the futures commission merchant through which a Fund entered into the Futures Contract will be made on a daily basis as the price of the underlying security, currency or index fluctuates making the Futures Contract more or less valuable, a process known as marking-to-market. If a Fund were unable to liquidate a Futures Contract or an option on a Futures Contract position due to the absence of a liquid secondary market or the imposition of price limits, it could incur substantial losses. The Fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the Fund would continue to be required to make daily variation 17 margin payments and might be required to maintain the position being hedged by the Futures Contract or option or to maintain cash or securities in a segregated account. Options on Futures Contracts. Options on Futures Contracts are similar to options on securities or currencies except that options on Futures Contracts give the purchaser the right, in return for the premium paid, to assume a position in a Futures Contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the Futures Contract position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's Futures Contract margin account. The Funds currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities. FORWARD CURRENCY CONTRACTS. Each of the Funds may engage in forward currency transactions in anticipation of, or to protect itself against, fluctuations in exchange rates. A forward currency contract is an obligation, usually arranged with a commercial bank or other currency dealer, to purchase or sell a currency against another currency at a future date, which may be any fixed number of days (term) from the date of the forward currency contract agreed upon by the parties, and price as agreed upon by the parties at the time the contract is entered. A Fund either may accept or make delivery of the currency at the maturity of the forward currency contract. A Fund may also, if its counterparty agrees prior to maturity, enter into a closing transaction involving the purchase or sale of an offsetting contract. Forward currency contracts are traded over-the-counter, and not on organized commodities or securities exchanges. As a result, it may be more difficult to value such contracts, and it may be difficult to enter into closing transactions. A Fund may enter into forward currency contracts with respect to a specific purchase or sale of a security, or with respect to its portfolio positions generally. When a Fund purchases a security denominated in a foreign currency for settlement in the near future, it may immediately purchase in the forward market the currency needed to pay for and settle the purchase. By entering into a forward currency contract with respect to the specific purchase or sale of a security denominated in a foreign currency, the Fund can secure an exchange rate between the trade and settlement dates for that purchase or sale transaction. This practice is sometimes referred to as "transaction hedging." Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions denominated or quoted in a foreign currency. The cost to a Fund of engaging in forward currency contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward currency contracts are usually entered into on a principal basis, no fees or commissions are involved. The use of forward currency contracts does not eliminate fluctuations in the prices of the underlying securities a Fund owns or intends to acquire, but it does establish a rate of exchange in advance. In addition, while forward currency contract sales limit the risk of loss due to a decline in the value of the hedged currencies, they also limit any potential gain that might result should the value of the currencies increase. Pursuant to federal securities rules and regulations, a Fund's use of forward currency contracts may require that Fund to set aside assets to reduce the risks associated with using forward currency contracts. This process is described in more detail below in the section "Cover." COVER. Transactions using forward currency contracts, futures contracts and options (other than options purchased by a Fund) expose a Fund to an obligation to another party. A Fund will not enter into any such transactions unless, in addition to complying with all the restrictions noted in the disclosure above, it owns either (1) an offsetting ("covered") position in securities, currencies, or other options, forward currency contracts or futures contracts or (2) cash, liquid assets and/or short-term debt securities with a value sufficient at all times to cover its potential obligations not covered as provided in (1) above. Each Fund will comply with SEC guidelines regarding cover for these instruments and, if the guidelines so require, set aside cash or liquid securities. To the extent that a futures contract, forward currency contract 18 or option is deemed to be illiquid, the assets used to "cover" the Fund's obligation will also be treated as illiquid for purposes of determining the Fund's maximum allowable investment in illiquid securities. Even though options purchased by the Funds do not expose the Funds to an obligation to another party, but rather provide the Funds with a right to exercise, the Funds intend to "cover" the cost of any such exercise. To the extent that a purchased option is deemed illiquid, a Fund will treat the market value of the option (i.e., the amount at risk to the Fund) as illiquid, but will not treat the assets used as cover on such transactions as illiquid. Assets used as cover cannot be sold while the position in the corresponding forward currency contract, futures contract or option is open, unless they are replaced with other appropriate assets. If a large portion of a Fund's assets is used for cover or otherwise set aside, it could affect portfolio management or the Fund's ability to meet redemption requests or other current obligations. GENERAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES. The use by the Funds of options, futures contracts and forward currency contracts involves special considerations and risks, as described below. Risks pertaining to particular strategies are described in the sections that follow. (1) Successful use of hedging transactions depends upon Invesco Aim's and the Sub-Advisors' ability to correctly predict the direction of changes in the value of the applicable markets and securities, contracts and/or currencies. While Invesco Aim and/or the Sub-Advisors are experienced in the use of these instruments, there can be no assurance that any particular hedging strategy will succeed. (2) In a hedging transaction, there might be imperfect correlation between price movements of an option, futures contract or option thereon, or a forward currency contract and price movement of the investment(s) being hedged. For example, if the value of an option, futures contract or option thereon, or a forward currency contract used in a short hedge increased by less than the decline in value of the hedged investment(s), the hedge would not be fully successful. This might be caused by certain kinds of trading activity that distorts the normal price relationship between the security being hedged and an option, futures contract or option thereon, or a forward currency contract. Similarly, the effectiveness of hedges using options on indexes will depend on the degree of correlation between price movements in the index and price movements in the securities being hedged. A Fund is authorized to use options and futures contracts related to securities with issuers, maturities or other characteristics different from the securities in which it typically invests. This involves a risk that the options or futures position will not track the performance of the Fund's portfolio investments. The direction of options and futures price movements can also diverge from the direction of the movements of the prices of their underlying instruments, even if the underlying instruments match a Fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. A Fund may take positions in options and futures contracts with a greater or lesser face value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. (3) Hedging strategies, if successful, can reduce risk of loss by wholly or partially offsetting the negative effect of unfavorable price movements in the investments being hedged. However, hedging strategies can also reduce opportunity for gain by offsetting the positive effect of favorable price movements in the hedged investments. (4) A Fund's ability to close out a position in an option, futures contract or option thereon, or a forward currency contract prior to expiration or maturity depends on the degree of liquidity of the market 19 or, in the absence of such a market, the ability and willingness of the other party to the transaction (the "counterparty") to enter into a transaction closing out the position. Therefore, there is no assurance that any position can be closed out at a time and price that is favorable to a Fund. (5) As described above, a Fund might be required to maintain assets as "cover," maintain segregated accounts or make margin payments when it takes positions in instruments involving obligations to third parties. If a Fund were unable to close out its positions in such instruments, it might be required to continue to maintain such assets or accounts or make such payments until the position expired or matured. The requirements might impair the Fund's ability to sell a portfolio security or make an investment at a time when it would otherwise be favorable to do so, or require that the Fund sell a portfolio security at a disadvantageous time. (6) There is no assurance that a Fund will use hedging transactions. For example, if a Fund determines that the cost of hedging will exceed the potential benefit to the Fund, the Fund will not enter into such transaction. Additional Securities or Investment Techniques PRIVATIZED ENTERPRISES. AIM European Growth Fund may invest in privatized enterprises. The governments of certain foreign countries have, to varying degrees, embarked on privatization programs contemplating the sale of all or part of their interests in state enterprises. AIM European Growth Fund's investments in the securities of privatized enterprises include: (i) privately negotiated investments in a government- or state-owned or controlled company or enterprise that has not yet conducted an initial equity offering; (ii) investments in the initial offering of equity securities of a state enterprise or former state enterprise; and (iii) investments in the securities of a state enterprise following its initial equity offering. The ability of foreign entities, such as AIM European Growth Fund, to participate in privatizations may be limited by local law and there can be no assurance that privatization programs will be successful or that governments will not re-nationalize enterprises that have been privatized. INVESTMENTS IN ENTITIES WITH RELATIONSHIPS WITH THE FUNDS/ADVISOR. Each Fund may invest in securities issued, sponsored or guaranteed by the following types of entities or their affiliates: (i) entities that sell shares of the AIM Funds; (ii) entities that rate or rank the AIM Funds; (iii) exchanges on which the AIM Funds buy or sell securities; and (iv) entities that provide services to the AIM Funds (e.g., custodian banks). The Funds will decide whether to invest in or sell securities issued by these entities based on the merits of the specific investment opportunity. FUND POLICIES FUNDAMENTAL RESTRICTIONS. Each Fund is subject to the following investment restrictions, which may be changed only by a vote of such Fund's outstanding shares. Fundamental restrictions may be changed only by a vote of the lesser of (i) 67% or more of the Fund's shares present at a meeting if the holders of more than 50% of the outstanding shares are present in person or represented by proxy, or (ii) more than 50% of the Fund's outstanding shares. Any investment restriction that involves a maximum or minimum percentage of securities or assets (other than with respect to borrowing) shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund. (1) The Fund is a "diversified company" as defined in the 1940 Act. The Fund will not purchase the securities of any issuer if, as a result, the Fund would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as such statute, rules and regulations are amended from time to time or are interpreted from time to time by the SEC staff (collectively, the "1940 Act Laws and Interpretations") or except to the extent that the Fund may be permitted to do so by exemptive order or similar relief (collectively, with the 1940 Act Laws and Interpretations, the "1940 Act Laws, Interpretations and Exemptions"). In complying with this restriction, however, the Fund may purchase securities of other investment companies to the extent permitted by the 1940 Act Laws, Interpretations and Exemptions. 20 (2) The Fund may not borrow money or issue senior securities, except as permitted by the 1940 Act Laws, Interpretations and Exemptions. (3) The Fund may not underwrite the securities of other issuers. This restriction does not prevent the Fund from engaging in transactions involving the acquisition, disposition or resale of its portfolio securities, regardless of whether the Fund may be considered to be an underwriter under the 1933 Act. (4) The Fund will not make investments that will result in the concentration (as that term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) of its investments in the securities of issuers primarily engaged in the same industry. This restriction does not limit the Fund's investments in (i) obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or (ii) tax-exempt obligations issued by governments or political subdivisions of governments. In complying with this restriction, the Fund will not consider a bank-issued guaranty or financial guaranty insurance as a separate security. (5) The Fund may not purchase real estate or sell real estate unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from investing in issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein. (6) The Fund may not purchase physical commodities or sell physical commodities unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities. (7) The Fund may not make personal loans or loans of its assets to persons who control or are under common control with the Fund, except to the extent permitted by 1940 Act Laws, Interpretations and Exemptions. This restriction does not prevent the Fund from, among other things, purchasing debt obligations, entering into repurchase agreements, loaning its assets to broker-dealers or institutional investors, or investing in loans, including assignments and participation interests. (8) The Fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and restrictions as the Fund. The investment restrictions set forth above provide each of the Funds with the ability to operate under new interpretations of the 1940 Act or pursuant to exemptive relief from the SEC without receiving prior shareholder approval of the change. Even though each of the Funds has this flexibility, the Board has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which Invesco Aim and, when applicable, the Sub-Advisors must follow in managing the Funds. Any changes to these non-fundamental restrictions, which are set forth below, require the approval of the Board. NON-FUNDAMENTAL RESTRICTIONS. The following non-fundamental investment restrictions apply to each of the Funds. They may be changed for any Fund without approval of that Fund's voting securities. (1) In complying with the fundamental restriction regarding issuer diversification, the Fund will not, with respect to 75% of its total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities and securities issued by other investment companies), if, as a result, (i) more than 5% of the Fund's total assets would be invested in the securities of that issuer, or (ii) the Fund would hold more than 10% of the outstanding voting securities of that issuer. The Fund may purchase securities of other investment companies as permitted by the 1940 Act Laws, Interpretations and Exemptions. 21 (2) In complying with the fundamental restriction regarding borrowing money and issuing senior securities, the Fund may borrow money in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). The Fund may borrow from banks, broker-dealers or an AIM Fund. The Fund may not borrow for leveraging, but may borrow for temporary or emergency purposes, in anticipation of or in response to adverse market conditions, or for cash management purposes. The Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund's total assets or when any borrowings from an AIM Fund are outstanding. (3) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry. (4) Notwithstanding the fundamental restriction with regard to engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities, the Fund currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities. (5) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to an AIM Fund, on such terms and conditions as the SEC may require in an exemptive order. (6) Notwithstanding the fundamental restriction with regard to investing all assets in an open-end fund, the Fund may not invest all of its assets in the securities of a single open-end management investment company with the same fundamental investment objectives, policies and restrictions as the Fund. (7) The Funds may not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act. (8) AIM European Growth Fund normally invests at least 80% of its assets in securities of European companies. For purposes of the foregoing sentence, "assets" means net assets, plus the amount of any borrowings for investment purposes. The Fund will provide written notice to its shareholders prior to any change to this policy, as required by the 1940 Act Laws, Interpretations and Exemptions. (9) AIM Asia Pacific Growth Fund normally invests at least 80% of its assets in securities of companies in the Asia Pacific region (except Japanese companies). For purposes of the foregoing sentence, "assets" means net assets, plus the amount of any borrowings for investment purposes. The Fund will provide written notice to its shareholders prior to any change to this policy, as required by the 1940 Act Laws, Interpretations and Exemptions. (10) AIM Global Small & Mid Cap Growth Fund normally invests at least 80% of its assets in equity securities of small- and mid-capitalization growth companies. For purposes of the foregoing sentence, "assets" means net assets, plus the amount of any borrowings for investment purposes. The Fund will provide written notice to its shareholders prior to any change to this policy, as required by the 1940 Act Laws, Interpretations and Exemptions. (11) AIM International Core Equity Fund normally invests at least 80% of its assets in equity securities. For purposes of the foregoing sentence, "assets" means net assets, plus the amount of any borrowings for investment purposes. The Fund will provide written notice to its shareholders prior to any change to this policy, as required by the 1940 Act Laws, Interpretations and Exemptions. (12) With respect to AIM International Core Equity Fund's investments in municipal securities, the following non-fundamental policy applies: 22 Each state (including the District of Columbia and Puerto Rico), territory and possession of the United States, each political subdivision, agency, instrumentality and authority thereof, and each multi-state agency of which a state is a member is a separate "issuer." When the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from the government creating the subdivision and the security is backed only by assets and revenues of the subdivision, such subdivision would be deemed to be the sole issuer. Similarly, in the case of an Industrial Development Bond or Private Activity bond, if that bond is backed only by the assets and revenues of the non-governmental user, then that non-governmental user would be deemed to be the sole issuer. However, if the creating government or another entity guarantees a security, then to the extent that the value of all securities issued or guaranteed by that government or entity and owned by the Fund exceeds 10% of the Fund's total assets, the guarantee would be considered a separate security and would be treated as issued by that government or entity. Securities issued or guaranteed by a bank or subject to financial guaranty insurance are not subject to the limitations set forth in the preceding sentence. The Funds do not consider currencies or other financial commodities or contracts and financial instruments to be physical commodities (which include, for example, oil, precious metals and grains). Accordingly, the Funds will interpret the restriction and the related non-fundamental restriction to permit the Funds, subject to each Fund's investment objectives and general investment policies (as stated in the Funds' prospectuses and herein), to invest directly in foreign currencies and other financial commodities and to purchase, sell or enter into commodity futures contracts and options thereon, foreign currency forward contracts, foreign currency options, currency-, commodity- and financial instrument-related swap agreements, hybrid instruments, interest rate or securities-related or foreign currency-related hedging instruments or other currency-, commodity- or financial instrument-related derivatives, subject to compliance with any applicable provisions of the federal securities or commodities laws. The Funds also will interpret their fundamental restriction regarding purchasing and selling physical commodities and their related non-fundamental restriction to permit the Funds to invest in exchange-traded funds that invest in physical and/or financial commodities, subject to the limits described in the Funds' prospectuses and herein. GEOGRAPHIC ASSET DISTRIBUTION FOR AIM ASIA PACIFIC GROWTH FUND AND AIM EUROPEAN GROWTH FUND. There are no prescribed limits on asset distribution within the Asia Pacific region for AIM Asia Pacific Growth Fund or within Europe for AIM European Growth Fund. AIM Asia Pacific Growth Fund intends to invest in securities of issuers in the Asia Pacific region, and may invest in "developing" countries or "emerging markets" without limit. AIM European Growth Fund intends to invest in securities of issuers in Western Europe and Eastern Europe. Many of the countries in Eastern Europe are "developing" countries or "emerging markets." AIM European Growth Fund may invest up to 35% of its total assets in securities of European issuers located in "developing" countries or "emerging markets." AIM Asia Pacific Growth Fund considers issuers of securities located in the following countries to be Asian issuers: Bangladesh(1) China(1) Hong Kong India(1) Indonesia(1) Malaysia(1) Phillipines(1) Singapore South Korea(1) Sri Lanka(1) Taiwan(1) Thailand(1) AIM Asia Pacific Growth Fund considers issuers of securities located in the following countries to be Pacific issuers: Australia New Zealand 23 AIM European Growth Fund considers issuers of securities located in the following countries to be European issuers: Austria Belgium Croatia(1) Czech Republic(1) Denmark Finland France Germany Greece Hungary(1) Ireland Italy Liechtenstein(1) Luxembourg Netherlands Norway Poland(1) Portugal Romania(1) Russia(1) Slovakia(1) Slovenia(1) Spain Sweden Switzerland Turkey(1) Ukraine(1) United Kingdom (1) This country is considered to be a developing country. TEMPORARY DEFENSIVE POSITIONS In anticipation of or in response to adverse market conditions, or atypical circumstances such as unusually large cash inflows or redemptions, each of the Funds may temporarily hold all or a portion of their assets in cash, cash equivalents or high-quality debt instruments (including shares of Affiliated Money Market Funds). PORTFOLIO TURNOVER For the fiscal years ended October 31, 2007 and 2006, the portfolio turnover rates for each Fund are presented in the table below. Unless otherwise indicated, variations in turnover rate may be due to a fluctuating volume of shareholder purchase and redemption orders, market conditions and/or changes in Invesco Aim's investment outlook.
TURNOVER RATES 2007 2006 - -------------------------------------- ---- ---- AIM Asia Pacific Growth Fund 41% 58% AIM European Growth Fund 20% 28% AIM Global Growth Fund 38% 42% AIM Global Small & Mid Cap Growth Fund 43% 64% AIM International Core Equity Fund 27% 21% AIM International Growth Fund 22% 37%
POLICIES AND PROCEDURES FOR DISCLOSURE OF FUND HOLDINGS The Board has adopted policies and procedures with respect to the disclosure of the Funds' portfolio holdings (the "Holdings Disclosure Policy"). Invesco Aim and the Board may amend the Holdings Disclosure Policy at any time without prior notice. Details of the Holdings Disclosure Policy and a description of the basis on which employees of Invesco Aim and its affiliates may release information about portfolio securities in certain contexts are provided below. 24 PUBLIC RELEASE OF PORTFOLIO HOLDINGS. The Funds disclose the following portfolio holdings information on http://www.invescoaim.com(1):
APPROXIMATE DATE OF WEBSITE INFORMATION REMAINS POSTED ON INFORMATION POSTING WEBSITE - --------------------------------- ---------------------------------- ----------------------------- Top ten holdings as of month-end 15 days after month-end Until replaced with the following month's top ten holdings Select holdings included in the 29 days after calendar quarter-end Until replaced with the Fund's Quarterly Performance following quarter's Quarterly Update Performance Update Complete portfolio holdings as of 30 days after calendar quarter-end For one year calendar quarter-end Complete portfolio holdings as of 60-70 days after fiscal For one year fiscal quarter-end quarter-end
These holdings are listed along with the percentage of the Fund's net assets they represent. Generally, employees of Invesco Aim and its affiliates may not disclose such portfolio holdings until one day after they have been posted on http://www.invescoaim.com. You may also obtain the publicly available portfolio holdings information described above by contacting us at 1-800-959-4246. SELECTIVE DISCLOSURE OF PORTFOLIO HOLDINGS PURSUANT TO NON-DISCLOSURE AGREEMENT. Employees of Invesco Aim and its affiliates may disclose non-public full portfolio holdings on a selective basis only if the Internal Compliance Controls Committee (the "ICCC") of Invesco Aim approves the parties to whom disclosure of non-public full portfolio holdings will be made. The ICCC must determine that the proposed selective disclosure will be made for legitimate business purposes of the applicable Fund and address any perceived conflicts of interest between shareholders of such Fund and Invesco Aim or its affiliates as part of granting its approval. The Board exercises continuing oversight of the disclosure of Fund portfolio holdings by (1) overseeing the implementation and enforcement of the Holdings Disclosure Policy and the AIM Funds Code of Ethics by the Chief Compliance Officer (or his designee) of Invesco Aim and the AIM Funds and (2) considering reports and recommendations by the Chief Compliance Officer concerning any material compliance matters (as defined in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Investment Advisers Act of 1940, as amended) that may arise in connection with the Holdings Disclosure Policy. Pursuant to the Holdings Disclosure Policy, the Board reviews the types of situations in which Invesco Aim provides selective disclosure and approves situations involving perceived conflicts of interest between shareholders of the applicable Fund and Invesco Aim or its affiliates brought to the Board's attention by Invesco Aim. Invesco Aim discloses non-public full portfolio holdings information to the following persons in connection with the day-to-day operations and management of the AIM Funds: - Attorneys and accountants; - Securities lending agents; - Lenders to the AIM Funds; - Rating and rankings agencies; - Persons assisting in the voting of proxies; - AIM Funds' custodians; - The AIM Funds' transfer agent(s) (in the event of a redemption in kind); - ---------- (1) To locate the Fund's portfolio holdings information on http://www.invescoaim.com, click on the Products and Performance tab, then click on the Mutual Funds link, then click on the Fund Overview link and select the Fund from the drop down menu. Links to the Fund's portfolio holdings are located in the upper right side of this website page. 25 - Pricing services, market makers, or other persons who provide systems or software support in connection with AIM Funds' operations (to determine the price of securities held by an AIM Fund); - Financial printers; - Brokers identified by the AIM Funds' portfolio management team who provide execution and research services to the team; and - Analysts hired to perform research and analysis to the AIM Funds' portfolio management team. In many cases, Invesco Aim will disclose current portfolio holdings on a daily basis to these persons. In these situations, Invesco Aim has entered into non-disclosure agreements which provide that the recipient of the portfolio holdings will maintain the confidentiality of such portfolio holdings and will not trade on such information ("Non-disclosure Agreements"). Please refer to Appendix B for a list of persons to whom Invesco Aim provides non-public portfolio holdings on an ongoing basis. Invesco Aim will also disclose non-public portfolio holdings information if such disclosure is required by applicable laws, rules or regulations, or by regulatory authorities having jurisdiction over Invesco Aim and its affiliates or the Funds. The Holdings Disclosure Policy provides that Invesco Aim will not request, receive or accept any compensation (including compensation in the form of the maintenance of assets in any Fund or other mutual fund or account managed by Invesco Aim or one of its affiliates) for the selective disclosure of portfolio holdings information. DISCLOSURE OF CERTAIN PORTFOLIO HOLDINGS AND RELATED INFORMATION WITHOUT NON-DISCLOSURE AGREEMENT. Invesco Aim and its affiliates that provide services to the Funds, and the Funds' sub-advisors, if applicable, and each of their employees may receive or have access to portfolio holdings as part of the day to day operations of the Funds. From time to time, employees of Invesco Aim and its affiliates may express their views orally or in writing on one or more of the Funds' portfolio securities or may state that a Fund has recently purchased or sold, or continues to own, one or more securities. The securities subject to these views and statements may be ones that were purchased or sold since a Fund's most recent quarter-end and therefore may not be reflected on the list of the Fund's most recent quarter-end portfolio holdings disclosed on the website. Such views and statements may be made to various persons, including members of the press, brokers and other financial intermediaries that sell shares of the Funds, shareholders in the applicable Fund, persons considering investing in the applicable Fund or representatives of such shareholders or potential shareholders, such as fiduciaries of a 401(k) plan or a trust and their advisers, and other entities for which Invesco Aim or its affiliates provides or may provide investment advisory services. The nature and content of the views and statements provided to each of these persons may differ. From time to time, employees of Invesco Aim and its affiliates also may provide oral or written information ("portfolio commentary") about a Fund, including, but not limited to, how the Fund's investments are divided among various sectors, industries, countries, investment styles and capitalization sizes, and among stocks, bonds, currencies and cash, security types, bond maturities, bond coupons and bond credit quality ratings. This portfolio commentary may also include information on how these various weightings and factors contributed to Fund performance. Invesco Aim may also provide oral or written information ("statistical information") about various financial characteristics of a Fund or its underlying portfolio securities including, but not limited to, alpha, beta, R-squared, coefficient of determination, duration, maturity, information ratio, sharpe ratio, earnings growth, payout ratio, price/book value, projected earnings growth, return on equity, standard deviation, tracking error, weighted average quality, market capitalization, percent debt to equity, price to cash flow, dividend yield or growth, default rate, portfolio turnover, and risk and style characteristics. This portfolio commentary and statistical information about a Fund may be based on the Fund's portfolio as of the most recent quarter-end or the end of some other interim period, such as month-end. The portfolio commentary and statistical information may be 26 provided to various persons, including those described in the preceding paragraph. The nature and content of the information provided to each of these persons may differ. DISCLOSURE OF PORTFOLIO HOLDINGS BY TRADERS. Additionally, employees of Invesco Aim and its affiliates may disclose one or more of the portfolio securities of a Fund when purchasing and selling securities through broker-dealers, requesting bids on securities, obtaining price quotations on securities, or in connection with litigation involving the Funds' portfolio securities. Invesco Aim does not enter into formal Non-disclosure Agreements in connection with these situations; however, the Funds would not continue to conduct business with a person who Invesco Aim believed was misusing the disclosed information. DISCLOSURE OF PORTFOLIO HOLDINGS OF OTHER INVESCO AIM-MANAGED PRODUCTS. Invesco Aim and its affiliates manage products sponsored by companies other than Invesco Aim, including investment companies, offshore funds, and separate accounts. In many cases, these other products are managed in a similar fashion to certain AIM Funds (as defined herein) and thus have similar portfolio holdings. The sponsors of these other products managed by Invesco Aim and its affiliates may disclose the portfolio holdings of their products at different times than Invesco Aim discloses portfolio holdings for the AIM Funds. Invesco Aim provides portfolio holdings information for portfolios of AIM Variable Insurance Funds (the "Insurance Funds") to insurance companies whose variable annuity and variable life insurance accounts invest in the Insurance Funds ("Insurance Companies"). Invesco Aim may disclose portfolio holdings information for the Insurance Funds to Insurance Companies with which Invesco Aim has entered into Non-disclosure Agreements up to five days prior to the scheduled dates for Invesco Aim's disclosure of similar portfolio holdings information for other AIM Funds on http://www.invescoaim.com. Invesco Aim provides portfolio holdings information for the Insurance Funds to such Insurance Companies to allow them to disclose this information on their websites at approximately the same time that Invesco Aim discloses portfolio holdings information for the other AIM Funds on its website. Invesco Aim manages the Insurance Funds in a similar fashion to certain other AIM Funds and thus the Insurance Funds and such other AIM Funds have similar portfolio holdings. Invesco Aim does not disclose the portfolio holdings information for the Insurance Funds on its website, and not all Insurance Companies disclose this information on their websites. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The Trustees have the authority to take all actions necessary in connection with the business affairs of the Trust. The Trustees, among other things, approve the investment objectives, policies and procedures for the Funds. The Trust enters into agreements with various entities to manage the day-to-day operations of the Funds, including the Funds' investment advisers, administrator, transfer agent, distributor and custodians. The Trustees are responsible for selecting these service providers, and approving the terms of their contracts with the Funds. On an ongoing basis, the Trustees exercise general oversight of these service providers. Certain trustees and officers of the Trust are affiliated with Invesco Aim and Invesco Aim Management, the parent corporation of Invesco Aim. All of the Trust's executive officers hold similar offices with some or all of the other AIM Funds. MANAGEMENT INFORMATION The trustees and officers of the Trust, their principal occupations during the last five years and certain other information concerning them are set forth in Appendix C. 27 The standing committees of the Board are the Audit Committee, the Compliance Committee, the Governance Committee, the Investments Committee, the Valuation, Distribution and Proxy Oversight Committee and the Special Market Timing Litigation Committee (the "Committees"). The members of the Audit Committee are James T. Bunch (Vice Chair), Bruce L. Crockett, Lewis F. Pennock, Dr. Larry Soll and Raymond Stickel, Jr. (Chair). The Audit Committee's primary purposes are to: (i) oversee qualifications and performance of the independent registered public accountants; (ii) appoint independent registered public accountants for the Funds; (iii) pre-approve all permissible audit and non-audit services that are provided to Funds by their independent registered public accountants to the extent required by section 10A(h) and (i) of the Exchange Act; (iv) pre-approve, in accordance with Rule 2-01(c)(7)(ii) of Regulation S-X, certain non-audit services provided by the Funds' independent registered public accountants to the Funds' investment advisor and certain other affiliated entities; (v) review the audit and tax plans prepared by the independent registered public accountants; (vi) review the Funds' audited financial statements; (vii) review the process that management uses to evaluate and certify disclosure controls and procedures in Form N-CSR; (viii) review the process for preparation and review of the Funds' shareholder reports; (ix) review certain tax procedures maintained by the Funds; (x) review modified or omitted officer certifications and disclosures; (xi) review any internal audits of the Funds; (xii) establish procedures regarding questionable accounting or auditing matters and other alleged violations; (xiii) set hiring policies for employees and proposed employees of the Funds who are employees or former employees of the independent registered public accountants; and (xiv) remain informed (a) of the Funds accounting systems and controls, (b) regulatory changes and new accounting pronouncements that affect the Funds' net asset value calculations and financial statement reporting requirements, and (c) communications with regulators regarding accounting and financial reporting matters that pertain to the Funds. During the fiscal year ended October 31, 2007, the Audit Committee held seven meetings. The members of the Compliance Committee are Messrs. Frank S. Bayley, Crockett (Chair), Albert R. Dowden (Vice Chair) and Stickel. The Compliance Committee is responsible for: (i) recommending to the Board and the independent trustees the appointment, compensation and removal of the Funds' Chief Compliance Officer; (ii) recommending to the independent trustees the appointment, compensation and removal of the Funds' Senior Officer appointed pursuant to the terms of the Assurances of Discontinuance entered into by the New York Attorney General, Invesco and INVESCO Funds Group, Inc. ("IFG"); (iii) recommending to the independent trustees the appointment and removal of Invesco Aim's independent Compliance Consultant (the "Compliance Consultant") and reviewing the report prepared by the Compliance Consultant upon its compliance review of Invesco Aim (the "Report") and any objections made by Invesco Aim with respect to the Report; (iv) reviewing any report prepared by a third party who is not an interested person of Invesco Aim, upon the conclusion by such third party of a compliance review of Invesco Aim; (v) reviewing all reports on compliance matters from the Funds' Chief Compliance Officer, (vi) reviewing all recommendations made by the Senior Officer regarding Invesco Aim's compliance procedures, (vii) reviewing all reports from the Senior Officer of any violations of state and federal securities laws, the Colorado Consumer Protection Act, or breaches of Invesco Aim's fiduciary duties to Fund shareholders and of Invesco Aim's Code of Ethics; (viii) overseeing all of the compliance policies and procedures of the Funds and their service providers adopted pursuant to Rule 38a-1 of the 1940 Act; (ix) from time to time, reviewing certain matters related to redemption fee waivers and recommending to the Board whether or not to approve such matters; (x) receiving and reviewing quarterly reports on the activities of Invesco Aim's Internal Compliance Controls Committee; (xi) reviewing all reports made by Invesco Aim's Chief Compliance Officer; (xii) reviewing and recommending to the independent trustees whether to approve procedures to investigate matters brought to the attention of Invesco Aim's ombudsman; (xiii) risk management oversight with respect to the Funds and, in connection therewith, receiving and overseeing risk management reports from Invesco Ltd. ("Invesco") that are applicable to the Funds or their service providers; and (xiv) overseeing potential conflicts of interest that are reported to the Compliance Committee by Invesco Aim, the Chief Compliance Officer, the Senior Officer and/or the Compliance Consultant. During the fiscal year ended October 31, 2007, the Compliance Committee held eight meetings. 28 The members of the Governance Committee are Messrs. Bob R. Baker, Bayley, Dowden (Chair), Jack M. Fields (Vice Chair), Carl Frischling and Dr. Prema Mathai-Davis. The Governance Committee is responsible for: (i) nominating persons who will qualify as independent trustees for (a) election as trustees in connection with meetings of shareholders of the Funds that are called to vote on the election of trustees, (b) appointment by the Board as trustees in connection with filling vacancies that arise in between meetings of shareholders; (ii) reviewing the size of the Board, and recommending to the Board whether the size of the Board shall be increased or decreased; (iii) nominating the Chair of the Board; (iv) monitoring the composition of the Board and each committee of the Board, and monitoring the qualifications of all trustees; (v) recommending persons to serve as members of each committee of the Board (other than the Compliance Committee), as well as persons who shall serve as the chair and vice chair of each such committee; (vi) reviewing and recommending the amount of compensation payable to the independent trustees; (vii) overseeing the selection of independent legal counsel to the independent trustees; (viii) reviewing and approving the compensation paid to independent legal counsel to the independent trustees; (ix) reviewing and approving the compensation paid to counsel and other advisers, if any, to the Committees of the Board; and (x) reviewing as they deem appropriate administrative and/or logistical matters pertaining to the operations of the Board. The Governance Committee will consider nominees recommended by a shareholder to serve as trustees, provided: (i) that such person is a shareholder of record at the time he or she submits such names and is entitled to vote at the meeting of shareholders at which trustees will be elected; and (ii) that the Governance Committee or the Board, as applicable, shall make the final determination of persons to be nominated. During the fiscal year ended October 31, 2007, the Governance Committee held eight meetings. Notice procedures set forth in the Trust's bylaws require that any shareholder of the Fund desiring to nominate a trustee for election at a shareholder meeting must submit to the Trust's Secretary the nomination in writing not later than the close of business on the later of the 90th day prior to such shareholder meeting or the tenth day following the day on which public announcement is made of the shareholder meeting and not earlier than the close of business on the 120th day prior to the shareholder meeting. The members of the Investments Committee are Messrs. Baker (Vice Chair), Bayley (Chair), Bunch, Crockett, Dowden, Fields, Martin L. Flanagan, Frischling, Pennock, Stickel, Philip A. Taylor and Drs. Mathai-Davis (Vice Chair) and Soll (Vice Chair). The Investments Committee's primary purposes are to: (i) assist the Board in its oversight of the investment management services provided by Invesco Aim as well as any sub-advisers; and (ii) review all proposed and existing advisory, sub-advisory and distribution arrangements for the Funds, and to recommend what action the full Boards and the independent trustees take regarding the approval of all such proposed arrangements and the continuance of all such existing arrangements. During the fiscal year ended October 31, 2007, the Investments Committee held seven meetings. The Investments Committee has established three Sub-Committees. The Sub-Committees are responsible for: (i) reviewing the performance, fees and expenses of the Funds that have been assigned to a particular Sub-Committee (for each Sub-Committee, the "Designated Funds"), unless the Investments Committee takes such action directly; (ii) reviewing with the applicable portfolio managers from time to time the investment objective(s), policies, strategies and limitations of the Designated Funds; (iii) evaluating the investment advisory, sub-advisory and distribution arrangements in effect or proposed for the Designated Funds, unless the Investments Committee takes such action directly; (iv) being familiar with the registration statements and periodic shareholder reports applicable to their Designated Funds; and (v) such other investment-related matters as the Investments Committee may delegate to the Sub-Committee from time to time. The members of the Valuation, Distribution and Proxy Oversight Committee are Messrs. Baker, Bunch, Fields, Frischling (Chair), Pennock (Vice Chair), Taylor and Drs. Mathai-Davis and Soll. The primary purposes of the Valuation, Distribution and Proxy Oversight Committee are: (a) to address issues requiring action or oversight by the Board of the AIM Funds (i) in the valuation of the AIM Funds' portfolio 29 securities consistent with the Pricing Procedures, (ii) in oversight of the creation and maintenance by the principal underwriters of the AIM Funds of an effective distribution and marketing system to build and maintain an adequate asset base and to create and maintain economies of scale for the AIM Funds, (iii) in the review of existing distribution arrangements for the AIM Funds under Rule 12b-1 and Section 15 of the 1940 Act, and (iv) in the oversight of proxy voting on portfolio securities of the funds; and (b) to make regular reports to the full Boards of the AIM Funds. The Valuation, Distribution and Proxy Oversight Committee is responsible for: (a) with regard to valuation, (i) developing an understanding of the valuation process and the Pricing Procedures, (ii) reviewing the Pricing Procedures and making recommendations to the full Board with respect thereto, (iii) reviewing the reports described in the Pricing Procedures and other information from Invesco Aim regarding fair value determinations made pursuant to the Pricing Procedures by Invesco Aim's internal valuation committee and making reports and recommendations to the full Board with respect thereto, (iv) receiving the reports of Invesco Aim's internal valuation committee requesting approval of any changes to pricing vendors or pricing methodologies as required by the Pricing Procedures and the annual report of Invesco Aim evaluating the pricing vendors, approving changes to pricing vendors and pricing methodologies as provided in the Pricing Procedures, and recommending annually the pricing vendors for approval by the full Board, (v) upon request of Invesco Aim, assisting Invesco Aim's internal valuation committee or the full Board in resolving particular fair valuation issues, (vi) reviewing the reports described in the Procedures for Determining the Liquidity of Securities (the "Liquidity Procedures") and other information from Invesco Aim regarding liquidity determinations made pursuant to the Liquidity Procedures by Invesco Aim and making reports and recommendations to the full Board with respect thereto, and (vii) overseeing actual or potential conflicts of interest by investment personnel or others that could affect their input or recommendations regarding pricing or liquidity issues; (b) with regard to distribution, (i) developing and understanding of mutual fund distribution and marketing channels and legal, regulatory and market developments regarding distribution, (ii) reviewing periodic distribution and marketing determinations and annual approval of distribution arrangements and making reports and recommendations to the full Board with respect thereto, and (iii) reviewing other information from the principal underwriters to the AIM Funds regarding distribution and marketing of the AIM Funds and making recommendations to the full Board with respect thereto; and (c) with regard to proxy voting, (i) overseeing the implementation of the Proxy Voting Guidelines (the "Guidelines") and the Proxy Policies and Procedures (the "Proxy Procedures") by Invesco Aim and other advisers, reviewing the Quarterly Proxy Voting Report and making recommendations to the full Board with respect thereto, (ii) reviewing the Guidelines and the Proxy Procedures and information provided by Invesco Aim or other advisers regarding industry developments and best practices in connection with proxy voting and making recommendations to the full Board with respect thereto, and (iii) in implementing its responsibilities in this area, assisting Invesco Aim in resolving particular proxy voting issues. The Valuation, Distribution and Proxy Oversight Committee was formed effective January 1, 2008. It succeeded to the Valuation Committee which existed prior to 2008. During the fiscal year ended October 31, 2007, the Valuation, Distribution and Proxy Oversight Committee held six meetings. The members of the Special Market Timing Litigation Committee are Messrs. Bayley, Bunch (Chair), Crockett and Dowden (Vice Chair). The Special Market Timing Litigation Committee is responsible: (i) for receiving reports from time to time from management, counsel for management, counsel for the AIM Funds and special counsel for the independent trustees, as applicable, related to (a) the civil lawsuits, including purported class action and shareholder derivative suits, that have been filed against the AIM Funds concerning alleged excessive short term trading in shares of the AIM Funds ("market timing") and (b) the civil enforcement actions and investigations related to market timing activity in the AIM Funds that were settled with certain regulators, including without limitation the SEC, the New York Attorney General and the Colorado Attorney General, and for recommending to the independent trustees what actions, if any, should be taken by the AIM Funds in light of all such reports; (ii) for overseeing the investigation(s) on behalf of the independent trustees by special counsel for the independent trustees and the independent trustees' financial expert of market timing activity in the AIM Funds, and for recommending to the independent trustees what actions, if any, should be taken by the AIM Funds in light of the results of such investigation(s); (iii) for (a) reviewing the methodology developed by Invesco Aim's Independent Distribution Consultant (the "Distribution Consultant") for the monies 30 ordered to be paid under the settlement order with the SEC, and making recommendations to the independent trustees as to the acceptability of such methodology and (b) recommending to the independent trustees whether to consent to any firm with which the Distribution Consultant is affiliated entering into any employment, consultant, attorney-client, auditing or other professional relationship with Invesco Aim, or any of its present or former affiliates, directors, officers, employees or agents acting in their capacity as such for the period of the Distribution Consultant's engagement and for a period of two years after the engagement; and (iv) for taking reasonable steps to ensure that any AIM Fund which the Special Market Timing Litigation Committee determines was harmed by improper market timing activity receives what the Special Market Timing Litigation Committee deems to be full restitution. During the fiscal year ended October 31, 2007, the Special Market Timing Litigation Committee did not meet. Trustee Ownership of Fund Shares The dollar range of equity securities beneficially owned by each trustee (i) in the Funds and (ii) on an aggregate basis, in all registered investment companies overseen by the trustee within the AIM Funds complex is set forth in Appendix C. COMPENSATION Each trustee who is not affiliated with Invesco Aim is compensated for his or her services according to a fee schedule which recognizes the fact that such trustee also serves as a trustee of other AIM Funds. Each such trustee receives a fee, allocated among the AIM Funds for which he or she serves as a trustee, which consists of an annual retainer component and a meeting fee component. The Chair of the Board and Chairs and Vice Chairs of certain committees receive additional compensation for their services. Information regarding compensation paid or accrued for each trustee of the Trust who was not affiliated with Invesco Aim during the year ended December 31, 2007 is found in Appendix D. Retirement Plan For Trustees The trustees have adopted a retirement plan for the trustees of the Trust who are not affiliated with Invesco Aim. The trustees have also adopted a retirement policy that permits each non-Invesco Aim-affiliated trustee to serve until December 31 of the year in which the trustee turns 72. A majority of the trustees may extend from time to time the retirement date of a trustee. Annual retirement benefits are available to each non-Invesco Aim-affiliated trustee of the Trust and/or the other AIM Funds (each, a "Covered Fund") who has at least five years of credited service as a trustee (including service to a predecessor fund) for a Covered Fund. Effective January 1, 2006 for retirements after December 31, 2005, the retirement benefits will equal 75% of the trustee's annual retainer paid to or accrued by any Covered Fund for such trustee during the twelve-month period prior to retirement, including the amount of any retainer deferred under a separate deferred compensation agreement between the Covered Fund and the trustee. The amount of the annual retirement benefit does not include additional compensation paid for Board meeting fees or compensation paid the Board and the Chairs and Vice Chairs of certain Board committees, whether such amounts are paid directly to the trustee or deferred. The annual retirement benefit is payable in quarterly installments for a number of years equal to the lesser of (i) sixteen years or (ii) the number of such trustee's credited years of service. If a trustee dies prior to receiving the full amount of retirement benefits, the remaining payments will be made to the deceased trustee's designated beneficiary for the same length of time that the trustee would have received the payments based on his or her service. A trustee must have attained the age of 65 (60 in the event of death or disability) to receive any retirement benefit. A trustee may make an irrevocable election to commence payment of retirement benefits upon retirement from the Board before age 72, subject to a reduction for early payment. 31 Deferred Compensation Agreements Messrs. Crockett, Edward K. Dunn, Jr., (a former trustee), Fields, Frischling, and Drs. Mathai-Davis and Soll (for purposes of this paragraph only, the "Deferring Trustees") have each executed a Deferred Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant to the Compensation Agreements, the Deferring Trustees have the option to elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account and deemed to be invested in one or more AIM Funds selected by the Deferring Trustee. Distributions from the Deferring Trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of up to ten (10) years (depending on the Compensation Agreement) beginning on the date selected under the Compensation Agreement. If a Deferring Trustee dies prior to the distribution of amounts in his or her deferral account, the balance of the deferral account will be distributed to his or her designated beneficiary. The Compensation Agreements are not funded and, with respect to the payments of amounts held in the deferral accounts, the Deferring Trustees have the status of unsecured creditors of the Trust and of each other AIM Fund from which they are deferring compensation. Purchases of Class A Shares of the Funds at Net Asset Value The trustees and other affiliated persons of the Trust may purchase Class A shares of the AIM Funds without paying an initial sales charge. Invesco Aim Distributors permits such purchases because there is a reduced sales effort involved in sales to such purchasers, thereby resulting in relatively low expenses of distribution. For a complete description of the persons who will not pay an initial sales charge on purchases of Class A shares of the AIM Funds, see "Purchase, Redemption and Pricing of Shares - Purchase and Redemption of Shares - - Purchases of Class A Shares, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund - Purchases of Class A Shares at the Net Asset Value." CODES OF ETHICS Invesco Aim, the Trust, Invesco Aim Distributors and the Sub-Advisors have adopted Codes of Ethics which apply to all AIM Fund trustees and officers, employees of Invesco Aim, the Sub-Advisors and its subsidiaries and Invesco Global, and governs, among other things, personal trading activities of such persons. The Codes of Ethics are intended to address conflicts of interest with the Trust that may arise from personal trading, including personal trading in most of the funds within The AIM Family of Funds--Registered Trademark--. Personal trading, including personal trading involving securities that may be purchased or held by a fund within The AIM Family of Funds--Registered Trademark--, is permitted under the Codes subject to certain restrictions; however employees are required to pre-clear security transactions with the Compliance Officer or a designee and to report transactions on a regular basis. [PROXY VOTING POLICIES The Board has delegated responsibility for decisions regarding proxy voting for securities held by each Fund other than AIM International Core Equity Fund to Invesco Aim. The Board has delegated responsibility for decisions regarding proxy voting for securities held by AIM International Core Equity Fund to the Sub-Advisor. Invesco Aim and the Sub-Advisor will vote such proxies in accordance with its proxy policies and procedures, which have been reviewed and approved by the Board, and which are found in Appendix E. Any material changes to the proxy policies and procedures will be submitted to the Board for approval. The Board will be supplied with a summary quarterly report of each Fund's proxy voting record. Information regarding how the Funds voted proxies related to its portfolio securities during the 12 months ended June 30, 2007 is available at our Web site, http://www.invescoaim.com. This information is also available at the SEC Web site, http://www.sec.gov.] 32 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES Information about the ownership of each class of each Fund's shares by beneficial or record owners of such Fund and by trustees and officers as a group is found in Appendix F. A shareholder who owns beneficially 25% or more of the outstanding shares of a Fund is presumed to "control" that Fund. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISOR Invesco Aim, the Funds' investment advisor, was organized in 1976, and along with its subsidiaries, manages or advises over 225 investment portfolios encompassing a broad range of investment objectives. Invesco Aim is a direct, wholly owned subsidiary of Invesco Aim Management, a holding company that has been engaged in the financial services business since 1976. Invesco Aim Management is an indirect, wholly owned subsidiary of Invesco. Invesco and its subsidiaries are an independent global investment management group. Certain of the directors and officers of Invesco Aim are also executive officers of the Trust and their affiliations are shown under "Management Information" herein. As investment advisor, Invesco Aim supervises all aspects of the Funds' operations and provides investment advisory services to the Funds. Invesco Aim obtains and evaluates economic, statistical and financial information to formulate and implement investment programs for the Funds. The Master Investment Advisory Agreement (the "Advisory Agreement") provides that, in fulfilling its responsibilities, Invesco Aim may engage the services of other investment managers with respect to one or more of the Funds. The investment advisory services of Invesco Aim is not exclusive and Invesco Aim is free to render investment advisory services to others, including other investment companies. Invesco Aim is also responsible for furnishing to each Fund, at Invesco Aim's expense, the services of persons believed to be competent to perform all supervisory and administrative services required by each Fund, in the judgment of the trustees, to conduct their respective businesses effectively, as well as the offices, equipment and other facilities necessary for their operations. Such functions include the maintenance of each Fund's accounts and records, and the preparation of all requisite corporate documents such as tax returns and reports to the SEC and shareholders. The Advisory Agreement provides that each Fund will pay or cause to be paid all expenses of such Fund not assumed by Invesco Aim, including, without limitation: brokerage commissions, taxes, legal, auditing or governmental fees, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption, and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of each Fund in connection with membership in investment company organizations, and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders. Invesco Aim, at its own expense, furnishes to the Trust office space and facilities. Invesco Aim furnishes to the Trust all personnel for managing the affairs of the Trust and each of its series of shares. Pursuant to its Advisory Agreement with the Trust, Invesco Aim receives a monthly fee from each Fund listed below calculated at the annual rates indicated in the second column below, based on the average daily net assets of each Fund during the year. Each Fund allocates advisory fees to a class based on the relative net assets of each class. 33
FUND NAME NET ASSETS ANNUAL RATE - -------------------------------------- ---------------- ----------- AIM Asia Pacific Growth Fund First $250M 0.935% AIM European Growth Fund Next $250M 0.91% AIM International Growth Fund Next $500M 0.885% Next $1.5B 0.86% Next $2.5B 0.835% Next $2.5B 0.81% Next $2.5B 0.785% Amount over $10B 0.76% AIM Global Growth Fund First $250M 0.80% AIM Global Small & Mid Cap Growth Fund Next $250M 0.78% Next $500M 0.76% Next $1.5B 0.74% Next $2.5B 0.72% Next $2.5B 0.70% Next $2.5B 0.68% Amount over $10B 0.66% AIM International Core Equity Fund First $500M 0.75% Next $500M 0.65% From $1B 0.55% From $2B 0.45% From $4B 0.40% From $6B 0.375% Amount over $8B 0.35%
Invesco Aim may from time to time waive or reduce its fee. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, Invesco Aim will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between Invesco Aim and the Fund. Invesco Aim has contractually agreed through at least June 30, 2008, to waive advisory fees payable by each Fund in an amount equal to 100% of the advisory fee AIM receives from the Affiliated Money Market Funds as a result of each Fund's investment of uninvested cash in the Affiliated Money Market Funds. See "Description of the Funds and Their Investments and Risks - Investment Strategies and Risks - Other Investments - Other Investment Companies." The management fees payable by each Fund, the amounts waived by Invesco Aim and the net fees paid by each Fund for the last three fiscal years ended October 31 are found in Appendix G. INVESTMENT SUB-ADVISORS Invesco Aim has entered into a Master Intergroup Sub-Advisory Contract (the "Sub-Advisory Agreement") with certain affiliates to serve as sub-advisors to the Funds, pursuant to which these affiliated sub-advisors may be appointed by Invesco Aim from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the Funds. These affiliated sub-advisors, each of which is a registered investment advisor under the investment Advisers Act of 1940 are: 34 Invesco Asset Management Deutschland GmbH ("Invesco Deutschland"); Invesco Asset Management Limited ("Invesco Asset Management"); Invesco Asset Management (Japan) Limited ("Invesco Japan"); Invesco Australia Limited ("Invesco Australia"); Invesco Global Asset Management (N.A.), Inc. ("Invesco Global"); Invesco Hong Kong Limited ("Invesco Hong Kong"); Invesco Institutional (N.A.), Inc. ("Invesco Institutional"); Invesco Senior Secured Management, Inc. ("Invesco Senior Secured"); and Invesco Trimark Investment Management Inc. ("Invesco Trimark") (each a "Sub-Advisor" and collectively, the "Sub-Advisors"). Invesco Aim and each Sub-Advisor are indirect wholly owned subsidiaries of Invesco. The only fees payable to the Sub-Advisors under the Sub-Advisory Agreement are for providing discretionary investment management services. For such services, Invesco Aim will pay each Sub-Advisor a fee, computed daily and paid monthly, equal to (i) 40% of the monthly compensation that Invesco Aim receives from the Trust, multiplied by (ii) the fraction equal to the net assets of such Fund as to which such Sub-Advisor shall have provided discretionary investment management services for that month divided by the net assets of such Fund for that month. Pursuant to the Sub-Advisory Agreement, this fee is reduced to reflect contractual or voluntary fee waivers or expense limitations by Invesco Aim, if any, in effect from time to time. In no event shall the aggregate monthly fees paid to the Sub-Advisors under the Sub-Advisory Agreement exceed 40% of the monthly compensation that Invesco Aim receives from the Trust pursuant to its advisory agreement with the Trust, as reduced to reflect contractual or voluntary fees waivers or expense limitations by Invesco Aim, if any. PORTFOLIO MANAGERS Appendix H contains the following information regarding the portfolio managers identified in each Fund's prospectus: - The dollar range of the managers' investments in each Fund. - A description of the managers' compensation structure. - Information regarding other accounts managed by the manager and potential conflicts of interest that might arise from the management of multiple accounts. SECURITY LENDING ARRANGEMENTS If a Fund engages in securities lending, Invesco Aim will provide the Fund investment advisory services and related administrative services. The Advisory Agreement describes the administrative services to be rendered by Invesco Aim if a Fund engages in securities lending activities, as well as the compensation Invesco Aim may receive for such administrative services. Services to be provided include: (a) overseeing participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assisting the securities lending agent or principal (the "agent") in determining which specific securities are available for loan; (c) monitoring the agent to ensure that securities loans are effected in accordance with Invesco Aim's instructions and with procedures 35 adopted by the Board; (d) preparing appropriate periodic reports for, and seeking appropriate approvals from, the Board with respect to securities lending activities; (e) responding to agent inquiries; and (f) performing such other duties as may be necessary. Invesco Aim's compensation for advisory services rendered in connection with securities lending is included in the advisory fee schedule. As compensation for the related administrative services Invesco Aim will provide, a lending Fund will pay Invesco Aim a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities. Invesco Aim currently waives such fee, and has agreed to seek Board approval prior to its receipt of all or a portion of such fee. SERVICE AGREEMENTS ADMINISTRATIVE SERVICES AGREEMENT. Invesco Aim and the Trust have entered into a Master Administrative Services Agreement ("Administrative Services Agreement") pursuant to which Invesco Aim may perform or arrange for the provision of certain accounting and other administrative services to each Fund which are not required to be performed by Invesco Aim under the Advisory Agreement. The Administrative Services Agreement provides that it will remain in effect and continue from year to year only if such continuance is specifically approved at least annually by the Board, including the independent trustees, by votes cast in person at a meeting called for such purpose. Under the Administrative Services Agreement, Invesco Aim is entitled to receive from the Funds reimbursement of its costs or such reasonable compensation as may be approved by the Board. Currently, Invesco Aim is reimbursed for the services of the Trust's principal financial officer and her staff, and any expenses related to fund accounting services. Administrative services fees paid to Invesco Aim by each Fund for the last three fiscal years ended October 31 are found in Appendix I. OTHER SERVICE PROVIDERS TRANSFER AGENT. Invesco Aim Investment Services, Inc. ("Invesco Aim Investment Services"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046, a wholly owned subsidiary of Invesco Aim, is the Trust's transfer agent. The Transfer Agency and Service Agreement (the "TA Agreement") between the Trust and Invesco Aim Investment Services provides that Invesco Aim Investment Services will perform certain services related to the servicing of shareholders of the Funds. Other such services may be delegated or sub-contracted to third party intermediaries. For servicing accounts holding Class A, A3, B, C, P, R, AIM Cash Reserve and Investor Class shares, the TA Agreement provides that the Trust, on behalf of the Funds, will pay Invesco Aim Investment Services an annual fee per open shareholder account plus certain out of pocket expenses. This fee is paid monthly at the rate of 1/12 of the annual rate and is based upon the number of open shareholder accounts during each month. For servicing accounts holding Institutional Class shares, the TA Agreement provides that the Trust, on behalf of the Funds, will pay Invesco Aim Investment Services a fee per trade executed, to be billed monthly plus certain out-of-pocket expenses. In addition, all fees payable by Invesco Aim Investment Services or its affiliates to third party intermediaries who service accounts pursuant to sub-transfer agency, omnibus account services and sub-accounting agreements are charged back to the Funds, subject to certain limitations approved by the Board of the Trust. These payments are made in consideration of services that would otherwise be provided by Invesco Aim Investment Services if the accounts serviced by such intermediaries were serviced by Invesco Aim Investment Services directly. For more information regarding such payments to intermediaries, see the discussion under "Sub-Accounting and Network Support Payments" below. SUB-TRANSFER AGENT. Invesco Trimark, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N6X7, a wholly owned, indirect subsidiary of Invesco, provides services to the Trust as a sub-transfer agent, pursuant to an agreement between Invesco Trimark and Invesco Aim Investment Services. 36 The Trust does not pay a fee to Invesco Trimark for these services. Rather Invesco Trimark is compensated by Invesco Aim Investment Services, as a sub-contractor. CUSTODIANS. State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. JPMorgan Chase Bank, N.A., 712 Main, Houston, Texas 77002, serves as sub-custodian for purchases of shares of the Funds. The Bank of New York, 2 Hanson Place, Brooklyn, New York 11217-1431, also serves as sub-custodian to facilitate cash management. The Custodian is authorized to establish separate accounts in foreign countries and to cause foreign securities owned by the Funds to be held outside the United States in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and securities depositories. Invesco Aim is responsible for selecting eligible foreign securities depositories and for assessing the risks associated with investing in foreign countries, including the risk of using eligible foreign securities depositories in a country. The Custodian is responsible for monitoring eligible foreign securities depositories. Under its contract with the Trust, the Custodian maintains the portfolio securities of the Funds, administers the purchases and sales of portfolio securities, collects interest and dividends and other distributions made on the securities held in the portfolios of the Funds and performs other ministerial duties. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. The Funds' independent registered public accounting firm is responsible for auditing the financial statements of the Funds. The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP, 1201 Louisiana, Suite 2900, Houston, Texas 77002, as the independent registered public accounting firm to audit the financial statements of the Funds. Such appointment was ratified and approved by the Board. COUNSEL TO THE TRUST. Legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103-7599. BROKERAGE ALLOCATION AND OTHER PRACTICES The Sub-Advisors have adopted compliance procedures that cover, among other items, brokerage allocation and other trading practices. Unless specifically noted, the Sub-Advisors' procedures do not materially differ from Invesco Aim's procedures discussed below. BROKERAGE TRANSACTIONS Invesco Aim or the Sub-Advisor makes decisions to buy and sell securities for each Fund, selects broker-dealers (each, a "Broker"), effects the Funds' investment portfolio transactions, allocates brokerage fees in such transactions and, where applicable, negotiates commissions and spreads on transactions. Invesco Aim's and the Sub-Advisors' primary consideration in effecting a security transaction is to obtain best execution, which is defined as prompt and efficient execution of the transaction at the best obtainable price with payment of commissions, mark-up or mark-downs which are reasonable in relation to the value of the brokerage services provided by the Broker. While Invesco Aim and the Sub-Advisors seek reasonably competitive commission rates, the Funds may not pay the lowest commission or spread available. See "Brokerage Selection" below. Some of the securities in which the Funds invest are traded in over-the-counter markets. Portfolio transactions placed in such markets may be effected at either net prices without commissions, but which include compensation to the broker-dealer in the form of a mark up or mark down, or on an agency basis, which involves the payment of negotiated brokerage commissions to the broker-dealer, including electronic communication networks. 37 Traditionally, commission rates have not been negotiated on stock markets outside the United States. Although in recent years many overseas stock markets have adopted a system of negotiated rates, a number of markets maintain an established schedule of minimum commission rates. Brokerage commissions paid by each of the Funds during the last three fiscal years ended October 31 are found in Appendix J. COMMISSIONS During the last three fiscal years ended October 31, none of the Funds paid brokerage commissions to brokers affiliated with the Funds, Invesco Aim, Invesco Aim Distributors, the Sub-Advisors or any affiliates of such entities. The Funds may engage in certain principal and agency transactions with banks and their affiliates that own 5% or more of the outstanding voting securities of an AIM Fund, provided the conditions of an exemptive order received by the AIM Funds from the SEC are met. In addition, a Fund may purchase or sell a security from or to certain other AIM Funds or accounts (and may invest in Affiliated Money Market Funds) provided the Funds follow procedures adopted by the Boards of the various AIM Funds, including the Trust. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses. BROKER SELECTION Invesco Aim's primary consideration in selecting Brokers to execute portfolio transactions for a Fund is to obtain best execution. In selecting a Broker to execute a portfolio transaction in equity securities for a Fund, Invesco Aim considers the full range and quality of a Broker's services, including the value of research and/or brokerage services provided, execution capability, commission rate, willingness to commit capital, anonymity and responsiveness. Invesco Aim's primary consideration when selecting a Broker to execute a portfolio transaction in fixed income securities for a Fund is the Broker's ability to deliver or sell the relevant fixed income securities; however, Invesco Aim will also consider the various factors listed above. In each case, the determinative factor is not the lowest commission or spread available but whether the transaction represents the best qualitative execution for the Fund. Invesco Aim will not select Brokers based upon their promotion or sale of Fund shares. In choosing Brokers to execute portfolio transactions for the Funds, Invesco Aim may select Brokers that provide brokerage and/or research services ("Soft Dollar Products") to the Funds and/or the other accounts over which Invesco Aim and its affiliates have investment discretion. Section 28(e) of the Securities Exchange Act of 1934, as amended, provides that Invesco Aim, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e)(1), Invesco Aim must make a good faith determination that the commissions paid are "reasonable in relation to the value of the brokerage and research services provided ... viewed in terms of either that particular transaction or [Invesco Aim's] overall responsibilities with respect to the accounts as to which [it] exercises investment discretion." The services provided by the Broker also must lawfully and appropriately assist Invesco Aim in the performance of its investment decision-making responsibilities. Accordingly, a Fund may pay a Broker higher commissions than those available from another Broker in recognition of such Broker's provision of Soft Dollar Products to Invesco Aim. Invesco Aim faces a potential conflict of interest when it uses client trades to obtain Soft Dollar Products. This conflict exists because Invesco Aim is able to use the Soft Dollar Products to manage client accounts without paying cash for the Soft Dollar Products, which reduces Invesco Aim's expenses to the extent that Invesco Aim would have purchased such products had they not been provided by Brokers. Section 28(e) permits Invesco Aim to use Soft Dollar Products for the benefit of any account it manages. Certain Invesco Aim-managed accounts may generate soft dollars used to purchase Soft Dollar Products that ultimately benefit other Invesco Aim-managed accounts, effectively cross 38 subsidizing the other Invesco Aim-managed accounts that benefit directly from the product. Invesco Aim may not use all of the Soft Dollar Products provided by Brokers through which a Fund effects securities transactions in connection with managing such Fund. Invesco Aim and certain of its affiliates presently engage in the following instances of cross-subsidization: 1. Fixed income funds normally do not generate soft dollar commissions to pay for Soft Dollar Products. Therefore, soft dollar commissions used to pay for Soft Dollar Products which are used to manage certain fixed income AIM Funds are generated entirely by equity AIM Funds and other equity client accounts managed by Invesco Aim or Invesco Aim Capital Management, Inc. ("Invesco Aim Capital"), a subsidiary of Invesco Aim. In other words, certain fixed income AIM Funds are cross-subsidized by the equity AIM Funds in that the fixed income AIM Funds receive the benefit of Soft Dollar Products services for which they do not pay. 2. The investment models used to manage many of the AIM Funds are also used to manage other accounts of Invesco Aim and/or Invesco Aim Capital. The Soft Dollar Products obtained through the use of soft dollar commissions generated by the transactions of the AIM Funds and/or other accounts managed by Invesco Aim and/or Invesco Aim Capital are used to maintain the investment models relied upon by both of these advisory affiliates. This type of cross-subsidization occurs in both directions. For example, soft dollar commissions generated by transactions of the AIM Funds and/or other accounts managed by Invesco Aim are used for Soft Dollar Products which may benefit those AIM Funds and/or accounts as well as accounts managed by Invesco Aim Capital. Additionally, soft dollar commissions generated by transactions of accounts managed by Invesco Aim Capital are used for Soft Dollar Products which may benefit those accounts as well as accounts managed by Invesco Aim. In certain circumstances, Invesco Aim Capital accounts may indicate that their transactions should not be used to generate soft dollar commissions but may still receive the benefits of Soft Dollar Products received by Invesco Aim or Invesco Aim Capital. 3. Some of the common investment models used to manage various Funds and other accounts of Invesco Aim and/or Invesco Aim Capital are also used to manage accounts of Invesco Aim Private Asset Management, Inc. ("IAPAM"), another Invesco Aim subsidiary. The Soft Dollar Products obtained through the use of soft dollar commissions generated by the transactions of the Funds and/or other accounts managed by Invesco Aim and/or Invesco Aim Capital are used to maintain the investment models relied upon by Invesco Aim, Invesco Aim Capital and IAPAM. This cross-subsidization occurs in only one direction. Most of IAPAM's accounts do not generate soft dollar commissions which can be used to purchase Soft Dollar Products. The soft dollar commissions generated by transactions of the Funds and/or other accounts managed by Invesco Aim and/or Invesco Aim Capital are used for Soft Dollar Products which may benefit the accounts managed by Invesco Aim, Invesco Aim Capital and IAPAM; however, IAPAM does not provide any soft dollar research benefit to the Funds and/or other accounts managed by Invesco Aim or Invesco Aim Capital. Invesco Aim and Invesco Aim Capital attempt to reduce or eliminate the potential conflicts of interest concerning the use of Soft Dollar Products by directing client trades for Soft Dollar Products only if Invesco Aim and Invesco Aim Capital conclude that the Broker supplying the product is capable of providing best execution. Certain Soft Dollar Products may be available directly from a vendor on a hard dollar basis; other Soft Dollar Products are available only through Brokers in exchange for soft dollars. Invesco Aim uses soft dollars to purchase two types of Soft Dollar Products: 39 - proprietary research created by the Broker executing the trade, and - other products created by third parties that are supplied to Invesco Aim through the Broker executing the trade. Proprietary research consists primarily of traditional research reports, recommendations and similar materials produced by the in house research staffs of broker-dealer firms. This research includes evaluations and recommendations of specific companies or industry groups, as well as analyses of general economic and market conditions and trends, market data, contacts and other related information and assistance. Invesco Aim periodically rates the quality of proprietary research produced by various Brokers. Based on the evaluation of the quality of information that Invesco Aim receives from each Broker, Invesco Aim develops an estimate of each Broker's share of Invesco Aim clients' commission dollars. Invesco Aim attempts to direct trades to the firms to meet these estimates. Invesco Aim also uses soft dollars to acquire products from third parties that are supplied to Invesco Aim through Brokers executing the trades or other Brokers who "step in" to a transaction and receive a portion of the brokerage commission for the trade. Invesco Aim may from time to time instruct the executing Broker to allocate or "step out" a portion of a transaction to another Broker. The Broker to which Invesco Aim has "stepped out" would then settle and complete the designated portion of the transaction, and the executing Broker would settle and complete the remaining portion of the transaction that has not been "stepped out." Each Broker may receive a commission or brokerage fee with respect to that portion of the transaction that it settles and completes. Soft Dollar Products received from Brokers supplement Invesco Aim's own research (and the research of certain of its affiliates), and may include the following types of products and services: - Database Services - comprehensive databases containing current and/or historical information on companies and industries and indices. Examples include historical securities prices, earnings estimates and financial data. These services may include software tools that allow the user to search the database or to prepare value-added analyses related to the investment process (such as forecasts and models used in the portfolio management process). - Quotation/Trading/News Systems - products that provide real time market data information, such as pricing of individual securities and information on current trading, as well as a variety of news services. - Economic Data/Forecasting Tools - various macro economic forecasting tools, such as economic data or currency and political forecasts for various countries or regions. - Quantitative/Technical Analysis - software tools that assist in quantitative and technical analysis of investment data. - Fundamental/Industry Analysis - industry specific fundamental investment research. - Fixed Income Security Analysis - data and analytical tools that pertain specifically to fixed income securities. These tools assist in creating financial models, such as cash flow projections and interest rate sensitivity analyses, which are relevant to fixed income securities. - Other Specialized Tools - other specialized products, such as consulting analyses, access to industry experts, and distinct investment expertise such as forensic accounting or custom built investment-analysis software. If Invesco Aim determines that any service or product has a mixed use (i.e., it also serves functions that do not assist the investment decision-making or trading process), Invesco Aim will allocate the costs of such service or product accordingly in its reasonable discretion. Invesco Aim will 40 allocate brokerage commissions to Brokers only for the portion of the service or product that Invesco Aim determines assists it in the investment decision-making or trading process and will pay for the remaining value of the product or service in cash. Outside research assistance is useful to Invesco Aim since the Brokers used by Invesco Aim tend to provide more in-depth analysis of a broader universe of securities and other matters than Invesco Aim's staff follows. In addition, such services provide Invesco Aim with a diverse perspective on financial markets. Some Brokers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by Invesco Aim's clients, including the Funds. However, the Funds are not under any obligation to deal with any Broker in the execution of transactions in portfolio securities. In some cases, Soft Dollar Products are available only from the Broker providing them. In other cases, Soft Dollar Products may be obtainable from alternative sources in return for cash payments. Invesco Aim believes that because Broker research supplements rather than replaces Invesco Aim's research, the receipt of such research tends to improve the quality of Invesco Aim's investment advice. The advisory fee paid by the Funds is not reduced because Invesco Aim receives such services. To the extent the Funds' portfolio transactions are used to obtain Soft Dollar Products, the brokerage commissions obtained by the Funds might exceed those that might otherwise have been paid. Invesco Aim may determine target levels of brokerage business with various Brokers on behalf of its clients (including the Funds) over a certain time period. The target levels will be based upon the following factors, among others: (1) the execution services provided by the Broker; and (2) the research services provided by the Broker. Portfolio transactions may be effected through Brokers that recommend the Funds to their clients, or that act as agent in the purchase of a Fund's shares for their clients, provided that Invesco Aim believes such Brokers provide best execution and such transactions are executed in compliance with Invesco Aim's policy against using directed brokerage to compensate Brokers for promoting or selling AIM Fund shares. Invesco Aim will not enter into a binding commitment with Brokers to place trades with such Brokers involving brokerage commissions in precise amounts. DIRECTED BROKERAGE (RESEARCH SERVICES) Directed brokerage (research services) paid by each of the Funds during the last fiscal year ended October 31, 2007 are found in Appendix K. REGULAR BROKERS Information concerning the Funds' acquisition of securities of their regular Brokers during the last fiscal year ended October 31, 2007 is found in Appendix K. ALLOCATION OF PORTFOLIO TRANSACTIONS Invesco Aim and its affiliates manage numerous other investment accounts. Some of these accounts may have investment objectives similar to the Funds. Occasionally, identical securities will be appropriate for investment by one of the Funds and by another Fund or one or more of these investment accounts. However, the position of each account in the same securities and the length of time that each account may hold its investment in the same securities may vary. The timing and amount of purchase by each account will also be determined by its cash position. If the purchase or sale of securities is consistent with the investment policies of the Fund(s) and one or more of these accounts, and is considered at or about the same time, Invesco Aim will fairly allocate transactions in such securities among the Fund(s) and these accounts on a prorata basis based on order size or in such other manner believed by Invesco Aim to be fair and equitable. Invesco Aim may combine such transactions, in accordance with applicable laws and regulations, to obtain the most favorable execution. Simultaneous transactions could, however, adversely affect a Fund's ability to obtain or dispose of the full amount of a security which it seeks to purchase or sell. 41 ALLOCATION OF INITIAL PUBLIC OFFERING ("IPO") TRANSACTIONS Certain of the AIM Funds or other accounts managed by Invesco Aim may become interested in participating in IPOs. Purchases of IPOs by one AIM Fund or account may also be considered for purchase by one or more other AIM Funds or accounts. It shall be Invesco Aim's practice to specifically combine or otherwise bunch indications of interest for IPOs for all AIM Funds and accounts participating in purchase transactions for that IPO, when the full amount of all IPO orders for such AIM Funds and accounts cannot be filled completely, and to allocate such transactions in accordance with the following procedures: Invesco Aim or the Sub-Advisor will determine the eligibility of each AIM Fund and account that seeks to participate in a particular IPO by reviewing a number of factors, including market capital/liquidity, suitability and sector/style suitability of the investment with the AIM Fund's or account's investment objective, policies and strategies, and current holdings. The allocation of securities issued in IPOs will be made to eligible AIM Funds and accounts on a pro rata basis based on order size. [Invesco Institutional allocates equity IPOs on a pro rata basis based on account size or in such other manner believed by Invesco Institutional to be fair and equitable.] PURCHASE, REDEMPTION AND PRICING OF SHARES TRANSACTIONS THROUGH FINANCIAL INTERMEDIARIES If you are investing indirectly in a Fund through a financial intermediary such as a broker-dealer, a bank (including a bank trust department), an insurance company separate account, an investment advisor, an administrator or trustee of a retirement plan or a qualified tuition plan or a sponsor of a fee-based program that maintains a master account (an omnibus account) with the Fund for trading on behalf of its customers, different guidelines, conditions and restrictions may apply than if you held your shares of the Fund directly. These differences may include, but are not limited to: (i) different eligibility standards to purchase and sell shares, different eligibility standards to invest in funds with limited offering status and different eligibility standards to exchange shares by telephone; (ii) different minimum and maximum initial and subsequent purchase amounts; (iii) system inability to provide Letter of Intent privileges; and (iv) different annual amounts (less than 12%) subject to withdrawal under a Systematic Redemption Plan without being subject to a contingent deferred sales charge. The financial intermediary through whom you are investing may also choose to adopt different exchange and/or transfer limit guidelines and restrictions, including different trading restrictions designed to discourage excessive or short-term trading. The financial intermediary through whom you are investing may also choose to impose a redemption fee that has different characteristics, which may be more or less restrictive, than the redemption fee currently imposed on certain Funds. If the financial intermediary is managing your account, you may also be charged a transaction or other fee by such financial intermediary, including service fees for handling redemption transactions. Consult with your financial intermediary (or, in the case of a retirement plan, your plan sponsor) to determine what fees, guidelines, conditions and restrictions, including any of the above, may be applicable to you. PURCHASE AND REDEMPTION OF SHARES Purchases of Class A Shares, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund INITIAL SALES CHARGES. Each AIM Fund (other than AIM Tax-Exempt Cash Fund) is grouped into one of four categories to determine the applicable initial sales charge for its Class A Shares. The sales charge is used to compensate Invesco Aim Distributors and participating dealers for their expenses 42 incurred in connection with the distribution of the Funds' shares. You may also be charged a transaction or other fee by the financial institution managing your account. Class A Shares of AIM Tax-Exempt Cash Fund, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund are sold without an initial sales charge. CATEGORY I FUNDS AIM Asia Pacific Growth Fund AIM Basic Balanced Fund AIM Basic Value Fund AIM Capital Development Fund AIM Charter Fund AIM China Fund AIM Conservative Allocation Fund AIM Constellation Fund AIM Developing Markets Fund AIM Diversified Dividend Fund AIM Dynamics Fund AIM Energy Fund AIM European Growth Fund AIM European Small Company Fund AIM Financial Services Fund AIM Global Equity Fund AIM Global Growth Fund AIM Global Health Care Fund AIM Global Real Estate Fund AIM Global Small & Mid Cap Growth Fund AIM Global Value Fund AIM Gold & Precious Metals Fund AIM Growth Allocation Fund AIM Income Allocation Fund AIM Independence Now Fund AIM Independence 2010 Fund AIM Independence 2020 Fund AIM Independence 2030 Fund AIM Independence 2040 Fund AIM Independence 2050 Fund AIM International Allocation Fund AIM International Core Equity Fund AIM International Growth Fund AIM International Small Company Fund AIM Japan Fund AIM Large Cap Basic Value Fund AIM Large Cap Growth Fund AIM Leisure Fund AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund AIM Moderate Allocation Fund AIM Moderate Growth Allocation Fund AIM Moderately Conservative Allocation Fund AIM Multi-Sector Fund AIM Real Estate Fund AIM Select Equity Fund AIM Select Real Estate Income Fund AIM Small Cap Equity Fund AIM Small Cap Growth Fund AIM Structured Core Fund AIM Structured Growth Fund AIM Structured Value Fund AIM Summit Fund AIM Technology Fund AIM Trimark Endeavor Fund AIM Trimark Fund AIM Trimark Small Companies Fund AIM Utilities Fund
