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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:
[ ] 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 240.14a-11(c) or 240.14a-12
INVESCO Bond Funds, 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:_________________________________________________
2) Form, Schedule or Registration Statement No.:___________________________
3) Filing Party:___________________________________________________________
4) Date Filed:_____________________________________________________________
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(R) INVESCO Select Income Fund
INVESCO High Yield Fund
INVESCO U.S. Government Securities Fund
(each a series of INVESCO Bond Funds, Inc.)
March 23, 1999
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Dear Shareholder:
The attached proxy materials seek your approval to make certain changes to
the fundamental investment restrictions of each of INVESCO Select Income Fund,
INVESCO High Yield Fund and INVESCO U.S. Government Securities Fund (each a
"Fund" or, collectively, the "Funds") each a series of INVESCO Bond Funds,
Inc. ("Bond Funds"), to elect directors of Bond Funds, and to ratify the
appointment of PricewaterhouseCoopers LLP as independent accountants of each
Fund.
Your board of directors unanimously recommends a vote FOR all proposals. The
changes to the fundamental investment restrictions of the Funds have been
approved by the board of directors in order to simplify and modernize the
Funds' fundamental investment restrictions and make them more uniform with
those of the other INVESCO Funds. The attached proxy materials provide more
information about the proposed changes in fundamental investment restrictions
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 Bond Funds to avoid costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, date
and sign 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 Bond Funds, Inc.
9950
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INVESCO SELECT INCOME FUND
INVESCO HIGH YIELD FUND
INVESCO U.S. GOVERNMENT SECURITIES FUND
(each a series of INVESCO Bonds Funds, Inc.)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
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To The Shareholders:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of INVESCO
Select Income Fund, INVESCO High Yield Fund and INVESCO U.S. Government
Securities Fund (each a "Fund" or, collectively, the "Funds"), each a series
of INVESCO Bond Funds, Inc. (formerly INVESCO Income Funds, Inc.) ("Bond
Funds"), will be held on May 20, 1999, at 10:00 a.m., Mountain Time, at the
office of INVESCO Funds Group, Inc., 7800 East Union Avenue, Denver, Colorado,
for the following purposes:
1. To approve certain changes to the fundamental investment restrictions of
the Funds;
2. To elect directors of Bond Funds;
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of each Fund; and
4. 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 a 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
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Glen A. Payne
Secretary
March 23, 1999
Denver, Colorado
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card,
date and sign the card, and return it in the envelope provided. IF YOU
DATE, SIGN, 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 in your proxy card promptly. As an alternative to
using the paper proxy card to vote, you may vote 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 that are 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 that appears on your proxy card. 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 to 1-800-733-1885. If we do not receive your
completed proxy card 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 cards 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.
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INVESCO BOND FUNDS, INC.
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INVESCO Select Income Fund
INVESCO High Yield Fund
INVESCO U.S. Government Securities Fund
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 Select
Income Fund ("Select Income Fund"), INVESCO High Yield Fund ("High Yield
Fund") and INVESCO U.S. Government Securities Fund ("U.S. Government
Securities Fund") (each a "Fund" or, collectively, the "Funds"), each a series
of INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.) ("Bond
Funds"), in connection with the solicitation of proxies from shareholders of
the Funds by the board of directors of Bond Funds ("Board") for use at a
special meeting of shareholders to be held on May 20, 1999 ("Meeting"), and at
any adjournment of the Meeting. This Proxy Statement will first be mailed to
shareholders on or about March 23, 1999.
For each Fund, one-third of the Fund's shares outstanding on March 12, 1999
(the "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 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.
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The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on the proxy card, if it is
received properly executed by you or by your duly appointed agent or attorney-
in-fact. If you date, sign and return the proxy card, but give no voting
instructions, your shares will be 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 Bond 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, notices to a shareholder having more than one
account in a 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, each Fund had the following shares of common stock
outstanding: Select Income Fund 83,843,179.236; High Yield Fund
127,010,710.941; U.S. Government Securities Fund 8,823,744.226. 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
Funds, and half by each 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"), who will not receive any compensation
for these activities from the Funds, or by Shareholder Communications
Corporation, professional proxy solicitors, which will be paid fees and
expenses of up to approximately $126,000 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 Bond Funds' 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 any Fund. Directors and officers
of Bond Funds own in the aggregate less than 1% of the shares of each Fund.
Vote Required. Approval of Proposal 1 with respect to a Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, as defined in the Investment Company Act of 1940, as amended ("1940
Act"). This means that for a Fund, Proposal 1 must be approved by the lesser
of (1) 67% of that Fund's shares present at a meeting of shareholders if the
owners of more than 50% of that Fund's shares then outstanding are present in
person or by proxy or (2) more than 50% of that Fund's outstanding shares. A
plurality of the votes cast at the Meeting and at a concurrent meeting of the
other series of Bond Funds, taken in the aggregate, is sufficient to approve
Proposal 2. Approval of Proposal 3 requires the affirmative vote of a majority
of the votes present at the Meeting, provided a quorum is present. Each
outstanding full share of each 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 of a Fund or the Funds, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies.
