<PAGE> 1
SCHEDULE 14a INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
INVESCO Growth Funds, Inc.
(formerly, INVESCO Growth Fund, Inc.)
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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.
[ ] 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
INVESCO LOGO
INVESCO BLUE CHIP GROWTH FUND
(A SERIES OF INVESCO GROWTH FUNDS, INC.)
MARCH 23, 1999
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Dear Shareholder:
The attached proxy materials seek your approval to convert INVESCO Blue
Chip Growth Fund (the "Fund"), the only series of INVESCO Growth Funds, Inc.
(formerly, INVESCO Growth Fund, Inc.) ("Growth Fund"), to a separate series of
INVESCO Stock Funds, Inc. ("Stock Funds"), to make certain changes in the
fundamental policies of the Fund, to amend the Articles of Restatement of the
Articles of Incorporation of Growth Funds (the "Articles"), to elect directors
of Growth Funds, and to ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Fund.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL
PROPOSALS. The conversion of the Fund to a series of Stock Funds, which is part
of a proposed conversion of other INVESCO funds that invest in equity securities
of domestic issuers to series of Stock Funds, will streamline and render more
efficient the administration of the Fund. The changes to the Fund's fundamental
policies and Articles have been approved by the board of directors in order to
simplify and modernize the Fund's fundamental investment restrictions and
Articles to make them more uniform with those of the other INVESCO funds. The
attached proxy materials provide more information about the proposed conversion,
as well as the proposed changes in fundamental policies and the other matters
you are being asked to vote upon.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit the Fund to avoid costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, sign and
date your proxy card and mail it in the enclosed return envelope promptly. As an
alternative to using the paper proxy card to vote, you may vote by telephone, by
facsimile, through the Internet, or in person.
Very truly yours,
/s/ Mark H. Williamson
Mark H. Williamson
President
INVESCO Growth Funds, Inc.
9956
<PAGE> 3
INVESCO BLUE CHIP GROWTH FUND
(A SERIES OF INVESCO GROWTH FUNDS, INC.)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
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To The Shareholders:
A special meeting of the shareholders of INVESCO Blue Chip Growth Fund
("Fund"), the only series of INVESCO Growth Funds, Inc. (formerly, INVESCO
Growth Fund, Inc.) ("Growth Funds"), will be held on May 20, 1999, at 10:00
a.m., Mountain Time, at the offices of INVESCO Funds Group, Inc., 7800 East
Union Avenue, Denver, Colorado, for the following purposes:
1) To approve an Agreement and Plan of Conversion and Termination
providing for the conversion of the Fund from the only series of Growth
Funds to a separate series of INVESCO Stock Funds, Inc.;
2) To approve certain changes to the fundamental investment
restrictions of the Fund;
3) To amend the Articles of Restatement of the Articles of
Incorporation of Growth Funds;
4) To elect directors of Growth Funds;
5) To ratify the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Fund; and
6) To transact such other business as may properly come before the
meeting or any adjournment thereof.
You are entitled to vote at the meeting and any adjournment thereof if you
owned shares of the Fund at the close of business on March 12, 1999. IF YOU
ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
By order of the Board of Directors,
/s/ Glen A. Payne
Glen A. Payne
Secretary
March 23, 1999
Denver, Colorado
<PAGE> 4
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, sign
and date the card, and return it in the envelope provided. IF YOU SIGN, DATE AND
RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED
"FOR" THE PROPOSALS DESCRIBED ABOVE. In order to avoid the additional expense of
further solicitation, we ask your cooperation in mailing your proxy card(s)
promptly. As an alternative to using the paper proxy card(s) to vote, you may
vote by mail, by telephone, through the Internet, by facsimile machine or in
person. To vote by telephone, please call 1-800-690-6903. Shares that are
registered in your name, as well as shares held in "street name" through a
broker, may be voted via the Internet or by telephone. To vote in this manner,
you will need the 12-digit "control" number(s) that appear on your proxy
card(s). To vote via the Internet, please access http://www.proxyvote.com on the
World Wide Web. In addition, shares that are registered in your name may be
voted by faxing your completed proxy card(s) to 1-800-733-1885. If we do not
receive your completed proxy card(s) after several weeks, you may be contacted
by our proxy solicitor, Shareholder Communications Corporation. Our proxy
solicitor will remind you to vote your shares or will record your vote over the
phone if you choose to vote in that manner.
Unless proxy card(s) submitted by corporations and partnerships are signed
by the appropriate persons as indicated in the voting instructions on the proxy
card, they will not be voted.
<PAGE> 5
INVESCO BLUE CHIP GROWTH FUND
(A SERIES OF INVESCO GROWTH FUNDS, INC.)
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7800 EAST UNION AVENUE
DENVER, COLORADO 80237
(TOLL FREE) 1-800-646-8372
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
VOTING INFORMATION
This Proxy Statement is being furnished to shareholders of INVESCO Blue
Chip Growth Fund ("Fund"), the only series of INVESCO Growth Funds, Inc.
(formerly, INVESCO Growth Fund, Inc.) ("Growth Funds"), in connection with the
solicitation of proxies from the Fund shareholders by the board of directors of
Growth Funds (the "Board") for use at a special meeting of shareholders to be
held on May 20, 1999 (the "Meeting"), and at any adjournment of the Meeting.
This Proxy Statement is first being mailed to shareholders on or about March 23,
1999.
A majority of the Fund's shares outstanding on March 12, 1999 ("Record
Date"), represented in person or by proxy, shall constitute a quorum and must be
present for the transaction of business at the Meeting. If a quorum is not
present at the Meeting or a quorum is present but sufficient votes to approve
one or more of the proposals set forth in this Proxy Statement are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies that
they are entitled to vote FOR any proposal in favor of such an adjournment and
will vote those proxies required to be voted AGAINST a proposal against such
adjournment. A shareholder vote may be taken on one or more of the proposals in
this Proxy Statement prior to any such adjournment if sufficient votes have been
received with respect to such proposal and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present or outstanding. Abstentions and broker non-votes will not be counted,
however, as votes cast for purposes of determining whether sufficient votes have
been received to approve a proposal.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on that proxy card, if it is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card, but give no
voting instructions, your shares will be
<PAGE> 6
voted in favor of approval of each of the proposals and the duly appointed
proxies may, in their discretion, vote upon such other matters as may come
before the Meeting. The proxy card may be revoked by giving another proxy or by
letter or telegram revoking the initial proxy. To be effective, revocation must
be received by Growth Funds prior to the Meeting and must indicate your name and
account number. If you attend the Meeting in person you may, if you wish, vote
by ballot at the Meeting, thereby canceling any proxy previously given.
In order to reduce costs, the notices to a shareholder 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 a
shareholder's votes will be counted for each such account.
As of the Record Date, the Fund had 184,068,404.778 shares of common stock
outstanding. The solicitation of proxies, the cost of which will be borne half
by INVESCO Funds Group, Inc. ("INVESCO"), the investment adviser and transfer
agent of the Fund, and half by the Fund, will be made primarily by mail but also
may be made by telephone or oral communications by representatives of INVESCO
and INVESCO Distributors, Inc. ("IDI"), the distributor of the INVESCO group of
investment companies ("INVESCO Funds"), none of whom will receive any
compensation for these activities from the Fund, or by Shareholder
Communications Corporation, professional proxy solicitors, which will be paid
fees and expenses of up to approximately $76,000 for soliciting services. If
votes are recorded by telephone, Shareholder Communications Corporation will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that a shareholder's instructions have been
properly recorded. You may also vote by mail, by facsimile or through a secure
Internet site. Proxies voted by telephone, facsimile or Internet may be revoked
at any time before they are voted at the meeting in the same manner that proxies
voted by mail may be revoked.
COPIES OF THE FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS MAY REQUEST COPIES OF THESE REPORTS, WITHOUT CHARGE, BY WRITING TO
INVESCO DISTRIBUTORS, INC., P.O. BOX 173706, DENVER, COLORADO 80217-3706, OR BY
CALLING TOLL-FREE 1-800-646-8372.
Except as set forth in Appendix A, INVESCO does not know of any person who
owns beneficially 5% or more of the shares of the Fund. Directors and officers
of Growth Funds own in the aggregate less than 1% of the shares of the Fund.
REQUIRED VOTE. Approval of Proposal 1 requires the affirmative vote of a
majority of the outstanding voting securities of the Fund. Approval of Proposal
2 requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, as defined in the Investment Company Act of 1940, as
amended ("1940 Act"). This means that Proposal 2 must be approved by the lesser
of (i) 67% of the Fund's shares present at a Meeting of shareholders if the
owners of more than 50% of the Fund's shares then outstanding are present in
person or by proxy or (ii) more than 50% of the Fund's outstanding shares.
Approval of Proposal 3 requires the affirmative vote of a majority of the
outstanding voting securities of the Fund. A plurality of the votes cast at the
Meeting is sufficient to approve Proposal 4. Approval of Proposal 5 requires the
affirmative vote of a majority of the votes present at the Meeting, provided a
quorum is present. Each outstanding full share of the Fund is entitled to one
vote, and each outstanding fractional share thereof is entitled to a
proportionate fractional share of one vote. If any Proposal is not approved by
the requisite vote of shareholders,
2
<PAGE> 7
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies.
PROPOSAL 1: TO APPROVE AN AGREEMENT AND PLAN OF
CONVERSION AND TERMINATION ("CONVERSION PLAN")
PROVIDING FOR THE CONVERSION OF THE FUND FROM
A SEPARATE SERIES OF GROWTH FUNDS TO A
SEPARATE SERIES OF INVESCO STOCK
FUNDS, INC., ("STOCK FUNDS")
The Fund is presently organized as the only series of Growth Funds. The
Board, including a majority of its directors who are not "interested persons,"
as that term is defined in the 1940 Act ("Independent Directors") of either
Growth Funds or INVESCO, has approved the Conversion Plan in the form attached
to this Proxy Statement as Appendix B. The Conversion Plan provides for the
conversion of the Fund from the only series of Growth Funds, a Maryland
corporation, to a newly established separate series (the "New Series") of Stock
Funds, also a Maryland corporation (the "Conversion"). THE PROPOSED CHANGE WILL
HAVE NO MATERIAL EFFECT ON THE SHAREHOLDERS, OFFICERS, OPERATIONS OR MANAGEMENT
OF THE FUND.
The New Series, which has not yet commenced business operations and was
established for the purpose of effecting the Conversion, will carry on the
business of the Fund following the Conversion and will have investment
objectives, policies, and limitations identical to those of the Fund. The
investment objectives, policies and limitations of the Fund will not change
except as approved by shareholders and as described in Proposals 2 and 3. Since
both Growth Funds and Stock Funds are Maryland corporations organized under
substantially similar Articles of Incorporation, the rights of the security
holders of the Fund under state law and its governing documents are expected to
remain unchanged after the Conversion. Shareholder voting rights under both
Growth Funds and Stock Funds are currently based on the number of shares owned.
The same individuals serve as directors of both Growth Funds and Stock Funds.
