PRELIMINARY COPY -- TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(C) or (S)240.14a-12
INVESCO GROWTH FUND, INC.
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
----------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DRAFT
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO GROWTH FUND, INC.
__________ __, 1997
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Dear INVESCO Growth Fund, Inc. Shareholder:
Enclosed is a Proxy Statement for the [October 28, 1997] special meeting
of shareholders of INVESCO Growth Fund, Inc. (the "Fund").
As explained more fully in the attached Proxy Statement, shareholders of
the Fund will be asked to approve changes to the investment policies of the
Fund, to permit the Fund to invest in futures, options, puts and calls.
The board of directors of the Fund believes that the change in investment
policy is in the best interests of the shareholders. Therefore, we ask that you
read the enclosed materials and vote promptly. Should you have any questions,
please feel free to call our client services representatives at 1-800-646- 8372.
They will be happy to answer any questions that you might have.
YOUR VOTE IS IMPORTANT. THE CHANGE IN INVESTMENT POLICY WE ARE SUBMITTING
FOR YOUR CONSIDERATION IS SIGNIFICANT TO THE FUND AND TO YOU AS A SHAREHOLDER.
IF WE DO NOT RECEIVE SUFFICIENT VOTES TO APPROVE THIS PROPOSAL, WE MAY HAVE TO
SEND ADDITIONAL MAILINGS OR CONDUCT TELEPHONE CANVASSING, WHICH WOULD INCREASE
COSTS TO SHAREHOLDERS. THEREFORE, PLEASE TAKE THE TIME TO READ THE PROXY
STATEMENT AND CAST YOUR VOTE ON THE ENCLOSED PROXY CARD, AND RETURN IT IN THE
ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.
Sincerely,
- ----------------------------
Dan J. Hesser
President
INVESCO Growth Fund, Inc.
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO GROWTH FUND, INC.
7800 East Union Avenue
Denver, Colorado 80237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [OCTOBER 28, 1997]
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Notice is hereby given that a special meeting of shareholders (the
"Meeting") of INVESCO Growth Fund, Inc. (the "Fund") will be held at the Hyatt
Regency Tech Center, 7800 E. Union Avenue, Denver, Colorado 80237 on [Tuesday,
October 28, 1997], at 10:00 a.m., Mountain Time, for the following purposes:
1. To approve or disapprove a change in the investment policy of the
Fund to allow the Fund to invest in futures, options, puts and
calls.
2. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
The board of directors of the Fund has fixed the close of business on
[September 4, 1997] as the record date for the determination of shareholders
entitled to notice of and to vote at the Meeting or any adjournment(s) thereof.
A complete list of shareholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Fund for any purpose germane to the Meeting during ordinary business hours after
________ __, 1997, at the offices of the Fund, 7800 East Union Avenue, Denver,
Colorado 80237.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the enclosed envelope that
requires NO postage if mailed in the United States. The enclosed proxy is being
solicited on behalf of the board of directors of the Fund.
IMPORTANT
Please mark, sign, date and return the enclosed proxy in the accompanying
envelope as soon as possible in order to ensure a full representation at the
Meeting.
The Meeting will have to be adjourned without conducting any business if
less than a majority of the eligible shares is represented, and the Fund will
have to continue to solicit votes until a quorum is obtained. The Meeting also
may be adjourned, if necessary, to continue to solicit votes if less than the
required shareholder vote has been obtained to approve Proposal 1.
<PAGE>
Your vote, then, could be critical in allowing the Fund to hold the
Meeting as scheduled. By marking, signing, and promptly returning the enclosed
proxy, you may eliminate the need for additional solicitation. Your cooperation
is appreciated.
By Order of the Board of Directors,
-------------------------------------
Glen A. Payne
Secretary
Denver, Colorado
Dated: _________ __, 1997
<PAGE>
PRELIMINARY COPY -- TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
INVESCO GROWTH FUND, INC.
____________ __, 1997
- -------------------------------------------------------------------------------
INVESCO GROWTH FUND, INC.
7800 East Union Avenue
Denver, Colorado 80237
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [OCTOBER 28, 1997]
INTRODUCTION
The enclosed proxy is being solicited by the board of directors (the
"Board" or the "Directors") of INVESCO Growth Fund, Inc. (the "Fund") for use in
connection with the special meeting of shareholders of the Fund (the "Meeting")
to be held at 10:00 a.m., Mountain Time, on [Tuesday, October 28, 1997], at the
Hyatt Regency Tech Center, 7800 E. Union Avenue, Denver, Colorado 80237, and at
any adjournment(s) thereof for the purposes set forth in the foregoing notice.