2
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PROPOSAL 1: TO APPROVE AMENDMENTS TO THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF
THE FUNDS
As required by the 1940 Act, each Fund has adopted certain fundamental
investment restrictions ("fundamental restrictions"), which are set forth in
the Funds' Statement of Additional Information. These fundamental restrictions
may be changed only with shareholder approval. Restrictions and policies that
a Fund has not specifically designated as fundamental are considered to be
"non-fundamental" and may be changed by the Board without shareholder
approval.
Some of the Funds' 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 Funds' fundamental restrictions in order to simplify, modernize and
make the Funds' fundamental restrictions 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 directors to review and monitor investment
policies more easily. In addition, standardizing the fundamental investment
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 each 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 each Fund.
The text and a summary description of each proposed change to each Fund's
fundamental restrictions are set forth below, together with the text of each
current corresponding 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 further shareholder approval.
If approved by the Funds' shareholders at the Meeting, the proposed changes to
the Funds' fundamental restrictions will be adopted by each Fund. The Funds'
Statement of Additional Information will be revised to reflect those changes
as soon as practicable following the Meeting.
a. Elimination of fundamental restriction on short sales and margin purchases
and adoption of non-fundamental restriction on short sales and margin
purchases
Each Fund's current fundamental restriction on selling short and buying on
margin is as follows:
The Fund may not sell short or buy on margin.
The Board recommends that shareholders vote to eliminate this fundamental
restriction. If the proposal is approved by shareholders, the Board will adopt
the following non-fundamental restriction for each 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
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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 a Fund from selling
securities short or buying securities on margin. Margin purchases involve the
purchase of securities with money borrowed from a broker. "Margin" is the cash
or eligible securities that the borrower places with a broker as collateral
against the loan. In a short sale, an investor sells a borrowed security and
has a corresponding obligation to the lender to return the identical security.
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 a 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
Funds with greater investment flexibility.
b. Modification of fundamental restriction on borrowing and adoption of non-
fundamental restriction on borrowing
The current fundamental restriction on borrowing for each of Select Income
Fund and High Yield Fund is as follows:
The Fund may not mortgage, pledge or hypothecate portfolio securities or
borrow money, except from banks for temporary or emergency purposes
(but not for investment) and then in an amount not exceeding 10% of the
value of its total net assets. A Fund will not purchase additional
securities while any borrowings on behalf of such Fund exist.
U.S. Government Securities Fund's current fundamental restriction on
borrowing is as follows:
The Fund may not mortgage, pledge or hypothecate portfolio securities or
borrow money, except from banks for temporary or emergency purposes
(but not for investment) and then in an amount not exceeding 10% of the
value of its total net assets. A Fund will not purchase additional
securities while any borrowings on behalf of such Fund exist; provided,
however, that this restriction shall not be deemed to affect the U.S.
Government Securities Fund's entering into futures contracts in
accordance with that Fund's investment policies.
The Board recommends that shareholders vote to replace the applicable
restriction set forth above 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).
The primary purpose of the proposal is to standardize each Fund's
fundamental borrowing limitation to conform to other INVESCO Funds and to the
1940 Act requirements for borrowing. Currently, each Fund's fundamental
restriction is significantly more limiting than the restrictions imposed by
the 1940 Act. The proposal eliminates the fundamental nature of the
restrictions on the purposes for which a Fund may borrow money and increases
from 10% to 33 1/3% the amount those Funds may borrow as a percentage of their
total assets. The proposed revision also eliminates the prohibition on
mortgaging, pledging or hypothecating Fund securities.
If the proposal is approved, the Board will adopt a non-fundamental
restriction as follows:
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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 ( )).
The non-fundamental restriction reflects each Fund's current policy that
borrowing by a Fund may only be done for temporary or emergency purposes. In
addition to borrowing from banks, as permitted in each Fund's current
restriction, the non-fundamental restriction permits each Fund to borrow from
open-end funds managed by INVESCO or an affiliate or successor thereof. A Fund
would not be able to do so, however, unless it obtains permission for such
borrowings from the Securities and Exchange Commission (the "SEC"). The non-
fundamental restriction also clarifies that reverse repurchase agreements will
be treated as borrowings. The Board believes that this approach, making each
Fund's fundamental restriction on borrowing no more limiting than is required
under the 1940 Act, while incorporating more strict limits on borrowing in
each Fund's non-fundamental restriction, will maximize each Fund's flexibility
for future contingencies.
c. Modification of fundamental restriction and adoption of non-fundamental
restriction on investing in another investment company
Each Fund's current fundamental restriction regarding investment in another
investment company is 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 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 successor thereof, with substantially the same
fundamental investment objective, policies and limitations as the Fund.