INVESCO, the Fund's investment adviser, will be responsible for providing
the New Series with various administrative services and supervising the New
Series' daily business affairs, subject to the supervision of the board of
directors of Stock Funds (the "Stock Funds Board"), under a management contract
substantially identical to the contract in effect between INVESCO and Growth
Funds immediately prior to the Closing Date (defined below). The Fund's
distribution agent, IDI, will distribute shares of the New Series under a
General Distribution Agreement substantially identical to the contract in effect
between IDI and Growth Funds immediately prior to the Closing Date.
REASONS FOR THE PROPOSED CONVERSION
The Board unanimously recommends conversion of the Fund to a separate
series of Stock Funds (i.e., to the New Series). This proposed conversion is
part of an overall plan that involves the conversion of other INVESCO Funds as
well. The goal of the conversions is to combine similar types of funds into a
single corporate entity. Ultimately, if all of the conversions are approved, the
INVESCO Funds will be organized into a group of core companies, with one core
company for each major fund type -- for example, all INVESCO Funds that invest
internationally will be series of one core company, all INVESCO Funds that
3
<PAGE> 8
invest solely in debt securities will be series of one core company, and all
INVESCO Funds that invest in equity securities of domestic issuers will be
series of one core company. Moving the Fund from Growth Funds to Stock Funds
will also consolidate and streamline the production and mailing of certain
financial reports and legal documents, reducing expense to the Fund. THE
PROPOSED CHANGE WILL HAVE NO MATERIAL EFFECT ON THE SHAREHOLDERS, OFFICERS,
OPERATIONS OR MANAGEMENT OF THE FUND.
The proposal to present the Conversion Plan to shareholders was approved by
the Board, including all of its Independent Directors, on August 5, 1998. The
Board recommends that the Fund shareholders vote FOR the approval of the
Conversion Plan. Such a vote encompasses approval of both (i) the conversion of
the Fund to a separate series of Stock Funds; and (ii) a temporary waiver of
certain investment limitations of the Fund to permit the Conversion (see
"Temporary Waiver of Investment Restrictions" below). If shareholders of the
Fund do not approve the Conversion Plan set forth herein, the Fund will continue
to operate as the only series of Growth Funds.
SUMMARY OF THE CONVERSION PLAN
The following discussion summarizes the important terms of the Conversion
Plan. This summary is qualified in its entirety by reference to the Conversion
Plan itself, which is attached as Appendix B to this Proxy Statement.
If this Proposal is approved by shareholders, then on June 10, 1999 or such
later date to which Growth Funds and Stock Funds agree (the "Closing Date"), the
Fund will transfer all of its assets to the New Series in exchange solely for
shares of the New Series ("New Series Shares") equal to the number of the Fund
shares outstanding on the Closing Date ("Fund Shares") and the assumption by the
New Series of all of the liabilities of the Fund. Immediately thereafter, the
Fund will constructively distribute to each the Fund shareholder one New Series
Share for each Fund Share held by the shareholder on the Closing Date in
liquidation of the Fund Shares. As soon as is practicable after this
distribution of New Series Shares, the Fund will be terminated as a series of
Growth Funds, which will be wound up and liquidated. UPON COMPLETION OF THE
CONVERSION, EACH FUND SHAREHOLDER WILL OWN FULL AND FRACTIONAL NEW SERIES SHARES
EQUAL IN NUMBER, DENOMINATION AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND
SHARES.
The Conversion Plan obligates Stock Funds, on behalf of the New Series, to
enter into (i) a Management Contract with INVESCO with respect to the New Series
(the "New Management Contract") and (ii) a Distribution and Service Plan under
Rule 12b-1 promulgated under the 1940 Act (the "New 12b-1 Plan") with respect to
the New Series (collectively, the "New Agreements"). Approval of the Conversion
Plan will authorize Growth Funds (which will be issued a single share of the New
Series on a temporary basis) to approve the New Agreements as the sole initial
shareholder of the New Series. Each New Agreement will be virtually identical to
the corresponding contract or plan in effect with respect to Growth Funds
immediately prior to the Closing Date.
The New Agreements will take effect on the Closing Date, and each will
continue in effect until May 15, 2000. Thereafter, the New Management Contract
will continue in effect only if its continuance is approved at least annually
(i) by the vote of a majority of Independent Directors cast in person at a
meeting called for the purpose of voting on such approval and (ii) by the vote
of a majority of directors or a majority of the outstanding voting shares of the
New Series. The New 12b-1 Plan will continue in effect only if approved annually
by a vote Stock Funds' Independent Directors, cast in person at a meeting called
for that purpose.
4
<PAGE> 9
The New Management Contract will be terminable without penalty on sixty days'
written notice either by Stock Funds or INVESCO and will terminate automatically
in the event of its assignment. The New 12b-1 Plan will be terminable at any
time without penalty by a vote of a majority of Stock Funds' Independent
Directors or a majority of the outstanding voting shares of the New Series.
The Stock Funds Board will hold office without limit in time except that
(i) any director may resign and (ii) any director may be removed at any special
meeting of the Stock Funds shareholders by the affirmative vote of a majority of
the votes cast at a meeting, provided a quorum is present. In case a vacancy
shall for any reason exist, a majority of the remaining directors, though less
than a quorum, will vote to fill such vacancy by appointing another director, so
long as, immediately after such appointment, at least two-thirds of the
directors then holding office have been elected by shareholders. If, at any
time, less than a majority of the directors holding office have been elected by
shareholders, the directors then in office will promptly call a shareholders'
meeting for the purpose of electing directors. Otherwise, there need normally be
no meetings of shareholders for the purpose of electing directors.
Assuming the Conversion Plan is approved, it is currently contemplated that
the Conversion will become effective on the Closing Date. However, the
Conversion may become effective at such other date as to which Growth Funds and
Stock Funds may agree in writing.
The obligations of Growth Funds and Stock Funds under the Conversion Plan
are subject to various conditions as stated therein. Notwithstanding the
approval of the Conversion Plan by Fund shareholders, it may be terminated or
amended at any time prior to the Conversion by action of the directors to
provide against unforeseen events, if (i) there is a material breach by the
other party of any representation, warranty, or agreement contained in the
Conversion Plan to be performed at or prior to the Closing Date or (ii) it
reasonably appears that the other party will not or cannot meet a condition of
the Conversion Plan. Either Growth Funds or Stock Funds may at any time waive
compliance with any of the covenants and conditions contained in, or may amend,
the Conversion Plan, provided that the waiver or amendment does not materially
adversely affect the interests of Fund shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS
Stock Funds' transfer agent will establish accounts for the New Series
shareholders containing the appropriate number of New Series Shares to be
received by each holder of Fund Shares under the Conversion Plan. Such accounts
will be identical in all material respects to the accounts currently maintained
by the Funds' transfer agent for the Fund's shareholders.
EXPENSES
The expenses of the Conversion, estimated at $91,300 in the aggregate, will
be borne half by INVESCO and half by the Fund and the New Series.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS
Certain fundamental investment restrictions of the Fund, which prohibit it
from acquiring more than a stated percentage of ownership of another company,
might be construed as restricting its ability to carry out the Conversion. By
approving the Conversion Plan, Fund shareholders will be agreeing to waive, only
for the
5
<PAGE> 10
purpose of the Conversion, those fundamental investment restrictions that could
prohibit or otherwise impede the transaction.
TAX CONSEQUENCES OF THE CONVERSION
Both Growth Funds and Stock Funds will receive an opinion from their
counsel, Kirkpatrick & Lockhart LLP, that the Conversion will constitute a
tax-free reorganization within the meaning of section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, neither the
Fund, the New Series nor the Fund's shareholders will recognize gain or loss for
federal income tax purposes upon (i) the transfer of the Fund's assets in
exchange solely for New Series Shares and the assumption by the New Series of
the Fund's liabilities or (ii) the distribution of the New Series Shares to the
Fund's shareholders in liquidation of their Fund Shares. The opinion will
further provide, among other things, that (1) a Fund shareholder's aggregate
basis for federal income tax purposes of the New Series Shares to be received by
the shareholder in the Conversion will be the same as the aggregate basis of his
or her Fund Shares to be constructively surrendered in exchange for those New
Series Shares and (2) a Fund shareholder's holding period for his or her New
Series Shares will include the shareholder's holding period for his or her Fund
Shares, provided that those were held as capital assets at the time of
Conversion.
CONCLUSION
The Board has concluded that the proposed Conversion Plan is in the best
interests of the Fund's shareholders. A vote in favor of the Conversion Plan
encompasses (i) approval of the conversion of the Fund to the New Series, (ii)
approval of the temporary waiver of certain investment limitations of the Fund
to permit the Conversion (see "Temporary Waiver of Investment Restrictions"
above) and (iii) authorization of Growth Funds, as the sole initial shareholder
of the New Series, to approve (a) a Management Contract with respect to the New
Series between Stock Funds and INVESCO and (b) a Distribution and Service Plan
under Rule 12b-1 with respect to the New Series. Each of these New Agreements is
virtually identical to the corresponding contract or plan in effect with the
Fund immediately prior to the Closing Date. If approved, the Conversion Plan
will take effect on the Closing Date. If the Conversion Plan is not approved,
the Fund will continue to operate as a series of Growth Funds.
REQUIRED VOTE. Approval of the Conversion Plan requires the affirmative
vote of a majority of the outstanding voting securities of the Fund.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 1
6
<PAGE> 11
PROPOSAL 2: TO APPROVE AMENDMENTS TO THE
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
As required by the 1940 Act, the Fund has adopted certain fundamental
investment restrictions ("fundamental restrictions"), which are set forth in the
Funds' Statement of Additional Information. Certain of these fundamental
restrictions are also set forth in the Fund's Articles of Restatement of the
Articles of Incorporation (the "Articles"). Fundamental restrictions may be
changed only with shareholder approval. Restrictions and policies that the Fund
has not specifically designated as fundamental are considered to be
"non-fundamental" and may be changed by the Board without shareholder approval.
As more fully set forth in Proposal 3, fundamental restrictions contained in the
Articles require a separate vote of Fund shareholders to remove them from the
Articles.
Some of the Fund's fundamental restrictions reflect past regulatory,
business or industry conditions, practices or requirements that are no longer in
effect. Also, as other INVESCO Funds have been created over the years, these
funds have adopted substantially similar fundamental restrictions that often
have been phrased in slightly different ways, resulting in minor but unintended
differences in effect or potentially giving rise to unintended differences in
interpretation. Accordingly, the Board has approved revisions to the Fund's
fundamental restrictions in order to simplify and modernize the Fund's
fundamental restrictions and make them more uniform with those of the other
INVESCO Funds.
The Board believes that eliminating the disparities among the INVESCO
Funds' fundamental restrictions will enhance management's ability to manage the
Funds' assets efficiently and effectively in changing regulatory and investment
environments and permit the Board to review and monitor investment policies more
easily. In addition, standardizing the fundamental restrictions of the INVESCO
Funds will assist the INVESCO Funds in making required regulatory filings in a
more efficient and cost-effective way. Although the proposed changes in
fundamental restrictions will allow the Fund greater investment flexibility to
respond to future investment opportunities, the Board does not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
the Fund.
The text and a summary description of each proposed change to the Fund's
fundamental restrictions are set forth below, together with a summary of the
text of the corresponding current fundamental restriction. The text below also
describes any non-fundamental restrictions that would be adopted by the Board in
conjunction with the revision of certain fundamental restrictions. Any
non-fundamental restriction may be modified or eliminated by the Board at any
future date without shareholder approval.