Dealer Investor's Sales Charge Concession -------------------------- ------------- As a As a As a Percentage Percentage Percentage of the Public of the Net of the Public Amount of Investment in Offering Amount Offering Single Transaction Price Invested Price - --------------------------------- ------------- ---------- ------------- Less than $ 25,000 5.50% 5.82% 4.75% $ 25,000 but less than $ 50,000 5.25 5.54 4.50 $ 50,000 but less than $ 100,000 4.75 4.99 4.00 $100,000 but less than $ 250,000 3.75 3.90 3.00 $250,000 but less than $ 500,000 3.00 3.09 2.50 $500,000 but less than $1,000,000 2.00 2.04 1.60
43 CATEGORY II FUNDS AIM High Income Municipal Fund AIM High Yield Fund AIM Income Fund AIM Intermediate Government Fund AIM International Total Return Fund AIM Municipal Bond Fund AIM Total Return Bond Fund
Dealer Investor's Sales Charge Concession -------------------------- ------------- As a As a As a Percentage Percentage Percentage of the Public of the Net of the Public Amount of Investment in Offering Amount Offering Single Transaction Price Invested Price - --------------------------------- ------------- ---------- ------------- Less than $ 50,000 4.75% 4.99% 4.00% $ 50,000 but less than $ 100,000 4.00 4.17 3.25 $100,000 but less than $ 250,000 3.75 3.90 3.00 $250,000 but less than $ 500,000 2.50 2.56 2.00 $500,000 but less than $1,000,000 2.00 2.04 1.60
CATEGORY III FUNDS AIM Limited Maturity Treasury Fund AIM Tax-Free Intermediate Fund
Dealer Investor's Sales Charge Concession -------------------------- ------------- As a As a As a Percentage Percentage Percentage of the Public of the Net of the Public Amount of Investment in Offering Amount Offering Single Transaction Price Invested Price - --------------------------------- ------------- ---------- ------------- Less than $ 100,000 1.00% 1.01% 0.75% $100,000 but less than $ 250,000 0.75 0.76 0.50 $250,000 but less than $1,000,000 0.50 0.50 0.40
As of the close of business on October 30, 2002, Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund were closed to new investors. Current investors must maintain a share balance in order to continue to make incremental purchases. CATEGORY IV FUNDS AIM Floating Rate Fund AIM LIBOR Alpha Fund AIM Short Term Bond Fund 44
Dealer Investor's Sales Charge Concession -------------------------- ------------- As a As a As a Percentage Percentage Percentage of the Public of the Net of the Public Amount of Investment in Offering Amount Offering Single Transaction Price Invested Price - --------------------------------- ------------- ---------- ------------- Less than $ 100,000 2.50% 2.56% 2.00% $100,000 but less than $ 250,000 2.00 2.04 1.50 $250,000 but less than $ 500,000 1.50 1.52 1.25 $500,000 but less than $1,000,000 1.25 1.27 1.00
LARGE PURCHASES OF CLASS A SHARES. Investors who purchase $1,000,000 or more of Class A Shares of Category I, II, III or IV Fund do not pay an initial sales charge. In addition, investors who currently own Class A shares of Category I, II, III or IV Funds and make additional purchases that result in account balances of $1,000,000 or more do not pay an initial sales charge on the additional purchases. The additional purchases, as well as initial purchases of $1,000,000 or more, are referred to as Large Purchases. If an investor makes a Large Purchase of Class A shares of a Category I, II or IV Fund, each share will generally be subject to a 1.00% contingent deferred sales charge ("CDSC") if the investor redeems those shares within 18 months after purchase. Invesco Aim Distributors may pay a dealer concession and/or advance a service fee on Large Purchases, as set forth below. Exchanges between the AIM Funds may affect total compensation paid. PURCHASES OF CLASS A SHARES BY NON-RETIREMENT PLANS. Invesco Aim Distributors may make the following payments to dealers of record for Large Purchases of Class A shares of Category I, II or IV Funds by investors other than: (i) retirement plans that are maintained pursuant to Sections 401 and 457 of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) retirement plans that are maintained pursuant to Section 403 of the Code if the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code: PERCENT OF PURCHASES 1% of the first $2 million plus 0.80% of the next $1 million plus 0.50% of the next $17 million plus 0.25% of amounts in excess of $20 million If (i) the amount of any single purchase order plus (ii) the public offering price of all other shares owned by the same customer submitting the purchase order on the day on which the purchase order is received equals or exceeds $1,000,000, the purchase will be considered a "jumbo accumulation purchase." With regard to any individual jumbo accumulation purchase, Invesco Aim Distributors may make payment to the dealer of record based on the cumulative total of jumbo accumulation purchases made by the same customer over the life of his or her account(s). If an investor makes a Large Purchase of Class A3 shares of a Category III Fund on and after October 31, 2002 and exchanges those shares for Class A shares of a Category I, II or IV Fund, Invesco Aim Distributors will pay 1.00% of such purchase as dealer compensation upon the exchange. The Class A shares of the Category I, II or IV Fund received in exchange generally will be subject to a 1.00% CDSC if the investor redeems such shares within 18 months from the date of exchange. PURCHASES OF CLASS A SHARES BY CERTAIN RETIREMENT PLANS AT NAV. For purchases of Class A shares of Category I, II and IV Funds, Invesco Aim Distributors may make the following payments to 45 investment dealers or other financial service firms for sales of such shares at net asset value ("NAV") to certain retirement plans provided that the applicable dealer of record is able to establish that the retirement plan's purchase of such Class A shares is a new investment (as defined below): PERCENT OF PURCHASES 0.50% of the first $20 million plus 0.25% of amounts in excess of $20 million This payment schedule will be applicable to purchases of Class A shares at NAV by the following types of retirement plans: (i) all plans maintained pursuant to Sections 401 and 457 of the Code, and (ii) plans maintained pursuant to Section 403 of the Code if the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code. A "new investment" means a purchase paid for with money that does not represent (i) the proceeds of one or more redemptions of AIM Fund shares, (ii) an exchange of AIM Fund shares, (iii) the repayment of one or more retirement plan loans that were funded through the redemption of AIM Fund shares, or (iv) money returned from another fund family. If Invesco Aim Distributors pays a dealer concession in connection with a plan's purchase of Class A shares at NAV, such shares may be subject to a CDSC of 1.00% of net assets for 12 months, commencing on the date the plan first invests in Class A shares of an AIM Fund. If the applicable dealer of record is unable to establish that a plan's purchase of Class A shares at NAV is a new investment, Invesco Aim Distributors will not pay a dealer concession in connection with such purchase and such shares will not be subject to a CDSC. With regard to any individual jumbo accumulation purchase, Invesco Aim Distributors may make payment to the dealer of record based on the cumulative total of jumbo accumulation purchases made by the same plan over the life of the plan's account(s). PURCHASERS QUALIFYING FOR REDUCTIONS IN INITIAL SALES CHARGES. As shown in the tables above, purchases of certain amounts of AIM Fund shares may reduce the initial sales charges. These reductions are available to purchasers that meet the qualifications listed below. We will refer to purchasers that meet these qualifications as "Qualified Purchasers." DEFINITIONS As used herein, the terms below shall be defined as follows: - "Individual" refers to a person, as well as his or her Spouse or Domestic Partner and his or her Children; - "Spouse" is the person to whom one is legally married under state law; - "Domestic Partner" is an adult with whom one shares a primary residence for at least six-months, is in a relationship as a couple where one or each of them provides personal or financial welfare of the other without a fee, is not related by blood and is not married; - "Child" or "Children" include a biological, adopted or foster son or daughter, a Step-child, a legal ward or a Child of a person standing in loco parentis; - "Parent" is a person's biological or adoptive mother or father; - "Step-child" is the child of one's Spouse by a previous marriage or relationship; 46 - "Step-parent" is the Spouse of a Child's Parent; and - "Immediate Family" includes an Individual (including, as defined above, a person, his or her Spouse or Domestic Partner and his or her Children) as well as his or her Parents, Step-parents and the Parents of Spouse or Domestic Partner. INDIVIDUALS - an Individual (including his or her spouse or domestic partner, and children); - a retirement plan established exclusively for the benefit of an Individual, specifically including, but not limited to, a Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Keogh plan, or a tax-sheltered 403(b)(7) custodial account; and - a qualified tuition plan account, maintained pursuant to Section 529 of the Code, or a Coverdell Education Savings Account, maintained pursuant to Section 530 of the Code (in either case, the account must be established by an Individual or have an Individual named as the beneficiary thereof). EMPLOYER-SPONSORED RETIREMENT PLANS - a retirement plan maintained pursuant to Sections 401, 403 (only if the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code), 408 (includes SEP, SARSEP and SIMPLE IRA plans) or 457 of the Code, if: a. the employer or plan sponsor submits all contributions for all participating employees in a single contribution transmittal (the AIM Funds will not accept separate contributions submitted with respect to individual participants); b. each transmittal is accompanied by checks or wire transfers; and c. if the AIM Funds are expected to carry separate accounts in the names of each of the plan participants, (i) the employer or plan sponsor notifies Invesco Aim Distributors in writing that the separate accounts of all plan participants should be linked, and (ii) all new participant accounts are established by submitting an appropriate Account Application on behalf of each new participant with the contribution transmittal. HOW TO QUALIFY FOR REDUCTIONS IN INITIAL SALES CHARGES. The following sections discuss different ways that a Qualified Purchaser can qualify for a reduction in the initial sales charges for purchases of Class A shares of the AIM Funds. LETTERS OF INTENT A Qualified Purchaser may pay reduced initial sales charges by (i) indicating on the Account Application that he, she or it intends to provide a Letter of Intent ("LOI"); and (ii) subsequently fulfilling the conditions of that LOI. Employer-sponsored retirement plans, with the exception of Solo 401(k) plans and SEP plans, are not eligible for a LOI. The LOI confirms the total investment in shares of the AIM Funds that the Qualified Purchaser intends to make within the next 13 months. By marking the LOI section on the account application and by signing the account application, the Qualified Purchaser indicates that he, she or it understands and agrees to the terms of the LOI and is bound by the provisions described below: Calculating the Initial Sales Charge 47 - Each purchase of fund shares normally subject to an initial sales charge made during the 13-month period will be made at the public offering price applicable to a single transaction of the total dollar amount indicated by the LOI (to determine what the applicable public offering price is, look at the sales charge table in the section on "Initial Sales Charges" above). - It is the purchaser's responsibility at the time of purchase to specify the account numbers that should be considered in determining the appropriate sales charge. - The offering price may be further reduced as described below under "Rights of Accumulation" if Invesco Aim Investment Services, the Funds' transfer agent ("Transfer Agent") is advised of all other accounts at the time of the investment. - Reinvestment of dividends and capital gains distributions acquired during the 13-month LOI period will not be applied to the LOI. Calculating the Number of Shares to be Purchased - Purchases made and shares acquired through reinvestment of dividends and capital gains distributions prior to the LOI effective date will be applied toward the completion of the LOI based on the value of the shares calculated at the public offering price on the effective date of the LOI. - If a purchaser wishes to revise the LOI investment amount upward, he, she or it may submit a written and signed request at anytime prior to the completion of the original LOI. This revision will not change the original expiration date. - The Transfer Agent will process necessary adjustments upon the expiration or completion date of the LOI. Fulfilling the Intended Investment - By signing an LOI, a purchaser is not making a binding commitment to purchase additional shares, but if purchases made within the 13-month period do not total the amount specified, the purchaser will have to pay the increased amount of sales charge. - To assure compliance with the provisions of the 1940 Act, the Transfer Agent will escrow in the form of shares an appropriate dollar amount (computed to the nearest full share) out of the initial purchase (or subsequent purchases if necessary). All dividends and any capital gain distributions on the escrowed shares will be credited to the purchaser. All shares purchased, including those escrowed, will be registered in the purchaser's name. If the total investment specified under this LOI is completed within the 13-month period, the escrowed shares will be promptly released. - If the intended investment is not completed, the purchaser will pay the Transfer Agent the difference between the sales charge on the specified amount and the sales charge on the amount actually purchased. If the purchaser does not pay such difference within 20 days of the expiration date, he or she irrevocably constitutes and appoints the Transfer Agent as his attorney to surrender for redemption any or all shares, to make up such difference within 60 days of the expiration date. Canceling the LOI - If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he or she must give written notice to Invesco Aim Distributors or its designee. 48 - If at any time before completing the LOI Program the purchaser requests the Transfer Agent to liquidate or transfer beneficial ownership of his total shares, the LOI will be automatically canceled. If the total amount purchased is less than the amount specified in the LOI, the Transfer Agent will redeem an appropriate number of escrowed shares equal to the difference between the sales charge actually paid and the sales charge that would have been paid if the total purchases had been made at a single time. Other Persons Eligible for the LOI Privilege The LOI privilege is also available to holders of the Connecticut General Guaranteed Account, established for tax qualified group annuities, for contracts purchased on or before June 30, 1992. LOIs and Contingent Deferred Sales Charges All LOIs to purchase $1,000,000 or more of Class A Shares of Category I, II and IV Funds are subject to an 18-month, 1% CDSC. RIGHTS OF ACCUMULATION A Qualified Purchaser may also qualify for reduced initial sales charges based upon his, her or its existing investment in shares of any of the AIM Funds at the time of the proposed purchase. To determine whether or not a reduced initial sales charge applies to a proposed purchase, Invesco Aim Distributors takes into account not only the money which is invested upon such proposed purchase, but also the value of all shares of the AIM Funds owned by such purchaser, calculated at their then current public offering price. If a purchaser qualifies for a reduced sales charge, the reduced sales charge applies to the total amount of money being invested, even if only a portion of that amount exceeds the breakpoint for the reduced sales charge. For example, if a purchaser already owns qualifying shares of any AIM Fund with a value of $20,000 and wishes to invest an additional $20,000 in a fund with a maximum initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to the full $20,000 purchase and not just to the $15,000 in excess of the $25,000 breakpoint. To qualify for obtaining the discount applicable to a particular purchase, the purchaser or his dealer must furnish the Transfer Agent with a list of the account numbers and the names in which such accounts of the purchaser are registered at the time the purchase is made. Rights of Accumulation are also available to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992. If an investor's new purchase of Class A shares of a Category I, II or IV Fund is at net asset value, the newly purchased shares will be subject to a CDSC if the investor redeems them prior to the end of the 18 month holding period. REINSTATEMENT FOLLOWING REDEMPTION If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested in Class A shares with no initial sales charge. This reinstatement privilege does not apply to: - A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or 49 - A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan. In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment. OTHER REQUIREMENTS FOR REDUCTIONS IN INITIAL SALES CHARGES. As discussed above, investors or dealers seeking to qualify orders for a reduced initial sales charge must identify such orders and, if necessary, support their qualification for the reduced charge. Invesco Aim Distributors reserves the right to determine whether any purchaser is entitled to the reduced sales charge based on the definition of a Qualified Purchaser listed above. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to Qualified Purchasers. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any Fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges. PURCHASES OF CLASS A SHARES AT NET ASSET VALUE. Invesco Aim Distributors permits certain categories of persons to purchase Class A shares of AIM Funds without paying an initial sales charge. These are typically categories of persons whose transactions involve little expense, such as persons who have a relationship with the funds or with Invesco Aim and certain programs for purchase. It is the purchaser's responsibility to notify Invesco Aim Distributors or its designee of any qualifying relationship at the time of purchase. Invesco Aim Distributors believes that it is appropriate and in the Funds' best interests that such persons, and certain other persons whose purchases result in relatively low expenses of distribution, be permitted to purchase shares through Invesco Aim Distributors without payment of a sales charge. Accordingly, the following purchasers will not pay initial sales charges on purchases of Class A shares because there is a reduced sales effort involved in sales to these purchasers: - Any current or retired trustee, director, officer or employee of any AIM Fund or of Invesco Ltd. or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any members of their Immediate Family); - Any current or retired officer, director, or employee (and members of their Immediate Family) of DST Systems, Inc. or Personix, a division of Fiserv Solutions, Inc.; - Any registered representative or employee of any intermediary who has an agreement with Invesco Aim Distributors to sell shares of the Funds (this includes any members of their Immediate Family); - Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship); - Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which Invesco Aim Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account; 50 - Employer-sponsored retirement plans that are Qualified Purchasers, as defined above, provided that: a. the plan has assets of at least $1 million; b. there are at least 100 employees eligible to participate in the plan; or c. all plan transactions are executed through a single omnibus account per Fund; further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code; - "Grandfathered" shareholders as follows: a. Shareholders of record of Advisor Class shares of AIM International Growth Fund or AIM Worldwide Growth Fund on February 12, 1999 who have continuously owned shares of the AIM Funds; b. Shareholders of record or discretionary advised clients of any investment advisor holding shares of AIM Weingarten Fund or AIM Constellation Fund on September 8, 1986, or of AIM Charter Fund on November 17, 1986, who have continuously owned shares and who purchase additional shares of AIM Constellation Fund or AIM Charter Fund, respectively; c. Unitholders of G/SET series unit investment trusts investing proceeds from such trusts in shares of AIM Constellation Fund; provided, however, prior to the termination date of the trusts, a unitholder may invest proceeds from the redemption or repurchase of his units only when the investment in shares of AIM Constellation Fund is effected within 30 days of the redemption or repurchase; d. A shareholder of a fund that merges or consolidates with an AIM Fund or that sells its assets to an AIM Fund in exchange for shares of an AIM Fund; e. Shareholders of the former GT Global funds as of April 30, 1987 who since that date continually have owned shares of one or more of these funds; f. Certain former AMA Investment Advisers' shareholders who became shareholders of the AIM Global Health Care Fund in October 1989, and who have continuously held shares in the GT Global funds since that time; g. Shareholders of record of Advisor Class shares of an AIM Fund on February 11, 2000 who have continuously owned shares of that AIM Fund, and who purchase additional shares of that AIM Fund; and h. Additional purchases of Class A shares by shareholders of record of Class K shares on October 21, 2005 whose Class K shares were converted to Class A shares; - Any investor who maintains an account in Investor Class shares of a Fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and members of their Immediate Family); - Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code; - Insurance company separate accounts; 51 - Retirement plan established exclusively for the benefit of an individual (specifically including, but not limited to, a Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Keogh plan, or a tax-sheltered 403(b)(7) custodial account) if: a. such plan is funded by a rollover of assets from an Employer-Sponsored Retirement Plan; b. the account being funded by such rollover is to be maintained by the same trustee, custodian or administrator that maintained the plan from which the rollover distribution funding such rollover originated, or an affiliate thereof; and c. the dealer of record with respect to the account being funded by such rollover is the same as the dealer of record with respect to the plan from which the rollover distribution funding such rollover originated, or an affiliate thereof. - Transfers to IRAs that are attributable to AIM Fund investments held in 403(b)(7)s, SIMPLEs, SEPs, SARSEPs, Traditional or Roth IRAs; and - Rollovers from Invesco Aim held 403(b)(7)s, 401(K)s, SEPs, SIMPLEs, SARSEPs, Money Purchase Plans, and Profit Sharing Plans if the assets are transferred to an Invesco Aim IRA. In addition, an investor may acquire shares of any of the AIM Funds at net asset value in connection with: - when reinvesting dividends and distributions; - when exchanging shares of one Fund, that were previously assessed a sales charge, for shares of another Fund; as more fully described in the Prospectus; - the purchase of shares in connection with the repayment of a retirement plan loan administered by Invesco Aim Investment Services; - as a result of a Fund's merger, consolidation or acquisition of the assets of another Fund; - the purchase of Class A shares with proceeds from the redemption of Class B or Class C shares where the redemption and purchase are effectuated on the same business day; or - when buying Class A shares of AIM Tax-Exempt Cash Fund. PAYMENTS TO DEALERS. Invesco Aim Distributors may elect to re-allow the entire initial sales charge to dealers for all sales with respect to which orders are placed with Invesco Aim Distributors during a particular period. Dealers to whom substantially the entire sales charge is re-allowed may be deemed to be "underwriters" as that term is defined under the 1933 Act. The financial advisor through which you purchase your shares may receive all or a portion of the sales charges and Rule 12b-1 distribution fees discussed above. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), insurance company separate account, transfer agent, registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with Invesco Aim Distributors or one or more of its corporate affiliates (collectively, the "Invesco Aim Distributors Affiliates"). In addition to those payments, Invesco Aim Distributors Affiliates may make additional cash payments to financial advisors in connection with the promotion and sale of shares of AIM Funds. Invesco Aim Distributors Affiliates make these payments from their own resources, from Invesco Aim Distributors' retention of underwriting concessions and from payments to Invesco Aim Distributors under Rule 12b-1 plans. In the case of sub-accounting payments, discussed below, Invesco Aim Distributors Affiliates will be reimbursed directly by the AIM Funds for such payments. These additional cash 52 payments are described below. The categories described below are not mutually exclusive. The same financial advisor, or one or more of its affiliates, may receive payments under more than one or all categories. Most financial advisors that sell shares of AIM Funds receive one or more types of these cash payments. Financial advisors negotiate the cash payments to be paid on an individual basis. Where services are provided, the costs of providing the services and the overall package of services provided may vary from one financial advisor to another. Invesco Aim Distributors Affiliates do not make an independent assessment of the cost of providing such services. A list of certain financial advisors that received one or more types of payments below during the prior calendar year is attached here as Appendix L. This list is not necessarily current and will change over time. Certain arrangements are still being negotiated, and there is a possibility that payments will be made retroactively to financial advisors not listed below. Accordingly, please contact your financial advisor to determine whether they currently may be receiving such payments and to obtain further information regarding any such payments. FINANCIAL SUPPORT PAYMENTS. Invesco Aim Distributors Affiliates make financial support payments as incentives to certain financial advisors to promote and sell shares of AIM Funds. The benefits Invesco Aim Distributors Affiliates receive when they make these payments include, among other things, placing AIM Funds on the financial advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. Financial support payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including AIM Funds in its fund sales system (on its "sales shelf"). Invesco Aim Distributors Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. In addition, payments typically apply only to retail sales, and may not apply to other types of sales or assets (such as sales to retirement plans, qualified tuition programs, or fee based advisor programs - some of which may generate certain other payments described below.) The financial support payments Invesco Aim Distributors Affiliates make may be calculated on sales of shares of AIM Funds ("Sales-Based Payments"), in which case the total amount of such payments shall not exceed 0.25% (for non-Institutional Class shares) or 0.10% (for Institutional Class shares) of the public offering price of all such shares sold by the financial advisor during the particular period. Such payments also may be calculated on the average daily net assets of the applicable AIM Funds attributable to that particular financial advisor ("Asset-Based Payments"), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of AIM Funds and Asset-Based Payments primarily create incentives to retain previously sold shares of AIM Funds in investor accounts. Invesco Aim Distributors Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments. SUB-ACCOUNTING AND NETWORKING SUPPORT PAYMENTS. Invesco Aim Investment Services, an Invesco Aim Distributors Affiliate, acts as the transfer agent for the AIM Funds, registering the transfer, issuance and redemption of AIM Fund shares, and disbursing dividends and other distributions to AIM Funds shareholders. However, many AIM Fund shares are owned or held by financial advisors, as that term is defined above, for the benefit of their customers. In those cases, the AIM Funds often do not maintain an account for the shareholder. Thus, some or all of the transfer agency functions for these accounts are performed by the financial advisor. In these situations, Invesco Aim Distributors Affiliates may make payments to financial advisors that sell AIM Fund shares for certain transfer agency services, including record keeping and sub-accounting shareholder accounts. Payments for these services typically do not exceed 0.25% (for non-Institutional Class shares) or 0.10% (for Institutional Class shares) of average annual assets of such share classes or $19 per annum per shareholder account (for non-Institutional Class shares only). Invesco Aim Distributors Affiliates also may make payments to certain financial advisors that sell AIM Fund shares in connection with client account maintenance support, statement preparation and transaction processing. The types of payments that Invesco Aim Distributors Affiliates may make under this category include, among others, payment of networking fees of up to $12 per shareholder account maintained on certain mutual fund trading systems. 53 All fees payable by Invesco Aim Distributors Affiliates pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement are charged back to the AIM Funds, subject to certain limitations approved by the Board of the Trust. OTHER CASH PAYMENTS. From time to time, Invesco Aim Distributors Affiliates, at their expense and out of their own resources, may provide additional compensation to financial advisors which sell or arrange for the sale of shares of the Fund. Such compensation provided by Invesco Aim Distributors Affiliates may include payment of ticket charges per purchase or exchange order placed by a financial advisor, one-time payments for ancillary services such as setting up funds on a financial advisor's mutual fund trading systems, financial assistance to financial advisors that enable Invesco Aim Distributors Affiliates to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events, and other financial advisor-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips. Other compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as the Financial Industry Regulatory Authority ("FINRA") (formerly, NASD, Inc.). Invesco Aim Distributors Affiliates make payments for entertainment events it deems appropriate, subject to Invesco Aim Distributors Affiliates guidelines and applicable law. These payments may vary depending upon the nature of the event or the relationship. Invesco Aim Distributors Affiliates are motivated to make the payments described above since they promote the sale of AIM Fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of AIM Funds or retain shares of AIM Funds in their clients' accounts, Invesco Aim Distributors Affiliates benefit from the incremental management and other fees paid to Invesco Aim Distributors Affiliates by the AIM Funds with respect to those assets. In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in the prospectus. You can ask your financial advisor about any payments it receives from Invesco Aim Distributors Affiliates or the AIM Funds, as well as about fees and/or commissions it charges. You should consult disclosures made by your financial advisor at the time of purchase. Purchases of Class B Shares Class B shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a CDSC if they redeem their shares within six years after purchase. See the Prospectus for additional information regarding contingent deferred sales charges. Invesco Aim Distributors may pay sales commissions to dealers and institutions who sell Class B shares of the AIM Funds at the time of such sales. Payments will equal 4.00% of the purchase price and will consist of a sales commission equal to 3.75% plus an advance of the first year service fee of 0.25%. Purchases of Class C Shares Class C shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a CDSC if they redeem their shares within the first year after purchase (no CDSC applies to Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you exchange shares of another AIM Fund that are subject to a CDSC into AIM LIBOR Alpha Fund or AIM Short Term Bond Fund). See the Prospectus for additional information regarding this CDSC. Invesco Aim Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds (except for Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund) at the time of such sales. Payments with respect to Funds other than AIM Floating Rate Fund will equal 1.00% of the purchase price and will consist of a sales commission of 0.75% plus an advance of the first year service fee of 0.25%. Payments with respect to AIM Floating Rate Fund will equal 0.75% of the purchase price and will consist of a sales commission of 0.50% plus an advance of the first year service fee of 0.25%. These commissions are not paid on sales to investors exempt from the CDSC, including 54 shareholders of record of AIM Advisor Funds, Inc. on April 30, 1995, who purchase additional shares in any of the Funds on or after May 1, 1995, and in circumstances where Invesco Aim Distributors grants an exemption on particular transactions. Payments with Regard to Converted Class K Shares For Class A shares acquired by a former Class K shareholder (i) as a result of a fund merger; or (ii) as a result of the conversion of Class K shares into Class A shares on October 21, 2005, Invesco Aim Distributors will pay financial intermediaries 0.45% on such Class A shares as follows: (i) 0.25% from the Class A shares' Rule 12b-1 plan fees; and (ii) 0.20% from Invesco Aim Distributors' own resources provided that, on an annualized basis for 2005 as of October 21, 2005, the 0.20% exceeds $2,000 per year. Purchase and Redemption of Class P Shares Certain former investors in the AIM Summit Plans I and II may acquire Class P shares at net asset value. Please see AIM Summit Fund's Prospectus for details. Purchases of Class R Shares Class R shares are sold at net asset value, and are not subject to an initial sales charge. If Invesco Aim Distributors pays a concession to the dealer of record, however, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all retirement plan assets are redeemed within one year from the date of the retirement plan's initial purchase. For purchases of Class R shares of Category I, II or IV Funds, Invesco Aim Distributors may make the following payments to dealers of record provided that the applicable dealer of record is able to establish that the purchase of Class R shares is a new investment or a rollover from a retirement plan in which an AIM Fund was offered as an investment option: PERCENT OF CUMULATIVE PURCHASES 0.75% of the first $5 million plus 0.50% of amounts in excess of $5 million With regard to any individual purchase of Class R shares, Invesco Aim Distributors may make payment to the dealer of record based on the cumulative total of purchases made by the same plan over the life of the plan's account(s). Purchases of Investor Class Shares Investor Class shares are sold at net asset value, and are not subject to an initial sales charge or to a CDSC. Invesco Aim Distributors may pay dealers and institutions an annual service fee of 0.25% of average daily net assets and such payments will commence immediately. The Investor Class is closed to new investors. Purchases of Institutional Class Shares Institutional Class shares are sold at net asset value, and are not subject to an initial sales charge or to a CDSC. Please refer to the Institutional Class Prospectus for more information. Exchanges TERMS AND CONDITIONS OF EXCHANGES. Normally, shares of an AIM Fund to be acquired by exchange are purchased at their net asset value or applicable offering price, as the case may be, determined on the date that such request is received, but under unusual market conditions such 55 purchases may be delayed for up to five business days if it is determined that a fund would be materially disadvantaged by an immediate transfer of the proceeds of the exchange. If a shareholder is exchanging into a fund paying daily dividends, and the release of the exchange proceeds is delayed for the foregoing five-day period, such shareholder will not begin to accrue dividends until the sixth business day after the exchange. Redemptions GENERAL. Shares of the AIM Funds may be redeemed directly through Invesco Aim Distributors or through any dealer who has entered into an agreement with Invesco Aim Distributors. In addition to the Funds' obligation to redeem shares, Invesco Aim Distributors may also repurchase shares as an accommodation to shareholders. To effect a repurchase, those dealers who have executed Selected Dealer Agreements with Invesco Aim Distributors must phone orders to the order desk of the Funds at (800) 959-4246 and guarantee delivery of all required documents in good order. A repurchase is effected at the net asset value per share of the applicable Fund next determined after the repurchase order is received in good order. Such an arrangement is subject to timely receipt by Invesco Aim Investment Services, the Funds' transfer agent, of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation. While there is no charge imposed by a Fund or by Invesco Aim Distributors (other than any applicable contingent deferred sales charge and any applicable redemption fee) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction. SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or the date of payment postponed when (a) trading on the NYSE is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of a Fund not reasonably practicable. SYSTEMATIC REDEMPTION PLAN. A Systematic Redemption Plan permits a shareholder of an AIM Fund to withdraw on a regular basis at least $50 per withdrawal. Under a Systematic Redemption Plan, all shares are to be held by Invesco Aim Investment Services. To provide funds for payments made under the Systematic Redemption Plan, Invesco Aim Investment Services redeems sufficient full and fractional shares at their net asset value in effect at the time of each such redemption. Payments under a Systematic Redemption Plan constitute taxable events. Since such payments are funded by the redemption of shares, they may result in a return of capital and in capital gains or losses, rather than in ordinary income. Because sales charges are imposed on additional purchases of Class A shares, it is disadvantageous to effect such purchases while a Systematic Redemption Plan is in effect. Each AIM Fund bears its share of the cost of operating the Systematic Redemption Plan. Contingent Deferred Sales Charges Imposed upon Redemption of Shares A CDSC may be imposed upon the redemption of Large Purchases of Class A shares of Category I, II and IV Funds, upon the redemption of Class B shares or Class C shares (no CDSC applies to Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you exchange shares of another AIM Fund that are subject to a CDSC into AIM LIBOR Alpha Fund or AIM Short Term Bond Fund) and, in certain circumstances, upon the redemption of Class R shares. See the Prospectus for additional information regarding CDSCs. CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR LARGE PURCHASES OF CLASS A SHARES. An investor who has made a Large Purchase of Class A shares of a Category I, II or IV Fund, will not be subject to a CDSC upon the redemption of those shares in the following situations: 56 - Redemptions of shares of Category I, II or IV Funds held more than 18 months; - Redemptions of shares held by retirement plans in cases where (i) the plan has remained invested in Class A shares of a Fund for at least 12 months, or (ii) the redemption is not a complete redemption of shares held by the plan; - Redemptions of shares by the investor where the investor's dealer waives the amounts otherwise payable to it by the distributor and notifies the distributor prior to the time of investment; - Minimum required distributions made in connection with an IRA, Keogh Plan or custodial account under Section 403(b) of the Code or other retirement plan following attainment of age 70 1/2; - Redemptions following the death or post-purchase disability of (i) any registered shareholders on an account or (ii) a settlor of a living trust, of shares held in the account at the time of death or initial determination of post-purchase disability, provided that shares have not been commingled with shares that are subject to CDSC; - Amounts from a monthly, quarterly or annual Systematic Redemption Plan of up to an annual amount of 12% of the account value on a per fund basis provided the investor reinvests his dividends. At the time the withdrawal plan is established, the account value must be $5,000 or more; CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR CLASS B AND C SHARES. CDSCs will not apply to the following redemptions of Class B or Class C shares, as applicable: - Additional purchases of Class C shares of AIM International Core Equity Fund and AIM Real Estate Fund by shareholders of record on April 30, 1995, of AIM International Value Fund, predecessor to AIM International Core Equity Fund, and AIM Real Estate Fund, except that shareholders whose broker-dealers maintain a single omnibus account with Invesco Aim Investment Services on behalf of those shareholders, perform sub-accounting functions with respect to those shareholders, and are unable to segregate shareholders of record prior to April 30, 1995, from shareholders whose accounts were opened after that date will be subject to a CDSC on all purchases made after March 1, 1996; - Redemptions following the death or post-purchase disability of (1) any registered shareholders on an account or (2) a settlor of a living trust, of shares held in the account at the time of death or initial determination of post-purchase disability, provided that shares have not been commingled with shares that are subject to CDSC; - Certain distributions from individual retirement accounts, Section 403(b) retirement plans, Section 457 deferred compensation plans and Section 401 qualified plans, where redemptions result from (i) required minimum distributions to plan participants or beneficiaries who are age 70 1/2 or older, and only with respect to that portion of such distributions that does not exceed 12% annually of the participant's or beneficiary's account value in a particular Fund; (ii) in kind transfers of assets where the participant or beneficiary notifies the distributor of the transfer no later than the time the transfer occurs; (iii) tax-free rollovers or transfers of assets to another plan of the type described above invested in Class B or Class C shares of one or more of the Funds; (iv) tax-free returns of excess contributions or returns of excess deferral amounts; and (v) distributions on the death or disability (as defined in the Code) of the participant or beneficiary; 57 - Amounts from a monthly or quarterly Systematic Redemption Plan of up to an annual amount of 12% of the account value on a per fund basis provided the investor reinvests his dividends. At the time the withdrawal plan is established, the account value must be $5,000 or more; - Liquidation initiated by the Fund when the account value falls below the minimum required account size of $500; and - Investment account(s) of Invesco Aim and its affiliates. CDSCs will not apply to the following redemptions of Class C shares: - A total or partial redemption of shares where the investor's dealer of record notifies the distributor prior to the time of investment that the dealer would waive the upfront payment otherwise payable to him; - A total or partial redemption which is necessary to fund a distribution requested by a participant in a retirement plan maintained pursuant to Section 401, 403, or 457 of the Code; and - Redemptions of Class C shares of a Fund other than AIM LIBOR Alpha Fund or AIM Short Term Bond Fund if you received such Class C shares by exchanging Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund. CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR CLASS R SHARES. CDSCs will not apply to the following redemptions of Class R shares: - A total or partial redemption of Class R shares where the retirement plan's dealer of record notifies the distributor prior to the time of investment that the dealer waives the upfront payment otherwise payable to him; and - Redemptions of shares held by retirement plans in cases where (i) the plan has remained invested in Class R shares of a Fund for at least 12 months, or (ii) the redemption is not a complete redemption of all Class R shares held by the plan. General Information Regarding Purchases, Exchanges and Redemptions GOOD ORDER. Purchase, exchange and redemption orders must be received in good order in accordance with Invesco Aim Investment Services policy and procedures and U.S. regulations. Invesco Aim Investment Services reserves the right to refuse transactions. Transactions not in good order will not be processed and once brought into good order, will receive current price. To be in good order, an investor or financial intermediary must supply Invesco Aim Investment Services with all required information and documentation, including signature guarantees when required. In addition, if a purchase of shares is made by check, the check must be received in good order. This means that the check must be properly completed and signed, and legible to Invesco Aim Investment Services in its sole discretion. If a check used to purchase shares does not clear, or if any investment order must be canceled due to nonpayment, the investor will be responsible for any resulting loss. AUTHORIZED AGENTS. Invesco Aim Investment Services and Invesco Aim Distributors may authorize agents to accept purchase and redemption orders that are in good form on behalf of the AIM Funds. In certain cases, these authorized agents are authorized to designate other intermediaries to accept purchase and redemption orders on a Fund's behalf. The Fund will be deemed to have received the purchase or redemption order when the Fund's authorized agent or its designee accepts the order. The order will be priced at the net asset value next determined after the order is accepted by the Fund's authorized agent or its designee. 58 SIGNATURE GUARANTEES. In addition to those circumstances listed in the "Shareholder Information" section of each Fund's prospectus, signature guarantees are required in the following situations: (1) requests to transfer the registration of shares to another owner; (2) telephone exchange and telephone redemption authorization forms; (3) changes in previously designated wiring or electronic funds transfer instructions; (4) written redemptions or exchanges of shares held in certificate form previously reported to Invesco Aim as lost, whether or not the redemption amount is under $250,000 or the proceeds are to be sent to the address of record; and (5) requests to redeem accounts where the proceeds are over $250,000 or the proceeds are to be sent to an address or a bank other than the address or bank of record. AIM Funds may waive or modify any signature guarantee requirements at any time. Acceptable guarantors include banks, broker-dealers, credit unions, national securities exchanges, savings associations and any other organization, provided that such institution or organization qualifies as an "eligible guarantor institution" as that term is defined in rules adopted by the SEC, and further provided that such guarantor institution is listed in one of the reference guides contained in Invesco Aim Investment Services' current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. Notary public signatures are not an acceptable replacement for a signature guarantee. Invesco Aim Investment Services will also accept signatures with either: (1) a signature guaranteed with a medallion stamp of the STAMP Program, or (2) a signature guaranteed with a medallion stamp of the NYSE Medallion Signature Program, provided that in either event, the amount of the total transaction involved does not exceed the surety coverage amount indicated on the medallion. For information regarding whether a particular institution or organization qualifies as an "eligible guarantor institution" and to determine how to fulfill a signature guarantee requirement, an investor should contact the Client Services Department of Invesco Aim Investment Services. TRANSACTIONS BY TELEPHONE. By signing an account application form, an investor appoints Invesco Aim Investment Services as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by Invesco Aim Investment Services in the designated account(s), or in any other account with any of the AIM Funds, present or future, which has the identical registration as the designated account(s), with full power of substitution in the premises. Invesco Aim Investment Services and Invesco Aim Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption proceeds to be applied to purchase shares in any one or more of the AIM Funds, provided that such fund is available for sale and provided that the registration and mailing address of the shares to be purchased are identical to the registration of the shares being redeemed. An investor acknowledges by signing the form that he understands and agrees that Invesco Aim Investment Services and Invesco Aim Distributors may not be liable for any loss, expense or cost arising out of any telephone exchange requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transactions. Invesco Aim Investment Services reserves the right to modify or terminate the telephone exchange privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any exchanges must be effected in writing by the investor. INTERNET TRANSACTIONS. An investor may effect transactions in his account through the internet by establishing a Personal Identification Number (PIN). By establishing a PIN the investor acknowledges and agrees that neither Invesco Aim Investment Services nor Invesco Aim Distributors will be liable for any loss, expense or cost arising out of any internet transaction effected by them in accordance with any instructions submitted by a user who transmits the PIN as authentication of his or her identity. Procedures for verification of internet transactions include requests for confirmation of the shareholder's personal identification number and mailing of confirmations promptly after the transactions. The investor also acknowledges that the ability to effect internet transactions may be terminated at any time by the 59 AIM Funds. Policies for processing transactions via the Internet may differ from policies for transactions via telephone due to system settings. ABANDONED PROPERTY. It is the responsibility of the investor to ensure that Invesco Aim Investment Services maintains a correct address for his account(s). An incorrect address may cause an investor's account statements and other mailings to be returned to Invesco Aim Investment Services. Upon receiving returned mail, Invesco Aim Investment Services will attempt to locate the investor or rightful owner of the account. If unsuccessful, Invesco Aim Investment Services will retain a shareholder locator service with a national information database to conduct periodic searches for the investor. If the search firm is unable to locate the investor, the search firm will determine whether the investor's account has legally been abandoned. Invesco Aim Investment Services is legally obligated to escheat (or transfer) abandoned property to the appropriate state's unclaimed property administrator in accordance with statutory requirements. The investor's last known address of record determines which state has jurisdiction. MISCELLANEOUS FEES. In certain circumstances, the intermediary maintaining the shareholder account through which your Fund shares are held may assess various fees related to the maintenance of that account, such as: - an annual custodial fee on accounts where Invesco Aim Distributors acts as the prototype sponsor; - expedited mailing fees in response to overnight redemption requests; and - copying and mailing charges in response to requests for duplicate statements. Please consult with your intermediary for further details concerning any applicable fees. INSTITUTIONAL CLASS SHARES Before the initial purchase of shares, an investor must submit a completed account application to his financial intermediary, who should forward the application to Invesco Aim Investment Services, Inc. at P.O. Box 4497, Houston, Texas 77210-4497. An investor may change information in his account application by submitting written changes or a new account application to his intermediary or to Invesco Aim Investment Services. Purchase and redemption orders must be received in good order. To be in good order, the financial intermediary must give Invesco Aim Investment Services all required information and documentation with respect to the investor. If the intermediary fails to deliver the investor's payment on the required settlement date, the intermediary must reimburse the Fund for any overdraft charges incurred. A financial intermediary may submit a written request to Invesco Aim Investment Services for correction of transactions involving Fund shares. If Invesco Aim Investment Services agrees to correct a transaction, and the correction requires a dividend adjustment, the intermediary must agree in writing to reimburse the Fund for any resulting loss. An investor may terminate his relationship with an intermediary and become the shareholder of record on his account. However, until the investor establishes a relationship with an intermediary, the investor will not be able to purchase additional shares of the Fund, except through the reinvestment of distributions. Payment for redeemed shares is normally made by Federal Reserve wire to the bank account designated in the investor's account application, but may be sent by check at the investor's request. By providing written notice to his financial intermediary or to Invesco Aim Investment Services, an investor 60 may change the bank account designated to receive redemption proceeds. Invesco Aim Investment Services may request additional documentation. Invesco Aim Investment Services may request that an intermediary maintain separate master accounts in the Fund for shares held by the intermediary (a) for its own account, for the account of other institutions and for accounts for which the intermediary acts as a fiduciary; and (b) for accounts for which the intermediary acts in some other capacity. An intermediary may aggregate its master accounts and sub-accounts to satisfy the minimum investment requirement. Platform sponsors that provide investment vehicles to fund Section 401 defined contribution plans and have entered into written agreements with Invesco Aim Distributors to waive applicable investment minimums may purchase Institutional Class shares for accounts within such plans. OFFERING PRICE The following formula may be used to determine the public offering price per Class A share of an investor's investment: Net Asset Value / (1 - Sales Charge as % of Offering Price) = Offering Price. For example, at the close of business on October 31, 2007, AIM Asia Pacific Growth Fund - Class A shares had a net asset value per share of $35.16. The offering price, assuming an initial sales charge of 5.50%, therefore was $37.21. Calculation of Net Asset Value Each Fund determines its net asset value per share once daily as of the close of the customary trading session of the NYSE (generally 4:00 p.m. Eastern time) on each business day of the Fund. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, each Fund determines its net asset value per share as of the close of the NYSE on such day. For purposes of determining net asset value per share, futures and option contracts may be valued 15 minutes after the close of the customary trading session of the NYSE. Futures contracts may be valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. The Funds determine net asset value per share by dividing the value of a Fund's securities, cash and other assets (including interest accrued but not collected) attributable to a particular class, less all its liabilities (including accrued expenses and dividends payable) attributable to that class, by the total number of shares outstanding of that class. Determination of a Fund's net asset value per share is made in accordance with generally accepted accounting principles. Generally, the portfolio securities for non-money market funds are recorded in the NAV no later than trade date plus one, except that on fiscal quarter ends, such securities are recorded on trade date. For money market funds, portfolio securities are recorded in the NAV on trade date. The net asset value for shareholder transactions may be different than the net asset value reported in the Fund's financial statements due to adjustments required by generally accepted accounting principles made to the net asset value of the Fund at period end. Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. A security listed or traded on an exchange (excluding convertible bonds) held by a Fund is valued at its last sales price or official closing price on the exchange where the security is principally traded or, lacking any sales or official closing price on a particular day, the security may be valued at the closing bid 61 price on that day. Each equity security traded in the over-the-counter market is valued on the basis of prices furnished by independent pricing services vendors or market makers. Debt securities (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing vendor. Evaluated quotes provided by the pricing vendor may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and ask prices. Short-term investments (including commercial paper) are valued at amortized cost when the security has 60 days or less to maturity. Generally, trading in corporate bonds, U.S. Government securities and money market instruments is substantially completed each day at various times prior to the close of the customary trading session of the NYSE. The values of such securities used in computing the net asset value of a Fund's shares are determined at such times. Occasionally, events affecting the values of such securities may occur between the times at which such values are determined and the close of the customary trading session of the NYSE. If Invesco Aim believes a development/event has actually caused a closing price to no longer reflect current market value, the closing prices may be adjusted to reflect the fair value of the affected security as of the close of the NYSE as determined in good faith using procedures approved by the Board. Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. If an issuer specific event has occurred that Invesco Aim determines, in its judgment is likely to have affected the closing price of a foreign security, it will price the security at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where Invesco Aim believes, at the approved degree of certainty, that the price is not reflective of current market value, Invesco Aim will use the indication of fair value from the pricing vendor to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Multiple factors may be considered by the pricing vendor in determining adjustments to reflect fair value and may include information relating to sector indices, ADRs domestic and foreign index futures, and exchange-traded funds. Fund securities primarily traded in foreign markets may be traded in such markets on days that are not business days of the Fund. Because the net asset value per share of each Fund is determined only on business days of the Fund, the value of the portfolio securities of a Fund that invests in foreign securities may change on days when an investor cannot exchange or redeem shares of the Fund. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in accordance with procedures approved by the Board. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value. 62 REDEMPTIONS IN KIND Although the Funds generally intend to pay redemption proceeds solely in cash, the Funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). For instance, a Fund may make a redemption in kind, if a cash redemption would disrupt its operations or performance. Securities that will be delivered as payment in redemptions in kind will be valued using the same methodologies that the Fund typically utilizes in valuing such securities. Shareholders receiving such securities are likely to incur transaction and brokerage costs on their subsequent sales of such securities, and the securities may increase or decrease in value until the shareholder sells them. The Trust, on behalf of the Funds made an election under Rule 18f-1 under the 1940 Act (a "Rule 18f-1 Election"), and therefore, the Trust, on behalf of a Fund is obligated to redeem for cash all shares presented to such Fund for redemption by any one shareholder in an amount up to the lesser of $250,000 or 1% of that Fund's net assets in any 90-day period. The Rule 18f-1 Election is irrevocable while Rule 18f-1 under the 1940 Act is in effect unless the SEC by order permits withdrawal of such Rule 18f-1 Election. BACKUP WITHHOLDING Accounts submitted without a correct, certified taxpayer identification number or, alternatively, a correctly completed and currently effective Internal Revenue Service ("IRS") Form W-8 (for non-resident aliens) or Form W-9 (certifying exempt status) accompanying the registration information will generally be subject to backup withholding. Each Fund, and other payers, generally must withhold 28% of reportable dividends (whether paid or accrued), including exempt-interest dividends, in the case of any shareholder who fails to provide the Fund with a taxpayer identification number ("TIN") and a certification that he is not subject to backup withholding. An investor is subject to backup withholding if: 1. the investor fails to furnish a correct TIN to the Fund; 2. the IRS notifies the Fund that the investor furnished an incorrect TIN; 3. the investor or the Fund is notified by the IRS that the investor is subject to backup withholding because the investor failed to report all of the interest and dividends on such investor's tax return (for reportable interest and dividends only); 4. the investor fails to certify to the Fund that the investor is not subject to backup withholding under (3) above (for reportable interest and dividend accounts opened after 1983 only); or 5. the investor does not certify his TIN. This applies only to non-exempt mutual fund accounts opened after 1983. Interest and dividend payments are subject to backup withholding in all five situations discussed above. Redemption proceeds are subject to backup withholding only if (1), (2) or (5) above applies. Certain payees and payments are exempt from backup withholding and information reporting. Invesco Aim or Invesco Aim Investment Services will not provide Form 1099 to those payees. Investors should contact the IRS if they have any questions concerning withholding. IRS PENALTIES - Investors who do not supply the AIM Funds with a correct TIN will be subject to a $50 penalty imposed by the IRS unless such failure is due to reasonable cause and not willful neglect. If an investor falsifies information on this form or makes any other false statement resulting in no backup withholding on an account which should be subject to backup withholding, such investor may be subject to a $500 penalty imposed by the IRS and to certain criminal penalties including fines and/or imprisonment. 63 NONRESIDENT ALIENS - Nonresident alien individuals and foreign entities are not subject to the backup withholding previously discussed, but must certify their foreign status by attaching IRS Form W-8 to their application. Form W-8 generally remains in effect for a period starting on the date the Form is signed and ending on the last day of the third succeeding calendar year. Such shareholders may, however, be subject to federal income tax withholding at a 30% rate on ordinary income dividends and other distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption. DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS DIVIDENDS AND DISTRIBUTIONS It is the present policy of each Fund to declare and pay annually any net investment income dividends and any capital gain distributions. It is each Fund's intention to distribute substantially all of its net investment income and capital gain net income (excess of capital gains over capital losses). All dividends and distributions will be automatically reinvested in additional shares of the same class of each Fund unless the shareholder has requested in writing to receive such dividends and distributions in cash or that they be invested in shares of another AIM Fund, subject to the terms and conditions set forth in the Prospectus under the caption "Purchasing Shares - Automatic Dividend and Distribution Investment." Such dividends and distributions will be reinvested at the net asset value per share determined on the ex-dividend date. If a shareholder's account does not have any shares in it on a dividend or capital gain distribution payment date, the dividend or distribution will be paid in cash whether or not the shareholder has elected to have such dividends or distributions reinvested. Dividends on Class B, Class C and Class R of certain Funds are expected to be lower than those for Class A and Institutional Class shares of the same Fund because of higher distribution fees paid by Class B, Class C and Class R shares. Other class-specific expenses may also affect dividends on shares of those classes. Expenses attributable to a particular class ("Class Expenses") include distribution plan expenses, which must be allocated to the class for which they are incurred. Other expenses may be allocated as Class Expenses, consistent with applicable legal principles under the 1940 Act and the Code. TAX MATTERS The following is only a summary of certain additional tax considerations generally affecting the Funds and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of each Fund or its shareholders, and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning. QUALIFICATION AS A REGULATED INVESTMENT COMPANY. Each Fund has elected to be taxed under Subchapter M of the Code as a regulated investment company and intends to maintain its qualification as such in each of its taxable years. As a regulated investment company, each Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income that it distributes to shareholders, provided that it distributes an amount equal to (i) at least 90% of its investment company taxable income (i.e., net investment income, net foreign currency ordinary gain or loss and the excess of net short-term capital gain over net long-term capital loss) and (ii) at least 90% of the excess of its tax-exempt interest income under Code Section 103(a) over its deductions disallowed under Code Sections 265 and 171(a)(2) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by a Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gain of the taxable year and can therefore satisfy the Distribution Requirement. 64 Each Fund presently intends to elect under applicable Treasury regulations to treat any net capital loss and any net long-term capital loss incurred after October 31 as if it had been incurred in the succeeding taxable year in determining its taxable income for the current taxable year. Certain Funds may also elect under the same regulations to treat all or part of any net foreign currency loss incurred after October 31 as if it had been incurred in the succeeding taxable year. Each Fund may use "equalization accounting" in determining the portion of its net investment income and capital gain net income that has been distributed. A Fund that elects to use equalization accounting will allocate a portion of its realized investment income and capital gain to redemptions of Fund shares and will reduce the amount of such income and/or gain that it distributes in cash. However, each Fund intends to make cash distributions for each taxable year in an aggregate amount that is sufficient to satisfy the Distribution Requirement without taking into account its use of equalization accounting. The IRS has not published any guidance concerning the methods to be used in allocating investment income and capital gain to redemptions of shares. In the event that the IRS determines that a Fund is using an improper method of allocation and has under-distributed its net investment income or capital gain net income for any taxable year, such Fund may be liable for additional federal income tax. In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gain from the sale or other disposition of stock, securities or foreign currencies (to the extent such currency gain is directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including, but not limited to, gain from options, futures or forward contracts) derived from its business of investing in such stock, securities or currencies and net income derived from certain publicly traded partnerships (the "Income Requirement"). Under certain circumstances, a Fund may be required to sell portfolio holdings to meet this requirement. In addition to satisfying the requirements described above, each Fund must satisfy an asset diversification test in order to qualify as a regulated investment company (the "Asset Diversification Test"). Under this test, at the close of each quarter of each Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers, as to which the Fund has not invested more than 5% of the value of the Fund's total assets in securities of such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of such issuer, and no more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies) of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses, or, collectively, of certain publicly traded partnerships. For purposes of the Asset Diversification Test, the IRS has ruled that the issuer of a purchased listed call option on stock is the issuer of the stock underlying the option. The IRS has also informally ruled that, in general, the issuers of purchased or written call and put options on securities, of long and short positions on futures contracts on securities and of options on such futures contracts are the issuers of the securities underlying such financial instruments where the instruments are traded on an exchange. Where the writer of a listed call option owns the underlying securities, the IRS has ruled that the Asset Diversification Test will be applied solely to such securities and not to the value of the option itself. With respect to options on securities indexes, futures contracts on securities indexes and options on such futures contracts, the IRS has informally ruled that the issuers of such options and futures contracts are the separate entities whose securities are listed on the index, in proportion to the weighting of securities in the computation of the index. It is unclear under present law who should be treated as the issuer of forward foreign currency exchange contracts, of options on foreign currencies, or of foreign currency futures and related options. It has been suggested that the issuer in each case may be the foreign central bank or the foreign government backing the particular currency. Due to this uncertainty and because the Funds may not rely on informal rulings of the IRS, the Funds may find it necessary to seek a ruling from the IRS as to the application of the Asset Diversification Test to certain of the foregoing types 65 of financial instruments or to limit its holdings of some or all such instruments in order to stay within the limits of such test. Under an IRS revenue procedure, a Fund may treat its position as lender under a repurchase agreement as a U.S. Government security for purposes of the Asset Diversification Test where the repurchase agreement is fully collateralized (under applicable SEC standards) with securities that constitute U.S. Government securities. If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain (net long-term capital gain over any net short-term capital loss)) would be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions would be taxable as ordinary dividends to the extent of such Fund's current and accumulated earnings and profits. Such distributions generally would be eligible for the dividends received deduction (to the extent discussed below) in the case of corporate shareholders and would be included in the qualified dividend income of non-corporate shareholders. See "Fund Distributions" below. DETERMINATION OF TAXABLE INCOME OF A REGULATED INVESTMENT COMPANY. In general, gain or loss recognized by a Fund on the disposition of an asset will be a capital gain or loss. However, gain recognized on the disposition of a debt obligation purchased by a Fund at a market discount (generally, at a price less than its principal amount) will be treated as ordinary income to the extent of the portion of the market discount which accrued during the period of time the Fund held the debt obligation unless the Fund made an election to accrue market discount into income. If a Fund purchases a debt obligation that was originally issued at a discount, the Fund is generally required to include in gross income each year the portion of the original issue discount which accrues during such year. In addition, under the rules of Code Section 988, gain or loss recognized on the disposition of a debt obligation denominated in a foreign currency or an option with respect thereto (but only to the extent attributable to changes in foreign currency exchange rates), and gain or loss recognized on the disposition of a forward foreign currency contract or of foreign currency itself, will generally be treated as ordinary income or loss. In certain cases a Fund may make an election to treat such gain or loss as capital. Certain hedging transactions that may be engaged in by certain of the Funds (such as short sales "against the box") may be subject to special tax treatment as "constructive sales" under Section 1259 of the Code if a Fund holds certain "appreciated financial positions" (defined generally as any interest (including a futures or forward contract, short sale or option) with respect to stock, certain debt instruments, or partnership interests if there would be a gain were such interest sold, assigned, or otherwise terminated at its fair market value). Upon entering into a constructive sales transaction with respect to an appreciated financial position, a Fund will generally be deemed to have constructively sold such appreciated financial position and will recognize gain as if such position were sold, assigned, or otherwise terminated at its fair market value on the date of such constructive sale (and will take into account any gain for the taxable year which includes such date). Some of the forward foreign currency exchange contracts, options and futures contracts that certain of the Funds may enter into will be subject to special tax treatment as "Section 1256 contracts." Section 1256 contracts that a Fund holds are treated as if they are sold for their fair market value on the last business day of the taxable year, regardless of whether a taxpayer's obligations (or rights) under such contracts have terminated (by delivery, exercise, entering into a closing transaction or otherwise) as of such date. Any gain or loss recognized as a consequence of the year-end deemed disposition of Section 1256 contracts is combined with any other gain or loss that was previously recognized upon the termination of Section 1256 contracts during that taxable year. The net amount of such gain or loss for the entire taxable year (including gain or loss arising as a consequence of the year-end deemed sale of such contracts) is deemed to be 60% long-term and 40% short-term gain or loss. However, in the case of Section 1256 contracts that are forward foreign currency exchange contracts, the net gain or loss is separately determined and (as discussed above) generally treated as ordinary income or loss. If such a future or option is held as an offsetting position and can be considered a straddle under Section 1092 of 66 the Code, such a straddle will constitute a mixed straddle. A mixed straddle will be subject to both Section 1256 and Section 1092 unless certain elections are made by the Fund. Other hedging transactions in which the Funds may engage may result in "straddles" or "conversion transactions" for U.S. federal income tax purposes. The straddle and conversion transaction rules may affect the character of gains (or in the case of the straddle rules, losses) realized by the Funds. In addition, losses realized by the Funds on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. Because only a few regulations implementing the straddle rules and the conversion transaction rules have been promulgated, the tax consequences to the Funds of hedging transactions are not entirely clear. The hedging transactions may increase the amount of short-term capital gain realized by the Funds (and, if they are conversion transactions, the amount of ordinary income) which is taxed as ordinary income when distributed to shareholders. Because application of any of the foregoing rules governing Section 1256 contracts, constructive sales, straddle and conversion transactions may affect the character of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected investment or straddle positions, the taxable income of a Fund may exceed or be less than its book income. Accordingly, the amount which must be distributed to shareholders and which will be taxed to shareholders as ordinary income, qualified dividend income, or long-term capital gain may also differ from the book income of a Fund and may be increased or decreased as compared to a fund that did not engage in such transactions. PFIC INVESTMENTS. The Funds are permitted to invest in foreign equity securities and thus may invest in stocks of foreign companies that are classified under the Code as passive foreign investment companies ("PFICs"). In general, a foreign company is classified as a PFIC if at least one-half of its assets constitute investment-type assets or 75% or more of its gross income is investment-type income. The application of the PFIC rules may affect, among other things, the character of gain, the amount of gain or loss and the timing of the recognition and character of income with respect to PFIC stock, as well as subject the Funds themselves to tax on certain income from PFIC stock. For these reasons the amount that must be distributed to shareholders, and which will be taxed to shareholders as ordinary income or long-term capital gain, may be increased or decreased substantially as compared to a fund that did not invest in PFIC stock. SWAP AGREEMENTS. A Fund may enter into swap agreements as permitted by each Fund's prospectus. Certain requirements that must be met under the Code in order for a Fund to qualify as a regulated investment company may limit the extent to which a Fund will be able to engage in certain types of swap agreements. Moreover, the rules governing the tax aspects of certain types of these agreements are in a developing stage and are not entirely clear in certain respects. Accordingly, while a Fund intends to account for such transactions in a manner deemed to be appropriate, the IRS might not accept such treatment. If it did not, the status of a Fund as a regulated investment company might be affected. Each Fund intends to monitor developments in this area. EXCISE TAX ON REGULATED INVESTMENT COMPANIES. A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year. For purposes of the excise tax, a regulated investment company shall (1) reduce its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year and (2) exclude Section 988 foreign currency gains and losses incurred after October 31 (or after the end of its taxable year if it has made a taxable year election) in determining the amount of ordinary taxable income for the current calendar year (and, instead, include such gains and losses in determining ordinary taxable 67 income for the current calendar year (and, instead, include such gains and losses in determining ordinary taxable income for the succeeding calendar year). Each Fund generally intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, in the event that the IRS determines that a Fund is using an improper method of allocation for purposes of equalization accounting (as discussed above), such Fund may be liable for excise tax. Moreover, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. In addition, under certain circumstances, a Fund may elect to pay a minimal amount of excise tax. FUND DISTRIBUTIONS. Each Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Such distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes, but they will qualify for the 70% dividends received deduction for corporations and as qualified dividend income for individuals and other non-corporate taxpayers to the extent discussed below. A Fund may either retain or distribute to shareholders its net capital gain for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain dividend, it will be taxable to shareholders as long-term capital gain (currently taxable at a maximum rates of 15% or 25%, depending on the nature of the capital gain, for non-corporate shareholders) regardless of the length of time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his shares. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carry forwards) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit. Subject to applicable Code limitations, each Fund will be allowed to take into account a net capital loss (excess of losses over gains from the sale of capital assets) from a prior taxable year as a short-term capital loss for the current taxable year in determining its investment company taxable income and net capital gain. Ordinary income dividends paid by a Fund with respect to a taxable year will qualify for the 70% dividends received deduction generally available to corporations to the extent of the amount of qualifying dividends received by the Fund from domestic corporations for the taxable year. Ordinary income dividends paid by a Fund to individuals and other non-corporate taxpayers will be treated as qualified dividend income that is subject to tax at a maximum rate of 15% to the extent of the amount of qualifying dividends received by the Fund from domestic corporations and from foreign corporations that are either incorporated in a possession of the United States, or are eligible for benefits under certain income tax treaties with the United States that include an exchange of information program. In addition, qualifying dividends include dividends paid with respect to stock of a foreign corporation that is readily tradable on an established securities market in the United States. Dividends received by the Fund from PFICs are not qualifying dividends, and dividends received by a Fund from REITs generally are not qualifying dividends. If the qualifying dividend income received by a Fund is equal to 95% (or a greater percentage) of the Fund's gross income (exclusive of net capital gain) in any taxable year, all of the ordinary income dividends paid by the Fund will be qualifying dividend income. Alternative minimum tax ("AMT") is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum rate of 28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. However, the AMT on capital gain dividends and qualified dividend income paid by a 68 Fund to a non-corporate shareholder may not exceed the maximum applicable capital gains rate for non-corporate taxpayers. The AMT applicable to corporations may reduce the value of the dividends received deduction. However, certain small corporations are wholly exempt from the AMT. Distributions by a Fund that are not paid from earnings and profits will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in his shares; any excess will be treated as gain from the sale of his shares. Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund (or of another Fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the ex-dividend date. Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year in accordance with the guidance that has been provided by the IRS. If the net asset value of shares is reduced below a shareholder's cost as a result of a distribution by a Fund, such distribution generally will be taxable even though it represents a return of invested capital. Investors should be careful to consider the tax implications of buying shares of a Fund just prior to a distribution. The price of shares purchased at this time may reflect the amount of the forthcoming distribution. Those purchasing just prior to a distribution will receive a distribution which generally will be taxable to them. SALE OR REDEMPTION OF SHARES. A shareholder will recognize gain or loss on the sale or redemption of shares of a Fund in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be deferred under the wash sale rules if the shareholder purchases other shares of the Fund within 30 days before or after the sale or redemption. In general, any gain or loss arising from (or treated as arising from) the sale or redemption of shares of a Fund will be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year. Currently, any long-term capital gain recognized by a non-corporate shareholder will be subject to tax at a maximum rate of 15%. However, any capital loss arising from the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary income. The Transfer Agent may provide Fund shareholders with information concerning the average cost basis of their shares in order to help them calculate their gain or loss from a sale or redemption. This information is supplied as a convenience to shareholders and will be not reported to the IRS. Although the IRS permits the use of several methods to determine the cost basis of mutual fund shares, the cost basis information provided by the Transfer Agent will be calculated using only the single-category average cost method. Neither the Transfer Agent nor the Fund recommends any particular method of determining cost basis, and the use of other methods may result in more favorable tax consequences for some shareholders. Even if you have reported gains or losses for a Fund in past years using another method of basis determination, you may be able to use the average cost method for determining gains or losses in the current year. However, once you have elected to use the average cost method, you must continue to use it unless you apply to the IRS for permission to change methods. If a shareholder (a) incurs a sales load in acquiring shares of a Fund, (b) disposes of such shares less than 91 days after they are acquired, and (c) subsequently acquires shares of the Fund or another 69 fund at a reduced sales load pursuant to a right to reinvest at such reduced sales load acquired in connection with the acquisition of the shares disposed of, then the sales load on the shares disposed of (to the extent of the reduction in the sales load on the shares subsequently acquired) shall not be taken into account in determining gain or loss on the shares disposed of, but shall be treated as incurred on the acquisition of the shares subsequently acquired. The wash sale rules may also limit the amount of loss that may be taken into account on disposition after such adjustment. BACKUP WITHHOLDING. The Funds may be required to withhold 28% of distributions and/or redemption payments. For more information refer to "Purchase, Redemption and Pricing of Shares - Backup Withholding." FOREIGN SHAREHOLDERS. Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership ("foreign shareholder"), depends on whether the income from a Fund is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, distributions (other than capital gain dividends) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gain realized on the redemption of shares of a Fund, capital gain dividends and amounts retained by a Fund that are designated as undistributed net capital gain. However, amounts designated as capital gain dividends that are attributable to certain capital gain dividends received from REITs will not be exempt from U.S. federal income tax and may be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate). Foreign shareholders owning more than 5% of the shares of the Fund should consult their tax advisors as different tax consequences may apply to their receipt of such capital gain dividends. If the income from a Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale or redemption of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations. In the case of foreign non-corporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 28% on distributions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper notification of their foreign status. Foreign shareholders may be subject to U.S. withholding tax at a rate of 30% on the income resulting from the Foreign Tax Election (as described below), but may not be able to claim a credit or deduction with respect to the withholding tax for the foreign tax treated as having been paid by them. Foreign persons who file a United States tax return to obtain a U.S. tax refund and who are not eligible to obtain a social security number must apply to the IRS for an individual taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form W-7 and accompanying instructions, please contact your tax adviser or the IRS. Transfers by gift of shares of a Fund by a foreign shareholder who is a nonresident alien individual will not be subject to U.S. federal gift tax. An individual who, at the time of death, is a foreign shareholder will nevertheless be subject to U.S. federal estate tax with respect to shares at the graduated rates applicable to U.S. citizens and residents, unless a treaty exception applies. In the absence of a treaty, there is a $13,000 statutory estate tax credit. Estates of non-resident alien shareholders dying after December 31, 2004 and before January 1, 2008 will be able to exempt from federal estate tax the proportion of the value of a Fund's shares attributable to "qualifying assets" held by the Fund at the end of the quarter immediately preceding the non-resident alien shareholder's death (or such other time as the IRS may designate in regulations). Qualifying assets include bank deposits and other debt obligations that pay interest or accrue original issue discount that is exempt from withholding tax, debt obligations of a domestic corporation that are treated as giving rise to foreign source income, and other investments that are not treated for tax purposes as being within the United States. Shareholders will be advised 70 annually of the portion of a Fund's assets that constituted qualifying assets at the end of each quarter of its taxable year. The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund, including the applicability of foreign tax. FOREIGN INCOME TAX. Investment income received by each Fund from sources within foreign countries may be subject to foreign income tax withheld at the source and the amount of tax withheld will generally be treated as an expense of the Fund. The United States has entered into tax treaties with many foreign countries which entitle the Funds to a reduced rate of, or exemption from, tax on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of a Fund's assets to be invested in various countries is not known. If more than 50% of the value of a Fund's total assets at the close of each taxable year consists of the stock or securities of foreign corporations, the Fund may elect to "pass through" to the Fund's shareholders the amount of foreign income tax paid by the Fund (the "Foreign Tax Election") in lieu of deducting such amount in determining its investment company taxable income. Pursuant to the Foreign Tax Election, shareholders will be required (i) to include in gross income, even though not actually received, their respective pro-rata shares of the foreign income tax paid by the Fund that are attributable to any distributions they receive; and (ii) either to deduct their pro-rata share of foreign tax in computing their taxable income, or to use it (subject to various Code limitations) as a foreign tax credit against Federal income tax (but not both). No deduction for foreign tax may be claimed by a non-corporate shareholder who does not itemize deductions or who is subject to AMT. Unless certain requirements are met, a credit for foreign tax is subject to the limitation that it may not exceed the shareholder's U.S. tax (determined without regard to the availability of the credit) attributable to the shareholder's foreign source taxable income. In determining the source and character of distributions received from a Fund for this purpose, shareholders will be required to allocate Fund distributions according to the source of the income realized by the Fund. Each Fund's gain from the sale of stock and securities and certain currency fluctuation gain and loss will generally be treated as derived from U.S. sources. In addition, the limitation on the foreign tax credit is applied separately to foreign source "passive" income, such as dividend income, and the portion of foreign source income consisting of qualified dividend income is reduced by approximately 57% to account for the tax rate differential. Individuals who have no more than $300 ($600 for married persons filing jointly) of creditable foreign tax included on Form 1099 and whose foreign source income is all "qualified passive income" may elect each year to be exempt from the foreign tax credit limitation and will be able to claim a foreign tax credit without filing Form 1116 with its corresponding requirement to report income and tax by country. Moreover, no foreign tax credit will be allowable to any shareholder who has not held his shares of the Fund for at least 16 days during the 30-day period beginning 15 days before the day such shares become ex-dividend with respect to any Fund distribution to which foreign income taxes are attributed (taking into account certain holding period reduction requirements of the Code). Because of these limitations, shareholders may be unable to claim a credit for the full amount of their proportionate shares of the foreign income tax paid by a Fund. EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS. The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on February 12, 2008. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein. Rules of state and local taxation of ordinary income, qualified dividend income and capital gain dividends may differ from the rules for U.S. federal income taxation described above. Distributions may also be subject to additional state, local and foreign taxes depending on each shareholder's particular situation. Non-U.S. shareholders may be subject to U.S. tax rules that differ significantly from those 71 summarized above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Funds. DISTRIBUTION OF SECURITIES DISTRIBUTION PLANS The Trust has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to each Fund's Class A shares, Class B shares, Class C shares, Class R shares and Investor Class shares, if applicable (collectively the "Plans"). Each Fund, pursuant to its Class A, Class B, Class C and Class R Plans, as applicable, pays Invesco Aim Distributors compensation at the annual rate, shown immediately below, of the Fund's average daily net assets of the applicable class.