The proposed revision to each Fund's current fundamental restriction will
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 administration costs and maximize the
possibility of gaining a broader investor base. Currently, none of the INVESCO
Funds intend to establish a master/feeder structure; however, the Board
recommends that each Fund's shareholders adopt a policy that will permit this
structure in the event that the Board determines to recommend the adoption of
a master/feeder structure by a Fund. The proposed revision would require that
any fund in which a Fund may invest under a master/feeder structure be advised
by INVESCO or an affiliate.
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.
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, each Fund's fundamental restriction
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is much more limiting than the restrictions imposed by the 1940 Act. Adoption
of this non-fundamental restriction will enable each Fund to purchase the
securities of other investment companies to the extent permitted under the
1940 Act or 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.
d. Modification of fundamental restriction on issuer diversification
Each Fund's current fundamental restriction on issuer diversification is as
follows:
The Fund may not purchase securities if the purchase would cause the
Fund to have at the time more than 5% of the value of its total assets
invested in securities of any one issuer or to own more than 10% of the
outstanding voting securities of any one issuer (except obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities*). For this purpose, all indebtedness of an issuer
shall be deemed a single class of security.
*If an entity, other than the U.S. government, its agencies or
instrumentalities, guarantees a security, such guarantee is considered
a separate security which must be valued and included in the five
percent limitation, subject to those exceptions allowed by Rule 5b-2
under the 1940 Act.
The Board recommends that this restriction be replaced 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 each 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.
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. INVESCO may use the
increased flexibility and will only invest more than 5% of the Fund's total
assets in an issuer's securities when it believes the securities' potential
return justifies the risks associated with the higher level of investment.
The amended fundamental restriction would also 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.
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e. Modification of fundamental restriction on loans
Each 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 investment policies of the
Funds, 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 net assets (taken at current value). No more
than 10% of a Fund's total net assets may be invested in repurchase
agreements maturing in more than seven days.
The Board recommends that shareholders of each Fund 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 the restriction
regarding repurchase agreements and to conform to 1940 Act requirements
regarding the lending of securities. The Funds' ability to invest in
repurchase agreements maturing in more than seven days will be restricted in
accordance with the non-fundamental restriction on investment in illiquid
securities, discussed in 2.i., below. The Board believes that the adoption of
the proposed fundamental restriction is no more limiting than is required
under the 1940 Act. In addition, the Board believes the proposal will provide
greater flexibility, maximize each Fund's lending capabilities and conform to
the fundamental restrictions of other INVESCO Funds on the lending of Fund
securities.
f. Modification of fundamental restriction on investing in commodities
The current fundamental restriction on investing in commodities for each of
Select Income Fund and High Yield Fund is as follows:
The Fund may not buy or sell commodities, commodity contracts or real
estate (however, securities of companies investing in real estate may
be purchased).
U.S. Government Securities Fund's current fundamental restriction on
investing in commodities is as follows:
The Fund may not, other than the U.S. Government Securities Fund
entering into futures contracts in accordance with the Fund's
investment policies, buy or sell commodities, commodity contracts or
real estate (however, securities of companies investing in real estate
may be purchased).
The Board recommends that shareholders vote to replace the applicable
restriction set forth above with the following fundamental restriction:
The Fund will 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.
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The proposed changes are intended to conform the restriction to those of the
other INVESCO Funds and ensure that each 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 Funds 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 each 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 each 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 a Fund would not permit investment in one or more of the permitted
transactions. The proposed change also separates the Funds' restriction on
commodity investments from their restrictions on real estate related
investments (see below).
g. Modification of fundamental restriction on real estate investments
Each Fund's current fundamental restriction on real estate investments is
combined with the Fund's current fundamental restriction on investing in
commodities (see above).
The Board recommends that the shareholders vote to replace the restriction
set forth above 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 conforming each Fund's fundamental restriction to that of the
other INVESCO Funds, the proposed amendment more completely describes the
types of real estate-related securities investments that are permissible for
the Funds and permits the Funds 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 a Fund directly or indirectly holds an
interest). The Board believes that this clarification will make it easier for
decisions to be made concerning each Funds' investments in real estate-related
securities without materially altering the general restriction on direct
investments in real estate or interests in real estate.
h. Elimination of fundamental restriction regarding investments for the
purpose of exercising control or management
Each 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 of each Fund 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 Funds have 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 a Fund and its shareholders.
8
<PAGE>
i. Elimination of fundamental restrictions on investments in securities that
are not "readily marketable," elimination of fundamental restriction on
entering into repurchase agreements, and adoption of non-fundamental
restriction on investing in illiquid securities
The current fundamental restriction on investment in restricted securities
of each of Select Income Fund and U.S. Government Securities Fund is as
follows:
The Fund may not buy other than readily marketable securities.