If Fund shareholders approve Proposals 2, those proposed changes in the
Fund's fundamental restrictions will be adopted by the Fund. If Fund
shareholders approve Proposal 3 below, those Proposed changes in the Fund's
fundamental restrictions will be adopted by the Fund. The Fund's Statement of
Additional Information will be revised to reflect any changes as soon as
practicable following the Meeting. IF THE FUND'S SHAREHOLDERS APPROVE PROPOSAL 2
BUT DO NOT APPROVE PROPOSAL 3, THE CORRESPONDING FUNDAMENTAL RESTRICTIONS SET
FORTH IN THE ARTICLES WILL CONTINUE TO GOVERN THE FUND'S INVESTMENT DECISIONS
WITH RESPECT TO THOSE FUNDAMENTAL RESTRICTIONS.
7
<PAGE> 12
A. ELIMINATION OF FUNDAMENTAL RESTRICTION ON ISSUING PREFERENCE SHARES AND
CREATING FUNDED DEBT AND ADOPTION OF FUNDAMENTAL RESTRICTION ON THE ISSUANCE
OF SENIOR SECURITIES
Blue Chip Growth Fund's current fundamental restriction on issuing
preference shares and creating funded debt is as follows:
The Fund may not issue preference shares or create any funded debt.
The Board recommends that shareholders vote to replace the fundamental
restriction set forth above with the following fundamental restriction on the
issuance of senior securities:
The Fund may not issue senior securities, except as permitted under
the Investment Company Act of 1940.
The Board believes that the replacement of the current fundamental
restriction on issuing preference shares and creating funded debt with the
proposed fundamental restriction, which does not specify the manner in which
senior securities may be issued and is no more limiting than is required under
the 1940 Act, would maximize the Fund's borrowing flexibility for future
contingencies and would conform to the fundamental restrictions of the other
INVESCO Funds on the issuance of senior securities.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON LOANS
Blue Chip Growth Fund's current fundamental restriction on loans is as
follows:
The Fund may not make loans to any person, except through the purchase
of debt securities in accordance with the Fund's investment policies,
or the lending of portfolio securities to broker-dealers or other
institutional investors, or the entering into repurchase agreements
with member banks of the Federal Reserve System, registered
broker-dealers and registered government securities dealers. The
aggregate value of all portfolio securities loaned may not exceed
33 1/3% of the Fund's total assets (taken at current value). No more
than 10% of the Fund's total assets may be invested in repurchase
agreements maturing in more than seven days.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not lend any security or make any loan if, as a result,
more than 33 1/3% of its total assets would be lent to other parties,
but this limitation does not apply to the purchase of debt securities
or to repurchase agreements.
The primary purpose of the proposal is to eliminate minor differences in
the wording of the INVESCO Funds' current restrictions on loans to achieve
greater uniformity. The proposed changes to this fundamental restriction are
relatively minor and would have no substantive effect on the Fund's lending
activities or other investments. The proposed changes would eliminate the
current restriction that prohibits the Fund from investing more than 10% of its
total assets in repurchase agreements maturing in more than seven days. The
Fund's investment in such repurchase agreements, however, will be subject to the
restriction on investment in illiquid securities, discussed below.
8
<PAGE> 13
C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES
Blue Chip Growth Fund's current fundamental restriction on investing in
commodities is as follows:
The Fund may not buy or sell commodities, commodity contracts or real
estate (however, the Fund may purchase securities of companies
investing in real estate). 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 foreign currency contracts.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not purchase or sell physical commodities; however, this
policy shall not prevent the Fund from purchasing and selling foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.
The proposed changes to this investment restriction are intended to conform
the restriction to those of the other INVESCO Funds and to ensure that the Fund
will have the maximum flexibility to enter into hedging or other transactions
utilizing financial contracts and derivative products when doing so is permitted
by operating policies established for the Fund by the Board. Due to the rapid
and continuing development of derivative products and the possibility of changes
in the definition of "commodities," particularly in the context of the
jurisdiction of the Commodities Futures Trading Commission, it is important for
the Fund's policy to be flexible enough to allow it to enter into hedging and
other transactions using these products when doing so is deemed appropriate by
INVESCO and is within the investment parameters established by the Board. To
maximize that flexibility, the Board recommends that the Fund's fundamental
restriction on commodities investments be clear in permitting the use of
derivative products, even if the current non-fundamental investment policies of
the Fund would not permit investment in one or more of the permitted
transactions. The proposed revision also separates the Fund's restriction on
commodity investments from its restriction on real estate related investments
(see below).
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
Blue Chip Growth Fund's current fundamental restriction on real estate
investments is combined with its restriction on investing in commodities (see
above). To conform the restriction on real estate investment with those of other
INVESCO Funds, the Board recommends that shareholders vote to replace this
restriction with the following fundamental restriction:
The Fund may not purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
In addition to stating separately the Fund's fundamental restriction, the
proposal would more completely describe the types of real estate-related
securities investments that are permissible for the Fund and would permit the
Fund to purchase or sell real estate acquired as a result of ownership of
securities or other instruments (e.g., through foreclosure on a mortgage in
which the Fund directly or indirectly holds an interest). The Board believes
that this clarification will make it easier for decisions to be made concerning
the
9
<PAGE> 14
Fund's investments in real estate-related securities without materially altering
the general restriction on direct investments in real estate or interests in
real estate. The proposed change would also give the Fund the ability to invest
in assets secured by real estate.
E. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMPANIES FOR THE
PURPOSE OF EXERCISING CONTROL OR MANAGEMENT
Blue Chip Growth Fund's current fundamental restriction regarding investing
in companies for the purpose of exercising control or management is as follows:
The Fund may not invest in any company for the purpose of exercising
control or management.
The Board recommends that shareholders vote to eliminate this restriction.
There is no legal requirement that a fund have an affirmative policy on
investment for the purpose of exercising control or management if it does not
intend to make investments for that purpose. The Fund has no intention of
investing in any company for the purpose of exercising control or management. By
eliminating this restriction, the Board may, however, be able to authorize such
a strategy in the future if it concludes that doing so would be in the best
interests of the Fund and its shareholders.
F. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN ILLIQUID SECURITIES
AND ADOPTION OF NON-FUNDAMENTAL RESTRICTION ON INVESTING IN ILLIQUID
SECURITIES
Blue Chip Growth Fund currently has the following fundamental restriction
on investing in illiquid securities:
The Fund may not buy other than readily marketable securities.
The Board recommends that shareholders vote to eliminate this restriction.
If the proposal is approved, the Board will adopt the following non-fundamental
restriction:
The Fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
The primary purpose of the proposal is to conform to the Federal securities
law requirements regarding investment in illiquid securities and to conform the
investment restrictions of the Fund to those of the other INVESCO Funds. The
Fund is currently prohibited from investing in illiquid securities. The Board
believes that the proposed elimination of the fundamental restriction and
subsequent adoption of the non-fundamental restriction will make the restriction
more accurately reflect market conditions and will maximize the Fund's
flexibility for future contingencies. The Board may delegate to INVESCO, the
Fund's investment adviser, the authority to determine whether a security is
liquid for the purposes of this investment limitation.
10
<PAGE> 15
G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
Blue Chip Growth Fund's current fundamental restriction on underwriting
securities is as follows:
The Fund may not engage in the underwriting of any securities.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not underwrite securities of other issuers, except
insofar as it may be deemed to be an underwriter under the Securities
Act of 1933, as amended, in connection with the disposition of the
Fund's portfolio securities.
The purpose of the proposal is to eliminate minor differences in the
wording of the INVESCO Funds' current restrictions on underwriting for greater
uniformity with the fundamental restrictions of the other INVESCO Funds, and to
eliminate unintended limitations.
H. ELIMINATION OF FUNDAMENTAL RESTRICTION ON OWNERSHIP OF SECURITIES ALSO OWNED
BY DIRECTORS AND OFFICERS OF THE FUND OR ITS INVESTMENT ADVISER
Blue Chip Growth Fund's current fundamental restriction concerning Fund
ownership of securities also owned by directors and officers of the Fund or its
investment adviser is as follows:
The Fund may not purchase securities of any company in which any
officer or director of the Fund or its investment adviser owns more
than 1/2 of 1% of the outstanding securities, or in which all of the
officers and directors of the Fund and its investment adviser, as a
group, own more than 5% of such securities.
The Board recommends that the shareholders vote to eliminate this
restriction. Funds are not legally required to have a fundamental restriction
limiting or prohibiting the purchase of securities of companies that are also
owned by affiliated parties of the fund. This restriction was derived from state
laws that are no longer applicable. The concerns that this restriction was
designed to address are sufficiently safeguarded against by provisions of the
1940 Act applicable to the Fund, as well as by the Fund's other investment
policies. Specifically, to the extent that this restriction seeks to limit
possible conflicts of interest arising out of transactions with affiliated
parties, the restriction is unnecessary and unduly burdensome because the Fund
is subject to the extensive affiliated transaction provisions of the 1940 Act.
Because this restriction provides no additional protections to shareholders and
may hinder the Board in pursuing investment strategies that may be advantageous
to the Fund, the Board recommends that this investment restriction be
eliminated.
11
<PAGE> 16
I. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INDUSTRY CONCENTRATION
Blue Chip Growth Fund's current fundamental restriction on industry
concentration is as follows:
The Fund may not invest more than 25% of the value of its total assets
in one particular industry.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities or municipal securities) if, as a
result, more than 25% of the Fund's total assets would be invested in
the securities of companies whose principal business activities are in
the same industry.
The primary purpose of the modification is to eliminate minor differences
in the wording of the INVESCO Funds' current restrictions on concentration for
greater uniformity and to avoid unintended limitations without materially
altering the restriction. The proposed changes to the Fund's fundamental
concentration policy exclude municipal securities and securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities from the
concentration limitation. There is no such exclusion from the current
concentration limitation. A failure to exclude all such securities from the
concentration policy could hinder the Fund's ability to purchase such securities
in conjunction with taking temporary defensive positions.
REQUIRED VOTE. Approval of Proposal 2 requires the affirmative vote of a
"majority of the outstanding voting securities" of the Fund, which for this
purpose means the affirmative vote of the lesser of (i) 67% or more of the
shares of the Fund present at the Meeting or represented by proxy if more than
50% of the outstanding shares of the Fund are so present or represented, or (ii)
more than 50% of the outstanding shares of the Fund. Shareholders who vote "for"
Proposal 2 will vote "for" each proposed change described above. THOSE
SHAREHOLDERS WHO WISH TO VOTE AGAINST ANY OF THE SPECIFIC PROPOSED CHANGES
DESCRIBED ABOVE MAY DO SO ON THE PROXY PROVIDED.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 2.
PROPOSAL 3: TO AMEND THE ARTICLES OF RESTATEMENT OF THE
ARTICLES OF INCORPORATION OF GROWTH FUND
The Fund's Articles set forth some of the Fund's fundamental restrictions.
In order to change these fundamental restrictions, the Fund's shareholders must
approve certain amendments (the "Amendments") to the Articles removing such
fundamental restrictions from the Articles. The Board has approved the
Amendments in order to carry out the proposed revisions to the Fund's
fundamental restrictions and to make the Articles uniform with those of other
INVESCO Funds in their exclusion of fundamental restrictions from such Articles.