FUND CLASS A CLASS B CLASS C CLASS R - ---- ------- ------- ------- ------- AIM Asia Pacific Growth Fund 0.25% 1.00% 1.00% N/A AIM European Growth Fund 0.25 1.00 1.00 0.50% AIM Global Growth Fund 0.25 1.00 1.00 N/A AIM Global Small & Mid Cap Growth Fund 0.25 1.00 1.00 N/A AIM International Core Equity Fund 0.25 1.00 1.00 0.50 AIM International Growth Fund 0.25 1.00 1.00 0.50
AIM International Core Equity Fund, pursuant to its Investor Class Plan, pays Invesco Aim Distributors compensation at the annual rate of 0.25% of the Fund's average daily net assets of Investor Class shares. AIM European Growth Fund, pursuant to its Investor Class Plan, pays Invesco Aim Distributors an amount necessary to reimburse Invesco Aim Distributors for its actual allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the Fund's average daily net assets of its Investor Class shares. All of the Plans compensate or reimburse Invesco Aim Distributors, as applicable, for the purpose of financing any activity which is primarily intended to result in the sale of shares of the Funds. Such activities include, but are not limited to, the following: printing of prospectuses and statements of additional information and reports for other than existing shareholders; overhead; preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars; supplemental payments to dealers and other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering each Plan. Amounts payable by a Fund under the Class A, Class B, Class C and Class R Plans, as applicable, and amounts payable by AIM International Core Equity Fund, under its Investor Class Plan need not be directly related to the expenses actually incurred by Invesco Aim Distributors on behalf of each Fund. These Plans do not obligate the Funds to reimburse Invesco Aim Distributors for the actual allocated share of expenses Invesco Aim Distributors may incur in fulfilling its obligations under these Plans. Thus, even if Invesco Aim Distributors' actual allocated share of expenses exceeds the fee payable to Invesco Aim Distributors at any given time, under these Plans the Funds will not be obligated to pay more than that fee. If Invesco Aim Distributors' actual allocated share of expenses is less than the fee it receives, under these Plans Invesco Aim Distributors will retain the full amount of the fee. Amounts payable by AIM European Growth Fund under its Investor Class Plan are directly related to the expenses incurred by Invesco Aim Distributors on behalf of the Fund, as this Plan obligates the Fund to reimburse Invesco Aim Distributors for its actual allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the 72 average daily net assets of the Investor Class shares of the Fund. If Invesco Aim Distributors' actual allocated share of expenses incurred pursuant to the Investor Class Plan for the period exceeds the 0.25% annual cap, under this Plan AIM European Growth Fund will not be obligated to pay more than the 0.25% annual cap. If Invesco Aim Distributors' actual allocated share of expenses incurred pursuant to the Investor Class Plan for the period is less than the 0.25% annual cap, under this Plan Invesco Aim Distributors is entitled to be reimbursed only for its actual allocated share of expenses. Invesco Aim Distributors may from time to time waive or reduce any portion of its 12b-1 fee for Class A, Class C, Class R or Investor Class shares. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, Invesco Aim Distributors will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between Invesco Aim Distributors and the Fund. The Funds may pay a service fee of 0.25% of the average daily net assets of the Class A, Class B, Class C, Class R and Investor Class shares attributable to the customers of selected dealers and financial institutions to such dealers and financial institutions, including Invesco Aim Distributors, acting as principal, who furnish continuing personal shareholder services to their customers who purchase and own the applicable class of shares of the Fund. Under the terms of a shareholder service agreement, such personal shareholder services include responding to customer inquiries and providing customers with information about their investments. Any amounts not paid as a service fee under each Plan would constitute an asset-based sales charge. Invesco Aim Distributors may pay dealers and institutions who sell Class R shares an annual fee of 0.50% of average daily net assets. These payments will consist of an asset-based fee of 0.25% and a service fee of 0.25% and will commence either on the thirteenth month after the first purchase, on accounts on which a dealer concession was paid, or immediately, on accounts on which a dealer concession was not paid. If Invesco Aim Distributors pays a dealer concession, it will retain all payments received by it relating to Class R shares for the first year after they are purchased. Invesco Aim Distributors will make quarterly payments to dealers and institutions based on the average net asset value of Class R shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. Under a Shareholder Service Agreement, a Fund agrees to pay periodically fees to selected dealers and other institutions who render the foregoing services to their customers. The fees payable under a Shareholder Service Agreement will be calculated at the end of each payment period for each business day of the Funds during such period at the annual rate specified in each agreement based on the average daily net asset value of the Funds' shares purchased or acquired through exchange. Fees shall be paid only to those selected dealers or other institutions who are dealers or institutions of record at the close of business on the last business day of the applicable payment period for the account in which such Fund's shares are held. Selected dealers and other institutions entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one particular class over another. Under the Plans, certain financial institutions which have entered into service agreements and which sell shares of the Funds on an agency basis, may receive payments from the Funds pursuant to the respective Plans. Invesco Aim Distributors does not act as principal, but rather as agent for the Funds, in making dealer incentive and shareholder servicing payments to dealers and other financial institutions under the Plans. These payments are an obligation of the Funds and not of Invesco Aim Distributors. Payments pursuant to the Plans are subject to any applicable limitations imposed by rules of FINRA. See Appendix M for a list of the amounts paid by each class of shares of each Fund to Invesco Aim Distributors pursuant to the Plans for the year ended October 31, 2007 and Appendix N for an 73 estimate by category of the allocation of actual fees paid by each class of shares of each Fund pursuant to its respective distribution plan for the year ended October 31, 2007. As required by Rule 12b-1, the Plans and related forms of Shareholder Service Agreements were approved by the Board, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plans or in any agreements related to the Plans (the "Rule 12b-1 Trustees"). In approving the Plans in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plans would benefit each class of the Funds and its respective shareholders. The anticipated benefits that may result from the Plans with respect to each Fund and/or the classes of each Fund and its shareholders include but are not limited to the following: (1) rapid account access; (2) relatively predictable flow of cash; and (3) a well-developed, dependable network of shareholder service agents to help to curb sharp fluctuations in rates of redemptions and sales, thereby reducing the chance that an unanticipated increase in net redemptions could adversely affect the performance of each Fund. Unless terminated earlier in accordance with their terms, the Plans continue from year to year as long as such continuance is specifically approved, in person, at least annually by the Board, including a majority of the Rule 12b-1 Trustees. A Plan may be terminated as to any Fund or class by the vote of a majority of the Rule 12b-1 Trustees or, with respect to a particular class, by the vote of a majority of the outstanding voting securities of that class. Any change in the Plans that would increase materially the distribution expenses paid by the applicable class requires shareholder approval; otherwise, the Plans may be amended by the trustees, including a majority of the Rule 12b-1Trustees, by votes cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plans are in effect, the selection or nomination of the Independent Trustees is committed to the discretion of the Independent Trustees. The Class B Plan obligates Class B shares to continue to make payments to Invesco Aim Distributors following termination of the Class B shares Distribution Agreement with respect to Class B shares sold by or attributable to the distribution efforts of Invesco Aim Distributors or its predecessors, unless there has been a complete termination of the Class B Plan (as defined in such Plan) and the Class B Plan expressly authorizes Invesco Aim Distributors to assign, transfer or pledge its rights to payments pursuant to the Class B Plan. DISTRIBUTOR The Trust has entered into master distribution agreements, as amended, relating to the Funds (the "Distribution Agreements") with Invesco Aim Distributors, a registered broker-dealer and a wholly owned subsidiary of Invesco Aim, pursuant to which Invesco Aim Distributors acts as the distributor of shares of the Funds. The address of Invesco Aim Distributors is P.O. Box 4739, Houston, Texas 77210-4739. Certain trustees and officers of the Trust are affiliated with Invesco Aim Distributors. See "Management of the Trust." The Distribution Agreements provide Invesco Aim Distributors with the exclusive right to distribute shares of the Funds on a continuous basis directly and through other broker dealers with whom Invesco Aim Distributors has entered into selected dealer agreements. Invesco Aim Distributors has not undertaken to sell any specified number of shares of any classes of the Funds. Invesco Aim Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B, Class C and Class R shares of the Funds at the time of such sales. Payments with respect to Class B shares will equal 4.00% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the 74 purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to Invesco Aim Distributors under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit Invesco Aim Distributors to recoup a portion of such sales commissions plus financing costs. In the future, if multiple distributors serve a Fund, each such distributor (or its assignee or transferee) would receive a share of the payments under the Class B Plan based on the portion of the Fund's Class B shares sold by or attributable to the distribution efforts of that distributor. Invesco Aim Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. Invesco Aim Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to Invesco Aim Distributors under the Class C Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit Invesco Aim Distributors to recoup a portion of the sales commissions to dealers plus financing costs, if any. After the first full year, Invesco Aim Distributors will make quarterly payments to dealers and institutions based on the average net asset value of Class C shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. These payments will consist of an asset-based sales charge of 0.75% and a service fee of 0.25%. Invesco Aim Distributors may pay dealers and institutions who sell Class R shares an annual fee or 0.50% of average daily net assets. These payments will consist of an asset-based fee of 0.25% and a service fee of 0.25% and will commence either on the thirteenth month after the first purchase, on accounts on which a dealer concession was paid, or immediately, on accounts on which a dealer concession was not paid. If Invesco Aim Distributors pays a dealer concession, it will retain all payments received by it relating to Class R shares for the first year after they are purchased. Invesco Aim Distributors will make quarterly payments to dealers and institutions based on the average net asset value of Class R shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. The Trust (on behalf of any class of any Fund) or Invesco Aim Distributors may terminate the Distribution Agreements on 60 days' written notice without penalty. The Distribution Agreements will terminate automatically in the event of their assignment. In the event the Class B shares Distribution Agreement is terminated, Invesco Aim Distributors would continue to receive payments of asset-based distribution fees in respect of the outstanding Class B shares attributable to the distribution efforts of Invesco Aim Distributors or its predecessors; provided, however that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments to Invesco Aim Distributors. Termination of the Class B Plan or the Distribution Agreement for Class B shares would not affect the obligation of Class B shareholders to pay contingent deferred sales charges. Total sales charges (front end and contingent deferred sales charges) paid in connection with the sale of shares of each class of each Fund, if applicable, for the last three fiscal years ended October 31 are found in Appendix O. FINANCIAL STATEMENTS Each Fund's Financial Statements for the period ended October 31, 2007, including the Financial Highlights and the report of the independent registered public accounting firm pertaining thereto, are incorporated by reference into this Statement of Additional Information ("SAI") from such Fund's Annual Report to shareholders contained in the Trust's Form N-CSR filed on January 4, 2008. The portions of such Annual Reports that are not specifically listed above are not incorporated by reference into this SAI and are not a part of this Registration Statement. 75 PENDING LITIGATION Settled Enforcement Actions Related to Market Timing On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), Invesco Aim and Invesco Aim Distributors reached final settlements with certain regulators, including the SEC, the New York Attorney General and the Colorado Attorney General, to resolve civil enforcement actions and/or investigations related to market timing and related activity in the AIM Funds, including those formerly advised by IFG. As part of the settlements, a $325 million fair fund ($110 million of which is civil penalties) has been created to compensate shareholders harmed by market timing and related activity in funds formerly advised by IFG. Additionally, Invesco Aim and Invesco Aim Distributors created a $50 million fair fund ($30 million of which is civil penalties) to compensate shareholders harmed by market timing and related activity in funds advised by Invesco Aim, which was done pursuant to the terms of the settlements. These two fair funds will be distributed in accordance with a methodology to be determined by Invesco Aim's independent distribution consultant, in consultation with Invesco Aim and the independent trustees of the AIM Funds and acceptable to the staff of the SEC. The AIM Funds expect that the SEC will, in the near future, provide notice to the public that it has approved the distribution methodology (the "IDC Plan") determined by Invesco Aim's independent distribution consultant, as described above, and that payments from the two fair funds may be distributed in accordance with the terms of the IDC Plan. Invesco Aim has informed the AIM Funds that, as soon as practicable upon the SEC's issuance of such notice, Invesco Aim intends to make or cause to be made available further details regarding the IDC Plan and planned distributions thereunder on Invesco Aim's website, available at http://www.invescoaim.com. Invesco Aim's website is not a part of this Statement of Additional Information or the prospectus of any AIM Fund. While the AIM Funds expect that the SEC will make the above-described notice available in the near future, neither Invesco Aim nor the AIM Funds are able to guarantee this or make any specific representation as to the actual timing of such notice's availability. Regulatory Action Alleging Market Timing On August 30, 2005, the West Virginia Office of the State Auditor - Securities Commission ("WVASC") issued a Summary Order to Cease and Desist and Notice of Right to Hearing to Invesco Aim and Invesco Aim Distributors (Order No. 05-1318). The WVASC makes findings of fact that Invesco Aim and Invesco Aim Distributors entered into certain arrangements permitting market timing of the AIM Funds and failed to disclose these arrangements in the prospectuses for such Funds, and conclusions of law to the effect that Invesco Aim and Invesco Aim Distributors violated the West Virginia securities laws. The WVASC orders Invesco Aim and Invesco Aim Distributors to cease any further violations and seeks to impose monetary sanctions, including restitution to affected investors, disgorgement of fees, reimbursement of investigatory, administrative and legal costs and an "administrative assessment," to be determined by the Commissioner. Initial research indicates that these damages could be limited or capped by statute. By agreement with the Commissioner of Securities, Invesco Aim's time to respond to that Order has been indefinitely suspended. Private Civil Actions Alleging Market Timing Multiple civil lawsuits, including purported class action and shareholder derivative suits, have been filed against various parties (including, depending on the lawsuit, certain AIM Funds, IFG, Invesco Aim, Invesco Aim Management and certain related entities, certain of their current and former officers and/or certain unrelated third parties) based on allegations of improper market timing and related activity in the AIM Funds. These lawsuits allege a variety of theories of recovery, including but not limited to: (i) violation of various provisions of the Federal and state securities laws; (ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty; and/or (iv) breach of contract. These lawsuits were initiated in both Federal and state courts and seek such remedies as compensatory damages; restitution; injunctive relief; disgorgement of management fees; imposition of a constructive trust; removal of certain 76 directors and/or employees; various corrective measures under ERISA; rescission of certain Funds' advisory agreements; interest; and attorneys' and experts' fees. A list identifying such lawsuits (excluding those lawsuits that have been recently transferred as mentioned herein) that have been served on IFG, Invesco Aim, the AIM Funds or related entities, or for which service of process has been waived is set forth in Appendix P-1. All lawsuits based on allegations of market timing, late trading, and related issues have been transferred to the United States District Court for the District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial proceedings. Pursuant to an Order of the MDL Court, plaintiffs in these lawsuits consolidated their claims for pre-trial purposes into three amended complaints against various Invesco Aim- and IFG-related parties. A list identifying the amended complaints in the MDL Court is included in Appendix P-1. Plaintiffs in two of the underlying lawsuits transferred to the MDL Court continue to seek remand of their action to state court. These lawsuits are identified in Appendix P-1. Private Civil Actions Alleging Improper Use of Fair Value Pricing Multiple civil class action lawsuits have been filed against various parties (including, depending on the lawsuit, certain AIM Funds, IFG and/or Invesco Aim) alleging that certain AIM Funds inadequately employed fair value pricing. These lawsuits allege a variety of theories of recovery, including but not limited to: (i) violations of various provisions of the Federal securities laws; (ii) common law breach of duty; and (iii) common law negligence and gross negligence. These lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory and punitive damages; interest; and attorneys' fees and costs. A list identifying such lawsuits that have been served on IFG, Invesco Aim, the AIM Funds or related entities, or for which service of process has been waived is set forth in Appendix P-2. 77 APPENDIX A RATINGS OF DEBT SECURITIES The following is a description of the factors underlying the debt ratings of Moody's, S&P and Fitch: MOODY'S LONG-TERM DEBT RATINGS Moody's corporate ratings are as follows: AAA: Bonds and preferred stock which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. AA: Bonds and preferred stock which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. These are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk in Aa rated bonds appear somewhat larger than those securities rated Aaa. A: Bonds and preferred stock which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. BAA: Bonds and preferred stock which are rated Baa are considered as medium-grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. BA: Bonds and preferred stock which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds and preferred stock which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. CAA: Bonds and preferred stock which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. CA: Bonds and preferred stock which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C: Bonds and preferred stock which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating A-1 category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. MOODY'S SHORT-TERM PRIME RATING SYSTEM Moody's short-term ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such obligations generally have an original maturity not exceeding one year, unless explicitly noted. Moody's employs the following designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers. PRIME-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability for repayment of senior short-term obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity. PRIME-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. PRIME-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability for repayment of senior short-term debt obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained. NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating categories. Note: In addition, in certain countries the prime rating may be modified by the issuer's or guarantor's senior unsecured long-term debt rating. Moody's municipal ratings are as follows: MOODY'S U.S. LONG-TERM MUNICIPAL BOND RATING DEFINITIONS Municipal Ratings are opinions of the investment quality of issuers and issues in the US municipal and tax-exempt markets. As such, these ratings incorporate Moody's assessment of the default probability and loss severity of these issuers and issues. Municipal Ratings are based upon the analysis of four primary factors relating to municipal finance: economy, debt, finances, and administration/management strategies. Each of the factors is evaluated individually and for its effect on the other factors in the context of the municipality's ability to repay its debt. AAA: Issuers or issues rated Aaa demonstrate the strongest creditworthiness relative to other US municipal or tax-exempt issuers or issues. AA: Issuers or issues rated Aa demonstrate very strong creditworthiness relative to other US municipal or tax-exempt issuers or issues. A-2 A: Issuers or issues rated A present above-average creditworthiness relative to other US municipal or tax-exempt issuers or issues. BAA: Issuers or issues rated Baa represent average creditworthiness relative to other US municipal or tax-exempt issuers or issues. BA: Issuers or issues rated Ba demonstrate below-average creditworthiness relative to other US municipal or tax-exempt issuers or issues. B: Issuers or issues rated B demonstrate weak creditworthiness relative to other US municipal or tax-exempt issuers or issues. CAA: Issuers or issues rated Caa demonstrate very weak creditworthiness relative to other US municipal or tax-exempt issuers or issues. CA: Issuers or issues rated Ca demonstrate extremely weak creditworthiness relative to other US municipal or tax-exempt issuers or issues. C: Issuers or issues rated C demonstrate the weakest creditworthiness relative to other US municipal or tax-exempt issuers or issues. Note: Also, Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa to Caa. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic category. MOODY'S MIG/VMIG US SHORT-TERM RATINGS In municipal debt issuance, there are three rating categories for short-term obligations that are considered investment grade. These ratings are designated as Moody's Investment Grade (MIG) and are divided into three levels - MIG 1 through MIG 3. In addition, those short-term obligations that are of speculative quality are designated SG, or speculative grade. In the case of variable rate demand obligations (VRDOs), a two-component rating is assigned. The first element represents Moody's evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody's evaluation of the degree of risk associated with the demand feature, using the MIG rating scale. The short-term rating assigned to the demand feature of VRDOs is designated as VMIG. When either the long- or short-term aspect of a VRDO is not rated, that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1. MIG ratings expire at note maturity. By contrast, VMIG rating expirations will be a function of each issue's specific structural or credit features. Gradations of investment quality are indicated by rating symbols, with each symbol representing a group in which the quality characteristics are broadly the same. MIG 1/VMIG 1: This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing. A-3 MIG 2/VMIG 2: This designation denotes strong credit quality. Margins of protection are ample although not as large as in the preceding group. MIG 3/VMIG 3: This designation denotes acceptable credit quality. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. SG: This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. STANDARD & POOR'S LONG-TERM CORPORATE AND MUNICIPAL RATINGS Issue credit ratings are based in varying degrees, on the following considerations: likelihood of payment - capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; nature of and provisions of the obligation; and protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. The issue ratings definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. S&P describes its ratings for corporate and municipal bonds as follows: AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA: Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree. A: Debt rated A has a strong capacity to meet its financial commitments although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB: Debt rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet its financial commitment on the obligation. BB-B-CCC-CC-C: Debt rated BB, B, CCC, CC and C is regarded as having significant speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the least degree of speculation and C the highest. While such debt will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. NR: Not Rated. S&P DUAL RATINGS S&P assigns "dual" ratings to all debt issues that have a put option or demand feature as part of their structure. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols for the put option (for example, A-4 AAA/A-1+). With short-term demand debt, the note rating symbols are used with the commercial paper rating symbols (for example, SP-1+/A-1+). S&P COMMERCIAL PAPER RATINGS An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days. These categories are as follows: A-1: This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2: Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated A-1. A-3: Issues carrying this designation have adequate capacity for timely payment. They are, however, more vulnerable to the adverse effects of changes in circumstances than obligations carrying the higher designations. B: Issues rated 'B' are regarded as having only speculative capacity for timely payment. C: This rating is assigned to short-term debt obligations with a doubtful capacity for payment. D: Debt rated 'D' is in payment default. The 'D' rating category is used when interest payments or principal payments are not made on the date due, even if the applicable grace period has not expired, unless Standard & Poor's believes such payments will be made during such grace period. S&P SHORT-TERM MUNICIPAL RATINGS An S&P note rating reflect the liquidity factors and market-access risks unique to notes. Notes due in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment: amortization schedule (the larger the final maturity relative to other maturities, the more likely it will be treated as a note); and source of payment (the more dependant the issue is on the market for its refinancing, the more likely it will be treated as a note). Note rating symbols are as follows: SP-1: Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation. SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. SP-3: Speculative capacity to pay principal and interest. FITCH LONG-TERM CREDIT RATINGS Fitch Ratings provides an opinion on the ability of an entity or of a securities issue to meet financial commitments, such as interest, preferred dividends, or repayment of principal, on a timely basis. A-5 These credit ratings apply to a variety of entities and issues, including but not limited to sovereigns, governments, structured financings, and corporations; debt, preferred/preference stock, bank loans, and counterparties; as well as the financial strength of insurance companies and financial guarantors. Credit ratings are used by investors as indications of the likelihood of getting their money back in accordance with the terms on which they invested. Thus, the use of credit ratings defines their function: "investment grade" ratings (international Long-term 'AAA' - 'BBB' categories; Short-term 'F1' - 'F3') indicate a relatively low probability of default, while those in the "speculative" or "non-investment grade" categories (international Long-term 'BB' - - 'D'; Short-term 'B' - 'D') either signal a higher probability of default or that a default has already occurred. Ratings imply no specific prediction of default probability. However, for example, it is relevant to note that over the long term, defaults on 'AAA' rated U.S. corporate bonds have averaged less than 0.10% per annum, while the equivalent rate for 'BBB' rated bonds was 0.35%, and for 'B' rated bonds, 3.0%. Fitch ratings do not reflect any credit enhancement that may be provided by insurance policies or financial guaranties unless otherwise indicated. Entities or issues carrying the same rating are of similar but not necessarily identical credit quality since the rating categories do not fully reflect small differences in the degrees of credit risk. Fitch credit and research are not recommendations to buy, sell or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature of taxability of payments of any security. The ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch Ratings believes to be reliable. Fitch Ratings does not audit or verify the truth or accuracy of such information. Ratings may be changed or withdrawn as a result of changes in, or the unavailability of, information or for other reasons. Our program ratings relate only to standard issues made under the program concerned; it should not be assumed that these ratings apply to every issue made under the program. In particular, in the case of non-standard issues, i.e., those that are linked to the credit of a third party or linked to the performance of an index, ratings of these issues may deviate from the applicable program rating. Credit ratings do not directly address any risk other than credit risk. In particular, these ratings do not deal with the risk of loss due to changes in market interest rates and other market considerations. AAA: Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong capacity for timely payment of financial commitments, which is unlikely to be affected by foreseeable events. AA: Bonds considered to be investment grade and of very high credit quality. The obligor has a very strong capacity for timely payment of financial commitments which is not significantly vulnerable to foreseeable events. A: Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings. BBB: Bonds considered to be investment grade and of good credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances are more likely to impair this capacity. PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "AAA" category. A-6 NR: Indicates that Fitch does not rate the specific issue. WITHDRAWN: A rating will be withdrawn when an issue matures or is called or refinanced and at Fitch's discretion, when Fitch Ratings deems the amount of information available to be inadequate for ratings purposes. RATINGWATCH: Ratings are placed on RatingWatch to notify investors that there is a reasonable possibility of a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," if ratings may be raised, lowered or maintained. RatingWatch is typically resolved over a relatively short period. FITCH SPECULATIVE GRADE BOND RATINGS BB: Bonds are considered speculative. There is a possibility of credit risk developing, particularly as the result of adverse economic changes over time. However, business and financial alternatives may be available to allow financial commitments to be met. B: Bonds are considered highly speculative. Significant credit risk is present but a limited margin of safety remains. While bonds in this class are currently meeting financial commitments, the capacity for continued payment is contingent upon a sustained, favorable business and economic environment. CCC: Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. CC: Default of some kind appears probable. C: Bonds are in imminent default in payment of interest or principal. DDD, DD, AND D: Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and are valued on the basis of their prospects for achieving partial or full recovery value in liquidation or reorganization of the obligor. "DDD" represents the highest potential for recovery on these bonds, and "D" represents the lowest potential for recovery. PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in categories below CCC. FITCH SHORT-TERM CREDIT RATINGS The following ratings scale applies to foreign currency and local currency ratings. A Short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner. F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1: Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated "F-1+." F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as in the case of the higher ratings. A-7 F-3: Fair Credit Quality. Issues assigned this rating have characteristics suggesting that the degree of assurance for timely payment is adequate, however, near-term adverse changes could result in a reduction to non-investment grade. B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions. C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment. D: Default. Issues assigned this rating are in actual or imminent payment default. A-8 APPENDIX B PERSONS TO WHOM AIM PROVIDES NON-PUBLIC PORTFOLIO HOLDINGS ON AN ONGOING BASIS (AS OF MARCH 31, 2008)
SERVICE PROVIDER DISCLOSURE CATEGORY - ----------------------------------------------------- -------------------------------------------------------------------- ABN AMRO Financial Services, Inc. Broker (for certain AIM Funds) Anglemyer & Co. Analyst (for certain AIM Funds) Ballard Spahr Andrews & Ingersoll, LLP Legal Counsel BB&T Capital Markets Broker (for certain AIM Funds) Bear, Stearns Pricing Direct Pricing Vendor (for certain AIM Funds) BOSC, Inc. Broker (for certain AIM Funds) BOWNE & Co. Financial Printer Brown Brothers Harriman & Co. Securities Lender (for certain AIM Funds) Cabrera Capital Markets Broker (for certain AIM Funds) CENVEO Financial Printer Charles River Systems, Inc. System Provider Citigroup Global Markets, Inc. Broker (for certain AIM Funds) Classic Printers Inc. Financial Printer Color Dynamics Financial Printer Commerce Capital Markets Broker (for certain AIM Funds) D.A. Davidson & Co. Broker (for certain AIM Funds) Dechert LLP Legal Counsel Earth Color Houston Financial Printer EMCO Press Financial Printer Empirical Research Partners Analyst (for certain AIM Funds) Finacorp Securities Broker (for certain AIM Funds) First Albany Capital Broker (for certain AIM Funds) First Tryon Securities Broker (for certain AIM Funds) F T Interactive Data Corporation Pricing Vendor GainsKeeper Software Provider (for certain AIM Funds) GCom2 Solutions Software Provider (for certain AIM Funds) George K. Baum & Company Broker (for certain AIM Funds) Glass, Lewis & Co. System Provider (for certain AIM Funds) Global Trend Alert Analyst (for certain AIM Funds) Greater Houston Publishers Financial Printer Grover Printing Financial Printer Gulfstream Graphics Corp. Financial Printer Hattier, Sanford & Reynoir Broker (for certain AIM Funds) Hutchinson, Shockey, Erley & Co. Broker (for certain AIM Funds) Imageset Financial Printer iMoneyNet, Inc. Rating & Ranking Agency (for certain AIM Funds) Infinity Web, Inc. Financial Printer Initram Data, Inc. Pricing Vendor Institutional Shareholder Services, Inc. Proxy Voting Service (for certain AIM Funds) Invesco Aim Investment Services, Inc. Transfer Agent Invesco Senior Secured Management, Inc. System Provider (for certain AIM Funds) Investortools, Inc. Broker (for certain AIM Funds) ITG, Inc. Pricing Vendor (for certain AIM Funds) J.P. Morgan Securities, Inc. Analyst (for certain AIM Funds) JPMorgan Securities Inc.\Citigroup Global Markets Lender (for certain AIM Funds) Inc.\JPMorgan Chase Bank, N.A.
B-1
SERVICE PROVIDER DISCLOSURE CATEGORY - ----------------------------------------------------- -------------------------------------------------------------------- John Hancock Investment Management Services, LLC Sub-advisor (for certain sub-advised accounts) Jorden Burt LLP Special Insurance Counsel Kramer, Levin Naftalis & Frankel LLP Legal Counsel Lipper, Inc. Rating & Ranking Agency (for certain AIM Funds) Loan Pricing Corporation Pricing Service (for certain AIM Funds) Loop Capital Markets Broker (for certain AIM Funds) MarkIt Group Limited Pricing Vendor (for certain AIM Funds) Merrill Communications, LLC Financial Printer Mesirow Financial, Inc. Broker (for certain AIM Funds) Moody's Investors Service Rating & Ranking Agency (for certain AIM Funds) Morgan Keegan & Company, Inc. Broker (for certain AIM Funds) Morrison Foerster LLP Legal Counsel MS Securities Services, Inc. and Morgan Stanley & Co. Incorporated Securities Lender (for certain AIM Funds) Muzea Insider Consulting Services, LLC Analyst (for certain AIM Funds) Ness USA System provider Noah Financial, LLC Analyst (for certain AIM Funds) OMGEO Oasys Trading System Page International Financial Printer PCP Publishing Financial Printer Piper Jaffray Analyst (for certain AIM Funds) Prager, Sealy & Co. Broker (for certain AIM Funds) PricewaterhouseCoopers LLP Independent Registered Public Accounting Firm (for all AIM Funds) Protective Securities Broker (for certain AIM Funds) Ramirez & Co., Inc. Broker (for certain AIM Funds) Raymond James & Associates, Inc. Broker (for certain AIM Funds) RBC Capital Markets Analyst (for certain AIM Funds) RBC Dain Rauscher Incorporated Broker (for certain AIM Funds) Reuters America, LLC Pricing Service (for certain AIM Funds) Robert W. Baird & Co. Incorporated Broker (for certain AIM Funds) RR Donnelley Financial Financial Printer Ryan Beck & Co. Broker (for certain AIM Funds) Seattle-Northwest Securities Corporation Broker (for certain AIM Funds) Siebert Brandford Shank & Co., L.L.C. Broker (for certain AIM Funds) Signature Financial Printer Simon Printing Company Financial Printer Southwest Precision Printers, Inc. Financial Printer Standard and Poor's/Standard and Poor's Securities Pricing Service and Rating and Ranking Agency (each, respectively, Evaluations, Inc. for certain AIM Funds) StarCompliance, Inc. System Provider State Street Bank and Trust Company Custodian, Lender, Securities Lender, and System Provider (each, respectively, for certain AIM Funds) Sterne, Agee & Leach, Inc. Broker (for certain AIM Funds) Stifel, Nicolaus & Company, Incorporated Broker (for certain AIM Funds) Stradley Ronon Stevens & Young, LLP Legal Counsel The Bank of New York Custodian and Securities Lender (each, respectively, for certain AIM Funds) The MacGregor Group, Inc. Software Provider The Savader Group Broker (for certain AIM Funds) Thomson Information Services Incorporated Software Provider UBS Financial Services, Inc. Broker (for certain AIM Funds) VCI Group Inc. Financial Printer
B-2
SERVICE PROVIDER DISCLOSURE CATEGORY - ----------------------------------------------------- -------------------------------------------------------------------- Wachovia National Bank, N.A. Broker (for certain AIM Funds) Western Lithograph Financial Printer Wiley Bros. Aintree Capital L.L.C. Broker (for certain AIM Funds) William Blair & Co. Broker (for certain AIM Funds) XSP, LLC\Solutions PLUS, Inc. Software Provider
B-3 APPENDIX C TRUSTEES AND OFFICERS As of April 30, 2008 The address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 104 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- INTERESTED PERSONS Martin L. Flanagan(1) - 1960 2007 Executive Director, Chief Executive Officer and None Trustee President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Chairman, Invesco Aim Advisors, Inc. (registered investment advisor); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company) and INVESCO North American Holdings, Inc. (holding company); Chairman and President, INVESCO Group Services, Inc. (service provider); Trustee, The AIM Family of Funds--Registered Trademark--; Vice Chairman, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute; and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization) Philip A. Taylor(2) - 1954 2006 Director, Chief Executive Officer and President, Invesco None Trustee, President and Principal Trimark Dealer Inc./Courtage Invesco Trimark Inc. Executive Officer (registered broker dealer), Invesco Aim Advisors, Inc., Invesco Trimark Investment Management Inc./Gestion de placements Invesco Trimark Inc. d/b/a INVESCO Enterprise Services (registered investment advisor and registered transfer agent), 1371 Preferred Inc. (holding company), AIM Trimark Corporate Class Inc. (formerly AIM Trimark Global Fund Inc.) (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company) and Invesco Aim Capital Management, Inc. (registered investment advisor); Director and President, INVESCO Funds Group, Inc. (registered investment advisor and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnership); Director, Invesco Aim Distributors,
- ---------- (1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr. Flanagan is considered an interested person of the Trust because he is an officer of the advisor to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the advisor to the Trust. (2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of the Trust. C-1
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, IVZ Callco Inc. (holding company), INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Trustee, President and Principal Executive Officer, The AIM Family of Funds--Registered Trademark-- (other than AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds--Registered Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); and Manager, PowerShares Capital Management LLC Formerly: Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds--Registered Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); Chairman, AIM Canada Holdings, Inc.; President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.; and Director, Trimark Trust (federally regulated Canadian trust company) INDEPENDENT TRUSTEES Bruce L. Crockett - 1944 Trustee 1992 Chairman, Crockett Technology Associates (technology ACE Limited (insurance and Chair consulting company) company); and Captaris, Inc. (unified messaging provider) Bob R. Baker - 1936 2003 Retired None Trustee Frank S. Bayley - 1939 2001 Retired None Trustee Formerly: Partner, law firm of Baker & McKenzie and Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) James T. Bunch - 1942 2003 Founder, Green, Manning & Bunch Ltd. (investment None Trustee banking firm) Formerly: Director, Policy Studies, Inc. and Van Gilder Insurance Corporation
C-2
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- Albert R. Dowden - 1941 2000 Director of a number of public and private business None Trustee corporations, including the Boss Group, Ltd. (private investment and management), Reich & Tang Funds (Chairman) (registered investment company) (7 portfolios), Daily Income Fund (4 portfolios), California Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc. and New Jersey Daily Municipal Income Fund, Inc., Annuity and Life Re (Holdings), Ltd. (insurance company), and Homeowners of America Holding Corporation (property casualty company) Formerly: Director, CompuDyne Corporation (provider of product and services to the public security market); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various affiliated Volvo companies; and Director, Magellan Insurance Company Jack M. Fields - 1952 1997 Chief Executive Officer, Twenty First Century Group, Administaff Trustee Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and Discovery Global Education Fund (non-profit) Carl Frischling - 1937 1991 Partner, law firm of Kramer Levin Naftalis and Frankel Director, Reich & Tang Trustee LLP Funds (15 portfolios) Prema Mathai-Davis - 1950 1998 Formerly: Chief Executive Officer, YWCA of the USA None Trustee Lewis F. Pennock - 1942 1991 Partner, law firm of Pennock & Cooper None Trustee Larry Soll - 1942 2003 Retired None Trustee Raymond Stickel, Jr. - 1944 2005 Retired None Trustee Formerly: Partner, Deloitte & Touche; and Director, Mainstay VP Series Funds, Inc. (25 portfolios) OTHER OFFICERS Russell C. Burk - 1958 2005 Senior Vice President and Senior Officer, The AIM N/A Senior Vice President and Senior Family of Funds--Registered Trademark-- Officer Formerly: Director of Compliance and Assistant General Counsel, ICON Advisers, Inc.; Financial Consultant, Merrill Lynch; and General Counsel and Director of Compliance, ALPS Mutual Funds, Inc.
C-3
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- John M. Zerr - 1962 2006 Director, Senior Vice President, Secretary and N/A Senior Vice President, Chief General Counsel, Invesco Aim Management Group, Inc., Legal Officer and Secretary Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds--Registered Trademark--; and Manager, PowerShares Capital Management LLC Formerly: Director, Vice President and Secretary, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer, Senior Vice President, General Counsel and Secretary, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company); Vice President and Secretary, PBHG Insurance Series Fund (an investment company); General Counsel and Secretary, Pilgrim Baxter Value Investors (an investment adviser); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator); General Counsel and Secretary, Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) Lisa O. Brinkley - 1959 2004 Global Compliance Director, Invesco Ltd.; and Vice N/A Vice President President, The AIM Family of Funds--Registered Trademark-- Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds--Registered Trademark--; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company; and Senior Vice President and Compliance Director, Delaware Investments Family of Funds
C-4
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- Kevin M. Carome - 1956 2003 General Counsel, Secretary and Senior Managing Director, N/A Vice President Invesco Ltd.; Director and Secretary, Invesco Holding Company Limited, IVZ, Inc. and INVESCO Group Services, Inc; Director, INVESCO Funds Group, Inc.; Secretary, INVESCO North American Holdings, Inc.; and Vice President, The AIM Family of Funds--Registered Trademark-- Formerly: Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds--Registered Trademark--; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group Sidney M. Dilgren - 1961 2004 Vice President, Invesco Aim Advisors, Inc. and Invesco N/A Vice President, Treasurer and Aim Capital Management, Inc.; and Vice President, Principal Financial Officer Treasurer and Principal Financial Officer, The AIM Family of Funds--Registered Trademark-- Formerly: Fund Treasurer, Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Investment Services, Inc. and Vice President, Invesco Aim Distributors, Inc. Karen Dunn Kelley - 1960 2004 Head of Invesco's World Wide Fixed Income and Cash N/A Vice President Management Group; Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; Vice President, The AIM Family of Funds--Registered Trademark-- (other than AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds--Registered Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only) Formerly: Director and President, Fund Management Company; Chief Cash Management Officer and Managing Director, Invesco Aim Capital Management, Inc.; and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds--Registered Trademark-- (AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
C-5
TRUSTEE OTHER AND/OR TRUSTEESHIP(S)/ NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S) POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR - -------------------------------- ------- -------------------------------------------------------- ------------------------- Lance A. Rejsek - 1967 2005 Anti-Money Laundering Compliance Officer, Invesco Aim N/A Anti-Money Laundering Compliance Advisors, Inc., Invesco Aim Capital Management, Inc., Officer Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., Invesco Aim Private Asset Management, Inc. and The AIM Family of Funds--Registered Trademark-- Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company; and Manager of the Fraud Prevention Department, Invesco Aim Investment Services, Inc. Todd L. Spillane - 1958 2006 Senior Vice President, Invesco Aim Management Group N/A Chief Compliance Officer Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, The AIM Family of Funds--Registered Trademark--, Invesco Global Asset Management (N.A.), Inc. (registered investment advisor), Invesco Institutional (N.A.), Inc. (registered investment advisor), INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment advisor) and Invesco Senior Secured Management, Inc. (registered investment advisor); and Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company; Global Head of Product Development, AIG-Global Investment Group, Inc.; and Chief Compliance Officer and Deputy General Counsel, AIG-SunAmerica Asset Management
C-6 TRUSTEE OWNERSHIP OF FUND SHARES AS OF DECEMBER 31, 2007
Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Dollar Range of Equity Securities Overseen by Trustee in The AIM Name of Trustee Per Fund Family of Funds--Registered Trademark-- - -------------------- --------------------------------------------------------- --------------------------------------- Martin L. Flanagan - 0 - Over $100,000 Philip A. Taylor - 0 - -0- Bob R. Baker AIM Asia Pacific Growth Fund $50,001 - $100,000 Over $100,000 AIM Asia Pacific Growth Fund $50,001 - $100,000 Frank S. Bayley AIM European Growth Fund $10,001 - $50,000 Over $100,000 AIM Global Growth Fund $10,001 - $50,000 James T. Bunch - 0 - Over $100,000(3) AIM Asia Pacific Growth Fund $10,001 - $50,000 Bruce L. Crockett AIM International Core Equity Fund $50,001 - $100,000 Over $100,000(3) AIM International Growth Fund $1 - $10,000 Albert R. Dowden AIM Asia Pacific Growth Fund $10,001 - $50,000 Over $100,000 AIM European Growth Fund $10,001 - $50,000 Jack M. Fields AIM Asia Pacific Growth Fund Over $100,000 Over $100,000(3) AIM European Growth Fund Over $100,000 AIM Asia Pacific Growth Fund Over $100,000 AIM Global Growth Fund Over $100,000 Carl Frischling AIM Global Small & Mid Cap Growth Fund Over $100,000 Over $100,000(3) AIM International Core Equity Fund $10,001 - $50,000 AIM International Growth Fund Over $100,000 Prema Mathai-Davis AIM European Growth Fund $50,001 - $100,000 Over $100,000(3) AIM Global Small & Mid Cap Growth Fund $50,001 - $100,000 AIM Asia Pacific Growth Fund $1 - $10,000 AIM European Growth Fund $1 - $10,000 Lewis F. Pennock AIM International Core Equity Fund $1 - $10,000 Over $100,000 AIM International Growth Fund $1 - $10,000 AIM Asia Pacific Growth Fund $10,001 - $50,000 AIM European Growth Fund $50,001 - $100,000 Larry Soll AIM Global Small Mid Cap Growth Fund $50,001 - $100,000 Over $100,000(3) AIM International Core Equity Fund $1 - $10,000 AIM International Growth Fund $50,001 - $100,000 Raymond Stickel, Jr. - 0 - Over $100,000
- ---------- (3) Includes the total amount of compensation deferred by the trustee at his or her election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one or more of the AIM Funds. C-7 APPENDIX D TRUSTEE COMPENSATION TABLE Set forth below is information regarding compensation paid or accrued for each trustee of the Trust who was not affiliated with Invesco Aim during the year ended December 31, 2007:
RETIREMENT ESTIMATED AGGREGATE BENEFITS ANNUAL TOTAL COMPENSATION ACCRUED BY BENEFITS COMPENSATION FROM THE ALL AIM UPON FROM ALL AIM TRUSTEE TRUST(1) FUNDS(2) RETIREMENT(3) FUNDS (4) - -------------------- ------------ ---------- ------------- ------------ Bob R. Baker $14,313 $234,974 $188,144 $232,400 Frank S. Bayley 15,305 164,614 126,750 249,300 James T. Bunch 13,321 159,121 126,750 215,500 Bruce L. Crockett 26,916 85,879 126,750 452,100 Albert R. Dowden 15,305 115,299 126,750 249,300 Jack M. Fields 13,321 110,194 126,750 215,500 Carl Frischling(5) 13,321 96,518 126,750 215,500 Prema Mathai-Davis 13,970 109,077 126,750 232,400 Lewis F. Pennock 13,321 88,793 126,750 215,500 Ruth H. Quigley(6) 15,305 192,521 126,750 249,300 Larry Soll 13,321 203,535 147,748 215,500 Raymond Stickel, Jr. 15,305 85,977 126,750 249,300
(1) Amounts shown are based on the fiscal year ended October 31, 2007. The total amount of compensation deferred by all trustees of the Trust during the fiscal year ended October 31, 2007, including earnings, was $44,605. (2) During the fiscal year ended October 31, 2007, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $138,324. (3) These amounts represent the estimated annual benefits payable by the AIM Funds upon the trustees' retirement and assumes each trustee serves until his or her normal retirement date. (4) All trustees currently serve as trustee of 16 registered investment companies advised by Invesco Aim. (5) During the fiscal year ended October 31, 2007, the Trust paid $59,544 in legal fees to Kramer Levin Naftalis & Frankel LLP for services rendered by such firm as counsel to the independent trustees of the Trust. Mr. Frischling is a partner of such firm. (6) Miss Quigley retired effective January 1, 2008. D-1 APPENDIX E PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO AIM ADVISORS, INC. INVESCO AIM PROXY VOTING GUIDELINES (Effective as of March 31, 2008) The following Invesco Aim Proxy Voting Guidelines are applicable to all funds and other accounts managed by Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc and Invesco Aim Private Asset Management, Inc. (collectively, "Invesco Aim").(1) INTRODUCTION OUR BELIEF The AIM Funds Boards of Trustees and Invesco Aim's investment professionals expect a high standard of corporate governance from the companies in our portfolios so that Invesco Aim may fulfill its fiduciary obligation to our fund shareholders and other account holders. Well governed companies are characterized by a primary focus on the interests of shareholders, accountable boards of directors, ample transparency in financial disclosure, performance-driven cultures and appropriate consideration of all stakeholders. Invesco Aim believes well governed companies create greater shareholder wealth over the long term than poorly governed companies, so we endeavor to vote in a manner that increases the value of our investments and fosters good governance within our portfolio companies. In determining how to vote proxy issues, Invesco Aim considers the probable business consequences of each issue and votes in a manner designed to protect and enhance fund shareholders' and other account holders' interests. Our voting decisions are intended to enhance each company's total shareholder value over Invesco Aim's typical investment horizon. Proxy voting is an integral part of Invesco Aim's investment process. We believe that the right to vote proxies should be managed with the same care as all other elements of the investment process. The objective of Invesco Aim's proxy-voting activity is to promote good governance and advance the economic interests of our clients. At no time will Invesco Aim exercise its voting power to advance its own commercial interests, to pursue a social or political cause that is unrelated to our clients' economic interests, or to favor a particular client or business relationship to the detriment of others. E-1 PROXY ADMINISTRATION The Invesco Aim Proxy Committee (the "Proxy Committee") consists of members representing Invesco Aim's Investments, Legal and Compliance departments. Invesco Aim's Proxy Voting Guidelines (the "Guidelines") are revised annually by the Proxy Committee, and are approved by the AIM Funds Boards of Trustees. The Proxy Committee implements the Guidelines and oversees proxy voting. The Proxy Committee has retained outside experts to assist with the analysis and voting of proxy issues. In addition to the advice offered by these experts, Invesco Aim uses information gathered from our own research, company managements, Invesco Aim's portfolio managers and outside shareholder groups to reach our voting decisions. Generally speaking, Invesco Aim's investment-research process leads us to invest in companies led by management teams we believe have the ability to conceive and execute strategies to outperform their competitors. We select companies for investment based in large part on our assessment of their management teams' ability to create shareholder wealth. Therefore, in formulating our proxy-voting decisions, Invesco Aim gives proper consideration to the recommendations of a company's Board of Directors. IMPORTANT PRINCIPLES UNDERLYING THE INVESCO AIM PROXY VOTING GUIDELINES I. ACCOUNTABILITY Management teams of companies are accountable to their boards of directors, and directors of publicly held companies are accountable to their shareholders. Invesco Aim endeavors to vote the proxies of its portfolio companies in a manner that will reinforce the notion of a board's accountability to its shareholders. Consequently, Invesco Aim votes against any actions that would impair the rights of shareholders or would reduce shareholders' influence over the board or over management. The following are specific voting issues that illustrate how Invesco Aim applies this principle of accountability. - Elections of directors. In uncontested director elections for companies that do not have a controlling shareholder, Invesco Aim votes in favor of slates if they are comprised of at least a majority of independent directors and if the boards' key committees are fully independent. Key committees include the Audit, Compensation and Governance or Nominating Committees. Invesco Aim's standard of independence excludes directors who, in addition to the directorship, have any material business or family relationships with the companies they serve. E-2 Contested director elections are evaluated on a case-by-case basis and are decided within the context of Invesco Aim's investment thesis on a company. - Director performance. Invesco Aim withholds votes from directors who exhibit a lack of accountability to shareholders, either through their level of attendance at meetings or by enacting egregious corporate-governance or other policies. In cases of material financial restatements, accounting fraud, habitually late filings, adopting shareholder rights plan ("poison pills") without shareholder approval, or other areas of poor performance, Invesco Aim may withhold votes from some or all of a company's directors. In situations where directors' performance is a concern, Invesco Aim may also support shareholder proposals to take corrective actions such as so-called "clawback" provisions. - Auditors and Audit Committee members. Invesco Aim believes a company's Audit Committee has a high degree of responsibility to shareholders in matters of financial disclosure, integrity of the financial statements and effectiveness of a company's internal controls. Independence, experience and financial expertise are critical elements of a well-functioning Audit Committee. When electing directors who are members of a company's Audit Committee, or when ratifying a company's auditors, Invesco Aim considers the past performance of the Committee and holds its members accountable for the quality of the company's financial statements and reports. - Majority standard in director elections. The right to elect directors is the single most important mechanism shareholders have to promote accountability. Invesco Aim supports the nascent effort to reform the U.S. convention of electing directors, and votes in favor of proposals to elect directors by a majority vote. - Classified boards. Invesco Aim supports proposals to elect directors annually instead of electing them to staggered multi-year terms because annual elections increase a board's level of accountability to its shareholders. - Supermajority voting requirements. Unless proscribed by law in the state of incorporation, Invesco Aim votes against actions that would impose any supermajority voting requirement, and supports actions to dismantle existing supermajority requirements. - Responsiveness. Invesco Aim withholds votes from directors who do not adequately respond to shareholder proposals that were approved by a majority of votes cast the prior year. - Cumulative voting. The practice of cumulative voting can enable minority shareholders to have representation on a company's board. Invesco Aim supports proposals to institute the practice of cumulative voting at companies whose overall corporate-governance standards indicate a particular need to protect the interests of minority shareholders. E-3 - Shareholder access. On business matters with potential financial consequences, Invesco Aim votes in favor of proposals that would increase shareholders' opportunities to express their views to boards of directors, proposals that would lower barriers to shareholder action and proposals to promote the adoption of generally accepted best practices in corporate governance. II. INCENTIVES Invesco Aim believes properly constructed compensation plans that include equity ownership are effective in creating incentives that induce managements and employees of our portfolio companies to create greater shareholder wealth. Invesco Aim supports equity compensation plans that promote the proper alignment of incentives, and votes against plans that are overly dilutive to existing shareholders, plans that contain objectionable structural features, and plans that appear likely to reduce the value of an account's investment. Following are specific voting issues that illustrate how Invesco Aim evaluates incentive plans. - Executive compensation. Invesco Aim evaluates compensation plans for executives within the context of the company's performance under the executives' tenure. Invesco Aim believes independent compensation committees are best positioned to craft executive-compensation plans that are suitable for their company-specific circumstances. We view the election of those independent compensation committee members as the appropriate mechanism for shareholders to express their approval or disapproval of a company's compensation practices. Therefore, Invesco Aim generally does not support shareholder proposals to limit or eliminate certain forms of executive compensation. In the interest of reinforcing the notion of a compensation committee's accountability to shareholders, Invesco Aim supports proposals requesting that companies subject each year's compensation record to an advisory shareholder vote, or so-called "say on pay" proposals. - Equity-based compensation plans. When voting to approve or reject equity-based compensation plans, Invesco Aim compares the total estimated cost of the plans, including stock options and restricted stock, against a carefully selected peer group and uses multiple performance metrics that help us determine whether the incentive structures in place are creating genuine shareholder wealth. Regardless of a plan's estimated cost relative to its peer group, Invesco Aim votes against plans that contain structural features that would impair the alignment of incentives between shareholders and management. Such features include the ability to reprice or reload options without shareholder approval, the ability to issue options below the stock's current market price, or the ability to automatically replenish shares without shareholder approval. - Employee stock-purchase plans. Invesco Aim supports employee stock-purchase plans that are reasonably designed to provide proper incentives to a broad base of employees, provided that the price at which employees may acquire stock is at most a 15 percent discount from the market price. E-4 - Severance agreements. Invesco Aim generally votes in favor of proposals requiring advisory shareholder ratification of executives' severance agreements. However, we oppose proposals requiring such agreements to be ratified by shareholders in advance of their adoption. III. CAPITALIZATION Examples of management proposals related to a company's capital structure include authorizing or issuing additional equity capital, repurchasing outstanding stock, or enacting a stock split or reverse stock split. On requests for additional capital stock, Invesco Aim analyzes the company's stated reasons for the request. Except where the request could adversely affect the fund's ownership stake or voting rights, AIM generally supports a board's decisions on its needs for additional capital stock. Some capitalization proposals require a case-by-case analysis within the context of Invesco Aim's investment thesis on a company. Examples of such proposals include authorizing common or preferred stock with special voting rights, or issuing additional stock in connection with an acquisition. IV. MERGERS, ACQUISITIONS AND OTHER CORPORATE ACTIONS Issuers occasionally require shareholder approval to engage in certain corporate actions such as mergers, acquisitions, name changes, dissolutions, reorganizations, divestitures and reincorporations. Invesco Aim analyzes these proposals within the context of our investment thesis on the company, and determines its vote on a case-by-case basis. V. ANTI-TAKEOVER MEASURES Practices designed to protect a company from unsolicited bids can adversely affect shareholder value and voting rights, and they create conflicts of interests among directors, management and shareholders. Except under special issuer-specific circumstances, Invesco Aim votes to reduce or eliminate such measures. These measures include adopting or renewing "poison pills", requiring supermajority voting on certain corporate actions, classifying the election of directors instead of electing each director to an annual term, or creating separate classes of common or preferred stock with special voting rights. Invesco Aim generally votes against management proposals to impose these types of measures, and generally votes for shareholder proposals designed to reduce such measures. Invesco Aim supports shareholder proposals directing companies to subject their anti-takeover provisions to a shareholder vote. VI. SHAREHOLDER PROPOSALS ON CORPORATE GOVERNANCE Invesco Aim generally votes for shareholder proposals that are designed to protect shareholder rights if a company's corporate-governance standards indicate that such additional protections are warranted. E-5 VII. SHAREHOLDER PROPOSALS ON SOCIAL RESPONSIBILITY The potential costs and economic benefits of shareholder proposals seeking to amend a company's practices for social reasons are difficult to assess. Analyzing the costs and economic benefits of these proposals is highly subjective and does not fit readily within our framework of voting to create greater shareholder wealth over Invesco Aim's typical investment horizon. Therefore, Invesco Aim abstains from voting on shareholder proposals deemed to be of a purely social, political or moral nature. VIII. ROUTINE BUSINESS MATTERS Routine business matters rarely have a potentially material effect on the economic prospects of fund holdings, so we generally support the board's discretion on these items. However, Invesco Aim votes against proposals where there is insufficient information to make a decision about the nature of the proposal. Similarly, Invesco Aim votes against proposals to conduct other unidentified business at shareholder meetings. SUMMARY These Guidelines provide an important framework for making proxy-voting decisions, and should give fund shareholders and other account holders insight into the factors driving Invesco Aim's decisions. The Guidelines cannot address all potential proxy issues, however. Decisions on specific issues must be made within the context of these Guidelines and within the context of the investment thesis of the funds and other accounts that own the company's stock. Where a different investment thesis is held by portfolio managers who may hold stocks in common, Invesco Aim may vote the shares held on a fund-by-fund or account-by-account basis. EXCEPTIONS In certain circumstances, Invesco Aim may refrain from voting where the economic cost of voting a company's proxy exceeds any anticipated benefits of that proxy proposal. SHARE-LENDING PROGRAMS One reason that some portion of Invesco Aim's position in a particular security might not be voted is the securities lending program. When securities are out on loan and earning fees for the lending fund, they are transferred into the borrower's name. Any proxies during the period of the loan are voted by the borrower. The lending fund would have to terminate the loan to vote the company's proxy, an action that is not generally in the best economic interest of fund shareholders. However, whenever Invesco Aim determines that the benefit to shareholders or other account holders of voting a particular proxy outweighs the revenue lost by terminating the loan, we recall the securities for the purpose of voting the fund's full position. E-6 "SHARE-BLOCKING" Another example of a situation where Invesco Aim may be unable to vote is in countries where the exercise of voting rights requires the fund to submit to short-term trading restrictions, a practice known as "share-blocking." Invesco Aim generally refrains from voting proxies in share-blocking countries unless the portfolio manager determines that the benefit to fund shareholders and other account holders of voting a specific proxy outweighs the fund's or other account's temporary inability to sell the security. INTERNATIONAL CONSTRAINTS An additional concern that sometimes precludes our voting non-U.S. proxies is our inability to receive proxy materials with enough time and enough information to make a voting decision. In the great majority of instances, however, we are able to vote non-U.S. proxies successfully. It is important to note that Invesco Aim makes voting decisions for non-U.S. issuers using these Guidelines as our framework, but also takes into account the corporate-governance standards, regulatory environment and generally accepted best practices of the local market. EXCEPTIONS TO THESE GUIDELINES Invesco Aim retains the flexibility to accommodate company-specific situations where strictly adhering to the Guidelines would lead to a vote that the Proxy Committee deems not to be in the best interest of the funds' shareholders and other account holders. In these situations, the Proxy Committee will vote the proxy in the manner deemed to be in the best interest of the funds' shareholders and other account holders, and will promptly inform the funds' Boards of Trustees of such vote and the circumstances surrounding it. RESOLVING POTENTIAL CONFLICTS OF INTEREST A potential conflict of interest arises when Invesco Aim votes a proxy for an issuer with which it also maintains a material business relationship. Examples could include issuers that are distributors of Invesco Aim's products, or issuers that employ Invesco Aim to manage portions of their retirement plans or treasury accounts. Invesco Aim reviews each proxy proposal to assess the extent, if any, to which there may be a material conflict between the interests of the fund shareholders or other account holders and Invesco Aim. Invesco Aim takes reasonable measures to determine whether a potential conflict may exist. A potential conflict is deemed to exist only if one or more of the Proxy Committee members actually knew or should have known of the potential conflict. If a material potential conflict is deemed to exist, Invesco Aim may resolve the potential conflict in one of the following ways: (1) if the proposal that gives rise to the potential conflict is specifically addressed by the Guidelines, Invesco Aim may vote the proxy in accordance with the predetermined Guidelines; (2) Invesco Aim may engage an independent third party to determine how the proxy should be voted; or (3) Invesco Aim may establish an ethical wall or other informational barrier between the persons involved in the potential conflict and the E-7 persons making the proxy-voting decision in order to insulate the potential conflict from the decision makers. Because the Guidelines are pre-determined and crafted to be in the best economic interest of shareholders and other account holders, applying the Guidelines to vote client proxies should, in most instances, adequately resolve any potential conflict of interest. As an additional safeguard against potential conflicts, persons from Invesco Aim's marketing, distribution and other customer-facing functions are precluded from becoming members of the Proxy Committee. On a quarterly basis, the AIM Funds Boards of Trustees review a report from Invesco Aim's Internal Compliance Controls Committee. The report contains a list of all known material business relationships that Invesco Aim maintains with publicly traded issuers. That list is cross-referenced with the list of proxies voted over the period. If there are any instances where Invesco Aim's voting pattern on the proxies of its material business partners is inconsistent with its voting pattern on all other issuers, they are brought before the Trustees and explained by the Chairman of the Proxy Committee. Personal conflicts of interest. If any member of the Proxy Committee has a personal conflict of interest with respect to a company or an issue presented for voting, that Proxy Committee member will inform the Proxy Committee of such conflict and will abstain from voting on that company or issue. Funds of funds. Some AIM Funds offering diversified asset allocation within one investment vehicle own shares in other AIM Funds. A potential conflict of interest could arise if an underlying AIM Fund has a shareholder meeting with any proxy issues to be voted on, because Invesco Aim's asset-allocation funds or target-maturity funds may be large shareholders of the underlying fund. In order to avoid any potential for a conflict, the asset-allocation funds and target maturity funds vote their shares in the same proportion as the votes of the external shareholders of the underlying fund. POLICIES AND VOTE DISCLOSURE A copy of these Guidelines and the voting record of each AIM Fund are available on our web site, www.invescoaim.com. In accordance with Securities and Exchange Commission regulations, all funds file a record of all proxy-voting activity for the prior 12 months ending June 30th. That filing is made on or before August 31st of each year. E-8 FOOTNOTES (1) AIM Funds not managed by Invesco Aim Advisors, Inc., are governed by the proxy voting policies of their respective sub-advisors. Proxy Voting Guidelines applicable to AIM CHINA FUND, AIM FLOATING RATE FUND, AIM GLOBAL REAL ESTATE FUND, AIM INTERNATIONAL CORE EQUITY FUND, AIM INTERNATIONAL TOTAL RETURN FUND, AIM JAPAN FUND, AIM LIBOR ALPHA FUND, AIM REAL ESTATE FUND, AIM S&P 500 INDEX FUND, AIM SELECT REAL ESTATE INCOME FUND, AIM STRUCTURED CORE FUND, AIM STRUCTURED GROWTH FUND, AIM STRUCTURED VALUE FUND, AIM TRIMARK ENDEAVOR FUND, AIM TRIMARK FUND, AIM TRIMARK SMALL COMPANIES FUND, SERIES C and SERIES M are available at our website, http://www.invescoaim.com. E-9 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO ASSET MANAGEMENT DEUTSCHLAND, GMBH (INVESCO LOGO) PROXY VOTING POLICY INVESCO ASSET MANAGEMENT DEUTSCHLAND GMBH December 2007 E-10 GENERAL POLICY INVESCO has responsibility for making investment decisions that are in the best interests of its clients. As part of the investment management services it provides to clients, INVESCO may be authorized by clients to vote proxies appurtenant to the shares for which the clients are beneficial owners. INVESCO believes that it has a duty to manage clients' assets in the best economic interests of the clients and that the ability to vote proxies is a client asset. INVESCO reserves the right to amend its proxy policies and procedures from time to time without prior notice to its clients. PROXY VOTING POLICIES VOTING OF PROXIES INVESCO will on a fund by fund basis, decide whether it will vote proxies and if so, for which parts of the portfolio it will voted for. If INVESCO decides to vote proxies, it will do so in accordance with the procedures set forth below. If the client retains in writing the right to vote or if INVESCO determines that any benefit the client might gain from voting a proxy would be outweighed by the costs associated therewith, it will refrain from voting. BEST ECONOMIC INTERESTS OF CLIENTS In voting proxies, INVESCO will take into consideration those factors that may affect the value of the security and will vote proxies in a manner in which, in its opinion, is in the best economic interests of clients. INVESCO endeavors to resolve any conflicts of interest exclusively in the best economic interests of clients. CERTAIN PROXY VOTES MAY NOT BE CAST In some cases, INVESCO may determine that it is not in the best economic interests of clients to vote proxies. For example, proxy voting in certain countries outside the United States requires share blocking. Shareholders who wish to vote their proxies must deposit their shares 7 to 21 days before the date of the meeting with a designated depositary. During the blocked period, shares to be voted at the meeting cannot be sold until the meeting has taken place and the shares have been returned to the Custodian/Sub-Custodian bank. In addition, voting certain international securities may involve unusual costs to clients. In other cases, it may not be possible to vote certain proxies despite good faith efforts to do so, for instance when inadequate notice of the matter is provided. In the instance of loan securities, voting of proxies typically requires termination of the loan, so it is not usually in the best economic interests of clients to vote proxies on loaned securities. INVESCO typically will not, but reserves the right to, vote where share blocking restrictions, unusual costs or other barriers to efficient voting apply. If E-11 INVESCO does not vote, it would have made the determination that the cost of voting exceeds the expected benefit to the client. ISS SERVICES INVESCO has contracted with Institutional Shareholder Services ("ISS"), an independent third party service provider, to vote INVESCO's clients' proxies according to ISS's proxy voting recommendations. In addition, ISS will provide proxy analyses, vote recommendations, vote execution and record-keeping services for clients for which INVESCO has proxy voting responsibility. On an annual basis, INVESCO will review information obtained from ISS to ascertain whether ISS (i) has the capacity and competency to adequately analyze proxy issues, and (ii) can make such recommendations in an impartial manner and in the best economic interest of INVESCO's clients. This may include a review of ISS' Policies, Procedures and Practices Regarding Potential Conflicts of Interests and obtaining information about the work ISS does for corporate issuers and the payments ISS receives from such issuers. Custodians forward proxy materials for clients who rely on INVESCO to vote proxies to ISS. ISS is responsible for exercising the voting rights in accordance with the ISS proxy voting guidelines. If INVESCO receives proxy materials in connection with a client's account where the client has, in writing, communicated to INVESCO that the client, plan fiduciary or other third party has reserved the right to vote proxies, INVESCO will forward to the party appointed by client any proxy materials it receives with respect to the account. In order to avoid voting proxies in circumstances where INVESCO, or any of its affiliates have or may have any conflict of interest, real or perceived, INVESCO has engaged ISS to provide the proxy analyses, vote recommendations and voting of proxies. In the event that (i) ISS recuses itself on a proxy voting matter and makes no recommendation or (ii) INVESCO decides to override the ISS vote recommendation, the Proxy Voting Committee (PVC) of the International Structured Products Group and the Compliance Officer will review the issue and direct ISS how to vote the proxies as described below. ISS RECUSAL When ISS makes no recommendation on a proxy voting issue or is recused due to a conflict of interest, the Proxy Voting Committee (PVC) of the International Structured Products Group and the Compliance Officer will review the issue and, if INVESCO does not have a conflict of interest, direct ISS how to vote the proxies. In such cases where INVESCO has a conflict of interest, INVESCO, in its sole discretion, shall either (a) vote the proxies pursuant to ISS's general proxy voting guidelines, (b) engage an independent third party to provide a vote recommendation, or (c) contact its client(s) for direction as to how to vote the proxies. OVERRIDE OF ISS RECOMMENDATION There may be occasions where the INVESCO investment personnel or senior officers seek to override ISS's recommendations if they believe that ISS's recommendations are not in accordance with the best economic interests of clients. In the event that an individual listed above E-12 in this section disagrees with an ISS recommendation on a particular voting issue, the individual shall document in writing the reasons that he/she believes that the ISS recommendation is not in accordance with clients' best economic interests and submit such written documentation to the Proxy Voting Committee (PVC) of the International Structured Products Group. Upon review of the documentation and consultation with the individual and others as the PVC deems appropriate, the PVC together with the Compliance Officer may make a determination to override the ISS voting recommendation if they determine that it is in the best economic interests of clients. PROXY VOTING RECORDS Clients may obtain information about how INVESCO voted proxies on their behalf by contacting their client services representative. Alternatively, clients may make a written request for proxy voting information. CONFLICTS OF INTEREST PROCEDURES TO ADDRESS CONFLICTS OF INTEREST AND IMPROPER INFLUENCE In order to avoid voting proxies in circumstances where INVESCO or any of its affiliates have or may have any conflict of interest, real or perceived, INVESCO has contracted with ISS to provide proxy analyses, vote recommendations and voting of proxies. Unless noted otherwise by ISS, each vote recommendation provided by ISS to INVESCO includes a representation from ISS that ISS faces no conflict of interest with respect to the vote. In instances where ISS has recused itself and makes no recommendation on a particular matter or if an override submission is requested, the Proxy Voting Committee (PVC) of the International Structured Products Group together with the Compliance Officer shall determine how the proxy is to be voted and instruct accordingly in which case the conflict of interest provisions discussed below shall apply. In effecting the policy of voting proxies in the best economic interests of clients, there may be occasions where the voting of such proxies may present a real or perceived conflict of interest between INVESCO, as the investment manager, and clients. For each director, officer and employee of INVESCO ("INVESCO person"), the interests of INVESCO's clients must come first, ahead of the interest of INVESCO and any person within the INVESCO organization, which includes INVESCO's affiliates. Accordingly, each INVESCO person must not put "personal benefit," whether tangible or intangible, before the interests of clients of INVESCO or otherwise take advantage of the relationship to INVESCO's clients. "Personal benefit" includes any intended benefit for oneself or any other individual, company, group or organization of any kind whatsoever, except a benefit for a client of INVESCO, as appropriate. It is imperative that each of INVESCO's directors, officers and employees avoid any situation that might compromise, or call into question, the exercise of fully independent judgment in the interests of INVESCO's clients. E-13 Occasions may arise where a person or organization involved in the proxy voting process may have a conflict of interest. A conflict of interest may also exist if INVESCO has a business relationship with (or is actively soliciting business from) either the company soliciting the proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. An INVESCO person shall not be considered to have a conflict of interest if the INVESCO person did not know of the conflict of interest and did not attempt to influence the outcome of a proxy vote. Any individual with actual knowledge of a conflict of interest relating to a particular referral item shall disclose that conflict to the Compliance Officer. The following are examples of situations where a conflict may exist: - Business Relationships - where INVESCO manages money for a company or an employee group, manages pension assets or is actively soliciting any such business, or leases office space from a company; - Personal Relationships - where a INVESCO person has a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships; and - Familial Relationships - where an INVESCO person has a known familial relationship relating to a company (e.g. a spouse or other relative who serves as a director of a public company or is employed by the company). In the event that INVESCO (or an affiliate) manages assets for a company, its pension plan, or related entity and where clients' funds are invested in that company's shares, it will not take into consideration this relationship and will vote proxies in that company solely in the best economic interest of its clients. It is the responsibility of the INVESCO person to report any real or potential conflict of interest of which such individual has actual knowledge to the Compliance Officer, who shall present any such information to the Head of Continental Europe Compliance. However, once a particular conflict has been reported to the Compliance Officer, this requirement shall be deemed satisfied with respect to all individuals with knowledge of such conflict. In addition, any INVESCO person who submits an ISS override recommendation to the Proxy Voting Committee (PVC) of the International Structured Products Group shall certify as to their compliance with this policy concurrently with the submission of their override recommendation. A form of such certification is attached as Appendix A hereto. In addition, the Proxy Voting Committee (PVC) of the International Structured Products Group must notify INVESCO's Compliance Officer with impunity and without fear of retribution or retaliation, of any direct, indirect or perceived improper influence made by anyone within INVESCO or by an affiliated company's representatives with regard to how INVESCO should vote proxies. The Compliance Officer will investigate the allegations and will report his or her findings to the INVESCO Risk Management Committee and to the Head of Continental Europe Compliance. In the event that it is determined that improper influence was made, the Risk Management Committee will determine the appropriate action to take which may include, but is E-14 not limited to, (1) notifying the affiliated company's Chief Executive Officer, its Management Committee or Board of Directors, (2) taking remedial action, if necessary, to correct the result of any improper influence where clients have been harmed, or (3) notifying the appropriate regulatory agencies of the improper influence and to fully cooperate with these regulatory agencies as required. In all cases, the Proxy Voting Committee (PVC) of the International Structured Products Group together with the Compliance Officer shall not take into consideration the improper influence in determining how to vote proxies and will vote proxies solely in the best economic interest of clients. ISS PROXY VOTING GUIDELINES A copy of the most recent ISS Proxy Voting Guidelines Summary can be found on ISS's website at www.issproxy.com. From this website, click on ISS Governance Services tab, next click on "Policy Gateway", next click on "2008 Policy Information", and then click on "Download 2008 U.S. Proxy Voting Guidelines Summary." E-15 APPENDIX A ACKNOWLEDGEMENT AND CERTIFICATION I acknowledge that I have read the INVESCO Proxy Voting Policy (a copy of which has been supplied to me, which I will retain for future reference) and agree to comply in all respects with the terms and provisions thereof. I have disclosed or reported all real or potential conflicts of interest to the INVESCO Compliance Officer and will continue to do so as matters arise. I have complied with all provisions of this Policy. ---------------------------------------- Print Name - ------------------------------------- ---------------------------------------- Date Signature E-16 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO ASSET MANAGEMENT LIMITED INVESCO PERPETUAL POLICY ON CORPORATE GOVERNANCE 1. INTRODUCTION INVESCO PERPETUAL (IP) has adopted a clear and considered policy towards its responsibility as a shareholder. As part of this policy, IP will take steps to satisfy itself about the extent to which the companies in which it invests comply with local recommendations and practices, such as the UK Combined Code issued by the Committee on Corporate Governance and/or the US Department of Labour Interpretive Bulletins. 2. RESPONSIBLE VOTING IP has a responsibility to optimise returns to its clients. As a core part of the investment process, Fund Managers will endeavour to establish a dialogue with management to promote company decision making that is in the best interests of shareholders, and is in accordance with good Corporate Governance principles. IP considers that shareholder activism is fundamental to good Corporate Governance. Whilst this does not entail intervening in daily management decisions, it does involve supporting general standards for corporate activity and, where necessary, taking the initiative to ensure those standards are met. One important means of putting shareholder responsibility into practice is via the exercising of voting rights. In deciding whether to vote shares, IP will take into account such factors as the likely impact of voting on management activity, and where expressed, the preference of clients. As a result of these two factors, IP will tend to vote on all UK and European shares, but to vote on a more selective basis on other shares. (See Appendix I - Voting on non-UK/European shares) IP considers that the voting rights attached to its clients' investments should be actively managed with the same duty of care as that applied to all other aspects of asset administration. As such, voting rights will be exercised on an informed and independent basis, and will not simply be passed back to the company concerned for discretionary voting by the Chairman. In doing this, IP will have in mind three objectives: E-17 i) To protect the rights of its clients ii) To minimise the risk of financial or business impropriety within the companies in which its clients are invested, and iii) To protect the long-term value of its clients' investments. It is important to note that, when exercising voting rights, a third option of abstention can also be used as a means of expressing dissatisfaction, or lack of support, to a Board on a particular issue. Additionally, in the event of a conflict of interest arising between IP and its clients over a specific issue, IP will either abstain or seek instruction from each client. IP will exercise actively the voting rights represented by the shares it manages on behalf of its investors. Note: Share Blocking Generally, IP will not vote where this results in shares being blocked from trading for a period of more than a few hours. IP considers that it is not in the interest of clients that their shares are blocked at a potentially sensitive time, such as that around a shareholder meeting. 3. VOTING PROCEDURES IP will endeavour to keep under regular review with trustees, depositaries and custodians the practical arrangements for circulating company resolutions and notices of meetings and for exercising votes in accordance with standing or special instructions. IP will endeavour to review regularly any standing or special instructions on voting and where possible, discuss with company representatives any significant issues. IP will take into account the implications of stock lending arrangements where this is relevant (that is, when stock is lent to the extent permitted by local regulations, the voting rights attaching to that stock pass to the borrower). 4. DIALOGUE WITH COMPANIES IP will endeavour, where practicable in accordance with its investment processes, to enter into a dialogue with companies based on the mutual understanding of objectives. This dialogue is likely to include regular meetings with company representatives to explore any concerns about corporate governance where these may impact on the best interests of clients. In discussion with Company Boards and senior non-Executive Directors, IP will endeavour to cover any matters with particular relevance to shareholder value. Specifically when considering resolutions put to shareholders, IP will pay attention to the companies' compliance with the relevant local requirements. In addition, when analysing the E-18 company's prospects for future profitability and hence returns to shareholders, IP will take many variables into account, including but not limited to, the following: - Nomination and audit committees - Remuneration committee and directors' remuneration - Board balance and structure - Financial reporting principles - Internal control system and annual review of its effectiveness - Dividend and Capital Management policies 5. NON-ROUTINE RESOLUTIONS AND OTHER TOPICS These will be considered on a case-by-case basis and where proposals are put to the vote will require proper explanation and justification by (in most instances) the Board. Examples of such would be all SRI issues (i.e. those with social, environmental or ethical connotations), political donations, and any proposal raised by a shareholder or body of shareholders (typically a pressure group). Apart from the three fundamental voting objectives set out under 'Responsible Voting' above, considerations that IP might apply to non-routine proposals will include: i) The degree to which the company's stated position on the issue could affect its reputation and/or sales, or leave it vulnerable to boycott or selective purchasing ii) What other companies have done in response to the issue iii) Whether implementation would achieve the objectives sought in the proposal iv) Whether the matter is best left to the Board's discretion. 6. EVALUATION OF COMPANIES' CORPORATE GOVERNANCE ARRANGEMENTS IP will, when evaluating companies' governance arrangements, particularly those relating to board structure and composition, give due weight to all relevant factors drawn to their attention. 7. DISCLOSURE On request from clients, IP will in good faith provide records of voting instructions given to third parties such as trustees, depositaries and custodians provided that (i) in IP's discretion, to do so does not conflict with the best interests of other clients and (ii) it is understood that IP will not be held accountable for the expression of views within such voting instructions and (iii) IP are not giving any assurance nor undertaking any obligation to ensure that such instructions resulted in any votes actually being cast. Records of voting instructions within the immediate preceding 3 months will not normally be provided. E-19 Note: The record of votes will reflect the voting instruction of the relevant Fund Manager. This may not be the same as votes actually cast as IP is entirely reliant on third parties complying promptly with such instructions to ensure that such votes are cast correctly. Accordingly, the provision of information relating to an instruction does not mean that a vote was actually cast, just that an instruction was given in accordance with a particular view taken. E-20 APPENDIX I VOTING ON NON-UK/EUROPEAN SHARES When deciding whether to exercise the voting rights attached to its clients' non-UK/European shares, IP will take into consideration a number of factors. These will include: - the likely impact of voting on management activity, versus the cost to the client - the portfolio management restrictions (e.g. share blocking) that may result from voting - the preferences, where expressed, of clients Generally, IP will vote on non-UK/European shares by exception only, except where the client or local regulator expressly requires voting on all shares. SHARE BLOCKING Generally, IP will not vote where this results in shares being blocked from trading for a period of more than a few hours. IP considers that it is not in the interest of clients that their shares are blocked at a potentially sensitive time, such as that around a shareholder meeting. E-21 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO ASSET MANAGEMENT (JAPAN) LIMITED (Quick Translation) INTERNAL RULES ON PROXY VOTING EXECUTION (PURPOSE) ARTICLE 1 INVESCO Asset Management (Japan) Limited (referred to as "INVESCO" thereafter)] assumes a fiduciary responsibility to vote proxies in the best interest of its trustors and beneficiaries. In addition, INVESCO acknowledges its responsibility as a fiduciary to vote proxies prudently and solely for the purpose of maximizing the economic values of trustors (investors) and beneficiaries. So that it may fulfill these fiduciary responsibilities to trustors (investors) and beneficiaries , INVESCO has adopted and implemented these internal rules reasonably designed to ensure that the business operations of the company to invest are appropriately conducted in the best interest of shareholders and are always monitored by the shareholders. (PROXY VOTING POLICY) ARTICLE 2 INVESCO exercises the voting right in the best interest of its trustors and beneficiaries not in the interests of the third parties. The interests of trustors and beneficiaries are defined as the increase of the value of the enterprise or the expansion of the economic value of the shareholders or to protect these values from the impairment. (VOTING EXERCISE STRUCTURE) ARTICLE 3 Please refer to the Article 2 of Proxy Voting basic Policy as per attached. (PROXY VOTING GUIDELINES) ARTICLE 4 Please refer to Proxy Voting Guidelines (Attachment 2). (PROXY VOTING PROCESS) ARTICLE 5 1. DOMESTIC EQUITIES E-22 (a) Notification on the shareholder meeting will be delivered to Operations from trustee banks which will be in turn forwarded to the person in charge of equities investment. The instruction shall be handled by Operations. (b) The person in charge of equities investment scrutinizes the subjects according to the "Screening Standard" and forward them to the proxy voting committee("Committee"). (c) In case of asking for the outside counsel, to forward our proxy voting guidelines("Guidlines") to them beforehand and obtain their advice (d) In either case of [b] or [c], the person in charge shall make proposal to the committee to ask for their "For", "Against", "Abstention", etc. (e) The committee scrutinizes the respective subjects and approves/disapproves with the quorum of two thirds according to the Guidelines. (f) In case where as to the subject which the Committee judges as inappropriate according to the Guidelines and/or the subject which cannot obtain the quorum, the Committee will be held again to discuss the subject. 2. FOREIGN EQUITIES (a) As to the voting exercise of the foreign equities, we shall consider the manners and customs of the foreign countries as well as the costs. (b) As to the voting process, the above process of the domestic equities shall be accordingly adjusted and applied. (DISCLOSURE OF INFORMATION) ARTICLE 6 In case of the request from the customers, we can disclose the content. (VOTING RECORD) ARTICLE 7 [ ] The Committee preserves the record of Attachment 1 for one year. [ ] The administration office is the Investment Division which shall preserve all the related documents of this voting process. [ ] Operations which handle the instruction shall preserve the instruction documents for 10 years after the termination of the ITM funds or the termination of the investment advisory contracts. Article 8 and addendum are omitted. E-23 PROXY VOTING BASIC POLICY 1. Basic Thought on Proxy Voting - INVESCO makes efforts to maximize the entrusted assets in terms of fiduciary duties in investing the funds entrusted by the trustors (investors ) and the beneficiaries. - For the purpose of maximizing the invested assets and the value of the equities, INVESCO always monitors the invested companies to operate appropriately as a shareholder in the best interests of the shareholders. - From the above point of view, INVESCO has adopted and implemented this Proxy Voting Basic Policy and Proxy Voting Policy and Procedure to fulfill the proxy voting rights properly. - In exercising the proxy voting rights, INVESCO fulfills the voting rights in the benefits of the trustors (investors ) and the beneficiaries not in the benefits of the third parties. 2. Voting Process and Structure - INVESCO establishes the Proxy Voting Committee (referred to as "Committee" thereafter) which executes the proxy voting rights. - The Committee is composed of the chairman who is designated by Japanese Management Committee (referred to as "J-Mac" thereafter) and the members appointed by the chairman. Persons in charge of Investment Division and Legal & Compliance Division shall be mandatory members. - The Committee has been delegated the judgment power to execute the voting right from the J-Mac. - The Committee has worked out the subjects according to the pre-determined "Screening Standard" in terms of benefits of the shareholders and executes the voting rights based on the "Proxy Voting Guidelines". - The Committee is occasionally taken the advice from the outside parties according to the "Proxy Voting Guidelines". The Committee is held on a monthly basis and the result of the voting execution is to be reported to J-Mac on a monthly basis at least. 3. Screening Standard For the purpose of efficient voting execution, INVESCO implements the following screening criteria. The companies fallen under this screening criteria shall be scrutinized according to "Voting Guidelines". (1) Quantitative Standard 1) Low profit margin of operational income and recurrent income for certain periods 2) Negative Net Assets/Insolvency 3) Extremely High Dividend Ratios or Low Dividend Ratios (2) Qualitative Standard 1) In breach of the substantial laws or anti-social activities for the past one year 2) Impairment of the interests of the shareholders for the past one year (3) Others 1) External Auditor's Audit Report with the limited auditor's opinion 2) Shareholders' proposals 4. Proxy Voting Guidelines E-24 (1) General Subjects 1) Any violation of laws and anti-social activities ? 2) Inappropriate disclosure which impairs the interests of shareholders ? 3) Enough Business Improvement Efforts ? (2) Subjects on Financial Statements Any reasonable reasons for Interest Appropriation/Loss Disposal ? (3) Amendments to Articles of Incorporations, etc Any possibility of the limitation to the shareholder's rights ? (4) Directors/Statutory Auditors Appointment of the unqualified person, or inappropriate amount of payment/gifts to the unqualified person ? (5) Capital Policy/Business Policy Unreasonable policy in terms of maximization of the shareholders' interests ? (6) Others 1)Shareholder's Proposals Contribution to the increase of the shareholders' economic interests ? 2)Appointment of Auditor Any problem of independency ? E-25 Voting Screening Criteria & Decision Making Documents (Attachment 1)
Company Name: Year Month - ------------- ---- -----
Screening Criteria: Quantitative Criteria (consolidated or (single))
Yes No --- --- Consecutive unprofitable settlements for the past 3 years Consecutive Non dividend payments for the past 3 years Operational loss for the most recent fiscal year Negative net assets for the most recent fiscal year Less than 10% or more than 100% of the dividend ratios for the most recent fiscal year
Screening Criteria/Qualitative Criteria
Yes No --- --- Substantial breach of the laws/anti-social activities for the past one year
If Yes, describe the content of the breach of the law/anti-social activities: Others, especially, any impairment of the value of the shareholders for the past one year If Yes, describe the content of the impairment of the value of shareholders: Others
Yes No --- --- External Auditor's report with the limited auditor's opinion Shareholder's proposal
Person in charge of equities investment Initial Signature - - If all Nos (ARROW) No objection to the agenda of the shareholders' meeting - - If one or more Yes (ARROW)(Person in charge of equities investment shall fill Out the blanks below and forward to the Committee) Proposal on Voting Execution Reason for judgment Chairman For Against Initial Signature
E-26 Member For Against Initial Signature Member For Against Initial Signature Member For Against Initial Signature Member For Against Initial Signature Member For Against Initial Signature