In addition, the current fundamental restriction of each of Select Income
Fund and U.S. Government Securities Fund regarding repurchase agreements is as
follows:
The Fund may not enter into repurchase agreements maturing in more than
seven days if, as a result, such repurchase agreements, together with
securities for which there are no readily available market quotations,
would constitute more than 10% of that Fund's total net assets.
The Board recommends that shareholders of Select Income Fund and U.S.
Government Securities Fund vote to eliminate these restrictions. 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 Select Income Fund and U.S. Government
Securities Fund to those of the other INVESCO Funds. Currently, the
fundamental restriction of Select Income Fund and U.S. Government Securities
Fund limits investment in securities that are not "readily marketable,"
including illiquid securities. The proposed non-fundamental restriction would
permit those Funds to invest in illiquid securities, but would restrict
investment in such securities to 15% of each Fund's net assets as permitted
under the 1940 Act. The proposal also eliminates the specific limitation
regarding entering into repurchase agreements maturing in more than seven days
because such agreements are routinely treated as illiquid securities by the
SEC. The Board believes that the proposed elimination of the fundamental
restrictions and subsequent adoption of the non-fundamental restriction will
make the restriction more accurately reflect market conditions and will
maximize the flexibility of Select Income Fund and U.S. Government Securities
Fund for future contingencies. The Board may delegate to INVESCO, the Funds'
investment adviser, the authority to determine whether a security is liquid
for the purposes of this investment restriction.
j. Modification of fundamental restriction on underwriting
Each Fund's current fundamental restriction on underwriting 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:
9
<PAGE>
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 primary purpose of the proposal is to eliminate minor differences in the
wording of the Funds' current fundamental restriction on underwriting for
greater uniformity with the fundamental restrictions of other INVESCO Funds
and to avoid unintended limitations.
k. Elimination of fundamental restriction on Fund ownership of securities also
owned by directors and officers of each Fund or its investment adviser
Each Fund's current fundamental restriction concerning Fund ownership of
securities also owned by directors and officers of each 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 of its investment adviser beneficially owns
more than 1/2 of 1% of the outstanding securities or in which all of
the officers or directors of the Fund and its investment adviser, as a
group, own more than 5% of such securities.
The Board recommends the elimination of this fundamental 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 Funds, as well as by each Fund's other investment policies.
Specifically, to the extent 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 Funds are subject
to the extensive affiliated transaction provisions of the 1940 Act. Because
this restriction does not provide any additional protections to shareholders
and may hinder the Board in pursuing investment strategies that may be
advantageous to a Fund, the Board recommends that this restriction be
eliminated.
l. Elimination of fundamental restriction on purchasing equity securities and
securities convertible into equity securities
The current fundamental restriction on purchasing equity securities of each
of Select Income Fund and U.S. Government Securities Fund is as follows:
The Fund may not purchase equity securities. This shall not be deemed to
prohibit the acquisition of equity securities resulting from the
ownership of debt securities, as, for example, the conversion of
convertible bonds or an exchange in connection with a corporate
reorganization.
The current fundamental restriction on purchasing equity securities of High
Yield Fund is as follows:
The Fund may not purchase equity securities; provided, however, that the
High Yield Fund may purchase convertible and non-convertible preferred
stock. This shall not be deemed to prohibit the acquisition of equity
securities resulting from the ownership of debt securities, as, for
example, the conversion of convertible bonds or an exchange in
connection with a corporate reorganization.
The Board recommends the elimination of these fundamental restrictions. This
is an outdated restriction that fulfills no legal or regulatory requirements.
It is not necessary for the Funds to state affirmatively the type of
10
<PAGE>
investments they do not intend to make. In addition, elimination of this
restriction would aid in standardizing the fundamental restrictions of the
INVESCO Funds, as few of the INVESCO Funds currently have such a restriction.
It is not expected that elimination of this restriction will have any impact
on how the Funds are managed or the securities in which they invest.
m. Elimination of fundamental restriction on investing in securities of newly-
formed issuers
The current fundamental restriction of Select Income Fund and U.S.
Government Securities Fund on investing in the securities of newly-formed
issuers is as follows:
The Fund may not purchase the securities of any issuer having a record,
together with predecessors, of less than three years continuous
operation.
The Board recommends the elimination of this fundamental restriction. This
restriction was derived from a state "blue sky" requirement that has been pre-
empted by recent amendments of the federal securities laws. Companies with
less than three years of continuous operation are typically referred to as
newly-formed issuers or "unseasoned issuers." Because newly formed companies
have no proven track record in business, their prospects may be uncertain.