Also, the Board believes that approval of the Amendments will save the expense
of amending the Articles in the future if the Board should deem that further
modifications to the Fund's fundamental restrictions are advisable. The Board
recommends that Fund shareholders vote for Proposal 3 in order to carry out the
proposed changes in the Fund's fundamental restrictions.
12
<PAGE> 17
The text of the fundamental restrictions contained in the Articles that the
Board is proposing to eliminate is set forth below.
A. ELIMINATION FROM THE ARTICLES OF FUNDAMENTAL RESTRICTION ON SHORT SALES AND
MARGIN PURCHASES AND ADOPTION OF NON-FUNDAMENTAL RESTRICTION ON SHORT SALES
AND MARGIN PURCHASES
Blue Chip Growth Fund's current fundamental restriction on short sales and
margin purchases as set forth in the Articles is as follows:
The [Fund] shall not purchase any securities on margin . . . nor shall
[the Fund] effect a short sale of any security.
This restriction is reflected in the Fund's Statement of Additional
Information as follows:
The Fund may not sell short or buy on margin, except for the Fund's
purchase or sale of options or futures, or writing, purchasing or
selling puts or calls options.
The Board recommends that shareholders vote to amend the Articles to remove
this fundamental restriction from the Articles and from the Statement of
Additional Information. If the proposal is approved by shareholders, the Board
will adopt the following non-fundamental restriction for Fund:
The Fund may not sell securities short (unless it owns or has the
right to obtain securities equivalent in kind and amount to the
securities sold short) or purchase securities on margin, except that
(i) this policy does not prevent the Fund from entering into short
positions in foreign currency, futures contracts, options, forward
contracts, swaps, caps, floors, collars and other financial
instruments, (ii) the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and (iii) the Fund may
make margin payments in connection with futures contracts, options,
forward contracts, swaps, caps, floors, collars and other financial
instruments.
The proposed changes clarify the wording of the restriction and expand the
exceptions to the restriction, which generally prohibits the Fund from selling
securities short or buying securities on margin. The proposed non-fundamental
restriction permits short sales against the box, when an investor sells
securities short while owning the same securities in the same amount or having
the right to obtain equivalent securities. It also permits the Fund to borrow a
security on a short-term basis and to enter into short positions and make margin
payments in a variety of financial instruments. The Board believes that
elimination of the fundamental restriction and adoption of the non-fundamental
restriction will provide the Fund with greater investment flexibility.
B. ELIMINATION FROM ARTICLES OF FUNDAMENTAL RESTRICTION ON BORROWING
Blue Chip Growth Fund's current fundamental restriction on borrowing as set
forth in the Articles is as follows:
The [Fund] . . . shall not borrow amounts in excess of five percent
(5%) of the value of its gross assets . . . and no borrowing shall be
undertaken except from banks as a temporary measure for extraordinary
or emergency purposes. In no event may any of the assets of the
[Fund] . . . be mortgaged, pledged or hypothecated.
13
<PAGE> 18
This restriction is reflected in the Fund's Statement of Additional
Information as follows:
The Fund may not borrow money in excess of 5% of the value of its
total assets and then only from banks, and when borrowing, it is a
temporary measure for emergency purposes.
The Board recommends that shareholders vote to amend the Articles to remove
this fundamental restriction from the Articles and to replace the fundamental
restriction in the Statement of Additional Information with the following
fundamental restriction:
The Fund may not borrow money, except that 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).
Currently, the Fund's fundamental restriction is significantly more
limiting than the restrictions imposed by the 1940 Act in that it limits the
purposes for which the Fund may borrow money and it limits all borrowings to 5%
of the Fund's assets. The proposal eliminates the fundamental nature of the
restrictions on the purposes for which the Fund may borrow money and increases
the Fund's borrowing authority from 5% to 33 1/3% of total assets. The Board
believes that this approach, making the Fund's fundamental restriction on
borrowing no more limiting than is required under the 1940 Act, will maximize
the Fund's flexibility for future contingencies.
If the proposal is approved, the Board will adopt a non-fundamental
restriction as follows:
The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency
purposes (not for leveraging or investing) or by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
will be treated as borrowings for purposes of fundamental limitation
on borrowings above).
The non-fundamental restriction reflects the Fund's current policy that
borrowing by the Fund may only be done for temporary or emergency purposes. In
addition to borrowing from banks, as permitted by the Fund's current policy, the
non-fundamental restriction permits the Fund to borrow from open-end funds
managed by INVESCO or an affiliate or successor thereof. The Fund would not be
able to do so, however, unless it obtains permission for such borrowings from
the Securities and Exchange Commission ("SEC"). The non-fundamental restriction
also clarifies that reverse repurchase agreements will be treated as borrowings.
The Board believes that this approach, making the Fund's fundamental restriction
on borrowing no more limiting than is required under the 1940 Act, while
incorporating more strict limits on borrowing in the Fund's non-fundamental
restriction, will maximize the Fund's flexibility for future contingencies.
C. ELIMINATION FROM ARTICLES OF FUNDAMENTAL RESTRICTION ON JOINT TRADING
ACTIVITIES
Blue Chip Growth Fund's Articles currently include the following
fundamental restriction on joint trading activities:
The [Fund] . . . shall not participate on a joint or joint and several
basis in any trading account in securities. . . .
14
<PAGE> 19
The Board recommends that shareholders vote to eliminate this fundamental
restriction. This restriction is derived from a 1940 Act requirement, which
makes it unlawful for a registered investment company to participate on a joint
or a joint and several basis in any trading account in securities, except in
connection with an underwriting in which such registered investment company is a
participant. The 1940 Act does not, however, require that this limitation be
stated as a fundamental restriction or included in a Fund's articles of
incorporation. Accordingly, the Board recommends that this restriction be
eliminated from the Fund's Articles.
D. ELIMINATION FROM ARTICLES OF FUNDAMENTAL RESTRICTION ON INVESTING IN ANOTHER
INVESTMENT COMPANY
Blue Chip Growth Fund's Articles have the following fundamental restriction
on investing in other investment companies:
The [Fund] . . . shall not purchase or acquire securities of any other
investment company as defined in Section 3 of the Investment Company
Act of 1940, except for a purchase or acquisition pursuant to a plan
of reorganization, merger or consolidation.
This fundamental restriction is reflected in the Fund's Statement of
Additional Information as follows:
The Fund may not invest in the securities of any other investment
company except for a purchase or acquisition in accordance with a plan
of reorganization, merger or consolidation.
The Board recommends that shareholders vote to replace this fundamental
restriction with the following fundamental restriction:
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 managed by INVESCO Funds Group,
Inc. or an affiliate or a successor thereof, with substantially the
same fundamental investment objective, policies and limitations as the
Fund.
The proposed revision to the Fund's current fundamental restriction would
ensure that the INVESCO Funds have uniform policies permitting each Fund to
adopt a "master/feeder" structure whereby one or more Funds invest all of their
assets in another Fund. The master/feeder structure has the potential, under
certain circumstances, to minimize administrative costs and maximize the
possibility of gaining a broader investor base. Currently, none of the Funds
intends to establish a master/feeder structure; however, the Board recommends
that the Fund shareholders adopt a restriction that would permit this structure
in the event that the Board determines to recommend the adoption of a
master/feeder structure by the Fund. The proposed revision would require that
any fund in which the Fund may invest under a master/feeder structure be advised
by INVESCO or an affiliate thereof.
If the proposed revision is approved, the Board will adopt a
non-fundamental restriction as follows:
The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.
15
<PAGE> 20
The primary purpose of this non-fundamental restriction is to conform to
the other INVESCO Funds and to the 1940 Act requirements for investing in other
investment companies. Currently, the Fund's fundamental restriction is much more
limiting than the restrictions imposed by the 1940 Act. Adoption of this non-
fundamental restriction will enable the Fund to purchase the securities of other
investment companies to the extent permitted under the 1940 Act or pursuant to
an exemption granted by the SEC. If a Fund did purchase the securities of
another investment company, shareholders might incur additional expenses because
the Fund would have to pay its ratable share of the expenses of the other
investment company.
E. ELIMINATION FROM ARTICLES OF FUNDAMENTAL RESTRICTIONS ON ISSUER
DIVERSIFICATION
Blue Chip Growth Fund's Articles have the following fundamental
restrictions on issuer diversification:
The [Fund] . . . may not purchase securities of any one issuer if
immediately after such purchase more than five percent (5%) of the
assets, taken at market value, would be invested in securities of such
issuer, but this limitation shall not apply to investments and
obligations of the United States or on obligations of any corporation
organized under general act of Congress if such corporation be an
instrumentality of the United States.
The [Fund] . . . shall not purchase securities of any issuer if
immediately after and as a result of such purchase the
[Fund] . . . would own more than ten percent (10%) of the outstanding
voting securities of such issuer.
These fundamental restrictions on issuer diversification are reflected in
the Fund's Statement of Additional Information as follows:
The Fund may not purchase securities if the purchase would cause the
Fund, at the time, to have more than 5% of the value of its total
assets invested in the securities of any one company or to own more
than 10% of the voting securities of any one company (except
obligations issued or guaranteed by the U.S. Government).
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not, with respect to 75% of the Fund's 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, or securities of 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 proposed fundamental restriction concerning diversification is the
limitation imposed by the 1940 Act for diversified investment companies. The
amended fundamental restriction would allow the Fund, with respect to 25% of its
total assets, to invest more than 5% of its assets in the securities of one or
more issuers and to hold more than 10% of the voting securities of an issuer.
The Fund will continue to be required to invest 75% of its total assets so that
no more than 5% of total assets are invested in any one issuer, and so that the
Fund will not own more than 10% of the voting securities of an issuer.
16
<PAGE> 21
The amended restriction would give the Fund greater investment flexibility
by permitting it to acquire larger positions in the securities of a particular
issuer, consistent with its investment objective and strategies. This increased
flexibility could provide opportunities to enhance the Fund's performance.
Investing a larger percentage of the Fund's assets in a single issuer's
securities, however, increases the Fund's exposure to credit and other risks
associated with that issuer's financial condition and operations, including the
risk of default on debt securities.
The amended fundamental restriction also would permit the Fund to invest
without limit in the securities of other investment companies. The Fund has no
current intention of doing so and the 1940 Act imposes restrictions on the
extent to which a fund may invest in the securities of other investment
companies. The revision would, however, give the Fund flexibility to invest in
other investment companies in the event legal and other regulatory requirements
change.
F. ELIMINATION FROM ARTICLES OF FUNDAMENTAL RESTRICTION ON LOANS TO AFFILIATES
Blue Chip Growth Fund's Articles have the following fundamental restriction
on loans to affiliated persons:
The [Fund] . . . shall not lend any of its funds or assets to any
officer or director of Company, any investment advisor or principal
underwriter, or any officer or director of any investment advisor or
principal underwriter.
The Board recommends the elimination of this fundamental restriction from
the Fund's Articles. The type of loans this provision addresses are prohibited
by the 1940 Act. The restriction is unnecessary because the Fund is subject to
the extensive affiliated transaction provisions of the 1940 Act. Because this
restriction does not provide any additional protection to shareholders, and in
keeping with the Board's intent to remove investment restrictions from the
Fund's Articles, the Board recommends that this restriction be eliminated.