(Attachment 2) Proxy Voting Guidelines 1. PURPORT OF GUIDELINES Pursuant to Article 2 of Proxy Voting Policy and Procedure, INVESCO has adopted and implemented the following guidelines and hereby scrutinizes and decides the subjects one by one in light of the guidelines. 2. GUIDELINES (1) General Subjects 1) Any violation of laws and anti-social activities ? - To scrutinize and judge respectively the substantial impact over the company's business operations by the above subjects or the impairment of the shareholders' economic value. 2) Inappropriate disclosure which impairs the interests of shareholders ? - To scrutinize and judge respectively the potential impairment of the shareholder's economic value. 3) Enough Business Improvement Efforts ? - Although the continuous extremely unprofitable and the extremely bad performance, the management is in short of business improvement efforts. To scrutinize and judge respectively the cases. (2) Subjects on Financial Statements 1) Interest Appropriation Plan (1) Interest Appropriation Plan (Dividends) - To basically approve unless the extremely overpayment or minimum payment of the dividends (2) Interest Appropriation Plan (Bonus payment to corporate officers) - To basically agree but in case where the extremely unprofitable, for example, the consecutive unprofitable and no dividend payments or it is apparent of the impairment of the shareholder's value, to request to decrease the amount or no bonus payment. (3) To basically disagree to the interest appropriation plan if no dividend payments but to pay the bonus to the corporate officers without prior assessment. 2) Loss Disposal Plan To scrutinize and judge respectively E-27 (3) Amendments to Articles of Incorporation, etc. 1. Company Name Change/Address Change, etc. 2. Change of Purpose/Method of Public Announcement 3. Change of Business Operations, etc. 4. Change of Stipulations on Shareholders/Shareholders Meeting 5. Change of Stipulations on Directors/Board of Directors/Statutory Auditors - To basically approve however, in case of the possibility of the limitation to the shareholders' rights, to judge respectively (4) Subjects on Corporate Organization 1) Composition of Board of Directors Meeting, etc - To basically approve the introduction of "Committee Installation Company" or "Substantial Asset Control Institution" - To basically approve the introduction of the corporate officer institution. Provided, however, that in case where all directors are concurrent with those committee members and the institutions, to basically disagree. In case of the above introduction, to basically disapprove to the decrease of the board members or adjustment of the remuneration. 2) Appointment of Directors - To basically disagree in case where the increase of the board members which is deemed to be overstaffed and no explanatory comments on the increase. In case of 21 or more board members, to respectively judge. - To basically disagree the re-appointment of the existing directors in case where the consecutive unprofitable settlements for the past 3 years and the consecutive 3 year no dividend payments, or the consecutive decrease in the net profits for the past 5 years. - To basically disagree the re-appointment of the existing directors in case where the scandal of the breach of the laws and the anti-social activities occurred and caused the substantial impact over the business operations during his/her assignment. 3) Appointment of Outside Directors - To basically agree after the confirmation of its independency based on the information obtained from the possible data sources. - To basically disagree the decrease in number. - To basically disagree the job concurrence of the competitors' CEO, COO,CFO or concurrence of the outside directors of 4 or more companies. - To basically disagree in case of no-independence of the company - To basically disagree the extension of the board of directors' term. 4) Appointment of Statutory Auditors E-28 - To basically disagree the appointment of the candidate who is appointed as a director and a statutory auditor by turns. - To basically disagree the re-appointment of the existing directors in case where the scandal of the breach of the laws and the anti-social activities occurred and caused the substantial impact over the business operations during his/her assignment. 5) Appointment of Outside Statutory Auditors - To basically disagree in case where the outside statutory auditor is not actually the outside auditor (the officer or employee of the parent company, etc.) - To basically disagree in case where the reason of the decrease in the number is not clearly described. - To basically agree in case where the introduction of the "Statutory Auditor Appointment Committee" which includes plural outside statutory auditors. (5) Officer Remuneration/officer Retirement Allowances 1) Officer Remuneration - To basically disagree the amendment of the officer remuneration (unless the decrease in amount or no payment) in case where the consecutive unprofitable settlements for the past 3 years and the consecutive 3 year no dividend payments, or the consecutive decrease in the net profits for the past 5 years. - To basically disagree and scrutinize respectively in case where no sufficient explanation of the substantial increase (10% or more per head), or no decrease of the remuneration amount if the number of the officers decrease. 2) Officer Retirement Allowance - To basically approve - To basically disapprove in case where the payment of the allowance to the outside statutory auditors and the outside directors. - To basically disapprove in case where the officer resigned or retired during his/her assignment due to the scandal of the breach of the laws and the anti-social activities. - To basically disagree in case where the consecutive unprofitable settlements for the past 3 years and the consecutive 3 year no dividend payments, or the consecutive decrease in the net profits for the past 5 years. (2) Capital Policy/Business Policy 1) Acquisition of Own shares - To basically approve E-29 - To basically approve the disposition of the own sharers if the disposition ratio of less than 10% of the total issued shares and the shareholders' equities. In case of 10% or more, to respectively scrutinize. 2) Capital Reduction To basically disagree in case where the future growth of the business might be substantially decreased. 3) Increase of the authorized capital To basically disagree in case of the substantial increase of the authorized capital taking into consideration the dilution of the voting right(10% or more) and incentive. 4) Granting of the stock options to Directors, Statutory Auditors and Employees : - To basically approve - To basically disagree in case where the substantial dilution of the value of the stocks (the potential dilution ration is to increase 5% of the total issued stock number) will occur and accordingly decrease of the shareholders' interests. - To basically disagree in case where the exercise price is deviated by 10% or more from the market value as of the fiscal year-end - To basically disagree the decrease of the exercise price (re-pricing) - To basically disagree in case where the exercise term remains less than 1 year. - To basically disagree in case the scope of the option granted objectives (transaction countereparties)is not so closely connected with the better performance. 5) Mergers and Acquisitions - To basically disagree in case where the terms and conditions are not advantageous and there is no assessment base by the thirdparty. - To basically disagree in case where the content of the mergers and acquisitions can not be deemed to be reasonable in comparison with the business strategy. 6) Business Transfer/Acceptance To basically disagree in case where the content of the mergers and acquisitions can not be deemed to be reasonable and extremely unprofitable in comparison with the business strategy. 7) Capital Increase by the allocation to the thirdparties - To basically analyze on a case by case basis - Provided, however, that to basically approve in case where the companies under the financial difficulties executes as the restructuring of the business. (7) Others 1) Appointment of Accountant E-30 - To basically approve - To basically disapprove on suspicion of its independency. [ ] To scrutinize the subjects in case where the decline of the re-appointment due to the conflict of the audit policy. 2) Shareholders' proposal To basically analyze on a case by case basis The basic judgment criterion is the contribution to the increase of the shareholders' value. However, to basically disapprove in case where to maneuver as a method to resolve the specific social and political problems. E-31 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO AUSTRALIA LIMITED PROXY VOTING POLICY 1. Purpose of this Policy INVESCO recognises its fiduciary obligation to act in the best interests of all clients, be they superannuation trustees, institutional clients, unit-holders in managed investment schemes or personal investors. One way INVESCO represents its clients in matters of corporate governance is through the proxy voting process. This document sets out INVESCO's policy in relation to proxy voting. It has been approved by the INVESCO Australia Limited Board. 2. Scope This policy applies to all INVESCO portfolios with the following exceptions: - "index" or "index like" funds where, due to the nature of the funds, INVESCO will generally abstain from voting; - private client or discrete wholesale mandates, where the voting policy has been agreed within the mandate; - where investment management of an international fund has been delegated to an overseas AMVESCAP or INVESCO company, proxy voting will rest with that delegated manager. 3. Policy In accordance with industry practices and the IFSA standard on proxy voting, our policy is as follows: - INVESCO's overriding principle is that votes will be cast in the best economic interests of investors. - INVESCO's intention is to vote on all Australian Company shareholder resolutions however it recognises that in some circumstances it would be inappropriate to vote, or its vote may be immaterial. INVESCO will generally abstain from voting on "routine" company resolutions (eg approval of financial accounts or housekeeping amendments to Articles of Association or Constitution) unless its clients' portfolios in aggregate represent a significant proportion of the shareholdings of the company in question (a significant proportion in this context means 5% or more of the market capitalisation of the company). - INVESCO will always vote on the following issues arising in company Annual General Meetings where it has the authority to do so on behalf of clients. - contentious issues (eg. issues of perceived national interest, or where there has been extensive press coverage or public comment); - employee and executive share and option schemes; - approval of changes of substantial shareholdings; - mergers or schemes of arrangement; and - approval of major asset sales or purchases. - Management agreements or mandates for individually-managed clients will provide direction as to who has responsibility for voting. - In the case of existing management agreements which do not contain a provision concerning voting authority or are ambiguous on the subject, E-32 INVESCO will not vote until clear instructions have been received from the client. - In the case of clients who wish to place special conditions on the delegation of proxy voting powers, INVESCO will endeavour to accommodate those clients' requirements as far as practicable, subject to any administrative obstacles or additional costs that might arise in implementing the conditions. - In considering proxy voting issues arising in respect of unit-holders in managed investment schemes, INVESCO will act solely in accordance with its fiduciary responsibility to take account of the collective interests of unit-holders in the scheme as a whole. INVESCO cannot accept instructions from individual unit-holders as to the exercise of proxy voting authority in a particular instance. - In order to facilitate its proxy voting process, INVESCO may retain a professional proxy voting service to assist with in-depth proxy research, vote execution, and the necessary record keeping. 4. Reporting and Disclosure A written record will be kept of the voting decision in each case, and of the reasons for each decision (including abstentions). INVESCO will disclose on an annual basis, a summary of its proxy voting statistics on its website as required by IFSA standard No. 13 - Proxy Voting. 5. Conflicts of Interest All INVESCO employees are under an obligation to be aware of the potential for conflicts of interest with respect to voting proxies on behalf of clients. INVESCO acknowledges that conflicts of interest do arise and where a conflict of interest is considered material, INVESCO will not vote until a resolution has been agreed upon and implemented. E-33 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO HONG KONG LIMITED INVESCO HONG KONG LIMITED PROXY VOTING POLICY 8 APRIL 2004 E-34 TABLE OF CONTENTS Introduction 2 1. Guiding Principles 3 2. Proxy Voting Authority 4 3. Key Proxy Voting Issues 7 4. Internal Administration and Decision-Making Process 10 5. Client Reporting 12
E-35 INTRODUCTION This policy sets out Invesco's approach to proxy voting in the context of our broader portfolio management and client service responsibilities. It applies to Asia related equity portfolios managed by Invesco on behalf of individually-managed clients and pooled fund clients Invesco's proxy voting policy is expected to evolve over time to cater for changing circumstances or unforeseen events. E-36 1. GUIDING PRINCIPLES 1.1 Invesco recognises its fiduciary obligation to act in the best interests of all clients, be they retirement scheme trustees, institutional clients, unitholders in pooled investment vehicles or personal investors. The application of due care and skill in exercising shareholder responsibilities is a key aspect of this fiduciary obligation. 1.2 The sole objective of Invesco's proxy voting policy is to promote the economic interests of its clients. At no time will Invesco use the shareholding powers exercised in respect of its clients' investments to advance its own commercial interests, to pursue a social or political cause that is unrelated to clients' economic interests, or to favour a particular client or other relationship to the detriment of others. 1.3 Invesco also recognises the broader chain of accountability that exists in the proper governance of corporations, and the extent and limitations of the shareholder's role in that process. In particular, it is recognised that company management should ordinarily be presumed to be best placed to conduct the commercial affairs of the enterprise concerned, with prime accountability to the enterprise's Board of Directors which is in turn accountable to shareholders and to external regulators and exchanges. The involvement of Invesco as an institutional shareholder will not extend to interference in the proper exercise of Board or management responsibilities, or impede the ability of companies to take the calculated commercial risks which are essential means of adding value for shareholders. 1.4 The primary aim of the policy is to encourage a culture of performance among investee companies, rather than one of mere conformance with a prescriptive set of rules and constraints. Rigid adherence to a checklist approach to corporate governance issues is of itself unlikely to promote the maximum economic performance of companies, or to cater for circumstances in which non-compliance with a checklist is appropriate or unavoidable. 1.5 Invesco considers that proxy voting rights are an asset which should be managed with the same care as any other asset managed on behalf of its clients. E-37 2. PROXY VOTING AUTHORITY 2.1 An important dimension of Invesco's approach to corporate governance is the exercise of proxy voting authority at the Annual General Meetings or other decision-making forums of companies in which we manage investments on behalf of clients. 2.2 An initial issue to consider in framing a proxy voting policy is the question of where discretion to exercise voting power should rest - with Invesco as the investment manager, or with each individual client? Under the first alternative, Invesco's role would be both to make voting decisions on clients' behalf and to implement those decisions. Under the second alternative, Invesco would either have no role to play, or its role would be limited solely to implementing voting decisions under instructions from our clients. 2.3 In addressing this issue, it is necessary to distinguish the different legal structures and fiduciary relationships which exist as between individually-managed clients, who hold investments directly on their own accounts, and pooled fund clients, whose investments are held indirectly under a trust structure. 2.4 INDIVIDUALLY-MANAGED CLIENTS 2.4.1 As a matter of general policy, Invesco believes that unless a client's mandate gives specific instructions to the contrary, discretion to exercise votes should normally rest with the investment manager, provided that the discretion is always exercised in the client's interests alone. 2.4.2 The reason for this position is that Invesco believes that, with its dedicated research resources and ongoing monitoring of companies, an investment manager is usually better placed to identify issues upon which a vote is necessary or desirable. We believe it is also more practical that voting discretion rests with the party that has the authority to buy and sell shares, which is essentially what investment managers have been engaged to do on behalf of their clients. 2.4.3 In cases where voting authority is delegated by an individually-managed client, Invesco recognises its responsibility to be accountable for the decisions it makes. If a client requires, an appropriate reporting mechanism will be put in place. 2.4.4 While it is envisaged that the above arrangements will be acceptable in the majority of cases, it is recognised that some individually-managed clients will wish to retain voting authority for themselves, or to place conditions on the circumstances in which it can be exercised by investment managers. In practice, it is believed that this option is generally only likely to arise with relatively large clients such as trustees of major superannuation funds or statutory corporations which have the resources to develop their own policies and to supervise their implementation by investment managers and custodians. In particular, clients who have multiple equity managers and utilise a master custody arrangement may be more likely to consider retaining voting authority in order to ensure consistency of approach across their total portfolio. 2.4.5 In any event, whatever decision is taken as to where voting authority should lie, Invesco believes that the matter should be explicitly covered by the terms of the investment management agreement and clearly understood by the respective parties. 2.4.6 Accordingly, Invesco will pursue the following policies with respect to the exercise of proxy voting authority for individually-managed clients: E-38 PROXY VOTING AUTHORITY Individually-Managed Clients Unless an individually-managed client wishes to retain proxy voting authority, Invesco will assume proxy voting authority by way of delegation from the client, provided that the allocation of proxy voting responsibility is clearly set out in the investment management agreement. In the case of clients who wish to place special conditions on the delegation of proxy voting powers, Invesco will endeavour to accommodate those clients' requirements as far as practicable, subject to any administrative obstacles or additional costs that might arise in implementing the conditions. 2.5 POOLED FUND CLIENTS 2.5.1 The legal relationship between an investment manager and its pooled fund clients is different in a number of important respects from that applying to individually-managed clients. These differences have a bearing on how proxy voting authority is exercised on behalf of pooled fund clients. 2.5.2 These legal relationships essentially mean that the manager is required to act solely in the collective interests of unitholders at large rather than as a direct agent or delegate of each unitholder. On the issue of proxy voting, as with all other aspects of our client relationships, Invesco will naturally continue to be receptive to any views and concerns raised by its pooled fund clients. However, the legal relationship that exists means it is not possible for the manager to accept instructions from a particular pooled fund client as to how to exercise proxy voting authority in a particular instance. 2.5.3 As in the case of individually-managed clients who delegate their proxy voting authority, Invesco's accountability to pooled fund clients in exercising its fiduciary responsibilities is best addressed as part of the manager's broader client relationship and reporting responsibilities. 2.5.4 Accordingly, Invesco will pursue the following policies with respect to the exercise of proxy voting authority for pooled fund clients: PROXY VOTING AUTHORITY Pooled Fund Clients In considering proxy voting issues arising in respect of pooled fund shareholdings, Invesco will act solely in accordance with its fiduciary responsibility to take account of the collective interests of unitholders in the pooled fund as a whole. Invesco cannot accept instructions from individual unitholders as to the exercise of proxy voting authority in a particular instance. E-39 3. KEY PROXY VOTING ISSUES 3.1 This section outlines Invesco's intended approach in cases where proxy voting authority is being exercised on clients' behalf. 3.2 Invesco will vote on all material issues at all company meetings where it has the voting authority and responsibility to do so. We will not announce our voting intentions and the reasons behind them. 3.3 Invesco applies two underlying principles. First, our interpretation of 'material voting issues' is confined to those issues which affect the value of shares we hold on behalf of clients and the rights of shareholders to an equal voice in influencing the affairs of companies in proportion to their shareholdings. We do not consider it appropriate to use shareholder powers for reasons other than the pursuit of these economic interests. Second, we believe that a critical factor in the development of an optimal corporate governance policy is the need to avoid unduly diverting resources from our primary responsibilities to add value to our clients' portfolios through investment performance and client service. 3.4 In order to expand upon these principles, Invesco believes it is necessary to consider the role of proxy voting policy in the context of broader portfolio management and administrative issues which apply to our investment management business as a whole. These are discussed as follows. 3.5 PORTFOLIO MANAGEMENT ISSUES - ACTIVE EQUITY PORTFOLIOS 3.5.1 While recognising in general terms that issues concerning corporate governance practices can have a significant bearing on the financial performance of companies, the primary criterion for the selection and retention of a particular stock in active equity portfolios remains our judgment that the stock will deliver superior investment performance for our clients, based on our investment themes and market analysis. 3.5.2 In view of these dynamics, Invesco does not consider it feasible or desirable to prescribe in advance comprehensive guidelines as to how it will exercise proxy voting authority in all circumstances. The primary aim of Invesco's approach to corporate governance is to encourage a culture of performance among the companies in which we manage investments in order to add value to our clients' portfolios, rather than one of mere conformance with a prescriptive set of rules and constraints. 3.5.3 Nevertheless, Invesco has identified a limited range of issues upon which it will always exercise proxy voting authority - either to register disapproval of management proposals or to demonstrate support for company initiatives through positive use of voting powers. These issues are outlined as follows: KEY VOTING ISSUES Major Corporate Proposals Invesco will always vote on the following issues arising in company General Meetings where it has the authority to do so on behalf of clients. - contentious issues (eg. issues of perceived national interest, or where there has been extensive press coverage or public comment); - approval of changes of substantial shareholdings; - mergers or schemes of arrangement; and - approval of major asset sales or purchases. E-40 As a general rule, Invesco will vote against any actions that will reduce the rights or options of shareholders, reduce shareholder influence over the board of directors and management, reduce the alignment of interests between management and shareholders, or reduce the value of shareholders' investments, unless balanced by reasonable increase in net worth of the shareholding. Where appropriate, Invesco will also use voting powers to influence companies to adopt generally accepted best corporate governance practices in areas such as board composition, disclosure policies and the other areas of recommended corporate governance practice. Invesco's approach to significant proxy voting issues which fall outside these areas will be addressed on their merits. 3.6 ADMINISTRATIVE ISSUES 3.6.1 In addition to the portfolio management issues outlined above, Invesco's proxy voting policy also takes account of administrative and cost implications, together with the size of our holdings as compared to the issue size, involved in the exercise of proxy voting authority on our clients' behalf. 3.6.2 There are practical constraints to the implementation of proxy voting decisions. Proxy voting is a highly seasonal activity, with most company Annual General Meetings being collapsed into a few months, with short deadlines for the distribution and return of notice papers, multiple resolutions from multiple companies being considered simultaneously, and under a legal system which is essentially dependent upon paper-based communication and record-keeping. 3.6.3 In addition, for investment managers such as Invesco who do not invest as principals and who consequently do not appear directly on the share registers of companies, all of these communications are channelled through external custodians, among whom there is in turn a considerable variation in the nature and quality of systems to deal with the flow of information. 3.6.4 While Invesco has the systems in place to efficiently implement proxy voting decisions when required, it can be seen that administrative and cost considerations by necessity play an important role in the application of a responsible proxy voting policy. This is particularly so bearing in mind the extremely limited time period within which voting decisions must often be made and implemented (which can in practice be as little as a few days). This factor also explains why Invesco resists any suggestion that there should be compulsory proxy voting on all issues, as in our view this would only increase the costs to be borne by our clients with very little practical improvement in corporate performance in most cases. 3.6.5 These administrative constraints are further highlighted by the fact that many issues on which shareholders are in practice asked to vote are routine matters relating to the ongoing administration of the company - eg. approval of financial accounts or housekeeping amendments to Articles of Association. Generally in such cases, we will be in favour of the motion as most companies take seriously their duties and are acting in the best interests of shareholders. However, the actual casting of a "yes" vote on all such resolutions in our view would entail an unreasonable administrative workload and cost. 3.6.6 Accordingly, Invesco believes that an important consideration in the framing of a proxy voting policy is the need to avoid unduly diverting resources from our primary responsibilities to add value to our clients' investments through portfolio management and client service. The policies outlined below have been prepared on this basis. E-41 KEY PROXY VOTING ISSUES Administrative Constraints In view of the administrative constraints and costs involved in the exercise of proxy voting powers, Invesco may (depending on circumstances) not exercise its voting right unless its clients' portfolios in aggregate represent a significant proportion of the shareholdings of the company in question. A significant proportion in this context means 5% or more of the market capitalisation of the company. E-42 4. INTERNAL ADMINISTRATION & DECISION-MAKING PROCESS 4.1 The following diagram illustrates the procedures adopted by Invesco for the administration of proxy voting: ----------------------- | | | COMPANY | | | ----------------------- | | \|/ Notice Paper | ------------------------------------------------------------------------------------- | Custodian | Custodian | Custodian | Custodian | Custodian | Custodian | Custodian | | No. 1 | No. 2 | No. 3 | No. 4 | No. 5 | No. 6 | No. 7 | (etc) ------------------------------------------------------------------------------------- | | Courier/Fax advice | /|\ INSTRUCTION OF VOTING \|/ | | | -------------------------- | | | IAL Settlement Team |(----- | | | -------------------------- /|\ | | | | \|/ Memo | | | -------------------------- | | Primary Equity | | ADVISE DECISION | Investment Manager for | | (RETURN EMAIL) | relevant market | | -------------------------- | | | | | \|/ Decision | | | -------------------------- | | | | | Vote |------ | | --------------------------
4.2 As shown by the diagram, a central administrative role is performed by our Settlement Team, located within the Client Administration section. The initial role of the Settlement Team is to receive company notice papers via the range of custodians who hold shares on behalf of our clients, to ascertain which client portfolios hold the stock, and to initiate the decision-making process by distributing the company notice papers to the Primary Investment Manager responsible for the company in question. 4.3 A voting decision on each company resolution (whether a yes or no vote, or a recommended abstention) is made by the Primary Investment Manager responsible for the company in question. Invesco believes that this approach is preferable to the appointment of a committee with responsibility for handling voting issues across all companies, as it takes advantage of the expertise of individuals whose professional lives are occupied by analysing particular companies and sectors, and who are familiar with the issues facing particular companies through their regular company visits. 4.4 Moreover, the Primary Equity Manager has overall responsibility for the relevant market and this ensures that similar issues which arise in different companies are handled in a consistent way across the relevant market. 4.5 The voting decision is then documented and passed back to the Settlement Team, who issue the voting instructions to each custodian in advance of the closing date for receipt of proxies by the company. At the same time, the Settlement Team logs all proxy voting activities for record keeping or client reporting purposes. 4.6 A key task in administering the overall process is the capture and dissemination of data from companies and custodians within a time frame that makes exercising votes feasible in practice. This applies particularly during the company Annual General Meeting "season", when there are typically a large number of proxy E-43 voting issues under consideration simultaneously. Invesco has no control over the former dependency and Invesco's ability to influence a custodian's service levels are limited in the case of individually-managed clients, where the custodian is answerable to the client. 4.7 The following policy commitments are implicit in these administrative and decision-making processes: INTERNAL ADMINISTRATION AND DECISION-MAKING PROCESS Invesco will consider all resolutions put forward in the Annual General Meetings or other decision-making forums of all companies in which investments are held on behalf of clients, where it has the authority to exercise voting powers. This consideration will occur in the context of our policy on Key Voting Issues outlined in Section 3. The voting decision will be made by the Primary Investment Manager responsible for the market in question. A written record will be kept of the voting decision in each case, and in case of an opposing vote, the reason/comment for the decision. Voting instructions will be issued to custodians as far as practicable in advance of the deadline for receipt of proxies by the company. Invesco will monitor the efficiency with which custodians implement voting instructions on clients' behalf. Invesco's ability to exercise proxy voting authority is dependent on timely receipt of notification from the relevant custodians. E-44 5. CLIENT REPORTING 5.1 Invesco will keep records of its proxy voting activities. 5.2 Upon client request, Invesco will regularly report back to the client on proxy voting activities for investments owned by the client. 5.2 The following points summarise Invesco's policy commitments on the reporting of proxy voting activities to clients (other than in cases where specific forms of client reporting are specified in the client's mandate): CLIENT REPORTING Where proxy voting authority is being exercised on a client's behalf, a statistical summary of voting activity will be provided on request as part of the client's regular quarterly report. Invesco will provide more detailed information on particular proxy voting issues in response to requests from clients wherever possible. E-45 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO INSTITUTIONAL (N.A.), INC. INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC. INVESCO SENIOR SECURED MANAGEMENT, INC. (INVESCO LOGO) PROXY VOTING POLICIES AND PROCEDURES April 1, 2006 E-46 GENERAL POLICY INVESCO Institutional (N.A.), Inc. and its wholly-owned subsidiaries, and INVESCO Global Asset Management (N.A.), Inc. (collectively, "INVESCO"), each has responsibility for making investment decisions that are in the best interests of its clients. As part of the investment management services it provides to clients, INVESCO may be authorized by clients to vote proxies appurtenant to the shares for which the clients are beneficial owners. INVESCO believes that it has a duty to manage clients' assets in the best economic interests of the clients and that the ability to vote proxies is a client asset. INVESCO reserves the right to amend its proxy policies and procedures from time to time without prior notice to its clients. PROXY VOTING POLICIES VOTING OF PROXIES INVESCO will vote client proxies in accordance with the procedures set forth below unless the client for non-ERISA clients retains in writing the right to vote, the named fiduciary (e.g., the plan sponsor) for ERISA clients retains in writing the right to direct the plan trustee or a third party to vote proxies or INVESCO determines that any benefit the client might gain from voting a proxy would be outweighed by the costs associated therewith. BEST ECONOMIC INTERESTS OF CLIENTS In voting proxies, INVESCO will take into consideration those factors that may affect the value of the security and will vote proxies in a manner in which, in its opinion, is in the best economic interests of clients. INVESCO endeavors to resolve any conflicts of interest exclusively in the best economic interests of clients. ISS SERVICES INVESCO has contracted with Institutional Shareholder Services ("ISS"), an independent third party service provider, to vote INVESCO's clients' proxies according to ISS's proxy voting recommendations. In addition, ISS will provide proxy analyses, vote recommendations, vote execution and record-keeping services for clients for which INVESCO has proxy voting responsibility. On an annual basis, INVESCO will review information obtained from ISS to ascertain whether ISS (i) has the capacity and competency to adequately analyze proxy issues, and (ii) can make such recommendations in an impartial manner and in the best economic interest of INVESCO's clients. This may include a review of ISS' Policies, Procedures and Practices Regarding Potential Conflicts of Interests and obtaining information about the work ISS does for corporate issuers and the payments ISS receives from such issuers. E-47 Custodians forward proxy materials for clients who rely on INVESCO to vote proxies to ISS. ISS is responsible for exercising the voting rights in accordance with the ISS proxy voting guidelines. If INVESCO receives proxy materials in connection with a client's account where the client has, in writing, communicated to INVESCO that the client, plan fiduciary or other third party has reserved the right to vote proxies, INVESCO will forward to the party appointed by client any proxy materials it receives with respect to the account. In order to avoid voting proxies in circumstances where INVESCO, or any of its affiliates have or may have any conflict of interest, real or perceived, INVESCO has engaged ISS to provide the proxy analyses, vote recommendations and voting of proxies. In the event that (i) ISS recuses itself on a proxy voting matter and makes no recommendation or (ii) INVESCO decides to override the ISS vote recommendation, the Proxy Committee will review the issue and direct ISS how to vote the proxies as described below. PROXY COMMITTEE The Proxy Committee shall have seven (7) members, which shall include representatives from portfolio management, operations, and legal/compliance or other functional departments as deemed appropriate who are knowledgeable regarding the proxy process. A majority of the members of the Proxy Committee shall constitute a quorum and the Proxy Committee shall act by a majority vote. The chair of the Proxy Committee shall be chosen by the Chief Compliance Officer of INVESCO. The Proxy Committee shall keep minutes of its meetings that shall be kept with the proxy voting records of INVESCO. The Proxy Committee will appoint a Proxy Manager to manage the proxy voting process, which includes the voting of proxies and the maintenance of appropriate records. Proxy Committee meetings shall be called by the Proxy Manager when override submissions are made and in instances when ISS has recused itself from a vote recommendation. In these situations, the Proxy Committee shall meet and determine how proxies are to be voted in the best interests of clients. The Proxy Committee periodically reviews new types of corporate governance issues, evaluates proposals not addressed by the ISS proxy voting guidelines in instances when ISS has recused itself, and determines how INVESCO should vote. The Committee monitors adherence to these Procedures, industry trends and reviews the ISS proxy voting guidelines. ISS RECUSAL When ISS makes no recommendation on a proxy voting issue or is recused due to a conflict of interest, the Proxy Committee will review the issue and, if INVESCO does not have a conflict of interest, direct ISS how to vote the proxies. In such cases where INVESCO has a conflict of interest, INVESCO, in its sole discretion, shall either (a) vote the proxies pursuant to ISS's general proxy voting guidelines, (b) engage an independent third party to provide a vote recommendation, or (c) contact its client(s) for direction as to how to vote the proxies. OVERRIDE OF ISS RECOMMENDATION There may be occasions where the INVESCO investment personnel, senior officers or a member of the Proxy Committee seek to override ISS's recommendations if they believe that ISS's recommendations are not in accordance with the best economic interests of clients. In the event that an individual listed E-48 above in this section disagrees with an ISS recommendation on a particular voting issue, the individual shall document in writing the reasons that he/she believes that the ISS recommendation is not in accordance with clients' best economic interests and submit such written documentation to the Proxy Manager for consideration by the Proxy Committee. Upon review of the documentation and consultation with the individual and others as the Proxy Committee deems appropriate, the Proxy Committee may make a determination to override the ISS voting recommendation if the Committee determines that it is in the best economic interests of clients and the Committee has addressed conflict of interest issues as discussed below. PROXY COMMITTEE MEETINGS When a Proxy Committee Meeting is called, whether because of an ISS recusal or request for override of an ISS recommendation, the Proxy Committee shall review the report of the Chief Compliance Officer as to whether any INVESCO person has reported a conflict of interest. The Proxy Committee shall review the information provided to it to determine if a real or perceived conflict of interest exists and the minutes of the Proxy Committee shall: (1) describe any real or perceived conflict of interest, (2) discuss any procedure used to address such conflict of interest, (3) report any contacts from outside parties (other than routine communications from proxy solicitors), and (4) include confirmation that the recommendation as to how the proxies are to be voted is in the best economic interests of clients and was made without regard to any conflict of interest. Based on the above review and determinations, the Proxy Committee will direct ISS how to vote the proxies. CERTAIN PROXY VOTES MAY NOT BE CAST In some cases, INVESCO may determine that it is not in the best economic interests of clients to vote proxies. For example, proxy voting in certain countries outside the United States requires share blocking. Shareholders who wish to vote their proxies must deposit their shares 7 to 21 days before the date of the meeting with a designated depositary. During the blocked period, shares to be voted at the meeting cannot be sold until the meeting has taken place and the shares have been returned to the Custodian/Sub-Custodian bank. In addition, voting certain international securities may involve unusual costs to clients. In other cases, it may not be possible to vote certain proxies despite good faith efforts to do so, for instance when inadequate notice of the matter is provided. In the instance of loan securities, voting of proxies typically requires termination of the loan, so it is not usually in the best economic interests of clients to vote proxies on loaned securities. INVESCO typically will not, but reserves the right to, vote where share blocking restrictions, unusual costs or other barriers to efficient voting apply. If INVESCO does not vote, it would have made the determination that the cost of voting exceeds the expected benefit to the client. The Proxy Manager shall record the reason for any proxy not being voted, which record shall be kept with the proxy voting records of INVESCO. E-49 PROXY VOTING RECORDS Clients may obtain information about how INVESCO voted proxies on their behalf by contacting their client services representative. Alternatively, clients may make a written request for proxy voting information to: Proxy Manager, 1360 Peachtree Street, N.E., Atlanta, Georgia 30309. CONFLICTS OF INTEREST PROCEDURES TO ADDRESS CONFLICTS OF INTEREST AND IMPROPER INFLUENCE In order to avoid voting proxies in circumstances where INVESCO or any of its affiliates have or may have any conflict of interest, real or perceived, INVESCO has contracted with ISS to provide proxy analyses, vote recommendations and voting of proxies. Unless noted otherwise by ISS, each vote recommendation provided by ISS to INVESCO includes a representation from ISS that ISS faces no conflict of interest with respect to the vote. In instances where ISS has recused itself and makes no recommendation on a particular matter or if an override submission is requested, the Proxy Committee shall determine how the proxy is to be voted and instruct the Proxy Manager accordingly in which case the conflict of interest provisions discussed below shall apply. In effecting the policy of voting proxies in the best economic interests of clients, there may be occasions where the voting of such proxies may present a real or perceived conflict of interest between INVESCO, as the investment manager, and clients. For each director, officer and employee of INVESCO ("INVESCO person"), the interests of INVESCO's clients must come first, ahead of the interest of INVESCO and any person within the INVESCO organization, which includes INVESCO's affiliates. Accordingly, each INVESCO person must not put "personal benefit," whether tangible or intangible, before the interests of clients of INVESCO or otherwise take advantage of the relationship to INVESCO's clients. "Personal benefit" includes any intended benefit for oneself or any other individual, company, group or organization of any kind whatsoever, except a benefit for a client of INVESCO, as appropriate. It is imperative that each of INVESCO's directors, officers and employees avoid any situation that might compromise, or call into question, the exercise of fully independent judgment in the interests of INVESCO's clients. Occasions may arise where a person or organization involved in the proxy voting process may have a conflict of interest. A conflict of interest may also exist if INVESCO has a business relationship with (or is actively soliciting business from) either the company soliciting the proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. An INVESCO person (excluding members of the Proxy Committee) shall not be considered to have a conflict of interest if the INVESCO person did not know of the conflict of interest and did not attempt to influence the outcome of a proxy vote. Any individual with actual knowledge of a conflict of interest relating to a particular referral item shall disclose that conflict to the Chief Compliance Officer. E-50 The following are examples of situations where a conflict may exist: - Business Relationships - where INVESCO manages money for a company or an employee group, manages pension assets or is actively soliciting any such business, or leases office space from a company; - Personal Relationships - where a INVESCO person has a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships; and - Familial Relationships - where an INVESCO person has a known familial relationship relating to a company (e.g. a spouse or other relative who serves as a director of a public company or is employed by the company). In the event that INVESCO (or an affiliate) manages assets for a company, its pension plan, or related entity or where any member of the Proxy Committee has a personal conflict of interest, and where clients' funds are invested in that company's shares, the Proxy Committee will not take into consideration this relationship and will vote proxies in that company solely in the best economic interest of its clients. It is the responsibility of the Proxy Manager and each member of the Proxy Committee to report any real or potential conflict of interest of which such individual has actual knowledge to the Chief Compliance Officer, who shall present any such information to the Proxy Committee. However, once a particular conflict has been reported to the Chief Compliance Officer, this requirement shall be deemed satisfied with respect to all individuals with knowledge of such conflict. In addition, the Proxy Manager and each member of the Proxy Committee shall certify annually as to their compliance with this policy. In addition, any INVESCO person who submits an ISS override recommendation to the Proxy Committee shall certify as to their compliance with this policy concurrently with the submission of their override recommendation. A form of such certification is attached as Appendix A hereto. In addition, members of the Proxy Committee must notify INVESCO's Chief Compliance Officer, with impunity and without fear of retribution or retaliation, of any direct, indirect or perceived improper influence made by anyone within INVESCO or by an affiliated company's representatives with regard to how INVESCO should vote proxies. The Chief Compliance Officer will investigate the allegations and will report his or her findings to the INVESCO Risk Management Committee. In the event that it is determined that improper influence was made, the Risk Management Committee will determine the appropriate action to take which may include, but is not limited to, (1) notifying the affiliated company's Chief Executive Officer, its Management Committee or Board of Directors, (2) taking remedial action, if necessary, to correct the result of any improper influence where clients have been harmed, or (3) notifying the appropriate regulatory agencies of the improper influence and to fully cooperate with these regulatory agencies as required. In all cases, the Proxy Committee shall not take into consideration the improper influence in determining how to vote proxies and will vote proxies solely in the best economic interest of clients. Furthermore, members of the Proxy Committee must advise INVESCO's Chief Compliance Officer and fellow Committee members of any real or perceived conflicts of interest he or she may have with E-51 regard to how proxies are to be voted regarding certain companies (e.g., personal security ownership in a company, or personal or business relationships with participants in proxy contests, corporate directors or candidates for corporate directorships). After reviewing such conflict, upon advice from the Chief Compliance Officer, the Committee may require such Committee member to recuse himself or herself from participating in the discussions regarding the proxy vote item and from casting a vote regarding how INVESCO should vote such proxy. ISS PROXY VOTING GUIDELINES A copy of the most recent ISS US Proxy Voting Guidelines Summary can be found on ISS's website at www.issproxy.com. From this website, click on ISS Governance Services tab, next click on "Policy Gateway", next click on "2008 Policy Information", and then click on "Download 2008 U.S. Proxy Voting Guidelines Summary." E-52 APPENDIX A ACKNOWLEDGEMENT AND CERTIFICATION I acknowledge that I have read the INVESCO Proxy Voting Policy (a copy of which has been supplied to me, which I will retain for future reference) and agree to comply in all respects with the terms and provisions thereof. I have disclosed or reported all real or potential conflicts of interest to the INVESCO Compliance Officer and will continue to do so as matters arise. I have complied with all provisions of this Policy. ---------------------------------------- Print Name - ------------------------------------- ---------------------------------------- Date Signature E-53 PROXY POLICY APPLIES TO THE FOLLOWING: INVESCO TRIMARK INVESTMENT MANAGEMENT INC. - PROXY VOTING Policy Number: B-6 Effective Date: May 1, 2001 Revision Date: November 6, 2006 PURPOSE AND BACKGROUND In its trusteeship and management of mutual funds, AIM Trimark acts as fiduciary to the unitholders and must act in their best interests. APPLICATION AIM Trimark will make every effort to exercise all voting rights with respect to securities held in the mutual funds that it manages in Canada or to which it provides sub-advisory services, including a Fund registered under and governed by the US Investment Company Act of 1940, as amended (the "US Funds") (collectively, the "Funds"). Proxies for the funds distributed by AIM Trimark Investments and managed by an affiliate or a third party (a "Sub-Advisor") will be voted in accordance with the Sub-Advisor's policy, unless the sub-advisory agreement provides otherwise. The portfolio managers have responsibility for exercising all proxy votes and in doing so, for acting in the best interest of the Fund. Portfolio managers must vote proxies in accordance with the Guidelines, as amended from time to time, a copy of which is attached to this policy. When a proxy is voted against management's recommendation, the portfolio manager will provide to the CIO the reasons in writing for any vote in opposition to management's recommendation. AIM Trimark may delegate to a third party the responsibility to vote proxies on behalf of all or certain Funds, in accordance with the Guidelines. RECORDS MANAGEMENT The Investment Department will endeavour to ensure that all proxies and notices are received from all issuers on a timely basis, and will maintain for all Funds - A record of all proxies received; - a record of votes cast; - a copy of the reasons for voting against management; and for the US Funds - the documents mentioned above; and E-54 - a copy of any document created by AIM Trimark that was material to making a decision how to vote proxies on behalf of a US Fund and that memorializes the basis of that decision. AIM Trimark has a dedicated Central Proxy Administrator who manages all proxy voting materials. Proxy voting circulars for all companies are received electronically through an external service provider. Circulars for North American companies and ADRs are generally also received in paper format. Once a circular is received, the Administrator verifies that all shares and Funds affected are correctly listed. The Administrator then gives a copy of the proxy summary to each affected portfolio manager and maintains a tracking list to ensure that all proxies are voted within the prescribed deadlines. Once voting information has been received from the portfolio managers, voting instructions are sent electronically to the service provider who then forwards the instructions to the appropriate proxy voting agent or transfer agent. The external service provider retains on behalf of AIM Trimark a record of the votes cast and agrees to provide AIM Trimark with a copy of proxy records promptly upon request. The service provider must make all documents available to AIM Trimark for a period of 6 years. In the event that AIM Trimark ceases to use an external service provider, all documents would be maintained and preserved in an easily accessible place i) for a period of 2 years where AIM Trimark carries on business in Canada and ii) for a period of 3 years thereafter at the same location or at any other location. REPORTING The CIO will report on proxy voting to the Fund Boards on an annual basis with respect to all funds managed in Canada or distributed by AIM Trimark Investments and managed by a Sub-Advisor. The CIO will report on proxy voting to the Board of Directors of the US Funds as required from time to time. In accordance with NI 81-106, proxy voting records for all Canadian mutual funds for years ending June 30th are posted on AIM Trimark's websites. The AIM Trimark Compliance department will review the proxy voting records held by AIM Trimark on an annual basis. E-55 AIM TRIMARK INVESTMENTS PROXY VOTING GUIDELINES (APRIL 17, 2006) PURPOSE The purpose of this document is to describe AIM Trimark's general guidelines for voting proxies received from companies held in AIM Trimark's Toronto-based funds. Proxy voting for the funds managed on behalf of AIM Trimark on a sub-advised basis (i.e. by other AMVESCAP business units or on a third party basis) are subject to the proxy voting policies & procedures of those other entities. As part of its regular due diligence, AIM Trimark will review the proxy voting policies & procedures of any new sub-advisors to ensure that they are appropriate in the circumstances. INTRODUCTION AIM Trimark has the fiduciary obligation to ensure that the long-term economic best interest of unitholders is the key consideration when voting proxies of portfolio companies. As a general rule, AIM Trimark shall vote against any actions that would: - reduce the rights or options of shareholders, - reduce shareholder influence over the board of directors and management, - reduce the alignment of interests between management and shareholders, or - reduce the value of shareholders' investments. At the same time, since AIM Trimark's Toronto-based portfolio managers follow an investment discipline that includes investing in companies that are believed to have strong management teams, the portfolio managers will generally support the management of companies in which they invest, and will accord proper weight to the positions of a company's board of directors. Therefore, in most circumstances, votes will be cast in accordance with the recommendations of the company's board of directors. While AIM Trimark's proxy voting guidelines are stated below, the portfolio managers will take into consideration all relevant facts and circumstances (including country specific considerations), and retain the right to vote proxies as deemed appropriate. These guidelines may be amended from time to time. CONFLICTS OF INTEREST When voting proxies, AIM Trimark's portfolio managers assess whether there are material conflicts of interest between AIM Trimark's interests and those of unitholders. A potential conflict of interest situation may include where AIM Trimark or an affiliate manages assets for, provides other financial services to, or otherwise has a material business relationship with, a company whose management is soliciting proxies, and failure to vote in favour of management of the company may harm AIM Trimark's relationship with the company. In all situations, the portfolio managers will not take AIM Trimark's relationship with the company into account, and will vote the proxies in the E-56 best interest of the unitholders. To the extent that a portfolio manager has any conflict of interest with respect to a company or an issue presented, that portfolio manager should abstain from voting on that company or issue. Portfolio managers are required to report to the Chief Investment Officer any such conflicts of interest and/or attempts by outside parties to improperly influence the voting process. BOARDS OF DIRECTORS We believe that a board that has at least a majority of independent directors is integral to good corporate governance. Unless there are restrictions specific to a company's home jurisdiction, key board committees, including audit and compensation committees, should be completely independent. VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS Votes in an uncontested election of directors are evaluated on a CASE-BY-CASE basis, considering factors that may include: - Long-term company performance relative to a market index, - Composition of the board and key board committees, - Nominee's attendance at board meetings, - Nominee's time commitments as a result of serving on other company boards, - Nominee's investments in the company, - Whether the chairman is also serving as CEO, and - Whether a retired CEO sits on the board. VOTING ON DIRECTOR NOMINEES IN CONTESTED ELECTIONS Votes in a contested election of directors are evaluated on a CASE-BY-CASE basis, considering factors that may include: - Long-term financial performance of the target company relative to its industry, - Management's track record, - Background to the proxy contest, - Qualifications of director nominees (both slates), - Evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met, and - Stock ownership positions. MAJORITY THRESHOLD VOTING FOR DIRECTOR ELECTIONS We will generally vote FOR proposals that require directors to be elected with an affirmative majority of votes cast unless the relevant portfolio manager believes that the company has adopted formal corporate governance principles that present a meaningful alternative to the majority voting standard and provide an adequate and timely response to both new nominees as well as incumbent nominees who fail to receive a majority of votes cast. E-57 REIMBURSEMENT OF PROXY SOLICITATION EXPENSES Decisions to provide reimbursement for dissidents waging a proxy contest are made on a CASE-BY-CASE basis. SEPARATING CHAIRMAN AND CEO Shareholder proposals to separate the chairman and CEO positions should be evaluated on a CASE-BY-CASE basis. While we generally support these proposals, some companies have governance structures in place that can satisfactorily counterbalance a combined position. Voting decisions will take into account factors such as: - Designated lead director, appointed from the ranks of the independent board members with clearly delineated duties; - Majority of independent directors; - All-independent key committees; - Committee chairpersons nominated by the independent directors; - CEO performance is reviewed annually by a committee of outside directors; and - Established governance guidelines. MAJORITY OF INDEPENDENT DIRECTORS While we generally support shareholder proposals asking that a majority of directors be independent, each proposal should be evaluated on a case-by-case basis. We generally vote for shareholder proposals that request that the board's audit, compensation, and/or nominating committees be composed exclusively of independent directors. STOCK OWNERSHIP REQUIREMENTS We believe that individual directors should be appropriately compensated and motivated to act in the best interests of shareholders. Share ownership by directors better aligns their interests with those of other shareholders. Therefore, we believe that meaningful share ownership by directors is in the best interest of the company. We generally vote FOR proposals that require a certain percentage of a director's compensation to be in the form of common stock. SIZE OF BOARDS OF DIRECTORS We believe that the number of directors is important to ensuring the board's effectiveness in maximizing long-term shareholder value. The board must be large enough to allow it to adequately discharge its responsibilities, without being so large that it becomes cumbersome. While we will prefer a board of no fewer than 5 and no more than16 members, each situation will be considered on a CASE-BY-CASE basis taking into consideration the specific company circumstances. CLASSIFIED OR STAGGERED BOARDS In a classified or staggered board, directors are typically elected in two or more "classes", serving terms greater than one year. E-58 We prefer the annual election of all directors and will generally NOT SUPPORT proposals that provide for staggered terms for board members. We recognize that there may be jurisdictions where staggered terms for board members is common practice and, in such situations, we will review the proposals on a CASE-BY-CASE basis. DIRECTOR INDEMNIFICATION AND LIABILITY PROTECTION We recognize that many individuals may be reluctant to serve as corporate directors if they were to be personally liable for all lawsuits and legal costs. As a result, limitations on directors' liability can benefit the corporation and its shareholders by helping to attract and retain qualified directors while providing recourse to shareholders on areas of misconduct by directors. We generally vote FOR proposals that limit directors' liability and provide indemnification as long as the arrangements are limited to the director acting honestly and in good faith with a view to the best interests of the corporation and, in criminal matters, are limited to the director having reasonable grounds for believing the conduct was lawful. AUDITORS A strong audit process is a requirement for good corporate governance. A significant aspect of the audit process is a strong relationship with a knowledgeable and independent set of auditors. RATIFICATION OF AUDITORS We believe a company should limit its relationship with its auditors to the audit engagement, and certain closely related activities that do not, in the aggregate, raise an appearance of impaired independence. We generally vote FOR the reappointment of the company's auditors unless: - It is not clear that the auditors will be able to fulfill their function; - There is reason to believe the auditors have rendered an opinion that is neither accurate nor indicative of the company's financial position; or - The auditors have a significant professional or personal relationship with the issuer that compromises their independence. DISCLOSURE OF AUDIT VS. NON-AUDIT FEES Understanding the fees earned by the auditors is important for assessing auditor independence. Our support for the re-appointment of the auditors will take into consideration whether the management information circular contains adequate disclosure about the amount and nature of audit vs. non-audit fees. There may be certain jurisdictions that do not currently require disclosure of audit vs. non-audit fees. In these circumstances, we will generally SUPPORT proposals that call for this disclosure. COMPENSATION PROGRAMS Appropriately designed equity-based compensation plans, approved by shareholders, can be an effective way to align the interests of long-term shareholders and the interests of management, employees and directors. Plans should not substantially dilute shareholders' ownership interests in the company, provide participants with excessive awards or have objectionable structural features. We will consider each compensation plan in its entirety (including all incentives, awards and other compensation) to E-59 determine if the plan provides the right incentives to managers and directors and is reasonable on the whole. While we generally encourage companies to provide more transparent disclosure related to their compensation programs, the following are specific guidelines dealing with some of the more common features of these programs (features not specifically itemized below will be considered on a CASE-BY-CASE basis taking into consideration the general principles described above): CASH COMPENSATION AND SEVERANCE PACKAGES We will generally SUPPORT the board's discretion to determine and grant appropriate cash compensation and severance packages. EQUITY BASED PLANS - DILUTION We will generally vote AGAINST equity-based plans where the total dilution (including all equity-based plans) is excessive. EMPLOYEE STOCK PURCHASE PLANS We will generally vote FOR the use of employee stock purchase plans to increase company stock ownership by employees, provided that shares purchased under the plan are acquired for no less than 85% of their market value. It is recognized that country specific circumstances may exist (e.g. tax issues) that require proposals to be reviewed on a CASE-BY-CASE basis. LOANS TO EMPLOYEES We will vote AGAINST the corporation making loans to employees to allow employees to pay for stock or stock options. It is recognized that country specific circumstances may exist that require proposals to be reviewed on a CASE-BY-CASE basis. STOCK OPTION PLANS - BOARD DISCRETION We will vote AGAINST stock option plans that give the board broad discretion in setting the terms and conditions of the programs. Such programs should be submitted with detail and be reasonable in the circumstances regarding their cost, scope, frequency and schedule for exercising the options. STOCK OPTION PLANS - INAPPROPRIATE FEATURES We will generally vote AGAINST plans that have any of the following structural features: - ability to re-price "underwater" options without shareholder approval, - ability to issue options with an exercise price below the stock's current market price, - ability to issue "reload" options, or - automatic share replenishment ("evergreen") features. STOCK OPTION PLANS - DIRECTOR ELIGIBILITY While we prefer stock ownership by directors, we will SUPPORT stock option plans for directors as long as the terms and conditions of director options are clearly defined and are reasonable. E-60 STOCK OPTION PLANS - REPRICING We will vote FOR proposals to re-price options if there is a value-for-value (rather than a share-for-share) exchange. STOCK OPTION PLANS - VESTING We will vote AGAINST stock option plans that are 100% vested when granted. STOCK OPTION PLANS - AUTHORIZED ALLOCATIONS We will generally vote AGAINST stock option plans that authorize allocation of 25% or more of the available options to any one individual. STOCK OPTION PLANS - CHANGE IN CONTROL PROVISIONS We will vote AGAINST stock option plans with change in control provisions that allow option holders to receive more for their options than shareholders would receive for their shares. CORPORATE MATTERS We will review management proposals relating to changes to capital structure, reincorporation, restructuring and mergers & acquisitions on a case-by-case basis, taking into consideration the impact of the changes on corporate governance and shareholder rights, anticipated financial and operating benefits, portfolio manager views, level of dilution, and a company's industry and performance in terms of shareholder returns. COMMON STOCK AUTHORIZATION We will review proposals to increase the number of shares of common stock authorized for issue on a CASE-BY-CASE basis. DUAL CLASS SHARE STRUCTURES Dual class share structures involve a second class of common stock with either superior or inferior voting rights to those of another class of stock. We will generally vote AGAINST proposals to create or extend dual class share structures where certain stockholders have superior or inferior voting rights to another class of stock. STOCK SPLITS We will vote FOR proposals to increase common share authorization for a stock split, provided that the increase in authorized shares would not result in excessive dilution given a company's industry and performance in terms of shareholder returns. REVERSE STOCK SPLITS We will vote FOR management proposals to implement a reverse stock split, provided that the reverse split does not result in an increase of authorized but unissued shares of more than 100% after giving effect to the shares needed for the reverse split. SHARE REPURCHASE PROGRAMS We will vote AGAINST proposals to institute open-market share repurchase plans if all shareholders do not participate on an equal basis. E-61 REINCORPORATION Reincorporation involves re-establishing the company in a different legal jurisdiction. We will generally vote FOR proposals to reincorporate the company provided that the board and management have demonstrated sound financial or business reasons for the move. Proposals to reincorporate will NOT BE SUPPORTED if solely as part of an anti-takeover defense or as a way to limit directors' liability. MERGERS & ACQUISITIONS We will vote FOR merger & acquisition proposals that the relevant portfolio managers believe, based on their review of the materials: - will result in financial and operating benefits, - have a fair offer price, - have favourable prospects for the combined companies, and - will not have a negative impact on corporate governance or shareholder rights. SOCIAL RESPONSIBILITY We recognize that to effectively manage a corporation, directors and management must consider not only the interests of shareholders, but the interests of employees, customers, suppliers, and creditors, among others. We believe that companies and their boards must give careful consideration to social responsibility issues in order to enhance long-term shareholder value. We SUPPORT efforts by companies to develop policies and practices that consider social responsibility issues related to their businesses. SHAREHOLDER PROPOSALS Shareholder proposals can be extremely complex, and the impact on the interests of all stakeholders can rarely be anticipated with a high degree of confidence. As a result, shareholder proposals will be reviewed on a CASE-BY-CASE basis with consideration of factors such as: - the proposal's impact on the company's short-term and long-term share value, - its effect on the company's reputation, - the economic effect of the proposal, - industry and regional norms applicable to the company, - the company's overall corporate governance provisions, and - the reasonableness of the request. We will generally SUPPORT shareholder proposals that require additional disclosure regarding corporate responsibility issues where the relevant portfolio manager believes: - the company has failed to adequately address these issues with shareholders, - there is information to suggest that a company follows procedures that are not in compliance with applicable regulations, or E-62 - the company fails to provide a level of disclosure that is comparable to industry peers or generally accepted standards. We will generally NOT SUPPORT shareholder proposals that place arbitrary or artificial constraints on the board, management or the company. ORDINARY BUSINESS PRACTICES We will generally SUPPORT the board's discretion regarding shareholder proposals that involve ordinary business practices. PROTECTION OF SHAREHOLDER RIGHTS We will generally vote FOR shareholder proposals that are designed to protect shareholder rights if the company's corporate governance standards indicate that such additional protections are warranted. BARRIERS TO SHAREHOLDER ACTION We will generally vote FOR proposals to lower barriers to shareholder action. SHAREHOLDER RIGHTS PLANS We will generally vote FOR proposals to subject shareholder rights plans to a shareholder vote. OTHER We will vote AGAINST any proposal where the proxy materials lack sufficient information upon which to base an informed decision. We will vote AGAINST any proposals to authorize the company to conduct any other business that is not described in the proxy statement (including the authority to approve any further amendments to an otherwise approved resolution). E-63 APPENDIX F CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES To the best knowledge of the Trust, the names and addresses of the record and beneficial holders of 5% or more of the outstanding shares of each class of the Trust's equity securities and the percentage of the outstanding shares held by such holders are set forth below. Unless otherwise indicated below, the Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially. A shareholder who owns beneficially 25% or more of the outstanding securities of a Fund is presumed to "control" that Fund as defined in the 1940 Act. Such control may affect the voting rights of other shareholders. All information listed below is as of January 31, 2008. AIM ASIA PACIFIC GROWTH FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES ------------------- ------------------- ------------------- NAME AND ADDRESS OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PERCENTAGE OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD - -------------------------------------- ------------------- ------------------- ------------------- Citigroup Global Markets House Account -- 8.21% 8.61% Attn: Cindy Tempesta, 7th Floor 333 West 34th Street New York, NY 10001-2402 Merrill Lynch Pierce Fenner & Smith 9.50% 5.38% 29.64% FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr East 2nd Floor Jacksonville, FL 32246 Pershing LLC 9.16% 11.04% 6.51% 1 Pershing Plaza Jersey City, NJ 07399-0001
AIM EUROPEAN GROWTH FUND
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES INVESTOR CLASS SHARES -------------- -------------- -------------- -------------- --------------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------ -------------- -------------- -------------- -------------- --------------------- Charles Schwab & Co. Inc. 7.17% -- -- -- -- Reinvestment Account 101 Montgomery St. San Francisco, CA 94104-4122
F-1
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES INVESTOR CLASS SHARES -------------- -------------- -------------- -------------- --------------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------ -------------- -------------- -------------- -------------- --------------------- Charles Schwab & Co. Inc. -- -- -- -- 24.65% Special Custody FBO Customers (SIM) Attn: Mutual Funds 101 Montgomery St., San Francisco, CA 94104-4122 Citigroup Global Markets 7.48% 9.30% 24.59% -- -- House Account Attn: Cindy Tempesta 7th Floor 333 West 34th Street New York NY 10001-2402 FIIOC Agent -- -- -- -- 6.43% Employee Benefit Plans 100 Magellan Way KW1C Covington, KY 41051-1987 Hartford Life Insurance Co -- -- -- 22.00% -- Separate Account 401K P O Box 2999 Hartford, CT 06104-2999 Merrill Lynch Pierce 8.97% 5.38% 17.93% -- -- Fenner & Smith FBO the Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East 2nd Floor Jacksonville, FL 32246-6484
F-2
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES INVESTOR CLASS SHARES -------------- -------------- -------------- -------------- --------------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------ -------------- -------------- -------------- -------------- --------------------- Nat'l Financial Services Corp -- -- -- -- 11.96% The Exclusive Benefit of Cust. One World Financial Center 200 Liberty St. 5th Floor Attn: Kate - Recon New York, NY 10281-5503 Pershing LLC 7.04% 10.10% 5.25% -- -- 1 Pershing Plaza Jersey City, NJ 07399-0001 Reliance Trust Company -- -- -- 5.28% -- Cust FBO Grand Rapid Ophthamalogy PC 3300 Northeast Expy Ste 200 Atlanta, GA 30341-3932 State Street Bank & Trust Co. -- -- -- 26.59% -- Cust for Various Symetra Retirement Plans 801 Pennsylvania Ave. Kansas City, MO 64105-1307
F-3 AIM GLOBAL GROWTH FUND
INSTITUTIONAL CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS SHARES ---------------- -------------- ---------------- ---------------- PERCENTAGE OWNED PERCENTAGE PERCENTAGE OWNED PERCENTAGE OWNED NAME AND ADDRESS OF OF OWNED OF OF OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD - -------------------------------------- ---------------- -------------- ---------------- ---------------- AIM Advisors Inc.* -- -- -- 100.00% Attn: Corporate Controller 1360 Peachtree St. NE Atlanta, GA 30309-3283 Citigroup Global Markets House Account 8.29% -- 5.70% -- Attn: Cindy Tempesta 7th Floor 333 West 34th Street New York NY 10001-2402 Merrill Lynch Pierce Fenner & Smith 7.83% 5.47% 15.38% -- FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr East 2nd Floor Jacksonville FL 32246 Pershing LLC 1 Pershing Plaza 5.10% 7.14% 7.51% -- Jersey City, NJ 07399-0001
* Owned of record and beneficially. AIM GLOBAL SMALL & MID CAP GROWTH FUND
INSTITUTIONAL CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS SHARES ---------------- -------------- ---------------- ---------------- PERCENTAGE OWNED PERCENTAGE PERCENTAGE OWNED PERCENTAGE OWNED NAME AND ADDRESS OF OF OWNED OF OF OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD - -------------------------------------- ---------------- -------------- ---------------- ---------------- Brown Brothers Harriman and Company as -- -- -- 95.06% Custodian 525 Washington Blvd. Jersey City, NJ 07310 Citigroup Global Markets House Account Attn: Cindy Tempesta 7th Floor 333 West 34th Street 6.99% -- 9.53% -- New York NY 10001-2402 Merrill Lynch Pierce Fenner & Smith FBO The Sole Benefit of Customers Attn: Fund Administration 8.37% 6.09% 14.55% -- 4800 Deer Lake Dr East 2nd Floor Jacksonville FL 32246
F-4
INSTITUTIONAL CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS SHARES ---------------- -------------- ---------------- ---------------- PERCENTAGE OWNED PERCENTAGE PERCENTAGE OWNED PERCENTAGE OWNED NAME AND ADDRESS OF OF OWNED OF OF OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD - -------------------------------------- ---------------- -------------- ---------------- ---------------- Pershing LLC 1 Pershing Plaza 6.75% 6.01% 6.91% -- Jersey City, NJ 07399-0001
AIM INTERNATIONAL CORE EQUITY FUND
CLASS A CLASS B CLASS C CLASS R INVESTOR INSTITUTIONAL SHARES SHARES SHARES SHARES CLASS SHARES CLASS SHARES ---------- ---------- ---------- ---------- ------------ ------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD RECORD - ------------------------------- ---------- ---------- ---------- ---------- ------------ ------------- AIM Growth Allocation Fund -- -- -- -- -- 23.46% Omnibus Account c/o AIM Advisors 11 E. Greenway Plaza, Suite 100 Houston, TX 77046-1113 AIM International Allocation Fund Omnibus Account c/o AIM Advisors -- -- -- -- -- 36.77% 11 E. Greenway Plaza, Suite 100 Houston, TX 77046-1113 AIM Moderate Growth Allocation Fund Omnibus Account c/o AIM Advisors -- -- -- -- -- 14.30% 11 E. Greenway Plaza, Ste. 100 Houston, TX 77046-1113 AIM Moderate Asset Allocation Fund Omnibus Account c/o AIM Advisors -- -- -- -- -- 19.96% 11 E. Greenway Plaza, Ste. 100 Houston, TX 77046-1113 Charles Schwab & Co. Inc. -- -- -- -- 7.99% -- Special Custody Acct for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104-4122
F-5
CLASS A CLASS B CLASS C CLASS R INVESTOR INSTITUTIONAL SHARES SHARES SHARES SHARES CLASS SHARES CLASS SHARES ---------- ---------- ---------- ---------- ------------ ------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD RECORD - ------------------------------- ---------- ---------- ---------- ---------- ------------ ------------- GPC Securities Inc. as Agent -- -- -- -- 6.83% -- for Merrill Lynch B&T Co FSB TTEE 401k Retirement & Savings Plan for Employees of Fairfield Inc. PO Box 7940 Lafayette, IN 47903-7940 Merrill Lynch Pierce Fenner & 10.74% 11.25% 43.05% 8.04% -- -- Smith Security 4800 Deer Lake Dr. East Jacksonville FL 32246-6484 MG Trust Co Cust -- -- -- 8.48% -- -- Bracing Systems Inc. 401k Pension 700 17th Street, Ste 300 Denver, CO 80202-3531 Pershing LLC 1 Pershing Plaza 5.69% 6.51% -- -- -- -- Jersey City, NJ 07399-0001 Reliance Trust Company Cust FBO -- -- -- 7.84% -- -- William J. Kamm and Sons Inc. 401K Plan PO Box 48529 Atlanta, GA 30362-1529
AIM INTERNATIONAL GROWTH FUND
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL SHARES SHARES SHARES SHARES CLASS SHARES ---------- ---------- ---------- ---------- ------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------- ---------- ---------- ---------- ---------- ------------- AIM Growth Allocation Fund -- -- -- -- 11.34% Omnibus Account c/o AIM Advisors 11 E. Greenway Plaza, Ste. 100 Houston, TX 77046-1113
F-6
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL SHARES SHARES SHARES SHARES CLASS SHARES ---------- ---------- ---------- ---------- ------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------- ---------- ---------- ---------- ---------- ------------- AIM International Allocation -- -- -- -- 11.41% Fund Omnibus Account c/o AIM Advisors 11 E. Greenway Plaza, Suite 100 Houston, TX 77046-1113 AIM Moderate Asset Allocation -- -- -- -- 7.24% Fund Omnibus Account c/o AIM Advisors 11 E. Greenway Plaza, Ste. 100 Houston, TX 77046-1113 AIM Moderate Growth Allocation -- -- -- -- 6.91% Fund Omnibus Account c/o AIM Advisors 11 Greenway Plaza, Ste. 100 Houston, TX 77046-1113 Citigroup Global Markets House -- 5.61% 7.74% -- -- Account Attn: Cindy Tempesta 7th Floor 333 West 34th Street New York NY 10001-2402 Citistreet Retirement Services -- -- -- 5.45% -- Citigroup Institutional Trust 400 Atrium Dr Somerset, NJ 08873-4162 First Command Bank Trust -- -- -- -- 20.18% FBO First Command SIP Attention: Trust Department PO Box 901075 Fort Worth, TX 76101-2075 Hartford Life Insurance Co. -- -- -- 7.71% -- Separate Account 401k PO Box 2999 Hartford, CT 06104-2999
F-7
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL SHARES SHARES SHARES SHARES CLASS SHARES ---------- ---------- ---------- ---------- ------------- PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD - ------------------------------- ---------- ---------- ---------- ---------- ------------- Merrill Lynch Pierce Fenner & 29.03% 15.64% 40.44% 16.40% 19.77% Smith FBO the Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East 2nd Floor Jacksonville FL 32246-6484 Morgan Stanley DW -- -- 6.38% -- -- Attn: Mutual Fund Operations 3 Harborslide Pl., Fl. 6 Jersey City, NJ 07311-3907 Pershing LLC -- 7.99% -- -- -- 1 Pershing Plaza Jersey City, NJ 07399-0001
MANAGEMENT OWNERSHIP As of January 31, 2008, the trustees and officers as a group owned less than 1% of the shares outstanding of each class of each Fund. F-8 APPENDIX G MANAGEMENT FEES For the last three fiscal years ended October 31, the management fees payable by each Fund, the amounts waived by Invesco Aim and the net fees paid by each Fund were as follows:
2007 2006 --------------------------------------- --------------------------------------- NET NET MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT FUND NAME FEE PAYABLE FEE WAIVERS FEE PAID FEE PAYABLE FEE WAIVERS FEE PAID - ------------------- ----------- ----------- ----------- ----------- ----------- ----------- AIM Asia Pacific Growth Fund $ 5,666,245 $ (124,936) $ 5,541,309 $ 3,094,875 $ (72,465) $ 3,022,410 AIM European Growth Fund 14,989,508 (371,438) 14,618,070 10,172,696 (266,035) 9,906,661 AIM Global Growth Fund 3,739,804 (186,587) 3,553,217 3,632,157 (251,322) 3,380,835 AIM Global Small & Mid Cap Growth Fund 9,141,077 (892,592) 8,248,485 8,521,900 (1,182,251) 7,339,649 AIM International Core Equity Fund 3,974,963 (9,279) 3,965,684 2,687,175 (2,860) 2,684,315 AIM International Growth Fund 29,613,472 (1,099,718) 28,513,754 21,456,671 (1,013,311) 20,443,360 2005 --------------------------------------- NET MANAGEMENT MANAGEMENT MANAGEMENT FUND NAME FEE PAYABLE FEE WAIVERS FEE PAID - ------------------- ----------- ----------- ----------- AIM Asia Pacific Growth Fund $ 1,774,292 $ (25,386) $ 1,748,906 AIM European Growth Fund 8,429,581 (179,839) 8,249,742 AIM Global Growth Fund 3,760,099 (214,777) 3,545,322 AIM Global Small & Mid Cap Growth Fund 7,895,094 (899,179) 6,995,915 AIM International Core Equity Fund 1,792,685 (3,138) 1,789,547 AIM International Growth Fund 17,569,855 (814,911) 16,754,944
G-1 APPENDIX H PORTFOLIO MANAGERS PORTFOLIO MANAGER FUND HOLDINGS AND INFORMATION ON OTHER MANAGED ACCOUNTS Invesco Aim's portfolio managers develop investment models which are used in connection with the management of certain AIM Funds as well as other mutual funds for which Invesco Aim or an affiliate acts as sub-advisor, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals. The following chart reflects the portfolio managers' investments in the Funds that they manage. The chart also reflects information regarding accounts other than the Funds for which each portfolio manager has day-to-day management responsibilities. Accounts are grouped into three categories: (i) mutual funds, (ii) other pooled investment vehicles, and (iii) other accounts. To the extent that any of these accounts pay advisory fees that are based on account performance ("performance-based fees"), information on those accounts is specifically broken out. In addition, any assets denominated in foreign currencies have been converted into U.S. Dollars using the exchange rates as of the applicable date. The following information is as of October 31, 2007:
OTHER POOLED OTHER REGISTERED INVESTMENT OTHER ACCOUNTS DOLLAR MUTUAL FUNDS MANAGED VEHICLES MANAGED MANAGED RANGE OF (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) INVESTMENTS --------------------- -------------------- ----------------------- IN EACH NUMBER OF NUMBER OF NUMBER OF PORTFOLIO MANAGER FUND(1) ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS - -------------------- ------------------- --------- --------- --------- -------- --------- ----------- AIM ASIA PACIFIC GROWTH FUND Shuxin Cao $100,001-$500,000 8 $10,383.1 1 $259.5 3,918 $1,457.2(2) Mark Jason $10,001-$50,000 None None None None None None Barrett K. Sides $100,001-$500,000 6 $7,037.6 4 $640.5 3,918 $1,457.2(2) AIM EUROPEAN GROWTH FUND Matthew W. Dennis $1-$10,000 6 $7,037.6 6 $1,087.0 3,918 $1,457.2(2) Borge Endresen $100,001-$500,000 4 $4,335.8 3 $706.0 None None Jason T. Holzer $500,001-$1,000,000 8 $9,405.4 10 $4,838.8 3,918 $1,457.2(2) Richard Nield $100,001-$500,000 1 $1,100.40 7 $4,493.6 None None Clas G. Olsson $500,001-$1,000,000 6 $7,037.6 10 $4,838.8 3,918 $1,457.2(2)
- ---------- (1) This column reflects investments in a Fund's shares owned directly by a portfolio manager or beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended). A portfolio manager is presumed to be a beneficial owner of securities that are held by his or her immediate family members sharing the same household. (2) These are accounts of individual investors for which Invesco Aim's affiliate, Invesco Aim Private Asset Management, Inc. ("IAPAM") provides investment advice. IAPAM offers separately managed accounts that are managed according to the investment models developed by Invesco Aim's portfolio managers and used in connection with the management of certain AIM Funds. IAPAM accounts may be invested in accordance with one or more of those investment models and investments held in those accounts are traded in accordance with the applicable models. H-1
OTHER POOLED OTHER REGISTERED INVESTMENT OTHER ACCOUNTS DOLLAR MUTUAL FUNDS MANAGED VEHICLES MANAGED MANAGED RANGE OF (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) INVESTMENTS --------------------- -------------------- ----------------------- IN EACH NUMBER OF NUMBER OF NUMBER OF PORTFOLIO MANAGER FUND(1) ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS - -------------------- ------------------- --------- --------- --------- -------- --------- ----------- AIM GLOBAL GROWTH FUND Matthew W. Dennis $1-$10,000 6 $8,431.2 6 $1,087.0 3,918 $1,457.2(2) Robert J. Lloyd(3) None 3 $10,759.5 6 $1,047.4 None None Clas G. Olsson None 6 $8,431.2 10 $4,838.8 3,918 $1,457.2(2) Barrett K. Sides $50,001-$100,000 6 $7,444.2 4 $640.5 3,918 $1,457.2(2) AIM GLOBAL SMALL & MID CAP GROWTH FUND Shuxin Cao None 8 $10,049.2 1 $259.5 3,918 $1,457.2(2) Borge Endresen $1-$10,000 4 $4,988.9 3 $706.0 None None Jason T. Holzer $10,001-$50,000 8 $10,058.5 10 $4,838.8 3,918 $1,457.2(2) Paul J. Rasplicka(4) None 5 $4,562.8 None None 1 $0.2 AIM INTERNATIONAL CORE EQUITY FUND Ingrid E. Baker None 2 $525.0 8 $2,417.0 109 $13,680.6 W. Lindsay Davidson None 2 $525.0 8 $2,417.0 109 $13,680.6 Michele T. Garren None 2 $525.0 8 $2,417.0 109 $13,680.6 Erik B. Granade None 2 $525.0 8 $2,417.0 109 $13,680.6 Kent A. Starke None 2 $525.0 8 $2,417.0 109 $13,680.6 AIM INTERNATIONAL GROWTH FUND Shuxin Cao $50,001-$100,000 8 $6,939.5 1 $259.5 3,918 $1,457.2(2) Matthew W. Dennis $100,001-$500,000 6 $4,581.0 6 $1,087.0 3,918 $1,457.2(2) Jason T. Holzer $100,001-$500,000 8 $6,948.8 10 $4,838.8 3,918 $1,457.2(2) Clas G. Olsson $500,001-$1,000,000 6 $4,581.0 10 $4,838.8 3,918 $1,457.2(2) Barrett K. Sides $100,001-$500,000 6 $3,594.0 4 $640.5 3,918 $1,457.2(2)
- ---------- (3) Mr. Lloyd began serving as portfolio manager on AIM Global Growth Fund on February 4, 2008. Information for Mr. Lloyd has been provided as of December 31, 2007. (4) Mr. Rasplicka began serving as portfolio manager on AIM Global Small & Mid Cap Growth Fund on February 4, 2008. Information for Mr. Rasplika has been provided as of December 31, 2007. H-2 POTENTIAL CONFLICTS OF INTEREST Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one Fund or other account. More specifically, portfolio managers who manage multiple Funds and/or other accounts may be presented with one or more of the following potential conflicts: - - The management of multiple Funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each Fund and/or other account. Invesco Aim seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the Funds. - - If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one Fund or other account, a Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible Funds and other accounts. To deal with these situations, Invesco Aim and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts. - - With respect to securities transactions for the Funds, Invesco Aim determines which broker to use to execute each order, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts (such as mutual funds for which Invesco Aim or an affiliate acts as sub-advisor, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), Invesco Aim may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a Fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or other account(s) involved. - - Finally, the appearance of a conflict of interest may arise where Invesco Aim has an incentive, such as a performance-based management fee, which relates to the management of one Fund or account but not all Funds and accounts with respect to which a portfolio manager has day-to-day management responsibilities. Invesco Aim and the Funds have adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises. DESCRIPTION OF COMPENSATION STRUCTURE INVESCO AIM ADVISORS, INC. Invesco Aim seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. Invesco Aim evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements: H-3 - - BASE SALARY. Each portfolio manager is paid a base salary. In setting the base salary, Invesco Aim's intention is to be competitive in light of the particular portfolio manager's experience and responsibilities. - - ANNUAL BONUS. Each portfolio manager is eligible to receive an annual cash bonus which has quantitative and non-quantitative components. Generally, 70% of the bonus is quantitatively determined, based typically on a four-year rolling average of pre-tax performance of all registered investment company accounts for which a portfolio manager has day-to-day management responsibilities versus the performance of a pre-determined peer group. In instances where a portfolio manager has responsibility for management of more than one fund, an asset weighted four-year rolling average is used. High fund performance (against applicable peer group) would deliver compensation generally associated with top pay in the industry (determined by reference to the third-party provided compensation survey information) and poor fund performance (versus applicable peer group) could result in no bonus. The amount of fund assets under management typically has an impact on the bonus potential (for example, managing more assets increases the bonus potential); however, this factor typically carries less weight than relative performance. The remaining 30% portion of the bonus is discretionary as determined by Invesco Aim and takes into account other subjective factors. - - EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. - - PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes. - - PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation. Portfolio managers also participate in benefit plans and programs available generally to all employees. INVESCO INSTITUTIONAL (N.A.), INC. Invesco Institutional (N.A.), Inc. seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive, as more fully described below, a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. Invesco Institutional (N.A.), Inc. evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements: - - BASE SALARY. Each portfolio manager is paid a base salary which is set at a level determined to be appropriate based upon an individual's experience and responsibilities through the use of independent compensation surveys of the investment management industry. - - ANNUAL BONUS. Each portfolio manager is paid an annual cash bonus which has a performance driven component and a discretionary component, the combined total of which will typically range from 50 to over 100 percent of the manager's base salary. Generally, the majority of the bonus is pre-tax performance driven, based on the success of the team's investment results which are H-4 measured against appropriate market benchmarks and peer groups. The remaining portion of the bonus is discretionary and is determined by the sub-advisor's Chief Investment Officer and Chief Executive Officer. - - EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. - - PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes. PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation. Portfolio managers also participate in benefit plans and programs available generally to all employees. INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC. Invesco Global Asset Management (N.A.), Inc. seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive, as more fully described below, a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. Invesco Global Asset Management (N.A.), Inc. evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements: - - BASE SALARY. Each portfolio manager is paid a base salary which is set at a level determined to be appropriate based upon an individual's experience and responsibilities through the use of independent compensation surveys of the investment management industry. - - ANNUAL BONUS. Each portfolio manager is paid an annual cash bonus which has a performance driven component and a discretionary component, the combined total of which will typically range from 50 to over 100 percent of the manager's base salary. Generally, the majority of the bonus is pre-tax performance driven, based on the success of the team's investment results which are measured against appropriate market benchmarks and peer groups. The remaining portion of the bonus is discretionary and is determined by the sub-advisor's Chief Investment Officer and Chief Executive Officer. - - EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. - - PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes. H-5 - - PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation. Portfolio managers also participate in benefit plans and programs available generally to all employees. INVESCO SENIOR SECURED MANAGEMENT, INC. Invesco Senior Secured Management, Inc. seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive, as more fully described below, a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. Invesco Senior Secured Management, Inc. evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements: - - BASE SALARY. Each portfolio manager is paid a base salary which is set at a level determined to be appropriate based upon an individual's experience and responsibilities through the use of independent compensation surveys of the investment management industry. - - ANNUAL BONUS. Each portfolio manager is paid an annual cash bonus which has a performance driven component and a discretionary component, the combined total of which will typically range from 50 to over 100 percent of the manager's base salary. - - EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. - - PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes. - - PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation. Portfolio managers also participate in benefit plans and programs available generally to all employees. INVESCO TRIMARK INVESTMENT MANAGEMENT INC. Invesco Trimark Investment Management Inc.'s compensation practices for its Investment team are aimed at retaining and motivating employees in order to maximize investment performance. Accordingly, the compensation packages offered to the portfolio managers are competitive with opportunities in the best managed firms in the investment management industry. Portfolio managers receive a competitive base salary, an incentive bonus opportunity, equity compensation and a benefits package. Total cash compensation, as described below, is set for each portfolio manager relative to his or her performance. Portfolio manager compensation is reviewed and modified each year as appropriate. Each portfolio manager's compensation consists of the following elements: - - BASE SALARY. Each portfolio manager is paid a base salary. In setting the base salary, Invesco Trimark Investment Management Inc.'s intention is to be competitive in light of the particular portfolio manager's experience and responsibilities. - - ANNUAL BONUS. Each portfolio manager is eligible to receive an annual cash bonus which has quantitative and qualitative components. Generally, 75% of the bonus is quantitatively determined, H-6 based primarily on the 3 and 5-year investment results of the funds for which the portfolio manager has day-to-day responsibility. In instances where a portfolio manager has responsibility for more than one fund, consideration is given to both the overall assets under management as well as the individual fund performances. The remaining 25% portion of the bonus is discretionary as determined by Invesco Trimark Investment Management Inc. and takes into account other subjective factors. - - EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or may be granted restricted shares of Invesco stock from pools determined by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. - - PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group term life insurance policy. They also have the opportunity of purchasing optional life insurance for their spouse and dependents. Portfolio managers also participate in benefit plans and programs available generally to all employees. INVESCO ASSET MANAGEMENT LIMITED (INVESCO ASSET MANAGEMENT) The success of the Invesco Worldwide Fixed Income division of INVESCO Asset Management drives its financial rewards. Compensation is paid in the form of salary and incentive bonus and is designed to be competitive with industry standards. Bonuses are based on a combination of INVESCO Asset Management's profitability, Fixed Income Group profitability, and individual contribution to the investment process and performance. Investment professionals are also eligible for the Invesco Partnership program in which employees can share in the ownership of the firm. Employees who achieve consistent outstanding performance results may receive merit options. INVESCO Asset Management's compensation structure was developed to encourage employees, especially key investment professionals, to remain with the firm. Our compensation structure involves the following key components: - - SALARY AND BONUS. INVESCO Asset Management's compensation policy and practices are aimed at attracting and retaining highly talented employees and rewarding them for excellence in investment performance, client service, and business management. Salary ranges from 50% to 75% and bonus ranges from 25% to 50% of total compensation. The 70% of the bonus, which is quantitatively determined, is based on a 1 year and 3 year performance measurement against the performance of a pre-determined peer group. The compensation packages offered to all employees are benchmarked to be highly competitive with other leading firms in the investment management industry. INVESCO Asset Management's compensation packages have strong links to both the firm's and the individual's performance. Salaries are adjusted periodically based on individual contribution. All employees are eligible for bonuses. High performing professionals can receive upper quartile bonuses depending on individual performance and the firm's financial success. For portfolio managers, performance is measured against predetermined client benchmarks. Our compensation objective is to attract and retain the best-qualified talent in the investment management industry. INVESCO Asset Management participates in annual compensation surveys, and targets the median to upper quartile of total compensation (depending on performance), to ensure that INVESCO Limited is highly competitive in the market for talent. Stock Options and Eligibility. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. H-7 INVESCO ASSET MANAGEMENT (JAPAN) LIMITED (INVESCO JAPAN) Invesco Japan offers its employees competitive salaries and attractive benefits packages. Remuneration is to a large extent dependent on performance and the generation of ideas, both from the individual and the team. Individual fund managers are paid a competitive salary and a bonus measured by business contribution. The bonus is largely based upon the underlying performance of the funds that they manage over a rolling one and three-year period, together with their overall contribution to the success of the team. This contribution is defined in terms of research, teamwork, marketing and revenue. As a rough standard, 70% is reviewed from quantitative measurement such as performance, growth of AUM, and 30% from qualitative measurement, such as contribution to development in investment process. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of Invesco stock from pools determined from time to time by the Remuneration Committee of the Invesco Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent. Although we are a large public company, Invesco Japan's management structure is de-centralised to promote an entrepreneurial mindset. Senior professionals have significant responsibility and authority, and we believe that our structure allows each operating group to focus on and maximise local investment opportunities, service clients more effectively, and operate more efficiently. In this environment, stock ownership by management and other employees is an important means of aligning their interests with those of our shareholders. Invesco Japan has implemented various employee benefit plans to promote stock ownership by management and employees. INVESCO HONG KONG LIMITED (INVESCO HONG KONG) Invesco Hong Kong strives to have a compensation policy and practices for portfolio managers to attract and retain highly talented portfolio managers and reward them for excellence in investment performance, client service, and business management. The compensation packages offered to them are benchmarked to be highly competitive with other leading firms in the investment management industry in accordance with their experience and responsbillities and would be reviewed annually. Portfolio Managers receive a base salary, bonus and a benefit package which available generally to all employees. - - BASE SALARY. The portfoio managers receives a base salary. The level of the base salary is based on the experience and responsibilities. - - ANNUAL BONUS. The portfolio managers are entitled to receive an annual bonus which has quantitative and qualitative components. In principle, 70% weighting is qunatitatively determined while 30% is qualitatively determined. High performing professionals can receive upper quartile bonuses depending on individual performance and the firm's financial success. Specifically, portfolio managers' performance is measured against predetermined client benchmarks. - - EQUITY-BASED COMPENSATION: In addition to salary and bonus, Invesco Hong Kong Limited provides a comprehensive benefit program such as pension scheme, medical and life insurances and share saving plans to all employees including portfolio managers. Invesco Hong Kong Limited believes that employee ownership is one of the key motivating factors contributing to the stability of our organization. In addition, any key employees who achieve consistent outstanding performance results and contributions to the businesss can also be rewarded for merit options. H-8 APPENDIX I ADMINISTRATIVE SERVICES FEES The Funds paid Invesco Aim the following amounts for administrative services for the last three fiscal years ended October 31:
FUND NAME 2007 2006 2005 - -------------------------------------- --------- -------- -------- AIM Asia Pacific Growth Fund $159,916 $ 94,929 $ 50,000 AIM European Growth Fund 405,474 293,580 249,034 AIM Global Growth Fund 124,515 118,282 121,744 AIM Global Small & Mid Cap Growth Fund 267,314 237,782 221,764 AIM International Core Equity Fund 172,960 132,407 104,976 AIM International Growth Fund 589,116 492,708 436,565
I-1 APPENDIX J BROKERAGE COMMISSIONS Set forth below are brokerage commissions(1) paid by each of the Funds listed below during the last three fiscal years or periods ended October 31. Unless otherwise indicated, the amount of brokerage commissions paid by a Fund may change from year to year because of, among other things, changing asset levels, shareholder activity, and/or portfolio turnover.
FUND 2007 2006 2005 - -------------------------------------- ---------- ---------- ---------- AIM Asia Pacific Growth Fund $1,718,033 $1,249,386 $ 558,274 AIM European Growth Fund 1,491,692 1,163,593 1,591,465 AIM Global Growth Fund 502,734 593,534 795,131 AIM Global Small & Mid Cap Growth Fund 1,591,308 2,145,747 2,147,732 AIM International Core Equity Fund 483,668 200,010 211,342 AIM International Growth Fund 4,246,131 3,600,043 2,975,290
- ---------- (1) Disclosure regarding brokerage commissions is limited to commissions paid on agency trades and designated as such on the trade confirm. J-1 APPENDIX K DIRECTED BROKERAGE (RESEARCH SERVICES) During the last fiscal year ended October 31, 2007, each Fund allocated the following amount of transactions to broker-dealers that provided Invesco Aim with certain research, statistics and other information:
RELATED FUND TRANSACTIONS(1) BROKERAGE COMMISSIONS(1) - -------------------------------------- --------------- ------------------------ AIM Asia Pacific Growth Fund $ 592,493,647 $1,912,200 AIM European Growth Fund $ 701,197,701 $1,451,358 AIM Global Growth Fund $ 329,931,442 $ 487,437 AIM Global Small & Mid Cap Growth Fund $ 849,081,330 $1,693,935 AIM International Core Equity Fund $ 217,690,326 $ 386,161 AIM International Growth Fund $1,844,087,198 $4,245,241
(1) Amount is inclusive of commissions paid to, and brokerage transactions placed with, certain brokers that provide execution, research and other services. PURCHASES OF SECURITIES OF REGULAR BROKERS OR DEALERS During the last fiscal year ended October 31, 2007, the Funds purchased securities issued by the following companies, which are "regular" brokers or dealers of one or more of the Funds identified below.