Their securities may fluctuate in price more widely than securities of
established companies. The Board believes that elimination of the fundamental
restriction will provide the Funds with greater investment flexibility. If
this proposed revision is approved, Select Income Fund and U.S. Government
Securities Fund could invest in the securities of newly-formed issuers in
accordance with their respective investment objectives, policies and
limitations.
n. Elimination of fundamental restriction on investing in oil, gas or other
mineral interest or exploration programs
Each Fund's current fundamental restriction on investing in oil, gas or
other mineral interest or exploration programs is as follows:
The Fund may not buy or sell oil, gas or other mineral interest or
exploration programs.
Investment in oil, gas or other mineral interest or exploration programs is
not prohibited under Federal standards for mutual funds, but was prohibited in
the past by some state regulations. Because these state regulations are no
longer applicable, the Board recommends that shareholders vote to eliminate
this fundamental restriction to provide for greater investment flexibility.
o. Elimination of fundamental restriction on joint trading activities and
purchase of warrants
Each Fund's current fundamental restriction on joint trading activities and
purchase of warrants is as follows:
The Fund may not participate on a joint or joint and several basis in
any securities trading account, or purchase warrants, or write,
purchase or sell puts, calls, straddles or any other option contract or
combination thereof.
The Board recommends the elimination of 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. Accordingly, the Board recommends that this
restriction be eliminated.
11
<PAGE>
The Board also recommends the elimination of this fundamental restriction
because it prohibits the purchase of warrants. This restriction also 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 Funds, as well as by the Funds'
other investment policies. Accordingly, the Board recommends the elimination
of this restriction to provide for greater investment flexibility.
p. Modification of fundamental restriction on industry concentration
Each Fund's current fundamental restriction on industry concentration is as
follows:
The Fund may not invest more than 25% of the Fund's total assets in any
one industry, excluding government securities. Telephone utilities,
water, gas, and electric utilities shall be considered separate
industries.
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.
If the proposed revision is approved, the Board would also adopt the
following non-fundamental restriction:
With respect to fundamental limitation ( ), domestic and foreign banking
will be considered to be different industries.
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. The proposed changes
to the Funds' fundamental concentration policies exclude municipal securities
and securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities from the concentration limitation. A failure to exclude all
such securities from the concentration policy could hinder the Funds'
abilities to purchase securities in conjunction with taking temporary
defensive positions.
q. Adoption of fundamental restriction on the issuance of senior securities
The Board recommends that shareholders of each Fund vote to adopt the
following fundamental restriction with respect to 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 adoption of 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 by the 1940 Act, will
maximize each Fund's borrowing flexibility for future contingencies and will
conform to the fundamental restrictions of the other INVESCO Funds on the
issuance of senior securities.
Required Vote. Approval of Proposal 1 with respect to a Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, which for this purpose means the affirmative vote of the lesser of (1)
67% or more of the shares of that Fund present at the Meeting or represented
by proxy if more than 50% of the
12
<PAGE>
outstanding shares of that Fund are so present or represented, or (2) more
than 50% of the outstanding shares of that Fund. Shareholders who vote "for"
Proposal 1 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 SHAREHOLDERSVOTE "FOR" PROPOSAL 1.
PROPOSAL 2: TO ELECT THE DIRECTORS OF BOND FUNDS
The Board has nominated the individuals identified below for election to the
Board at the Meeting. Bond 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. Consistent with the
provisions of Bond Funds' by-laws, and as permitted by Maryland law, Bond
Funds 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 (i.e., those directors who are not
"interested persons" of Bond Funds, as such term is defined in the 1940 Act)
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
Bond 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 Bond Funds' shares owned by each, and their
respective memberships on Board committees are listed in the table below.
13
<PAGE>
<TABLE>
<CAPTION>
Number of
Company Shares
Beneficially
Director or Owned Directly
Principal Occupation Executive Officer or Indirectly
Name, Position with and Business Experience of Company on Dec. 31, Member of
Company and Age (during the past five years) Since 1998 (1) Committee
------------------- --------------------------- ----------------- -------------- -----------
<C> <S> <C> <C> <C>
Charles W. Brady, Chief Executive Officer and Director 1993 0 (3),(5),(6)
Chairman of the Board, of AMVESCAP PLC, London, England,
Age 63* and of various subsidiaries thereof.
Chairman of the Board of INVESCO
Global Health Sciences Fund.
Fred A. Deering, Trustee of INVESCO Global Health 1993 152.688 (2),(3),(5)
Vice Chairman of the Sciences Fund. Formerly, Chairman of
Board, the Executive Committee and Chairman
Age 71 of the Board of Security Life of
Denver Insurance Company, Denver,
Colorado; Director of ING American
Holdings Company and First ING Life
Insurance Company of New York.