THE FUND'S ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS OF THE FUND FOR THE
FISCAL YEAR ENDED AUGUST 31, 1996, AND SEMI-ANNUAL REPORT, INCLUDING FINANCIAL
STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 1997, ARE AVAILABLE WITHOUT CHARGE
UPON REQUEST FROM GLEN A. PAYNE, SECRETARY OF THE FUND, AT P.O. BOX 173706,
DENVER, COLORADO 80217-3706 (TELEPHONE NUMBER 1-800-646-8372). The approximate
mailing date of proxies and this Proxy Statement is ________ __, 1997.
The primary purpose of the Meeting is to allow shareholders to consider a
change in the investment policy of the Fund to allow it to invest in futures,
options, puts and calls.
The following factors should be considered by shareholders in determining
whether to authorize the change in investment policy to permit investment in
futures, options, puts and calls:
o The change in investment policy, if approved, would assist the Fund
in achieving its investment objective.
o The change, if approved, will permit the Fund to invest in these
instruments as a hedge against the volatility associated with investments
in the Fund.
o If approved, the change could result in additional risks associated with
such investments.
If the enclosed form of proxy is duly executed and returned in time to be
voted at the Meeting, and not subsequently revoked, all shares represented by
the proxy will be voted in accordance with the instructions marked thereon. If
no instructions are given, such shares will be voted FOR Proposal 1. A majority
of the outstanding shares of the Fund entitled to vote, represented in person or
by proxy, will constitute a quorum at the Meeting.
<PAGE>
Shares held by shareholders present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting. An
abstention by a shareholder, either by proxy or by vote in person at the
Meeting, has the same effect as a negative vote. Shares held by a broker or
other fiduciary as record owner for the account of the beneficial owner are
counted toward the required quorum if the beneficial owner has executed and
timely delivered the necessary instructions for the broker to vote the shares or
if the broker has and exercises discretionary voting power. Where the broker or
fiduciary does not receive instructions from the beneficial owner and does not
have discretionary voting power as to one or more issues before the Meeting, but
grants a proxy for or votes such shares, they will be counted toward the
required quorum but will have the effect of a negative vote on any proposals on
which it does not vote.
In order to further reduce costs, the notices to shareholders having more
than one account in the Fund listed under the same Social Security number at a
single address have been combined. The proxy cards have been coded so that each
shareholder's votes will be counted for all such accounts.
Execution of the enclosed proxy card will not affect a shareholder's right
to attend the Meeting and vote in person, and a shareholder giving a proxy has
the power to revoke it (by written notice to the Company at P.O. Box 173706,
Denver, Colorado 80217-3706, execution of a subsequent proxy card, or oral
revocation at the Meeting) at any time before it is exercised.
Shareholders of the Fund of record at the close of business on [September
4, 1997] (the "Record Date"), are entitled to vote at the Meeting, including any
adjournment(s) thereof, and are entitled to one vote for each share, and
corresponding fractional votes for fractional shares, on each matter to be acted
upon at the Meeting. On the Record Date, [____________] shares of beneficial
interest of the Fund, $.01 par value per share were outstanding, all of them
being shares of the Fund.
In addition to the solicitations of proxies by use of the mail, proxies
may be solicited by officers of the Fund, and by officers and employees of
INVESCO Funds Group, Inc., the investment adviser and transfer agent of the
Funds, and INVESCO Distributors, Inc., personally or by telephone or telegraph,
without special compensation. Until September 29, 1997, INVESCO Funds Group,
Inc. is also the distributor of the Funds. Effective on that date, INVESCO
Distributors, Inc., a wholly-owned subsidiary of INVESCO Funds Group, Inc., will
become the distributor of the Funds. INVESCO Funds Group, Inc. and INVESCO
Distributors, Inc. are referred to collectively as "INVESCO." In addition,
Shareholder Communications Corporation ("SCC") has been retained to assist in
the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes the Fund
has not yet received may receive telephone calls from representatives of SCC
requesting that they authorize SCC, by telephonic or electronically transmitted
instructions, to execute proxy cards on their behalf. Telephone authorizations
will be recorded in accordance with the procedures set forth below. INVESCO
believes that these procedures are reasonably designed to ensure that the
identity of the shareholder casting the vote is accurately determined and that
the voting instructions of the shareholder are accurately determined.
<PAGE>
SCC has received an opinion of Maryland counsel that addresses the
validity, under the applicable laws of the State of Maryland, of authorization
given orally to execute a proxy. The opinion given by Maryland counsel concludes
that a Maryland court would find that there is no Maryland law or public policy
against the acceptance of proxies signed by an orally authorized agent, provided
it adheres to the procedures set forth below.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask the shareholder for such shareholder's full name, address,
Social Security or employer identification number, title (if the person giving
the proxy is authorized to act on behalf of an entity, such as a corporation),
and the number of shares owned, and to confirm that the shareholder has received
the Proxy Statement in the mail. If the information solicited agrees with the
information provided to SCC by the Fund, the SCC representative has the
responsibility to explain the voting process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on each proposal.