REQUIRED VOTE. Approval of Proposal 3 requires the affirmative vote of a
majority of the outstanding voting securities of the Fund. THOSE SHAREHOLDERS
WHO WISH TO VOTE AGAINST ANY OF THE SPECIFIC AMENDMENTS DESCRIBED ABOVE MAY DO
SO ON THE PROXY PROVIDED. ONLY THOSE SPECIFIC AMENDMENTS APPROVED BY THE
REQUIRED VOTE WILL BECOME EFFECTIVE. If Proposal 3 is approved in whole or in
part, and Proposal 1 is approved, the Articles as amended will remain in effect
only until the Conversion described in Proposal 1 is consummated.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 3.
PROPOSAL 4: TO ELECT THE DIRECTORS OF GROWTH FUNDS
The Board has nominated the individuals identified below for election to
the Board at the Meeting. Growth Funds currently has ten directors. Vacancies on
the Board are generally filled by appointment by the remaining directors.
However, the 1940 Act provides that vacancies may not be filled by directors
unless thereafter at least two-thirds of the directors shall have been elected
by shareholders. To ensure continued compliance with this rule without incurring
the expense of calling additional shareholder meetings, shareholders are being
asked at this Meeting to elect the current ten directors to hold office until
the next meeting of shareholders. Consistent with the by-laws of Growth Funds,
and as permitted by Maryland law, Growth Funds
17
<PAGE> 22
does not anticipate holding annual shareholder meetings. Thus, the directors
will be elected for indefinite terms, subject to termination or resignation.
Each nominee has indicated a willingness to serve if elected. If any of the
nominees should not be available for election, the persons named as proxies (or
their substitutes) may vote for other persons in their discretion. Management
has no reason to believe that any nominee will be unavailable for election.
All of the Independent Directors now being proposed for election were
nominated and selected by Independent Directors. Eight of the ten current
directors are Independent Directors.
The persons named as attorneys-in-fact in the enclosed proxy have advised
Growth Funds that unless a proxy instructs them to withhold authority to vote
for all listed nominees or for any individual nominee, they will vote all
validly executed proxies for the election of the nominees named below.
The nominees for director, their ages, a description of their principal
occupations, the number of Fund shares owned by each, and their respective
memberships on Board committees are listed in the table below.
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHARLES W. BRADY, Chief Executive Officer and 1993 0 (3), (5), (6)
Chairman of the Board, Director of AMVESCAP PLC,
Age 63* London, England, and of various
subsidiaries thereof. Chairman
of the Board of INVESCO Global
Health Sciences Fund.
FRED A. DEERING, Trustee of INVESCO Global Health 1993 83.6650 (2), (3), (5)
Vice Chairman of the Sciences Fund. Formerly,
Board, Age 71 Chairman of the Executive
Committee and Chairman of the
Board of Security Life of Denver
Insurance Company, Denver,
Colorado; Director of ING
American Holding Company, and
First ING Life Insurance Company
of New York.
</TABLE>
18
<PAGE> 23
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARK H. WILLIAMSON, President, Chief Executive 1998 0 (3), (5)
President, Chief Officer, and Director, INVESCO
Executive Officer, and Distributors Inc.; President,
Director, Age 47* Chief Executive Officer, and
Director, INVESCO; President,
Chief Operating Officer, and
Trustee, INVESCO Global Health
Sciences Fund. Formerly,
Chairman of the Board and Chief
Executive Officer, NationsBanc
Advisors, Inc. (1995-1997);
Chairman of the Board,
NationsBanc Investments, Inc.
(1997-1998).
DR. VICTOR L. ANDREWS, Professor Emeritus, Chairman 1993 83.6650 (4), (6), (8)
Director, Age 68 Emeritus and Chairman of the CFO
Roundtable of the Department of
Finance of Georgia State
University, Atlanta, Georgia and
President, Andrews Financial
Associates, Inc. (consulting
firm). Formerly, member of the
faculties of the Harvard
Business School and the Sloan
School of Management of MIT. Dr.
Andrews is also a director of
the Sheffield Funds, Inc.
</TABLE>
19
<PAGE> 24
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BOB R. BAKER, President and Chief Executive 1993 83.6650 (3), (4), (5)
Director, Age 62 Officer of AMC Cancer Research
Center, Denver, Colorado, since
January 1989; until December
1988, Vice Chairman of the
Board, First Columbia Financial
Corporation, Englewood,
Colorado. Formerly, Chairman of
the Board and Chief Executive
Officer of First Columbia
Financial Corporation.
LAWRENCE H. BUDNER, Trust Consultant. Prior to June 1993 4536.3630 (2), (6), (7)
Director, Age 68 1987, Senior Vice President and
Senior Trust Officer, InterFirst
Bank, Dallas, Texas.
</TABLE>
20
<PAGE> 25
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. WENDY LEE GRAMM, Self-employed (since 1993), 1997 83.6650 (4), (8)
Director, Age 54 Professor of Economics and
Public Administration,
University of Texas at
Arlington. Formerly, Chairman,
Commodities Futures Trading
Commission (1988-1993);
Administrator for Information
and Regulatory Affairs, Office
of Management and Budget
(1985-1988); Executive Director,
Presidential Task Force on
Regulatory Relief; Director,
Federal Trade Commission's
Bureau of Economics. Director of
the Chicago Mercantile Exchange;
Enron Corporation; IBP, Inc.;
State Farm Insurance Company;
Independent Women's Forum;
International Republic
Institute; and the Republican
Women's Federal Forum.
</TABLE>
21
<PAGE> 26
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KENNETH T. KING, Presently retired. Formerly, 1993 83.6650 (2), (3), (5),
Director, Age 73 Chairman of the Board, The (6), (7)
Capitol Life Insurance Company,
Providence Washington Insurance
Company, and Director of
numerous U.S. subsidiaries
thereof. Formerly, Chairman of
the Board, The Providence
Capitol Companies in the United
Kingdom and Guernsey. Until
1987, Chairman of the Board,
Symbion Corporation.
JOHN W. MCINTYRE, Presently retired. Formerly, 1995 83.6650 (2), (3), (5),
Director, Age 68 Vice Chairman of the Board, The (7)
Citizens and Southern
Corporation; Chairman of the
Board and Chief Executive
Officer, The Citizens and
Southern Georgia Corporation;
Chairman of the Board and Chief
Executive Officer, The Citizens
and Southern National Bank.
Trustee of INVESCO Global Health
Sciences Fund and Gables
Residential Trust, Employee's
Retirement System of Georgia,
Emory University, and J.M. Tull
Charitable Foundation; Director
of Kaiser Foundation Health
Plans of Georgia, Inc.
</TABLE>
22
<PAGE> 27
<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST FIVE OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. LARRY SOLL, Presently retired. Formerly, 1998 83.6650 (4), (8)
Director, Age 56 Chairman of the Board
(1987-1994), Chief Executive
Officer (1982-1989 and
1993-1994) and President
(1982-1989) of Synergen Inc.
Director of Synergen Inc. since
incorporation in 1982. Director
of Isis Pharmaceuticals, Inc.
Trustee of INVESCO Global Health
Sciences Fund.
</TABLE>
- ---------------
* Because of his affiliation with INVESCO, with the Fund's investment adviser,
or with companies affiliated with INVESCO, this individual is deemed to be
an "interested person" of Growth Funds as that term is defined in the 1940
Act.
(1) As interpreted by the SEC, a security is beneficially owned by a person if
that person has or shares voting power or investment power with respect to
that security. The persons listed have partial or complete voting and
investment power with respect to their respective Fund shares.
(2) Member of the Audit Committee
(3) Member of the Executive Committee
(4) Member of the Management Liaison Committee
(5) Member of the Valuation Committee
(6) Member of the Compensation Committee
(7) Member of the Soft Dollar Brokerage Committee
(8) Member of the Derivatives Committee
The Board has audit, management liaison, soft dollar brokerage, and
derivatives committees consisting of Independent Directors and compensation,
executive and valuation committees consisting of both Independent Directors and
non-independent directors. The Board does not have a nominating committee. The
audit committee, consisting of four Independent Directors, meets quarterly with
the independent accountants and executive officers of Growth Funds. This
committee reviews the accounting principles being applied by Growth Funds in
financial reporting, the scope and adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters. All
of the recommendations of the audit committee are reported to the full Board.
During the intervals between the meetings of the Board, the executive committee
may exercise all powers and authority of the Board in the management of the
business of Growth Funds,
23
<PAGE> 28
except for certain powers which, under applicable law and/or the by-laws of
Growth Funds, may only be exercised by the full Board. All decisions are
subsequently submitted for ratification by the Board. The management liaison
committee meets quarterly with various management personnel of INVESCO in order
to facilitate better understanding of the management and operations of Growth
Funds, and to review legal and operational matters that have been assigned to
the committee by the Board, in furtherance of the Board's overall duty of
supervision. The soft dollar brokerage committee meets periodically to review
soft dollar brokerage transactions by Growth Funds, and to review policies and
procedures of Growth Funds' adviser with respect to soft dollar brokerage
transactions. The committee then reports on these matters to the Board. The
derivatives committee meets periodically to review derivatives investments made
by Growth Funds. The committee monitors derivatives usage by Growth Funds and
the procedures utilized by Growth Funds' adviser to ensure that the use of such
instruments follows the policies on such instruments adopted by the Board. The
committee then reports on these matters to the Board.
Each Independent Director receives an annual retainer of $56,000 for their
service to the INVESCO Funds. Additionally, each Independent Director receives
$3,000 for in-person attendance at each board meeting and $1,000 for in-person
attendance at each committee meeting. The chairmen of the audit and management
liaison committees receive an annual fee of $4,000 for serving in such capacity.
During the past fiscal year, the Board met five times, the audit committee
met four times, the compensation committee met once, the management liaison
committee met four times, the soft dollar brokerage committee met two times, and
the derivatives committee met twice. The executive committee did not meet.
During the last fiscal year of Growth Funds, each director nominee attended 75%
or more of the Board meetings and meetings of the committees of the Board on
which he or she served.
The Independent Directors nominate individuals to serve as Independent
Directors, without any specific nominating committee. The Board ordinarily will
not consider unsolicited director nominations recommended by Growth Funds'
shareholders. The Board, including its Independent Directors, unanimously
approved the nomination of the foregoing persons to serve as directors and
directed that the election of these nominees be submitted to Growth Funds'
shareholders.
