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 [ ]
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (SECTION) 240.14a-11(c) or (SECTION)
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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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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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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4) Date Filed:
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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
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,
Mark H. Williamson
President
INVESCO Bond Funds, Inc.
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INVESCO SELECT INCOME FUND
INVESCO HIGH YIELD FUND
INVESCO U.S. GOVERNMENT SECURITIES FUND
(EACH A SERIES OF INVESCO BOND FUNDS, INC.)
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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,
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 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 the toll-free number listed on the enclosed proxy
card. 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 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 1-516-254-7564. 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.
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
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
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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
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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 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 ____________; High Yield Fund _____________;
U.S. Government Securities Fund ____________. 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.
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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.
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.
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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 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.
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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:
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
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with any party (reverse repurchase agreements will be treated as
borrowings for purposes of fundamental limitation (4)).
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.
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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 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.
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.
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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.
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.
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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.
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:
9
<PAGE>
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.
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
10
<PAGE>
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:
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.
11
<PAGE>
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
12
<PAGE>
of 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:
13
<PAGE>
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.
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 (1), 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
14
<PAGE>
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 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 SHAREHOLDERS VOTE
"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.
15
<PAGE>
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.
<TABLE>
<CAPTION>
NUMBER OF
---------
COMPANY SHARES
--------------
DIRECTOR OR BENEFICIALLY
----------- ------------
EXECUTIVE OWNED DIRECTLY
--------- ---------------
NAME, POSITION WITH PRINCIPAL OCCUPATION AND BUSINESS OFFICER OF OR INDIRECTLY MEMBER OF
- ------------------- --------------------------------- ---------- -------------- ---------
COMPANY, AND AGE EXPERIENCE (DURING THE PAST FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------- --------------------------------------- ------------- ---------------- ---------
<S> <C> <C> <C> <C>
CHARLES W. BRADY, Chief Executive Officer and Director of 1993 0 (3), (5), (6)
CHAIRMAN OF THE BOARD, AMVESCAPPLC, London, England, and of
AGE 63* various subsidiaries thereof. Chairman
of the Board of INVESCO Global Health
Sciences Fund.
FRED A. DEERING, Trustee of INVESCO Global Health Sciences 1993 152.688 (2), (3), (5)
VICE CHAIRMAN OF THE Fund. Formerly, Chairman of the Executive
BOARD, AGE 71 Committee and Chairman 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. President, Chief Executive Officer, and 1998 0 (3), (5)
WILLIAMSON, Director, INVESCO Distributors Inc.;
PRESIDENT, CHIEF President, Chief Executive Officer, and
EXECUTIVE OFFICER, AND Director, INVESCO; President, Chief
DIRECTOR, AGE 47* 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. Professor Emeritus, Chairman Emeritus and 1993 111.144 (4), (6), (8)
ANDREWS, DIRECTOR, Chairman of the CFO Roundtable of the
AGE 68 Department of Finance at 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.
16
<PAGE>
NUMBER OF
---------
COMPANY SHARES
--------------
DIRECTOR OR BENEFICIALLY
----------- ------------
EXECUTIVE OWNED DIRECTLY
--------- ---------------
NAME, POSITION WITH PRINCIPAL OCCUPATION AND BUSINESS OFFICER OF OR INDIRECTLY MEMBER OF
- ------------------- --------------------------------- ---------- -------------- ---------
COMPANY, AND AGE EXPERIENCE (DURING THE PAST FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------- --------------------------------------- ------------- ---------------- ---------
<S> <C> <C> <C> <C>
BOB R. BAKER, President and Chief Executive Officer 1993 111.144 (3), (4), (5)
DIRECTOR, AGE 62 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. Trust Consultant. Prior to June 1987, Senior 1993 111.144 (2), (6), (7)
BUDNER, DIRECTOR, Vice President and Senior Trust Officer,
AGE 68 InterFirst Bank, Dallas, Texas.
DR. WENDY LEE Self-employed (since 1993). Professor of 1997 111.144 (4), (8)
GRAMM, DIRECTOR, Economics and Public Administration,
AGE 54 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, Chairman of the 1993 111.144 (2), (3), (5)
DIRECTOR, AGE 73 Board of the Capitol Life Insurance (6), (7)
Company, Providence Washington Insurance
Company, and Director of numerous U.S.
subsidiaries thereof. Formerly, Chairman of
the Board of the Providence Capitol
Companies in the United Kingdom and
Guernsey. Until 1987, Chairman of the
Board, Symbion Corporation.
JOHN W. MCINTYRE, Presently retired. Formerly, Vice Chairman 1995 111.144 (2), (3), (5)
DIRECTOR, AGE 68 of the Board of The Citizens and Southern (7)
Corporation; Chairman of the Board and
Chief Executive Officer of The Citizens and
Southern Georgia Corporation; Chairman of
the Board and Chief Executive Officer of
The Citizens and Southern National Bank.
Trustee of INVESCO Global Health Sciences
Fund, 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.
DR. LARRY SOLL, Presently retired. Formerly, Chairman of the 1997 111.144 (4), (8)
DIRECTOR, AGE 56 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>
17
<PAGE>
*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
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.