Although he or she is permitted to answer questions about the process, the SCC
representative is not permitted to recommend to the shareholder how to vote,
other than to read any recommendation set forth in the Proxy Statement. SCC will
record the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram confirming the shareholder's vote and
asking the shareholder to call SCC immediately if the shareholder's instructions
are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting, but does not wish
to give a proxy by telephone, such shareholder may still submit the proxy card
originally sent with the Proxy Statement or attend in person. Any proxy given by
a shareholder, whether in writing or by telephone, is revocable. A shareholder
may revoke the accompanying proxy or a proxy given telephonically at any time
prior to its use by filing with the Fund a written revocation or duly executed
proxy bearing a later date. In addition, any shareholder who attends the Meeting
in person may vote by ballot at the Meeting, thereby canceling any proxy
previously given.
All costs of printing and mailing proxy materials and the costs and
expenses of holding the Meeting and soliciting proxies, including any amount
paid to SCC, will be paid by the Fund.
The Board may seek one or more adjournments of the Meeting to solicit
additional shareholders, if necessary, to obtain a quorum for the Meeting, or to
obtain the required shareholder vote to approve Proposals 1 and 2. An
adjournment would require the affirmative vote of the holders of a majority of
the shares present at the Meeting (or an adjournment thereof) in person or by
proxy and entitled to vote. If adjournment is proposed in order to obtain the
required shareholder vote on a particular proposal, the persons named as proxies
will vote in favor of adjournment those shares which they are entitled to vote
in favor of such proposal and will vote against adjournment those shares which
they are required to vote against such proposal. A shareholder vote may be taken
on one or more of the proposals discussed herein prior to any such adjournment
if sufficient votes have been received and it is otherwise appropriate.
PROPOSAL 1: APPROVAL OR DISAPPROVAL OF THE CHANGE IN INVESTMENT
POLICIES PERMITTING INVESTMENTS IN FUTURES, OPTIONS, PUTS
AND CALLS.
<PAGE>
Background
The current fundamental investment policies of the Fund concerning
investing in futures contracts and options, as disclosed in the Statement of
Additional Information, are as follows:
The Fund will not:
...(2) sell short or buy on margin, except if the Fund ever commences
writing put or call options (which the Fund currently does not anticipate
doing).
...(7) buy or sell commodities, commodity contracts or real estate
(however, the Fund may purchase securities of companies investing in real
estate)....
Under these fundamental investment policies, the Fund is prohibited from
investing in futures contracts or options. Of the 45 open-end mutual funds for
which INVESCO Funds Group, Inc. serves as investment adviser (the "INVESCO
Mutual Funds"), 21 have the ability to invest in futures contracts and options.
INVESCO Funds Group, Inc. and the Fund's sub-adviser, INVESCO Trust Company
("ITC") (collectively, "Fund Management"), are asking shareholders to amend
these policies so that the Fund may invest in such instruments.
Reasons For The Requested Changes
Futures, options puts and calls are part of a wider group of financial
instruments commonly known as "derivatives," because their value "derives" from
an underlying security or index. Although derivatives in recent years often have
been characterized as high-risk investments, such descriptions most often are
applied to the use of derivatives in an attempt to increase mutual fund
performance. Fund Management, to the contrary, wishes to utilize futures
contracts, options, puts and calls in an attempt to hedge the risk inherent in
any Fund's portfolio. Although investment in such instruments presents a certain
degree of potential risk, in the opinion of Fund Management and the Board, the
Fund's present inability to hedge portfolio risk through the use of such
instruments may itself be a potential risk under certain market conditions.
Although hedging in this manner may potentially increase the Fund's investment
return in certain markets, that, of course, cannot be guaranteed. The primary
purpose for the use of these instruments by the Fund is a defensive one.
Options currently are traded on several companies' securities in which the
Fund invests and, in addition, options are available on several indexes that
reflect certain markets in which the Fund invests. The ability to trade in such
instruments may allow the Fund to hedge against downward price movements in
these securities and markets, thus enhancing the Fund's ability to protect the
value of its assets in declining markets.
Moreover, many of the Fund's competitors are authorized to use, and
actively do utilize futures, options, puts and calls. The Fund's present
inability to utilize these instruments puts the Fund at a competitive
disadvantage, to the potential detriment of its shareholders.