The following table sets forth information relating to the compensation
paid to directors during the last fiscal year:
COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY GROWTH FUNDS TO DIRECTORS
<TABLE>
<CAPTION>
PENSION OR RETIREMENT TOTAL COMPENSATION FROM
AGGREGATE BENEFITS ACCRUED AS PART ESTIMATED ANNUAL GROWTH FUNDS AND THE
COMPENSATION FROM OF GROWTH FUNDS' BENEFITS UPON OTHER 14 INVESCO FUNDS
NAME OF PERSON, POSITION GROWTH FUNDS(1) EXPENSES(2) RETIREMENT(3) PAID TO DIRECTORS(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred A. Deering,
Vice Chairman of the
Board and Director $ 2,872 $ 1,808 $1,160 $103,700
Dr. Victor L. Andrews,
Director $ 2,743 $ 1,709 $1,343 $ 80,350
Bob R. Baker,
Director $ 2,906 $ 1,526 $1,800 $ 84,000
</TABLE>
24
<PAGE> 29
<TABLE>
<CAPTION>
PENSION OR RETIREMENT TOTAL COMPENSATION FROM
AGGREGATE BENEFITS ACCRUED AS PART ESTIMATED ANNUAL GROWTH FUNDS AND THE
COMPENSATION FROM OF GROWTH FUNDS' BENEFITS UPON OTHER 14 INVESCO FUNDS
NAME OF PERSON, POSITION GROWTH FUNDS(1) EXPENSES(2) RETIREMENT(3) PAID TO DIRECTORS(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lawrence H. Budner,
Director $ 2,654 $ 1,709 $1,343 $ 79,350
Daniel D. Chabris,(4)
Director $ 2,772 $ 1,847 $1,002 $ 70,000
Dr. Wendy L. Gramm,
Director $ 2,549 $ 0 $ 0 $ 79,000
Kenneth T. King,
Director $ 2,474 $ 1,878 $1,052 $ 77,050
John W. McIntyre,
Director $ 2,594 $ 0 $ 0 $ 98,500
Dr. Larry Soll,
Director $ 2,594 $ 0 $ 0 $ 96,000
------- ------- ------ --------
TOTAL $24,158 $10,477 $7,700 $767,950
======= ======= ====== ========
AS A PERCENTAGE OF NET
ASSETS 0.0032%(5) 0.0014%(5) 0.0035%(6)
</TABLE>
- ---------------
(1) The Vice Chairman of the board, the chairmen of the audit, management
liaison, derivatives, soft dollar brokerage and compensation committee, and
the Independent Director members of the committees of each Fund receive
compensation for serving in such capacities in addition to the compensation
paid to all Independent Directors.
(2) Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the
election of the directors.
(3) These figures represent the Fund's share of the estimated annual benefits
payable by the INVESCO Complex (excluding INVESCO Global Health Sciences
Fund which does not participate in this retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the INVESCO Funds. These estimated benefits assume
retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex, and for other reasons during the period in
which retirement benefits are accrued on behalf of the respective directors.
This results in lower estimated benefits for directors who are closer to
retirement and higher estimated benefits for directors who are farther from
retirement. With the exception of Drs. Soll and Gramm, each of these
directors has served as director of one or more of the INVESCO Funds for the
minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan. Although Mr. McIntyre became
eligible to participate in the Defined Benefit Deferred Compensation Plan as
of November 1, 1998, he will not be included in the calculation of
retirement benefits until November 1, 1999.
(4) Mr. Chabris retired as a director effective September 30, 1998.
(5) Total as a percentage of the Fund's net assets as of August 31, 1998.
(6) Total as a percentage of the net assets of the 15 INVESCO Funds in the
INVESCO Complex as of December 31, 1998.
Growth Funds pays its Independent Directors, Board vice chairman, committee
chairmen and committee members the fees described above. Growth Funds also
reimburses its Independent Directors for travel expenses incurred in attending
meetings. Charles W. Brady, Chairman of the Board, and Mark H. Williamson,
President, Chief Executive Officer, and Director, as "interested persons" of
Growth Funds and of other INVESCO Funds, receive compensation and are reimbursed
for travel expenses incurred in attending meetings as officers or employees of
INVESCO or its affiliated companies, but do not receive any director's fees or
other compensation from Growth Funds or other INVESCO Funds for their services
as directors.
25
<PAGE> 30
The overall direction and supervision of Growth Funds is the responsibility
of the Board, which has the primary duty of ensuring that Growth Funds' general
investment policies and programs are adhered to and that Growth Funds is
properly administered. The officers of Growth Funds, all of whom are officers
and employees of and paid by INVESCO, are responsible for the day-to-day
administration of Growth Funds. INVESCO, as investment adviser for Growth Funds,
has the primary responsibility for making investment decisions on behalf of
Growth Funds. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of Growth Funds hold comparable positions
with the following INVESCO Funds: INVESCO Bond Funds, Inc. (formerly, INVESCO
Income Funds, Inc.), INVESCO Combination Stock & Bond Funds, Inc. (formerly,
INVESCO Flexible Funds, Inc. and INVESCO Multiple Asset Funds, Inc.), INVESCO
Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money
Market Funds, Inc., INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic
Portfolios, Inc.), INVESCO Specialty Funds, Inc., INVESCO Stock Funds, Inc.
(formerly, INVESCO Equity Funds, Inc. and INVESCO Capital Appreciation Funds,
Inc.), INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment
Funds, Inc., All of the directors and officers of Growth Funds hold comparable
positions with INVESCO Value Trust, and INVESCO Treasurer's Series Trust.
The Boards of the Funds managed by INVESCO, have adopted a Defined Benefit
Deferred Compensation Plan (the "Plan") for the non-interested directors and
trustees serve as trustees of the Funds. Under the Plan, each director or
trustee who is not an interested person of Funds (as defined in Section 2(a)(19)
of the 1940 Act) and who has served for at least five years (a "Qualified
Director") is entitled to receive, upon termination of service as director
(normally at retirement age 72 or the retirement age of 73 or 74, if the
retirement date is extended by the Boards for one or two years, but less than
three years) continuation of payment for one year (the "First Year Retirement
Benefit") of the annual basic retainer and annualized board meeting fees payable
by the Funds to the Qualified Director at the time of his or her retirement (the
"Basic Benefit"). Commencing with any such director's second year of retirement,
and commencing with the first year of retirement of any director whose
retirement has been extended by the Board for three years, a Qualified Director
shall receive quarterly payments at an annual rate equal to 50% of the Basic
Benefit. These payments will continue for the remainder of the Qualified
Director's life or ten years, whichever is longer (the "Reduced Benefit
Payments"). If a Qualified Director dies or becomes disabled after age 72 and
before age 74 while still a director of Growth Funds, the First Year Retirement
Benefit and Reduced Benefit Payments will be made to him or her or to his or her
beneficiary or estate. If a Qualified Director becomes disabled or dies either
prior to age 72 or during his or her 74th year while still a director of Growth
Funds, the director will not be entitled to receive the First Year Retirement
Benefit; however, the Reduced Benefit Payments will be made to his or her
beneficiary or estate. The Plan is administered by a committee of three
directors who are also participants in the Plan and one director who is not a
Plan participant. The cost of the Plan will be allocated among the INVESCO
Funds, in a manner determined to be fair and equitable by the committee. The
Funds began making payments to Mr. Chabris as of October 1, 1998 under the Plan.
The Fund has no stock options or other pension or retirement plans for
management or other personnel and pays no salary or compensation to any of its
officers.
The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors
26
<PAGE> 31
of certain of the INVESCO Funds. The deferred amounts have been invested in
shares of certain INVESCO Funds. Each Independent Director may, therefore, be
deemed to have an indirect interest in shares of each such INVESCO Fund, in
addition to any Fund shares that they may own directly or beneficially.
REQUIRED VOTE. Election of each nominee as a director of Growth Funds
requires the affirmative vote of a plurality of the votes cast at the Meeting in
person or by proxy.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE NOMINEES IN PROPOSAL 4.
PROPOSAL 5: RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board, including all of its Independent Directors, has selected
PricewaterhouseCoopers LLP to continue to serve as independent accountants of
the Fund, subject to ratification by the Fund's shareholders.
PricewaterhouseCoopers LLP has no direct financial interest or material indirect
financial interest in the Fund. Representatives of PricewaterhouseCoopers LLP
are not expected to attend the Meeting, but have been given the opportunity to
make a statement if they so desire, and will be available should any matter
arise requiring their presence.
The independent accountants examine annual financial statements for the
Fund and provide other audit and tax-related services. In recommending the
selection of PricewaterhouseCoopers LLP, the Board reviewed the nature and scope
of the services to be provided (including non-audit services) and whether the
performance of such services would affect the accountants' independence.
REQUIRED VOTE. Approval of Proposal 5 requires the affirmative vote of a
majority of the votes present at the Meeting, provided that a quorum is present.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 5.
INFORMATION CONCERNING ADVISER,
DISTRIBUTOR AND AFFILIATED COMPANIES
INVESCO, a Delaware corporation, serves as the Fund's investment adviser, and
provides other services to the Fund and Growth Funds. IDI, a Delaware
corporation, serves as the Fund's distributor. IDI is a wholly owned subsidiary
of INVESCO. INVESCO is a wholly owned subsidiary of INVESCO North American
Holdings, Inc. ("INAH"). INAH is an indirect wholly owned subsidiary of AMVESCAP
PLC.(1)
- ---------------
(1) The intermediary companies between INAH and AMVESCAP PLC are as follows:
INVESCO, Inc., AMVESCAP Group Services, Inc., AVZ, Inc. and INVESCO North
American Group, Ltd., each of which is wholly owned by its immediate parent.
27
<PAGE> 32
INVESCO's and IDI's offices are located at 7800 East Union Avenue, Denver,
Colorado 80237. INAH's offices are located at 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309. The corporate headquarters of AMVESCAP PLC are located
at 11 Devonshire Square, London, EC2M 4YR, England. INVESCO currently serves as
investment adviser of 14 open-end investment companies having aggregate net
assets of $21.1 billion as of December 31, 1998.
The principal executive officers and directors of INVESCO and their
principal occupations are:
Mark H. Williamson, Chairman of the Board, President, Chief Executive
Officer and Director, also, President and Chief Executive Officer of IDI;
Charles P. Mayer, Senior Vice President and Director, also, Senior Vice
President and Director of IDI; Ronald L. Grooms, Director, Senior Vice-President
and Treasurer, also, Director, Senior Vice-President and Treasurer of IDI;
Richard W. Healey, Senior Vice President and Director, also, Senior Vice
President and Director of IDI; Timothy J. Miller, Senior Vice President and
Director, also, Senior Vice President and Director of IDI; and Glen A. Payne,
Senior Vice-President, Secretary and General Counsel, also Senior
Vice-President, Secretary and General Counsel of IDI.
The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237.
Pursuant to an Administrative Services Agreement between Growth Funds and
INVESCO, INVESCO provides administrative services to Growth Funds, including
sub-accounting and recordkeeping services and functions. For such services, the
Fund pays INVESCO a fee consisting of a base fee of $10,000 per year, plus an
additional incremental fee computed at the annual rate of 0.015% per year of the
average net assets of the Fund. INVESCO is also paid a fee by the Fund for
providing transfer agent services, including acting as registrar, transfer agent
and dividend disbursing agent for Growth Funds. During the fiscal year ended
August 31, 1998, Growth Funds paid INVESCO total compensation of $1,291,611 for
such services.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.
28
<PAGE> 33
SHAREHOLDER PROPOSALS
Growth Funds 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 Growth Funds, 7800 East Union Avenue, Denver, Colorado 80237.
Growth Funds has not received any shareholder proposals to be presented at this
Meeting.
By order of the Board of Directors
/s/ Glen A. Payne
----------------------------------
Glen A. Payne
Secretary
March 23, 1999
29
<PAGE> 34
APPENDIX A
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of the Fund's
outstanding equity securities as of March 12, 1999 by each beneficial owner of
5% or more of the Fund's outstanding equity securities.
