Common use of Advisor Compensation Clause in Contracts

Advisor Compensation. During the fund's fiscal year ended December 31, 2002, the advisor received compensation of 0.63% of the fund's average daily net assets. PORTFOLIO MANAGERS The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the fund's portfolio are as follows: - Lanny H. Sachnowitz (lead manager), Senior Portfolio Manager, who h▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇le for the fund since 2002 and has been associated with the advisor and/or its affiliates since 1987. - James G. Birdsall, Portfolio Manager, who has been responsible for ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 2003 and has been associated with the advisor and/or its affiliates since 1997. - Monika H. Degan, Senior Portfolio Manager, who has been responsible ▇▇▇ ▇▇▇ ▇▇▇▇ since 1998 and has been associated with the advisor and/or its affiliates since 1995. They are assisted by the Large Cap Growth Team. More information on the fund's management team may be found on our website (http://www.aiminvestments.com). -------------------- AIM V.I. GROWTH FUND -------------------- OTHER INFORMATION -------------------------------------------------------------------------------- PURCHASE AND REDEMPTION OF SHARES The fund ordinarily effects orders to purchase and redeem shares at the fund's next computed net asset value after it receives an order. Life insurance companies participating in the fund serve as the fund's designee for receiving orders of separate accounts that invest in the fund. Shares of the fund are offered in connection with mixed and shared funding, i.e., to separate accounts of affiliated and unaffiliated life insurance companies funding variable annuity contracts and variable life insurance policies. The fund currently offers shares only to insurance company separate accounts. In the future, the fund may offer them to pension and retirement plans that qualify for special federal income tax treatment. Due to differences in tax treatment and other considerations, the interests of variable contract owners investing in separate accounts investing in the fund, and the interests of plan participants investing in the fund, may conflict. Mixed and shared funding may present certain conflicts of interest. For example, violation of the federal tax laws by one separate account investing in a fund could cause owners of contracts and policies funded through another separate account to lose their tax-deferred status, unless remedial actions were taken. The Board of Trustees of the fund will monitor for the existence of any material conflicts and determine what action, if any, should be taken. A fund's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a separate account (or plan) withdrawing because of a conflict. PRICING OF SHARES The fund prices its shares based on its net asset value. The fund values portfolio securities for which market quotations are readily available at market value. The fund values short-term investments maturing within 60 days at amortized cost, which approximates market value. The fund values all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the New York Stock Exchange (NYSE), events occur that materially affect the value of the security, the fund may value the security at its fair value as determined in good faith by or under the supervision of the Board of Trustees. The effect of using fair value pricing is that the fund's net asset value will be subject to the judgment of the Board of Trustees or its designee instead of being determined by the market. Because the fund may invest in securities that are primarily listed on foreign exchanges, the value of the fund's shares may change on days when the separate account will not be able to purchase or redeem shares. The fund determines the net asset value of its shares as of the close of the customary trading session of the NYSE on each day the NYSE is open for business, or any earlier NYSE closing time that day.

Advisor Compensation. During the fund's fiscal year ended December 31, 2002, 2002 the advisor received compensation of 0.630.62% of the fund's average daily net assets. PORTFOLIO MANAGERS The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the fund's portfolio are as follows: (Co-Managed) - Lanny H. Sachnowitz (lead manager)Peter Ehret, Senior Portfolio Manager, who h▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇le for the fund since 2002 and has been associated with the advisor and/or its affiliates since 1987. - James G. Birdsall, Portfolio Manager, who has been responsible for ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 2003 since 2001 and has been associated with the advisor and/or its affiliates since 19972001. From 1992 to 2001, he was director of high yield research and portfolio manager for Van Kampen Investment Advisory Corp. - Monika H. DeganCarolyn L. Gibbs, Senior Portfolio ManagerPo▇▇▇▇▇▇▇ ▇▇nager, who has been responsible responsibl▇ ▇▇▇ ▇▇▇ ▇▇▇▇ since 1998 2000 and has been associated with the advisor and/or its affiliates since 19951992. They are assisted by the Large Cap Growth High Yield Taxable Team. More information on the fund's management team may be found on our website (http://www.aiminvestments.com). -------------------- ------------------------ AIM V.I. GROWTH HIGH YIELD FUND -------------------- ------------------------ OTHER INFORMATION -------------------------------------------------------------------------------- PURCHASE AND REDEMPTION OF SHARES The fund ordinarily effects orders to purchase and redeem shares at the fund's next computed net asset value after it receives an order. Life insurance companies participating in the fund serve as the fund's designee for receiving orders of separate accounts that invest in the fund. Shares of the fund are offered in connection with mixed and shared funding, i.e., to separate accounts of affiliated and unaffiliated life insurance companies funding variable annuity contracts and variable life insurance policies. The fund currently offers shares only to insurance company separate accounts. In the future, the fund may offer them to pension and retirement plans that qualify for special federal income tax treatment. Due to differences in tax treatment and other considerations, the interests of variable contract owners investing in separate accounts investing in the fund, and the interests of plan participants investing in the fund, may conflict. Mixed and shared funding may present certain conflicts of interest. For example, violation of the federal tax laws by one separate account investing in a fund could cause owners of contracts and policies funded through another separate account to lose their tax-deferred status, unless remedial actions were taken. The Board of Trustees of the fund will monitor for the existence of any material conflicts and determine what action, if any, should be taken. A fund's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a separate account (or plan) withdrawing because of a conflict. PRICING OF SHARES The fund prices its shares based on its net asset value. The fund values portfolio securities for which market quotations are readily available at market value. The fund values short-term investments maturing within 60 days at amortized cost, which approximates market value. The fund values all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the New York Stock Exchange (NYSE), events occur that materially affect the value of the security, the fund may value the security at its fair value as determined in good faith by or under the supervision of the Board of Trustees. The effect of using fair value pricing is that the fund's net asset value will be subject to the judgment of the Board of Trustees or its designee instead of being determined by the market. Because the fund may invest in securities that are primarily listed on foreign exchanges, the value of the fund's shares may change on days when the separate account will not be able to purchase or redeem shares. The fund determines the net asset value of its shares as of the close of the customary trading session of the NYSE on each day the NYSE is open for business, or any earlier NYSE closing time that day.