Of course, investment in such instruments is not without risk. The use of
these instruments requires skills and involves risks different from those
involved in trading the other instruments in which the Fund invests. Among these
<PAGE>
risks is the possibility that there may be imperfect correlation, or no
correlation at all, between price movements in an option or future and the
underlying instrument being hedged. The successful use of these instruments will
depend upon the ability of Fund Management to forecast price and interest rate
movements correctly. Should prices move in an unexpected manner, the Fund may
not achieve the potential benefits of these instruments or may realize losses
and thus be in a worse position than if such strategies had not been used. Your
attention is directed specifically to the descriptions of these instruments
under this proposal and to Exhibit A attached hereto which further describes
these risks.
Proposed Changes to Investment Policies
Fund Management and the Board have determined that the ability to invest
in futures, options, puts and calls would provide the Fund with an important
additional means for seeking to hedge the value of its portfolio, i.e.,
attempting to reduce the overall level of investment risk that normally would be
expected to be associated with the Fund's portfolio and attempting to protect
the Fund against market movements that might adversely affect the value of the
Fund's assets or the price of securities that the Fund is considering
purchasing. The Directors believe that the Fund would benefit from having the
flexibility to deal in such instruments, in addition to its other investments,
and that the Fund's investments in these instruments would be consistent with
the Fund's investment objective and policies. There can be no assurance,
however, that the use of these instruments by the Fund will assist it in
achieving its investment objective.
Accordingly, the Board, including all of the Directors who are completely
independent of any INVESCO-affiliated company (the "Independent Directors"),
unanimously approved the proposed change in a meeting on May 16, 1997, and is
proposing that shareholders approve the modification of the above-quoted
fundamental investment policies of the Fund. Under the proposal, the language of
these fundamental investment policies would be revised to read, in their
entirety, as follows:
The Fund will not:
...(2)sell short or buy on margin, except for the Fund's purchase or sale
of options or futures, or writing, purchasing or selling puts and calls.
...(7)buy or sell commodities, commodity contracts, or real estate
(however, the Fund may purchase securities of companies which invest in
the foregoing). This restriction shall not prevent the Fund from
purchasing or selling options on individual securities, security indexes,
and currencies, or financial futures or options on financial futures, or
undertaking forward currency contracts....
In order to ensure that the proposed modification of the Fund's
fundamental investment policies will not have the effect of unduly increasing
the investment risk involved in investing in the Fund's shares and to ensure
that the Fund will continue to comply with and adhere to all limitations imposed
by the Commodity Futures Trading Commission (the "CFTC"), the Board also has
approved the following new non-fundamental investment policy for the Fund which
will be effective if Proposal 1 is adopted by the Fund's shareholders:
<PAGE>
The Fund will not (i) enter into any futures contracts or options on
futures contracts if immediately thereafter the aggregate margin deposits
on all outstanding futures contracts positions held by the Fund and
premiums paid on outstanding options on futures contracts, after taking
into account unrealized profits and losses, would exceed 5% of the market
value of the total assets of the Fund, or (ii) enter into any futures
contracts if the aggregate net amount of the Fund's commitments under
outstanding futures contracts positions of the Fund would exceed the
market value of the total assets of the Fund.
This new non-fundamental investment policy will result in the Fund being
able to invest up to 5% of its total assets as margin deposits for futures
contracts or options on futures contracts as long as the Fund's commitments
under any outstanding futures contracts is not greater than the total assets of
the Fund. Making this new policy a non-fundamental investment policy will give
the Fund's board of directors, which includes a majority of directors who are
completely independent of any INVESCO- affiliated company, greater flexibility
to modify the policy in the future if any such modification is deemed to be in
the best interests of the Fund's shareholders.
Vote Required
As provided under the Investment Company Act of 1940 (the "1940 Act"),
approval of any investment policy changes will require the affirmative vote of a
majority of the outstanding shares of the Fund. Such a majority is defined in
the 1940 Act as the lesser of: (a) 67% or more of the shares present at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
are present or represented by proxy, or (b) more than 50% of the total
outstanding shares of the Fund.
If approved, this Proposal will take effect as soon as possible after any
remaining legal prerequisites to implementation of the Proposal have been
satisfied. If the shareholders of the Fund fail to approve this Proposal, the
Fund's above-quoted fundamental investment policies will remain unchanged.
THE DIRECTORS OF THE FUND UNANIMOUSLY RECOMMEND
THAT THE FUND'S SHAREHOLDERS VOTE
IN FAVOR OF PROPOSAL 1.