BENEFICIAL OWNERS OF 5% OR MORE OF GROWTH FUND
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OWNERSHIP PERCENTAGE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co. Inc. 11,603,262.6780 6.33%
Special Custody Account for Record
The Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
</TABLE>
A-1
<PAGE> 35
APPENDIX B
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
This AGREEMENT AND PLAN OF CONVERSION AND TERMINATION ("Agreement") is made
as of March 21, 1999, between INVESCO Growth Funds, Inc., a Maryland corporation
(operating through a single series, INVESCO Blue Chip Growth Fund) ("Old Fund"),
and INVESCO Stock Funds, Inc., a Maryland corporation ("Stock Funds"), on behalf
of its INVESCO Blue Chip Growth Fund, a segregated portfolio of assets
("series") thereof ("New Fund"). (Old Fund and New Fund are sometimes referred
to herein individually as a "Fund" and collectively as the "Funds"; and Old Fund
and Stock Funds are sometimes referred to herein individually as an "Investment
Company.") All agreements, representations, actions, and obligations described
herein made or to be taken or undertaken by New Fund are made and shall be taken
or undertaken by Stock Funds on its behalf.
Old Fund intends to change its identity -- by converting to a series of
Stock Funds -- through a reorganization within the meaning of section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended ("Code"). Old Fund
desires to accomplish such conversion by transferring all its assets to New Fund
(which is being established solely for the purpose of acquiring such assets and
continuing Old Fund's business) in exchange solely for voting shares of common
stock in New Fund ("New Fund Shares") and New Fund's assumption of Old Fund's
liabilities, followed by the constructive distribution of the New Fund Shares
pro rata to the holders of shares of common stock in Old Fund ("Old Fund
Shares") in exchange therefor, all on the terms and conditions set forth in this
Agreement (which is intended to be, and is adopted as, a "plan of
reorganization" for federal income tax purposes). All such transactions are
referred to herein as the "Reorganization."
In consideration of the mutual promises herein contained, the parties agree
as follows:
1. PLAN OF CONVERSION AND TERMINATION
1.1. Old Fund agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to New Fund. New Fund
agrees in exchange therefor --
(a) to issue and deliver to Old Fund the number of full and fractional
(rounded to the third decimal place) New Fund Shares equal to the
number of full and fractional Old Fund Shares then outstanding, and
(b) to assume all of Old Fund's liabilities described in paragraph 1.3
("Liabilities").
Such transactions shall take place at the Closing (as defined in
paragraph 2.1).
1.2. The Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and
prepaid expenses shown as assets on Old Fund's books, and other
property owned by Old Fund at the Effective Time (as defined in
paragraph 2.1).
1.3. The Liabilities shall include all of Old Fund's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not arising in the
B-1
<PAGE> 36
ordinary course of business, whether or not determinable at the
Effective Time, and whether or not specifically referred to in this
Agreement.
1.4. At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Share issued pursuant to paragraph 4.4
shall be redeemed by New Fund for $1.00 and (b) Old Fund shall
distribute the New Fund Shares it received pursuant to paragraph 1.1
to its shareholders of record, determined as of the Effective Time
(each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Old Fund Shares. Such distribution
shall be accomplished by Stock Funds' transfer agent's opening
accounts on New Fund's share transfer books in the Shareholders' names
and transferring such New Fund Shares thereto. Each Shareholder's
account shall be credited with the respective pro rata number of full
and fractional (rounded to the third decimal place) New Fund Shares
due that Shareholder. All outstanding Old Fund Shares, including those
represented by certificates, shall simultaneously be canceled on Old
Fund's share transfer books. New Fund shall not issue certificates
representing the New Fund Shares in connection with the
Reorganization.
1.5. As soon as reasonably practicable after distribution of the New Fund
Shares pursuant to paragraph 1.4, but in all events within twelve
months after the Effective Time, Old Fund shall be terminated and any
further actions shall be taken in connection therewith as required by
applicable law.
1.6. Any reporting responsibility of Old Fund to a public authority is and
shall remain its responsibility up to and including the date on which
it is terminated.
1.7. Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder on Old Fund's books of the
Old Fund Shares constructively exchanged therefor shall be paid by the
person to whom such New Fund Shares are to be issued, as a condition
of such transfer.
2. CLOSING AND EFFECTIVE TIME
2.1. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Funds' principal office on
June 1, 1999, or at such other place and/or on such other date as to
which the parties may agree. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the close of
business on the date thereof or at such other time as to which the
parties may agree ("Effective Time").
2.2. Old Fund's fund accounting and pricing agent shall deliver at the
Closing a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot)
concerning the Assets, including all portfolio securities, transferred
by Old Fund to New Fund, as reflected on New Fund's books immediately
following the Closing, does or will conform to such information on Old
Fund's books immediately before the Closing. Old Fund's custodian
shall deliver at the Closing a certificate of an authorized officer
stating that (a) the Assets held by the custodian will be transferred
to New Fund at the Effective Time and (b) all necessary taxes in
conjunction with the delivery of the Assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made.
B-2
<PAGE> 37
2.3. Stock Funds' transfer agent shall deliver at the Closing a certificate
as to the opening on New Fund's share transfer books of accounts in
the Shareholders' names. Stock Funds shall issue and deliver a
confirmation to Old Fund evidencing the New Fund Shares to be credited
to Old Fund at the Effective Time or provide evidence satisfactory to
Old Fund that such New Fund Shares have been credited to Old Fund's
account on such books. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates,
receipts, or other documents as the other party or its counsel may
reasonably request.
2.4. Each Investment Company shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President
in form and substance satisfactory to the recipient and dated the
Effective Time, to the effect that the representations and warranties
it made in this Agreement are true and correct at the Effective Time
except as they may be affected by the transactions contemplated by
this Agreement.
3. REPRESENTATIONS AND WARRANTIES
3.1. Old Fund represents and warrants as follows:
3.1.1. Old Fund is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland; and a
copy of its Articles of Incorporation is on file with the
Secretary of State of Maryland;
3.1.2. Old Fund is duly registered as an open-end management investment
company under the Investment Company Act of 1940, as amended
("1940 Act"), and such registration will be in full force and
effect at the Effective Time;
3.1.3. At the Closing, Old Fund will have good and marketable title to
the Assets and full right, power, and authority to sell, assign,
transfer, and deliver the Assets free of any liens or other
encumbrances; and upon delivery and payment for the Assets, New
Fund will acquire good and marketable title thereto;
3.1.4. New Fund Shares are not being acquired for the purpose of making
any distribution thereof, other than in accordance with the
terms hereof;
3.1.5. Old Fund qualified for treatment as a regulated investment
company under Subchapter M of the Code ("RIC") for each past
taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current
taxable year; and it has no earnings and profits accumulated in
any taxable year in which the provisions of Subchapter M did not
apply to it. The Assets shall be invested at all times through
the Effective Time in a manner that ensures compliance with the
foregoing;
3.1.6. The Liabilities were incurred by Old Fund in the ordinary course
of its business and are associated with the Assets;
3.1.7. Old Fund is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar
case within the meaning of section 368(a)(3)(A) of the Code;
B-3
<PAGE> 38
3.1.8. Not more than 25% of the value of Old Fund's total assets
(excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not
more than 50% of the value of such assets is invested in the
stock and securities of five or fewer issuers;
3.1.9. As of the Effective Time, Old Fund will not have outstanding any
warrants, options, convertible securities, or any other type of
rights pursuant to which any person could acquire Old Fund
Shares;
3.1.10. At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by Old Fund's
shareholders; and
3.1.11. Old Fund will be terminated as soon as reasonably practicable
after the Effective Time, but in all events within twelve
months thereafter.
3.2. New Fund represents and warrants as follows:
3.2.1. Stock Funds is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Maryland;
and a copy of its Articles of Incorporation is on file with the
Secretary of State of Maryland;
3.2.2. Stock Funds is duly registered as an open-end management
investment company under the 1940 Act, and such registration
will be in full force and effect at the Effective Time;
3.2.3. Before the Effective Time, New Fund will be a duly established
and designated series of Stock Funds;
3.2.4. New Fund has not commenced operations and will not do so until
after the Closing;
3.2.5. Prior to the Effective Time, there will be no issued and
outstanding shares in New Fund or any other securities issued by
New Fund, except as provided in paragraph 4.4;
3.2.6. No consideration other than New Fund Shares (and New Fund's
assumption of the Liabilities) will be issued in exchange for
the Assets in the Reorganization;
3.2.7. The New Fund Shares to be issued and delivered to Old Fund
hereunder will, at the Effective Time, have been duly authorized
and, when issued and delivered as provided herein, will be duly
and validly issued and outstanding shares of New Fund, fully
paid and non-assessable;
3.2.8. New Fund will be a "fund" as defined in section 851(g)(2) of the
Code and will meet all the requirements to qualify for treatment
as a RIC for its taxable year in which the Reorganization
occurs;
3.2.9. New Fund has no plan or intention to issue additional New Fund
Shares following the Reorganization except for shares issued in
the ordinary course of its business as a series of an open-end
investment company; nor does New Fund have any plan or intention
to redeem or otherwise reacquire any New Fund Shares issued to
the Shareholders pursuant to the Reorganization, except to the
extent it is required by the 1940 Act to redeem any of its
shares presented for redemption at net asset value in the
ordinary course of that business;
B-4
<PAGE> 39
3.2.10. Following the Reorganization, New Fund (a) will continue Old
Fund's "historic business" (within the meaning of section
1.368-1(d)(2) of the Income Tax Regulations under the Code), (b)
use a significant portion of Old Fund's historic business assets
(within the meaning of section 1.368-1(d)(3) of those
regulations) in a business, (c) has no plan or intention to sell
or otherwise dispose of any of the Assets, except for
dispositions made in the ordinary course of that business and
dispositions necessary to maintain its status as a RIC, and (d)
expects to retain substantially all the Assets in the same form
as it receives them in the Reorganization, unless and until
subsequent investment circumstances suggest the desirability of
change or it becomes necessary to make dispositions thereof to
maintain such status;
3.2.11. There is no plan or intention for New Fund to be dissolved or
merged into another corporation or a business trust or any
"fund" thereof (within the meaning of section 851(g)(2) of the
Code) following the Reorganization; and
3.2.12. Immediately after the Reorganization, (a) not more than 25% of
the value of New Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the
stock and securities of any one issuer and (b) not more than 50%
of the value of such assets will be invested in the stock and
securities of five or fewer issuers.