Mark H. Williamson, President, Chief Executive Officer, 1998 0 (3),(5)
President, Chief Executive and Director, INVESCO Distributors
Officer, and Director, Inc.; President, Chief Executive
Age 47* 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 111.144 (4),(6),(8)
Director, Emeritus and Chairman of the CFO
Age 68 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>
14
<PAGE>
<TABLE>
<CAPTION>
Number of
Company Shares
Beneficially
Director or Owned Directly
Principal Occupation Executive Officer or Indirectly
Name, Position with and Business Experience of Company on Dec. 31, Member of
Company and Age (during the past five years) Since 1998 (1) Committee
------------------- --------------------------- ----------------- -------------- ------------
<C> <S> <C> <C> <C>
Bob R. Baker, President and Chief Executive 1993 111.144 (3),(4),(5)
Director, Officer of AMC Cancer Research
Age 62 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 111.144 (2),(6),(7)
Director, 1987, Senior Vice President and
Age 68 Senior Trust Officer, InterFirst
Bank, Dallas, Texas.
Dr. Wendy Lee Gramm, Self-employed (since 1993). 1997 111.144 (4),(8)
Director, Professor of Economics and Public
Age 54 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
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.
Kenneth T. King, Presently retired. Formerly, 1993 111.144 (2),(3),(5),
Director, Chairman of the Board, The Capitol (6), (7)
Age 73 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.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Number of
Company Shares
Beneficially
Director or Owned Directly
Name, Position Principal Occupation Executive Officer or Indirectly
with and Business Experience of Company on Dec. 31, Member of
Company and Age (during the past five years) Since 1998 (1) Committee
--------------- --------------------------- ----------------- -------------- ---------------
<C> <S> <C> <C> <C>
John W. McIntyre, Presently retired. Formerly, Vice 1995 111.144 (2),(3),(5),(7)
Director, Chairman of the Board, The Citizens
Age 68 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 the J.M. Tull
Charitable Foundation; Director of
Kaiser Foundation Health Plans of
Georgia, Inc.
Dr. Larry Soll, Presently retired. Formerly, 1997 111.144 (4),(8)
Director, Chairman of the Board (1987-1994),
Age 56 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 a Fund's investment
adviser, or with companies affiliated with INVESCO, this individual is
deemed to be an "interested person" of Bond 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
16
<PAGE>
The Board has audit, management liaison, soft dollar brokerage and
derivatives committees consisting of Independent Directors, and compensation,
executive and valuation committees consisting of 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 Bond Funds. This
committee reviews the accounting principles being applied by Bond 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 Bond Funds' business, except for certain powers which, under applicable law
and/or Bond Funds' by-laws, 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 Bond 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 transactions by the Funds, and to review
policies and procedures of the 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 the Funds. The committee monitors derivatives usage by the
Funds and the procedures utilized by the 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 twice, and
the derivatives committee met twice. The executive committee did not meet.
During Bond Funds' last fiscal year, each director 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 the 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 each Fund's
shareholders.
The following table sets forth information relating to the compensation paid
to directors during the last fiscal year:
17
<PAGE>
COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY BOND FUNDS TO DIRECTORS
<TABLE>
<CAPTION>
Total
Compensation
from Bond
Pension or Funds and
Aggregate Retirement Benefits Estimated the 14 other
Compensation Accrued as Part of Annual INVESCO Funds
from Bond Bond Funds' Benefits Upon Paid to
Name of Person, Position Funds(1) Expenses(2) Retirement(3) Directors(1)
------------------------------ ------------ -------------------- ------------- -------------
<S> <C> <C> <C> <C>
Fred A. Deering,
Vice Chairman of the Board and Director $ 6,464 $ 2,112 $1,356 $103,700
Dr. Victor L. Andrews,
Director $ 6,305 $ 1,996 $1,569 $ 80,350
Bob R. Baker,
Director $ 6,518 $ 1,783 $2,103 $ 84,000
Lawrence H. Budner,
Director $ 6,189 $ 1,996 $1,569 $ 79,350
Daniel D. Chabris(4),
Director $ 6,344 $ 2,158 $1,171 $ 70,000
Kenneth T. King,
Director $ 5,957 $ 2,194 $1,230 $ 77,050
John W. McIntyre,
Director $ 6,108 $ 0 $ 0 $ 98,500
Dr. Wendy L. Gramm,
Director $ 6,067 $ 0 $ 0 $ 79,000
Dr. Larry Soll,
Director $ 6,108 $ 0 $ 0 $ 96,000
------- ------- ------ --------
TOTAL $56,060 $12,239 $8,998 $767,950
======= ======= ====== ========
AS A PERCENTAGE OF
NET ASSETS 0.0044%(5) 0.0010%(5) 0.0035%(6)
</TABLE>
18
<PAGE>
- --------
(1) The Vice Chairman of the Board, the chairmen of the audit, management
liaison, derivatives, soft dollar brokerage and compensation committees, and
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 Funds' 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 Funds' 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.
19
<PAGE>
Bond Funds pays its Independent Directors, Board vice chairman, and
committee chairmen and committee members the fees described above. Bond 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 Bond 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 Bond Funds or other INVESCO Funds
for their services as directors.