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
18
<PAGE>
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:
<TABLE>
<CAPTION>
COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY BOND FUNDS TO DIRECTORS
PENSION OR RETIREMENT TOTAL COMPENSATION
--------------------- ------------------
AGGREGATE BENEFITS ACCRUED AS ESTIMATED ANNUAL FROM BOND FUNDS AND
--------- ------------------- ---------------- -------------------
COMPENSATION FROM PART OF BOND FUNDS' BENEFITS UPON INVESCO FUNDS PAID TO
----------------- ------------------- ------------- ---------------------
NAME OF PERSON, POSITION BOND FUNDS(1) EXPENSES(2) RETIREMENT(3) DIRECTORS(1)
------------------------ ---------- -------- ---------- ---------
<S> <C> <C> <C> <C>
FRED A DEERING, VICE $6,464 $2,112 $1,356 $103,700
CHAIRMAN OF THE BOARD
AND DIRECTOR
DR. VICTOR L. $6,305 $1,996 $1,569 $80,350
ANDREWS, DIRECTOR
BOB R. BAKER, DIRECTOR $6,518 $1,783 $2,103 $84,000
LAWRENCE H. BUDNER, $6,189 $1,996 $1,569 $79,350
DIRECTOR
DANIEL D. CHABRIS(4), $6,344 $2,158 $1,171 $70,000
DIRECTOR
KENNETH T. KING, $5,957 $2,194 $1,230 $77,050
DIRECTOR
JOHN W. MCINTYRE, $6,108 $0 $0 $98,500
DIRECTOR
DR. WENDY L. $6,067 $0 $0 $79,000
GRAMM, DIRECTOR
DR. LARRY SOLL, $6,108 $0 $0 $96,000
DIRECTOR
-------------- ------------------ ---------------- ---------------------
TOTAL $56,060 $12,239 $8,998 $767,950
-----
AS A PERCENTAGE OF NET 0.0044%(5) 0.0010%(5) 0.0035%(6)
----------------------
ASSETS
</TABLE>
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 Mr. McIntyre and 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.
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 INVESCO Complex's net assets 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 Board 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
20
<PAGE>
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.
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 is, therefore, an indirect
owner of shares of each INVESCO Fund, in addition to any Fund shares that may be
owned directly.
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.
21
<PAGE>
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.
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, Senior Vice-President and
Treasurer, also, Senior Vice-President and Treasurer 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.
- --------
1 The intermediary companies between INAH and AMVESCAP PLC are as follows:
INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North American Group,
Ltd., each of which is wholly owned by its immediate parent.
22
<PAGE>
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
Glen A. Payne
Secretary
March 23, 1999
23
<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.
Shares Of Equity Securities Beneficially Owned
NAME AND ADDRESS AMOUNT PERCENT
- ---------------- ------ -------
24
<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. ("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 [ ] and [ ], 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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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.
VOTE ON DIRECTORS FOR WITHHOLD FOR
ALL ALL ALL
2 Election of the Company's EXCEPT
Board of Directors; (1) / / / / / / To withhold
Charles W. Brady; (2) Fred A. authority to vote
Deering; (3) Mark H. for any individual
Williamson; (4) Dr. Victor L. nominee(s), mark
Andrews; (5) Bob R. Baker; (6) "For All Except" and
Lawrence H. Budner; (7) Dr. write the nominee's
Wendy Lee Gramm; (8) Kenneth number on the line
T. King; (9) John W. McIntyre; below.
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
policies, but to approve others, PLACE AN "X"
IN THE BOX AT left and indicate the number(s)
(as set forth in the proxy statement)
of the investment policy or policies you do not
want to change on the line below.
------------------------------------------------
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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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
<PAGE>
- ------------------------------------------------- ------------------------------
Signature Date
- ------------------------------------------------- ------------------------------
Signature (Joint Owners) Date
<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. ("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 [ ] and [ ], 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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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.
VOTE ON DIRECTORS FOR WITHHOLD FOR
ALL ALL ALL
2. Election of the Company's EXCEPT
Board of Directors; (1) / / / / / / To withhold all
Charles W. Brady; (2) Fred A. to vote for any
Deering; (3) Mark H. individual
Williamson; (4) Dr. Victor L. nominee(s), mark
Andrews; (5) Bob R. Baker; (6) mark "For All
Lawrence H. Budner; (7) Dr. Except" and write
Wendy Lee Gramm; (8) Kenneth the nominee's
T. King; (9) John W. McIntyre; number on the
and (10) Dr. Larry Soll line below.
-----------------
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 policies,
but to approve others, PLACE AN "X"
IN THE BOX AT left and indicate the
number(s) (as set forth in the proxy
statement) of the investment policy or
policies you do not want to change on
the line below.
--------------------------------------
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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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
<PAGE>
- ------------------------------------------------- ------------------------------
Signature Date
- ------------------------------------------------- ------------------------------
Signature (Joint Owners) Date
<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. ("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 [ ] and [ ], 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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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.
VOTE ON DIRECTORS FOR WITHHOLD FOR
ALL ALL ALL
2. Election of the Company's EXCEPT
Board of Directors; (1) / / / / / / To withhold author-
Charles W. Brady; (2) Fred A. ity to vote for any
Deering; (3) Mark H. individual
Williamson; (4) Dr. Victor L. nominee(s) mark
Andrews; (5) Bob R. Baker; (6) "For All Except"
Lawrence H. Budner; (7) Dr. and write the
Wendy Lee Gramm; (8) Kenneth nominee's number on
T. King; (9) John W. McIntyre; the line below.
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
policies, but to approve others,
PLACE AN "X" IN THE BOX AT left
and indicate the number(s) (as
set forth in the proxy statement)
of the investment policy or policies
you do not want to change on the line
below.
-------------------------------------
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 WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION, PLEASE FAX
YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
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
<PAGE>
- ------------------------------------------------- ------------------------------
Signature Date
- ------------------------------------------------- ------------------------------
Signature (Joint Owners) Date