MARKET VALUE FUND/ISSUER SECURITY (AS OF OCTOBER 31, 2007) - ---------------------------------- ------------ ------------------------ AIM European Growth Fund Credit Suisse Group Common Stock $24,143,707 AIM Global Growth Fund Credit Suisse Group Common Stock $ 5,325,782 Goldman Sachs Group, Inc. (The) Common Stock $ 6,846,559 AIM International Core Equity Fund Credit Suisse Group Common Stock $ 8,204,107 AIM International Growth Fund Credit Suisse Group Common Stock $40,423,558
K-1 APPENDIX L CERTAIN FINANCIAL ADVISORS THAT RECEIVE ONE OR MORE TYPES OF PAYMENTS 1st Global Capital Corporation A G Edwards & Sons, Inc. ADP Broker Dealer, Inc. Advantage Capital Corporation American General Securities, Inc. American Skandia Life Assurance Corporation American United Life Insurance Company Ameriprise Financial Services, Inc. APS Financial Associated Securities Corporation AXA Advisors, LLC Bank of New York Bank of Oklahoma N.A. BBVA Investments Bear Stearns Securities Co Brown Brothers Harriman Cadaret Grant & Company, Inc. Cambridge Investment Research, Inc. Cantella Cantor Fitzgerald Centennial Bank Charles Schwab & Company, Inc. Chase Investment Services Corporation Chicago Mercantile Exchange Citigroup CitiCorp Investment Services Citigroup Global Markets, Inc. Citistreet Equities LLC Comerica Bank Commonwealth Financial Network Compass Brokerage, Inc. Contemporary Financial Solutions, Inc. Credit Suisse CUNA Brokerage Services, Inc. CUSO Financial Services, Inc. Equity Services, Inc. Fidelity Brokerage Services, LLC Fidelity Institutional Operations Company, Inc. Fifth Third Bank Financial Network Investment Corporation Fiserv Frost Brokerage Services, Inc. Frost National Bank FSC Securities Corporation Fund Services Advisors Goldman Sachs Great West Life & Annuity Company Guaranty Bank & Trust Guardian Insurance & Annuity Company, Inc. GunnAllen Finanical Harris Nesbitt Burns H. D. Vest Investment Securities, Inc. Hilliard Lyons, Inc. Hornor Townsend & Kent, Inc. Huntington ING Financial Partners, Inc. ING USA Annuity and Life Insurance Company Intersecurities, Inc. INVEST Financial Corporation, Inc. Investment Centers of America, Inc. Jefferson Pilot Securities Corporation JM Lummis Securities JP Morgan Chase LaSalle Lincoln Financial Advisors Corporation Lincoln Investment Planning, Inc. Linsco/Private Ledger Corporation M & I Trust M & T Securities, Inc. M M L Investors Services, Inc. Matrix McDonald Investments, Inc. Mellon Financial Merrill Lynch & Company, Inc. Merrill Lynch Life Insurance Company Metlife Securities, Inc. Meyer Financial Group Money Concepts Capital Corporation Morgan Keegan & Company, Inc. Morgan Stanley Morgan Stanley DW Inc. Multi-Financial Securities Corporation Mutual Service Corporation N F P Securities, Inc. NatCity Investments, Inc. National Planning Corporation Nationwide Investment Services Corporation New England Securities Corporation Next Financial Group, Inc. Northwestern Mutual Investment Services NYLIFE Distributors, LLC Oppenheimer & Company, Inc. Pershing LLC PFS Investments, Inc. Piper Jaffray & Company PNC Capital Markets Primevest Financial Services, Inc. Proequities, Inc. R B C Centura Securities, Inc. R B C Dain Rauscher, Inc. Raymond James & Associates, Inc. Raymond James Financial Services, Inc. Ross Sinclair and Associates Royal Alliance Associates, Inc. SCF Securities S I I Investments, Inc. Securities America, Inc. Sentra Securities Corporation Signator Investors, Inc. Simmons 1st Investment Group Spelman & Company, Inc. State Farm VP Management Corp State Street Bank & Trust Company SunAmerica Securities, Inc. SunGard Institutional Brokerage, Inc. Sungard Investment Products, Inc. SunTrust Bank, Central Florida, N.A. SunTrust Robinson Humphrey SWS Financial Services The (Wilson) William Financial Tower Square Securities, Inc. Transamerica Financial Advisors, Inc. Transamerica Life Insurance & Annuity Company Trust Management Network U.S. Bancorp Investments, Inc. UBS Financial Services Inc. Union Bank of California United Planner Financial Service USAllianz Securities, Inc. US Bank UVEST Financial Services, Inc. V S R Financial Services, Inc. VALIC Financial Advisors, Inc. vFinance Investments Wachovia Capital Markets LLC Wachovia Securities, LLC Walnut Street Securities, Inc. Waterstone Financial Group, Inc. Wells Fargo Investments, LLC Woodbury Financial Services, Inc. X C U Capital Corporation, Inc. Zions Bank L-1 APPENDIX M AMOUNTS PAID TO INVESCO AIM DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS A list of amounts paid by each class of shares to Invesco Aim Distributors pursuant to the Plans for the fiscal year ended October 31, 2007 follows:
CLASS A CLASS B CLASS C CLASS R INVESTOR FUND SHARES SHARES SHARES SHARES CLASS SHARES - ---------------------------------- ---------- ---------- ---------- -------- ------------ AIM Asia Pacific Growth Fund $1,127,916 $ 712,966 $ 858,667 N/A N/A AIM European Growth Fund 2,464,359 1,724,712 1,445,793 $ 89,605 $841,950 AIM Global Growth Fund 843,504 867,802 261,796 N/A N/A AIM Global Small & Mid Cap Growth Fund 2,257,365 1,332,837 349,967 N/A N/A AIM International Core Equity Fund 260,666 320,299 458,163 19,297 110,979 AIM International Growth Fund 5,787,780 2,499,215 2,224,802 157,334 N/A
M-1 APPENDIX N ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS An estimate by category of the allocation of actual fees paid by Class A Shares of the Funds during the year ended October 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATED ADVERTISING MAILING COMPENSATION COMPENSATION SEMINARS TO MARKETING PERSONNEL ----------- ---------- ------------ ------------ -------- -------------- --------- AIM Asia Pacific Growth Fund $0 $0 $0 $1,127,916 $0 $0 $0 AIM European Growth Fund 0 0 0 2,464,359 0 0 0 AIM Global Growth Fund 0 0 0 843,504 0 0 0 AIM Global Small & Mid Cap Growth Fund 0 0 0 2,257,365 0 0 0 AIM International Core Equity Fund 0 0 0 260,666 0 0 0 AIM International Growth Fund 0 0 0 5,787,780 0 0 0
An estimate by category of the allocation of actual fees paid by Class C shares of the Funds during the year ended October 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATED ADVERTISING MAILING COMPENSATION COMPENSATION SEMINARS TO MARKETING PERSONNEL ----------- ---------- ------------ ------------ -------- -------------- --------- AIM Asia Pacific Growth Fund $1,930 $263 $ 534,725 $154,113 $1,462 $1,462 $19,011 AIM European Growth Fund 2,748 442 1,293,534 400,736 1,719 1,719 23,814 AIM Global Growth Fund 246 54 650,852 209,607 599 599 5,845 AIM Global Small & Mid Cap Growth Fund 1,382 175 999,628 318,225 778 778 11,871 AIM International Core Equity Fund 0 0 240,224 76,686 0 0 3,389 AIM International Growth Fund 2,119 341 1,874,411 596,611 1,514 1,514 22,705
An estimate by category of the allocation of actual fees paid by Class C shares of the Funds during the year ended October 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATED ADVERTISING MAILING COMPENSATION COMPENSATION SEMINARS TO MARKETING PERSONNEL ----------- ---------- ------------ ------------ -------- -------------- --------- AIM Asia Pacific Growth Fund $4,897 $ 745 $232,465 $ 572,412 $3,009 $3,009 $42,130 AIM European Growth Fund 7,456 1,043 367,422 992,601 5,023 4,636 67,612 AIM Global Growth Fund 0 0 17,419 240,506 0 0 3,871 AIM Global Small & Mid Cap Growth Fund 234 52 50,759 287,737 574 574 10,037 AIM International Core Equity Fund 0 0 32,872 418,074 267 0 6,950 AIM International Growth Fund 6,938 1,006 346,885 1,797,595 4,413 4,119 63,846
An estimate by category of the allocation of actual fees paid by Class R shares of the Funds during the year ended October 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATED ADVERTISING MAILING COMPENSATION COMPENSATION SEMINARS TO MARKETING PERSONNEL ----------- ---------- ------------ ------------ -------- -------------- --------- AIM European Growth Fund $356 $ 52 $ 5,981 $ 79,447 $229 $216 $3,324 AIM International Core Equity Fund 97 14 1,602 16,567 61 58 898 AIM International Growth Fund 954 136 16,067 130,181 635 577 8,784
N-1 An estimate by category of the allocation of actual fees paid by Investor Class shares of the Funds during the year ended October 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATED ADVERTISING MAILING COMPENSATION COMPENSATION SEMINARS TO MARKETING PERSONNEL ----------- ---------- ------------ ------------ -------- -------------- --------- AIM European Growth Fund $25,015 $3,717 $0 $506,157 $15,263 $15,263 $276,535 AIM International Core Equity Fund 0 0 0 110,979 0 0 0
N-2 APPENDIX O TOTAL SALES CHARGES The following chart reflects the total sales charges paid in connection with the sale of Class A shares of each Fund and the amount retained by Invesco Aim Distributors for the last three fiscal years ended October 31:
2007 2006 2005 --------------------- --------------------- --------------------- SALES AMOUNT SALES AMOUNT SALES AMOUNT CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED ---------- -------- ---------- -------- ---------- -------- AIM Asia Pacific Growth Fund $1,840,041 $307,012 $1,182,958 $196,900 $ 578,597 $ 93,321 AIM European Growth Fund 2,431,764 403,830 1,153,624 191,996 975,212 159,110 AIM Global Growth Fund 380,871 68,704 216,494 38,251 204,522 38,301 AIM Global Small & Mid Cap Growth Fund 822,796 136,234 554,470 94,493 366,783 73,411 AIM International Core Equity Fund 182,222 31,506 193,545 32,725 194,367 32,193 AIM International Growth Fund 1,904,697 305,376 1,325,320 215,123 1,049,728 169,848
The following chart reflects the contingent deferred sales charges paid by Class A, Class B, Class C, and Class R shareholders and retained by Invesco Aim Distributors for the last three fiscal years ended October 31:
2007 2006 2005 -------- -------- ------- AIM Asia Pacific Growth Fund $175,845 $ 67,075 $24,802 AIM European Growth Fund 158,425 90,080 45,983 AIM Global Growth Fund 43,537 47,842 43,660 AIM Global Small & Mid Cap Growth Fund 76,647 69,072 52,243 AIM International Core Equity Fund 17,835 17,120 11,674 AIM International Growth Fund 162,951 120,240 78,139
O-1 APPENDIX P-1 PENDING LITIGATION ALLEGING MARKET TIMING The following civil lawsuits, including purported class action and shareholder derivative suits, involve, depending on the lawsuit, one or more AIM Funds, IFG, Invesco Aim, Invesco Aim Management and certain related entities, certain of their current and former officers and/or certain unrelated third parties and are based on allegations of improper market timing and related activity in the AIM Funds. These lawsuits either have been served or have had service of process waived (with the exception of the Sayegh lawsuit discussed below). RICHARD LEPERA, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., INVESCO BOND FUNDS, INC., INVESCO SECTOR FUNDS, INC. AND DOE DEFENDANTS 1-100, in the District Court, City and County of Denver, Colorado, (Civil Action No. 03-CV-7600), filed on October 2, 2003. This claim alleges: common law breach of fiduciary duty; common law breach of contract; and common law tortious interference with contract. The plaintiff in this case is seeking: compensatory and punitive damages; injunctive relief; disgorgement of revenues and profits; and costs and expenses, including counsel fees and expert fees. MIKE SAYEGH, ON BEHALF OF THE GENERAL PUBLIC, V. JANUS CAPITAL CORPORATION, JANUS CAPITAL MANAGEMENT LLC, JANUS INVESTMENT FUND, EDWARD J. STERN, CANARY CAPITAL PARTNERS LLC, CANARY INVESTMENT MANAGEMENT LLC, CANARY CAPITAL PARTNERS LTD., KAPLAN & CO. SECURITIES INC., BANK ONE CORPORATION, BANC ONE INVESTMENT ADVISORS, THE ONE GROUP MUTUAL FUNDS, BANK OF AMERICA CORPORATION, BANC OF AMERICA CAPITAL MANAGEMENT LLC, BANC OF AMERICA ADVISORS LLC, NATIONS FUND INC., ROBERT H. GORDON, THEODORE H. SIHPOL III, CHARLES D. BRYCELAND, SECURITY TRUST COMPANY, STRONG CAPITAL MANAGEMENT INC., JB OXFORD & COMPANY, ALLIANCE CAPITAL MANAGEMENT HOLDING L.P., ALLIANCE CAPITAL MANAGEMENT L.P., ALLIANCE CAPITAL MANAGEMENT CORPORATION, AXA FINANCIAL INC., ALLIANCEBERNSTEIN REGISTRANTS, GERALD MALONE, CHARLES SCHAFFRAN, MARSH & MCLENNAN COMPANIES, INC., PUTNAM INVESTMENTS TRUST, PUTNAM INVESTMENT MANAGEMENT LLC, PUTNAM INVESTMENT FUNDS, AND DOES 1-500, in the Superior Court of the State of California, County of Los Angeles (Case No. BC304655), filed on October 22, 2003 and amended on December 17, 2003 to substitute INVESCO Funds Group, Inc. and Raymond R. Cunningham for unnamed Doe defendants. This claim alleges unfair business practices and violations of Sections 17200 and 17203 of the California Business and Professions Code. The plaintiff in this case is seeking: injunctive relief; restitution, including pre-judgment interest; an accounting to determine the amount to be returned by the defendants and the amount to be refunded to the public; the creation of an administrative process whereby injured customers of the defendants receive their losses; and counsel fees. RAJ SANYAL, DERIVATIVELY ON BEHALF OF NATIONS INTERNATIONAL EQUITY FUND, V. WILLIAM P. CARMICHAEL, WILLIAM H. GRIGG, THOMAS F. KELLER, CARL E. MUNDY, JR., CORNELIUS J. PINGS, A. MAX WALKER, CHARLES B. WALKER, EDMUND L. BENSON, III, ROBERT H. GORDON, JAMES B. SOMMERS, THOMAS S. WORD, JR., EDWARD D. BEDARD, GERALD MURPHY, ROBERT B. CARROLL, INVESCO GLOBAL ASSET MANAGEMENT, PUTNAM INVESTMENT MANAGEMENT, BANK OF AMERICA CORPORATION, MARSICO CAPITAL MANAGEMENT, LLC, BANC OF AMERICA ADVISORS, LLC, BANC OF AMERICA CAPITAL MANAGEMENT, LLC, AND NATIONS FUNDS TRUST, in the Superior Court Division, State of North Carolina (Civil Action No. 03-CVS-19622), filed on November 14, 2003. P-1 This claim alleges common law breach of fiduciary duty; abuse of control; gross mismanagement; waste of fund assets; and unjust enrichment. The plaintiff in this case is seeking: injunctive relief, including imposition of a constructive trust; damages; restitution and disgorgement; and costs and expenses, including counsel fees and expert fees. L. SCOTT KARLIN, DERIVATIVELY ON BEHALF OF INVESCO FUNDS GROUP, INC. V. AMVESCAP, PLC, INVESCO, INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, AND CANARY CAPITAL PARTNERS, LTD., in the United States District Court, District of Colorado (Civil Action No. 03-MK-2406), filed on November 28, 2003. This claim alleges violations of Section 36(b) of the Investment Company Act of 1940 ("Investment Company Act"), and common law breach of fiduciary duty. The plaintiff in this case is seeking damages and costs and expenses, including counsel fees and expert fees. RICHARD RAVER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC, AIM MANAGEMENT GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP PLC, INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP VALUE FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL PARTNERS, LLC, AND DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 03-F-2441), filed on December 2, 2003. This claim alleges violations of: Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act"); Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"); Rule 10b-5 under the Exchange Act; and Sections 34(b), 36(a) and 36(b) of the Investment Company Act. The claim also alleges common law breach of fiduciary duty. The plaintiffs in this case are seeking: damages; pre-judgment and post-judgment interest; counsel fees and expert fees; and other relief. JERRY FATTAH, CUSTODIAN FOR BASIM FATTAH, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURER'S MONEY MARKET RESERVE FUND, AIM INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO U.S. GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO P-2 GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO, INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 03-F-2456), filed on December 4, 2003. This claim alleges violations of: Sections 11 and 15 of Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the Investment Advisers Act of 1940, as amended (the "Advisers Act"). The plaintiffs in this case are seeking: compensatory damages; rescission; return of fees paid; accounting for wrongfully gotten gains, profits and compensation; restitution and disgorgement; and other costs and expenses, including counsel fees and expert fees. EDWARD LOWINGER AND SHARON LOWINGER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURER'S MONEY MARKET RESERVE FUND, AIM INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO U.S. GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO; INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court, Southern District of New York (Civil Action No. 03-CV-9634), filed on December 4, 2003. This claim alleges violations of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the Advisers Act. The plaintiffs in this case are seeking: compensatory damages; rescission; return of fees paid; accounting for wrongfully gotten gains, profits and compensation; restitution and disgorgement; and other costs and expenses, including counsel fees and expert fees. P-3 JOEL GOODMAN, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC. AND RAYMOND R. CUNNINGHAM, in the District Court, City and County of Denver, Colorado (Case Number 03CV9268), filed on December 5, 2003. This claim alleges common law breach of fiduciary duty and aiding and abetting breach of fiduciary duty. The plaintiffs in this case are seeking: injunctive relief; accounting for all damages and for all profits and any special benefits obtained; disgorgement; restitution and damages; costs and disbursements, including counsel fees and expert fees; and equitable relief. STEVEN B. EHRLICH, CUSTODIAN FOR ALEXA P. EHRLICH, UGTMA/FLORIDA, AND DENNY P. JACOBSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURERS MONEY MARKET RESERVE FUND, AIM INVESCO TREASURERS TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 03-N-2559), filed on December 17, 2003. This claim alleges violations of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the Advisers Act. The plaintiffs in this case are seeking: compensatory damages; rescission; return of fees paid; accounting for wrongfully gotten gains, profits and compensation; restitution and disgorgement; and other costs and expenses, including counsel fees and expert fees. JOSEPH R. RUSSO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURERS MONEY MARKET RESERVE FUND, P-4 AIM INVESCO TREASURERS TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court, Southern District of New York (Civil Action No. 03-CV-10045), filed on December 18, 2003. This claim alleges violations of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the Advisers Act. The plaintiffs in this case are seeking: compensatory damages; rescission; return of fees paid; accounting for wrongfully gotten gains, profits and compensation; restitution and disgorgement; and other costs and expenses, including counsel fees and expert fees. MIRIAM CALDERON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. AMVESCAP PLC, AVZ, INC., AMVESCAP RETIREMENT, INC., AMVESCAP NATIONAL TRUST COMPANY, ROBERT F. MCCULLOUGH, GORDON NEBEKER, JEFFREY G. CALLAHAN, INVESCO FUNDS GROUP, INC., RAYMOND R. CUNNINGHAM, AND DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 03-M-2604), filed on December 24, 2003. This claim alleges violations of Sections 404, 405 and 406B of the Employee Retirement Income Security Act ("ERISA"). The plaintiffs in this case are seeking: declarations that the defendants breached their ERISA fiduciary duties and that they are not entitled to the protection of Section 404(c)(1)(B) of ERISA; an order compelling the defendants to make good all losses to a particular retirement plan described in this case (the "Retirement Plan") resulting from the defendants' breaches of their fiduciary duties, including losses to the Retirement Plan resulting from imprudent investment of the Retirement Plan's assets, and to restore to the Retirement Plan all profits the defendants made through use of the Retirement Plan's assets, and to restore to the Retirement Plan all profits which the participants would have made if the defendants had fulfilled their fiduciary obligations; damages on behalf of the Retirement Plan; imposition of a constructive trust, injunctive relief, damages suffered by the Retirement Plan, to be allocated proportionately to the participants in the Retirement Plan; restitution and other costs and expenses, including counsel fees and expert fees. PAT B. GORSUCH AND GEORGE L. GORSUCH V. INVESCO FUNDS GROUP, INC. AND AIM ADVISER, INC., in the United States District Court, District of Colorado (Civil Action No. 03-MK-2612), filed on December 24, 2003. This claim alleges violations of Sections 15(a), 20(a) and 36(b) of the Investment Company Act. The plaintiffs in this case are seeking: rescission and/or voiding of the investment advisory agreements; return of fees paid; damages; and other costs and expenses, including counsel fees and expert fees. LORI WEINRIB, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION P-5 STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC., AMVESCAP PLC, TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court, Southern District of New York (Civil Action No. 04-CV-00492), filed on January 21, 2004. This claim alleges violations of: Sections 11 and 15 of the 1933 Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the Advisers Act. The plaintiffs in this case are seeking: compensatory damages; rescission; return of fees paid; accounting for wrongfully gotten gains, profits and compensation; restitution and disgorgement; and other costs and expenses, including counsel fees and expert fees. ROBERT S. BALLAGH, JR., INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., AIM MANAGEMENT GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP PLC, INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP VALUE FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL PARTNERS, LLC, AND DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 04-MK-0152), filed on January 28, 2004. This claim alleges violations of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Sections 34(b), 36(a) and 36(b) of the Investment Company Act. The claim also alleges common law breach of fiduciary duty. The plaintiffs in this case are seeking: damages; pre-judgment and post-judgment interest; counsel fees and expert fees; and other relief. JONATHAN GALLO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., AIM MANAGEMENT GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP PLC, INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP VALUE FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY P-6 INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL PARTNERS, LLC, AND DOES 1-100, in the United States District Court, District of Colorado (Civil Action No. 04-MK-0151), filed on January 28, 2004. This claim alleges violations of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange Act; and Sections 34(b), 36(a) and 36(b) of the Investment Company Act. The claim also alleges common law breach of fiduciary duty. The plaintiffs in this case are seeking: damages; pre-judgment and post-judgment interest; counsel fees and expert fees; and other relief. EILEEN CLANCY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURER'S MONEY MARKET RESERVE FUND, AIM INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO, INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM AND THOMAS KOLBE, in the United States District Court, Southern District of New York (Civil Action No. 04-CV-0713), filed on January 30, 2004. This claim alleges violations of Sections 11 and 15 of the Securities Act. The plaintiffs in this case are seeking: compensatory damages, rescission; return of fees paid; and other costs and expenses, including counsel fees and expert fees. SCOTT WALDMAN, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO DYNAMICS FUND, INVESCO EUROPEAN FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC., AMVESCAP PLC, AND RAYMOND CUNNINGHAM, in the United States District Court, Southern District of New York (Civil Action No. 04-CV-00915), filed on February 3, 2004. This claim alleges violations of Sections 11 and 15 of the Securities Act and common law breach of fiduciary duty. The plaintiffs in this case are seeking compensatory damages; injunctive relief; and costs and expenses, including counsel fees and expert fees. CARL E. VONDER HAAR AND MARILYN P. MARTIN, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC. AND DOE DEFENDANTS 1-100, in the United States District Court, District of Colorado (Civil Action No. 04-CV-812), filed on February 5, 2004. This claim P-7 alleges: common law breach of fiduciary duty; breach of contract; and tortious interference with contract. The plaintiffs in this case are seeking: injunctive relief; damages; disgorgement; and costs and expenses, including counsel fees and expert fees. HENRY KRAMER, DERIVATIVELY ON BEHALF OF INVESCO ENERGY FUND, INVESCO STOCK FUNDS, INC., AND INVESCO MUTUAL FUNDS V. AMVESCAP, PLC, INVESCO FUNDS GROUP, INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, AND CANARY CAPITAL PARTNERS, LTD., DEFENDANTS, AND INVESCO ENERGY FUND, INVESCO STOCK FUNDS, INC., AND INVESCO MUTUAL FUNDS, NOMINAL DEFENDANTS, in the United States District Court, District of Colorado (Civil Action No. 04-MK-0397), filed on March 4, 2004. This claim alleges violations of Section 36(b) of the Investment Company Act and common law breach of fiduciary duty. The plaintiff in this case is seeking damages and costs and expenses, including counsel fees and expert fees. CYNTHIA L. ESSENMACHER, DERIVATIVELY ON BEHALF OF THE INVESCO DYNAMICS FUND AND THE REMAINING "INVESCO FUNDS" V. INVESCO FUNDS GROUPS, INC., AMVESCAP PLC, AIM MANAGEMENT GROUP, INC., RAYMOND CUNNINGHAM, TIMOTHY MILLER, THOMAS KOLBE AND MICHAEL LEGOSKI, DEFENDANTS, AND INVESCO DYNAMICS FUND AND THE "INVESCO FUNDS", NOMINAL DEFENDANTS, in the United States District Court, District of Delaware (Civil Action No. 04-CV-188), filed on March 29, 2004. This claim alleges: violations of Section 36(b) of the Investment Company Act; violations of Section 206 of the Advisers Act; common law breach of fiduciary duty; and civil conspiracy. The plaintiff in this case is seeking: damages; injunctive relief; and costs and expenses, including counsel fees and expert fees. ANNE G. PERENTESIS (WIDOW) V. AIM INVESTMENTS, ET AL (INVESCO FUNDS GROUP, INC.), in the District Court of Maryland for Baltimore County (Case No. 080400228152005), filed on July 21, 2005. This claim alleges financial losses, mental anguish and emotional distress as a result of unlawful market timing and related activity by the defendants. The plaintiff in this case is seeking damages and costs and expenses. Pursuant to an Order of the MDL Court, plaintiffs in the above lawsuits (with the exception of Carl E. Vonder Haar, et al. v. INVESCO Funds Group, Inc. et al. and Mike Sayegh v. Janus Capital Corporation, et al.) consolidated their claims for pre-trial purposes into three amended complaints against various Invesco Aim- and IFG-related parties: (i) a Consolidated Amended Class Action Complaint purportedly brought on behalf of shareholders of the AIM Funds (the Lepera lawsuit discussed below); (ii) a Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of the AIM Funds and fund registrants (the Essenmacher lawsuit discussed below); and (iii) an Amended Class Action Complaint for Violations of the Employee Retirement Income Securities Act ("ERISA") purportedly brought on behalf of participants in Invesco's 401(k) plan (the Calderon lawsuit discussed below). The plaintiffs in the Vonder Haar and Sayegh lawsuits continue to seek remand of their lawsuits to state court. Set forth below is detailed information about these three amended complaints. RICHARD LEPERA, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED (LEAD PLAINTIFF: CITY OF CHICAGO DEFERRED COMPENSATION PLAN), V. INVESCO FUNDS GROUP, INC., AMVESCAP, PLC, AIM INVESTMENTS, AIM ADVISORS, INC., INVESCO INSTITUTIONAL (N.A.), INC., INVESCO ASSETS MANAGEMENT LIMITED, INVESCO GLOBAL ASSETS MANAGEMENT (N.A.), AIM STOCK FUNDS, AIM MUTUAL FUNDS, AIM COMBINATION STOCK & BOND FUNDS, AIM SECTOR FUNDS, AIM TREASURER'S SERIES TRUST, INVESCO DISTRIBUTORS, INC., AIM DISTRIBUTORS, INC., RAYMOND R. CUNNINGHAM, TIMOTHY J. MILLER, THOMAS A. KOLBE, MICHAEL D. LEGOSKI, MICHAEL K. P-8 BRUGMAN, MARK WILLIAMSON, EDWARD J. STERN, CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., RYAN GOLDBERG, MICHAEL GRADY, CITIGROUP, INC., CITIGROUP GLOBAL MARKETS HOLDINGS, INC., SALOMON SMITH BARNEY, INC., MORGAN STANLEY DW, ANNA BRUGMAN, ANB CONSULTING, LLC, KAPLAN & CO. SECURITIES INC., SECURITY TRUST COMPANY, N.A., GRANT D. SEEGER, JB OXFORD HOLDINGS, INC., NATIONAL CLEARING CORPORATION, JAMES G. LEWIS, KRAIG L. KIBBLE, JAMES Y. LIN, BANK OF AMERICA CORPORATION, BANC OF AMERICA SECURITIES LLC, THEODORE C. SIHPOL, III, BEAR STEARNS & CO., INC., BEAR STEARNS SECURITIES CORP., CHARLES SCHWAB & CO., CREDIT SUISSE FIRST BOSTON (USA) INC., PRUDENTIAL FINANCIAL, INC., PRUDENTIAL SECURITIES, INC., CANADIAN IMPERIAL BANK OF COMMERCE, JP MORGAN CHASE AND CO., AND JOHN DOE DEFENDANTS 1-100, in the MDL Court (Case No. 04-MD-15864; No. 04-CV-00814-JFM) (originally in the United States District Court for the District of Colorado), filed on September 29, 2004. This lawsuit alleges violations of Sections 11, 12(a) (2), and 15 of the Securities Act; Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; Section 20(a) of the Exchange Act; Sections 34(b), 36(a), 36(b) and 48(a) of the Investment Company Act; breach of fiduciary duty/constructive fraud; aiding and abetting breach of fiduciary duty; and unjust enrichment. The plaintiffs in this lawsuit are seeking: compensatory damages, including interest; and other costs and expenses, including counsel and expert fees. CYNTHIA ESSENMACHER, SILVANA G. DELLA CAMERA, FELICIA BERNSTEIN AS CUSTODIAN FOR DANIELLE BROOKE BERNSTEIN, EDWARD CASEY, TINA CASEY, SIMON DENENBERG, GEORGE L. GORSUCH, PAT B. GORSUCH, L. SCOTT KARLIN, HENRY KRAMER, JOHN E. MORRISEY, HARRY SCHIPPER, BERTY KREISLER, GERSON SMITH, CYNTHIA PULEO, ZACHARY ALAN STARR, JOSHUA GUTTMAN, AND AMY SUGIN, DERIVATIVELY ON BEHALF OF THE MUTUAL FUNDS, TRUSTS AND CORPORATIONS COMPRISING THE INVESCO AND AIM FAMILY OF MUTUAL FUNDS V. AMVESCAP, PLC, INVESCO FUNDS GROUP, INC., INVESCO DISTRIBUTORS, INC., INVESCO INSTITUTIONAL (N.A.), INC., INVESCO ASSETS MANAGEMENT LIMITED, INVESCO GLOBAL ASSETS MANAGEMENT (N.A.), AIM MANAGEMENT GROUP, INC., AIM ADVISERS, INC., AIM INVESTMENT SERVICES, INC., AIM DISTRIBUTORS, INC., FUND MANAGEMENT COMPANY, MARK H. WILLIAMSON, RAYMOND R. CUNNINGHAM, TIMOTHY MILLER, THOMAS KOLBE, MICHAEL LEGOSKI, MICHAEL BRUGMAN, FRED A. DEERING, VICTOR L. ANDREWS, BOB R. BAKER, LAWRENCE H. BUDNER, JAMES T. BUNCH, GERALD J. LEWIS, JOHN W. MCINTYRE, LARRY SOLL, RONALD L. GROOMS, WILLIAM J. GALVIN, JR., ROBERT H. GRAHAM, FRANK S. BAYLEY, BRUCE L. CROCKETT, ALBERT R. DOWDEN, EDWARD K. DUNN, JACK M. FIELDS, CARL FRISCHILING, PREMA MATHAI-DAVIS, LEWIS F. PENNOCK, RUTH H. QUIGLEY, LOUIS S. SKLAR, OWEN DALY II, AURUM SECURITIES CORP., AURUM CAPITAL MANAGEMENT CORP., GOLDEN GATE FINANCIAL GROUP, LLC, BANK OF AMERICA CORP., BANC OF AMERICA SECURITIES LLC, BANK OF AMERICA, N.A., BEAR STEARNS & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY INVESTMENT MANAGEMENT, LLC, EDWARD J. STERN, CANADIAN IMPERIAL BANK OF COMMERCE, CIRCLE TRUST COMPANY, RYAN GOLDBERG, MICHAEL GRADY, KAPLAN & CO. SECURITIES, INC., JP MORGAN CHASE & CO., OPPENHEIMER & CO., INC., PRITCHARD CAPITAL PARTNERS LLC, TIJA MANAGEMENT, TRAUTMAN WASSERMAN & COMPANY, INC., DEFENDANTS, AND THE INVESCO FUNDS AND THE AIM FUNDS AND ALL TRUSTS AND CORPORATIONS THAT COMPRISE THE INVESCO FUNDS AND AIM FUNDS THAT WERE MANAGED BY INVESCO AND AIM, NOMINAL DEFENDANTS, in the MDL Court (Case No. 04-MD-15864-FPS; No. 04-819), filed on September 29, 2004. This lawsuit alleges violations of Sections 206 and 215 of the Investment Advisers Act; Sections P-9 36(a), 36(b) and 47 of the Investment Company Act; control person liability under Section 48 of the Investment Company Act; breach of fiduciary duty; aiding and abetting breach of fiduciary duty; breach of contract; unjust enrichment; interference with contract; and civil conspiracy. The plaintiffs in this lawsuit are seeking: removal of director defendants; removal of adviser, sub-adviser and distributor defendants; rescission of management and other contracts between the Funds and defendants; rescission of 12b-1 plans; disgorgement of management fees and other compensation/profits paid to adviser defendants; compensatory and punitive damages; and fees and expenses, including attorney and expert fees. MIRIAM CALDERON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. AVZ, INC., AMVESCAP RETIREMENT, INC., AMVESCAP NATIONAL TRUST COMPANY, INVESCO FUNDS GROUP, INC., AMVESCAP, ROBERT F. MCCULLOUGH, GORDON NEBEKER, JEFFREY G. CALLAHAN, AND RAYMOND R. CUNNINGHAM, in the MDL Court (Case No. 1:04-MD-15864-FPS), filed on September 29, 2004. This lawsuit alleges violations of ERISA Sections 404, 405 and 406. The plaintiffs in this lawsuit are seeking: declaratory judgment; restoration of losses suffered by the plan; disgorgement of profits; imposition of a constructive trust; injunctive relief; compensatory damages; costs and attorneys' fees; and equitable restitution. On March 1, 2006, the MDL Court entered orders on Defendants' Motions to dismiss in the derivative (Essenmacher) and class action (Lepera) lawsuits. The MDL Court dismissed all derivative causes of action in the Essenmacher lawsuit but two: (i) the excessive fee claim under Section 36(b) of the Investment Company Act of 1940 (the "1940 Act"); and (ii) the "control person liability" claim under Section 48 of the 1940 Act. The MDL Court dismissed all claims asserted in the Lepera class action lawsuit but three: (i) the securities fraud claims under Section 10(b) of the Securities Exchange Act of 1934; (ii) the excessive fee claim under Section 36(b) of the 1940 Act (which survived only insofar as plaintiffs seek recovery of fees associated with the assets involved in market timing); and (iii) the "control person liability" claim under Section 48 of the 1940 Act. On June 14, 2006, the MDL Court entered an order dismissing the Section 48 claim in the derivative (Essenmacher) lawsuit. Based on the MDL Court's March 1, 2006 and June 14, 2006 orders, all claims asserted against the Funds that have been transferred to the MDL Court have been dismissed, although certain Funds remain nominal defendants in the derivative (Essenmacher) lawsuit. Defendants filed their Original Answer in the class action (Lepera) lawsuit on March 31, 2006. The MDL Court has indefinitely deferred Defendants' obligation to answer the derivative (Essenmacher) lawsuit. The Plaintiffs in the class action (Lepera) lawsuit stipulated that their claims against Invesco Aim, Invesco Aim Distributors and Invesco Aim Investment Services, Inc. ("Invesco Aim Investment Services") are based solely on successor liability for alleged timing in the AIM Funds formerly advised by IFG and that they are not making any claims based on alleged timing in the other AIM Funds. Based upon this stipulation, Invesco Aim withdrew its pending Motion to Dismiss the claims against Invesco Aim, Invesco Aim Distributors and Invesco Aim Investment Services. On July 3, 2007, the Defendants filed an Omnibus Motion to Dismiss in both the class action (Lepera) and derivative (Essenmacher) lawsuits based on Plaintiffs' lack of standing to sue for injuries to funds the Plaintiffs do not own. On October 19, 2007, Judge Motz for the MDL Court denied the Defendants' Motion to Dismiss. On September 15, 2006, Judge Motz for the MDL Court granted the Defendants' motion to dismiss the ERISA (Calderon) lawsuit and dismissed such lawsuit. The Plaintiff has commenced an appeal from Judge Motz's decision. P-10 APPENDIX P-2 PENDING LITIGATION ALLEGING INADEQUATELY EMPLOYED FAIR VALUE PRICING The following civil class action lawsuits involve, depending on the lawsuit, one or more AIM Funds, IFG and/or Invesco Aim and allege that the defendants inadequately employed fair value pricing. These lawsuits either have been served or have had service of process waived. T.K. PARTHASARATHY, EDMUND WOODBURY, STUART ALLEN SMITH AND SHARON SMITH, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. T. ROWE PRICE INTERNATIONAL FUNDS, INC., T. ROWE PRICE INTERNATIONAL, INC., ARTISAN FUNDS, INC., ARTISAN PARTNERS LIMITED PARTNERSHIP, AIM INTERNATIONAL FUNDS, INC. AND AIM ADVISORS, INC., in the Third Judicial Circuit Court for Madison County, Illinois (Case No. 2003-L-001253), filed on September 23, 2003. This claim alleges: common law breach of duty and common law negligence and gross negligence. The plaintiffs in these cases are seeking: compensatory and punitive damages; interest; and attorneys' fees and costs. The Third Judicial Circuit Court for Madison County, Illinois has issued an order severing the claims of plaintiff Parthasarathy from the claims of the other plaintiffs against Invesco Aim and other defendants. As a result, Invesco Aim is a defendant in the following severed action: EDMUND WOODBURY, STUART ALLEN SMITH and SHARON SMITH, Individually and On Behalf of All Others Similarly Situated, v. AIM INTERNATIONAL FUNDS, INC., ET AL., in the Third Judicial Circuit Court for Madison County, Illinois (Case No. 03-L-1253A). The claims made by Plaintiffs and the relief sought in the Woodbury lawsuit are identical to those in the Parthasarathy lawsuit. Based on a recent Federal appellate court decision (the "Kircher" case), Invesco Aim and the other defendants in the Woodbury lawsuit removed the action to Federal District Court (U.S. District Court, Southern District of Illinois, Cause No. 05-CV-302-DRH) on April 22, 2005. On June 10, 2005, the Court dismissed the Woodbury lawsuit based upon the Kircher ruling and ordered the court clerk to close this case. On August 27, 2005, Plaintiffs filed their Notice of Appeal. On September 2, 2005, the Federal Appellate Court consolidated the nine cases on this subject matter, including the case against Invesco Aim. Invesco Aim has submitted a statement to the Federal Appellate Court asserting that the U.S. Supreme Court's holding in the Dabit case mandates the dismissal of the Plaintiffs' appeals. The appeals were vacated and the suit remanded back to Illinois state court. The Defendants removed the suit to Federal District Court and the parties are contesting whether the proper venue for this action is the Federal District Court or the Illinois state court. On July 17, 2007, the Court lifted the Stay and ordered this case remanded back to Illinois State Court. On August 10, 2007, the Defendants filed their Motion to Dismiss this suit in the Illinois State Court. JOHN BILSKI, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. AIM INTERNATIONAL FUNDS, INC., AIM ADVISORS, INC., INVESCO INTERNATIONAL FUNDS, INC., INVESCO FUNDS GROUP, INC., T. ROWE PRICE INTERNATIONAL FUNDS, INC. AND T. ROWE PRICE INTERNATIONAL, INC., in the United States District Court, Southern District of Illinois (East St. Louis) (Case No. 03-772), filed on November 19, 2003. This claim alleges: violations of Sections 36(a) and 36(b) of the Investment Company Act of 1940; common law breach of duty; and common law negligence and gross negligence. The plaintiff in this case is seeking: compensatory and punitive damages; interest; and attorneys' fees and costs. This lawsuit has been transferred to the MDL Court by order of the United States District Court, Southern District of Illinois (East St. Louis). P-11 PART C OTHER INFORMATION Item 23. Exhibits a (1) - (a) Amended and Restated Agreement and Declaration of Trust of the Registrant, dated September 14, 2005.(18) - (b) Amendment No. 1, dated May 24, 2006, to the Amended and Restated Agreement and Declaration of Trust of the Registrant.(20) - (c) Amendment No. 2, dated July 5, 2006, to the Amended and Restated Agreement and Declaration of Trust of the Registrant.(20) - (d) Amendment No. 3, dated January 17, 2008, to the Amended and Restated Agreement and Declaration of Trust of the Registrant.(23) - (e) Form of Amendment No. 4, dated May 1, 2008, to the Amended and Restated Agreement and Declaration of Trust of the Registrant.(23) b (1) - (a) Amended and Restated Bylaws, adopted effective September 14, 2005.(18) - (b) Amendment, dated August 1, 2006, to the Bylaws of the Registrant.(20) - (c) Amendment, dated March 23, 2007, to the Bylaws of the Registrant.(22) - (d) Amendment, dated January 1, 2008, to the Bylaws of the Registrant.(22) c - Articles II, VI, VII, VIII and IX of the Amended and Restated Agreement and Declaration of Trust, as amended, and Articles IV, V and VI of the Amended and Restated Bylaws, as amended, define rights of holders of shares. d (1) - (a) Master Investment Advisory Agreement, dated November 25, 2003, between A I M Advisors, Inc. and Registrant.(13) - (b) Amendment No. 1, dated October 15, 2004, to Master Investment Advisory Agreement.(16) - (c) Amendment No. 2, dated July 1, 2007, to Master Investment Advisory Agreement.(22) (2) - Master Intergroup Sub-Advisory contract for Mutual Funds, dated November 25, 2003, between A I M Advisors, Inc. and INVESCO Global Asset Management (N.A.), Inc. on behalf of INVESCO International Core Equity Fund.(13) (3) - Form of Master Intergroup Sub-Advisory Contract for Mutual Funds, dated [May 1, 2008] between Invesco Aim Advisors, Inc., on behalf of Registrant, and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Ltd., Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Investment Management Inc. (23) e (1) - (a) First Restated Master Distribution Agreement, made as of August 18, 2003, as C-1 subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(20) - (b) Amendment No. 1, dated December 8, 2006, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(20) - (c) Amendment No. 2, dated January 31, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(20) - (d) Amendment No. 3, dated February 28, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(21) - (e) Amendment No. 4, dated March 9, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(21) - (f) Amendment No. 5, dated April 23, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(21) - (g) Amendment No. 6, dated September 28, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(22) - (h) Amendment No. 7, dated December 20, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (all classes of shares except Class B shares) and A I M Distributors, Inc.(22) (2) - (a) First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (Class B shares) and A I M Distributors, Inc.(20) - (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (Class B shares) and A I M Distributors, Inc.(20) - (c) Amendment No. 2, dated February 28, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (Class B shares) and A I M Distributors, Inc.(22) - (d) Amendment No. 3, dated March 9, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (Class B shares) and A I M Distributors, Inc.(22) C-2 - (e) Amendment No. 4, dated April 23, 2007, to the First Restated Master Distribution Agreement, made as of August 18, 2003, as subsequently amended, and as restated September 20, 2006, by and between Registrant (Class B shares) and A I M Distributors, Inc.(22) (3) - Form of Selected Dealer Agreement for Investment Companies Managed by A I M Advisors, Inc.(6) (4) - Form of Bank Acting as Agent for its Customers between A I M Distributors, Inc. and banks.(3) f (1) - AIM Funds Retirement Plan for Eligible Directors/Trustees, March 8, 1994, as restated January 1, 2005.(20) (2) - Form of AIM Funds Director Deferred Compensation Agreement, as amended March 7, 2000, September 28, 2001 and September 26, 2002.(10) g (1) - (a) Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(5) - (b) Amendment, dated as of May 1, 2000, to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(5) - (c) Amendment, dated as of June 29, 2001, to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(9) - (d) Amendment, dated as of April 2, 2002, to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(10) - (e) Amendment, dated as of September 8, 2004 to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(16) - (f) Amendment, dated as of February 8, 2006, to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(19) - (g) Amendment, dated as of January 31, 2007, to Master Custodian Contract, dated May 1, 2000, between Registrant and State Street Bank and Trust Company.(20) (2) - (a) Subcustodian Agreement with Texas Commerce Bank, dated September 9, 1994, among Texas Commerce Bank National Association, State Street Bank and Trust Company, A I M Fund Services, Inc. and Registrant.(1) - (b) Amendment No. 1, dated October 2, 1998, to Subcustodian Agreement with Chase Bank of Texas, N.A. (formerly, Texas Commerce Bank) among Chase Bank of Texas, N.A. (formerly, Texas Commerce Bank), State Street Bank and Trust Company, A I M Fund Services, Inc. and Registrant.(4) - (c) Amendment No. 2, dated March 15, 2002, to Subcustodian Agreement, dated September 9, 1994, with JPMorgan Chase Bank (formerly known as the Chase Manhattan Bank, successor-in-interest by merger to Chase Bank of Texas, N.A.), State Street Bank and Trust Company, A I M Fund Services, Inc. and Registrant.(17) - (d) Amendment No. 3, dated May 1, 2004 to Subcustodian Agreement, dated September 9, 1994, with JP Morgan Chase Bank (formerly known as the Chase Manhattan Bank, successor-in-interest by merger to Chase Bank of Texas, N.A.), C-3 State Street Bank and Trust Company, A I M Fund Services, Inc. and Registrant.(19) (3) - Foreign Assets Delegation Agreement, dated November 6, 2006, between A I M Advisors, Inc. and Registrant.(22) h (1) - (a) Third Amended and Restated Transfer Agency and Service Agreement, dated July 1, 2006, between Registrant and AIM Investment Services, Inc.(20) - (b) Amendment No. 1, dated July 1, 2007, to Third Amended and Restated Transfer Agency and Service Agreement, dated July 1, 2006, between Registrant and AIM Investment Services, Inc.(22) (2) - Amended and Restated Master Administrative Services Agreement, dated July 1, 2006, between A I M Advisors, Inc. and Registrant.(20) (3) - Shareholder Sub-Accounting Services Agreement, dated as of October 1, 1993, among the Registrant, First Data Investor Services Group (formerly The Shareholder Services Group, Inc.), Financial Data Services, Inc. and Merrill Lynch Pierce Fenner & Smith, Inc.(1) (4) - Memorandum of Agreement, regarding securities lending, dated July 1, 2007, between Registrant and A I M Advisors, Inc.(22) (5) - Memorandum of Agreement, regarding affiliated money market fund fee waiver, dated July 1, 2007, between Registrant and A I M Advisors, Inc.(22) (6) - Third Amended and Restated Interfund Loan Agreement, dated December 30, 2005, between A I M Advisors, Inc. and Registrant.(20) i - Legal opinion - None. j (1) - Consent of Ballard Spahr Andrews & Ingersoll, LLP.(23) (2) - Consent of PricewaterhouseCoopers LLP.(23) k - Financial Statements for the period ended October 31, 2007 is incorporated by reference to the Funds' annual report to shareholders contained in the Registrant's Form N-CSR filed on January 4, 2008. l (1) - (a) Initial Capitalization Agreement, dated as of July 1, 1994, for AIM Global Aggressive Growth Fund, AIM Global Growth Fund and AIM Global Income Fund.(1) - (b) Initial Capitalization Agreement, dated November 3, 1997, for AIM Asian Growth Fund and AIM European Development Fund.(2) - (c) Initial Capitalization Agreement, dated September 28, 2007, for Institutional Class shares of AIM Global Aggressive Growth Fund and AIM Global Growth Fund.(22) m (1) - (a) First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class A shares).(20) - (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class A shares).(20) C-4 - (c) Amendment No. 2, dated February 28, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class A shares).(22) - (d) Amendment No. 3, dated March 9, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class A shares).(22) - (e) Amendment No. 4, dated April 23, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class A shares).(22) (2) - (a) First Restated Master Distribution Plan, effective as of August 18, 2003, and as restated September 20, 2006 (Class B shares) (Securitization Feature).(20) - (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, and as restated September 20, 2006 (Class B shares) (Securitization Feature).(20) - (c) Amendment No. 2, dated February 28, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, and as restated September 20, 2006 (Class B shares) (Securitization Feature).(22) - (d) Amendment No. 3, dated March 9, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, and as restated September 20, 2006 (Class B shares) (Securitization Feature).(22) - (e) Amendment No. 4, dated April 23, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, and as restated September 20, 2006 (Class B shares) (Securitization Feature).(22) (3) - (a) First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class C shares).(20) - (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class C shares).(20) - (c) Amendment No. 2, dated February 28, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class C shares).(22) - (d) Amendment No. 3, dated March 3, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class C shares).(22) - (e) Amendment No. 4, dated April 23, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class C shares).(22) (4) - (a) First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class R shares).(20) - (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Plan, effective as of August 18, 2003, as subsequently amended, and as restated September 20, 2006 (Class R shares).(20) C-5 (5) - (a) First Restated Master Distribution Plan (Compensation) effective as of July 1, 2004, as subsequently amended, and as restated September 20, 2006 (Investor Class shares).(20) - (b) Amendment No, 1, dated December 20, 2007, to the First Restated Master Distribution Plan (Compensation) effective as of July 1, 2006 (Investor Class shares).(22) (6) - First Restated Master Distribution Plan (Reimbursement) effective as of July 1, 2004, as subsequently amended, and as restated September 20, 2006 (Investor Class shares).(20) (7) - Master Related Agreement to First Restated Master Distribution Plan (Class A shares).(20) (8) - Master Related Agreement to First Restated Master Distribution Plan (Class C shares).(20) (9) - Master Related Agreement to First Restated Master Distribution Plan (Class R shares).(20) (10) - Master Related Agreement to First Restated Master Distribution Plan (Compensation) (Investor Class shares).(20) (11) - Master Related Agreement to Amended and Restated Master Distribution Plan (Reimbursement) (Investor Class shares).(20) n (1) - (a) Eleventh Amended and Restated Multiple Class Plan of The AIM Family of Funds(R) effective December 12, 2001 as amended and restated, December 8, 2006.(20) - (b) Twelfth Amended and Restated Multiple Class Plan of The AIM Family of Funds(R) effective December 12, 2001, as amended and restated December 7, 2007.(22) - (c) Thirteenth Amended and Restated Multiple Class Plan of The AIM Family of Funds(R) effective December 12, 2001, as amended and restated December 13, 2007.(22) o - Reserved. p (1) - AIM Funds, A I M Management Group Inc. Code of Ethics, adopted May 1, 1981, as last amended effective February 16, 2006, relating to A I M Management Group Inc. and any of its subsidiaries.(20) (2) - INVESCO Global Asset Management (N.A.), Inc. Code of Ethics, effective June 5, 2007.(22) (3) - Code of Ethics relating to INVESCO Asset Management (Japan) Limited.(23) (4) - INVESCO Code of Ethics, dated February 2008, relating to Invesco Global Asset Management (N.A.), Inc., Invesco Institutional (N.A.), Inc. and Invesco Senior Secured Management, Inc.(24) (5) - Invesco Staff Ethics and Personal Share Dealing, dated April 2007, relating to Invesco Hong Kong Limited.(23) C-6 (6) - INVESCO PLC Code of Conduct, revised July 2006, AIM Trimark Investments Addendum to the AMVESCAP Code of Conduct, revised April 2, 2007, Policy No. D-6 Gifts and Entertainment, revised April 2007, and Policy No. D-7 AIM Trimark Personal Trading Policy, revised March 2007, together the Code of Ethics relating to Invesco Trimark Investment Management Inc.(23) (7) - Code of Ethics relating to Invesco Asset Management Deutschland GmbH.(23) (8) - Code of Ethics relating to Invesco Asset Management Limited.(23) (9) - INVESCO PLC Code of Conduct, revised July 2006, relating to Invesco Australia Limited.(23) q - Powers of Attorney for Messrs. Baker, Bayley, Bunch, Crockett, Dowden, Fields, Flanagan, Frischling, Mathai-Davis, Pennock, Quigley, Soll, Stickel and Taylor.(21) (1) Incorporated by reference to PEA No. 9, filed on February 28, 1996. (2) Incorporated by reference to PEA No. 14, filed on February 20, 1998. (3) Incorporated by reference to PEA No. 15, filed on December 23, 1998. (4) Incorporated by reference to PEA No. 17, filed on February 23, 2000. (5) Incorporated by reference to PEA No. 21, filed on June 20, 2000. (6) Incorporated by reference to PEA No. 22, filed on February 22, 2001. (7) Incorporated by reference to PEA No. 23, filed on December 28, 2001. (8) Incorporated by reference to PEA No. 24, filed on February 22, 2002. (9) Incorporated by reference to PEA No. 25, filed on April 4, 2002. (10) Incorporated by reference to PEA No. 26, filed on February 26, 2003. (11) Incorporated by reference to PEA No. 28, filed on July 7, 2003. (12) Incorporated by reference to PEA No. 29 filed on August 29, 2003. (13) Incorporated by reference to PEA No. 31, filed on February 25, 2004. (14) Previously filed with PEA No. 22 to the Registration Statement of INVESCO International Funds, Inc. on February 13, 2003 and incorporated by reference herein. (Identical except for the name of the Registrant (AIM International Mutual Funds) and the date of the Agreement.) (15) Incorporated by reference to PEA No. 32, filed on March 1, 2004. (16) Incorporated by reference to PEA No. 33, filed on December 23, 2004. (17) Incorporated by reference to PEA No. 34, filed on February 28, 2005. (18) Incorporated by reference to PEA No. 35, filed on December 14, 2005. (19) Incorporated by reference to PEA No. 36, filed on February 23, 2006. (20) Incorporated by reference to PEA No. 37, filed on February 28, 2007. (21) Incorporated by reference to PEA No. 38, filed on July 28, 2007. (22) Incorporated by reference to PEA No. 39, filed on February 6, 2008. (23) Filed herewith electronically. (24) To be filed by amendment. Item 24. Persons Controlled by or Under Common Control With the Fund None. C-7 Item 25. Indemnification Indemnification provisions for officers, trustees, and employees of the Registrant are set forth in Article VIII of the Registrant's Amended and Restated Agreement and Declaration of Trust and Article VIII of its Amended and Restated Bylaws, and are hereby incorporated by reference. See Items 23(a) and (b) above. Under the Amended and Restated Agreement and Declaration of Trust, effective as of September 14, 2005, as amended, (i) Trustees or officers, when acting in such capacity, shall not be personally liable for any act, omission or obligation of the Registrant or any Trustee or officer except by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office with the Trust; (ii) every Trustee, officer, employee or agent of the Registrant shall be indemnified to the fullest extent permitted under the Delaware Statutory Trust act, the Registrant's Bylaws and other applicable law; (iii) in case any shareholder or former shareholder of the Registrant shall be held to be personally liable solely by reason of his being or having been a shareholder of the Registrant or any portfolio or class and not because of his acts or omissions or for some other reason, the shareholder or former shareholder (or his heirs, executors, administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or general successor) shall be entitled, out of the assets belonging to the applicable portfolio (or allocable to the applicable class), to be held harmless from and indemnified against all loss and expense arising from such liability in accordance with the Bylaws and applicable law. The Registrant, on behalf of the affected portfolio (or class), shall upon request by the shareholder, assume the defense of any such claim made against the shareholder for any act or obligation of that portfolio (or class). The Registrant and other investment companies and their respective officers and trustees are insured under a joint Mutual Fund Directors and Officers Liability Policy, issued by ICI Mutual Insurance Company and certain other domestic issuers, with limits up to $60,000,000 (plus an additional $20,000,000 limit that applies to independent directors/trustees only). Section 16 of the Master Investment Advisory Agreement between the Registrant and AIM provides that in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of AIM or any of its officers, directors or employees, that AIM shall not be subject to liability to the Registrant or to any series of the Registrant, or to any shareholder of any series of the Registrant for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. Any liability of AIM to any series of the Registrant shall not automatically impart liability on the part of AIM to any other series of the Registrant. No series of the Registrant shall be liable for the obligations of any other series of the Registrant. Section 7 of the Master Intergroup Sub-Advisory Contract For Mutual Funds between AIM and Invesco Global Asset Management (N.A.) Inc. (the "Sub-Advisory Contract") provides that the sub-advisor shall not be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by any series of the Registrant or the Registrant in connection with the matters to which the Sub-Advisory Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the sub-advisor in the performance by the sub-advisor of its duties or from reckless disregard by the sub-advisor of its obligations and duties under the Sub-Advisory Contract. C-8 Effective May 1, 2008, Section 9 of the Master Intergroup Sub-Advisory Contract for Mutual Funds (the "Sub-Advisory Contract") between Invesco Aim Advisors, Inc., on behalf of Registrant, and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited., Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Investment Management Inc. (each a "Sub-Advisor", collectively the "Sub-Advisors") provides that the Sub-Advisor shall not be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by any series of the Registrant or the Registrant in connection with the matters to which the Sub-Advisory Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-Advisor in the performance by the Sub-advisor of its duties or from reckless disregard by the Sub-Advisor of its obligations and duties under the Sub-Advisory Contract. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in connection with the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the shares being registered hereby, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 26. Business and Other Connections of Investment Advisor The only employment of a substantial nature of the Advisors' directors and officers is with the Advisors and its affiliated companies. For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and directors of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Ltd., Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Investment Management Inc. (each a "Sub-Advisor", collectively the "Sub-Advisors") reference is made to Form ADV filed under the Investment Advisers Act of 1940 by each Sub-Advisor herein incorporated by reference. Reference is also made to the caption "Fund Management - The Advisors" of the Prospectuses which comprises Part A of this Registration Statement, and to the discussion under the caption "Management of the Trust" of the Statement of Additional Information which comprises Part B of this Registration Statement, and to Item 27(b) of this Part C. C-9 Item 27. Principal Underwriters A I M Distributors, Inc., the Registrant's principal underwriter, also acts as a principal underwriter to the following investment companies: (a) AIM Core Allocation Portfolio Series AIM Counselor Series Trust AIM Equity Funds AIM Funds Group AIM Growth Series AIM Investment Funds AIM Investment Securities Funds AIM Sector Funds AIM Stock Funds AIM Summit Fund AIM Tax-Exempt Funds AIM Treasurer's Series Trust AIM Variable Insurance Funds PowerShares Exchange-Traded Fund Trust PowerShares Exchange-Traded Fund Trust II Short-Term Investments Trust Tax-Free Investments Trust (b) The following table sets forth information with respect to each director, officer or partner of A I M Distributors, Inc.
Name and Principal Position and Offices Positions and Offices Business Address* with Underwriter with Registrant - ------------------ ------------------------------------ ---------------------------------- Philip A. Taylor Director Trustee, President and Principal Executive Officer John S. Cooper President None William Hoppe, Jr. Executive Vice President None Karen Dunn Kelley Executive Vice President Vice President Brian Lee Executive Vice President None Ben Utt Executive Vice President None Patrick R. Bray Senior Vice President None Michael A. Bredlau Senior Vice President None LuAnn S. Katz Senior Vice President None Ivy B. McLemore Senior Vice President None Lyman Missimer III Senior Vice President Assistant Vice President David J. Nardecchia Senior Vice President None
C-10 Margaret A. Vinson Senior Vice President None Gary K. Wendler Director & Senior Vice President None Scott B. Widder Senior Vice President None John M. Zerr Director, Senior Vice President & Senior Vice President, Secretary & Secretary Chief Legal Officer David A. Hartley Treasurer & Chief Financial Officer None Rebecca Starling-Klatt Chief Compliance Officer & Assistant None Vice President Lance A. Rejsek Anti-Money Laundering Anti-Money Laundering Compliance Officer Compliance Officer
- ---------- * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 (c) Not applicable. C-11 Item 28. Location of Accounts and Records A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, will maintain physical possession of each such account, book or other document of the Registrant at its principal executive offices, except for those maintained at the offices of Invesco Global Asset Management (N.A.), Inc., 1360 Peachtree Street, Suite 100, Atlanta, Georgia 30309, and except for those relating to certain transactions in portfolio securities that are maintained by the Registrant's Custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, and the Registrant's Transfer Agent and Dividend Paying Agent, AIM Investment Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739. Effective May 1, 2008, records may also be maintained at the offices of: Invesco Asset Management Deutschland GmbH Bleichstrasse 60-62 Frankfurt, Germany 60313 Invesco Asset Management Ltd. 30 Finsbury Square London, United Kingdom EC2A 1AG Invesco Asset Management (Japan) Limited 25th Floor, Shiroyama Trust Tower 3-1, Toranoman 4-chome, Minato-Ku Tokyo, Japan 105-6025 Invesco Australia Limited 333 Collins Street, Level 26 Melbourne Vic 3000, Australia Invesco Global Asset Management (N.A.), Inc. One Midtown Plaza 1360 Peachtree Street, N.E. Atlanta, Georgia 30309 Invesco Hong Kong Limited 32nd Floor Three Pacific Place 1 Queen's Road East Hong Kong Invesco Institutional (N.A.), Inc. One Midtown Plaza 1360 Peachtree Street, N.E. Atlanta, Georgia 30309 Invesco Senior Secured Management, Inc. 1166 Avenue of the Americas New York, NY 10036 Invesco Trimark Investment Management Inc. 5140 Yonge Street Suite 900 Toronto, Ontario Canada M2N 6X7 C-12 Item 29 Management Services None Item 30. Undertakings Not applicable. C-13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, Texas on the 19th day of February, 2008. REGISTRANT: AIM INTERNATIONAL MUTUAL FUNDS By: /s/ Philip A. Taylor -------------------------------------- Philip A. Taylor, President Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURES TITLE DATE - ------------------------------------- ----------------------------- ----------------- /s/ Philip A. Taylor Trustee & President February 19, 2008 - ------------------------------------- (Principal Executive Officer) (Philip A. Taylor) /s/ Bob R. Baker* Trustee February 19, 2008 - ------------------------------------- (Bob R. Baker) /s/ Frank S. Bayley* Trustee February 19, 2008 - ------------------------------------- (Frank S. Bayley) /s/ James T. Bunch* Trustee February 19, 2008 - ------------------------------------- (James T. Bunch) /s/ Bruce L. Crockett* Chair & Trustee February 19, 2008 - ------------------------------------- (Bruce L. Crockett) /s/ Albert R. Dowden* Trustee February 19, 2008 - ------------------------------------- (Albert R. Dowden) /s/ Martin L. Flanagan* Trustee February 19, 2008 - ------------------------------------- (Martin L. Flanagan) /s/ Jack M. Fields* Trustee February 19, 2008 - ------------------------------------- (Jack M. Fields) /s/ Carl Frischling* Trustee February 19, 2008 - ------------------------------------- (Carl Frischling) /s/ Prema Mathai-Davis* Trustee February 19, 2008 - ------------------------------------- (Prema Mathai-Davis) /s/ Lewis F. Pennock* Trustee February 19, 2008 - ------------------------------------- (Lewis F. Pennock) /s/ Larry Soll* Trustee February 19, 2008 - ------------------------------------- (Larry Soll) /s/ Raymond Stickel, Jr.* Trustee February 19, 2008 - ------------------------------------- (Raymond Stickel, Jr.)