The overall direction and supervision of each Fund is the responsibility of
the Board, which has the primary duty of ensuring that each Fund's general
investment policies and programs are adhered to and that each Fund is properly
administered. The officers of each Fund, all of whom are officers and
employees of and paid by INVESCO, are responsible for the day-to-day
administration of the Funds. The investment adviser for a Fund has the primary
responsibility for making investment decisions on behalf of that Fund. These
investment decisions are reviewed by the investment committee of INVESCO.
All of the officers and directors of Bond Funds hold comparable positions
with the following INVESCO Funds: 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 Growth Funds, Inc. (formerly, INVESCO Growth Fund, 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., INVESCO
Variable Investment Funds, Inc. All of the directors of the Bond Funds also
serve as trustees of INVESCO Value Trust, and INVESCO Treasurer's Series Trust
(the "INVESCO Funds").
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 of the Funds. Under the Plan, each director or trustee who is not an
interested person of the 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 the 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 the 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. Bond Funds 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.
20
<PAGE>
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 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 Bond Funds
requires, in the aggregate, a plurality of the votes cast at the Meeting in
person or by proxy, and of the votes of the other series of Bond Funds cast at
a concurrent meeting of the shareholders of that series.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES IN PROPOSAL 2.
PROPOSAL 3: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
each Fund, subject to ratification by each Fund's shareholders.
PricewaterhouseCoopers LLP has no direct financial interest or material
indirect financial interest in any 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
Funds 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. Ratification of the selection of PricewaterhouseCoopers LLP
as independent accountants requires the vote of a majority of the votes
present at the Meeting provided a quorum is present.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
INFORMATION CONCERNING ADVISER,
DISTRIBUTOR AND AFFILIATED COMPANIES
INVESCO, a Delaware corporation, serves as each Fund's investment adviser,
and provides other services to each Fund and the Bond Funds. IDI, a Delaware
corporation that serves as each Fund's distributor, is a wholly owned
subsidiary of INVESCO. INVESCO is a wholly owned subsidiary of INVESCO North
American Holdings, Inc. ("INAH"), 1315 Peachtree Street, N.E., Atlanta,
Georgia 30309. INAH is an indirect wholly owned subsidiary of AMVESCAP
PLC.(1) The corporate headquarters of AMVESCAP PLC are located at 11
Devonshire Square, London, EC2M 4YR, England. INVESCO's and IDI's offices are
located at 7800 East Union Avenue, Denver, Colorado 80237. INVESCO currently
serves as investment adviser of 14 open-end investment companies having
aggregate net assets of $21.1 billion as of December 31, 1998.
- --------
(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.
21
<PAGE>
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 Director and Chief Executive Officer
of IDI; Charles P. Mayer, Director and Senior Vice President, also, Director
and Senior Vice President of IDI; Ronald L. Grooms, Director, Senior Vice-
President and Treasurer, also, Director, Senior Vice-President and Treasurer
of IDI; Richard W. Healey, Director and Senior Vice President, also, Director
and Senior Vice President of IDI; Timothy J. Miller, Director and Senior Vice
President, also, Director and Senior Vice President 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 Bond Funds and
INVESCO, INVESCO provides administrative services to Bond Funds, including
sub-accounting and recordkeeping services and functions. During the fiscal
year ended August 31, 1998, Bond Funds paid INVESCO, which also serves as Bond
Funds' registrar, transfer agent and dividend disbursing agent, total
compensation of $2,138,292 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.
SHAREHOLDER PROPOSALS
Bond 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 Bond Funds, 7800 East Union Avenue, Denver,
Colorado 80237. Bond 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
22
<PAGE>
APPENDIX A
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of each Fund's
outstanding equity securities as of March 12, 1999 by each beneficial owner of
5% or more of a Fund's outstanding equity securities.