INFORMATION CONCERNING ADVISER, SUB-ADVISER, DISTRIBUTOR AND AFFILIATED
COMPANIES
INVESCO Funds Group, Inc., a Delaware corporation, serves as the Fund's
investment adviser and distributor, as well as providing other services to the
Fund. INVESCO Distributors, Inc. is a wholly-owned subsidiary of INVESCO Funds
Group, Inc. INVESCO Funds Group, Inc. is a wholly-owned subsidiary of INVESCO
North American Holdings, Inc. ("INAH"), 1315 Peachtree Street, N.E., Atlanta,
Georgia 30309. INAH is an indirect wholly-owned subsidiary of AMVESCAP PLC.(1)
- ----------------------------
(1) The intermediary companies between INAH and AMVESCAP are as follows:
INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North American Group,
Ltd., each of which is wholly-owned by its immediate parent.
<PAGE>
The corporate headquarters of AMVESCAP are located at 11 Devonshire Square,
London EC2M 4YR, England. INVESCO's offices are located at 7800 East Union
Avenue, Denver, Colorado 80237. INVESCO currently serves as investment adviser
of 14 open-end investment companies having aggregate net assets of $16.4 billion
as of July 31, 1997.
The principal executive officers and directors of INVESCO Funds Group, Inc.
and their principal occupations are:
Dan J. Hesser, Chairman of the Board, President, Chief Executive Officer
and Director; Brian N. Minturn, Executive Vice President and Director; Hubert L.
Harris, Jr., Director, also, President of INVESCO Services, Inc., Director of
AMVESCAP, Chief Financial Officer of INVESCO Individual Services Group; Charles
P. Mayer, Director; Robert J. O'Connor, Director, also, Chief Executive Officer
and Chairman of INVESCO Retirement Plan Services, a division of INVESCO Funds
Group, Inc.
The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237, with the exception of the address of
Messrs. Bishop, DeKinder and Harris, which is 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309 and Mr. O'Connor, whose address is 1355 Peachtree Street,
N.E., Atlanta, Georgia 30309.
INVESCO Trust Company ("ITC"), a Colorado trust company formed in 1969,
serves as the sub-adviser to the Fund. ITC is an indirect wholly-owned
subsidiary of INVESCO Funds Group, Inc. ITC's offices are located at 7800 East
Union Avenue, Denver, Colorado 80237. ITC has the primary responsibility for
providing investment advisory services to the Fund. ITC currently serves
as adviser or sub-adviser to __ investment portfolios having aggregate net
assets of $___ million as of July 31, 1997. In addition, ITC provides investment
management services to private clients, including employee benefit plans that
may be invested in a collective trust sponsored by ITC.
The principal executive officer and directors of ITC and their principal
occupations are as follows:
Dan J. Hesser, President and Director, also, President, Chief Executive
Officer and Director of IFG; Hubert L. Harris, Chairman of the Board, also
Director of IFG; Charles P. Mayer, Senior Vice President and Director, also
Director of IFG.
The address of each of the foregoing officer and directors is 7800 East
Union Avenue, Denver, Colorado 80237.
Pursuant to an Administrative Services Agreement between the Company and
INVESCO, INVESCO provides administrative services to the Company, including
distribution, sub-accounting and recordkeeping services and functions. During
the fiscal year ended August 31, 1996, the Company paid INVESCO total
compensation of $92,412 in payment of such services.
During the fiscal year ended August 31, 1996, the Company paid INVESCO,
which also serves the Company's registrar, transfer agent and dividend
disbursing agent, total compensation of $751,390 for such services.
<PAGE>
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS [AND MANAGEMENT]
The following table sets forth, as of the Record Date, the beneficial
ownership of the Fund's issued and outstanding shares of beneficial interest by
each 5% or greater shareholder.
Percent of
Name and Address Amount & Nature of Shares of
of Beneficial Owner Beneficial Ownership(2) Beneficial Interest
- --------------------- ----------------------- -------------------
OTHER BUSINESS
The management of the Fund has no business to bring before the Meeting
other than the matters described above. Should any other business be presented
at the Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
- --------
(2) Each beneficial owner named above shares investment power with respect
to the shares listed next to its respective row, but its customers retain sole
voting power.
SHAREHOLDER PROPOSALS
The Fund does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of proxy
for a subsequent shareholders' meeting should send their written proposals to
the Secretary of the Fund, 7800 East Union Avenue, Denver, Colorado 80237. The
Fund has not received any shareholder proposals to be presented at this Meeting.
By Order of the Board of Directors,
Glen A. Payne
Secretary
__________________ __, 1997
<PAGE>
EXHIBIT A
SUMMARY CONCERNING FUTURES AND OPTIONS
Futures Contracts and Options on Futures Contracts.