/s/ Sidney M. Dilgren Vice President & Treasurer February 19, 2008 - ------------------------------------- (Principal Financial and (Sidney M. Dilgren) Accounting Officer)
*By /s/ Philip A. Taylor --------------------------------- Philip A. Taylor Attorney-in-Fact * Philip A. Taylor, pursuant to powers of attorney filed in Registrant's Post-Effective Amendment No. 38 on July 27, 2007. INDEX
Exhibit Number Description - ------- ----------- a(1)(d) Amendment No. 3, dated January 17, 2008, to the Amended and Restated Agreement and Declaration of Trust of the Registrant a(1)(e) Form of Amendment No. 4, dated May 1, 2008, to the Amended and Restated Agreement and Declaration of Trust of the Registrant d(3) Form of Master Intergroup Sub-Advisory Contract for Mutual Funds, dated [May 1, 2008] between Invesco Aim Advisors, Inc., on behalf of Registrant, and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Ltd., Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Investment Management Inc. j(1) Consent of Ballard Spahr Andrews & Ingersoll, LLP j(2) Consent of PricewaterhouseCoopers LLP p(3) Code of Ethics relating to INVESCO Asset Management (Japan) Limited p(5) Invesco Staff Ethics and Personal Share Dealing, dated April 2007, relating to Invesco Hong Kong Limited.(23) p(6) INVESCO PLC Code of Conduct, revised July 2006, AIM Trimark Investments Addendum to the AMVESCAP Code of Conduct, revised April 2, 2007, Policy No. D-6 Gifts and Entertainment, revised April 2007, and Policy No. D-7 AIM Trimark Personal Trading Policy, revised March 2007, together the Code of Ethics relating to Invesco Trimark Investment Management Inc. p(7) Code of Ethics relating to Invesco Asset Management Deutschland GmbH p(8) Code of Ethics relating to Invesco Asset Management Limited p(9) INVESCO PLC Code of Conduct, revised July 2006, relating to Invesco Australia Limited
EX-99.A1.D 2 h53872aexv99wa1wd.txt AMENDMENT NO.3 TO AMENDED AGREEMENT AND DECLARATION OF TRUST AMENDMENT NO. 3 TO AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST OF AIM INTERNATIONAL MUTAL FUNDS This Amendment No. 3 (the "Amendment") to the Amended and Restated Agreement and Declaration of Trust of AIM International Mutual Funds (the "Trust") amends, effective as of May 1, 2008, the Amended and Restated Agreement and Declaration of Trust of the Trust dated as of September 14, 2005, as amended (the "Agreement"). By consent dated as of January 17, 2008, the Board of Trustees of the Trust, in accordance with Section 9.7 of the Agreement, approved the amendments to the Agreement. Under Section 9.7 of the Agreement, this Amendment may be executed by a duly authorized officer of the Trust. WHEREAS, the trust desires to change the name of AIM Global Aggressive Growth Fund to AIM Global Small & Mid Cap Growth Fund; NOW, THEREFORE, the Agreement is hereby amended as follows: 1. Schedule A of the agreement is hereby amended and restated in its entirety as set forth on Exhibit 1 to this amendment. 2. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment. 3. Except as specifically amended by this Amendment, the Agreement is hereby confirmed and remains in full force and effect. IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Trust, has executed this Amendment as of January 17, 2008. By: /s/ Philip A. Taylor ------------------------------------ Name: Philip A. Taylor Title: President 1 Exhibit 1 "SCHEDULE A AIM INTERNATIONAL MUTUAL FUNDS PORTFOLIOS AND CLASSES THEREOF
PORTFOLIO CLASSES OF EACH PORTFOLIO - --------- ------------------------- AIM Asia Pacific Growth Fund Class A Shares Class B Shares Class C Shares Institutional Class Shares AIM European Growth Fund Class A Shares Class B Shares Class C Shares Class R Shares Institutional Class Shares Investor Class Shares AIM Global Growth Fund Class A Shares Class B Shares Class C Shares Institutional Class Shares AIM Global Small and Mid Cap Growth Fund Class A Shares Class B Shares Class C Shares Institutional Class Shares AIM International Core Equity Fund Class A Shares Class B Shares Class C Shares Class R Shares Institutional Class Shares Investor Class Shares AIM International Growth Fund Class A Shares Class B Shares Class C Shares Class R Shares Institutional Class Shares"
2 EX-99.A1.E 3 h53872aexv99wa1we.txt FORM OF AMENDMENT NO.4 TO AMENDED AGREEMENT AND DECLARATION OF TRUST AMENDMENT NO. 4 TO AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST OF AIM INTERNATIONAL MUTUAL FUNDS This Amendment No. 4 (the "Amendment") to the Amended and Restated Agreement and Declaration of Trust of AIM International Mutual Funds (the "Trust") amends, effective as of May 1, 2008, the Amended and Restated Agreement and Declaration of Trust of the Trust dated as of September 14, 2005, as amended (the "Agreement"). Under Section 9.7 of the Agreement, this Amendment may be executed by a duly authorized officer of the Trust. WHEREAS, the Shareholders of the Trust approved this amendment to eliminate the requirement that shareholders approve the termination of the Trust, the Fund or a share class if there are 100 or more holders of record of the Trust, Fund or share class; NOW, THEREFORE, the Agreement is hereby amended as follows: 1. The first paragraph of Section 6.1 of the Agreement is amended and restated to read as follows: "Section 6.1 Voting Powers. The Shareholders shall have power to vote only to: (i) elect Trustees, provided that a meeting of Shareholders has been called for that purpose; (ii) remove Trustees, provided that a meeting of Shareholders has been called for that purpose; (iii) approve the sale of all or substantially all the assets of the Trust or any Portfolio or Class, unless the primary purpose of such sale is to change the Trust's domicile or form of organization or form of statutory trust; (iv) approve the merger or consolidation of the Trust or any Portfolio or Class with and into another Company or with and into any Portfolio or Class of the Trust, unless (A) the primary purpose of such merger or consolidation is to change the Trust's domicile or form of organization or form of statutory trust, or (B) after giving effect to such merger or consolidation, based on the number of Outstanding Shares as of a date selected by the Trustees, the Shareholders of the Trust or such Portfolio or Class will have a majority of the outstanding shares of the surviving Company or Portfolio or Class thereof, as the case may be; (v) approve any amendment to this Article VI, Section 6.1; and (vi) approve such additional matters as may be required by law or as the Trustees, in their sole discretion, shall determine." 2. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment. 3. Except as specifically amended by this Amendment, the Agreement is hereby confirmed and remains in full force and effect. 1 IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Trust, has executed this Amendment as of May 1, 2008. By: --------------------------------- Name: Philip A. Taylor Title: President 2 EX-99.D3 4 h53872aexv99wd3.txt FORM OF MASTER INTERGROUP SUB-ADVISORY CONTRACT MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS This contract is made as of May 1, 2008, by and among Invesco Aim Advisors, Inc. (the "Adviser") and each of Asset Management Deutschland GmbH Asset Management Ltd., Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Investment Management, Inc. (each a "Sub-Adviser" and, collectively, the "Sub-Advisers"). WHEREAS: A) The Adviser has entered into an investment advisory agreement with [NAME OF AIM REGISTRANT] (the "Trust"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), with respect to the funds set forth in Exhibit A attached hereto (each a "Fund"); B) The Adviser is authorized to delegate certain, any or all of its rights, duties and obligations under investment advisory agreements to sub-advisers, including sub-advisers that are affiliated with the Adviser; C) Each Sub-Adviser represents that it is registered with the U.S. Securities and Exchange Commission ("SEC") as an investment adviser under the Investment Advisers Act of 1940 ("Advisers Act") as an investment adviser, or will be so registered prior to providing any services to any of the Funds under this Contract, and engages in the business of acting as an investment adviser; and D) The Sub-Advisers and their affiliates have personnel in various locations throughout the world and have been formed in part for the purpose of researching and compiling information and recommendations on the economies of various countries and securities of issuers located in such countries or on various types of investments and investment techniques, and providing investment advisory services in connection therewith. NOW THEREFORE, in consideration of the promises and the mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. Appointment. The Adviser hereby appoints each Sub-Adviser as a sub-adviser of each Fund for the period and on the terms set forth herein. Each Sub-Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided. 2. Duties as Sub-Adviser. Subject to paragraph 7 below, the Adviser may, in its discretion, appoint each Sub-Advisor to perform one or more of the following services with respect to all or a portion of the investments of each Fund. The services and the portion of the investments of each Fund to be advised or managed by each Sub-Adviser shall be as agreed upon from time to -1- time by the Adviser and the Sub-Advisers. Each Sub-Adviser shall pay the salaries and fees of all personnel of such Sub-Adviser performing services for the Funds related to research, statistical and investment activities. (a) Investment Advice. If and to the extent requested by the Adviser, each Sub-Adviser shall provide investment advice to one or more of the Funds and the Adviser with respect to all or a portion of the investments of such Fund(s) or with respect to various investment techniques, and in connection with such advice shall furnish such Fund(s) and the Adviser with such factual information, research reports and investment recommendations as the Adviser may reasonably require. (b) Order Execution. If and to the extent requested by the Adviser, each Sub-Adviser shall place orders for the purchase and sale of portfolio securities or other investments for one or more of the Funds. In so doing, each Sub-Adviser agrees that it shall comply with paragraph 3 below. (c) Discretionary Investment Management. If and to the extent requested by the Adviser, each Sub-Adviser shall, subject to the supervision of the Trust's Board of Trustees (the "Board") and the Adviser, manage all or a portion of the investments of one or more of the Funds in accordance with the investment objectives, policies and limitations provided in the Trust's Registration Statement and such other limitations as the Trust or the Adviser may impose with respect to such Fund(s) by notice to the applicable Sub-Adviser(s) and otherwise in accordance with paragraph 5 below. With respect to the portion of the investments of a Fund under its management, each Sub-Adviser is authorized to: (i) make investment decisions on behalf of the Fund with regard to any stock, bond, other security or investment instrument, including but not limited to foreign currencies, futures, options and other derivatives, and with regard to borrowing money; (ii) place orders for the purchase and sale of securities or other investment instruments with such brokers and dealers as the Sub-Adviser may select; and (iii) upon the request of the Adviser, provide additional investment management services to the Fund, including but not limited to managing the Fund's cash and cash equivalents and lending securities on behalf of the Fund. In selecting brokers or dealers to execute trades for the Funds, each Sub-Adviser will comply with its written policies and procedures regarding brokerage and trading, which policies and procedures shall have been approved by the Board. All discretionary investment management and any other activities of each Sub-Adviser shall at all times be subject to the control and direction of the Adviser and the Board. 3. Broker-Dealer Relationships. Each Sub-Adviser agrees that, in placing orders with brokers and dealers, it will attempt to obtain the best net result in terms of price and execution. Consistent with this obligation, each Sub-Adviser may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who sell shares of the Funds or provide the Funds, the Adviser's other clients, or a Sub-Adviser's other clients with research, analysis, advice and similar services. Each Sub-Adviser may pay to brokers and dealers, in return for such research and analysis, a higher commission or spread than may be charged by other brokers and dealers, subject to such Sub-Adviser determining in good faith that such commission or spread is reasonable in terms either of the particular transaction or of the overall responsibility of the Adviser and such Sub-Adviser to the Funds and their other clients and that the total commissions or spreads paid by each Fund will be reasonable in relation to the benefits to the Fund over the -2- long term. In no instance will portfolio securities be purchased from or sold to a Sub-Adviser, or any affiliated person thereof, except in accordance with the applicable securities laws and the rules and regulations thereunder and any exemptive orders currently in effect. Whenever a Sub-Adviser simultaneously places orders to purchase or sell the same security on behalf of a Fund and one or more other accounts advised by such Sub-Adviser, such orders will be allocated as to price and amount among all such accounts in a manner believed to be equitable to each account. 4. Books and Records. Each Sub-Adviser will maintain all required books and records with respect to the securities transactions of the Funds, and will furnish the Board and the Adviser with such periodic and special reports as the Board or the Adviser reasonably may request. Each Sub-Adviser hereby agrees that all records which it maintains for the Adviser are the property of the Adviser, and agrees to preserve for the periods prescribed by applicable law any records which it maintains for the Adviser and which are required to be maintained, and further agrees to surrender promptly to the Adviser any records which it maintains for the Adviser upon request by the Adviser. 5. Further Duties. (a) In all matters relating to the performance of this Contract, each Sub-Adviser will act in conformity with the Agreement and Declaration of Trust, By-Laws and Registration Statement of the Trust and with the instructions and directions of the Adviser and the Board and will comply with the requirements of the 1940 Act, the rules, regulations, exemptive orders and no-action positions thereunder, and all other applicable laws and regulations. (b) Each Sub-Adviser shall maintain compliance procedures for the Funds that it and the Adviser reasonably believe are adequate to ensure compliance with the federal securities laws (as defined in Rule 38a-1 of the 1940 Act) and the investment objective(s) and policies as stated in the Funds' prospectuses and statements of additional information. Each Sub-Adviser at its expense will provide the Adviser or the Trust's Chief Compliance Officer with such compliance reports relating to its duties under this Contract as may be requested from time to time. Notwithstanding the foregoing, each Sub-Adviser will promptly report to the Adviser any material violations of the federal securities laws (as defined in Rule 38a-1 of the 1940 Act) that it is or should be aware of or of any material violation of the Sub-Adviser's compliance policies and procedures that pertain to the Funds. (c) Each Sub-Adviser at its expense will make available to the Board and the Adviser at reasonable times its portfolio managers and other appropriate personnel, either in person or, at the mutual convenience of the Adviser and the Sub-Adviser, by telephone, in order to review the investment policies, performance and other investment related information regarding the Funds and to consult with the Board and the Adviser regarding the Funds' investment affairs, including economic, statistical and investment matters related to the Sub-Adviser's duties hereunder, and will provide periodic reports to the Adviser relating to the investment strategies it employs. Each Sub-Adviser and its personnel shall also cooperate fully with counsel and auditors for, and the Chief Compliance Officer of, the Adviser and the Trust. (d) Each Sub-Adviser will assist in the fair valuation of portfolio securities held by the Funds. The Sub-Adviser will use its reasonable efforts to provide, based upon its own -3- expertise, and to arrange with parties independent of the Sub-Adviser such as broker-dealers for the provision of, valuation information or prices for securities for which prices are deemed by the Adviser or the Trust's administrator not to be readily available in the ordinary course of business from an automated pricing service. In addition, each Sub-Adviser will assist the Funds and their agents in determining whether prices obtained for valuation purposes accurately reflect market price information relating to the assets of the Funds at such times as the Adviser shall reasonably request, including but not limited to, the hours after the close of a securities market and prior to the daily determination of a Fund's net asset value per share. (e) Each Sub-Adviser represents and warrants that it has adopted a code of ethics meeting the requirements of Rule 17j-1 under the 1940 Act and the requirements of Rule 204A-1 under the Advisers Act and has provided the Adviser and the Board a copy of such code of ethics, together with evidence of its adoption, and will promptly provide copies of any changes thereto, together with evidence of their adoption. Upon request of the Adviser, but in any event no less frequently than annually, each Sub-Adviser will supply the Adviser a written report that (A) describes any issues arising under the code of ethics or procedures since the Sub-Adviser's last report, including but not limited to material violations of the code of ethics or procedures and sanctions imposed in response to the material violations; and (B) certifies that the procedures contained in the Sub-Adviser's code of ethics are reasonably designed to prevent "access persons" from violating the code of ethics. (f) Upon request of the Adviser, each Sub-Adviser will review draft reports to shareholders and other documents provided or available to it and provide comments on a timely basis. In addition, each Sub-Adviser and each officer and portfolio manager thereof designated by the Adviser will provide on a timely basis such certifications or sub-certifications as the Adviser may reasonably request in order to support and facilitate certifications required to be provided by the Trust's Principal Executive Officer and Principal Financial Officer and will adopt such disclosure controls and procedures in support of the disclosure controls and procedures adopted by the Trust as the Adviser, on behalf of the Trust, deems are reasonably necessary. (g) Unless otherwise directed by the Adviser or the Board, each Sub-Adviser will vote all proxies received in accordance with the Adviser's proxy voting policy or, if the Sub-Adviser has a proxy voting policy approved by the Board, the Sub-Adviser's proxy voting policy. Each Sub-Adviser shall maintain and shall forward to the Funds or their designated agent such proxy voting information as is necessary for the Funds to timely file proxy voting results in accordance with Rule 30b1-4 of the 1940 Act. (h) Each Sub-Adviser shall provide the Funds' custodian on each business day with information relating to all transactions concerning the assets of the Funds and shall provide the Adviser with such information upon request of the Adviser. 6. Services Not Exclusive. The services furnished by each Sub-Adviser hereunder are not to be deemed exclusive and such Sub-Adviser shall be free to furnish similar services to others so long as its services under this Contract are not impaired thereby. Nothing in this Contract shall limit or restrict the right of any director, officer or employee of a Sub-Adviser, who may also be a Trustee, officer or employee of the Trust, to engage in any other business or to devote his or -4- her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature. 7. Use of Subsidiaries and Affiliates. Each Sub-Adviser may perform any or all of the services contemplated hereunder, including but not limited to providing investment advice to the Funds pursuant to paragraph 2(a) above and placing orders for the purchase and sale of portfolio securities or other investments for the Funds pursuant to paragraph 2(b) above, directly or through such of its subsidiaries or other affiliates, including each of the other Sub-Advisers, as such Sub-Adviser shall determine; provided, however, that performance of such services through such subsidiaries or other affiliates shall have been approved, when required by the 1940 Act, by (i) a vote of a majority of the independent Trustees who are not parties to this Contract or "interested persons" (as defined in the 1940 Act) of a party to this Contract, other than as Board members ("Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval, and/or (ii) a vote of a majority of that Fund's outstanding voting securities. 8. Compensation. (a) The only fees payable to the Sub-Advisers under this Contract are for providing discretionary investment management services pursuant to paragraph 2(c) above. For such services, the Adviser will pay each Sub-Adviser a fee, computed daily and paid monthly, equal to (i) 40% of the monthly compensation that the Adviser receives from the Trust pursuant to its advisory agreement with the Trust, multiplied by (ii) the fraction equal to the net assets of such Fund as to which the Sub-Adviser shall have provided discretionary investment management services pursuant to paragraph 2(c) above for that month divided by the net assets of such Fund for that month. This fee shall be payable on or before the last business day of the next succeeding calendar month. This fee shall be reduced to reflect contractual or voluntary fee waivers or expense limitations by the Adviser, if any, in effect from time to time as set forth in paragraph 9 below. In no event shall the aggregate monthly fees paid to the Sub-Advisers under this Contract exceed 40% of the monthly compensation that the Adviser receives from the Trust pursuant to its advisory agreement with the Trust, as reduced to reflect contractual or voluntary fee waivers or expense limitations by the Adviser, if any. (b) If this Contract becomes effective or terminates before the end of any month, the fees for the period from the effective date to the end of the month or from the beginning of such month to the date of termination, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination occurs. (c) If a Sub-Adviser provides the services under paragraph 2(c) above to a Fund for a period that is less than a full month, the fees for such period shall be prorated according to the proportion which such period bears to the applicable full month. 9. Fee Waivers and Expense Limitations. If, for any fiscal year of a Fund, the amount of the advisory fee which such Fund would otherwise be obligated to pay to the Adviser is reduced because of contractual or voluntary fee waivers or expense limitations by the Adviser, the fee payable to each Sub-Adviser pursuant to paragraph 8 above shall be reduced proportionately; and to the extent that the Adviser reimburses the Fund as a result of such expense limitations, -5- such Sub-Adviser shall reimburse the Adviser that proportion of such reimbursement payments which the fee payable to each Sub-Adviser pursuant to paragraph 8 above bears to the advisory fee under this Contract. 10. Limitation of Liability of Sub-Adviser and Indemnification. No Sub-Adviser shall be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by a Fund or the Trust in connection with the matters to which this Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of such Sub-Adviser in the performance by such Sub-Adviser of its duties or from reckless disregard by such Sub-Adviser of its obligations and duties under this Contract. Any person, even though also an officer, partner, employee, or agent of a Sub-Adviser, who may be or become a Trustee, officer, employee or agent of the Trust, shall be deemed, when rendering services to a Fund or the Trust or acting with respect to any business of a Fund or the Trust, to be rendering such service to or acting solely for the Fund or the Trust and not as an officer, partner, employee, or agent or one under the control or direction of such Sub-Adviser even though paid by it. 11. Duration and Termination. (a) This Contract shall become effective with respect to each Sub-Adviser upon the later of the date hereabove written and the date that such Sub-Adviser is registered with the SEC as an investment adviser under the Advisers Act, if a Sub-Adviser is not so registered as of the date hereabove written; provided, however, that this Contract shall not take effect with respect to any Fund unless it has first been approved (i) by a vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by vote of a majority of that Fund's outstanding voting securities, when required by the 1940 Act. (b) Unless sooner terminated as provided herein, this Contract shall continue in force and effect until June 30, 2009. Thereafter, if not terminated, with respect to each Fund, this Contract shall continue automatically for successive periods not to exceed twelve months each, provided that such continuance is specifically approved at least annually (i) by a vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by the Board or by vote of a majority of the outstanding voting securities of that Fund. (c) Notwithstanding the foregoing, with respect to any Fund(s) or any Sub-Adviser(s), this Contract may be terminated at any time, without the payment of any penalty, (i) by vote of the Board or by a vote of a majority of the outstanding voting securities of such Fund(s) on sixty days' written notice to such Sub-Adviser(s); or (ii) by the Adviser on sixty days' written notice to such Sub-Adviser(s); or (iii) by a Sub-Adviser on sixty days' written notice to the Trust. Should this Contract be terminated with respect to a Sub-Adviser, the Adviser shall assume the duties and responsibilities of such Sub-Adviser unless and until the Adviser appoints another Sub-Adviser to perform such duties and responsibilities. Termination of this Contract with respect to one or more Fund(s) or Sub-Adviser(s) shall not affect the continued effectiveness of this Contract with respect to any remaining Fund(s) or Sub-Adviser(s). This Contract will automatically terminate in the event of its assignment. -6- 12. Amendment. No provision of this Contract may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and, when required by the 1940 Act, no amendment of this Contract shall be effective until approved by vote of a majority of the Fund's outstanding voting securities. 13. Notices. Any notices under this Contract shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust and the Adviser shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Until further notice to the other party, it is agreed that the address of each Sub-Adviser shall be set forth in Exhibit B attached hereto. 14. Governing Law. This Contract shall be construed in accordance with the laws of the State of Texas and the 1940 Act. To the extent that the applicable laws of the State of Texas conflict with the applicable provisions of the 1940 Act, the latter shall control. 15. Multiple Sub-Advisory Agreements. This Contract has been signed by multiple parties; namely the Adviser, on one hand, and each Sub-Adviser, on the other. The parties have signed one document for administrative convenience to avoid a multiplicity of documents. It is understood and agreed that this document shall constitute a separate sub-advisory agreement between the Adviser and each Sub-Adviser with respect to each Fund, as if the Adviser and such Sub-Adviser had executed a separate sub-advisory agreement naming such Sub-Adviser as a sub-adviser to each Fund. With respect to any one Sub-Adviser, (i) references in this Contract to "a Sub-Adviser" or to "each Sub-Adviser" shall be deemed to refer only to such Sub-Adviser, and (ii) the term "this Contract" shall be construed according to the foregoing provisions. 16. Miscellaneous. The captions in this Contract are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Contract shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Contract shall not be affected thereby. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. Any question of interpretation of any term or provision of this Contract having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Contract is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. -7- IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their officers designated as of the day and year first above written. INVESCO AIM ADVISORS, INC. INVESCO ASSET MANAGEMENT DEUTSCHLAND GMBH Adviser Sub-adviser BY: BY: --------------------------------- ------------------------------------ NAME: NAME: ------------------------------- ---------------------------------- TITLE: TITLE: ------------------------------ --------------------------------- INVESCO ASSET MANAGEMENT LTD. Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INVESCO ASSET MANAGEMENT (JAPAN) LIMITED Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -8- INVESCO AUSTRALIA LIMITED Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC. Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INVESCO HONG KONG LIMITED Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INVESCO INSTITUTIONAL (N.A.), INC. Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -9- INVESCO SENIOR SECURED MANAGEMENT, INC. Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INVESCO TRIMARK INVESTMENT MANAGEMENT INC. Sub-adviser By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -10- EXHIBIT A FUNDS [List all series portfolios] -11- EXHIBIT B ADDRESSES OF SUB-ADVISERS InvescoAsset Management Deutschland GmbH Bleichstrasse 60-62 Frankfurt, Germany 60313 Invesco Asset Management Ltd. 30 Finsbury Square London, United Kingdom EC2A 1AG Invesco Asset Management (Japan) Limited 25th Floor, Shiroyama Trust Tower 3-1, Toranoman 4-chome, Minato-Ku Tokyo, Japan 105-6025 Invesco Australia Limited 333 Collins Street, Level 26 Melbourne Vic 3000, Australia Invesco Global Asset Management (N.A.), Inc. One Midtown Plaza 1360 Peachtree Street, N.E. Atlanta, Georgia 30309 Invesco Hong Kong Limited 32nd Floor Three Pacific Place 1 Queen's Road East Hong Kong Invesco Institutional (N.A.), Inc. One Midtown Plaza 1360 Peachtree Street, N.E. Atlanta, Georgia 30309 Invesco Senior Secured Management, Inc. 1166 Avenue of the Americas New York, NY 10036 Invesco Trimark Investment Management Inc. 5140 Yonge Street, Suite 900 Toronto, Ontario Canada M2N 6X7 -12- EX-99.J1 5 h53872aexv99wj1.txt CONSENT OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP CONSENT OF COUNSEL AIM INTERNATIONAL MUTUAL FUNDS We hereby consent to the use of our name and to the reference to our firm under the caption "Investment Advisory and Other Services -- Other Service Providers -- Counsel to the Trust" in the Statement of Additional Information for the retail and institutional classes of AIM International Mutual Funds (the "Trust"), which are included in Post-Effective Amendment No. 40 to the Registration Statement under the Securities Act of 1933, as amended (No. 333-44611), and Amendment No. 42 to the Registration Statement under the Investment Company Act of 1940, as amended (No. 811-6463), on Form N-1A of the Trust. /s/ Ballard Spahr Andrews & Ingersoll, LLP -------------------------------------------- Ballard Spahr Andrews & Ingersoll, LLP Philadelphia, Pennsylvania February 15, 2008 EX-99.J2 6 h53872aexv99wj2.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our reports dated December 19, 2007, relating to the financial statements and financial highlights which appears in the October 31, 2007 Annual Report to Shareholders of each of the six funds constituting AIM International Mutual Funds, which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Highlights" and "Other Service Providers" in such Registration Statement. PricewaterhouseCoopers LLP Houston, Texas February 14, 2008 EX-99.P3 7 h53872aexv99wp3.txt CODE OF ETHICS INVESCO Asset Management (Japan) Limited Code of Ethics Fundamental Liabilities and Social Responsibilities 1. We will recognize the importance of the basic liabilities and social responsibilities as an asset management company and acquire the trust of the investors by the sound business In our Global Compliance Manual, there is a clear message that we will have to adhere to the fiduciary duties stipulated as a code of conduct. We consider that to fulfill the fiduciary duty ultimately results in the accomplishment of the fundamental liability as an asset management company. As a principle, we hereby stipulates in the manual for business operations as an investment trust management company that "In conducting the business operations, we will perform the fiduciary duties in compliance with the principle of the investment trust management company." And also in the manual for business operations as a discretionary investment management company that "In conducting the business operations, we will comply with the customer contracts and perform the fiduciary duties in compliance with the principle of the investment advisory company law." This idea reflects the specific articles of Investment Trust Law (1) and Investment Advisory Law (2) as described below: (1) "Funds of investors are pooled and managed as investments principally in securities,~, by a person other than such investors through the use of an investment trust~, the fruits thereof are distributed to such investors, ~" (excerpt from Article 1 of ITM Law) (2) "An investment advisor is entrusted with the whole or any part of the authority to make investment decisions based on an analysis of the value of securities, etc., and also with the authority necessary to invest clients' assets on behalf of such client based on such investment decisions"(Section 4 of Article 2 of Investment Advisory Law) Social Responsibilities An asset management company collects money from the investors in general and invests and returns the money with the yields based on the fiduciaries duties. We will have to recognize the sociability and public nature of an asset management company in the financial capital market and be requested to behave ourselves based on the rigid principle and self-responsibility. This will lead to the efficient investment of the funds and contribute to the sound development of the economic society and the protection of the investors. 1 INVESCO Asset Management (Japan) Limited Compliance with the laws and regulations 2. We will comply with the related laws and regulations and fulfill the sincere and sound business operations. COMPLIANCE INVESVO is regulated by Investment Trust Law, Investment Advisory Law, Securities and Exchange Law, Financial Product Sales Law and other related laws and regulations. In the meanwhile as to the trades with the overseas counterparties, we are also requested to abide by the laws and regulations overseas. This is an asset management company will fulfill the social responsibilities by the compliance with the laws and regulations as well as the sound business operations. SINCERE AND SOUND BUSINESS OPERATIONS In compliance with not only the related laws and regulations but also the association rules and the internal rules, we will have to realize our business principle by conducting the daily operations sincerely and soundly. All directors and employees should conduct the daily operations in recognition of the above fact. PRINCIPLE OF CONDUCT It is important for each of us to recognize our own responsibilities and powers and understand completely the related laws and regulations as well as the internal rules and 2 INVESCO Asset Management (Japan) Limited to implement the scheme which each of us makes the voluntary actions based on our own accord. Every department makes the own check on a daily routines basis as the first checking function, by the independent internal auditor as the second checking function and the audit by the statutory auditor and the external accountants as the third checking function. This is the realistic checking scheme. Violation of the laws is the most crucial risk(linked to the social responsibilities) that the management should pay attention in terms of risk management. Once the violation occurs, the management should try to grasp the issues swiftly and having the continuous contact with the related departments out of its responsibilities, and find out the reasons and settle as soon as possible and work out the countermeasures to prevent its recurrence. Provision of the High Quality of the Asset Management Service 3 We will contribute to the development of the economic society by providing the high quality of the asset management service in compliance with the investment purpose of the investors. PROVISION OF THE HIGH QUALITY OF THE ASSET MANAGEMENT SERVICE The investment needs of investors are constantly increasing under the change of the current investment circumstance. To comply with these needs, we will have to make efforts to increase investment efficiency and quality of the providing service. In terms of the investor protection, we will have to make efforts to strengthen the internal control scheme and risk management set up in line with the diversification and the complexity of the financial capital market. 3 INVESCO Asset Management (Japan) Limited At the same time, we will have to make the correct disclosure and accountability to the investors in line with the profundity and complexity of the proposed products. CONTRIBUTION TO THE ECONOMIC SOCIETY One of the social roles of an asset management company is to support the economic activities of the investors. We will fulfill our social responsibilities to make best efforts to the efficient investment of the funds, the better performance to respond to the needs of the investors. First Priority on the Customers' Interests 4 We will fulfill the fundamental responsibility to prioritize the customer's interests and conduct the proper business operations as an asset management company. FIRST PRIORITY ON THE CUSTOMERS' INTERESTS The high quality of the service provision is not always the better performance of the funds but the total service including other service, e.g., the efficient and correct operations, proper trade monitoring, etc. In principle, we should prioritize the customer's interests and effort to maximize their interest. We can realize the above service by the better performance of the invested funds, the efficient operations, the proper risk management, the better customer service as well as the compliance with the laws and regulations and the risk management. PROTECTION OF CONFLICTS OF INTERESTS As described above, for the better service provision, it is important to the better performance, the compliance with laws and regulations, the establishment of the risk management but in 4 INVESCO Asset Management (Japan) Limited considering the maximization of the investors'interests, It is very vital to protect the conflicts of interests. Transparent Business Operations 5. We will realize the transparent business operations by the appropriate disclosure. IMPORTANCE OF DISCLOSURE We can obtain the trust from the investors by the correct disclosure in order to fulfill the fundamental liabilities and the social responsibilities. We should pay attention to the sufficient and correct disclosure of the trusted assets and the corporate information which are vital for the investors' investment decision making. As to the disclosure content and method, etc., we are legally requested to be sound and correct, etc. TRANSPARENT BUSINESS OPERATIONS We are liable of the disclosure against the beneficiaries, Customers, investors, and the market and its accomplishment is one of our social responsibilities. To clarify the content of the daily operations and the judgment base for the everyone, it is our responsibilities to realize the transparent business operations. 5 INVESCO Asset Management (Japan) Limited EXCLUSION OF ANTI-SOCIAL FORCES It is necessary to establish the pre-clearance set-up and the organization to accomplish the social responsibilities to ensure the compliance with the laws and regulations. We are exposed to the risk which we should stand firm against the anti-social forces during the daily operations. As a social member, it is very important for each of us to have the strong faith to stand firm against the anti-social forces which impairs the social order. COUNTERMEASURES It is very important for us to proceed the correct operations in the course of the daily operations to comply with the anti-social forces and keep the close communication with the related departments in terms of the protection of the troubles. Just in case where we encounter the case, to make the swift contact with the related departments and recognize the alliance and cooperation with the other departments and consider the consultation to the outside police offices, etc. ALLIANCE WITH THE OUTSIDE PARTIES The most effective way is to stand firm against the anti-social forces. In this regard, we will have to consult with the police officers and outside legal counsels to comply with the swift 6 INVESCO Asset Management (Japan) Limited handling. It is very important to have close communications with the police offices, legal counsels to exchange information and comply with this issue. MONEY LAUNDERING In accordance with Law concerning Anti-Organization Crimes to have been implemented effective February 1, 2000, the definition of the illegal earnings is more widely defined so that the regulatory reporting on the suspicious trades which used to be limited to the drug trafficking has been expanded substantially to all illegal trades(Criminal Codes, Commercial Codes, Securities and Exchange Law, Foreign Exchange Law, etc.). It is very important for all directors and employees to recognize and pay attention that the identification of the principal and the report on the suspicious transactions are regulated and so be cautious about the money launderings. Upon discovery of the money laundering or the case of involvement in the money laundering, immediate report to the person in charge of money laundering and regulatory report to be made accordingly dependent upon the case. 7 EX-99.P5 8 h53872aexv99wp5.txt INVESCO STAFF ETHICS AND PERSONAL SHARE DEALING (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.1 FIDUCIARY DUTY 10.1.1 As a fiduciary, Invesco owes an undivided duty of loyalty to its clients. It is Invesco's policy that all employees conduct themselves so as to avoid not only actual conflicts of interest with Invesco clients, but also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust that clients have placed in Invesco. 10.1.2 The personal securities transactions of all employees must be conducted in accordance with the following general principles: (a) There is duty at all times to place the interests of Invesco clients first and foremost; (b) All personal securities transactions be conducted in a manner consistent with these rules and in such a manner as to avoid any actual, potential or appearance of a conflict of interest or any abuse of an employee's position of trust and responsibility; and (c) Employees should not take inappropriate advantage of their positions. 10.1.3 Invesco's policy is to avoid conflicts and, where they unavoidably occur, to resolve them in a manner that clearly places our clients' interests first. 10.1.4 A copy of the AMVESCAP Conflicts of Interest Policy is attached as Appendix 10.1. 10.1.5 The policy on personal securities transactions is set out under the following headings: (i) Definitions (ii) Prohibited Personal Transactions (iii) Transactions Exempt from Personal Share Dealing Rules (iv) Transactions Exempt from Authorisation but Requiring Reporting (v) Permitted Transactions Requiring Authorisation and Reporting (vi) Procedures for Authorisation and Placing Orders (vii) Procedures for Reporting (viii) Restrictions on Investing (ix) Dealing in Invesco PLC (x) Dealing in Invesco Funds/non Invesco Funds 10.2 DEFINITIONS 10.2.1 "Business Associate" shall mean any person or organisation that provides services to Invesco, that may do business or is being solicited to do business with Invesco or that is associated with an organisation that does or seeks to do business with Invesco. 10.2.2 "High Quality Short-Term Debt Instrument" means, but is not limited to, bankers' acceptances, bank certificates of deposit, commercial paper and repurchase agreements; and means any instrument having a maturity at issuance of less than 366 days and which is treated in one of the highest two rating categories by a recognised statistical rating organisation, or which is unrated but is of comparable quality. 10.2.3 "Security" includes stock, notes, bonds, debentures and other evidences of indebtedness (including loan participation's and assignments), limited partnership interests, investment contracts, and all derivative instruments, such as options and warrants. 10.2.4 "Related Accounts" means: APRIL 2007 1 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING (a) accounts held by (or for the benefit of) an employee's spouse, significant other, or any children or relatives who share his/her home; (b) accounts for which the employee has or shares, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise; (i) voting power (which includes power to vote, or to direct the voting of, a security), or (ii) investment power (which includes the power to dispose, or to direct the disposition) of a security; or (c) accounts held by any other person to whose support the employee materially contributes or in which, by reason of any agreement or arrangement, the employee has or shares benefits substantially equivalent to ownership, including, for example: (i) arrangements (which may be informal) under which the employee has agreed to share the profits from an investment, and (ii) accounts maintained or administered by the employee for a relative (such as children or parents) who do not share his/her home. (d) Families include husbands and wives, significant other, sons and daughters and other immediate family only where those persons take part in discussion or passing on of investment information. (e) All Invesco employees or members of his family only insofar as the Invesco employee controls or influences the investment decision are subject to the Invesco Code. 10.2.5 Non-Discretionary Account shall mean an account where an employee is deemed to have "no direct or indirect influence or control" over an account i.e.: (a) investment discretion for such account has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the employee, or decisions for the account are made by a family member or significant other and not by, or in connection with, the employee; (b) the employee (and, where applicable, the family member or significant other) certifies in writing that he or she has not and will not discuss any potential investment decisions with such independent fiduciary or household member; and (c) the Compliance Department has determined that the account satisfies the foregoing requirements. 10.2.6 "Pre-Clearance Officer" is the Head of Compliance. APRIL 2007 2 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.3 PROHIBITED PERSONAL TRANSACTIONS 10.3.1 Privately Issued Securities (a) Employees may not purchase or permit a Related Account to purchase or acquire any privately-issued securities, other than in exceptional cases specifically approved by the local Chief Executive Officer (e.g., where such investment is part of a family-owned and operated business venture that would not be expected to involve an investment opportunity of interest to any Invesco client). (b) Requests for exceptions should be made in the first instance to the local Head of Compliance. 10.3.2 Short Selling. An employee may not, sell short a security unless this is specifically related to personal taxation issues. Requests for exceptions should be made to the local Head of Compliance. 10.3.3 Futures. Employees may not write, sell or buy exchange-traded futures, synthetic futures, swaps and similar non-exchange traded instruments. 10.3.4 Deminimus transactions. An employee may request permission to buy or sell a security which would otherwise be the subject of the Blackout restrictions (10.10.1) if that security is so liquid that the transaction would not affect the price per share so that there is no disadvantage to any Invesco client transaction. Transaction unit size or cost should be considered by the local Head of Dealing and Chief Investment Officer. 10.3.4 THE LOCAL CHIEF EXECUTIVE OFFICER IN CONSULTATION WITH THE LOCAL HEAD OF COMPLIANCE MAY IN RARE INSTANCES GRANT EXCEPTIONS FROM THESE TRADING RESTRICTIONS UPON WRITTEN REQUEST. EMPLOYEES MUST DEMONSTRATE HARDSHIP OR EXTRAORDINARY CIRCUMSTANCES. ANY EXCEPTIONS GRANTED WILL BE REPORTED TO THE LOCAL BOARD OF DIRECTORS AT LEAST ANNUALLY. 10.4 TRANSACTIONS EXEMPT FROM PERSONAL DEALING RULES The following types of share dealing transactions do not need to be approved or reported. Non Invesco Funds (a) authorised non- Invesco managed open-end investment schemes (including, mutual funds, open-ended investment companies or unit trusts but not closed-end funds); Direct Government Obligations (b) Securities which are direct obligations of the country in which the employee is a resident (e.g., US treasuries for US residents/UK treasuries for UK residents); Short Term Debt (c) High quality short-term debt instruments; Retirement Fund (d) member choice pension scheme; Invesco Funds / Invesco Regular Investment Plan APRIL 2007 3 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING (e) authorized Invesco managed open-end investment schemes (including, mutual funds, open-ended investment companies or unit trusts but not closed-end funds) by lump sum payment or regular saving plan. For other details please refer to Section 10.12. 10.5 TRANSACTIONS EXEMPT FROM AUTHORISATION BUT REQUIRING REPORTING 10.5.1 The following types of personal share dealing transactions do not need to be approved but must be reported to the Compliance Department. (a) Transactions in a Non-Discretionary Account. (b) Investments in the debt obligations of Federal agencies or of state and municipal governments or agencies. (c) Transactions which are non-intentional on the part of the employee (e.g., receipt of securities pursuant to a stock dividend or merger bonus issues). (d) Purchases of the stock of a company pursuant to an automatic dividend reinvestment plan or an employee stock purchase plan sponsored by such company. (e) Receipt or exercise of rights issued by a company on a pro rata basis to all holders of a class of security. Employees must, however, pre-clear transactions for the acquisition of such rights from a third party or the disposition of such rights. (f) Interests in Securities comprising part of a broad-based, publicly traded market basket or index of stocks, e.g. S & P 500 Index, FTSE 100, DAX. 10.5.2 NOTE THAT ALL OF THESE TRANSACTIONS WHILE NOT SUBJECT TO PRE-CLEARANCE ARE NEVERTHELESS SUBJECT TO ALL OF THE REPORTING REQUIREMENTS BELOW. 10.6 PERMITTED TRANSACTIONS REQUIRING AUTHORISATION AND REPORTING 10.6.1 Transactions in any other Security not dealt with above for either an employee a Related Account are subject to the authorisation and reporting rules set out below. 10.6.2 IPOs. Where there are different amounts of an IPO specified for different investor types (e.g. private and institutional) investment is permitted with the consent of the local Head of Compliance after consultation with the local Chief Investment Officer or his designee. 10.6.3 Private Investment Funds. Employees may invest in interests in private investment funds (i.e., hedge funds) that are established to invest predominantly in public securities and instruments, subject to the pre-clearance procedures, trading restrictions and reporting requirements contained in this Code. 10.6.4 Clubs. Employees may also invest in residential co-operatives and private recreational clubs (such as sports clubs, country clubs, luncheon clubs and the like) for their personal use; such investments are not subject to the pre-clearance procedures, trading restrictions and reporting requirements unless the employee's investing is part of a business conducted by the employee. 10.7 PROCEDURES FOR AUTHORISATIONS 10.7.1 Prior to entering an order for a securities transaction either for the employee or in a Related Account, the employee must complete a Pre-Clearance of Personal Trade Authorisation Form (attached as APRIL 2007 4 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING Appendix 10.2) have it signed by the local Chief Investment Officer or his deputy in his absence and submit the completed form to the local Head of Compliance or his deputy in his absence (see Appendix 10.2). 10.7.2 (a) The employee must ensure that he answers all the questions on the Pre-Clearance of Personal Trade Authorisation Form honestly; (b) In particular, he must check with the relevant dealing desk as to whether there are any client trades ongoing or outstanding in the same stock; (c) If there are no such client orders he should note the time he checked this with the dealing desk and who reported back to him in writing on the form; (d) If there are client orders in place or if the transaction would fall in one of the blackout periods specified in Section 10.10.1, he should not submit the form until the blackout period has ended as the authorisation may expire in accordance with Section 10.7.9. 10.7.3 Proposed securities transactions in a Related Account of the local Head of Compliance must be submitted to the local Chief Executive Officer. 10.7.4 After receiving the completed Pre-Clearance of Personal Trade Authorisation Form, the local Head of Compliance or his deputy in his absence will review the information in the form and, as soon as practicable, will decide whether to clear the proposed Personal Transaction, subject to local requirements. 10.7.5 No order for a Personal Transaction for which pre-clearance authorisation is sought may be placed prior to the receipt of written authorisation of the transaction by the Head of Compliance or his deputy in his absence. 10.7.6 The authorisation and date and time of the authorisation must be stated on the Pre-Clearance of Personal Trade Authorisation Form. 10.7.7 The original of the completed form will be kept as part of Invesco's books and records. 10.7.8 (a) If an employee receives permission to trade a security or instrument, the trade must be executed by the close of business on the next business day after the day on which authorisation is given. (b) The Head of Compliance has the discretion to extend this period. APRIL 2007 5 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.8 PLACING PERSONAL SHARE DEALING ORDERS 10.8.1 Once a Pre-Clearance of Personal Trade Authorisation Form has been duly signed, a copy will be passed back to the employee and the original maintained by the local Head of Compliance. 10.8.2 The employee may then place his order to deal with an outside broker. 10.8.3 The employee must ensure that a copy of or duplicate contract note is provided to the Head of Compliance either directly from the broker or by the employee. 10.9 PROCEDURES FOR REPORTING 10.9.1 Initial certification and Schedules. Within 10 days of commencing employment at Invesco, each employee shall submit to the Compliance Department: (a) a signed Initial Certification of Compliance with the Invesco Code (attached as Appendix 10.3); and (b) a signed Initial Declaration of Personal Holding (attached as Appendix 10.4) listing (i) all Related Accounts; (ii) all public and private securities and instruments directly or indirectly held by any Related Account of such employee (other than exempt investments as set out in Section 10.4), with nonpublic securities plainly indicated; and (iii) directorships (or similar positions) of for-profit, non-profit and other enterprises. The Compliance Department will give these documents to each employee during the compliance briefing when commencing employment. 10.9.2 (a) Disclosure of Outside Brokerage Account. All employees must receive approval from the Head of Compliance prior to setting up personal share dealing accounts with brokers, either for themselves or Related Accounts. (b) New employees must disclose existing broker accounts on joining Invesco in Appendix 10.4. (c) Disciplinary action may be taken against employees who deal through a non-disclosed broker account. 10.9.3 Confirmation and Monthly Statements. Each employee must provide to the Compliance Department: (a) Duplicate copies of contract notes or confirmations of all transactions for his own and each Related Account; (b) If these are regularly provided by a broker or custodian, monthly statements for his own and each Related Account not later than 10 days after the end of each month. 10.9.4 Annual Certification. Each employee shall provide to the Compliance Department, not later than 10 days after the end of each calendar year, a signed Annual Certification of Compliance with the Invesco Code of Ethics (attached as Appendix 10.5) containing: APRIL 2007 6 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING (a) If the information is not provided in the monthly statement referred to in Section 10.9.2 (b) (i) the date of each Personal transaction, the title and number of securities and the principal amount of each security involved; (ii) the nature of the personal transaction (i.e., purchase, sale or any other type of acquisition or disposition); (iii) the price at which the personal transaction was effected; and (iv) the name of the broker, dealer or bank with or through which the personal transaction was effected. (b) If the information is not provided in the monthly statements or any change from the Initial Declaration of Personal Holding referred to in Section 10.9.2 (b) a schedule listing: (i) all Related Accounts; (ii) all public and private securities and instruments directly or indirectly held by him or any Related Account of such employee (other than exempt investment as set out in Section 10.4), with nonpublic securities plainly indicated; and (iii) directorships (or similar positions) of for-profit, non-profit and other enterprises. (c) With respect to non-discretionary accounts, certifications that such employee does discuss any investment decisions with the person making investment decisions; (d) With respect to any nonpublic security owned by such employee, a statement indicating whether the issuer has changed its name or publicly issued securities during such calendar quarter. 10.10 RESTRICTIONS ON PERSONAL INVESTING 10.10.1 Blackout Periods. An employee may not buy or sell for himself or permit any Related Account to buy or sell, a security or any instrument: (a) on the same day as any client is trading in the stock; (b) where he knows that the sale or purchase of the securities are being considered for a client account; (c) if the employee is a portfolio manager, within 7 calendar days before or after the day on which any client account trades in the same security or instrument or in a security convertible into or exchangeable for such security or instrument (including options) on transactions other than those covered under the paragraph below, or (d) if the employee is a portfolio manager, within two business days before or after the day on which a pro rata trade, which includes such security, is made for the purpose of rebalancing client accounts. APRIL 2007 7 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.10.2 (a) In the event there is a trade in a personal and a client account in the same security or instrument within a blackout period, the employee may be required to close out his personal position and to disgorge any profit to a charitable organisation chosen by the local Board of Directors; (b) If an employee has obtained pre-clearance for a transaction and a subsequent client trade occurs within the blackout period, the Chief Executive Officer in consultation with the Head of Compliance, upon a demonstration of hardship or extraordinary circumstances, may review the application of the disgorgement policy to such transaction and may select to impose alternative restrictions on the employee's personal position. 10.10.3 Trades effected by Invesco for the account of an index fund it manages in the ordinary course of such fund's investment activity will not trigger the blackout period restrictions except where client activity occurs on the same day as the personal transaction pre-clearance request. However, the addition or removal of a security from an index, thereby triggering an index fund trade, would cause employee trades in such security to be blacked-out for the seven prior and subsequent calendar days, as described above. 10.10.4 Short Term Trading Profits. (a) It is Invesco's policy to restrict the ability of employees to benefit from short-term trading in securities and instruments. (b) Employees must disgorge profits made on the sale by an employee of any security or instrument held less than 60 days. (c) Employees will not be permitted to purchase any security or instrument that has been sold by such employee within the prior 60 days. (d) Employees may be required to disgorge profits made on the sale for his own account or in a Related Account within the 60 days period. (d) This policy applies to trading in all types of securities and instruments, except where in a particular case the local Chief Executive Officer in consultation with the Head of Compliance has made a specific finding of hardship and it can be demonstrated that no potential abuse or conflict is present (for example, when an employee's request to sell a security purchased within 60 days prior to the request is prompted by a major corporate or market event, such as a tender offer, and the security was not held in client accounts). 10.11 DEALING IN INVESCO PLC If you wish to purchase and/or sell Invesco PLC shares or ADRs, you must follow the dealing procedure outlined. The only difference is that in additon to the Pre-Clearance Personal Trade Authorisation Form (Appendix 10.2) a request for Authorisation to deal in Invesco shares or ADRs Form must be completed and signed by the requestor and approval will need to be obtained from the the local Chief Investment Officer (or his deputy in his absence) and local Head of Compliance (or his deputy in his absence). You will not be permitted, however, to deal in these shares/ADRs/options where Invesco PLC is in a closed period. If you are uncertain whether Invesco PLC is in a closed period, you should speak to the local Head of Compliance before commencing the dealing process. APRIL 2007 8 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.12 DEALING IN Invesco FUNDS 10.12.1 Employees are not required to seek permission to deal in units/shares of Hong Kong authorized open-ended funds managed by Invesco. 10.12.2 Employees are not required to report deals in Invesco managed Hong Kong authorized open-ended funds. The Head of Compliance will monitor such dealing on a post-deal basis by reviewing dealing records obtained from the unitholder/shareholder registry. 10.12.3 Pre-clearance authorisation for dealing in close-ended funds and non-Hong Kong authorized funds managed by Invesco is required. 10.12.4 (a) Staff will be exempt from paying front end load, so long as the units/shares are held for a minimum period of 60 days; (b) Employees are not prevented from redeeming within the 60 day period; however at the discretion of the local Head of Compliance FEL may be charged on the subscription and redemption orders if there is a redemption within this period; (c) Full subcription payment must be made on application; no credit will be given in any circumstances; and (d) Staff should follow the relevant procedures for dealing in Invesco Funds (including the placement of deals between the hours of 9:00am to 5:00pm (Hong Kong time)). 10.12.5 After the 60 day holding period, shares/units purchased may be transferred but only to family members previously nominated on the Relationship Declaration Form on commencement of employment, after marriage or on other notified changes of family relationships. Transfers to people not nominated on the Relationship Declaration Form will not be allowed. 10.12.6 Staff will be allocated "C" shares in Invesco Funds wherever "C" shares are offered. However, transfers will be switched into "A" shares, if the value of the switch is below the normal "C" share threshold (normally USD1,000,000 or as stated in the prospectus). 10.12.7 Subscribing for shares on behalf of other people to take advantage of staff FEL concessions is strictly against company policy and offender may be subject to disciplinary action. 10.13 DEALING IN NON Invesco FUNDS 10.13.1 Employees are not required to seek permission to deal in units/shares of open-ended funds managed by other fund managers. 10.13.2 Employees are not required to report deals in non- Invesco managed open-ended funds. 10.13.3 Pre-clearance authorisation for dealing in close-ended funds managed by other fund managers is required. 10.14 HONG KONG EMPLOYEE REFERRALS APRIL 2007 9 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.14.1 Invesco employees may invite friends or family to subscribe for units in Invesco Funds. Investors referred in this manner may, at the discretion of the Head of Investor Services, Pooled Products or his/her deputy, be offered a discount on the front end load. 10.14.2 For any subscriptions into Invesco Funds referred by an employee, the employee should put his/her name in the Agent's Stamp Box on the application form and sign the form. 10.14.3 The completed application form should be given to the Head of Investor Services, Pooled Products or his/her deputy who will decide how much discount on the FEL fee should be given to the referred investor and countersigned by the local Head of Compliance or his/her deputy. 10.14.4 The Head of Investor Services, Pooled Products or his/her deputy should write the FEL to be charged on the application form and sign to indicate his approval. 10.14.5 The approved application form should be given to the Retail Administration Department to complete the subscription. 10.15 GIFTS AND ENTERTAINMENT 10.15.1 It is required that all Invesco personnel adhere to the highest standards of ethical conduct, including sensitivity to actual or apparent conflicts of interest. The provision or receipt of gifts or entertainment can create, or can have the appearance of creating, conflicts of interest. In addition, Invesco's clients and their personnel may be subject to similar restrictions regarding the receipt of gifts or entertainment. 10.15.2 This Policy establishes minimum standards to protect our Company. If the laws or regulations establish higher standards, we must adhere to those standards. 10.15.3 For purposes of this Policy, a "Gift" is anything of value given (1) by the Company or its personnel to a Business Associate (as defined in 10.2.1), or to a member of such a person's immediate family, or (2) by a Business Associate to any Invesco personnel, or to a member of such a person's immediate family. Gifts may include, but are not limited to, personal items, office accessories and sporting equipment (e.g., golf clubs, tennis rackets, etc.). For purposes of this Policy, Gifts also include charitable contributions made to or at the request of a Business Associate. For purposes of this Policy, Gifts do not include promotional items of nominal value (e.g., golf balls, pens, etc.) that display the logo of Invesco, or of the Business Associate. 10.15.4 "Entertainment" involves attendance at activities, including but not limited to meals, sporting events, the theatre, parties or receptions, and similar functions. Entertainment requires the presence of both Invesco personnel and the Business Associate; unless personnel from both entities attend, the activity constitutes a Gift. The value of Entertainment includes the cost of the activity itself (for example, the cost of tickets or a meal), as well as the cost of any related activities or services provided (such as prizes, transportation, and lodging in connection with the event). Entertainment does not include research or analysts meetings provided by issuers and attended by investment personnel or industry educational events sponsored by industry groups, so long as such events are for educational or research purposes. All Invesco personnel also should keep in mind that regulators may attempt to treat entertainment as "gifts" for compliance purposes, particularly where the entertainment appears excessive in value or frequency. 10.15.5 The providing or receiving of any Gift or Entertainment that is conditioned upon the Company doing business or not doing business with the Business Associate or any other person are STRICTLY PROHIBITED. APRIL 2007 10 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.15.6 Gifts. An employee may not retain a gift received from a Business Associate without the approval of the Head of Department and the local Head of Compliance (see Approval Form in Appendix 10.6). Reporting and approval are required for gifts received during festive seasons, including Christmas dinner sponsor, mooncakes, hampers, and flower and fruit baskets 10.15.7 Under no circumstances, the value of gift given or received should exceed USD 200 OR HKD 1,600 PER INDIVIDUAL ANNUALLY. If the value of the gift received is not able to be determined, professional judgment should be used to determine the value of the gift. Should the value exceed USD 200 or HKD 1,600, it should be returned to the donor, passed to the Human Resources or donates to the charity. Approval from Head of Department is required for providing and receiving gift, however PRIOR APPROVAL from local Head of Compliance is not necessary. Post approval from local Head of Compliance is required. If the gift is not giving to any particular person, the gift shall be passed to Human Resources Department and distributed to the staff on a raffle basis. The gift limit is applied to each individual office. 10.15.8 Employees may not give, and must tactfully refuse, any gift of cash, a gift certificate or a gift that is substantially the same as cash. Notwithstanding this requirement, employees may give or receive Lai-See (red envelopes) at Lunar New Year of an amount not more than HK$200 each. In case the amount is more than HK$200, the case must be reported to the Head of Department and the local Head of Compliance. Due to Chinese custom, it may be difficult to return the Lai-See. Therefore, the full amount should be donated to a charitable organization in Hong Kong, and the Business Associate be informed of the donation. 10.15.9 Gifts should not be given to an employee of any securities firm which is making a public offering of a fund advised by Invesco nor given in connection with the acquisition of a new client by Invesco. 10.15.10 Each employee is required to report annually to his/her Department Head all gifts received and made each year. The Department Head is required to report annually to the Compliance Department all gifts received and made by the Department for the whole year. The relevant forms are attached as Appendix 10.7. 10.15.11 Entertainment. Each employee is expected to use professional judgment, subject to review by his or her supervisor, in entertaining and in being entertained by a Business Associate. 10.15.12 Provided that the employee and Business Associate both attend, an employee may accept from a single business partner, or provide to a single person or a Business Partner for Entertainment of value UP TO USD 1,200 OR HKD 9,300 IN A CALENDAR YEAR. Under no circumstances, the value of the entertainment should exceed USD 400 OR HKD 3,100 PER INDIVIDUAL PER EVENT. Approval from Head of Department is required for providing and receiving entertainment, however PRIOR APPROVAL from local Head of Compliance is not necessary. Post approval from local Head of Compliance is required. If the event of the entertainment such as movie tickets is not giving to any particular employee, the event of the entertainment shall be passed to the Human Resources Department and distributed to the staff on a raffle basis. The entertainment limit is applied to each individual office. 10.16 OUTSIDE ACTIVITIES 10.16.1 In order to reduce potential conflicts of interest arising from the participation of employees on the boards of directors of public, private, non-profit and other enterprises, all employees are subject to the following restrictions and guidelines. APRIL 2007 11 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING 10.16.2 An employee may not serve as a director of a public company without the approval of the local Chief Executive Officer after consultation with the local Head of Compliance. 10.16.3 An employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if: (a) client assets have been invested in such company; and (b) service on a such board has been approved in writing by the local Chief Executive Officer. The employee must resign from such board of directors as soon as the company contemplates going public, except where the local Chief Executive Officer has determined that an employee may remain on a board. (In any event, an employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company; except with the prior written approval of the local Chief Executive Officer. (c) service on such a board is directly as a result of the employee position or status at Invesco. In this case any fees received for being a director must be reimbursed to Invesco. 10.16.4 An employee must receive prior written permission from the local Chief Executive Officer before serving as a director, trustee or member of an advisory board of either: (a) any non-profit or charitable institution; or (b) a private family-owned and -operated business. 10.16.5 If an employee serving on the board of directors or advisers of any entity comes into possession of material, nonpublic information through such service, he or she must immediately notify his or her local Head of Compliance. 10.17 ECONOMIC OPPORTUNITIES 10.17.1 An Invesco employee shall not take personal advantage of any economic opportunity properly belonging to a Invesco client or to Invesco itself. Such opportunities could arise, for example, from confidential information belonging to a client or the offer of a directorship. Employees must not disclose information relating to a client's intentions, activities or portfolios except: (a) to fellow employees, or other agents of the client, who need to know it to discharge their duties; or (b) to the client itself. 10.17.2 Employees may not cause or attempt to cause any client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the employee or Invesco. 10.17.3 If an employee or immediate family member stands to materially benefit from an investment decision for a Client that the employee is recommending or participating in, the employee must disclose that interest to persons with authority to make investment decisions or to the Head of Compliance. Based on the information given, a decision will be made on whether or not to restrict the employee's participation in causing a client to purchase or sell a Security in which the employee has an interest. 10.17.4 Employees must disclose to those persons with authority to make investment decisions for a client (or to the Head of Compliance if the employee in question is a person with authority to make investment decisions for the client), any beneficial interest that the employee (or immediate family member) has in that Security, or in the issuer thereof, where the decision could create a material benefit to the APRIL 2007 12 (INVESCO LOGO) STAFF ETHICS AND PERSONAL SHARE DEALING employee (or immediate family member) or the appearance of impropriety. The person to whom the employee reports the interest, in consultation with the Head of Compliance, must determine whether or not the employee will be restricted in making investment decisions. 10.18 SANCTIONS 10.18.1 These rules will be interpreted by the local Head of Compliance, as applicable. Questions of interpretation should be directed in the first instance to the local Head of Compliance or his/her designee or, if necessary, with the Head of Compliance of another Invesco entity. 10.18.2 If advised of a violation of these rules by an employee, the local Chief Executive Officer, (in the case of the local Chief Executive Officer, the local Board of Directors) may impose such sanctions as are deemed appropriate. Any violations of these Rules and sanctions therefore will be reported to the local Board of Directors at least annually. 10.19 ANNUAL REVIEW A review will be performed at least once a year and a report will be prepared that: (a) summarises existing procedures concerning personal investing and any changes in the procedures made during the past year; (b) identifies any violations requiring significant remedied action during the past year; and (c) identifies any recommended changes in existing restrictions or procedures based on the experience under the Code involving industry practices on developments in applicable laws or regulations . APRIL 2007 13 EX-99.P6 9 h53872aexv99wp6.txt CODE OF ETHICS (INVESCO LOGO) INVESCO PLC CODE OF CONDUCT INTRODUCTION Our company's Core Purpose and Mission are a logical beginning point for our Code of Conduct: INVESCO is committed to "Helping People Worldwide Build Their Financial Security". That Core Purpose underlies our Mission, which is to deliver superior investment performance worldwide. Over the years, INVESCO has developed a set of values that will continue to help us achieve our Core Purpose and Mission. Our values include: - Working with integrity - Respecting our employees and clients - Empowering people This Code of Conduct ("Code of Conduct" or "Code") has been created to assist us in accomplishing our Core Purpose and Mission. It contains a number of policies and standards which, when taken together, are designed to help define the essence of the conduct of an INVESCO representative. These policies and standards are also intended to provide guidance to INVESCO personnel in fulfilling their obligations to comply with applicable laws, rules and regulations. This Code of Conduct applies to all officers and other employees of INVESCO and its subsidiaries (collectively, "Covered Persons"). These standards are neither exclusive nor complete. Additional company policies and rules can be found in the company's Intranet site, and others may be published to company personnel from time to time. Covered Persons are required to comply with all applicable laws, rules and regulations, whether or not specifically addressed in these policies. For additional guidance, or if you have questions regarding the existence, interpretation or application of any law, rule or regulation, please contact your supervisor, the General Counsel of your business unit or division, or the INVESCO General Counsel. Our culture is based upon a set of shared values and principles. These include working with integrity and commitment to our clients, colleagues and communities. In practice, this means that our clients' interests must always come first, that Covered Persons should treat each other with respect and consideration, and that INVESCO should Page 1 of 23 participate as a responsible corporate citizen in every community in which it operates. This commitment is a vital part of our achieving our principal responsibility as a publicly-held company: producing a fair return on our shareholders' capital. This Code of Conduct contains broad and general principles that supplement the specific policies, procedures and training within each business unit of INVESCO. YOUR RESPONSIBLITIES One person's misconduct can damage our entire company's hard-earned reputation and compromise the public's trust in the company. Every Covered Person should therefore become familiar with this Code and abide strictly by its provisions. In brief: - It is your responsibility at all times to comply with the law and behave in an ethical manner. - This Code cannot anticipate every possible situation or cover every topic in detail. The company has established special policies to address specific subjects and will update this Code and those specific policies from time-to-time. If you are unclear about a situation, stop and ask for guidance before taking action. - Failure to obey laws and regulations violates this Code and may expose both you and the company to criminal or civil sanctions. Any violation of this Code or other company policies may result in disciplinary action, up to and including termination of employment. The company may also seek civil remedies from you and even refer criminal misconduct to law enforcement agencies. - You are responsible for reporting possible violations of this Code to the company (see below). - If you have a question about a topic covered in this Code or a concern regarding any conduct, please speak with your supervisor or with an appropriate member of the Legal & Compliance Department. - If you are aware of a violation and are uncomfortable speaking with any of these people or wish to remain anonymous, you may call the toll-free INVESCO Compliance Reporting Line (the "Compliance Reporting Line"). If you are calling from a U.S. or Canadian location dial 1-866-7-3627. For calls from all other locations, dial an international operator and request a collect call to 1-704-943-1136. When asked for your name use "INVESCO." (See further details below.) Page 2 of 23 - If you are an attorney or an executive officer of the company, you may have additional reporting or other obligations under specific rules applicable to you, such as the POLICY FOR REPORTING BY ATTORNEYS EMPLOYED BY INVESCO PLC AND ITS SUBSIDIARIES, and you should also comply with such rules. STATEMENT OF GENERAL PRINCIPLES INVESCO with its subsidiaries and various divisions operates in a highly-regulated and complex environment. There are numerous layers of overlapping, and occasionally conflicting, laws, customs and local practices. This Code of Conduct was designed to provide all of us who are part of the INVESCO group with a clear statement of our firm's ethical and cultural standards. We operate in major countries and securities markets throughout the world. Generally, we serve our clients as fiduciaries. Fiduciary businesses are generally held to a higher standard of conduct than other businesses, and as such there are special obligations that apply. The following key duties and principles govern our conduct as fiduciaries: - Best interests of clients - As fiduciaries, we have a duty to act with reasonable care, skill and caution in the best interests of our clients, and to avoid conflicts of interest. - Global fiduciary standards - INVESCO seeks to maintain the same high fiduciary standards throughout the world, even though those standards may not be legally required, or even recognized, in some countries. - Compliance with applicable laws, rules and regulations - We have a duty to comply with the laws, rules and regulations of the jurisdictions in which we operate, and to comply with the terms of our agreements with our clients. - Client confidentiality - We must maintain the confidentiality of information relating to the client, and comply with the data protection requirements imposed by many jurisdictions. - Information - Clients must be provided with timely and accurate information regarding their accounts. - Segregation and protection of assets - Processes must be established for the proper maintenance, control and protection of client assets. Fiduciary assets must be segregated from INVESCO assets and property. Page 3 of 23 - Delegation of duties - Fiduciary duties should be delegated only when the client consents and where permitted by applicable law. Reasonable care, skill and caution must be exercised in the selection of agents and review of their performance. - Client guidelines - INVESCO is responsible for making investment decisions on behalf of clients that are consistent with the prospectus, contract, or other controlling document relating to the client's account. - Relations with regulators - We seek relationships with regulators that are open and responsive in nature. 1. Compliance with Laws, Rules and Regulations INVESCO strives to ensure that all activity by or on behalf of INVESCO is in compliance with applicable laws, rules and regulations ("applicable laws"). Many of these applicable laws are specifically described in this Code of Conduct and in other INVESCO and business unit policies and procedures. In the conduct of our business, all Covered Persons are required to comply with all applicable laws. 2. Fair and Honest Dealing Covered Persons shall deal fairly and honestly with INVESCO's shareholders, customers, suppliers, competitors and employees. Covered Persons shall behave in an ethical manner and shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice. 3. Conflicts of Interest INVESCO and its Covered Persons must adhere to the highest standards of honest and ethical conduct. These include, but are not limited to, sensitivity to the existence of a conflict of interest or the appearance of a conflict of interest. Conflicts of interest can arise in many ways, and we must all be sensitive to those situations in which they are most likely to be present. A conflict of interest exists when a Covered Person's personal interest interferes, or appears to interfere, in any way with the interests of INVESCO or its clients, or when a Covered Person otherwise takes actions or has interests that may make it difficult to perform his or her company work objectively and effectively. For example, a conflict of interest would arise if a Covered Person, or a member of his or her family, receives improper personal benefits as a result of his or her position with INVESCO. All Covered Persons owe a duty of undivided and unqualified loyalty to INVESCO and may not use their positions improperly to profit personally or to assist others in profiting at the expense of the company. All Covered Persons are therefore expected and Page 4 of 23 required to regulate their activities so as to avoid conflicts of interest. In addition, Covered Persons shall promptly communicate to the applicable member of the Legal & Compliance Department any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest so that the company and the Covered Person may take steps to minimize the conflict. Covered Persons shall not take for personal use (or for use by a family member) any business opportunity learned of during the course of serving INVESCO, using INVESCO property or as a result of such individual's position with INVESCO. To the extent that an employee or officer learns of a business opportunity that is within INVESCO's existing or proposed lines of business, the employee or officer should inform his or her supervisor, the divisional or business unit General Counsel, or the Board of Directors, as appropriate, of the business opportunity and refrain from personally pursuing the matter until such time as INVESCO decides to forego the business opportunity. At no time may any employee or officer utilize any INVESCO property, information or position to generate personal gain or engage or participate in any business that directly competes with INVESCO. While not all-inclusive, the following examples of outside financial interests will serve to illustrate some of the types of activities that might cause conflicts of interest: - Ownership or other interest in or employment by any outside concern which does business with INVESCO. This does not apply to stock or other investments in a publicly-held company, provided that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. INVESCO may, following a review of the relevant facts, permit ownership interests which exceed these amounts if management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect INVESCO's business interests or the judgment of the affected Covered Person. - Conducting business, not on behalf of INVESCO, with any INVESCO vendor, supplier, contractor, agency, or any of their directors, officers or employees. - Representation of INVESCO by a Covered Person in any transaction in which he or she, or a family member, has a substantial personal interest. - Disclosure or use of confidential, special or inside information of or about INVESCO, particularly for personal profit or advantage of the Covered Person or a family member of such person. - Competition with INVESCO by a Covered Person, directly or indirectly, in the purchase, sale or ownership of property or services or business investment opportunities. Page 5 of 23 As described in more detail in Sections 4, 5 and 6 below, acting as an officer or director of an outside organization, personal share dealing, and the use of material non-public information represent additional areas where conflicts can arise and are of particular sensitivity. In addition to conflicts of interest between the company and its Covered Persons, conflicts of interest may arise between the company and its clients, including investment funds. Where a Covered Person is trading in securities owned by client accounts, or where a portfolio management team for a hedge fund also manages mutual funds that invest in the same securities, are each examples of situations that may give rise to real or apparent conflicts of interest. All Covered Persons must follow the procedures in place within their respective divisions and business units and must also be sensitive to the types of situations that can give rise to such conflicts or apparent conflicts. 4. Outside Activities and Compensation No Covered Person shall perform work or render services for any competitor of INVESCO or for any organization with which INVESCO does business or which seeks to do business with INVESCO, outside of the normal course of his or her employment with INVESCO, without the prior written approval of the company. Nor shall any such person be a director, officer, or consultant of such an organization, or permit his or her name to be used in any fashion that would tend to indicate a business connection with such organization, without such approval. Outside organizations can include public or private corporations, partnerships, charitable foundations and other not-for-profit institutions. With the above approval, Covered Persons may receive compensation for such activities. Service with organizations outside of INVESCO can, however, raise serious regulatory issues, including conflicts of interest and access to material non-public information. As an outside board member or officer, a Covered Person may come into possession of material non-public information about the outside company or other public companies. It is critical that a proper information barrier be in place between INVESCO and the outside organization, and that the Covered Person does not communicate such information to other Covered Persons in violation of the information barrier. Similarly, INVESCO may have a business relationship with the outside organization or may seek a relationship in the future. In those circumstances, the Covered Person must not be involved in any way in the business relationship between INVESCO and the outside organization. INVESCO retains the right to prohibit membership by Covered Persons on any board of directors/trustees or as an officer of an outside organization where such membership might conflict with the best interests of the company. Approval will be granted on a Page 6 of 23 case-by-case basis, subject to proper resolution of potential conflicts of interest. Outside activities will be approved only if these issues can be satisfactorily resolved. 5. Personal Share Dealing Purchasing and selling securities in a Covered Person's own account, or accounts over which the Covered Person has access or control, can give rise to potential conflicts of interest. As fiduciaries, we are held to the highest standards of conduct. Improperly gaining advance knowledge of portfolio transactions, or conducting securities transactions based upon information obtained at INVESCO, can be a violation of those standards. All personal securities transactions must be pre-cleared unless an exemption is obtained. Generally, an exemption will be granted only for Covered Persons whose duties do not give them access to information regarding the sale or purchase of, or the recommendation to sell or purchase, securities in any portfolio. Transactions in certain retirement benefit plans, such as 401(k)s and Money Purchase Plans, and in specified categories of securities, are exempt from pre-clearance. Every Covered Person must also comply with the specific rules in effect in this area for the Covered Person's division or business unit. INVESCO also has policies that specifically cover personal transactions in the shares and American Depositary Shares of the company. All Covered Persons are obligated to follow those procedures whenever they conduct such transactions. 6. Information Barriers and Material Non-Public Information In the conduct of our business, Covered Persons may come into possession of material non-public information. This information could concern an issuer, a client, a portfolio, the market for a particular security, or INVESCO itself. The purchase or sale of INVESCO's securities or the securities of other publicly-traded companies while aware of material nonpublic information about such company, or the disclosure of material nonpublic information to others who then trade in such company's securities, is prohibited by this Code of Conduct and by United States and other jurisdictions' securities laws. INVESCO and its subsidiaries have adopted insider trading policies that apply to all Covered Persons. All Covered Persons should review the insider trading policies carefully and follow the policies and procedures described therein. The failure of a Covered Person to comply with the company's insider trading policy may subject him or her to company-imposed sanctions, up to and including termination for cause, whether or not the failure to comply results in a violation of law. You should seek the advice of the applicable divisional or business unit General Counsel on any questions regarding this subject and the company's insider trading policy. All Covered Persons are prohibited from using such information in ways that violate the law, including for personal gain. Non-public information must be kept confidential, which may include keeping it confidential from other Covered Persons. Page 7 of 23 7. Anti-Bribery and Dealings with Governmental Officials Special care must be taken when dealing with government customers. Activities that might be appropriate when working with private sector customers may be improper and even illegal when dealing with government employees, or when providing goods and services to another customer who, in turn, will deliver the company's product to a government end user. Many of the countries in which INVESCO conducts its business prohibit the improper influencing of governmental officials or other persons by the payment of bribes, gifts, political contributions, lavish hospitality or by other means. Our policy requires adherence to those restrictions. Do not directly or indirectly promise, offer or make payment in money or anything of value to anyone, including a government official, agent or employee of a government, political party, labor organization or business entity or a candidate of a political party, or their families, with the intent to induce favorable business treatment or to improperly affect business or government decisions. This policy prohibits actions intended either to influence a specific decision or merely to enhance future relationships. In general, all travel and entertainment that Covered Persons provide to governmental officials must be pre-approved within the appropriate business unit. If approved, a written confirmation that such expenses do not violate local law must be obtained from an appropriate third party (e.g., the business unit's legal counsel or the government official's supervisor). Covered Persons shall comply with all laws, rules and regulations governing political campaign finance and lobbying activities and shall not engage in any conduct that is intended to avoid the application of such laws to activities undertaken on INVESCO's behalf. In addition, appropriate executive officers shall monitor compliance with lobbyist registration and disclosure requirements by all individuals who act on behalf of INVESCO. These prohibitions extend to any consultants or agents we may retain on behalf of INVESCO. 8. Anti-Discrimination and Harassment INVESCO is committed to providing a work environment that is free of discrimination and harassment. Such conduct, whether overt or subtle, is demeaning, may be illegal, and undermines the integrity of the employment relationship. Sexual harassment can include unwelcome sexual advances, requests for sexual favors, pressure to engage in a sexual relationship as a condition of employment or promotion, or conduct which creates a hostile or offensive work environment. Page 8 of 23 Discrimination can take many forms including actions, words, jokes, or comments based upon an individual's race, citizenship, ethnicity, color, religion, sex, veteran status, national origin, age, disability, sexual orientation, marital status or other legally protected characteristic. Any Covered Person who engages in harassment or discrimination will be subject to disciplinary action, up to and including termination of employment. 9. Anti-Money Laundering In the global marketplace, the attempted use of financial institutions and instruments to launder money is a significant problem that has resulted in the passage of strict laws in many countries. Money laundering is the attempt to disguise money derived from or intended to finance illegal activity including drug trafficking, terrorism, organized crime, fraud, and many other crimes. Money launderers go to great lengths to hide the sources of their funds. Among the most common stratagems are placing cash in legitimate financial institutions, layering between numerous financial institutions, and integrating the laundered proceeds back into the economy as apparently legitimate funds. All Covered Persons must be vigilant in the fight against money laundering, and must not allow INVESCO to be used for money laundering. Each business unit has developed an anti-money laundering program that is consistent with INVESCO's group-wide policy. Each Covered Person must comply with the applicable program. 10. Antitrust The laws of many countries are designed to protect consumers from illegal competitive actions such as price fixing and dividing markets. It is INVESCO's policy and practice to compete based on the merits of our products and services. In order to further that policy, Covered Persons must not fix or control prices with competitors, divide up territories or markets, limit the production or sale of products, boycott certain suppliers or customers, unfairly control or restrict trade in any way, restrict a competitor's marketing practices, or disparage a competitor. Covered Persons must never discuss products, pricing or markets with competitors with the intent to fix prices or divide markets. 11. Data Privacy Data privacy, as it relates both to our clients and our employees, has become a major political and legal issue in many jurisdictions in which we do business. A variety of laws in each of those jurisdictions governs the collection, storage, dissemination, transfer, use, access to and confidentiality of personal information and patient health information. These laws can work to limit transfers of such data across borders and even among affiliated entities in the INVESCO group of companies. INVESCO and its Covered Persons will comply with all provisions of these laws that relate to its business, including Page 9 of 23 the privacy, security and electronic transmission of financial, health and other personal information. The company expects its Covered Persons to keep all such data confidential and to protect, use and disclose information in the conduct of our business only in compliance with these laws. The company will consider and may release personal information to third parties to comply with law or to protect the rights, property or safety of INVESCO and its customers. In accordance with INVESCO policies, each business unit has developed required disclosures and data security procedures applicable to that business unit. All Covered Persons must comply with the applicable procedures. With respect to INVESCO Covered Persons, all salary, benefit, medical and other personal information relating to Covered Persons shall generally be treated as confidential. Personnel files, payroll information, disciplinary matters, and similar information are to be maintained in a manner designed to protect confidentiality in accordance with applicable laws. All Covered Persons shall exercise due care to prevent the release or sharing of such information beyond those persons who may need such information to fulfill their job functions. Notwithstanding the foregoing, all personnel information belongs solely to INVESCO and may be reviewed or used by the company as needed to conduct its business. 12. Communications with the Media and Analysts INVESCO has a long-standing policy of co-operating with the news media and the financial community. This policy is intended to enhance respect for the company, provide accurate information, and achieve our business goals. INVESCO employs media relations professionals who are responsible for handling all contacts with the news media. INVESCO's Communications and Corporate Affairs Department is responsible for formulating and directing our media relations policy worldwide. Other INVESCO employees may not speak to or disseminate information to the news media unless such contact has been requested and arranged by or coordinated with an INVESCO media relations professional in accordance with the company's media relations policy. Any contact from the news media should be referred promptly and without comment to an INVESCO media relations professional. If you do not know the appropriate media relations professional for your unit, you can refer the contact to the INVESCO Communications and Corporate Affairs Department. Many countries have detailed rules with regard to the dissemination of information about public companies. In particular, a public company must have procedures for controlling the release of information that may have a material impact on its share price. The Chief Executive Officer and the Chief Financial Officer are responsible for INVESCO's relationships with the financial community, including the release of price sensitive information. Other INVESCO employees may not speak to or disseminate information regarding the company to the financial community (including analysts, investors, shareholders, Company lenders, and rating agencies) unless such contact has been Page 10 of 23 requested and arranged by the Chief Executive Officer, the Chief Financial Officer or the Investor Relations Group within the Finance Department. 13. Electronic Communications The use of electronic mail, the Internet and other technology assets is an important part of our work at INVESCO. Used improperly, this technology presents legal and business risks for the company and for individual employees. There are also important privacy issues associated with the use of technology, and related regulations are evolving. In accordance with INVESCO's Electronic Communications policies, all Covered Persons are required to use information technology for proper business purposes and in a manner that does not compromise the confidentiality of sensitive or proprietary information. All communications with the public, clients, prospects and fellow employees must be conducted with dignity, integrity, and competence and in an ethical and professional manner. We must not use information technology to: transmit or store materials which are obscene, pornographic, or otherwise offensive; engage in criminal activity; obtain unauthorized access to data or files; commit copyright violations; install personal software without permission; or make Internet statements, without permission, that suggest that the user is speaking on behalf of INVESCO or its affiliates. 14. Gifts and Relationships with Customers and Suppliers INVESCO seeks to do business with clients and suppliers on a fair and equitable basis. We may not accept gifts of other than nominal value, or lavish entertainment, or other valuable benefits or special favors from customers or suppliers. We must observe any limits imposed by our business unit's policies, local laws, or regulations with respect to the acceptance of gifts or gratuities. 15. International Issues If you conduct business for INVESCO outside of the U.S., in addition to being familiar with the local laws of the other countries involved, be sure you are familiar with the following U.S. laws and regulations. Violations of these laws can result in substantial fines, imprisonment and severe restrictions on the company's ability to do business. FOREIGN CORRUPT PRACTICES ACT The United States Foreign Corrupt Practices Act (FCPA) and similar laws in many other countries have a variety of provisions that regulate business in other countries and with foreign citizens. In essence, these laws make it a crime to promise or give anything of value to a foreign official or political party in order to obtain or keep business or obtain any improper advantage. It is also illegal to make payments to agents, sales Page 11 of 23 representatives or other third parties if you have reason to believe your gift will be used illegally. Seek advice from the appropriate member of the Legal & Compliance Department for interpretation of the FCPA or similar laws if you are involved in any business dealings that involve foreign countries. ANTI-BOYCOTT LAWS From time to time, various countries may impose restrictions upon the ability of businesses in their jurisdiction to engage in commerce with designated individuals, countries or companies. These laws are commonly referred to as boycotts or trade embargoes. It may be against the law to cooperate in any boycotts between foreign countries not sanctioned by the laws of the place where your office is located. All requests for boycott support or boycott-related information must be reported to your supervisor and the member of the Legal & Compliance Department with responsibility for your office. Similarly, many countries contribute the names of criminal or terrorist organizations or individuals to a common database and require financial institutions to screen customer lists against the database as part of their "Know Your Customer" obligations. We must be aware of, and where appropriate, adhere to any such restrictions. EMBARGO SANCTIONS The United States Treasury Department's Office of Foreign Assets Control prohibits U.S. companies and their foreign subsidiaries from doing business with certain countries and agencies and certain individuals. The laws of other countries may have similar types of prohibitions. The regulations vary depending on the country and the type of transaction and often change as countries' foreign policies change. If you are aware of any sensitive political issues with a country in which INVESCO is doing or considering doing business, seek advice from the appropriate member of the Legal & Compliance Department. 16. Political Activities and Lobbying Covered Persons are encouraged to vote in elections for which they are eligible, and to make contributions supporting candidates or parties of their choice. Covered Persons are also encouraged to express their views on government, legislation and other matters of local or national interest. Many jurisdictions have imposed severe and complex restrictions on the ability of individuals and companies to make political contributions. You should assume that INVESCO and its Covered Persons are generally prohibited from certain types of political activities, and you must be familiar with the rules in effect for your business unit. No Covered Person may, under any circumstances, use company funds to make political contributions without the prior written approval of a member of the Legal & Page 12 of 23 Compliance Department, nor may you represent your personal political views as being those of the company. 17. Retention of Books and Records INVESCO corporate records are important assets. Corporate records include essentially everything you produce as a Covered Person, regardless of its format. A corporate record may be in the form of paper, computer tapes, microfilm, e-mail, or voice mail. It may be something as obvious as a memorandum or a contract or something not as obvious, such as a desk calendar, an appointment book, or an expense record. INVESCO is required by law to maintain certain types of corporate records, usually for a specified period of time. Failure to retain such documents for such minimum periods could subject INVESCO to penalties and fines, cause the loss of rights, obstruct justice, place INVESCO in contempt of court, or place INVESCO at a serious disadvantage in litigation. However, storage of voluminous records over time is costly. Therefore, INVESCO has established controls to assure retention for required periods and timely destruction of retrievable records, such as paper copies and records on computers, electronic systems, microfiche, and microfilm. Even if a document is retained for the legally required period, liability could still result if a document is destroyed before its scheduled destruction date. INVESCO and its affiliates are subject to the regulatory requirements of numerous countries and regulatory agencies. Virtually all of them have specific requirements concerning the creation, maintenance and storage of business records. INVESCO expects all Covered Persons to become familiar with and fully comply with the records retention/destruction schedule for the departments and office locations for which they work. If you believe documents should be retained beyond the applicable retention period, consult with the Legal & Compliance Department. 18. Sales and Marketing Materials INVESCO is committed to building sustained, open, and honest relationships with our customers, and to complying with all relevant regulatory requirements. This requires that all marketing and sales-related materials be prepared under standards approved by the Legal & Compliance Department and, prior to use, reviewed and approved by the appropriate supervisor within a business unit. Covered materials include requests for proposals, client presentations, performance summaries, advertisements, and published market commentaries. 19. Substance Abuse INVESCO is committed to providing a safe and healthy work place for all employees. The use, possession, sale, transfer, purchase, or being "under the influence" of drugs at Page 13 of 23 any time while on company premises or on company business is prohibited. The term "drug" includes alcoholic beverages (other than in connection with entertainment events, or in other appropriate settings), prescriptions not authorized by your doctor, inhalants, marijuana, cocaine, heroin and other illegal substances. 20. Confidential Information Confidential information includes all non-public information that might be of use to competitors, or harmful to the company or its customers, if disclosed. All information (in any form, including electronic information) that is created or used in support of company business activities is the property of INVESCO. This company information is a valuable asset and Covered Persons are expected to protect it from unauthorized disclosure. This includes INVESCO customer, supplier, business partner and employee data. United Kingdom, United States (federal and state) and other jurisdictions' laws may restrict the use of such information and impose penalties for impermissible use or disclosure. Covered Persons must maintain the confidentiality of information entrusted to them by the company or its customers, vendors or consultants except when disclosure is properly authorized by the company or legally mandated. Covered Persons shall take all reasonable efforts to safeguard such confidential information that is in their possession against inadvertent disclosure and shall comply with any non-disclosure obligations imposed on INVESCO in its agreements with third parties. Information pertaining to INVESCO's competitive position or business strategies, and information relating to negotiations with Covered Persons or third parties, should be protected and shared only with Covered Persons having a need to know such information in order to perform their job responsibilities. 