3.3. Each Fund represents and warrants as follows:
3.3.1. The aggregate fair market value of the New Fund Shares, when
received by the Shareholders, will be approximately equal to the
aggregate fair market value of their Old Fund Shares
constructively surrendered in exchange therefor;
3.3.2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem, sell, or otherwise dispose of (i) any
portion of their Old Fund Shares before the Reorganization to any
person related (within the meaning of section 1.368-1(e)(3) of
the Income Tax Regulations under the Code) to either Fund or (ii)
any portion of the New Fund Shares to be received by them in the
Reorganization to any person related (as so defined) to New Fund,
(b) does not anticipate dispositions of those New Fund Shares at
the time of or soon after the Reorganization to exceed the usual
rate and frequency of dispositions of shares of Old Fund as an
open-end investment company, (c) expects that the percentage of
Shareholder interests, if any, that will be disposed of as a
result of or at the time of the Reorganization will be de
minimis, and (d) does not anticipate that there will be
extraordinary redemptions of New Fund Shares immediately
following the Reorganization;
3.3.3. The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
3.3.4. Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares and will own such
shares solely by reason of their ownership of Old Fund Shares
immediately before the Reorganization;
3.3.5. Immediately following consummation of the Reorganization, New
Fund will hold the same assets -- except for assets distributed
to shareholders in the course of its business as a RIC and assets
used to pay expenses incurred in connection with the
Reorganization -- and be
B-5
<PAGE> 40
subject to the same liabilities that Old Fund held or was subject
to immediately prior to the Reorganization, plus any liabilities
for expenses of the parties incurred in connection with the
Reorganization. Such excepted assets, together with the amount of
all redemptions and distributions (other than regular, normal
dividends) made by Old Fund immediately preceding the
Reorganization, will, in the aggregate, constitute less than 1%
of its net assets;
3.3.6. There is no intercompany indebtedness between the Funds that was
issued or acquired, or will be settled, at a discount; and
3.3.7. Neither Fund will be reimbursed for any expenses incurred by it
or on its behalf in connection with the Reorganization unless
those expenses are solely and directly related to the
Reorganization (determined in accordance with the guidelines set
forth in Rev. Rul. 73-54, 1973-1 C.B. 187) ("Reorganization
Expenses").
4. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to (a) performance by
the other Fund of all its obligations to be performed hereunder at or before the
Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made on
and as of the Effective Time, and (c) the further conditions that, at or before
the Effective Time:
4.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by each Investment Company's board of
directors and shall have been approved by Old Fund's shareholders in
accordance with applicable law;
4.2. All necessary filings shall have been made with the Securities and
Exchange Commission ("SEC") and state securities authorities, and no
order or directive shall have been received that any other or further
action is required to permit the parties to carry out the transactions
contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state
securities authorities) deemed necessary by either Investment Company
to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain same would not involve a risk of a material adverse effect on
the assets or properties of either Fund, provided that either
Investment Company may for itself waive any of such conditions;
4.3. Each Investment Company shall have received an opinion of Kirkpatrick
& Lockhart LLP, addressed to and in form and substance satisfactory to
it, as to the federal income tax consequences mentioned below ("Tax
Opinion"). In rendering the Tax Opinion, such counsel may rely as to
factual matters, exclusively and without independent verification, on
the representations made in this Agreement (or in separate letters
addressed to such counsel) and the certificates delivered pursuant to
paragraph 2.4. The Tax Opinion shall be substantially to the effect
that, based on the facts and
B-6
<PAGE> 41
assumptions stated therein and conditioned on consummation of the
Reorganization in accordance with this Agreement, for federal income
tax purposes:
4.3.1. New Fund's acquisition of the Assets in exchange solely for New
Fund Shares and New Fund's assumption of the Liabilities,
followed by Old Fund's distribution of those shares pro rata to
the Shareholders constructively in exchange for the Shareholders'
Old Fund Shares, will constitute a reorganization within the
meaning of section 368(a)(1)(F) of the Code, and each Fund will
be "a party to a reorganization" within the meaning of section
368(b) of the Code;
4.3.2. Old Fund will recognize no gain or loss on the transfer to New
Fund of the Assets in exchange solely for New Fund Shares and New
Fund's assumption of the Liabilities or on the subsequent
distribution of those shares to the Shareholders in constructive
exchange for their Old Fund Shares;
4.3.3. New Fund will recognize no gain or loss on its receipt of the
Assets in exchange solely for New Fund Shares and its assumption
of the Liabilities;
4.3.4. New Fund's basis for the Assets will be the same as the basis
thereof in Old Fund's hands immediately before the
Reorganization, and New Fund's holding period for the Assets will
include Old Fund's holding period therefor;
4.3.5. A Shareholder will recognize no gain or loss on the constructive
exchange of all its Old Fund Shares solely for New Fund Shares
pursuant to the Reorganization;
4.3.6. A Shareholder's aggregate basis for the New Fund Shares to be
received by it in the Reorganization will be the same as the
aggregate basis for its Old Fund Shares to be constructively
surrendered in exchange for those New Fund Shares, and its
holding period for those New Fund Shares will include its holding
period for those Old Fund Shares, provided they are held as
capital assets by the Shareholder at the Effective Time; and
4.3.7. For purposes of section 381 of the Code, New Fund will be treated
as if there had been no Reorganization. Accordingly, the
Reorganization will not result in the termination of Old Fund's
taxable year, Old Fund's tax attributes enumerated in section
381(c) of the Code will be taken into account by New Fund as if
there had been no Reorganization, and the part of Old Fund's
taxable year before the Reorganization will be included in New
Fund's taxable year after the Reorganization;
4.4. Prior to the Closing, Stock Funds' directors shall have authorized the
issuance of, and New Fund shall have issued, one New Fund Share to Old
Fund in consideration of the payment of $1.00 to vote on the matters
referred to in paragraph 4.5; and
4.5. Stock Funds (on behalf of and with respect to New Fund) shall have
entered into a management contract, a distribution and service plan
pursuant to Rule 12b-1 under the 1940 Act, and such other agreements
as are necessary for New Fund's operation as a series of an open-end
investment company. Each such contract, plan, and agreement shall have
been approved by Stock Funds' directors and, to the extent required by
law, by such of those directors who are not "interested
B-7
<PAGE> 42
persons" thereof (as defined in the 1940 Act) and by Old Fund as the
sole shareholder of New Fund.
At any time before the Closing, either Investment Company may waive any of
the foregoing conditions (except that set forth in paragraph 4.1) if, in the
judgment of its board of directors, such waiver will not have a material adverse
effect on its Fund's shareholders' interests.
5. BROKERAGE FEES AND EXPENSES
5.1 Each Investment Company represents and warrants to the other that there
are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
5.2 Except as otherwise provided herein, 50% of the total Reorganization
Expenses will be borne by INVESCO Funds Group, Inc. and the remaining
50% will be borne one-half by each Fund.
6. ENTIRE AGREEMENT; NO SURVIVAL
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
7. TERMINATION
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Old Fund's shareholders:
7.1. By either Fund (a) in the event of the other Fund's material breach of
any representation, warranty, or covenant contained herein to be
performed at or prior to the Effective Time, (b) if a condition to its
obligations has not been met and it reasonably appears that such
condition will not or cannot be met, or (c) if the Closing has not
occurred on or before August 31, 1999; or
7.2. By the parties' mutual agreement.
In the event of termination under paragraphs 7.1(c) or 7.2, there shall be
no liability for damages on the part of either Fund, or the directors or
officers of either Investment Company, to the other Fund.
8. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Old Fund's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
Shareholders' interests.
9. MISCELLANEOUS
9.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Maryland; provided that, in the case
of any conflict between such laws and the federal securities laws, the
latter shall govern.
B-8
<PAGE> 43
9.2. Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other
than the parties and their respective successors and assigns any
rights or remedies under or by reason of this Agreement.
9.3. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been executed by each
Investment Company and delivered to the other party hereto. The
headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.
<TABLE>
<S> <C>
ATTEST: INVESCO GROWTH FUNDS, INC.
By:
- ----------------------------------------------------- ----------------------------------------------
Secretary President
ATTEST: INVESCO STOCK FUNDS, INC.,
on behalf of its series,
INVESCO Blue Chip Growth Fund
By:
- ----------------------------------------------------- ----------------------------------------------
Secretary President
</TABLE>
B-9
<PAGE> 44
[Name and Address]
INVESCO BLUE CHIP GROWTH FUND
INVESCO GROWTH FUNDS, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO Growth Funds, Inc. ( the "Company") and relates to the proposals with
respect to the Company and to INVESCO Blue Chip Growth Fund, a series of the
Company ("Fund"). The undersigned hereby appoints as proxies Fred A. Deering and
Mark H. Williamson, and each of them (with power of substitution), to vote all
shares of common stock of the undersigned in the Fund at the Special Meeting of
Shareholders to be held at 10:00 a.m., Mountain Standard Time, on May 20, 1999,
at the offices of the Company, 7800 East Union Avenue, Denver, Colorado 80237,
and any adjournment thereof ("Meeting"), with all the power the undersigned
would have if personally present.
The shares represented by this proxy will be voted as instructed.
Unless indicated to the contrary, this proxy shall be deemed to grant authority
to vote "FOR" all proposals relating to the Company and the Fund with
discretionary power to vote upon such other business as may properly come before
the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-800-733-1885.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[X] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE> 45
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO BLUE CHIP GROWTH FUND
INVESCO GROWTH FUNDS, INC.
VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
4. Election of the Company's Board of Directors: [ ] [ ] [ ] To withhold authority
(1) Charles W. Brady; (2) Fred A. Deering; (3) to vote, mark "For All
Mark H. Williamson; (4) Dr. Victor L. Andrews; Except" and write the
(5) Bob R. Baker; (6) Lawrence H. Budner; nominee's number on the
(7) Dr. Wendy Lee Gramm; (8) Kenneth T. King; line below.
(9) John W. McIntyre; and (10) Dr. Larry Soll;
------------------------
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of an Agreement and Plan of Conversion and Termination [ ] [ ] [ ]
providing for the Conversion of the Fund from the only series of the
Company to a separate series of INVESCO Stock Funds, Inc.;
2. Approval of changes to the fundamental investment restrictions; [ ] [ ] [ ]
[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN "X"
IN THE BOX AT LEFT and indicate the letter(s) (as set forth in the proxy
statement) of the investment restriction or restrictions you do not want to
change on the line on the reverse side. IF YOU CHOOSE TO VOTE DIFFERENTLY
ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN YOUR PROXY CARD. IF YOU CHOOSE
TO VOTE THE SAME ON ALL RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND
INTERNET VOTING ARE AVAILABLE.
3. To amend the Articles of Restatement of the Articles of Incorporation; [ ] [ ] [ ]
[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN "X" IN
THE BOX AT LEFT and indicate the letter(s) (as set forth in the proxy
statement) of the investment restriction or restrictions you do not want to
change on the line on the reverse side. IF YOU CHOOSE TO VOTE DIFFERENTLY
ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN YOUR PROXY CARD. IF YOU CHOOSE
TO VOTE THE SAME ON ALL RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND
INTERNET VOTING ARE AVAILABLE.
5. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's [ ] [ ] [ ]
Independent Public Accountants.
</TABLE>
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-800-733-1885.
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 Date
- ------------------------------------------------- -----------------------------
Signature (Joint Owners) Date
<PAGE> 46
[Back]
To vote against the proposed changes to one or more of the
specific fundamental investment restrictions, indicate the
letter(s) (as set forth in the proxy statement) of the
investment restriction or restrictions you do not want to
change on the line at the right. IF YOU CHOOSE TO VOTE
DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN
YOUR PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND INTERNET
VOTING ARE AVAILABLE.
2.______________________________
To vote against the proposed changes to one or more of the
specific fundamental investment restrictions, indicate the
letter(s) (as set forth in the proxy statement) of the
investment restriction or restrictions you do not want to
change on the line at the right. IF YOU CHOOSE TO VOTE
DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN
YOUR PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND INTERNET
VOTING ARE AVAILABLE.
3.___________________________