U.S. futures contracts are traded on exchanges which have been
designated "contract markets" by the Commodity Futures Trading Commission
("CFTC") and must be executed through a futures commission merchant (an "FCM"),
or brokerage firm, which is a member of the relevant contract market. Although
futures contracts by their terms call for the delivery or acquisition of the
underlying commodities or a cash payment based on the value of the underlying
commodities, in most cases the contractual obligation is offset before the
delivery date of the contract by buying, in the case of a contractual obligation
to sell, or selling, in the case of a contractual obligation to buy, an
identical futures contract on a commodities exchange. Such a transaction cancels
the obligation to make or take delivery of the commodities.
The acquisition or sale of a futures contract could occur, for example, if
a Fund held or considered purchasing debt securities and sought to protect
itself from fluctuations in prices without buying or selling those securities.
For example, if prices were expected to decrease, the Fund could sell Treasury
Futures, thereby hoping to offset a potential decline in the value of debt
securities in the portfolio by a corresponding increase in the value of the
futures contract position held by the Fund and thereby prevent the Fund's net
asset value from declining as much as it otherwise would have. The Fund also
could protect against potential price declines by selling portfolio securities
and investing in money market instruments. The use of futures contracts as an
investment technique would allow the Fund to maintain a defensive position
without having to sell portfolio securities.
Similarly, when prices of debt securities are expected to increase, futures
contracts could be bought to attempt to hedge against the possibility of having
to buy debt securities at higher prices. This technique is sometimes known as an
anticipatory hedge. Since the fluctuations in the value of futures contracts
should be similar to those of debt securities, the Fund could take advantage of
the potential rise in the value of debt securities without buying them until the
market has stabilized. At that time, the futures contracts could be liquidated
and the Fund could buy debt securities on the cash market.
The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
the ability of investors to close out futures contracts through offsetting
transactions could distort the normal price relationship between the cash and
futures markets. Second, to the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced and prices in the
futures market distorted. Third, from the point of view of speculators, the
margin deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price distortions. Due to
the possibility of the foregoing distortions, a correct forecast of general
price trends still may not result in a successful use of futures.
Futures contracts entail risks. Although the Fund believes that use of such
contracts could benefit the Fund, if the judgment of Fund Management was
incorrect, the Fund's overall performance could be worse than if the Fund had
<PAGE>
not entered into futures contracts. For example, if the Fund hedged against
the effects of a possible decrease in prices of securities held in the Fund's
portfolio and prices increase instead, the Fund would lose part or all of the
benefit of the increased value of these securities because of offsetting losses
in the Fund's futures positions. In addition, if the Fund had insufficient cash,
it might have to sell securities from its portfolio to meet daily variation
margin requirements. Those sales could be at increased prices which reflect the
rising market and could occur at a time when the sales would be disadvantageous
to the Fund.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to
the Fund would not match exactly the Fund's current or potential investments.
The Fund would be able to buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it would
typically invest -- for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities -- which involves a
risk that the futures position might not correlate precisely with the
performance of the Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with the
Fund's investments. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the contract. Those
factors may affect securities prices differently from futures prices. Imperfect
correlations between the Fund's investments and its futures positions could also
result from differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are traded,
and from imposition of daily price fluctuation limits for futures contracts. The
Fund would be able to buy or sell futures contracts with a greater or lesser
value than the securities it wished to hedge or was considering purchasing in
order to attempt to compensate for differences in historical volatility between
the futures contract and the securities, although this might not be successful
in all cases. If price changes in the Fund's futures positions were poorly
correlated with its other investments, its futures positions could fail to
produce desired gains or result in losses that would not be offset by the gains
in the Fund's other investments.
Because futures contracts are generally settled within a day from the date
they are closed out, compared with a settlement period of three business days
for some types of securities, the futures markets can provide superior liquidity
to the securities markets. Nevertheless, there is no assurance a liquid
secondary market will exist for any particular futures contract at any
particular time. In addition, futures exchanges may establish daily price
fluctuation limits for futures contracts and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached, it would be impossible
for the Fund to enter into new positions or close out existing positions. If the
secondary market for a futures contract were not liquid because of price
fluctuation limits or otherwise, the Fund would not be able to promptly
liquidate unfavorable futures positions and potentially could be required to
continue to hold a futures position until the delivery date, regardless of
changes in its value. As a result, a Fund's access to other assets held to cover
its futures positions also could be impaired.
<PAGE>
Although the buyer or seller of a futures contract is not required to
deliver or pay for the underlying instrument unless the contract is held until
the delivery date, both the buyer and seller are required to deposit "initial
margin" for the benefit of an FCM when the contract is entered into equal to a
percentage of the contract's value. If the value of either party's position
declines, that party will be required to make additional "variation margin"
payments with an FCM to settle the change in value on a daily basis. The party
that has a gain may be entitled to receive all or a portion of this amount.