21. Protection and Proper Use of Company Assets All Covered Persons shall strive to preserve and protect the company's assets and resources and to promote their efficient use. The standards set forth below are intended to guide Covered Persons by articulating INVESCO's expectations as they relate to activities or behaviors that may affect the company's assets. Personal Use of Corporate Assets Theft, carelessness and waste have a direct impact on INVESCO's profitability. Covered Persons are not to convert assets of the company to personal use. Company property should be used for the company's legitimate business purposes and the business of the company shall be conducted in a manner designed to further INVESCO's interest rather than the personal interest of an individual Covered Person. Covered Persons are prohibited from the unauthorized use or taking of INVESCO's equipment, supplies, materials or services. Prior to engaging in any activity on Page 14 of 23 company time which will result in remuneration to the Covered Person or the use of INVESCO's equipment, supplies, materials or services for personal or non-work related purposes, officers and other Covered Persons shall obtain the approval of the supervisor of the appropriate business unit. Use of Company Software Covered Persons use software programs for word processing, spreadsheets, data management, and many other applications. Software products purchased by the company are covered by some form of licensing agreement that describes the terms, conditions and allowed uses. It is the company's policy to respect copyright laws and observe the terms and conditions of any license agreements. Copyright laws in the United States and other countries impose civil and criminal penalties for illegal reproductions and use of licensed software. You must be aware of the restrictions on the use of software and abide by those restrictions. INVESCO business equipment may not be used to reproduce commercial software. In addition, you may not use personal software on company equipment without prior written approval. Computer Resources/E-mail The company's computer resources, which include the electronic mail system, belong to INVESCO and not to the Covered Person. They are not intended to be used for amusement, solicitation, or other non-business purposes. While it is recognized that Covered Persons will occasionally use the system for personal communications, it is expected that such uses will be kept to a minimum and that Covered Persons will be responsible and professional in their use of e-mail. The use of the computer systems to make or forward derogatory or offensive remarks about other people or groups is prohibited. E-mail messages should be treated as any other written business communication. 22. INVESCO Intellectual Property Employees and officers must carefully maintain and manage the intellectual property rights of INVESCO, including patents, trademarks, copyrights and trade secrets, to preserve and protect their value. Information, ideas and intellectual property assets of INVESCO are important to the company's success. INVESCO's name, logo, trademarks, inventions, processes and innovations are intellectual property assets and their protection is vital to the success of the company's business. The company's and any of its subsidiaries' names, logos and other trademarks and service marks are to be used only for authorized company business and never in connection with personal or other activities unless appropriately approved and in accordance with company policy. In addition, our Covered Persons must respect the intellectual property rights of third parties. Violation of these rights can subject both you and the company to substantial liability, including criminal penalties. Page 15 of 23 Any work product produced in the course of performing your job shall be deemed to be a "work made for hire" and shall belong to INVESCO and is to be used only for the benefit of INVESCO. This includes such items as marketing plans, product development plans, computer programs, software, hardware and similar materials. You must share any innovations or inventions you create with your supervisor so that the company can take steps to protect these valuable assets. 23. Integrity and Accuracy of Financial Records The preparation and maintenance of accurate books, records and accounts is required by law and essential to the proper discharge of financial, legal and reporting obligations. All Covered Persons are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or accounting book, record or account. In addition, all financial data must be completely and accurately recorded in compliance with applicable law and INVESCO's accounting policies and procedures. A Covered Person may violate this section by acting or by failing to act when he or she becomes aware of a violation or potential violation of this section. 24. Disclosure in Reports and Documents. Filings and Public Materials. As a public company, it is important that the company's filings with UK authorities, the United States Securities and Exchange Commission (the "SEC") and other U.S. federal, state, domestic and international regulatory agencies are full, fair, accurate, timely and understandable. The company also makes many other filings with the SEC and other UK, U.S. and international regulatory agencies on behalf of the funds that its subsidiaries and affiliates manage. Further, the company prepares mutual fund account statements, client investment performance information, prospectuses and advertising materials that are sent out to its mutual fund shareholders and clients. Disclosure and Reporting Policy. The company's policy is to comply with all applicable disclosure, financial reporting and accounting regulations applicable to the company. The company maintains the highest commitment to its disclosure and reporting requirements, and expects and requires all Covered Persons to record information accurately and truthfully in the books and records of the company. Information for Filings. Depending on his or her position with the company, a Covered Person may be called upon to provide necessary information to assure that the company's public reports and regulatory filings are full, fair, accurate, timely and understandable. The company expects all Covered Persons to be diligent in providing accurate information to the inquiries that are made related to the company's public disclosure requirements. Page 16 of 23 Disclosure Controls and Procedures and Internal Control Over Financial Reporting. Covered Persons are required to cooperate and comply with the company's disclosure controls and procedures and internal controls over financial reporting so that the company's reports and documents filed with the UK authorities, the SEC and other U.S. federal, state, domestic and international regulatory agencies comply in all material respects with applicable laws, and rules and regulations, and provide full, fair, accurate, timely and understandable disclosure. 25. Improper Influence on the Conduct of Audits Every Covered Person must deal fairly and honestly with outside accountants performing audits, reviews or examinations of INVESCO's and its subsidiaries' financial statements. To that end, no Covered Person of INVESCO may make or cause to be made a materially false or misleading statement (or omit facts necessary to make the statements made not misleading) in connection with an audit, review or examination of financial statements by independent accountants or the preparation of any document or report required to be filed with a governmental or regulatory authority. Covered Persons of INVESCO also are prohibited from coercing, manipulating, misleading or fraudulently inducing any independent public or certified public accountant engaged in the performance or review of financial statements that are required to be filed with a governmental or regulatory authority if he or she knows or should have known that his or her actions could result in making those financial statements materially misleading. 26. Standards for INVESCO's Financial Officers INVESCO's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer (the "Financial Officers") are required to take all reasonable steps to provide full, fair, accurate, timely and understandable disclosures in the reports and documents that INVESCO files with or submits to the SEC and other regulatory bodies and in other public communications made by INVESCO. In the event that a Financial Officer learns that any such report, document or communication does not meet this standard and such deviation is material, then the Financial Officers are required to review and investigate such deviation, advise the Board of Directors or the Audit Committee of the Board of Directors regarding the deviation and, where necessary, revise the relevant report, document or communication. Although a particular accounting treatment for one or more of INVESCO's operations may be permitted under applicable accounting standards, the Financial Officers may not authorize or permit the use of such an accounting treatment if the effect is to distort or conceal INVESCO's true financial condition. The accounting standards and treatments utilized by INVESCO must, in all instances, be determined on an objective and uniform basis and without reference to a single transaction or series of transactions and their impact on INVESCO's financial results for a particular time period. Any new or novel accounting treatment or standard that is to be utilized in the preparation of INVESCO's Page 17 of 23 financial statements must be discussed with INVESCO's Audit Committee and its independent auditors. 27. Policy and Procedures on Reporting Potential Material Violations INVESCO's Audit Committee has adopted the following statement of policy with respect to the reporting by employees of potential material violations of this Code of Conduct, laws or regulations and our related non-retaliation policy: "INVESCO strives to ensure that all activity by or on behalf of INVESCO is in compliance with applicable laws, rules and regulations. INVESCO and its employees must adhere to the highest standards of honest and ethical conduct. Employees of INVESCO and its subsidiaries are affirmatively required to report possible violations of the INVESCO Code of Conduct, laws or regulations promptly to their manager, a Human Resources Director at the employee's site, the employee's Legal and Compliance Department representative, or via the 24-hour toll-free, anonymous INVESCO Compliance Reporting Line. INVESCO will not permit retribution, harassment, or intimidation of any employee who in good faith reports a possible violation. Specifically, INVESCO policy prevents any employee from being subject to disciplinary or retaliatory action by INVESCO or any of its employees or agents as a result of the employee's good faith: - Disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation or possible violation of federal or state law or regulation; or - Providing information, causing information to be provided, filing, causing to be filed, testifying, participating in a proceeding filed or about to be filed, or otherwise assisting in an investigation or proceeding regarding any conduct that the employee reasonably believes involves a violation of: (1) any criminal law relating to securities fraud, mail fraud, bank fraud, or wire, radio, television or internet fraud; (2) any rule or regulation of the United States Securities and Exchange Commission or any other national, state or provincial securities regulatory authority; or any provision of applicable law relating to fraud against shareholders, where, with respect to investigations, such information or assistance is provided to or the investigation is being conducted by a national, state or provincial regulatory agency, a member of any parliamentary body, or a person at INVESCO with supervisory or similar authority over the employee. However, employees who file reports or provide evidence which they know to be false or without a reasonable belief in the truth and accuracy of such information will not be protected by the above policy statement and may be subject to disciplinary action, including termination of their employment." Page 18 of 23 If you are a Covered Person with complaints or concerns regarding: (i) violations of this Code of Conduct or the rules mentioned herein; (ii) violations of laws or regulations generally involving INVESCO; or (iii) questionable accounting matters, internal accounting controls, auditing matters, breaches of fiduciary duty or violations of United States or foreign securities laws or rules (collectively "Accounting Matters"), including: - fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of INVESCO; - fraud or deliberate error in the recording and maintaining of financial records of INVESCO; - deficiencies in or non-compliance with INVESCO's internal accounting controls; - misrepresentation or false statements to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of INVESCO; - deviation from full and fair reporting of INVESCO's financial condition; or - fraudulent or criminal activities engaged in by officers, directors or employees of INVESCO; you may report your concerns in any of three ways: YOU CAN SPEAK WITH YOUR SUPERVISOR. We encourage you to first contact your immediate supervisor, who is in turn responsible for informing INVESCO's Compliance Reporting Line (described below) of any concerns raised. YOU CAN SPEAK DIRECTLY WITH THE BUSINESS UNIT OR DIVISIONAL GENERAL COUNSEL. If you prefer not to discuss a concern with your own supervisor, you may instead contact the General Counsel of your business unit or division directly. You are also free to e-mail the business unit or divisional General Counsel at the appropriate e-mail address. Such person will then likewise be responsible for informing INVESCO's Compliance Reporting Line (described below) of any concerns raised. YOU CAN CALL OUR COMPLIANCE REPORTING LINE. You may also call the INVESCO Compliance Reporting Line. If you are calling from a U.S. or Canadian location dial 1-866-7-3627. For calls from all other locations, dial an international operator and request a collect call to 1-704-943-1136. When asked for your name use "INVESCO." You can Page 19 of 23 use the Compliance Reporting Line to report possible violations or to check on the status of a previously filed report. You can also report to the Compliance Reporting Line if you believe that a report previously made to company management, your supervisor, other management personnel or the applicable business unit or divisional General Counsel has not been addressed. The Compliance Reporting Line is administered by an outside vendor. The telephone operators for the Compliance Reporting Line have been trained to receive your call. The Compliance Reporting Line is available 24 hours a day, seven days a week. All calls will be answered by a live person. Calls are not recorded and are not able to be traced. You have the option to remain anonymous. If you remain anonymous, you will be given a numeric code so that you may call back and ask for follow up. You will be guided through the call and prompted by appropriate questions from the operator. You will be given a date on which you can call back and receive a follow up report. Once the call is completed, a report will be generated and sent to the appropriate departments within INVESCO based on the subject matter of your call. You are urged to call back for follow up, because in the event more information is required, this will be an opportunity for you to provide those details. If you report a possible violation, regardless of the method that you use to make the report, it is important that you provide as much detail as possible, including names, dates, times, locations and the specific conduct in question. Only with sufficient specific information can INVESCO adequately investigate the reported action. Your submission of information will be treated in a confidential manner to the extent reasonably possible. Please note, however, that if an investigation by INVESCO of the activities you have reported takes place, it may be impossible for INVESCO to maintain the confidentiality of the fact of the report or the information reported. Complaints relating to Accounting Matters will be reviewed under Audit Committee direction and oversight by such persons as the Audit Committee determines to be appropriate. All other matters will be reviewed under the direction and oversight of the appropriate departments within INVESCO, usually also including the Legal & Compliance Department. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee or other reviewing department. 28. Disclosure; Amendments To the extent required by law, the company shall publicly (e.g., in its Annual Report on Form 20-F and/or on its website) disclose this Code of Conduct and its application to all of the company's Covered Persons. Page 20 of 23 This Code may only be amended by INVESCO's Board of Directors or a duly authorized committee thereof. To the extent required by law, amendments to the Code of Conduct shall be disclosed publicly. As set forth in Item 16B of the company's Annual Report on Form 20-F for 2005 filed with the SEC, the company has elected to disclose certain amendments to the Code that affect, and any waivers of the Code granted to, Financial Officers on the company's Web site in accordance with the requirements of Instruction 4 to Item 16B. 29. Waivers of the Code. a. Waivers for Executive Officers. Any change in or waiver of this Code for executive officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, "Executive Officers") of the company may be made only by the Board of Directors or a committee thereof in the manner described in Section 29(d) below, and any such waiver (including any implicit waiver) shall be promptly disclosed to shareholders as required by the corporate governance listing standards of the New York Stock Exchange and other applicable laws, rules and regulations. b. Waivers for Other Covered Persons. Any requests for waivers of this Code for Covered Persons other than Executive Officers of the company may be made to the Legal and Compliance Department in the manner described in Section 29(e) below. c. Definition of Waiver. For the purposes of the Code, the term "waiver" shall mean a material departure from a provision of the Code. An "implicit waiver" shall mean the failure of the company to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an Executive Officer. d. Manner for Requesting Executive Officer Waivers. i. Request and Criteria. If an Executive Officer wishes to request a waiver of this Code, the Executive Officer may submit to the Global Compliance Director or the Legal and Compliance Department a written request for a waiver of the Code only if he/she can demonstrate that such a waiver: A. is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances; B. will not be inconsistent with the purposes and objectives of the Code; C. will not adversely affect the interests of clients of the company or the interests of the company; and Page 21 of 23 D. will not result in a transaction or conduct that would violate provisions of applicable laws or regulations. ii. Discretionary Waiver and Response. The Legal and Compliance Department will forward the waiver request to the Board of Directors or a committee thereof for consideration. Any decision to grant a waiver from the Code shall be at the sole and absolute discretion of the Board of Directors or committee thereof, as appropriate. The Company Secretary will advise the Legal and Compliance Department in writing of the Board of Director's decision regarding the waiver, including the grounds for granting or denying the waiver request. The Legal and Compliance Department shall promptly advise the Executive Officer in writing of the Board of Director's decision. e. Manner for Requesting Other Covered Person Waivers. i. Request and Criteria. If a Covered Person who is a non-Executive Officer wishes to request a waiver of this Code, such Covered Person may submit to the Legal and Compliance Department a written request for a waiver of the Code only if he/she can demonstrate that such a waiver would satisfy the same criteria set forth in Section 29(d). ii. Discretionary Waiver and Response. The Legal and Compliance Department shall forward the waiver request to the General Counsel of the company for consideration. The decision to grant a waiver shall be at the sole and absolute discretion of the General Counsel of the company. The General Counsel will advise the Legal and Compliance Department in writing of his/her decision regarding the waiver, including the grounds for granting or denying the waiver request. The Legal and Compliance Department shall promptly advise the Covered Person in writing of the General Counsel's decision. 30. Internal Use. This Code is intended solely for the internal use by the company and does not constitute an admission, by or on behalf of the company, as to any fact, circumstance, or legal conclusion. CONCLUSION As Covered Persons, each of us is obligated to read and understand this Code of Conduct and our relevant business unit's policies and procedures. No code of conduct, however, can address every situation for which guidance may be necessary. If you are unclear about a situation, stop and ask for guidance before taking action. All Covered Page 22 of 23 Persons are expected to abide by both the letter and spirit of this Code. Covered Persons are also expected to perform their work with honesty and integrity in any areas not specifically addressed by the Code. INVESCO will investigate reported violations of the Code and, if violations are found, may take disciplinary action, if appropriate, against the individuals involved, and may make reports, if appropriate, to civil, criminal or regulatory authorities. Nothing in this Code restricts the company from taking any disciplinary action on any matters pertaining to the conduct of a Covered Person, whether or not expressly set forth in the Code. Any questions regarding the scope or interpretation of this Code should be referred to the appropriate Compliance or Legal officer. Revised: July 2006 Page 23 of 23 AIM TRIMARK INVESTMENTS ADDENDUM TO THE AMVESCAP CODE OF CONDUCT EFFECTIVE DATE: OCTOBER 1, 2006 REVISED DATE: APRIL 2, 2007 1. INTRODUCTION Every employee of AIM Trimark Investments ("AIM Trimark") is considered an employee of AMVESCAP PLC and is subject to the AMVESCAP Code of Conduct ("AMVESCAP Code"). All officers, directors and employees of AIM Trimark, including temporary, part-time, contract, and seasonal personnel, are expected to be familiar with the AMVESCAP Code and this Addendum and are required to provide an annual certificate accepting the AMVESCAP Code and this Addendum and acknowledging the obligation to abide by their terms. The AMVESCAP Code has general application globally. It cannot address specific circumstances which may be required by local regulation or custom. This Addendum, together with the other Policies referred to below, is intended to provide supplementary guidance and more detailed procedures where needed to give effect to the AMVESCAP Code for AIM Trimark employees. The other AIM Trimark policies which deal directly and in a general manner with employee conduct include: - - AIM Trimark Personal Trading Policy -- Policy D-7 - - Personal Conflicts and Self-Dealing- Policy B-10 - - Gifts and Entertainment - Policy D-6 - - Corporate Systems Policies 2. FIDUCIARY OBLIGATIONS In AIM Trimark's capacity as a money manager, AIM Trimark stands in a fiduciary relationship to its clients. Those clients to whom the fiduciary obligations are owed are the mutual funds and investment accounts that we manage, and the holders of fund securities or the clients in the investment accounts, as applicable. (For purposes of this Addendum, the terms "clients" and "client accounts" always refers to the investment funds that we manage or sub-advise or other accounts in respect of which AIM Trimark has been engaged to provide money management services, and do not refer to business partners who distribute our products.) In carrying out our investment management responsibilities, AIM Trimark must at all times act honestly, in good faith and in the best interests of our clients. This means that the interests of our clients must always and in every instance come ahead of the interests of AIM Trimark or AMVESCAP or of any personal interest of an employee. The fiduciary nature of our business means that our actions and our policies are governed by the principles of: - - TRANSPARENCY: it is not enough that AIM Trimark put client interests ahead of our own interests; but rather, we must be seen to do so, and the appearance of conflicts is to be avoided where possible - - ACCOUNTABILITY: AIM Trimark must account to our clients as to how we manage their money, through appropriate and clear reporting and disclosure - - COMPETENCE: AIM Trimark must act competently and with the appropriate level of care, skill and diligence in the management of client funds. Regard shall be had to these principles in the interpretation and application of the AMVESCAP Code, this Addendum and related policies and procedures. 3. AIM TRIMARK PERSONAL TRADING POLICY Policy D-7, AIM Trimark Personal Trading Policy, covers the following topics in detail and should be referred to for the definitive rules in this regard. 3.1 RESTRICTION ON THE PERSONAL TRADING ACTIVITY OF AIM TRIMARK EMPLOYEES Employees of AIM Trimark may not engage in a personal securities transaction unless it has been pre-cleared by the AIM Trimark Compliance department following a determination that the transaction does not give rise to an actual or potential conflict of interest with activity by a client account in the same security. Employees are required to report transactions and holdings to the AIM Trimark Compliance department on a regular basis. The pre-clearance and reporting requirements also apply to Covered Accounts. Covered Accounts are accounts which an Employee is financially interested in or controls, and may include (but are not limited to) accounts of a spouse, minor child, relative, friend or personal business associate. 4. PERSONAL CONFLICTS OF INTEREST 4.1 UNDERLYING PRINCIPLE Employees must avoid taking any actions or placing themselves in circumstances that result in an actual or potential conflict between their own personal interests and the interests of AIM Trimark, AMVESCAP or client accounts. Employees must never profit personally at the expense of AIM Trimark, AMVESCAP or client accounts, and they must refrain from deliberately or knowingly doing things which may be otherwise detrimental to the interests of AIM Trimark, AMVESCAP or client accounts. Policy D-7, AIM Trimark Personal Trading Policy, and Policy B-10, Personal Conflicts and Self-Dealing, cover certain of the following topics in detail and should be referred to for the definitive rules in that regard. 2 4.2 POSSESSION OF INSIDE INFORMATION Any director, officer or employee who possesses or believes that he or she may possess material undisclosed or non-public information about any issuer of securities which could put such person in a conflict of interest with AIM Trimark or any of our client accounts must report the matter immediately to the AIM Trimark Chief Compliance Officer (or designee), who will review the matter and provide further instructions as to the appropriate handling of the information. 4.3 INSIDER TRADING & TIPPING Trading on or communicating, other than to persons with a need to know, material non-public information, or inside information, of any sort, whether obtained in the course of research activities, through a client relationship or otherwise, is strictly prohibited. AIM Trimark forbids its directors and employees from trading, either personally or on behalf of others (including client accounts managed by AIM Trimark), on material non-public information or communicating material non-public information to others in violation of the law. The communicating or passing on of this type of information is sometimes known as "tipping" and trading on such information is "insider trading". 4.4 PERSONAL TRADING Personal securities transactions of all Employees of AIM Trimark are subject to restrictions and pre-clearance, as discussed above. Personal securities transactions of independent directors of AIM Trimark's corporate funds and members of the AIM Trimark Fund Advisory Boards are not subject to the pre-clearance or reporting requirements, except with respect to trading in the securities of AMVESCAP or shares of any closed-end investment company or investment trust on which such independent director may serve in a director or trustee capacity. 4.5 SHORT TERM TRADING IN MUTUAL FUNDS AND SEG FUNDS Employees are prohibited from engaging in excessive short-term trading in any investment fund or similar investment vehicle (including segregated funds and variable annuity products) for which AIM Trimark is the manager or investment advisor or in which an AIM Trimark fund is an ingredient, in the case of fund-of-fund products. Determination of behaviour constituting "excessive short-term trading" will be as set out in Policy D-4, Market Timing. 4.6 PERSONAL BORROWING AND LENDING Except with the prior written approval of the AIM Trimark Compliance department, employees may not borrow from or lend personal funds or other personal property to any customer of AIM Trimark or third party vendor who has a business relationship or potential business relationship with AIM Trimark. This prohibition does not operate to prohibit employees borrowing from recognized financial institutions such as banks, trust companies and credit card companies with whom AIM Trimark does or may do business. 4.7 OUTSIDE ACTIVITIES Employees may not undertake or engage in a business activity that is in competition or in conflict with AIM Trimark's business unless they have received the written consent of the employee's manager and the approval of the AIM Trimark Compliance department. For this purpose, "undertaking or engaging in a business activity" includes any direct or indirect involvement with an enterprise for which the employee 3 may receive financial compensation or return. A business will be deemed to be in competition or conflict with AIM Trimark if the business offers or provides products or services of a type similar to products or services offered by AIM Trimark or AMVESCAP. This prohibition does not operate to prohibit employees from making personal investments in public issuers that are in a similar business to AIM Trimark or AMVESCAP. In addition, all Employees of AIM Trimark are prohibited from serving as directors/trustees of organizations (including charitable organizations) except with the prior written approval of AIM Trimark's President and Chief Executive Officer. All such requests must be submitted to the AIM Trimark Compliance department for consideration prior to submission to AIM Trimark's President and Chief Executive Officer. 4.8 DUAL REGISTRATION Employees who are registered with a securities regulatory authority as a representative or officer of both AIM Funds Management Inc. and AIM Mutual Fund Dealer Inc. have duties and responsibilities equally to both registered entities. Dually registered employees must allocate sufficient time to support each entity and take into consideration the impact on both entities when making policy decisions. Dually registered employees must disclose in writing to their clients, at account opening and on an annual basis, the fact that the employee is registered with both AIM Funds Management Inc. and AIM Mutual Fund Dealer Inc. and that there are policies and procedures in place to minimize the potential for conflicts of interest resulting from the dual registration. Employees licensed by any regulatory or professional body, are expected to adhere to any requirements imposed by those entities. Except with the prior written consent of the Chief Compliance Officer, no employee may be licensed or registered with, or as a representative of, any entity other than AIM Funds Management Inc. and AIM Mutual Fund Dealer Inc. This includes but is not limited to securities dealers, scholarship plan dealers, insurance agents, real estate agents, mortgage brokers and other similar entities. 5. POLITICAL CONTRIBUTIONS AND ACTIVITY Employees, as private citizens, should feel free to exercise their rights and duties in any political or civic process. AIM Trimark however, does not make political contributions nor does AIM Trimark participate in political activities, at any level of government. AIM Trimark does not make corporate donations to any political party or cause. For example: - no purchases of seats or tables at fundraising events - no contributions to political parties or candidate campaigns (includes local or municipal politics) - no use of AIM Trimark resources (e.g. photocopying, printing, use of office space) in aid of political activity No employee may make any such political contributions on behalf of AIM Trimark. Employees should be careful not to give the impression that personal political views and beliefs are those of AIM Trimark. Any departure from the foregoing must receive the prior approval of the AIM Trimark Compliance department. 4 6 LOCAL ADMINISTRATION 6.1 CODE OF ETHICS COMMITTEE Administration of the AMVESCAP Code, this Addendum, and related policies to employees of AIM Trimark is overseen by AIM Trimark's Code of Ethics Committee. 6.2 CODE OF ETHICS OFFICER The AIM Trimark Chief Compliance Officer is the AIM Trimark designated Code of Ethics Officer. 6.3 AMENDMENTS AND MODIFICATIONS Any amendments or modifications to this Addendum are effective upon approval of the Chief Compliance Officer and the Chief Executive Officer. 5 ================================================================================ Gifts and Entertainment Policy Number: D-6 Effective Date: March 2006 Revision Date: April 2007 ================================================================================ OVERVIEW AMVESCAP has in place the AMVESCAP Gifts and Entertainment Policy which is applicable to AMVESCAP and its individual business units worldwide. This AIM Trimark Gifts and Entertainment Policy ("Policy") is intended to work with the AMVESCAP Policy and supplement it with local rules. All AIM Trimark employees, including temporary, part-time, contract, and seasonal personnel, must refrain from conduct that could give rise to the appearance of a conflict of interest. The provision or receipt of gifts or entertainment can create, or can have the appearance of creating, conflicts of interest. Employees also need to take into consideration the firm's policy on corporate expenses, which can be found on Total Access Point ("TAP") under travel and entertainment guidelines, and the firm's policy on Sales Practices, which can be found in the AIM Trimark compliance manual under section D-2. DEFINITIONS For purposes of this Policy, a GIFT is anything of value given or received involving AIM Trimark personnel, and a person or entity that has a direct or indirect, existing or potential business relationship with AIM Trimark (a "Business Partner"). This Policy also applies to gifts given by AIM Trimark to family members of a Business Partner and gifts received from a Business Partner by a family member of an employee of AIM Trimark. Business Partners specifically include broker dealers and financial advisors. Gifts may include, but are not limited to, personal items, air miles, services, office accessories, electronic equipment (e.g., iPods, MP3s, etc.), tickets (e.g., theatre, concerts, sporting events, etc.) and sporting equipment (e.g., golf clubs, tennis rackets, etc.). For purposes of this Policy, gifts also include charitable contributions and sponsorship requests (e.g., sponsoring a minor hockey team) made to or at the request of a Business Partner. For purposes of this Policy, gifts do not include promotional items of nominal value (approximately $20 - e.g., golf balls, pens, etc.) that display the logo of AIM Trimark or its AMVESCAP business units, or of its Business Partners. ENTERTAINMENT involves attendance at activities, including but not limited to meals, sporting events, the theatre, parties or receptions, and similar functions. Entertainment requires the presence of both AIM Trimark personnel and Business Partner personnel; unless personnel from both entities attend, the activity constitutes a gift. The value of entertainment includes the cost of the activity itself (for example, the cost of tickets or a meal), as well as the cost of any related activities or services provided (such as prizes). The value of entertainment does not include the cost of overhead (such as rent or equipment rentals). THRESHOLDS Employees are prohibited from giving or receiving gifts with a value of more than $250. Entertainment should not exceed $450 per business partner. FREQUENCY Gifts and entertainment cannot be so extensive or so frequent as to cause a reasonable person to question whether the provision of the items or activity improperly influences the employee or Business Partner. The maximum total value of gifts received by, or given to, a business partner is $250 annually. Entertainment is limited to three times per year per business partner. PROHIBITED ACTIVITIES Employees are prohibited from providing or receiving any gift or entertainment that is conditioned upon AIM Trimark doing business with the entity or person involved. Employees are prohibited from soliciting gifts and entertainment. Employees are to immediately advise the AIM Trimark Compliance department if a Business Partner solicits the employee for gifts and entertainment other than a charitable donation or request for sponsorship. Except with the prior approval of the AIM Trimark Compliance department, employees cannot pay for, or accept, any travel and/or accommodation to or from a Business Partner. With respect to approved co-operative marketing practices, such as sales communications and investor seminars, where AIM Trimark pays a portion of the cost, AIM Trimark cannot provide gifts, other than nominal valued promotional items, to the dealer's clients. Nominal speaker gifts would be co-op eligible at approved dealer-sponsored events for financial advisors. REPORTING/RECORD KEEPING Each department or employee is responsible for keeping a record of all gifts and entertainment given or received. Minimum required information includes: date, employee name(s), business partner firm name, business partner representative name(s), description of gift or entertainment, approximate dollar value, and required approval where applicable. Promotional items of nominal value (approximately $20) and department breakfasts or lunches do not need to be recorded. Where the value of the activity or item is not readily known, the employee should record the estimated cost. REVIEW AND MONITORING This Policy shall be overseen and administered by AIM Trimark's Code of Ethics Committee, which has responsibility for the overall scope, application, and enforcement of this Policy. AIM Trimark's Code of Ethics Committee shall receive the reports and recommendations of the AIM Trimark Compliance department and of management from time to time and periodically update or revise this Policy as may be desirable. Each department head is expected to review the gifts and entertainment log on a regular basis in order to identify any concerns or trends. Any concerns or issues are to be brought to the attention of the AIM Trimark Compliance department. The AIM Trimark Compliance department will conduct a quarterly review of the gifts and entertainment log. A summary of such review, together with other relevant observations and recommendations, shall be reported to the AIM Trimark Code of Ethics Committee. Evidence of reviews must be maintained for a minimum of seven years. ================================================================================ D7. AIM TRIMARK PERSONAL TRADING POLICY Policy Number: D-7 Effective Date: October 2006 Revision Date: March 2007 ================================================================================ 1. PURPOSE AND APPLICATION The AIM Trimark Personal Trading Policy applies to all officers, directors and employees of AIM Trimark Investments, including temporary, part-time, contract, and seasonal personnel (collectively referred to as "Employee"). For purposes of this Policy, the terms "clients" and "client accounts" always refers to the investment funds that AIM Trimark manages or sub-advises or other accounts in respect of which AIM Trimark has been engaged to provide money management services. The purpose of this Policy is to ensure the fair treatment of client accounts through the highest standard of integrity and ethical business conduct by Employees. The Policy is designed to ensure, among other things, that the personal securities transactions of all Employees are conducted in accordance with the following general principles: - A duty at all times to place the interests of client accounts first. - The requirement that all personal securities transactions be conducted in a manner that avoids any actual or potential conflict of interest or the appearance of a conflict of interest. - That Employees should not take otherwise inappropriate advantage of their positions. Employees must not use any non-public information about client accounts for their direct or indirect personal benefit or in a manner that would not be in the best interests of client accounts. Employees also must not use their position to obtain special treatment or investment opportunities not generally available to client accounts or the public. The personal trading requirements pertaining to pre-clearance, reporting and investment restrictions contained in this Policy apply to both Employees and their Covered Accounts. AIM Trimark recognizes that certain relationships with non-employees may, from time to time, present particular risks that inappropriate trading could occur. Those risks may be present, for example, through certain arrangements with consultants or independent contractors who have entered into long-term services arrangements with AIM Trimark pursuant to which they are expected to have access to non-public information in connection with those arrangements (such information may relate to AIM Trimark or some outside source, and may be obtained from AIM Trimark or some outside source). Accordingly, as part of the process for engaging the services of consultants or other independent contractors, the AIM Trimark Chief Compliance Officer shall take such steps as may be reasonably determined to be necessary or appropriate. Those steps may or may not include requiring a non-employee to agree to be bound by these procedures as if he or she were an Employee. 2. DEFINITIONS 2.1 EMPLOYEE For the purposes of this Policy the term Employee includes all officers, directors and employees of AIM Trimark Investments including temporary, part-time, contract, and seasonal personnel 2.2 COVERED ACCOUNTS A Covered Account is defined for purposes of this Policy as any account: - In which an Employee has a direct or indirect financial interest; - Over which such Employee has direct or indirect control over the purchase or sale of securities; or - In which securities are held for an Employee's direct or indirect benefit. Such Covered Accounts may include, but are not limited to, accounts of a spouse, minor child, relative, friend or personal business associate. 3. PRE-CLEARANCE REQUIREMENTS 3.1 SUBMITTING THE REQUEST TO TRADE Except where noted below, an Employee must receive the prior approval using the automated review system (Star Compliance) or from the AIM Trimark Compliance department in order to engage in a personal securities transaction. The Star Compliance system will review the trade request to determine whether or not the proposed transaction gives rise to an actual or potential conflict of interest with activity in a client account in the same security. Upon completion of the review process, the Employee will receive a time stamped response indicating whether the trade is authorized or denied. Pre-clearance will not be given if there has been a transaction by a subject client account in the same, or equivalent, security within seven (7) calendar days of the proposed personal securities transaction (the "7-Day Rule"). An equivalent security means a security that (1) is convertible into another security or (2) gives its holder the right to purchase another security of the same issuer. For example, a bond or preferred stock may be convertible into another security of the same issuer, or an option or warrant may give the holder the right to purchase stock of the same issuer. ADR and EDR shares are considered equivalent to their corresponding foreign shares. The trade approval process involves the following steps: - A trade must be entered into the Star Compliance system. - The Star Compliance system will confirm that there is no activity currently on the trading desk for the security involved in the proposed personal transaction and check the portfolio accounting system to verify that there have been no transactions for the requested security within seven calendar days. - The Star Compliance system will provide an automated response on a timely basis for all pre-approval requests indicating whether the transaction has been approved or denied. 3.2 EXECUTING APPROVED TRANSACTIONS Except as may be authorized by the Chief Compliance Officer or designate in the case of certain securities or classes of securities, all authorized personal securities transactions must be executed by the next business day. If the trade is not executed within this time period, a new pre-clearance request must be submitted. Employees will be requested to reverse any trades processed without the required pre-approval. Any costs or losses associated with the reversal are the responsibility of the Employee. 3.3 EXCEPTIONS TO PRE-CLEARANCE REQUIREMENTS Employees may trade in the following types of securities without regard to the pre-clearance procedures: - Open-end mutual funds, open-end unit investment trusts and pooled trust funds (whether or not managed or distributed by an AMVESCAP Company). - Variable annuities, variable life products, segregated funds, and other similar unit-based insurance products issued by insurance companies and insurance company separate accounts. - Securities issued or guaranteed by the Government of Canada, or the government of any province in Canada. - Securities issued or guaranteed by the Governments of the United States, United Kingdom, Germany, Japan, France and Italy. - Guaranteed Investment certificates, bank certificates of deposit other deposits with financial institutions, bankers acceptances, commercial paper and high quality short-term instruments, including repurchase agreements. - Short-term debt securities maturing in less than 91 days from their date of issue. - Physical commodities or securities relating to those commodities. - Other securities or classes of securities as the Committee may from time to time designate. Employee accounts excluded from the pre-clearance requirement are the following: - Employee share purchase plans except for the sale of the securities. - Employee stock option purchase plans except for the sale of the securities. - Accounts capable of holding only deposits or GIC's issued by a financial institution and/or mutual funds. - Fully-managed discretionary accounts subject to the conditions in 3.4 below. 3.4 MANAGED ACCOUNTS To qualify as a fully-managed discretionary account, the account must be fully "discretionary", without any influence by the Employee over individual transactions. This means that full investment discretion has been granted to an investment manager or trustee and that neither the Employee nor Covered Account person participates in the investment decisions or is informed in advance of transactions in the account. Pre-clearance is not required for transactions in a Covered Account in which an Employee is not exercising power over investment discretion including a managed account, provided that: - The account is the subject of a written contract providing for the delegation by the Employee of substantially all investment discretion to another party. - The Employee has provided the AIM Trimark Compliance department with a copy of such written agreement. - The Employee certifies in writing that he or she has not discussed, and will not discuss, potential investment decisions with the party to whom investment discretion has been delegated. - The Employee otherwise complies with the annual reporting requirement contained herein, and also provides or makes provision for the delivery to the AIM Trimark Compliance department of periodic statements of discretionary account holdings. - The foregoing exception from the pre-clearance requirement does not apply to transactions by a delegated discretionary account in shares of AMVESCAP. All employees are required to notify parties to whom they have delegated investment discretion that such discretion may not be exercised to purchase shares of AMVESCAP and that any sales of AMVESCAP shares by a Covered Account that is the subject of delegated investment discretion are subject to the pre-clearance and reporting requirements. - Discretionary managed accounts for which this exemption is available would not include ones where the accountholder has given a power of attorney (POA) to another person such as a broker for occasional discretionary trading. Discretionary accounts would include blind trusts. 4. OPTIONS TRADING In the case of personal securities transactions involving the purchase or sale of an option on an equity security, the Star Compliance system will determine whether to authorize the transaction by matching the pre-clearance request against activity in client accounts in both the option and the underlying security. This determination will not be made, and pre-clearance will not be given, if there has been a client account transaction in either the option or the underlying security within 7 calendar days of the proposed personal securities transaction. Pre-clearance is required for both the opening and closing transaction. It is the responsibility of the employee to be aware of the additional risks that can result from engaging in certain transactions. For example, if an opening options transaction is approved, the closing options transaction may not be approved or may be delayed in certain cases due to actual or apparent conflicts of interest or competing obligations that arise after the time the employee's opening transaction was approved. An employee is prohibited from purchasing or selling options on shares of AMVESCAP. 5. SHORT SALES Short sales of securities are permissible subject to the following conditions: - No short sales on AMVESCAP - No short sales on securities where there has been a trade in the same security within the last 7 days in one of the client accounts - Employees are prohibited from short-term trading; therefore, the Employee is restricted from buying back the position within 60 days. - Portfolio managers are prohibited from short selling a security if the client account the Portfolio Manager manages are long the security. - If a Portfolio Manager is selling a stock there should generally be no "short selling" allowed until that position is completely sold. This provision includes the situation where the Portfolio Manager stops selling the security for a short period, for example to let the market absorb what has been sold, and then resumes selling the position. If other client accounts hold the same security, the AIM Trimark Compliance department will review the other client accounts to determine if the other client accounts are active in the security or are going to be active. 6. RESTRICTIONS ON CERTAIN ACTIVITIES In order to avoid even the appearance of conduct that might be deemed contrary to a client's best interests, Employees are subject to the following additional restrictions and prohibitions relating to certain investment activities and related conduct as set out herein. 6.1 PROHIBITION AGAINST TRADING IN SECURITIES ON "RESTRICTED LISTS" It is recognized that there may be occasions when AMVESCAP, an AMVESCAP Company, or an Employee who is a key executive of AMVESCAP or an AMVESCAP Company, may have a special relationship with an issuer of securities. In such occasions the Board of Directors of AMVESCAP or the Code of Ethics Committee may decide to place the securities of such issuer on a "restricted list", to be maintained by the Chief Compliance Officer. Employees are prohibited from engaging in any personal securities transactions in a security on a "restricted list". 6.2 PROHIBITION AGAINST SHORT-TERM TRADING ACTIVITIES Employees are prohibited from profiting from a trade in an "opposite transaction" in the same, or equivalent, security within 60 days of its purchase or sale. This short-term trading prohibition may be waived by the AIM Trimark Compliance department in certain instances including where an employee wishes to limit his or her losses on a security with rapidly depreciating market value. Such circumstances must be disclosed at the time pre-clearance is requested. 6.3 PROHIBITION AGAINST PURCHASES IN INITIAL PUBLIC OFFERINGS Employees generally are prohibited from purchasing securities in IPOs. Employees who are not investment personnel and whose proposed IPO trade is through discretionary accounts may acquire shares in an IPO. Investment personnel are prohibited from purchases in Initial Public Offerings, even if the proposed IPO trade would be through a discretionary account, unless the person has obtained pre-clearance by the Chief Compliance Officer and Chief Investment Officer. 6.4 RESTRICTED SECURITIES ISSUED BY PUBLIC COMPANIES Generally, Employees are discouraged from investing in restricted securities of public companies including special warrant deals. Restricted securities are securities acquired in an unregistered, private sale from an issuer. An Employee may purchase such securities, however, if such purchase has been pre-cleared by the AIM Trimark Compliance department following a determination that the proposed transaction does not present any actual or potential conflict of interest. 6.5 RESTRICTIONS ON PRIVATE PLACEMENTS (INCLUDING HEDGE FUNDS) An Employee may not purchase or sell any security (e.g., stock, bond or limited partnership interest) obtained through a private placement (including the purchase or sale of an interest in a so-called "hedge fund") unless such transaction has been pre-cleared by the AIM Trimark Compliance department following a determination that the proposed transaction does not (i) present any actual or potential conflict of interest, (ii) that the issuer is a "private issuer" under securities legislation and (iii) the Employee has no reason to believe that the issuer or a related subsidiary company (whether or not such securities are of the same class as the securities held by such Employee) will make a public offering of its securities within the next twelve months. The AIM Trimark Compliance department will also review the request with the Chief Investment Officer before granting pre-clearance. The AIM Trimark Compliance department will maintain a record of the approval and the rationale supporting the purchase of the Private Placement. If pre-clearance is provided, the security will then be added to the restricted list. Further, Employees who have been authorized to acquire securities in a private placement must disclose such investment when he/she plays a part in any client account's subsequent consideration of an investment in the issuer. In such circumstances, the client account's decision to purchase securities of the issuer is subject to an independent review by investment personnel with no personal interest in the issuer. 6.6 INVESTMENT CLUBS An Employee is prohibited from participating in an investment club unless such participation has been approved by the AIM Trimark Compliance department following a determination that the following conditions have been satisfied: - The Employee's participation does not create any actual or potential conflict of interest. - The Employee does not control investment decision-making for the investment club. - The Employee has made satisfactory arrangements to ensure that duplicate trade confirmations of investment club activity and quarterly statements of investment club holdings are provided to the AIM Trimark Compliance department by brokers acting on behalf of the investment club. If participation in an investment club has been approved, all future trades will be subject to pre-clearance. 6.7 TRADING IN AMVESCAP Employees are prohibited from trading in AMVESCAP during the "Close Periods". Details of the "Close Periods" are circulated to all employees by way of the internal e- mail system and can also be found via the attached link: http://atlas.amvescap.com/ags/amv_groupservices/sec_closed.html A "Close Period" is defined by the rules as the period of 60 days prior to the announcement of the year end results and the period of 30 days prior to the announcement of the interim and quarterly results. The close period may be shorter depending on when the results are announced but cannot start until the end of the relevant reporting period. Short term trading (i.e. buying and selling within a 60 day period) in AMVESCAP, where the intention is to make a quick profit, is prohibited. 7. REPORTING REQUIREMENTS 7.1 INITIAL REPORTS Within 10 days of becoming an Employee, each Employee, using the Star Compliance system, must submit a statement containing the following information: (i) a complete list of all of his or her Covered Accounts (including the name of the broker, dealer or bank with which the Employee maintained the Account); (ii) a list of each Reportable Security (whether held through a Covered Account, in certificate form, or otherwise) in which he or she has direct or indirect beneficial ownership (e.g., that he or she owns); and (iii) the date the Employee submits the report. The statement must be current as of a date no more than 45 days prior to the date of becoming an Employee. 7.2 REPORTS OF TRADE CONFIRMATIONS AND QUARTERLY REPORTS Within 10 calendar days of settlement of each personal securities transaction involving a Reportable Security, whether the transactions had to be pre-cleared or not, the Employee engaging in the transaction must file or cause to be filed with the AIM Trimark Compliance department a duplicate copy of the broker/dealer confirmation, or such other confirmations as are available, for such transaction. In addition, except to the extent that such report would duplicate information contained in such confirmations, within 30 calendar days after the end of each calendar quarter, the Employee must submit a statement: (i) with respect to each personal securities transaction during the quarter in a Reportable Security in which the Employee had any direct or indirect beneficial ownership; (ii) with respect to any Covered Account established during the quarter, the name of the broker, dealer or bank with which the account was established, the date the account was established, and (iii) the date that the statement is submitted by the Employee. Notwithstanding the reporting requirements set forth in the previous paragraph, transactions effected pursuant to an automatic investment plan need not be reported in the quarterly statement (nor in trade confirmations in lieu of the quarterly statement). An "automatic investment plan" means any program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan. 7.3 ANNUAL REPORTS By January 30 of each year, each Employee must file with the AIM Trimark Compliance department an annual account statement as of December 31 of each year, (i) all Covered Accounts of such Employee (including the name of the broker, dealer or bank with which the Employee maintained the account) (ii) each Reportable Security (whether held through a Covered Account, in certificate form, or otherwise) in which he or she has direct or indirect beneficial ownership; and (iii) the date the Employee submits the account statements. Employees are encouraged to request their broker or dealer to automatically send the AIM Trimark Compliance department copies of trade confirmations and monthly account statements. By doing so, the Employee does not have to make arrangements every time to meet the ongoing quarterly and annual reporting requirements. The AIM Trimark Compliance department will review all reports submitted and report any irregularity to the Code of Ethics Committee. 7.4 REPORTABLE SECURITY For purposes of this Policy, the term "Reportable Security" means any security except the following: - Unit investment trusts (i.e., variable insurance contracts funded by insurance company separate accounts organized as unit investment trusts) invested exclusively in open-end U.S. mutual funds that are not managed or distributed by AIM Trimark or any AMVESCAP Company. - Open-end U.S. mutual funds that are not managed or distributed by AIM Trimark or any AMVESCAP Company. - Open-end Canadian mutual funds that are not managed or distributed by AIM Trimark. - Securities issued or guaranteed by (i.e., securities that are the direct obligations of) the government of the United States. - Money market funds. - Money market instruments. a money market instrument is a debt instrument that has a maturity at issuance of less than 366 days and (i) is rated in one of the two highest ratings categories by a statistical rating organization that is nationally recognized in the United States or a rating organization not affiliated with AIM Trimark and of comparable status in Canada or (ii) if not rated, is determined by AIM Trimark in good faith to be of equivalent quality such that it presents a comparable (or better) degree of safety of principal. For example, a short-term debt instrument with a rating of AA or AAA by Moody's Investors Service or AA or AAA by Standard & Poor's Corporation meets this definition of money market instrument. Typical examples of money market instruments include bankers' acceptances, bank certificates of deposit, commercial paper and repurchase agreements. 8. INDEPENDENT DIRECTORS Except as otherwise provided in the special procedures for independent directors of US Funds, personal securities transactions of independent directors of AIM Trimark or of AIM Trimark's corporate funds and members of the Fund's Advisory Boards are not subject to either the pre-clearance or reporting requirements set forth in this Policy, except with respect to personal securities transactions in the shares of AMVESCAP or shares of any closed-end investment company or investment trust served by such independent director in a director or trustee capacity. 8.1 FOR PURPOSES OF THIS EXCEPTION THE TERM "INDEPENDENT DIRECTOR" MEANS a) any director of AIM Trimark's corporate funds or members of the AIM Trimark Fund Advisory Board i) who is neither an officer nor employee of AMVESCAP or of any AMVESCAP Company, or ii) who is not otherwise "connected with" AMVESCAP or any AMVESCAP Company within the meaning of the London Stock Exchange Yellow Book; and b) any director of AIM Trimark who i) is neither an officer nor employee of AMVESCAP or of any AMVESCAP Company, ii) is not otherwise "connected with" AMVESCAP or any AMVESCAP Company within the meaning of the London Stock Exchange Yellow Book, iii) is not an interested person of a US Fund under Section 2(a)(19) of the Investment Company Act (1940) and would otherwise be required to submit a pre-clearance request or make a report solely by reason of being an AIM director and iv) does not regularly obtain information concerning the investment recommendations or decisions made by AIM Trimark on behalf of the US Funds. 8.2 SPECIAL PROCEDURES FOR INDEPENDENT DIRECTORS OF US FUNDS While an "independent director" of AIM Trimark is not deemed to be an "Employee" and consequently is not subject to most of the procedures specified in this Policy with respect to securities transactions, independent directors of AIM Trimark are subject to all of the following provisions. For purposes of this Policy, a "US Fund" is an investment fund whose activities are governed by the laws of the United States. - An independent director is expected to adhere to the insider trading requirements. - An independent director is expected to avoid engaging in any of the following actions: - Employ any device, scheme or artifice to defraud a US Fund. - Make any untrue statement of a material fact to directors, officers or agents of a US Fund or with respect to the securities or investment operations of a US Fund, or omit to state a material fact necessary in order to make such statements in light of the circumstances under which they were made, not misleading. - Engage in any act, practice or course of business that operates or would operate as a fraud or deceit on a US Fund. - Engage in any manipulative practice with respect to a US Fund. - Prior to engaging in a personal securities transaction in a security (other than in a security excluded from pre-clearance), if an independent director knows, or in the ordinary course of fulfilling his or her official duties as an independent director to AIM Trimark, should have known, that during the 15-day period immediately before the date of his or her prospective transaction in the security, (i) a US Fund purchased or sold the security or (ii) a US Fund or its adviser or sub-adviser considered purchasing or selling the security, he or she is required to do the following: not purchase or sell such security until the day next following the completion by the Fund of its transaction, unless the director has submitted a pre-clearance request and the AIM Trimark Compliance department reasonably determines that, in view of the nature of the security and the market for the security, the director's transaction is not likely to affect the price paid for or received by the Fund. Absent such a finding, if such a transaction nonetheless is placed, the transaction is considered prohibited and any profits related thereto must be disgorged (to the Fund or an appropriate charity). - If an independent director knows, or in the ordinary course of fulfilling his or her official duties as an independent director to AIM Trimark should have known, that during the 15-day period immediately before or after the date of the director's transaction in a security (other than those excluded from reporting), (i) a US Fund purchased or sold the security or (ii) a US Fund or its adviser or sub-adviser considered purchasing or selling the security, he or she is required, whether or not he or she has pre-cleared the transaction, to follow the reporting requirements as if he or she were an Employee. 9. CERTIFICATION OF COMPLIANCE By signing off on the AMVESCAP Code of Conduct and the AIM Trimark Addendum to the Code on an annual basis, Employees are also confirming adherence to this Policy. 10. OVERSIGHT This Policy shall be overseen and administered by AIM Trimark's Code of Ethics Committee, while administration of this Policy is the responsibility of the Chief Compliance Officer. 10.1 CODE OF ETHICS COMMITTEE This Policy shall be overseen and administered by AIM Trimark's Code of Ethics Committee, which has responsibility for the overall scope, application, and enforcement of this Policy. AIM Trimark's Code of Ethics Committee shall receive the reports and recommendations of the AIM Trimark Compliance department from time to time and periodically update or revise this Policy as may be desirable. Members of the Code of Ethics Committee include: - President and Chief Executive Officer - Chief Investment Officer - Executive Vice President, Sales - General Counsel - Senior Vice President, Investment Operations and Analytics - Chief Compliance Officer - Assistant Vice President, Operations Compliance - Such other members as the President and CEO may designate The Committee meets no less frequently than annually to review the Chief Compliance Officer's report and the provisions of the AMVESCAP Code of Conduct and this Policy. The Chief Compliance Officer calls other meetings of the Committee when she or he believes that a possible violation of the Code or these Procedures has occurred or that the Committee should meet for other purposes, such as to consider changes to the AIM Trimark Addendum to the AMVESCAP Code of Conduct or to this Policy. A majority of the members of the Committee will constitute a quorum, provided that the President and Chief Executive Officer are present in order to have a quorum. A majority of the members present at a meeting constitutes the vote required for any action taken by the Committee. Special meetings of the Committee may be called by any member of the Committee to discuss matters that are deemed to warrant immediate attention. 10.2 AIM TRIMARK COMPLIANCE DEPARTMENT The AIM Trimark Compliance department administers all aspects of the Policy including informing new Employees of the requirements, reviewing pre-approval requests, monitoring personal trading activity, monitoring client account activity in the same security of an approved trade for the following seven (7) calendar days to determine whether the appearance of a conflict is present, following up on reporting requirements, and record keeping. The Chief Compliance Officer or designate will provide a written report, at least annually to the Committee summarizing: - Compliance with the Policy for the period under review. - Violations of the Policy for the period under review. - Sanctions imposed under the Policy by AIM Trimark during the period under review. - Whether AIM Trimark's external investment advisors have confirmed that they have complied with the basic principles set out in this Policy in providing investment advisory services to the funds during the period under review. - Changes in procedures recommended for the Policy. - Any other information requested by the Committee. EX-99.P7 10 h53872aexv99wp7.txt CODE OF ETHICS (INVESCO LOGO) CODE OF ETHICS This revised Code of Ethics ('the Code') regarding ethnic behaviour and conflicts of interest applies to all employees of all entities of INVESCO Continental Europe ("INVESCO"). It covers the following topics: - - Prohibitions related to material, non-public information; - - Personal securities investing; - - Service as a director and other business opportunities; and - - Gift and entertainment policy. This Code also imposes on employees certain restrictions and reporting obligations which are specified below. Adherence to this Code, once adopted, both letter and spirit, is a fundamental and absolute condition of employment with INVESCO. It is appreciated that no Code of Ethics can address every circumstance that may give rise to a conflict, a potential conflict or an appearance of a conflict of interest. Every employee should be alert to any actual, potential or appearance of a conflict of interest with INVESCO's clients and to conduct himself or herself with good judgment. Failure to exercise good judgment, as well as violations of this Code, may result in the imposition of sanctions on the employee, including suspension or dismissal. 1 STATEMENT OF GENERAL PRINCIPLES 1.1 As a fiduciary, INVESCO owes an undivided duty of loyalty to its clients. It is INVESCO's policy that all employees conduct themselves so as to avoid not only actual conflicts of interest with INVESCO clients, but also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust our clients have placed in us. 1.2 The Code is designed to ensure, among other things, that the personal securities transactions of all employees are conducted in accordance with the following general principles: 1.2.1 A duty at all times to place the interests of INVESCO's clients first and foremost; 1.2.2 The requirement that all personal securities transactions be conducted in a manner consistent with this Code and national legal & regulatory requirements and in such a manner as to avoid any actual, potential or appearance of a conflict of interest or any abuse of an employee's position of trust and responsibility; and 1.2.3 The requirement that employees should not take inappropriate advantage of their positions. 1.3 INVESCO's policy is to avoid conflicts of interest and, where they unavoidably occur, to resolve them in a manner that clearly places our clients' interests first. 1.4 No employee should have ownership in or other interest in or employment by any outside concern which does business with AMVESCAP. This does not apply to stock or other investments in a publicly held company, provided that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. AMVESCAP may, following a review of the relevant facts, permit ownership interests which exceed these amounts if management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect AMVESCAP's business interests or the judgment of the affected staff. (Please see AMVESCAP Code of Conduct). 1 (INVESCO LOGO) 2 MATERIAL, NONPUBLIC INFORMATION 2.1 RESTRICTION ON TRADING OR RECOMMENDING TRADING Each employee is reminded that it constitutes a violation of law and/or Market Abuse regulations for any person to trade in or recommend trading in the securities of a company while in possession of material, non-public information concerning that company, or to disclose such information to any person not entitled to receive it if there is reason to believe that such information will be used in connection with a trade in the securities of that company. Violations of law and regulations may give rise to civil as well as criminal liability, including the imposition of monetary penalties or prison sentences upon the individuals involved. Tippees (i.e., persons who receive material, nonpublic information) also may be held liable if they trade or if they do not trade but pass along such information to others who will most likely trade on such information. 2.2 WHAT IS MATERIAL, NONPUBLIC INFORMATION? 'MATERIAL INFORMATION' is any information about a company which, if disclosed, is likely to affect the market price of the company's securities or to be considered important by an average investor in deciding whether to purchase or sell those securities. Examples of information which should be presumed to be "material" are matters such as dividend increases or decreases, earnings estimates by the company, changes in the company's previously released earnings estimates, significant new products or discoveries, major litigation by or against the company, liquidity or solvency problems, extraordinary management developments, significant merger or acquisition proposals, or similar major events which would be viewed as having materially altered the "total mix" of information available regarding the company or the market for any of its securities. 2.3 'NONPUBLIC INFORMATION', often referred to as 'inside information,' is information that has not yet been publicly disclosed. Information about a company is considered to be nonpublic information if it is received under circumstances which indicate that it is not yet in general circulation and that such information may be attributable, directly or indirectly, to the company or its insiders, or that the recipient knows to have been furnished by someone in breach of a fiduciary obligation. Courts have held that fiduciary relationships exist between a company and another party in a broad variety of situations involving a relationship between a company and its lawyers, investment bankers, financial printers, employees, technical advisors and others. 2.4 Information should not be considered to have been publicly disclosed until a reasonable time after it has been made public (for example, by a press release). Someone with access to inside information may not "beat the market" by trading simultaneously with, or immediately after, the official release of material information. 2.5 The responsibility of ensuring that the proposed transaction does not constitute insider dealing or a conflict with the interests of a client remains with the relevant employee and obtaining pre-clearance to enter into a transaction under Section 3.3 below does not absolve that responsibility. 2.6 INVESCO is in a unique position, being privy to market research and rumours and being privy also to information about its clients which may be public companies. INVESCO employees must be aware and vigilant to ensure that they cannot be accused of being a party of any 'insider dealing' or market abuse situations. 2.7 In particular, the following investment activities must not be entered into without carefully ensuring that there are no implications of insider trading: 2.7.1 Trading in shares for a client in any other client of INVESCO which is quoted on a recognised stock exchange. 2.7.2 Trading in shares for a client in a quoted company where INVESCO: i) obtains information in any official capacity which may be price sensitive and has not been made available to the general public. ii) obtains any other information which can be substantiated in connection with a quoted company which is also both price sensitive and has not been made available to the general public. 2.7.3 Manipulation of the market through the release of information to regular market users which is false or misleading about a company. 2.7.4 Release of information about a company that would have the effect of distorting the market in such a way to be considered market abuse. 2 (INVESCO LOGO) 2.8 REPORTING REQUIREMENT. Whenever an employee believes that he or she may have come into possession of material, non-public information about a public company, he or she personally must immediately notify the Compliance Department and should not discuss such information with anyone else including INVESCO employees and should not engage in transactions for himself or others, including INVESCO clients. 2.9 Upon receipt of such information the Compliance Department will include the company name on a 'Black list' or 'Restricted list' of which no transactions may be entered into. This list will be advised to the Equity dealing desk and no discussion will be entered into. 2.10 CONFIDENTIALITY. No information regarding the affairs of any client of INVESCO may be passed to anyone outside INVESCO unless specifically requested by law, regulation or court order. In any event, the Compliance and Legal Department must be consulted prior to furnishing such information. 2.11 SANCTIONS. Any employee who knowingly trades or recommends trading while in possession of material, non-public information may be subject to civil and criminal penalties, as well as to immediate suspension and/or dismissal from INVESCO. 3 PERSONAL INVESTING ACTIVITIES, PRE-CLEARANCE AND PRE-NOTIFICATION REQUIREMENTS 3.1 Transactions covered by this Code All transactions by employees in investments made for Covered Accounts are subject to the pre- clearance procedures, trading restrictions, pre-notification and reporting requirements described below, unless otherwise indicated. For a listing of the employee and other accounts subject to these restrictions and requirements ("Covered Accounts"), see Appendix A. 3.2 Transactions in the following investments ("Exempt Investments") are not subject to the trading restrictions or other requirements of this Code and need not be pre-cleared, pre-notified or reported: 3.2.1 Registered UNAFFILIATED (e.g. Schroders) open ended Collective Investment Schemes [CIS] including; mutual funds, open-ended investment companies/ICVCs or unit trusts - but not closed-end funds, e.g. Investment Trusts; and 3.2.2 Securities which are direct obligations of an OECD country (e.g. US Treasury Bills). 3.3 Pre-Clearance 3.3.1 Prior to entering an order for a Securities Transaction in a Covered Account, the employee must complete a Trade Authorisation Form set forth in Appendix C (also found on the Compliance intranet site) and submit the completed form electronically to the Local compliance officer. 3.3.2 The Trade Authorisation Form requires employees to provide certain information and to make certain representations in connection with the specific securities transaction(s). 3.3.3 If satisfactory, then the Form will be authorised by Compliance and confirmation returned by e-mail to the individual, who will then be at liberty to deal through his or her broker within the designated timescales. 3.3.4 No order for a Securities Transaction for which pre-clearance authorisation is sought may be placed prior to the receipt of authorisation from Compliance. The authorisation and date and time of the authorisation must be reflected on the Trade Authorisation Form (see Appendix C). The original of the completed form will be kept as part of INVESCO's books and records, and matched to the copy contract or note that the member of staff must ensure is sent by their broker to INVESCO, or provided by the employee to INVESCO. 3.3.5 If an employee receives permission to trade a security or instrument, the trade must be executed by the close of business on the next business day, unless the local Compliance Officer's authorisation to extend this period has been obtained. Permission may be granted to place "Stop loss" and limit orders but only in cases where express clearance for this type of transaction has been granted by Compliance. 3 (INVESCO LOGO) 3.4 Pre-Notification 3.4.1 Transactions to buy, sell, switch or transfer holdings in INVESCO funds, or investment products or other affiliated schemes are subject to pre-notification directly to the Compliance Department regardless of whether the order is placed directly or through a broker/adviser. The employee must complete the relevant sections of the Trade Authorisation Form which can be found in Appendix C (and on the Compliance intranet site) and send it by e-mail to the local Compliance Officer. Transactions are subject to the 60 day holding period requirements. 3.4.2 It will be necessary to send copies of contract notes to the Compliance Department. 3.5 Transactions that do not need to be pre-cleared but must be reported. The pre-clearance requirements (and the trading restrictions on personal investing described below) do not apply to the following transactions: 3.5.1 Discretionary Accounts Transactions effected in any Covered Account over which the employee has no direct or indirect influence or control (a "Discretionary Account"). An employee shall be deemed to have "no direct or indirect influence or control" over an account only if all of the following conditions are met: i) investment discretion for such account has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the employee, or decisions for the account are made by a family member or significant other and not by, or in connection with, the employee; ii) the employee (and, where applicable, the family member or significant other) certifies in writing that he or she has not and will not discuss any potential investment decisions with such independent fiduciary or household member; and iii) the Compliance Department has determined that the account satisfies the foregoing requirements. 3.5.2 Governmental Issues Investments in the debt obligations of Federal agencies or of state and municipal governments or agencies, (e.g. Essex Council Electricity Bond). 3.5.3 Non-Volitional Trades Transactions which are non-volitional on the part of the employee (such as the receipt of securities pursuant to a stock dividend or merger). 3.5.4 Automatic Transactions Purchases of the stock of a company pursuant to an automatic dividend reinvestment plan or an employee stock purchase plan sponsored by such company. 3.5.5 Rights Offerings Receipt or exercise of rights issued by a company on a pro rata basis to all holders of a class of security. Employees must, however, pre-clear transactions for the acquisition of such rights from a third party or the disposition of such rights. 3.5.6 Interests in Securities comprising part of a broad-based, publicly traded market basket or index of stocks, e.g. S & P 500 Index, FTSE 100, DAX. 3.5.7 Non-Executive Director's transactions Transactions in securities, except for AMVESCAP PLC shares and/or UK Investment Trusts managed by INVESCO, by non-executive Directors. 4 (INVESCO LOGO) 3.5.8 Note that all of the transactions described in paragraphs 3.4.1. to 3.4.8 while not subject to pre-clearance are nevertheless subject to all of the reporting requirements set forth below in paragraph 7.3. 3.6 Director's dealings As of October 30, 2004, an obligation to immediately notify INVESCO (the local compliance officer) and the Financial Market Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht, "BaFin") exists, among other things, for - members of the Supervisory Board or the board of directors, - any employees in leading positions, - any employees who can access material nonpublic information on a regular basis, - their spouses and/or (in accordance with foreign legal orders) registered life companions, - dependent children, - other family members that lived in a household with the member of the Supervisory Board for at least 1 year prior to the transaction, - legal entities, associations operating as trusts or partnerships - regarding all transactions made by them on their own account, as to - trading in shares and share-equivalent securities (or related derivatives) of AMVESCAP PLC listed on regulated exchanges - trading in shares and share-equivalent securities (or related derivatives) listed on regulated exchanges of enterprises connected with AMVESCAP PLC (at the beginning of January 2005, the following enterprises are affected: AMVESCAP, AIM, INVESCO) The notification must contain: - Name of the person subject to notification - Reason for the obligation to notify - Identification of the issuer - Description of the financial instrument - Type of transaction (e.g. purchase or sale) - Closing date and place at which the transaction occurred - Price and volume of transaction The notification to the BaFin must take place within 5 business days after the date of the closing; however, this can be postponed until the aggregate sum of transactions reaches the amount of 5,000 euros. If this amount has not been reached at the end of the calendar year, the notification may be disregarded. For the determination of any aggregate sum, the transactions of the member of the Supervisory Board are to be added to the transactions of all persons that stand in a close relationship with such member (those natural and legal entities specified above). The obligation to notify the BaFin is to be undertaken by the persons subject to notification THEMSELVES and in writing. The form to be used can be found under www.bafin.de > fur Anbieter > borsennotierte Unternehmen > Director's Dealings. It has to be send to the BaFin by fax to: + 49 228/4108-62963, by email to paragraph15a@bafin.de or by post to BaFin, Postfach 50 01 54, 30391 Frankfurt. In addition to the obligation to notify, there is also a publication obligation, which can be effected in the form of a publication on the homepage of AMVESCAP PLC. Therefore, we ask for a simultaneous notification to AMVESCAP. Please provide notification of all information to the Compliance Department at INVESCO Asset Management, Bleichstrasse 60-62, 60313 Frankfurt. For further inquiries, Julia Happel is gladly at your disposal at any time. 4 TRADE RESTRICTIONS ON PERSONAL INVESTING 4.1 All transactions in Covered Accounts which are subject to the preclearance requirements specified in this Code are also subject to the following trading restrictions: 5 (INVESCO LOGO) 4.1.1 Blackout Restrictions Transactions in Covered Accounts generally will not be permitted during a specific period before and after a client account trades in the same security or instrument. 4.1.2 Blackout Periods An employee may not buy or sell, or permit any Covered Account to buy or sell, a security or any instrument: i) within SEVEN calendar days before or after the day on which any client account trades in the same security or instrument or in a security convertible into or exchangeable for such security or instrument (including options) on transactions other than those covered under the paragraph below, or ii) within TWO business days before or after the day on which a pro rata "strip" trade, which includes such security, is made for the purpose of rebalancing client accounts. 4.1.3 Blackout periods will no longer apply to equity transactions in "main index" constituents, i.e. FTSE 100, Dow Jones, etc, subject to a cost and proceeds limit of (euro) 35.000 per transaction. Normal blackout conditions will apply to transactions outside of these criteria. If in any doubt please consult your local Compliance Officer. On a case by case basis and at the discretion of the Compliance Officer in consultation with the Chief Investment Officer, this limit may be relaxed. 4.1.4 Trades effected by INVESCO for the account of an index fund it manages in the ordinary course of such fund's investment activity will not trigger the blackout period. However, the addition or removal of a security from an index, thereby triggering an index fund trade, would cause employee trades in such security to be blacked-out for the seven prior and subsequent calendar days, as described above. 4.1.5 In the event there is a trade in a client account in the same security or instrument within a blackout period, the employee may be required to close out the position and to disgorge any profit to a charitable organisation chosen by the local Board of Directors; provided, however, that if an employee has obtained preclearance for a transaction and a subsequent client trade occurs within the blackout period, the Chief Executive Officer in consultation with the Compliance Officer, upon a demonstration of hardship or extraordinary circumstances, may determine to review the application of the disgorgement policy to such transaction and may select to impose alternative restrictions on the employee's position. The disgorgement of profits will only apply if the total profit exceeds (euro)150 within the blackout period. 4.1.6 AMVESCAP PLC. SHARES Pre-clearance is also required to buy or sell AMVESCAP PLC Shares. Permission will not be given during a' closed period' i.e., two months before the half year and year end results, one month before the first and third quarters results, are announced. A "closed period" is defined by the rules as the period of two months prior to the announcement of the year end results and the period of one month prior to the announcement of the interim and quarterly results. The closed period may be shorter depending on when the results are announced but cannot start until the end of the relevant reporting period. Full details of the AMVESCAP stock transaction Pre-Clearance Guide and restrictions for all employees of AMVESCAP can be found in Appendix F. 4.1.9 Short Term Trading Profits It is INVESCO's policy to restrict the ability of employees to benefit from short-term trading in securities and instruments. Employees must disgorge profits made on the sale by an employee of any security or instrument held less than 60 days and will not be permitted to purchase any security or instrument that has been sold by such employee within the prior 60 days. Employees are required to disgorge profits made on the sale in a Covered Account within the 60 days period. Exceptions may be granted by the Compliance Department on a 6 (INVESCO LOGO) case by case basis. This policy applies to trading in all types of securities and instruments, except where in a particular case the local Chief Executive Officer in consultation with the Compliance Officer has made a specific finding of hardship and it can be demonstrated that no potential abuse or conflict is presented (for example, when an employee's request to sell a security purchased within 60 days prior to the request is prompted by a major corporate or market event, such as a tender offer, and the security was not held in client accounts). To clarify this also applies to non affiliated mutual funds. 4.1.10 Initial Public Offerings No employee may purchase or permit any Covered Account to purchase a security offered pursuant to an initial public offering, wherever such offering is made. However where the public offering is made by a Government of where the employee is resident and different amounts of the offering are specified for different investor types eg private and institutional, the local Compliance Officer may allow such purchases after consultation with the local Chief Executive Officer or his designee. 4.1.11 Privately-Issued Securities Employees may not purchase or permit a Covered Account to purchase or acquire any privately-issued securities, other than in exceptional cases specifically approved by the local Chief Executive Officer (e.g., where such investment is part of a family-owned and operated business venture that would not be expected to involve an investment opportunity of interest to any INVESCO client). Requests for exceptions should be made in the first instance to the local Compliance Officer. 4.1.12 Employees, however, may invest in interests in private investment funds (i.e., hedge funds) that are established to invest predominantly in public securities and instruments, subject to the pre-clearance procedures, trading restrictions and reporting requirements contained in this Code. Employees may also invest in residential co-operatives and private recreational clubs (such as sports clubs, country clubs, luncheon clubs and the like) for their personal use; such investments are not subject to the pre-clearance procedures, trading restrictions and reporting requirements unless the employee's investing is part of a business conducted by the employee. Such ownership should be reported to the Compliance Officer. 4.1.13 Short Sales An employee may not sell short a security unless this is specifically related to personal taxation issues. Requests for exceptions should be made to the local Compliance Officer. 4.1.14 Financial Spread Betting Employees may not enter into Financial Spread betting arrangements. The potential problematical issues to both the employee and INVESCO that could arise if the market were to move in the wrong direction are considered unacceptable and therefore prohibited. 4.1.15 Futures Employees may not write, sell or buy exchange-traded futures, synthetic futures, swaps and similar non-exchange traded instruments. 4.1.16 Exceptions The Chief Executive Officer or his designee in consultation with the Compliance Officer may in rare instances grant exceptions from these trading restrictions upon written request. Employees must demonstrate hardship or extraordinary circumstances. Any exceptions granted will be reported to the local Board of Directors at least annually. Additionally if a local Board or its designee wish to impose additional restrictions these should be included in Appendix B. 7 (INVESCO LOGO) 5 ECONOMIC OPPORTUNITIES, CONFIDENTIALITY AND OUTSIDE DIRECTORSHIPS 5.1 Monitoring the use of the name of INVESCO To be able to fully monitor the appearance of the name of INVESCO, any employee's activities on behalf of INVESCO such as the participation in an industry body or an external consulting group need to be pre-cleared to the local compliance officer and the local CEO. 5.2 Avoiding conflicts of interests In order to reduce potential conflicts of interest arising from the participation of employees on the boards of directors of public, private, non-profit and other enterprises, all employees are subject to the following restrictions and guidelines: 5.2.1 An employee may not serve as a director of a public company without the approval of the local Chief Executive Officer after consultation with the local Compliance Officer. 5.2.2 An employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if: (i) client assets have been invested in such company and having a seat on the board would be considered beneficial to our clients interest; and (ii) service on such board has been approved in writing by the local Chief Executive Officer. The employee must resign from such board of directors as soon as the company contemplates going public, except where the local Chief Executive Officer has determined that an employee may remain on a board. In any event, an employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company; any compensation offered shall either be refused or, if unable to be refused, distributed pro rata to the relevant client accounts. 5.2.3 An employee must receive prior written permission from the Chief Executive Officer or his designee before serving as a director, trustee or member of an advisory board of either: (i) any non-profit or charitable institution; or (ii) a private family-owned and operated business. 5.2.4 An employee may serve as an officer or director of a residential co-operative, but must receive prior written permission from the local Chief Executive Officer and the local Compliance Department before serving as a director if, in the course of such service, he or she gives advice with respect to the management of the co-operative's funds. 5.2.5 If an employee serving on the board of directors or advisers of any entity comes into possession of material, non-public information through such service, he or she must immediately notify his or her local Compliance Officer. 5.2.6 An INVESCO employee shall not take personal advantage of any economic opportunity properly belonging to an INVESCO Client or to INVESCO itself. Such opportunities could arise, for example, from confidential information belonging to a client or the offer of a directorship. Employees must not disclose information relating to a client's intentions, activities or portfolios except: i) to fellow employees, or other agents of the client, who need to know it to discharge their duties; or ii) to the client itself. 5.2.7 Employees may not cause or attempt to cause any Client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the employee or INVESCO. 5.2.8 If an employee or immediate family member stands to materially benefit from an investment decision for an Advisory Client that the employee is recommending or participating in, the employee must disclose that interest to persons with authority to make investment decisions or to the Compliance Officer. Based on the information given, a decision will be made on 8 (INVESCO LOGO) whether or not to restrict the employee's participation in causing a client to purchase or sell a Security in which the employee has an interest. 5.2.9 An employee must disclose to those persons with authority to make investment decisions for a Client (or to the Compliance Officer if the employee in question is a person with authority to make investment decisions for the Client), any Beneficial Interest that the employee (or immediate family) has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the employee (or immediate family) or the appearance of impropriety. The person to whom the employee reports the interest, in consultation with the Compliance Officer, must determine whether or not the employee will be restricted in making investment decisions. 6 CLIENT INVESTMENTS IN SECURITIES OWNED BY INVESCO EMPLOYEES 6.1 GENERAL PRINCIPLES In addition to the specific prohibitions on certain personal securities transactions as set forth herein, all employees are prohibited from: 6.1.1 Employing any device, scheme or artifice to defraud any prospect or client; 6.1.2 Making any untrue statement of a material fact or omitting to state to a client or a prospective client, a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; 6.1.3 Engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any prospect or client; 6.1.4 Engaging in any manipulative practice with respect to any prospect or client; or 6.1.5 Revealing to any other person (except in the normal course of his or her duties on behalf of a client) any information regarding securities transactions by any client or the consideration of any client or INVESCO of any securities transactions. 7 REPORTS 7.1 In order to implement the general principles, restrictions and prohibitions contained in this Code, each Employee is required to file the following periodic reports: 7.2 Initial Certification and Schedules. Within 10 business days of commencing employment at INVESCO, each new employee shall submit to the Compliance Department: 7.2.1 a signed Initial Certification of Compliance with the INVESCO Code (See Appendix D); and 7.2.2 schedules listing (i) all Covered Accounts; and (ii) directorships (or similar positions) of for-profit, non-profit and other enterprises. 7.3 Confirmations and Monthly Statements Each employee shall cause to be provided to the Human Resources Department where an outside broker undertakes the transaction: 7.3.1 Duplicate copies of confirmations of all transactions in each Covered Account; or 9 (INVESCO LOGO) 7.3.2 Not later than 10 days after the end of each month, monthly statements (if any are regularly prepared) for each Covered Account. 7.4 Annual Certification Each employee shall provide, or cause to be provided, to the Compliance Department, not later than 10 days after the end of each annual period, a signed annual Certification of Compliance with the INVESCO Code (Appendix E) containing: 7.4.1 To the extent not included in the foregoing monthly statements, a schedule listing: i) all Covered Accounts and any other transactions not included in the monthly statements; and ii) directorships (or similar positions) of for-profit, non-profit and other enterprises. iii) A copy of an annual statement of the custody account. 7.4.2 A schedule listing directorships (or similar positions) of for-profit, non-profit and other enterprises; 7.4.3 With respect to Discretionary Accounts, if any, certifications that such employee does not discuss any investment decisions with the person making investment decisions; and 7.4.4 With respect to any non-public security owned by such employee, a statement indicating whether the issuer has changed its name or publicly issued securities during such calendar year. 7.5 Exempt Investments Confirmations and periodic reports need not be provided with respect to Exempt Investments, (see 3.2). 7.6 Disclaimer of Beneficial Ownership Any report required under this Code may contain a statement that such report is not to be construed as an admission by the person making the report that he or she has any direct and indirect beneficial ownership of the security to which the report relates. 7.7 Annual Review The Director of European Compliance will review the Code as necessary, in light of legal and business developments and experience in implementing the Code, and will prepare a report to the relevant management committee that: 7.7.1 summarizes existing procedures concerning personal investing and any changes in the procedures made during the past year, 7.7.2 identifies any violations requiring significant remedial action during the past year, and 7.7.3 identifies any recommended changes in existing restrictions or procedures based on the experience under the Code, evolving industry practices, or developments in applicable laws or regulations. 8. TRAINING REQUIREMENTS In order to make sure that every employee is fully aware of the current rules and guidelines as well as changes in the local regulatory environment, he has to participate in compliance and anti money laundering training at least once a year. Several of these trainings will be provided in the local offices by the Compliance officer and the AML officer. 10 (INVESCO LOGO) 9. GIFTS AND ENTERTAINMENT In order to minimize any conflict, potential conflict or appearance of conflict of interest, employees are subject to the restrictions and guidelines with respect to gifts made to or received from, and entertainment with, a person that does business with or provides services to INVESCO, that may do business or is being solicited to do business with INVESCO or that is associated with an organisation that does or seeks to do business with INVESCO (a "Business Associate"). Restrictions are set out in Appendix G. 10. MISCELLANEOUS 10.1 INTERPRETATION The provisions of this Code will be interpreted by the local Compliance Officer, as applicable. Questions of interpretation should be directed in the first instance to the local Compliance Officer or his/her designee or, if necessary, with the Compliance Officer of another INVESCO entity. The interpretation of the local Compliance Officer is final. 10.2 SANCTIONS If advised of a violation of this Code by an employee, the local Chief Executive Officer (or, in the case of the local Chief Executive Officer, the local Board of Directors) may impose such sanctions as are deemed appropriate. Any violations of this Code and sanctions therefore will be reported to the local Board of Directors at least annually. 10.3 EFFECTIVE DATE: This revised Code shall become effective as of 1 September 2005. Specific Provisions for EMPLOYEES OF INVESCO REAL ESTATE GMBH and EMPLOYEES ASSOCIATED WITH REAL ESTATE TRANSACTIONS undertaken by INVESCO: 10 GUIDELINES FOR COMPLIANCE IN REAL ESTATE INVESTMENTS 10.1 The purpose of this section is to ensure all personal real estate transactions of employees are conducted - to place the interests of INVESCO's clients first, - to avoid any actual, potential or appearance of a conflict of interest, - to avoid any abuse of an employee's position of trust and responsibility and - to avoid the possibility that employees would take inappropriate advantage of their positions. 10.2 THE REQUIREMENTS IN THESE SECTIONS ARE AN ADDITION TO RATHER THAN A SUBSTITUTE OF ALL OTHER REQUIREMENTS MADE IN THE CODE OF ETHICS. RESTRICTIONS Any employee who: - knowingly invests in real estate or recommends investments in real estate while in possession of material, non-public information, - informs somebody (outside of INVESCO or the client) about a real estate investment or about a client using information he has received through his employment with INVESCO may be subject to civil and criminal penalties, as well as to immediate suspension and/or dismissal from INVESCO. These restrictions also apply to investments undertaken by third parties on the employee's account or by the employee for another person. DEFINITION 'Material information' is any information about a real estate investment which, if disclosed, is likely to affect the market price of a real estate investment. Examples of information which should be presumed to be "material" are matters such as income from property, pollution of the premises, earnings estimates of a real estate project development plans or changes of such estimates, or forthcoming transformation of land into building land prior to public planning. 11 (INVESCO LOGO) 'Non-public information' is information that is not provided by publicly available sources. Information about a real estate investment is considered to be non-public if it is received under circumstances which indicate that such information may be attributable, directly or indirectly, to any party involved in the real estate project or its insiders, or that the recipient knows to have been furnished by someone in breach of a fiduciary duty. An example of non-public information related to real estate investments is the desire or need of a client to sell a real estate investment. In particular, the following activities must not be entered into without carefully ensuring that there are no implications of insider trading and no appearance of a conflict of interest: 1. Personally investing in real estate for a client when another client or a business partner of INVESCO is involved in setting up and selling the investment. I.e. as an intermediary or a financier. 2. Entering into a private real estate transaction when any cost or fees brought forth by it are other than at arm's length. 3. Taking personal advantage of any economic opportunity properly belonging to an INVESCO Client or to INVESCO itself. 4. Investing in real estate for a client where INVESCO has access to information which may be price sensitive. 5. Manipulation of the market through the release of information to regular market users which is false or misleading about a company or a real estate investment. 6. Release of any information (except in the normal course of his or her duties as an employee of INVESCO) about a client's considerations of a real estate investment. 7. Personally engaging in real estate investments and thereby using information received through the employment with INVESCO. PERSONAL INVESTING ACTIVITIES, PRE-CLEARANCE AND PRE-NOTIFICATION Prior to engaging in any private real estate transaction the employee must fully disclose the transaction to the local compliance officer along with details of any non-public information held by the employee. Further detail may be requested by Compliance including an independent valuation or confirmation of purchase price. It will only be permitted if it is not contrary to the interests of INVESCO or the clients of INVESCO. In the event that such an engagement was entered into before the employee has joined INVESCO and it is a commercial investment (not inhabited by the employee or family members), it must be disclosed upon employment. Disclosure of the transaction is also required if the employee acts as an authorised agent or if the transaction is undertaken by a third party for the account of the employee. Compliance will without delay inform the employee about the decision. If the permission for a particular investment is given, a time limit of one year applies to the actual engagement in this specific investment. EXEMPTIONS If investment discretion for an investment has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the employee, or decisions for the account are made by a family member or significant other and not by, or in connection with, the employee. 12 EX-99.P8 11 h53872aexv99wp8.txt CODE OF ETHICS - -------------------------------------------------------------------------------- MEMORANDUM - -------------------------------------------------------------------------------- TO: All UK & Ireland Staff Members FROM: Nick Styman Director of European Compliance INVESCO UK & IRELAND --CODE OF ETHICS AND CONFLICTS OF INTEREST POLICY Please find attached a revised copy of the INVESCO UK & Ireland Code of Ethics and Conflicts of Interest Policy ('The Code') which is being distributed to all UK & Ireland employees. BACKGROUND INVESCO has a regulatory requirement to avoid conflicts of interest or where they cannot be avoided to manage and disclose them. This Code sets out the framework by which we demonstrate to both our customers and the Regulators that we are mindful that in certain circumstances conflicts may exist and that we have in place procedures to mitigate these conflicts. As with all policies, it is necessary to review and update them to take into account new practices both from a Company and an industry perspective. This revised Code does not include the Gifts, Benefits & Entertainment Policy which is being issued under separate cover to reflect the new AMVESCAP-wide policy. THE REVISED CODE The Code is applicable to all employees within the INVESCO UK & Ireland business units subject to the application of sound common sense and practicable business judgement. This Code cannot anticipate every possible situation or cover every topic in detail. The Company has established special policies to address specific subjects and will update this Code and those specific policies from time to time. If you are unclear about any situation, please stop and ask for guidance before taking action. Failure to obey laws and regulations violates this Code and may expose both you and the Company to criminal or civil sanctions. Any violation of this Code or other company policies may result in disciplinary action, up to and including termination of employment. The Company may also seek civil remedies from you and even refer criminal misconduct to law enforcement agencies. You are responsible for reporting possible violations of this Code to the Director of European Compliance, the Head of Dublin Compliance or their designees. The UK and Ireland business has put in place whistleblowing procedures as required under the regulations. If you wish to discuss any issues you feel uncomfortable with, please call the Director of European Compliance, the Head of Dublin Compliance or the Head of Human Resources as appropriate. If you are aware of a violation and are uncomfortable speaking with the Director of European Compliance or Head of Dublin Compliance or wish to remain anonymous, you may call the toll free AMVESCAP Compliance Reporting Line (the "Compliance Reporting Line"). For calls, dial an international operator and request a collect call to 1-704-943-1136. When asked for your name use "AMVESCAP". PLEASE READ THE CODE THOROUGHLY AND SIGN OFF THAT YOU HAVE READ AND UNDERSTOOD THE CODE, AS SOON AS POSSIBLE BUT NO LATER THAN 31 MARCH, 2007. FAILURE TO COMPLY WITH THE CODE COULD LEAD TO DISGORGEMENT OF PROFITS FROM DEALING OR POTENTIAL DISCIPLINARY ACTION BEING TAKEN AGAINST THE INDIVIDUAL CONCERNED. If you have any queries regarding any aspect of the revised Code please call the Compliance Department. Nick Styman Director of European Compliance INVESCO UK & IRELAND CODE OF ETHICS AND CONFLICTS OF INTEREST POLICY THIS REVISED CODE OF ETHICS AND CONFLICTS OF INTEREST POLICY ('THE CODE') APPLIES TO ALL EMPLOYEES OF ALL ENTITIES OF INVESCO UK AND IRELAND ("INVESCO"). IT COVERS THE FOLLOWING TOPICS: - - PROHIBITIONS RELATED TO MATERIAL, NON-PUBLIC INFORMATION; - - PERSONAL SECURITIES INVESTING; AND - - SERVICE AS A DIRECTOR AND OTHER BUSINESS OPPORTUNITIES. THIS CODE ALSO IMPOSES ON EMPLOYEES CERTAIN RESTRICTIONS AND REPORTING OBLIGATIONS WHICH ARE SPECIFIED BELOW. ADHERENCE TO THIS CODE, BOTH LETTER AND SPIRIT, IS A FUNDAMENTAL AND ABSOLUTE CONDITION OF EMPLOYMENT WITH INVESCO. It is appreciated that no Code of Ethics can address every circumstance that may give rise to a conflict, a potential conflict or an appearance of a conflict of interest. Every employee should be alert to any actual, potential or appearance of a conflict of interest with INVESCO's clients and to conduct himself or herself with good judgment. Failure to exercise good judgment, as well as violations of this Code, may result in the imposition of sanctions on the employee, including suspension or dismissal. 