Beneficial owners of 5% or more of High Yield Fund
<TABLE>
<CAPTION>
Amount and
Name and Address Nature of Ownership Percent
- ---------------- ------------------- -------
<S> <C> <C>
Charles Schwab & Co. Inc. 47,114,674.7810 36.70%
Special Custody Account for the Exclusive Benefit
of Customers Record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 9,835,184.9180 7.66%
The Exclusive Benefit of Customers
One World Financial Center
200 Liberty Street 5th Floor Record
Attn: Kate Recon
New York, NY 10281-5500
Beneficial owners of 5% or more of Selected Income Fund
Charles Schwab & Co. Inc. 13,839,097.5490 16.52%
Special Custody Account for the Exclusive Benefit
of Customers Record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
INVESCO Trust Company Trustee 6,174,812.6520 7.37%
Morris Communications Corp. Record
Employees' Profit Sharing Retirement Plan
725 Broad Street
Augusta, GA 30901-1336
Nat'l Financial Services Corp. 4,783,306.8130 5.71%
The Exclusive Benefit of Cust
One World Financial Center
200 Liberty Street 5th Flr Record
Attn: Kate Recon
New York, NY, 10281-5500
Prudential Securities Inc. 4,231,674.7270 5.05%
Acct 910-404559-000 Record
Attn: Mutual Funds
1 New York Plaza
New York, NY 10004-1901
</TABLE>
A-1
<PAGE>
Beneficial owners of 5% or more of U.S. Government Securities Fund
<TABLE>
<CAPTION>
Amount and
Name and Address Nature of Ownership Percent
- ---------------- ------------------- -------
<S> <C> <C>
Resources Trust Company Custody for the 1,302,323.3390 14.75%
Exclusive Benefit of the Various Customers of IMS Record
P.O. Box 3865
Englewood, CO 80155-3865
Charles Schwab & Co. Inc. 1,112,358.7730 12.60%
Special Custody Account for the Exclusive Benefit
of Customers Record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
</TABLE>
A-2
<PAGE>
[Name and Address]
INVESCO SELECT INCOME FUND
INVESCO BOND 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 Bond Funds, Inc. (the "Company") and relates to the proposals with
respect to the Company and to INVESCO Select Income 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>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO SELECT INCOME FUND
INVESCO BOND FUNDS, INC.
<TABLE>
<S> <C>
Vote on Directors FOR WITHHOLD ALL FOR ALL
ALL EXCEPT
[ ] [ ] [ ]
2. Election of the Company's Board of To withhold authority to
Directors: (1) Charles W. Brady; (2) Fred A. vote, mark "For All
Deering; (3) Mark H. Williamson; (4) Dr. Victor Except" and write the
L. Andrews; (5) Bob R. Baker; (6) Lawrence H. nominee's number on the
Budner; (7) Dr. Wendy Lee Gramm; (8) Kenneth T. line below.
King; (9) John W. McIntyre; and (10) Dr. Larry
Soll;
Vote On Proposals FOR AGAINST ABSTAIN
1. 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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's [ ] [ ] [ ]
Independent Public Accountants.
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
</TABLE>
<PAGE>
[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.
1. _______________________________
<PAGE>
[Name and Address]
INVESCO HIGH YIELD FUND
INVESCO BOND 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 Bond Funds, Inc. (the "Company") and relates to the proposals with
respect to the Company and to INVESCO High Yield 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>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO HIGH YIELD FUND
INVESCO BOND FUNDS, INC.
<TABLE>
<S> <C> <C> <C> <C>
Vote on Directors FOR WITHHOLD ALL FOR ALL
ALL EXCEPT
[ ] [ ] [ ]
2. Election of the Company's Board of To withhold authority to
Directors: (1) Charles W. Brady; (2) Fred A. vote, mark "For All
Deering; (3) Mark H. Williamson; (4) Dr. Victor Except" and write the
L. Andrews; (5) Bob R. Baker; (6) Lawrence H. nominee's number on the
Budner; (7) Dr. Wendy Lee Gramm; (8) Kenneth T. line below.
King; (9) John W. McIntyre; and (10) Dr. Larry
Soll;
Vote On Proposals FOR AGAINST ABSTAIN
[ ] [ ] [ ]
1. Approval of changes to the fundamental
investment restrictions;
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restriction, 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. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's
Independent Public Accountants.
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
</TABLE>
<PAGE>
[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.
1. _________________________
<PAGE>
[Name and Address]
INVESCO U.S. GOVERNMENT SECURITIES FUND
INVESCO BOND 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 Bond Funds, Inc. (the "Company") and relates to the proposals with
respect to the Company and to INVESCO U.S. Government Securities 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>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO U.S. GOVERNMENT SECURITIES FUND
INVESCO BOND FUNDS, INC.
<TABLE>
<S> <C>
Vote on Directors FOR WITHHOLD ALL FOR ALL
ALL EXCEPT
[ ] [ ] [ ]
2. Election of the Company's Board of To withhold authority to
Directors: (1) Charles W. Brady; (2) Fred A. vote, mark "For All
Deering; (3) Mark H. Williamson; (4) Dr. Victor Except" and write the
L. Andrews; (5) Bob R. Baker; (6) Lawrence H. nominee's number on the
Budner; (7) Dr. Wendy Lee Gramm; (8) Kenneth T. line below.
King; (9) John W. McIntyre; and (10) Dr. Larry
Soll;
Vote On Proposals FOR AGAINST ABSTAIN
1. Approval of changes to the fundamental investment restrictions;
[ ] [ ] [ ]
</TABLE>
[ ] 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
<PAGE>
are available.
FOR AGAINST ABSTAIN
3. Ratification of the selection of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as the Fund's
Independent Public Accountants.
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
[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.
1. ______________________________