Initial and variation margin payments are similar to good faith deposits or
performance bonds, unlike margin extended by a securities broker, and initial
and variation margin payments do not constitute purchasing securities on margin
for purposes of the Fund's investment policies. In the event of the bankruptcy
of an FCM that holds margin on behalf of the Fund, the Fund would be entitled to
return of margin owed to the Fund only in proportion to the amount received by
the FCM's other customers. Fund Management will attempt to minimize the risk by
careful monitoring of the creditworthiness of the FCMs with which the Fund would
do business and by depositing margin payments in a segregated account with the
custodian when practical or otherwise required by law.
The purchase of a call option on a futures contract is similar in some
respects to the purchase of a call option on an individual security. (See
"Options on Securities" below.) Depending on the pricing of the option compared
to either the price of the futures contract upon which it is based or the price
of the underlying instrument, ownership of the option may or may not be less
risky than ownership of the futures contract or the underlying instrument. As
with the purchase of futures contracts, when the Fund is not fully invested it
could buy a call option on a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security which is deliverable under, or of
the index comprising, the futures contract. If the futures price at the
expiration of the option were below the exercise price, the Fund would retain
the full amount of the option premium which would provide a partial hedge
against any decline that may have occurred in the Fund's portfolio holdings. The
writing of a put option on a futures contract constitutes a partial hedge
against increasing prices of the security which is deliverable under, or of the
index comprising, the futures contract. If the futures price at expiration of
the option was higher than the exercise price, a Fund would retain the full
amount of the option premium which would provide a partial hedge against any
increase in the price of securities which the Fund was considering to buy. If a
call or put option the Fund had written was exercised, the Fund would incur a
loss which would be reduced by the amount of the premium it received. Depending
on the degree of correlation between change in the value of its portfolio
securities and changes in the value of the futures positions, the Fund's losses
from existing options on futures could to some extent be reduced or increased by
changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, the Fund would be able to buy a put option on a futures contract to
hedge the Fund's portfolio against the risk of falling prices.
The amount of risk the Fund would assume if it bought an option on a
futures contract would be the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value of the
<PAGE>
underlying futures contract will not be fully reflected in the value of the
options bought.
Options on Securities.
A put option gives the holder the right, upon payment of a premium, to
deliver a specified amount of a security to the writer of the option on or
before a fixed date at a predetermined price. A call option gives the holder the
right, upon payment of a premium, to call upon the writer to deliver a specified
amount of a security on or before a fixed date at a predetermined price. In
purchasing an option, the Fund would be in a position to realize a gain if,
during the option period, the price of the underlying security increased (in the
case of a call) or decreased (in the case of a put) by an amount in excess of
the premium paid and would realize a loss if the price of the underlying
security did not increase (in the case of a call) or decrease (in the case of a
put) during the period by more than the amount of the premium. If a put or call
option bought by a Fund were permitted to expire without being sold or
exercised, the Fund would lose the amount of the premium.
If a put option or call option written by a Fund were exercised, the Fund
would be obligated to buy or sell the underlying security at the exercise price.
Writing a put option involves the risk of a decrease in the market value of the
underlying security, in which case the option could be exercised and the
underlying security would then be sold by the option holder to the Fund at a
higher price than its current market value. Writing a call option involves the
risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the Fund to the option holder at a lower price than its current market
value. Those risks could be reduced by entering into an offsetting transaction.
The Fund would retain the premium received from writing a put or call option
whether or not the option were exercised.
The Fund also would be able to buy or write options in privately negotiated
transactions on the types of securities and indexes based on the types of
securities in which the Fund were permitted to invest directly. The Fund would
effect such transactions only with investment dealers and other financial
institutions (such as commercial banks or savings and loan institutions) deemed
creditworthy, and only pursuant to procedures adopted by Fund Management for
monitoring the creditworthiness of those entities. The Fund is not permitted to
invest in securities for which there is no readily available market. Therefore,
the Fund could not invest in illiquid options.
A put option written by a Fund would be "covered" if the Fund (i)
maintained cash not available for investment or high-grade liquid assets with a
value equal to the exercise price in a segregated account with its custodian or
(ii) held a put on the same security and in the same principal amount as the put
written and the exercise price of the put held were equal to or greater than the
exercise price of the put written. A call option written by a Fund would be
"covered" if the Fund owned the underlying security covered by the call or had
an absolute and immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other securities held in its
portfolio. A call option also would be deemed to be covered if a Fund held a
call on the same security and in the same principal amount as the call written
and the exercise price of the call held (i) were equal to or less than the
exercise price of the call written or (ii) were greater than the exercise price
<PAGE>
of the call written if the difference were maintained by the Fund in cash and
high-grade liquid assets in a segregated account with its custodian.