1 STATEMENT OF GENERAL PRINCIPLES 1.1 As a fiduciary, INVESCO owes an undivided duty of loyalty to its clients. It is INVESCO's policy that all employees conduct themselves so as to avoid not only actual conflicts of interest with INVESCO clients, but also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust our clients have placed in us. 1.2 The Code is designed to ensure, among other things, that the personal securities transactions of all employees are conducted in accordance with the following general principles: 1.2.1 A duty at all times to place the interests of INVESCO's clients first and foremost; 1.2.2 The requirement that all personal securities transactions be conducted in a manner consistent with this Code and in such a manner as to avoid any actual, potential or appearance of a conflict of interest or any abuse of an employee's position of trust and responsibility; and 1.2.3 The requirement that employees should not take inappropriate advantage of their positions. 1.3 INVESCO's policy is to avoid conflicts of interest and, where they unavoidably occur, to resolve them in a manner that clearly places our clients' interests first. 1.4 No employee should have ownership in or other interest in or employment by any outside concern which does business with AMVESCAP. This does not apply to stock or other investments in a publicly held company, provided that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. AMVESCAP may, following a review of the relevant facts, permit ownership interests which exceed these amounts if management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect AMVESCAP's business interests or the judgment of the affected staff. (Please see AMVESCAP Code of Conduct). 2 MATERIAL, NONPUBLIC INFORMATION 2.1 RESTRICTION ON TRADING OR RECOMMENDING TRADING Each employee is reminded that it constitutes a violation of law and/or Market Abuse regulations for any person to trade in or recommend trading in the securities of a company while in possession of material, non-public information concerning that company, or to disclose such information to any person not entitled to receive it if there is reason to believe that such information will be used in connection with a trade in the securities of that company. Violations of law and regulations may give rise to civil as well as criminal liability, including the imposition of monetary penalties or prison sentences upon the individuals involved. Tippees (ie, persons who receive material, nonpublic information) also may be held liable if they trade or if they do not trade but pass along such information to others who will most likely trade on such information. 2.2 WHAT IS MATERIAL, NONPUBLIC INFORMATION? 'MATERIAL INFORMATION' is any information about a company which, if disclosed, is likely to affect the market price of the company's securities or to be considered important by an average investor in deciding whether to purchase or sell those securities. Examples of information which should be presumed to be "material" are matters such as dividend increases or decreases, earnings estimates by the company, changes in the company's previously released earnings estimates, significant new products or discoveries, major litigation by or against the company, liquidity or solvency problems, extraordinary management developments, significant merger or acquisition proposals, or similar major events which would be viewed as having materially altered the "total mix" of information available regarding the company or the market for any of its securities. Further examples can be found in the FSA Market Abuse Handbook. 2.3 'NONPUBLIC INFORMATION', often referred to as 'inside information,' is information that has not yet been publicly disclosed. Information about a company is considered to be nonpublic information if it is received under circumstances which indicate that it is not yet in general circulation and that such information may be attributable, directly or indirectly, to the company or its insiders, or that the recipient knows to have been furnished by someone in breach of a fiduciary obligation. Courts have held that fiduciary relationships exist between a company and another party in a broad variety of situations involving a relationship between a company and its lawyers, investment bankers, financial printers, employees, technical advisors and others. 2.4 Information should not be considered to have been publicly disclosed until a reasonable time after it has been made public (for example, by a press release). Someone with access to inside information may not "beat the market" by trading simultaneously with, or immediately after, the official release of material information. 2.5 The responsibility of ensuring that the proposed transaction does not constitute insider dealing or a conflict with the interests of a client remains with the relevant employee and obtaining pre-clearance to enter into a transaction under Section 3.3 below does not absolve that responsibility. 2.6 INVESCO is in a unique position, being privy to market research and rumours and being privy also to information about its clients which may be public companies. INVESCO employees must be aware and vigilant to ensure that they cannot be accused of being a party of any 'insider dealing' or market abuse situations. 2.7 In particular, the following investment activities must not be entered into without carefully ensuring that there are no implications of insider trading: 2.7.1 Trading in shares for a client in any other client of INVESCO which is quoted on a recognised stock exchange. 2.7.2 Trading in shares for a client in a quoted company where INVESCO: i) obtains information in any official capacity which may be price sensitive and has not been made available to the general public. ii) obtains any other information which can be substantiated in connection with a quoted company which is also both price sensitive and has not been made available to the general public. 2.7.3 Manipulation of the market through the release of information to regular market users which is false or misleading about a company. 2.7.4 Release of information about a company that would have the effect of distorting the market in such a way to be considered market abuse. 2.8 REPORTING REQUIREMENT. Whenever an employee believes that he or she may have come into possession of material, non-public information about a public company, he or she personally must immediately notify the Compliance Department and should not discuss such information with anyone else including INVESCO employees and should not engage in transactions for himself or others, including INVESCO clients. 2.9 Upon receipt of such information the Compliance Department will include the company name on a 'Black list' or 'Restricted list' of which no transactions may be entered into. This list will be advised to the Equity dealing desk and no discussion will be entered into. 2.10 CONFIDENTIALITY. No information regarding the affairs of any client of INVESCO may be passed to anyone outside INVESCO unless specifically requested by law, regulation or court order. In any event, the Compliance and Legal Department must be consulted prior to furnishing such information. 2.11 SANCTIONS. Any employee who knowingly trades or recommends trading while in possession of material, non-public information may be subject to civil and criminal penalties, as well as to immediate suspension and/or dismissal from INVESCO. 3 PERSONAL INVESTING ACTIVITIES, PRE-CLEARANCE AND PRE-NOTIFICATION REQUIREMENTS 3.1 TRANSACTIONS COVERED BY THIS CODE All transactions by employees in investments made for Covered Accounts are subject to the pre-clearance procedures, trading restrictions, pre-notification and reporting requirements described below, unless otherwise indicated. For a listing of the employee and other accounts subject to these restrictions and requirements ("Covered Accounts"), see Appendix A. 3.2 TRANSACTIONS IN THE FOLLOWING INVESTMENTS ("EXEMPT INVESTMENTS") ARE NOT SUBJECT TO THE TRADING RESTRICTIONS OR OTHER REQUIREMENTS OF THIS CODE AND NEED NOT BE PRE-CLEARED, PRE-NOTIFIED OR REPORTED: 3.2.1 Registered UNAFFILIATED (e.g. Schroders) open ended Collective Investment Schemes [CIS] including; mutual funds, open-ended investment companies/ICVCs or unit trusts - but not closed-end funds, e.g. Investment Trusts; and 3.2.2 Securities which are direct obligations of an OECD country (eg US Treasury's). TRANSACTIONS WHICH REQUIRE PRE CLEARANCE OR PRE NOTIFICATION. 3.3 PRE-CLEARANCE 3.3.1 Prior to entering an order for a Securities Transaction in a Covered Account, the employee must complete a Trade Authorisation Form set forth in Appendix C (also found on the Compliance intranet site) and submit the completed form electronically to the UK Equity Dealers by e-mail to Investment Dealers. The Trade Authorisation Form requires employees to provide certain information and to make certain representations in connection with the specific securities transaction(s). 3.3.2 After receiving the completed Trade Authorisation Form, UK Equity Dealers will review the information set forth in the form and, as soon as practicable, will determine whether to clear the proposed Securities Transaction, subject to local requirements. 3.3.3 Once UK Equity Dealers have authorised the transaction, it is passed electronically to Compliance to complete the authorisation process -- again this is conducted electronically by e-mail. UK Equity Dealers will forward the authorised Form to *UK- Compliance Personal Share Dealing, who will then check the proposed transaction against the significant holdings/block list to ascertain whether or not the security in question has been blocked. 3.3.4 If satisfactory, then the Form will be authorised by Compliance and confirmation returned by e-mail to the individual, who will then be at liberty to deal through his or her broker within the designated timescales. 3.3.5 No order for a Securities Transaction for which pre-clearance authorisation is sought may be placed prior to the receipt of authorisation of the transaction by both the UK Equity Dealers and Compliance. The authorisation and date and time of the authorisation must be reflected on the Trade Authorisation Form (see Appendix C). The original of the completed form will be kept as part of INVESCO's books and records, and matched to the copy contract note that the member of staff must ensure is sent by their broker to INVESCO. Please be advised that it is the individuals responsibility to ensure that a contract note is sent to the UK Compliance Department to be matched against the Permission to Deal Form. This must be sent within 10 working days. Failure to supply a trade confirmation is a breach of the Code. Further personal securities transactions will not be approved where contract notes/trade confirmations are outstanding. 3.3.6 If an employee receives permission to trade a security or instrument, the trade must be executed by the close of business on the next business day, unless the local Compliance Officer's authorisation to extend this period has been obtained. 3.4 PRE-NOTIFICATION 3.4.1 Transactions to buy or sell Venture Capital Trust ordinary securities or to buy, sell, switch or transfer holdings in AMVESCAP ordinary shares or in the INVESCO UK ICVCs, the INVESCO Global Product Range or other affiliated schemes are subject to pre-notification directly to the Compliance Department regardless of whether the order is placed directly or through a broker/adviser. The employee must complete the relevant sections of the Trade Authorisation Form which can be found in Appendix C (and on the Compliance intranet site) and send it by e-mail to *UK- Compliance Personal Share Dealing. Transactions are subject to the 60 day holding period requirements. 3.4.2 It will be necessary to send copies of contract notes to the Compliance Department. 3.5 TRANSACTIONS THAT DO NOT NEED TO BE PRE-CLEARED BUT MUST BE REPORTED. The pre-clearance requirements (and the trading restrictions on personal investing described below) do not apply to the following transactions: 3.5.1 Discretionary Accounts. Transactions effected in any Covered Account over which the employee has no direct or indirect influence or control (a "Discretionary Account"). An employee shall be deemed to have "no direct or indirect influence or control" over an account only if all of the following conditions are met: i) investment discretion for such account has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the employee, or decisions for the account are made by a family member or significant other and not by, or in connection with, the employee; ii) the employee (and, where applicable, the family member or significant other) certifies in writing that he or she has not and will not discuss any potential investment decisions with such independent fiduciary or household member; and iii) the Compliance Department has determined that the account satisfies the foregoing requirements. 3.5.2 Governmental Issues Investments in the debt obligations of Federal agencies or of state and municipal governments or agencies, (eg Essex Council Electricity Bond). 3.5.3 Non-Volitional Trades Transactions which are non-volitional on the part of the employee (such as the receipt of securities pursuant to a stock dividend or merger). 3.5.4 Automatic Transactions Purchases of the stock of a company pursuant to an automatic dividend reinvestment plan or an employee stock purchase plan sponsored by such company. 3.5.5 Rights Offerings Receipt or exercise of rights issued by a company on a pro rata basis to all holders of a class of security. Employees must, however, pre-clear transactions for the acquisition of such rights from a third party or the disposition of such rights. 3.5.6 Interests in Securities comprising part of a broad-based, publicly traded market basket or index of stocks, eg S & P 500 Index, FTSE 100, DAX. 3.5.7 Non-Executive Director's transactions Transactions in securities, except for AMVESCAP PLC shares and/or UK Investment Trusts managed by INVESCO, by non-executive Directors. 3.5.8 Note that all of the transactions described in paragraphs 3.4.1. to 3.4.8 while not subject to pre-clearance are nevertheless subject to all of the reporting requirements set forth below in paragraph 7.3. 4 TRADE RESTRICTIONS ON PERSONAL INVESTING 4.1 All transactions in Covered Accounts which are subject to the preclearance requirements specified in this Code are also subject to the following trading restrictions: 4.1.1 BLACKOUT RESTRICTIONS Transactions in Covered Accounts generally will not be permitted during a specific period before and after a client account trades in the same security or instrument. 4.1.2 BLACKOUT PERIODS An employee may not buy or sell, or permit any Covered Account to buy or sell, a security or any instrument: i) within SEVEN calendar days before or after the day on which any client account trades in the same security or instrument or in a security convertible into or exchangeable for such security or instrument (including options) on transactions other than those covered under the paragraph below, or ii) within TWO business days before or after the day on which a pro rata "strip" trade, which includes such security, is made for the purpose of rebalancing client accounts. 4.1.3 Blackout periods will no longer apply to equity transactions in "main index" constituents, i.e. FTSE 100, Dow Jones, etc, subject to a cost and proceeds limit of Pound Sterling 25,000 per transaction. Normal blackout conditions will apply to transactions outside of these criteria. If in any doubt please consult your local Compliance Officer. On a case by case basis and at the discretion of the Compliance Officer in consultation with the Chief Investment Officer, this limit may be relaxed. 4.1.4 Trades effected by INVESCO for the account of an index fund it manages in the ordinary course of such fund's investment activity will not trigger the blackout period. However, the addition or removal of a security from an index, thereby triggering an index fund trade, would cause employee trades in such security to be blacked-out for the seven prior and subsequent calendar days, as described above. 4.1.5 In the event there is a trade in a client account in the same security or instrument within a blackout period, the employee may be required to close out the position and to disgorge any profit to a charitable organisation chosen by the local Board of Directors; provided, however, that if an employee has obtained preclearance for a transaction and a subsequent client trade occurs within the blackout period, the Chief Executive Officer in consultation with the Compliance Officer, upon a demonstration of hardship or extraordinary circumstances, may determine to review the application of the disgorgement policy to such transaction and may select to impose alternative restrictions on the employee's position. The disgorgement of profits will only apply if the total profit exceeds Pound Sterling 100 within the blackout period. 4.1.6 AMVESCAP PLC SHARES Pre-clearance is also required to buy or sell AMVESCAP PLC Shares. Permission will not be given during a' closed period' i.e., two months before the half year and year end results, one month before the first and third quarters results, are announced. A "closed period" is defined by the rules as the period of two months prior to the announcement of the year end results and the period of one month prior to the announcement of the interim and quarterly results. The closed period may be shorter depending on when the results are announced but cannot start until the end of the relevant reporting period. Full details of the AMVESCAP stock transaction Pre-Clearance Guide and restrictions for all employees of AMVESCAP can be found in Appendix F. 4.1.7 INVESCO INVESTMENT TRUSTS Staff dealing in INVESCO Investment Trusts will also be subject to closed periods as dictated by each of the Trusts. 4.1.8 UK ICVCS, THE OFFSHORE GLOBAL PRODUCT RANGE (GPR) and other affiliated schemes will be subject to the Short Term Trading restrictions (60 day rule - see 4.1.9). The preferential rate of sales commission allowed to staff will be withdrawn in circumstances where it is apparent that the employee has traded on a short term basis in those shares/units i.e. where previous transactions by that person have resulted in the short term holding of those investments. Shares/Units of UK ICVCs, the GPR and affiliated schemes will not be accepted for redemption if the funds themselves are closed for redemption due to the effects of subsequent market or currency movements. 4.1.9 SHORT TERM TRADING PROFITS It is INVESCO's policy to restrict the ability of employees to benefit from short-term trading in securities and instruments. Employees must disgorge profits made on the sale by an employee of any security or instrument held less than 60 days and will not be permitted to purchase any security or instrument that has been sold by such employee within the prior 60 days. Employees are required to disgorge profits made on the sale in a Covered Account within the 60 days period. Exceptions may be granted by the Compliance Department on a case by case basis. This policy applies to trading in all types of securities and instruments, except where in a particular case the local Chief Executive Officer in consultation with the Compliance Officer has made a specific finding of hardship and it can be demonstrated that no potential abuse or conflict is presented (for example, when an employee's request to sell a security purchased within 60 days prior to the request is prompted by a major corporate or market event, such as a tender offer, and the security was not held in client accounts). To clarify this also applies to non affiliated mutual funds. 4.1.10 INITIAL PUBLIC OFFERINGS ("IPO") No employee may purchase or permit any Covered Account to purchase a security offered pursuant to an initial public offering, except in a Venture Capital Trust, wherever such offering is made. However, in certain circumstances an employee may be permitted to buy an IPO for example where the public offering is made by a Government of where the employee is resident and different amounts of the offering are specified for different investor types eg private and institutional, the local Compliance Officer may allow such purchases after consultation with the local Chief Executive Officer or his designee. 4.1.11 PRIVATELY-ISSUED SECURITIES Employees may not purchase or permit a Covered Account to purchase or acquire any privately-issued securities, other than in exceptional cases specifically approved by the local Chief Executive Officer and Compliance Officer (e.g., where such investment is part of a family-owned and operated business venture that would not be expected to involve an investment opportunity of interest to any INVESCO client). Requests for exceptions should be made in the first instance to the local Compliance Officer. 4.1.12 Employees, however, may invest in interests in private investment funds (i.e., hedge funds) that are established to invest predominantly in public securities and instruments, subject to the pre-clearance procedures, trading restrictions and reporting requirements contained in this Code. Employees may also invest in residential co-operatives and private recreational clubs (such as sports clubs, country clubs, luncheon clubs and the like) for their personal use; such investments are not subject to the pre-clearance procedures, trading restrictions and reporting requirements unless the employee's investing is part of a business conducted by the employee. Such ownership should be reported to the Compliance Officer. 4.1.13 SHORT SALES An employee may not sell short a security unless this is specifically related to personal taxation issues. Requests for exceptions should be made to the local Compliance Officer. 4.1.14 FINANCIAL SPREAD BETTING Employees may not enter into Financial Spread betting arrangements. The potential problematical issues to both the employee and INVESCO that could arise if the market were to move in the wrong direction are considered unacceptable and therefore prohibited. 4.1.15 FUTURES Employees may not write, sell or buy exchange-traded futures, synthetic futures, swaps and similar non-exchange traded instruments. 4.1.16 EXCEPTIONS The Chief Executive Officer or his designee in consultation with the Compliance Officer may in rare instances grant exceptions from these trading restrictions upon written request. Employees must demonstrate hardship or extraordinary circumstances. Any exceptions granted will be reported to the local Board of Directors at least annually. Additionally if a local Board or its designee wish to impose additional restrictions these should be included in Appendix B. 5 ECONOMIC OPPORTUNITIES, CONFIDENTIALITY AND OUTSIDE DIRECTORSHIPS 5.1 In order to reduce potential conflicts of interest arising from the participation of employees on the boards of directors of public, private, non-profit and other enterprises, all employees are subject to the following restrictions and guidelines: 5.1.1 An employee may not serve as a director of a public company without the approval of the local Chief Executive Officer after consultation with the local Compliance Officer. 5.1.2 An employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if: (i) client assets have been invested in such company and having a seat on the board would be considered beneficial to our clients interest; and (ii) service on such board has been approved in writing by the local Chief Executive Officer. The employee must resign from such board of directors as soon as the company contemplates going public, except where the local Chief Executive Officer in consultation with the Compliance Officer has determined that an employee may remain on a board. In any event, an employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company; any compensation offered shall either be refused or, if unable to be refused, distributed pro rata to the relevant client accounts. 5.1.3 An employee must receive prior written permission from the Chief Executive Officer or his designee before serving as a director, trustee or member of an advisory board of either: (i) any non-profit or charitable institution; or (ii) a private family-owned and operated business. 5.1.4 An employee may serve as an officer or director of a residential co-operative, but must receive prior written permission from the local Chief Executive Officer and the local Compliance Department before serving as a director if, in the course of such service, he or she gives advice with respect to the management of the co-operative's funds. 5.1.5 If an employee serving on the board of directors or advisers of any entity comes into possession of material, non-public information through such service, he or she must immediately notify the local Compliance Officer. 5.1.6 An INVESCO employee shall not take personal advantage of any economic opportunity properly belonging to an INVESCO Client or to INVESCO itself. Such opportunities could arise, for example, from confidential information belonging to a client or the offer of a directorship. Employees must not disclose information relating to a client's intentions, activities or portfolios except: i) to fellow employees, or other agents of the client, who need to know it to discharge their duties; or ii) to the client itself. 5.1.7 Employees may not cause or attempt to cause any Client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the employee or INVESCO. 5.1.8 If an employee or immediate family member stands to materially benefit from an investment decision for an Advisory Client that the employee is recommending or participating in, the employee must disclose that interest to persons with authority to make investment decisions or to the Compliance Officer. Based on the information given, a decision will be made on whether or not to restrict the employee's participation in causing a client to purchase or sell a Security in which the employee has an interest. 5.1.9 An employee must disclose to those persons with authority to make investment decisions for a Client (or to the Compliance Officer if the employee in question is a person with authority to make investment decisions for the Client), any Beneficial Interest that the employee (or immediate family) has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the employee (or immediate family) or the appearance of impropriety. The person to whom the employee reports the interest, in consultation with the Compliance Officer, must determine whether or not the employee will be restricted in making investment decisions. 6 CLIENT INVESTMENTS IN SECURITIES OWNED BY INVESCO EMPLOYEES 6.1 GENERAL PRINCIPLES In addition to the specific prohibitions on certain personal securities transactions as set forth herein, all employees are prohibited from: 6.1.1 Employing any device, scheme or artifice to defraud any prospect or client; 6.1.2 Making any untrue statement of a material fact or omitting to state to a client or a prospective client, a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; 6.1.3 Engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any prospect or client; 6.1.4 Engaging in any manipulative practice with respect to any prospect or client; or 6.1.5 Revealing to any other person (except in the normal course of his or her duties on behalf of a client) any information regarding securities transactions by any client or the consideration of any client or INVESCO of any securities transactions. 7 REPORTS 7.1 IN ORDER TO IMPLEMENT THE GENERAL PRINCIPLES, RESTRICTIONS AND PROHIBITIONS CONTAINED IN THIS CODE, EACH EMPLOYEE IS REQUIRED TO FILE THE FOLLOWING PERIODIC REPORTS: 7.2 INITIAL CERTIFICATION AND SCHEDULES. Within 10 business days of commencing employment at INVESCO, each new employee shall submit to the Compliance Department: 7.2.1 a signed Initial Certification of Compliance with the INVESCO Code (See Appendix D); and 7.2.2 schedules listing (i) all Covered Accounts; and (ii) directorships (or similar positions) of for-profit, non-profit and other enterprises. 7.3 CONFIRMATIONS AND MONTHLY STATEMENTS Each employee shall cause to be provided to the Compliance Department where an outside broker undertakes the transaction: 7.3.1 Duplicate copies of confirmations of all transactions in each Covered Account within 10 business days; or 7.3.2 Not later than 10 days after the end of each month, monthly statements (if any are regularly prepared) for each Covered Account. 7.4 ANNUAL CERTIFICATION Each employee shall provide, or cause to be provided, as requested, to the Compliance Department, not later than 10 days after the end of each annual period (or as specified in the electronic request), a signed annual Certification of Compliance with the INVESCO Code (Appendix E) containing: 7.4.1 To the extent not included in the foregoing monthly statements, a schedule listing: i) all Covered Accounts/securities and any other transactions not included in the monthly statements; and ii) directorships (or similar positions) of for-profit, non-profit and other enterprises. 7.4.2 A schedule listing directorships (or similar positions) of for-profit, non-profit and other enterprises; 7.4.3 With respect to Discretionary Accounts, if any, certifications that such employee does not discuss any investment decisions with the person making investment decisions; and 7.4.4 With respect to any non-public security owned by such employee, a statement indicating whether the issuer has changed its name or publicly issued securities during such calendar year. 7.5 EXEMPT INVESTMENTS Confirmations and periodic reports need not be provided with respect to Exempt Investments, (see 3.2). 7.6 DISCLAIMER OF BENEFICIAL OWNERSHIP Any report required under this Code may contain a statement that such report is not to be construed as an admission by the person making the report that he or she has any direct and indirect beneficial ownership of the security to which the report relates. 7.7 ANNUAL REVIEW The European Director of Compliance in consultation with the local Compliance Officers will review the Code as necessary, in light of legal and business developments and experience in implementing the Code, and will prepare a report to the Board of Directors that: 7.7.1 summarizes existing procedures concerning personal investing and any changes in the procedures made during the past year, 7.7.2 identifies any violations requiring significant remedial action during the past year, and 7.7.3 identifies any recommended changes in existing restrictions or procedures based on the experience under the Code, evolving industry practices, or developments in applicable laws or regulations. 8 GIFTS AND ENTERTAINMENT 8.1 In order to minimize any conflict, potential conflict or appearance of conflict of interest, employees are subject to the restrictions and guidelines with respect to gifts made to or received from, and entertainment with, a person that does business with or provides services to INVESCO, that may do business or is being solicited to do business with INVESCO or that is associated with an organisation that does or seeks to do business with INVESCO (a "Business Associate"). A revised UK and Ireland Gifts, Benefits and Entertainment Policy will be communicated shortly under separate cover reflecting the AVZ policy. 9 MISCELLANEOUS 9.1 INTERPRETATION The provisions of this Code will be interpreted by the local Compliance Officer, as applicable. Questions of interpretation should be directed in the first instance to the local Compliance Officer or his/her designee or, if necessary, with the Compliance Officer of another INVESCO entity. The interpretation of the local Compliance Officer is final. 9.2 SANCTIONS If advised of a violation of this Code by an employee, the local Chief Executive Officer (or, in the case of the local Chief Executive Officer, the local Board of Directors) may impose such sanctions as are deemed appropriate. Any violations of this Code and sanctions therefore will be reported to the local Board of Directors at least annually. 9.3 EFFECTIVE DATE This revised Code shall become effective as of 1 March 2007. APPENDIX A - -------------------------------------------------------------------------------- DEFINITIONS 1. 'ADVISORY CLIENT' means any client (including both investment companies and managed accounts) for which INVESCO serves as an investment adviser, renders investment advice, or makes investment decisions. 2 'BENEFICIAL INTEREST' means the opportunity to share, directly or indirectly, in any profit or loss on a transaction in Securities, including but not limited to all joint accounts, partnerships and trusts. 3 'COVERED ACCOUNTS' means: 3.1 any account/securities held by you, or your family, while an employee; 3.2 accounts/securities held by you for the benefit of your spouse, significant other, or any children or relatives who share your home; 3.3 accounts/securities for which you have or share, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise: (i) voting power (which includes power to vote, or to direct the voting of, a security), or (ii) investment power (which includes the power to dispose, or to direct the disposition) of a security; or 3.4 accounts/securities held by any other person to whose support you materially contribute or in which, by reason of any agreement or arrangement, you have or share benefits substantially equivalent to ownership, including, for example: (i) arrangements (which may be informal) under which you have agreed to share the profits from an investment, and (ii) accounts maintained or administered by you for a relative (such as children or parents) who do not share your home. 3.5 Families include husbands and wives, significant other, sons and daughters and other immediate family only where any of those persons take part in discussion or passing on of investment information. 4. 'EMPLOYEE' means a person who has a contract of employment with, or employed by, INVESCO UK or any associated INVESCO Company within Europe; including consultants, contractors or temporary employees. 5. 'EQUIVALENT SECURITY' means any Security issued by the same entity as the issuer of a security, including options, rights, warrants, preferred stock, restricted stock, bonds and other obligations of that company. 6. 'FUND' means an investment company for which INVESCO serves as an adviser or subadviser. 7. 'HIGH QUALITY SHORT-TERM DEBT INSTRUMENTS' means any instrument having a maturity at issuance of less than 366 days and which is treated in one of the highest two rating categories by a Nationally Recognised Statistical Rating Organisation, or which is unrated but is of comparable quality. 8. 'INDEPENDENT FUND DIRECTOR' means an independent director of an investment company advised by INVESCO. 9. 'INITIAL PUBLIC OFFERING' means any security which is being offered for the first time on a Recognised Stock Exchange. 10. 'OPEN-ENDED COLLECTIVE INVESTMENT SCHEME' means any Open-ended Investment Company, US Mutual Fund, UK ICVC or Dublin Unit Trust, Luxembourg SICAV, French SICAV or Bermuda Fund. 11. 'SECURITIES TRANSACTION' means a purchase of or sale of Securities. 12. 'SECURITY' includes stock, notes, bonds, debentures and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, investment contracts, and all derivative instruments, such as options and warrants. 13. "UK ICVC, THE GPR AND AFFILIATE SCHEMES" defined as all UK domiciled retail and institutional INVESCO ICVCs, and all INVESCO Dublin and Luxembourg SICAVs and Unit Trusts. 14. "MAIN INDEX" defined as a member of the FTSE 100 or equivalent. The equivalency will be determined by the Compliance Officer on a case by case basis. APPENDIX B PAGE 1 OF 2 - -------------------------------------------------------------------------------- PROCEDURES TO DEAL FOR INVESCO UK & IRELAND 1 The procedures to deal are as follows: A: Obtain the Pre-Clearance Trade Authorisation Form from the "forms" section of the Compliance Intranet site. B: Complete Trade Authorisation Form noting: i) permission sought to either buy or sell; ii) the amount in shares or currency; iii) is the transaction an INVESCO ICVC/ISA/PEP -- yes or no -- if yes, then you will have to submit your pre-clearance form to *UK- Compliance Personal Share Dealing e-mail group -- if no, then pre-clearance is not required; iv) type of security; v) name of company or other; vi) date of request to deal; vii) name of beneficial owner; and viii) address of beneficial owner. Then complete each of the questions in connection with the transaction you require completed -- "yes" or "no" answers will be required. C: For Venture Capital Trust ordinary securities or for INVESCO ICVC/PEP/ISA/Mutual Fund Trades, you should now only complete section Two. Once you have answered both questions, the pre-clearance form must be submitted to the e-mail *UK- COMPLIANCE PERSONAL SHARE DEALING - Compliance will review the prospective transaction and revert to you by e-mail. Once you have received this confirmation e-mail you are free to deal. However, the trade must be completed by the end of the next business day from the date of confirmation. If you wish to sell/buy AMVESCAP shares you should complete Section two as noted above. D: For Equity, Bond or Warrant deals, obtain pre-clearance to deal from the UK Investment Dealers by submitting the completed pre-clearance form by e-mail to - *UK- INVEST. DEALERS. E: Once the UK Investment Dealers have authorised the pre-clearance form, they will send the form on by e-mail to the Compliance Department for additional authorisation. UK Investment Dealers will send the form by e-mail to *UK- COMPLIANCE PERSONAL SHARE DEALING. Once Compliance have completed their checks, they will authorise the pre-clearance form and send back to the originator. The originator then has until close of business the day after pre-clearance is granted to deal. IF DEALING IS NOT COMPLETED IN THIS TIME FRAME, THEN ADDITIONAL PRE-CLEARANCE MUST BE SOUGHT VIA THE SAME PROCESS. APPENDIX B PAGE 2 OF 2 - -------------------------------------------------------------------------------- F: Once authority has been granted from the UK Investment Dealers and Compliance, the originator must also send a copy of the completed form to Elaine Coleman in Henley Compliance, who will enter the authority in the Personal Share Dealing Register. G: A copy of the contract note must also be sent to Compliance within 5 working days. NB PERMISSION TO DEAL WILL NOT BE GRANTED RETROSPECTIVELY. DEALS UNDERTAKEN WITHOUT PERMISSION WILL BE BROUGHT TO THE COMPLIANCE OFFICER'S ATTENTION, BY A REVIEW OF THE PERSONAL SHARE DEALING REGISTER, FOR DISCUSSION WITH THE PERSON CONCERNED AND THE LOCAL CHIEF EXECUTIVE OFFICER AS APPROPRIATE. APPENDIX C PAGE 1 OF 4 - -------------------------------------------------------------------------------- INVESCO UK AND IRELAND PRE-CLEARANCE OF PERSONAL TRADE AUTHORISATION FORM THIS FORM IS FOR USE BY UK & IRELAND STAFF PLEASE ENSURE YOU HAVE OPENED THIS FORM WITH MACROS ENABLED Section A STEP 1 PLEASE COMPLETE THIS SECTION: Permission is sought to: ------------------------------------ Type of Security: ------------------------------------ Please state the Name of Company / Fund of INVESCO Perpetual UK Equity: ------------------------------------ ------------------------------------ Date of Request: ------------------------------------ Name of Beneficial Owner: Address of Beneficial Owner: ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ Amount of transaction: ------------------------------------ Shares or currency: ------------------------------------ PLEASE COMPLETE THIS SECTION FULLY BY PUTTING AN "X" IN ONLY ONE OF THE BOXES BELOW AND THEN PRESSING THE ENTER BUTTON ON YOUR KEYPAD. THE NOTE BELOW THE BOXES WILL THEN TELL YOU WHAT TO DO NEXT This is a transaction in a Venture Capital Trust (VCT) or an INVESCO/Invesco Perpetual ICVC/ISA/PEP or a transaction in AMVESCAP shares This a transaction in a non-INVESCO ICVC /ISA/PEP This is a transaction which is not listed in the above two options (e.g. Investment Trusts; Ordinary shares etc..) PLEASE FOLLOW THE INSTRUCTIONS ABOVE FOR GUIDANCE I have read the INVESCO Code of Ethics and believe that the prepared trade fully complies with the requirements of the Code. Name of Employee: ------------------------------------ Date: ------------------------------------ Click here to view the INVESCO UK and Ireland Code of Ethics (If you click link press the enter button on returning to form) APPENDIX C PAGE 2 OF 4 - -------------------------------------------------------------------------------- STEP 2: COMPLETE EITHER SECTION B OR C BELOW AS INSTRUCTED ABOVE AND READ INSTRUCTIONS CAREFULLY Section B -- Venture Capital Trusts (VCTs); AMVESCAP and Invesco Perpetual ICVC/ISA/PEP/Mutual Fund Trades (Complete this section if directed by Section A above.) Step 3: Answer the questions below. If you are unable to change the answers to "N" please press the enter button and try again. If this does not work then you may not have enabled macros when opening the form and you should close the form and start again. 1. Are you aware of any recent (within 24 hours) dilution adjustments made against the fund(s) covered? x Yes No 2. Have you or any account covered by the pre-authorization provisions of the Code purchased or sold these securities (or equivalent securities) in the prior 60 days? x Yes No Step 4 E-mail to: UK -- Compliance Personal Share Dealing Date: Time: ------------------------- --------- ------- Compliance Step 5: Compliance will review and revert by e-mail. You can now trade. The trade must be completed by the end of the next business day from the date of this confirmation. For UK and Ireland staff please ensure copy contract notes are forwarded to Elaine Coleman. For Continental European Staff contract notes should be provided to their local Compliance representative. APPENDIX C Page 3 of 4 - -------------------------------------------------------------------------------- Section C -- Equity, Bonds, Warrants etc Step 3: Answer the questions below. If you are unable to change the answers to "N" please press the enter button and try again. If this does not work then you may not have enabled macros when opening the form and you should clear the form and start again. 1 Do you, or to your knowledge does anyone at INVESCO, possess material non-public information regarding the security or the issue of the security? X Yes No 2 To your knowledge are the securities (or equivalent securities) being considered, for purchase or sale by one or more accounts managed by INVESCO? X Yes No 3 Have you or any account covered by the pre-authorization provisions of the Code purchased or sold these securities (or equivalent securities) in the prior 60 days? X Yes No 4 Are the securities being acquired in an initial public offering? X Yes No 5 Are the securities being acquired in private placement? If so, please provide a written explanation on a separate sheet of paper. X Yes No STEP 4: E-mail to: "UK-Invest. Dealers Authorized by: Date: Time: Investment Dealers --------------- ------------ ------------------ Investment Dealers are signing off to confirm that the securities in question have not been traded in the last seven days (unless the deal is E.25,000 and a main index constituent) and there are no outstanding or loss. STEP 5: Investment Dealers will forward the deal to UK Compliance. Compliance will approve or reject items back to the applicant. Compliance --------------- ------------ ------------------ Compliance sign off is given for securities deals on the basis that section 3 questions have been answered 'No' and there would be no breach of Regulatory rules. INVESCO's fiduciary duty by the trade being executed and evidencing checking of MFTP based restrictions controlled by Compliance Administration. ----------- Step 6: Once authorization has been received from Dealers and Compliance you can place the trade by the end of the next business day without further approval. UK and Ireland staff must provide a copy of the contract note to Elaine Coleman, Compliance Department, Henley. Continental European staff must provide copy contract enter to APPENDIX C PAGE 4 OF 4 AUTHORITY TO DEAL This is to confirm that authorisation has been given today to the above application to acquire/dispose of the above amount of shares/bonds/options etc. This consent shall remain valid until the end of the next business day from the date of this authority letter and the transaction must be completed within this time period. As a condition of this consent the Company reserves the right to its withdrawal if circumstances arise, prior to your effecting this transaction, that would then make it inappropriate for you to enter into this transaction. You are required to ensure that a copy of the contract note evidencing the transaction is forwarded to the relevant Compliance department as stated above. This authorisation is given subject to the INVESCO Code of Ethics. 01 12 2006 ----------
INVESCO UK Ltd. assures that the confidentiality standards and data protection requirements of the country of origin are maintained. It also assures that all information regarding employees' requests for trading remains confidential and are handled by authorised personnel only. APPENDIX D - -------------------------------------------------------------------------------- ACKNOWLEDGMENT OF RECEIPT OF INVESCO UK REVISED CODE OF ETHICS I ACKNOWLEDGE THAT I HAVE RECEIVED THE INVESCO CODE OF ETHICS DATED 1 MARCH 2007, AND REPRESENT THAT: 1. In accordance with Section 7 of the Code of Ethics, I will fully disclose the Securities holdings in Covered Accounts* 2. In accordance with Section 3 of the Code of Ethics, I will obtain prior authorisation for all Securities Transactions in each of my Covered Accounts except for transactions exempt from pre-clearance under Section 3 of the Code of Ethics* 3. In accordance with section 7 of the Code of Ethics, I will report all Securities Transactions in each of my Covered Accounts except for transactions exempt from reporting under Section 3 of the Code of Ethics. 4. I will comply with the Code of Ethics in all other respects as well. ------------------------------- Signature ------------------------------- Print Name Date: ------------------------------------- *Representations Nos: 1 and 2 do not apply to Independent Fund Directors APPENDIX E - -------------------------------------------------------------------------------- ANNUAL CERTIFICATION OF COMPLIANCE WITH THE INVESCO CODE OF ETHICS TO BE COMPLETED BY ALL EMPLOYEES FOLLOWING THE END OF EACH CALENDAR YEAR I hereby certify that, with respect to the calendar year ending on 31 December, 2006 (the 'Calendar Year), I have arranged for monthly account statements for each of my Covered Account(s) to be provided to INVESCO if applicable. I further certify that I have reviewed the attachments hereto and confirm that: a) Schedule A contains a complete list of Covered Account(s) as well as a complete list of my directorships, advisory board memberships and similar positions; and b) Schedule B contains a complete list of trades, other than Exempt Investments, in my Covered Account(s) during the Calendar Year. I further certify that: a) For any of my Covered Accounts which have been approved by the Compliance Department as a Discretionary Account(s) (which have been identified on Schedule A with an 'E' prefix), that I have not exercised investment discretion or influenced any investment decisions and that I will not exercise investment discretion or influence any potential investment decisions with such Discretionary Account(s); b) As appropriate, I have identified on Schedule A hereto those Covered Accounts which contain open-ended Collective Investment Schemes/Investment Companies shares only but for which account statements and confirms are not and have not been provided and hereby confirm that all securities transactions in these accounts are and will be limited exclusively to transactions in shares of open-ended Collective Investment Schemes; c) For any privately-issued security held by me or my Covered Account(s), I will inform the Compliance Department upon learning that any issuer has either changed its name or has issued or proposed to issue any class of security to the public; d) I have received a copy of and understand the Code in its entirety and acknowledge that I am subject to its provisions. I also certify that I have complied and will comply with its requirements; e) I have provided my Department Head with a complete list of gifts received and accepted by me from a person/group that does business or seeks to do business with INVESCO during the Calendar Quarter; and to the extent that any of the attached Schedules contain inaccurate or incomplete information, I have noted and initialled the change directly on the Schedule and returned this certification along with all Schedules to the Compliance Department. Capitalised terms used herein without definition shall have the meanings given to them in the Code. ------------------------------- Signature ------------------------------- Print Name Date: ------------------------------------- UPON YOUR FULL REVIEW AND EXECUTION, PLEASE RETURN THE ENTIRE PACKAGE IMMEDIATELY TO THE COMPLIANCE DEPARTMENT IN HENLEY APPENDIX E SCHEDULE A - -------------------------------------------------------------------------------- Annual Certificate of Compliance with THE INVESCO CODE OF ETHICS COVERED ACCOUNTS The following is a list of Covered Accounts subject to the INVESCO Code of Ethics: DIRECTORSHIPS, ADVISORY BOARD MEMBERSHIPS AND SIMILAR POSITIONS HELD The following is a list of directorships, advisory board memberships and similar positions that I hold: APPENDIX E SCHEDULE B - -------------------------------------------------------------------------------- Annual Certificate of Compliance with THE INVESCO CODE OF ETHICS Trades undertaken during the period for which contract notes/monthly statements have not been forwarded: APPENDIX F - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- TYPE OF TRANSACTION IN AVZ PRE BASIS FOR QUARTERLY REPORTING ANNUAL REPORT OF CLEARANCE APPROVAL OF TRANSACTIONS HOLDINGS - ----------------------------------------------------------------------------------------------------------------------------------- - - OPEN MARKET PURCHASES & SALES Yes Yes Yes - - TRANSACTIONS IN 401(k) PLAN Local Not permitted in Local compliance Local compliance compliance blackout periods. officer officer officer - ----------------------------------------------------------------------------------------------------------------------------------- EXERCISE OF EMPLOYEE STOCK OPTIONS WHEN SAME Yes Not permitted in Yes n/a DAY SALE blackout periods. - REC'D WHEN MERGED W/ INVESCO AVZ Company Local compliance - OPTIONS FOR STOCK GRANTS Secretarial in Option holding officer - OPTIONS FOR GLOBAL STOCK PLANS London (Michael period must be - OPTIONS FOR RESTRICTED STKAWARDS Perman's office) satisfied. - ----------------------------------------------------------------------------------------------------------------------------------- SALE OF STOCKS EXERCISED AND HELD UNTIL LATER Yes Not permitted in Yes Yes DATE. OPTIONS EXERCISED WILL HAVE BEEN RECEIVED blackout periods. AS FOLLOWS: Local - REC'D WHEN MERGED W/ INVESCO compliance Stock holding Local compliance Local compliance - OPTIONS FOR STOCK GRANTS officer period must be officer officer - OPTIONS FOR GLOBAL STOCK PLANS satisfied. - OPTIONS FOR RESTRICTED STKAWARDS - ----------------------------------------------------------------------------------------------------------------------------------- SALE OF STOCK PURCHASED THROUGH SHARESAVE Yes Not permitted in Yes Yes blackout periods. Local Local compliance Local compliance compliance officer officer officer - ----------------------------------------------------------------------------------------------------------------------------------- SALE OF STOCK PURCHASED THROUGH UK SIP Yes Not permitted in Yes Yes blackout periods. Local Local compliance Local compliance compliance officer officer officer - -----------------------------------------------------------------------------------------------------------------------------------
1) OPEN MARKET PURCHASES/SALES - Pre-clearance to deal is required from Compliance, no dealing is permitted during close/blackout periods. Details of closed periods are posted to the intranet site by Company Secretarial (Michael Perman's Team). 2) EMPLOYEE STOCK OPTIONS (a) EXERCISE/SAME DAY SALE - authorisation of the Option is granted by Company Secretarial Department and signed by Trustees of the Scheme. Dealing would take place through Cazenove, who would not process the deal unless authorisation had been obtained. 3) EMPLOYEE STOCK OPTIONS (b) EXERCISE/TAKE POSSESSION/SUBSEQUENT DAY SALE - same as above, except that individual would pay for the shares and pay tax. The stock would then be lodged in the employee share service arrangement - then if subsequent disposal was sought the normal pre-clearance process would apply (pre-clearance from Compliance - no dealing during closed periods). 4) STOCK GRANTS (GLOBAL STOCK PLANS) - Awards made yearly, stock would be purchased through Company Secretarial and held for three years. After three years elect to keep the shares or distribute - stock would be transferred to employee share service arrangement with normal pre-clearance/closed period requirements. 5) EMPLOYEES WHO RECEIVE AVZ STOCK WHEN THEIR COMPANY IS PURCHASED BY AVZ - stock distribution as part of the transaction to buy the Company concerned. Stock would be issued to the individual concerned and, depending on the terms of the deal, may be required to be held for a period. Stock would be transferred into the employee share service, and subject to terms of the Company deal would then follow normal pre-clearance/close period guidelines. 6) RESTRICTED STOCK AWARDS - similar to stock grants as above - except tax not paid initially - pre-clearance from Compliance and closed period restrictions apply. 7) TRANSACTIONS IN AVZ STOCK VIA 401(k) PLAN - Transaction no different to open market purchases - pre-clearance required, dealing in closed periods no allowed. 8) SHARESAVE - If share save is exercised then stock would be placed into employee share service arrangement. Then if individual sells they go through normal pre-clearance and closed period process. Dealing through Cazenove, who are aware of all closed periods. So an individual would be unable to deal through them if permission was refused by Compliance for closed period reasons, as Cazenove have all the information as well. Special rules may be brought in at share save anniversary dates. These will be communicated as appropriate. 9) UK SIP - A UK SIP is open to UK employees - which is a tax efficient way of purchasing shares on a monthly basis. The shares must be held for 5 years from initial purchase date - sell before and then tax would be paid. If you sell after the five year period, then normal pre-clearance and closed period restrictions would apply. EX-99.P9 12 h53872aexv99wp9.txt CODE OF CONDUCT (INVESCO LOGO) INVESCO PLC CODE OF CONDUCT INTRODUCTION Our company's Core Purpose and Mission are a logical beginning point for our Code of Conduct: INVESCO is committed to "Helping People Worldwide Build Their Financial Security". That Core Purpose underlies our Mission, which is to deliver superior investment performance worldwide. Over the years, INVESCO has developed a set of values that will continue to help us achieve our Core Purpose and Mission. Our values include: - Working with integrity - Respecting our employees and clients - Empowering people This Code of Conduct ("Code of Conduct" or "Code") has been created to assist us in accomplishing our Core Purpose and Mission. It contains a number of policies and standards which, when taken together, are designed to help define the essence of the conduct of an INVESCO representative. These policies and standards are also intended to provide guidance to INVESCO personnel in fulfilling their obligations to comply with applicable laws, rules and regulations. This Code of Conduct applies to all officers and other employees of INVESCO and its subsidiaries (collectively, "Covered Persons"). These standards are neither exclusive nor complete. Additional company policies and rules can be found in the company's Intranet site, and others may be published to company personnel from time to time. Covered Persons are required to comply with all applicable laws, rules and regulations, whether or not specifically addressed in these policies. For additional guidance, or if you have questions regarding the existence, interpretation or application of any law, rule or regulation, please contact your supervisor, the General Counsel of your business unit or division, or the INVESCO General Counsel. Our culture is based upon a set of shared values and principles. These include working with integrity and commitment to our clients, colleagues and communities. In practice, this means that our clients' interests must always come first, that Covered Persons should treat each other with respect and consideration, and that INVESCO should Page 1 of 23 participate as a responsible corporate citizen in every community in which it operates. This commitment is a vital part of our achieving our principal responsibility as a publicly-held company: producing a fair return on our shareholders' capital. This Code of Conduct contains broad and general principles that supplement the specific policies, procedures and training within each business unit of INVESCO. YOUR RESPONSIBLITIES One person's misconduct can damage our entire company's hard-earned reputation and compromise the public's trust in the company. Every Covered Person should therefore become familiar with this Code and abide strictly by its provisions. In brief: - It is your responsibility at all times to comply with the law and behave in an ethical manner. - This Code cannot anticipate every possible situation or cover every topic in detail. The company has established special policies to address specific subjects and will update this Code and those specific policies from time-to-time. If you are unclear about a situation, stop and ask for guidance before taking action. - Failure to obey laws and regulations violates this Code and may expose both you and the company to criminal or civil sanctions. Any violation of this Code or other company policies may result in disciplinary action, up to and including termination of employment. The company may also seek civil remedies from you and even refer criminal misconduct to law enforcement agencies. - You are responsible for reporting possible violations of this Code to the company (see below). - If you have a question about a topic covered in this Code or a concern regarding any conduct, please speak with your supervisor or with an appropriate member of the Legal & Compliance Department. - If you are aware of a violation and are uncomfortable speaking with any of these people or wish to remain anonymous, you may call the toll-free INVESCO Compliance Reporting Line (the "Compliance Reporting Line"). If you are calling from a U.S. or Canadian location dial 1-866-7-3627. For calls from all other locations, dial an international operator and request a collect call to 1-704-943-1136. When asked for your name use "INVESCO." (See further details below.) Page 2 of 23 - If you are an attorney or an executive officer of the company, you may have additional reporting or other obligations under specific rules applicable to you, such as the POLICY FOR REPORTING BY ATTORNEYS EMPLOYED BY INVESCO PLC AND ITS SUBSIDIARIES, and you should also comply with such rules. STATEMENT OF GENERAL PRINCIPLES INVESCO with its subsidiaries and various divisions operates in a highly-regulated and complex environment. There are numerous layers of overlapping, and occasionally conflicting, laws, customs and local practices. This Code of Conduct was designed to provide all of us who are part of the INVESCO group with a clear statement of our firm's ethical and cultural standards. We operate in major countries and securities markets throughout the world. Generally, we serve our clients as fiduciaries. Fiduciary businesses are generally held to a higher standard of conduct than other businesses, and as such there are special obligations that apply. The following key duties and principles govern our conduct as fiduciaries: - Best interests of clients - As fiduciaries, we have a duty to act with reasonable care, skill and caution in the best interests of our clients, and to avoid conflicts of interest. - Global fiduciary standards - INVESCO seeks to maintain the same high fiduciary standards throughout the world, even though those standards may not be legally required, or even recognized, in some countries. - Compliance with applicable laws, rules and regulations - We have a duty to comply with the laws, rules and regulations of the jurisdictions in which we operate, and to comply with the terms of our agreements with our clients. - Client confidentiality - We must maintain the confidentiality of information relating to the client, and comply with the data protection requirements imposed by many jurisdictions. - Information - Clients must be provided with timely and accurate information regarding their accounts. - Segregation and protection of assets - Processes must be established for the proper maintenance, control and protection of client assets. Fiduciary assets must be segregated from INVESCO assets and property. Page 3 of 23 - Delegation of duties - Fiduciary duties should be delegated only when the client consents and where permitted by applicable law. Reasonable care, skill and caution must be exercised in the selection of agents and review of their performance. - Client guidelines - INVESCO is responsible for making investment decisions on behalf of clients that are consistent with the prospectus, contract, or other controlling document relating to the client's account. - Relations with regulators - We seek relationships with regulators that are open and responsive in nature. 1. Compliance with Laws, Rules and Regulations INVESCO strives to ensure that all activity by or on behalf of INVESCO is in compliance with applicable laws, rules and regulations ("applicable laws"). Many of these applicable laws are specifically described in this Code of Conduct and in other INVESCO and business unit policies and procedures. In the conduct of our business, all Covered Persons are required to comply with all applicable laws. 2. Fair and Honest Dealing Covered Persons shall deal fairly and honestly with INVESCO's shareholders, customers, suppliers, competitors and employees. Covered Persons shall behave in an ethical manner and shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice. 3. Conflicts of Interest INVESCO and its Covered Persons must adhere to the highest standards of honest and ethical conduct. These include, but are not limited to, sensitivity to the existence of a conflict of interest or the appearance of a conflict of interest. Conflicts of interest can arise in many ways, and we must all be sensitive to those situations in which they are most likely to be present. A conflict of interest exists when a Covered Person's personal interest interferes, or appears to interfere, in any way with the interests of INVESCO or its clients, or when a Covered Person otherwise takes actions or has interests that may make it difficult to perform his or her company work objectively and effectively. For example, a conflict of interest would arise if a Covered Person, or a member of his or her family, receives improper personal benefits as a result of his or her position with INVESCO. All Covered Persons owe a duty of undivided and unqualified loyalty to INVESCO and may not use their positions improperly to profit personally or to assist others in profiting at the expense of the company. All Covered Persons are therefore expected and Page 4 of 23 required to regulate their activities so as to avoid conflicts of interest. In addition, Covered Persons shall promptly communicate to the applicable member of the Legal & Compliance Department any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest so that the company and the Covered Person may take steps to minimize the conflict. Covered Persons shall not take for personal use (or for use by a family member) any business opportunity learned of during the course of serving INVESCO, using INVESCO property or as a result of such individual's position with INVESCO. To the extent that an employee or officer learns of a business opportunity that is within INVESCO's existing or proposed lines of business, the employee or officer should inform his or her supervisor, the divisional or business unit General Counsel, or the Board of Directors, as appropriate, of the business opportunity and refrain from personally pursuing the matter until such time as INVESCO decides to forego the business opportunity. At no time may any employee or officer utilize any INVESCO property, information or position to generate personal gain or engage or participate in any business that directly competes with INVESCO. While not all-inclusive, the following examples of outside financial interests will serve to illustrate some of the types of activities that might cause conflicts of interest: - Ownership or other interest in or employment by any outside concern which does business with INVESCO. This does not apply to stock or other investments in a publicly-held company, provided that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. INVESCO may, following a review of the relevant facts, permit ownership interests which exceed these amounts if management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect INVESCO's business interests or the judgment of the affected Covered Person. - Conducting business, not on behalf of INVESCO, with any INVESCO vendor, supplier, contractor, agency, or any of their directors, officers or employees. - Representation of INVESCO by a Covered Person in any transaction in which he or she, or a family member, has a substantial personal interest. - Disclosure or use of confidential, special or inside information of or about INVESCO, particularly for personal profit or advantage of the Covered Person or a family member of such person. - Competition with INVESCO by a Covered Person, directly or indirectly, in the purchase, sale or ownership of property or services or business investment opportunities. Page 5 of 23 As described in more detail in Sections 4, 5 and 6 below, acting as an officer or director of an outside organization, personal share dealing, and the use of material non-public information represent additional areas where conflicts can arise and are of particular sensitivity. In addition to conflicts of interest between the company and its Covered Persons, conflicts of interest may arise between the company and its clients, including investment funds. Where a Covered Person is trading in securities owned by client accounts, or where a portfolio management team for a hedge fund also manages mutual funds that invest in the same securities, are each examples of situations that may give rise to real or apparent conflicts of interest. All Covered Persons must follow the procedures in place within their respective divisions and business units and must also be sensitive to the types of situations that can give rise to such conflicts or apparent conflicts. 4. Outside Activities and Compensation No Covered Person shall perform work or render services for any competitor of INVESCO or for any organization with which INVESCO does business or which seeks to do business with INVESCO, outside of the normal course of his or her employment with INVESCO, without the prior written approval of the company. Nor shall any such person be a director, officer, or consultant of such an organization, or permit his or her name to be used in any fashion that would tend to indicate a business connection with such organization, without such approval. Outside organizations can include public or private corporations, partnerships, charitable foundations and other not-for-profit institutions. With the above approval, Covered Persons may receive compensation for such activities. Service with organizations outside of INVESCO can, however, raise serious regulatory issues, including conflicts of interest and access to material non-public information. As an outside board member or officer, a Covered Person may come into possession of material non-public information about the outside company or other public companies. It is critical that a proper information barrier be in place between INVESCO and the outside organization, and that the Covered Person does not communicate such information to other Covered Persons in violation of the information barrier. Similarly, INVESCO may have a business relationship with the outside organization or may seek a relationship in the future. In those circumstances, the Covered Person must not be involved in any way in the business relationship between INVESCO and the outside organization. INVESCO retains the right to prohibit membership by Covered Persons on any board of directors/trustees or as an officer of an outside organization where such membership might conflict with the best interests of the company. Approval will be granted on a Page 6 of 23 case-by-case basis, subject to proper resolution of potential conflicts of interest. Outside activities will be approved only if these issues can be satisfactorily resolved. 5. Personal Share Dealing Purchasing and selling securities in a Covered Person's own account, or accounts over which the Covered Person has access or control, can give rise to potential conflicts of interest. As fiduciaries, we are held to the highest standards of conduct. Improperly gaining advance knowledge of portfolio transactions, or conducting securities transactions based upon information obtained at INVESCO, can be a violation of those standards. All personal securities transactions must be pre-cleared unless an exemption is obtained. Generally, an exemption will be granted only for Covered Persons whose duties do not give them access to information regarding the sale or purchase of, or the recommendation to sell or purchase, securities in any portfolio. Transactions in certain retirement benefit plans, such as 401(k)s and Money Purchase Plans, and in specified categories of securities, are exempt from pre-clearance. Every Covered Person must also comply with the specific rules in effect in this area for the Covered Person's division or business unit. INVESCO also has policies that specifically cover personal transactions in the shares and American Depositary Shares of the company. All Covered Persons are obligated to follow those procedures whenever they conduct such transactions. 6. Information Barriers and Material Non-Public Information In the conduct of our business, Covered Persons may come into possession of material non-public information. This information could concern an issuer, a client, a portfolio, the market for a particular security, or INVESCO itself. The purchase or sale of INVESCO's securities or the securities of other publicly-traded companies while aware of material nonpublic information about such company, or the disclosure of material nonpublic information to others who then trade in such company's securities, is prohibited by this Code of Conduct and by United States and other jurisdictions' securities laws. INVESCO and its subsidiaries have adopted insider trading policies that apply to all Covered Persons. All Covered Persons should review the insider trading policies carefully and follow the policies and procedures described therein. The failure of a Covered Person to comply with the company's insider trading policy may subject him or her to company-imposed sanctions, up to and including termination for cause, whether or not the failure to comply results in a violation of law. You should seek the advice of the applicable divisional or business unit General Counsel on any questions regarding this subject and the company's insider trading policy. All Covered Persons are prohibited from using such information in ways that violate the law, including for personal gain. Non-public information must be kept confidential, which may include keeping it confidential from other Covered Persons. Page 7 of 23 7. Anti-Bribery and Dealings with Governmental Officials Special care must be taken when dealing with government customers. Activities that might be appropriate when working with private sector customers may be improper and even illegal when dealing with government employees, or when providing goods and services to another customer who, in turn, will deliver the company's product to a government end user. Many of the countries in which INVESCO conducts its business prohibit the improper influencing of governmental officials or other persons by the payment of bribes, gifts, political contributions, lavish hospitality or by other means. Our policy requires adherence to those restrictions. Do not directly or indirectly promise, offer or make payment in money or anything of value to anyone, including a government official, agent or employee of a government, political party, labor organization or business entity or a candidate of a political party, or their families, with the intent to induce favorable business treatment or to improperly affect business or government decisions. This policy prohibits actions intended either to influence a specific decision or merely to enhance future relationships. In general, all travel and entertainment that Covered Persons provide to governmental officials must be pre-approved within the appropriate business unit. If approved, a written confirmation that such expenses do not violate local law must be obtained from an appropriate third party (e.g., the business unit's legal counsel or the government official's supervisor). Covered Persons shall comply with all laws, rules and regulations governing political campaign finance and lobbying activities and shall not engage in any conduct that is intended to avoid the application of such laws to activities undertaken on INVESCO's behalf. In addition, appropriate executive officers shall monitor compliance with lobbyist registration and disclosure requirements by all individuals who act on behalf of INVESCO. These prohibitions extend to any consultants or agents we may retain on behalf of INVESCO. 8. Anti-Discrimination and Harassment INVESCO is committed to providing a work environment that is free of discrimination and harassment. Such conduct, whether overt or subtle, is demeaning, may be illegal, and undermines the integrity of the employment relationship. Sexual harassment can include unwelcome sexual advances, requests for sexual favors, pressure to engage in a sexual relationship as a condition of employment or promotion, or conduct which creates a hostile or offensive work environment. Page 8 of 23 Discrimination can take many forms including actions, words, jokes, or comments based upon an individual's race, citizenship, ethnicity, color, religion, sex, veteran status, national origin, age, disability, sexual orientation, marital status or other legally protected characteristic. Any Covered Person who engages in harassment or discrimination will be subject to disciplinary action, up to and including termination of employment. 9. Anti-Money Laundering In the global marketplace, the attempted use of financial institutions and instruments to launder money is a significant problem that has resulted in the passage of strict laws in many countries. Money laundering is the attempt to disguise money derived from or intended to finance illegal activity including drug trafficking, terrorism, organized crime, fraud, and many other crimes. Money launderers go to great lengths to hide the sources of their funds. Among the most common stratagems are placing cash in legitimate financial institutions, layering between numerous financial institutions, and integrating the laundered proceeds back into the economy as apparently legitimate funds. All Covered Persons must be vigilant in the fight against money laundering, and must not allow INVESCO to be used for money laundering. Each business unit has developed an anti-money laundering program that is consistent with INVESCO's group-wide policy. Each Covered Person must comply with the applicable program. 10. Antitrust The laws of many countries are designed to protect consumers from illegal competitive actions such as price fixing and dividing markets. It is INVESCO's policy and practice to compete based on the merits of our products and services. In order to further that policy, Covered Persons must not fix or control prices with competitors, divide up territories or markets, limit the production or sale of products, boycott certain suppliers or customers, unfairly control or restrict trade in any way, restrict a competitor's marketing practices, or disparage a competitor. Covered Persons must never discuss products, pricing or markets with competitors with the intent to fix prices or divide markets. 11. Data Privacy Data privacy, as it relates both to our clients and our employees, has become a major political and legal issue in many jurisdictions in which we do business. A variety of laws in each of those jurisdictions governs the collection, storage, dissemination, transfer, use, access to and confidentiality of personal information and patient health information. These laws can work to limit transfers of such data across borders and even among affiliated entities in the INVESCO group of companies. INVESCO and its Covered Persons will comply with all provisions of these laws that relate to its business, including Page 9 of 23 the privacy, security and electronic transmission of financial, health and other personal information. The company expects its Covered Persons to keep all such data confidential and to protect, use and disclose information in the conduct of our business only in compliance with these laws. The company will consider and may release personal information to third parties to comply with law or to protect the rights, property or safety of INVESCO and its customers. In accordance with INVESCO policies, each business unit has developed required disclosures and data security procedures applicable to that business unit. All Covered Persons must comply with the applicable procedures. With respect to INVESCO Covered Persons, all salary, benefit, medical and other personal information relating to Covered Persons shall generally be treated as confidential. Personnel files, payroll information, disciplinary matters, and similar information are to be maintained in a manner designed to protect confidentiality in accordance with applicable laws. All Covered Persons shall exercise due care to prevent the release or sharing of such information beyond those persons who may need such information to fulfill their job functions. Notwithstanding the foregoing, all personnel information belongs solely to INVESCO and may be reviewed or used by the company as needed to conduct its business. 12. Communications with the Media and Analysts INVESCO has a long-standing policy of co-operating with the news media and the financial community. This policy is intended to enhance respect for the company, provide accurate information, and achieve our business goals. INVESCO employs media relations professionals who are responsible for handling all contacts with the news media. INVESCO's Communications and Corporate Affairs Department is responsible for formulating and directing our media relations policy worldwide. Other INVESCO employees may not speak to or disseminate information to the news media unless such contact has been requested and arranged by or coordinated with an INVESCO media relations professional in accordance with the company's media relations policy. Any contact from the news media should be referred promptly and without comment to an INVESCO media relations professional. If you do not know the appropriate media relations professional for your unit, you can refer the contact to the INVESCO Communications and Corporate Affairs Department. Many countries have detailed rules with regard to the dissemination of information about public companies. In particular, a public company must have procedures for controlling the release of information that may have a material impact on its share price. The Chief Executive Officer and the Chief Financial Officer are responsible for INVESCO's relationships with the financial community, including the release of price sensitive information. Other INVESCO employees may not speak to or disseminate information regarding the company to the financial community (including analysts, investors, shareholders, Company lenders, and rating agencies) unless such contact has been Page 10 of 23 requested and arranged by the Chief Executive Officer, the Chief Financial Officer or the Investor Relations Group within the Finance Department. 13. Electronic Communications The use of electronic mail, the Internet and other technology assets is an important part of our work at INVESCO. Used improperly, this technology presents legal and business risks for the company and for individual employees. There are also important privacy issues associated with the use of technology, and related regulations are evolving. In accordance with INVESCO's Electronic Communications policies, all Covered Persons are required to use information technology for proper business purposes and in a manner that does not compromise the confidentiality of sensitive or proprietary information. All communications with the public, clients, prospects and fellow employees must be conducted with dignity, integrity, and competence and in an ethical and professional manner. We must not use information technology to: transmit or store materials which are obscene, pornographic, or otherwise offensive; engage in criminal activity; obtain unauthorized access to data or files; commit copyright violations; install personal software without permission; or make Internet statements, without permission, that suggest that the user is speaking on behalf of INVESCO or its affiliates. 14. Gifts and Relationships with Customers and Suppliers INVESCO seeks to do business with clients and suppliers on a fair and equitable basis. We may not accept gifts of other than nominal value, or lavish entertainment, or other valuable benefits or special favors from customers or suppliers. We must observe any limits imposed by our business unit's policies, local laws, or regulations with respect to the acceptance of gifts or gratuities. 15. International Issues If you conduct business for INVESCO outside of the U.S., in addition to being familiar with the local laws of the other countries involved, be sure you are familiar with the following U.S. laws and regulations. Violations of these laws can result in substantial fines, imprisonment and severe restrictions on the company's ability to do business. FOREIGN CORRUPT PRACTICES ACT The United States Foreign Corrupt Practices Act (FCPA) and similar laws in many other countries have a variety of provisions that regulate business in other countries and with foreign citizens. In essence, these laws make it a crime to promise or give anything of value to a foreign official or political party in order to obtain or keep business or obtain any improper advantage. It is also illegal to make payments to agents, sales Page 11 of 23 representatives or other third parties if you have reason to believe your gift will be used illegally. Seek advice from the appropriate member of the Legal & Compliance Department for interpretation of the FCPA or similar laws if you are involved in any business dealings that involve foreign countries. ANTI-BOYCOTT LAWS From time to time, various countries may impose restrictions upon the ability of businesses in their jurisdiction to engage in commerce with designated individuals, countries or companies. These laws are commonly referred to as boycotts or trade embargoes. It may be against the law to cooperate in any boycotts between foreign countries not sanctioned by the laws of the place where your office is located. All requests for boycott support or boycott-related information must be reported to your supervisor and the member of the Legal & Compliance Department with responsibility for your office. Similarly, many countries contribute the names of criminal or terrorist organizations or individuals to a common database and require financial institutions to screen customer lists against the database as part of their "Know Your Customer" obligations. We must be aware of, and where appropriate, adhere to any such restrictions. EMBARGO SANCTIONS The United States Treasury Department's Office of Foreign Assets Control prohibits U.S. companies and their foreign subsidiaries from doing business with certain countries and agencies and certain individuals. The laws of other countries may have similar types of prohibitions. The regulations vary depending on the country and the type of transaction and often change as countries' foreign policies change. If you are aware of any sensitive political issues with a country in which INVESCO is doing or considering doing business, seek advice from the appropriate member of the Legal & Compliance Department. 16. Political Activities and Lobbying Covered Persons are encouraged to vote in elections for which they are eligible, and to make contributions supporting candidates or parties of their choice. Covered Persons are also encouraged to express their views on government, legislation and other matters of local or national interest. Many jurisdictions have imposed severe and complex restrictions on the ability of individuals and companies to make political contributions. You should assume that INVESCO and its Covered Persons are generally prohibited from certain types of political activities, and you must be familiar with the rules in effect for your business unit. No Covered Person may, under any circumstances, use company funds to make political contributions without the prior written approval of a member of the Legal & Page 12 of 23 Compliance Department, nor may you represent your personal political views as being those of the company. 17. Retention of Books and Records INVESCO corporate records are important assets. Corporate records include essentially everything you produce as a Covered Person, regardless of its format. A corporate record may be in the form of paper, computer tapes, microfilm, e-mail, or voice mail. It may be something as obvious as a memorandum or a contract or something not as obvious, such as a desk calendar, an appointment book, or an expense record. INVESCO is required by law to maintain certain types of corporate records, usually for a specified period of time. Failure to retain such documents for such minimum periods could subject INVESCO to penalties and fines, cause the loss of rights, obstruct justice, place INVESCO in contempt of court, or place INVESCO at a serious disadvantage in litigation. However, storage of voluminous records over time is costly. Therefore, INVESCO has established controls to assure retention for required periods and timely destruction of retrievable records, such as paper copies and records on computers, electronic systems, microfiche, and microfilm. Even if a document is retained for the legally required period, liability could still result if a document is destroyed before its scheduled destruction date. INVESCO and its affiliates are subject to the regulatory requirements of numerous countries and regulatory agencies. Virtually all of them have specific requirements concerning the creation, maintenance and storage of business records. INVESCO expects all Covered Persons to become familiar with and fully comply with the records retention/destruction schedule for the departments and office locations for which they work. If you believe documents should be retained beyond the applicable retention period, consult with the Legal & Compliance Department. 18. Sales and Marketing Materials INVESCO is committed to building sustained, open, and honest relationships with our customers, and to complying with all relevant regulatory requirements. This requires that all marketing and sales-related materials be prepared under standards approved by the Legal & Compliance Department and, prior to use, reviewed and approved by the appropriate supervisor within a business unit. Covered materials include requests for proposals, client presentations, performance summaries, advertisements, and published market commentaries. 19. Substance Abuse INVESCO is committed to providing a safe and healthy work place for all employees. The use, possession, sale, transfer, purchase, or being "under the influence" of drugs at Page 13 of 23 any time while on company premises or on company business is prohibited. The term "drug" includes alcoholic beverages (other than in connection with entertainment events, or in other appropriate settings), prescriptions not authorized by your doctor, inhalants, marijuana, cocaine, heroin and other illegal substances. 20. Confidential Information Confidential information includes all non-public information that might be of use to competitors, or harmful to the company or its customers, if disclosed. All information (in any form, including electronic information) that is created or used in support of company business activities is the property of INVESCO. This company information is a valuable asset and Covered Persons are expected to protect it from unauthorized disclosure. This includes INVESCO customer, supplier, business partner and employee data. United Kingdom, United States (federal and state) and other jurisdictions' laws may restrict the use of such information and impose penalties for impermissible use or disclosure. Covered Persons must maintain the confidentiality of information entrusted to them by the company or its customers, vendors or consultants except when disclosure is properly authorized by the company or legally mandated. Covered Persons shall take all reasonable efforts to safeguard such confidential information that is in their possession against inadvertent disclosure and shall comply with any non-disclosure obligations imposed on INVESCO in its agreements with third parties. Information pertaining to INVESCO's competitive position or business strategies, and information relating to negotiations with Covered Persons or third parties, should be protected and shared only with Covered Persons having a need to know such information in order to perform their job responsibilities. 21. Protection and Proper Use of Company Assets All Covered Persons shall strive to preserve and protect the company's assets and resources and to promote their efficient use. The standards set forth below are intended to guide Covered Persons by articulating INVESCO's expectations as they relate to activities or behaviors that may affect the company's assets. Personal Use of Corporate Assets Theft, carelessness and waste have a direct impact on INVESCO's profitability. Covered Persons are not to convert assets of the company to personal use. Company property should be used for the company's legitimate business purposes and the business of the company shall be conducted in a manner designed to further INVESCO's interest rather than the personal interest of an individual Covered Person. Covered Persons are prohibited from the unauthorized use or taking of INVESCO's equipment, supplies, materials or services. Prior to engaging in any activity on Page 14 of 23 company time which will result in remuneration to the Covered Person or the use of INVESCO's equipment, supplies, materials or services for personal or non-work related purposes, officers and other Covered Persons shall obtain the approval of the supervisor of the appropriate business unit. Use of Company Software Covered Persons use software programs for word processing, spreadsheets, data management, and many other applications. Software products purchased by the company are covered by some form of licensing agreement that describes the terms, conditions and allowed uses. It is the company's policy to respect copyright laws and observe the terms and conditions of any license agreements. Copyright laws in the United States and other countries impose civil and criminal penalties for illegal reproductions and use of licensed software. You must be aware of the restrictions on the use of software and abide by those restrictions. INVESCO business equipment may not be used to reproduce commercial software. In addition, you may not use personal software on company equipment without prior written approval. Computer Resources/E-mail The company's computer resources, which include the electronic mail system, belong to INVESCO and not to the Covered Person. They are not intended to be used for amusement, solicitation, or other non-business purposes. While it is recognized that Covered Persons will occasionally use the system for personal communications, it is expected that such uses will be kept to a minimum and that Covered Persons will be responsible and professional in their use of e-mail. The use of the computer systems to make or forward derogatory or offensive remarks about other people or groups is prohibited. E-mail messages should be treated as any other written business communication. 22. INVESCO Intellectual Property Employees and officers must carefully maintain and manage the intellectual property rights of INVESCO, including patents, trademarks, copyrights and trade secrets, to preserve and protect their value. Information, ideas and intellectual property assets of INVESCO are important to the company's success. INVESCO's name, logo, trademarks, inventions, processes and innovations are intellectual property assets and their protection is vital to the success of the company's business. The company's and any of its subsidiaries' names, logos and other trademarks and service marks are to be used only for authorized company business and never in connection with personal or other activities unless appropriately approved and in accordance with company policy. In addition, our Covered Persons must respect the intellectual property rights of third parties. Violation of these rights can subject both you and the company to substantial liability, including criminal penalties. Page 15 of 23 Any work product produced in the course of performing your job shall be deemed to be a "work made for hire" and shall belong to INVESCO and is to be used only for the benefit of INVESCO. This includes such items as marketing plans, product development plans, computer programs, software, hardware and similar materials. You must share any innovations or inventions you create with your supervisor so that the company can take steps to protect these valuable assets. 23. Integrity and Accuracy of Financial Records The preparation and maintenance of accurate books, records and accounts is required by law and essential to the proper discharge of financial, legal and reporting obligations. All Covered Persons are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or accounting book, record or account. In addition, all financial data must be completely and accurately recorded in compliance with applicable law and INVESCO's accounting policies and procedures. A Covered Person may violate this section by acting or by failing to act when he or she becomes aware of a violation or potential violation of this section. 24. Disclosure in Reports and Documents. Filings and Public Materials. As a public company, it is important that the company's filings with UK authorities, the United States Securities and Exchange Commission (the "SEC") and other U.S. federal, state, domestic and international regulatory agencies are full, fair, accurate, timely and understandable. The company also makes many other filings with the SEC and other UK, U.S. and international regulatory agencies on behalf of the funds that its subsidiaries and affiliates manage. Further, the company prepares mutual fund account statements, client investment performance information, prospectuses and advertising materials that are sent out to its mutual fund shareholders and clients. Disclosure and Reporting Policy. The company's policy is to comply with all applicable disclosure, financial reporting and accounting regulations applicable to the company. The company maintains the highest commitment to its disclosure and reporting requirements, and expects and requires all Covered Persons to record information accurately and truthfully in the books and records of the company. Information for Filings. Depending on his or her position with the company, a Covered Person may be called upon to provide necessary information to assure that the company's public reports and regulatory filings are full, fair, accurate, timely and understandable. The company expects all Covered Persons to be diligent in providing accurate information to the inquiries that are made related to the company's public disclosure requirements. Page 16 of 23 Disclosure Controls and Procedures and Internal Control Over Financial Reporting. Covered Persons are required to cooperate and comply with the company's disclosure controls and procedures and internal controls over financial reporting so that the company's reports and documents filed with the UK authorities, the SEC and other U.S. federal, state, domestic and international regulatory agencies comply in all material respects with applicable laws, and rules and regulations, and provide full, fair, accurate, timely and understandable disclosure. 25. Improper Influence on the Conduct of Audits Every Covered Person must deal fairly and honestly with outside accountants performing audits, reviews or examinations of INVESCO's and its subsidiaries' financial statements. To that end, no Covered Person of INVESCO may make or cause to be made a materially false or misleading statement (or omit facts necessary to make the statements made not misleading) in connection with an audit, review or examination of financial statements by independent accountants or the preparation of any document or report required to be filed with a governmental or regulatory authority. Covered Persons of INVESCO also are prohibited from coercing, manipulating, misleading or fraudulently inducing any independent public or certified public accountant engaged in the performance or review of financial statements that are required to be filed with a governmental or regulatory authority if he or she knows or should have known that his or her actions could result in making those financial statements materially misleading. 26. Standards for INVESCO's Financial Officers INVESCO's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer (the "Financial Officers") are required to take all reasonable steps to provide full, fair, accurate, timely and understandable disclosures in the reports and documents that INVESCO files with or submits to the SEC and other regulatory bodies and in other public communications made by INVESCO. In the event that a Financial Officer learns that any such report, document or communication does not meet this standard and such deviation is material, then the Financial Officers are required to review and investigate such deviation, advise the Board of Directors or the Audit Committee of the Board of Directors regarding the deviation and, where necessary, revise the relevant report, document or communication. Although a particular accounting treatment for one or more of INVESCO's operations may be permitted under applicable accounting standards, the Financial Officers may not authorize or permit the use of such an accounting treatment if the effect is to distort or conceal INVESCO's true financial condition. The accounting standards and treatments utilized by INVESCO must, in all instances, be determined on an objective and uniform basis and without reference to a single transaction or series of transactions and their impact on INVESCO's financial results for a particular time period. Any new or novel accounting treatment or standard that is to be utilized in the preparation of INVESCO's Page 17 of 23 financial statements must be discussed with INVESCO's Audit Committee and its independent auditors. 27. Policy and Procedures on Reporting Potential Material Violations INVESCO's Audit Committee has adopted the following statement of policy with respect to the reporting by employees of potential material violations of this Code of Conduct, laws or regulations and our related non-retaliation policy: "INVESCO strives to ensure that all activity by or on behalf of INVESCO is in compliance with applicable laws, rules and regulations. INVESCO and its employees must adhere to the highest standards of honest and ethical conduct. Employees of INVESCO and its subsidiaries are affirmatively required to report possible violations of the INVESCO Code of Conduct, laws or regulations promptly to their manager, a Human Resources Director at the employee's site, the employee's Legal and Compliance Department representative, or via the 24-hour toll-free, anonymous INVESCO Compliance Reporting Line. INVESCO will not permit retribution, harassment, or intimidation of any employee who in good faith reports a possible violation. Specifically, INVESCO policy prevents any employee from being subject to disciplinary or retaliatory action by INVESCO or any of its employees or agents as a result of the employee's good faith: - Disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation or possible violation of federal or state law or regulation; or - Providing information, causing information to be provided, filing, causing to be filed, testifying, participating in a proceeding filed or about to be filed, or otherwise assisting in an investigation or proceeding regarding any conduct that the employee reasonably believes involves a violation of: (1) any criminal law relating to securities fraud, mail fraud, bank fraud, or wire, radio, television or internet fraud; (2) any rule or regulation of the United States Securities and Exchange Commission or any other national, state or provincial securities regulatory authority; or any provision of applicable law relating to fraud against shareholders, where, with respect to investigations, such information or assistance is provided to or the investigation is being conducted by a national, state or provincial regulatory agency, a member of any parliamentary body, or a person at INVESCO with supervisory or similar authority over the employee. However, employees who file reports or provide evidence which they know to be false or without a reasonable belief in the truth and accuracy of such information will not be protected by the above policy statement and may be subject to disciplinary action, including termination of their employment." Page 18 of 23 If you are a Covered Person with complaints or concerns regarding: (i) violations of this Code of Conduct or the rules mentioned herein; (ii) violations of laws or regulations generally involving INVESCO; or (iii) questionable accounting matters, internal accounting controls, auditing matters, breaches of fiduciary duty or violations of United States or foreign securities laws or rules (collectively "Accounting Matters"), including: - fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of INVESCO; - fraud or deliberate error in the recording and maintaining of financial records of INVESCO; - deficiencies in or non-compliance with INVESCO's internal accounting controls; - misrepresentation or false statements to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of INVESCO; - deviation from full and fair reporting of INVESCO's financial condition; or - fraudulent or criminal activities engaged in by officers, directors or employees of INVESCO; you may report your concerns in any of three ways: YOU CAN SPEAK WITH YOUR SUPERVISOR. We encourage you to first contact your immediate supervisor, who is in turn responsible for informing INVESCO's Compliance Reporting Line (described below) of any concerns raised. YOU CAN SPEAK DIRECTLY WITH THE BUSINESS UNIT OR DIVISIONAL GENERAL COUNSEL. If you prefer not to discuss a concern with your own supervisor, you may instead contact the General Counsel of your business unit or division directly. You are also free to e-mail the business unit or divisional General Counsel at the appropriate e-mail address. Such person will then likewise be responsible for informing INVESCO's Compliance Reporting Line (described below) of any concerns raised. YOU CAN CALL OUR COMPLIANCE REPORTING LINE. You may also call the INVESCO Compliance Reporting Line. If you are calling from a U.S. or Canadian location dial 1-866-7-3627. For calls from all other locations, dial an international operator and request a collect call to 1-704-943-1136. When asked for your name use "INVESCO." You can Page 19 of 23 use the Compliance Reporting Line to report possible violations or to check on the status of a previously filed report. You can also report to the Compliance Reporting Line if you believe that a report previously made to company management, your supervisor, other management personnel or the applicable business unit or divisional General Counsel has not been addressed. The Compliance Reporting Line is administered by an outside vendor. The telephone operators for the Compliance Reporting Line have been trained to receive your call. The Compliance Reporting Line is available 24 hours a day, seven days a week. All calls will be answered by a live person. Calls are not recorded and are not able to be traced. You have the option to remain anonymous. If you remain anonymous, you will be given a numeric code so that you may call back and ask for follow up. You will be guided through the call and prompted by appropriate questions from the operator. You will be given a date on which you can call back and receive a follow up report. Once the call is completed, a report will be generated and sent to the appropriate departments within INVESCO based on the subject matter of your call. You are urged to call back for follow up, because in the event more information is required, this will be an opportunity for you to provide those details. If you report a possible violation, regardless of the method that you use to make the report, it is important that you provide as much detail as possible, including names, dates, times, locations and the specific conduct in question. Only with sufficient specific information can INVESCO adequately investigate the reported action. Your submission of information will be treated in a confidential manner to the extent reasonably possible. Please note, however, that if an investigation by INVESCO of the activities you have reported takes place, it may be impossible for INVESCO to maintain the confidentiality of the fact of the report or the information reported. Complaints relating to Accounting Matters will be reviewed under Audit Committee direction and oversight by such persons as the Audit Committee determines to be appropriate. All other matters will be reviewed under the direction and oversight of the appropriate departments within INVESCO, usually also including the Legal & Compliance Department. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee or other reviewing department. 28. Disclosure; Amendments To the extent required by law, the company shall publicly (e.g., in its Annual Report on Form 20-F and/or on its website) disclose this Code of Conduct and its application to all of the company's Covered Persons. Page 20 of 23 This Code may only be amended by INVESCO's Board of Directors or a duly authorized committee thereof. To the extent required by law, amendments to the Code of Conduct shall be disclosed publicly. As set forth in Item 16B of the company's Annual Report on Form 20-F for 2005 filed with the SEC, the company has elected to disclose certain amendments to the Code that affect, and any waivers of the Code granted to, Financial Officers on the company's Web site in accordance with the requirements of Instruction 4 to Item 16B. 29. Waivers of the Code. a. Waivers for Executive Officers. Any change in or waiver of this Code for executive officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, "Executive Officers") of the company may be made only by the Board of Directors or a committee thereof in the manner described in Section 29(d) below, and any such waiver (including any implicit waiver) shall be promptly disclosed to shareholders as required by the corporate governance listing standards of the New York Stock Exchange and other applicable laws, rules and regulations. b. Waivers for Other Covered Persons. Any requests for waivers of this Code for Covered Persons other than Executive Officers of the company may be made to the Legal and Compliance Department in the manner described in Section 29(e) below. c. Definition of Waiver. For the purposes of the Code, the term "waiver" shall mean a material departure from a provision of the Code. An "implicit waiver" shall mean the failure of the company to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an Executive Officer. d. Manner for Requesting Executive Officer Waivers. i. Request and Criteria. If an Executive Officer wishes to request a waiver of this Code, the Executive Officer may submit to the Global Compliance Director or the Legal and Compliance Department a written request for a waiver of the Code only if he/she can demonstrate that such a waiver: A. is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances; B. will not be inconsistent with the purposes and objectives of the Code; C. will not adversely affect the interests of clients of the company or the interests of the company; and Page 21 of 23 D. will not result in a transaction or conduct that would violate provisions of applicable laws or regulations. ii. Discretionary Waiver and Response. The Legal and Compliance Department will forward the waiver request to the Board of Directors or a committee thereof for consideration. Any decision to grant a waiver from the Code shall be at the sole and absolute discretion of the Board of Directors or committee thereof, as appropriate. The Company Secretary will advise the Legal and Compliance Department in writing of the Board of Director's decision regarding the waiver, including the grounds for granting or denying the waiver request. The Legal and Compliance Department shall promptly advise the Executive Officer in writing of the Board of Director's decision. e. Manner for Requesting Other Covered Person Waivers. i. Request and Criteria. If a Covered Person who is a non-Executive Officer wishes to request a waiver of this Code, such Covered Person may submit to the Legal and Compliance Department a written request for a waiver of the Code only if he/she can demonstrate that such a waiver would satisfy the same criteria set forth in Section 29(d). ii. Discretionary Waiver and Response. The Legal and Compliance Department shall forward the waiver request to the General Counsel of the company for consideration. The decision to grant a waiver shall be at the sole and absolute discretion of the General Counsel of the company. The General Counsel will advise the Legal and Compliance Department in writing of his/her decision regarding the waiver, including the grounds for granting or denying the waiver request. The Legal and Compliance Department shall promptly advise the Covered Person in writing of the General Counsel's decision. 30. Internal Use. This Code is intended solely for the internal use by the company and does not constitute an admission, by or on behalf of the company, as to any fact, circumstance, or legal conclusion. CONCLUSION As Covered Persons, each of us is obligated to read and understand this Code of Conduct and our relevant business unit's policies and procedures. No code of conduct, however, can address every situation for which guidance may be necessary. If you are unclear about a situation, stop and ask for guidance before taking action. All Covered Page 22 of 23 Persons are expected to abide by both the letter and spirit of this Code. Covered Persons are also expected to perform their work with honesty and integrity in any areas not specifically addressed by the Code. INVESCO will investigate reported violations of the Code and, if violations are found, may take disciplinary action, if appropriate, against the individuals involved, and may make reports, if appropriate, to civil, criminal or regulatory authorities. Nothing in this Code restricts the company from taking any disciplinary action on any matters pertaining to the conduct of a Covered Person, whether or not expressly set forth in the Code. Any questions regarding the scope or interpretation of this Code should be referred to the appropriate Compliance or Legal officer. Revised: July 2006 Page 23 of 23 -----END PRIVACY-ENHANCED MESSAGE-----