The Fund also would be able to write covered call options for cross-hedging
purposes. A call option is written for cross-hedging purposes if the Fund does
not own the underlying security, and the option is designed to provide a hedge
against a decline in value in another security which the Fund owns or has the
right to acquire.
The Fund would collateralize its obligation under a written call option for
cross-hedging purposes by maintaining in a segregated account with its custodian
cash or high-grade liquid assets in an amount not less than the market value of
the underlying security, marked to market daily. The Fund would write a call
option for cross-hedging purposes, instead of writing a covered call option,
when the premium to be received from the cross-hedge transaction would exceed
that which would be received from writing a covered call option and when the
Fund believed that writing the option would achieve the desired hedge.
The writer of an option may have no control when the underlying securities
must be sold, in the case of a call option, or bought, in the case of a put
option, since with regard to certain options, the writer may be assigned an
exercise notice at any time prior to the termination of the obligation. Whether
or not an option expires unexercised, the writer retains the amount of the
premium. This amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security during the
option period. If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option is exercised, the
writer must fulfill the obligation to buy the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.
The writer of an option that wishes to terminate its obligation may effect
a "closing purchase transaction". This is accomplished by buying an option of
the same series as the option previously written. The effect of the purchase is
that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. Likewise, an investor who is the holder
of an option may liquidate its position by effecting a "closing sale
transaction". This is accomplished by selling an option of the same series as
the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected. Effecting a closing
transaction in the case of a written call option would permit the Fund to write
another call option on the underlying security with either a different exercise
price or expiration date or both or, in the case of a written put option, would
permit the Fund to write another put option to the extent that the exercise
price thereof is secured by deposited high-grade liquid assets.
The Fund would realize a profit from a closing transaction if the price of
the purchase transaction were less than the premium received from writing the
option or the price received from a sale transaction were more than the premium
paid to buy the option; the Fund would realize a loss from a closing transaction
if the price of the purchase transaction were more than the premium received
from writing the option or the price received from a sale transaction were less
than the premium paid to buy the option. Because increases in the market of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option
likely would be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
<PAGE>
Risk Factors of Investing in Futures and Options.
The successful use of the investment practices described above with respect
to futures contracts, options on futures contracts and options on draws upon
skills and experience which are different from those needed to select the other
instruments in which the Fund invests. Should interest rates or the prices of
securities or financial indexes move in an unexpected manner, the Fund may not
achieve the desired benefits of futures and options or may realize losses and
thus be in a worse position than if such strategies had not been used. Unlike
many exchange-traded futures contracts and options on futures contracts, there
are no daily price fluctuation limits with respect to negotiated or
over-the-counter instruments, and adverse market movements could therefore
continue to an unlimited extent over a period of time. In addition, the
correlation between movements in the price of the securities hedged or used for
cover will not be perfect and could produce unanticipated losses.
The Fund's ability to dispose of its positions in the foregoing instruments
will depend on the availability of liquid markets in the instruments. Markets in
a number of the instruments are relatively new and still developing, and it is
impossible to predict the amount of trading interest that may exist in those
instruments in the future. Particular risks exist with respect to the use of
each of the foregoing instruments and could result in such adverse consequences
to the Fund as the possible loss of the entire premium paid for an option bought
by the Fund, the inability of the Fund, as the writer of a covered call option,
to benefit from the appreciation of the underlying securities above the exercise
price of the option and the possible need to defer closing out positions in
certain instruments to avoid adverse tax consequences. As a result, no assurance
can be given that the Fund will be able to use those instruments effectively for
the purposes set forth above.
In connection with its transactions in futures and option writing, the Fund
would be required to place assets in a segregated account with the Fund's
custodian bank to ensure that the Fund would be able to meet its obligations
under these instruments. Assets held in a segregated account generally may not
be disposed of for so long as the Fund maintains the positions giving rise to
the segregation requirement. Segregation of a large percentage of the Fund's
assets could impede implementation of the Fund's investment policies or the
Fund's ability to meet redemption requests or other current obligations.
<PAGE>
INVESCO GROWTH FUND, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Growth Fund, Inc. (the
"Fund"), to be held at the Hyatt Regency Tech Center, 7800 E. Tufts Avenue,
Denver, Colorado 80237, on October 28, 1997 at 10:00 a.m. (Mountain Time) and at
any adjournment thereof, upon the matters set forth below, all in accordance
with and as more fully described in the Notice of Special Meeting and Proxy
Statement, dated ___________, 1997, receipt of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSAL 1.
INVIGF
INVESCO GROWTH FUND, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
Vote On Proposal For Against Abstain
1. Proposal to approve a change to the ---- ---- ----
investment policies of the Fund, to
permit the Fund to invest in futures,
options, puts and calls.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
- ---------------------- ---------------------------- ----------------
Signature Signature (Joint Owners) Date
