File No. 2-26125
As filed on ^ August 28, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1933 X
--
Pre-Effective Amendment No. ________
Post-Effective Amendment No. ^ 45 X
---------- --
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
--
Amendment No. ^ 19 X
------------ --
INVESCO DYNAMICS FUND, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
-------------------
Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
-------------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
- ---
^ X on September 1, 1996, pursuant to paragraph (b)
- ---
60 days after filing pursuant to paragraph (a)(1)
- ---
^ on _______________, pursuant to paragraph (a)(1)
- ---
75 days after filing pursuant to paragraph (a)(2)
- ---
on _______________, pursuant to paragraph (a)(2) of rule 485.
- ---
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended April 30, ^ 1996, was
filed on or about June ^ 24, 1996.
Page 1 of 195
Exhibit index is located at page 73
<PAGE>
INVESCO DYNAMICS FUND, INC.
-----------------------------
CROSS-REFERENCE SHEET
Form N-1A
Item Caption
- --------- -------
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses; Essential
Information
3....................... Financial Highlights; Fund Price
and Performance
4....................... Investment Objective and Strategy;
Investment Policies and Risks; The
Fund and Its Management
5....................... The Fund and Its Management
5A...................... Not Applicable
6....................... Fund Services; Taxes, Dividends and
Capital Gain Distributions;
Additional Information
7....................... How to Buy Shares; Fund Price and
Performance; Fund Services; The
Fund and Its Management
8....................... Fund Services; How to Sell Shares
9....................... Not Applicable
Part B Statement of Additional Information
10....................... Cover Page
11....................... Table of Contents
12....................... The Fund and Its Management
-i-
<PAGE>
Form N-1A
Item Caption
- --------- -------
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Fund and Its Management
15....................... The Fund and Its Management;
Additional Information
16....................... The Fund and Its Management;
Additional Information
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Fund; Tax-Deferred
Retirement Plans; How to Redeem
Shares
20....................... Dividends, Capital Gain
Distributions and Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
-ii-
<PAGE>
PROSPECTUS
^ September 1, 1996
INVESCO DYNAMICS FUND, INC.
INVESCO Dynamics Fund, Inc. (the "Fund") is actively and aggressively
managed to seek appreciation of capital. Most of its investments are in U.S.
common stocks, but the Fund has the flexibility to invest in other types of
securities.
This prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated ^ September 1, 1996, has been filed with the Securities
and Exchange Commission^ and is incorporated by reference into this prospectus.
To obtain a free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; or call 1- 800-525-8085.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
TABLE OF CONTENTS Page
ESSENTIAL INFORMATION...................................................... 6
ANNUAL FUND EXPENSES....................................................... 7
FINANCIAL HIGHLIGHTS..................................................... ^ 9
INVESTMENT OBJECTIVE AND STRATEGY........................................ 11 ^
INVESTMENT POLICIES AND RISKS............................................ 11 ^
THE FUND AND ITS MANAGEMENT.............................................. ^ 13
FUND PRICE AND PERFORMANCE............................................... ^ 15
HOW TO BUY SHARES........................................................ ^ 16
FUND SERVICES............................................................ ^ 20
HOW TO SELL SHARES....................................................... ^ 21
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.......................... ^ 24
ADDITIONAL INFORMATION................................................... 25 ^
<PAGE>
ESSENTIAL INFORMATION
Investment ^ Goal And Strategy. INVESCO Dynamics Fund, Inc.
is a diversified mutual fund that seeks appreciation of capital
through aggressive investment policies. It invests primarily in
common stocks of U.S. companies traded on national securities
exchanges and over-the-counter. There is no guarantee that the
Fund will meet its objective. See "Investment Objective And
Strategy."
The Fund is Designed For: Investors seeking capital growth over the long ^
term. While not intended as a complete investment program, the Fund may be a
valuable element of your investment portfolio. You also may wish to consider the
Fund as part of a Uniform Gift/Transfer To Minors Account or systematic
investing strategy. The Fund may be a suitable investment for many types of
retirement programs, including IRA, SEP-IRA, SARSEP, 401(k), Profit Sharing,
Money Purchase Pension, and 403(b) plans.
Time Horizon. Potential shareholders should consider this a
long-term investment due to the volatility of the securities held
by the Fund.
Risks. The Fund uses an aggressive investment strategy, which at times may
include holdings in foreign securities and rapid portfolio turnover. The returns
on foreign investments may be influenced by currency fluctuations and other
risks of investing overseas. Rapid portfolio turnover may result in higher
brokerage commissions and the acceleration of taxable capital gains. These
policies make the Fund unsuitable for that portion of your savings dedicated to
current income or preservation of capital over the short ^ term. See "Investment
Objective and Strategy" and "Investment Policies and Risks."
Organization and Management. The Fund is owned by its
shareholders. It employs INVESCO Funds Group, Inc. ("IFG"), founded
in 1932, to serve as investment adviser, administrator,
distributor, and transfer agent. INVESCO Trust Company ("INVESCO
Trust"), founded in 1969, serves as sub-adviser.
INVESCO Trust senior vice president Timothy J. Miller has managed INVESCO
Dynamics Fund since 1993. He has ^ 17 years of investment management experience.
A Chartered Financial Analyst, he earned his MBA from the University of Missouri
and a BSBA from St. Louis University. See "The Fund And Its Management."
IFG and INVESCO Trust are part of a global firm that managed approximately
^ $90 billion as of ^ June 30, 1996. The parent company, INVESCO PLC, is based
in London, with money managers located in Europe, North America and the Far
East.
<PAGE>
This Fund ^ offers all of the ^ following services at no charge:
Telephone purchases
Telephone exchanges
Telephone redemptions
Automatic reinvestment of distributions
Regular investment plans, such as EasiVest (the Fund's
automatic monthly investment program), Direct Payroll
Purchase, and Automatic Monthly Exchange
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans.
Minimum Subsequent Investment: $50 (Minimums are lower for certain
retirement plans.)
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange
or redeem shares. The Fund is authorized to pay a Rule 12b-1
distribution fee of one quarter of one percent each year. (See
"How To Buy Shares -- Distribution Expenses.")
Like any company, the Fund has operating expenses, such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts, and other expenses. These expenses are paid from the Fund's assets.
Lower expenses therefore benefit investors by increasing the Fund's total
return.
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, the Fund's manager
voluntarily reimburses the Fund for amounts in excess of 1.21% of average net
assets.
Annual Fund Operating Expenses
- ------------------------------
(as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees 0.25%
Other Expenses ^ 0.29%
Total Fund Operating Expenses^(1) 1.14%
^(1) It should be noted that the Fund's actual total operating expenses were
lower than the figures shown, because the Fund's custodian fees and pricing
expenses were reduced under an expense offset arrangement. However, as a result
of an SEC requirement for mutual funds to state their total operating expenses
without crediting any such expense offset arrangement, the figures shown above
do not reflect these reductions. In comparing expenses for different years,
please note that the ratios of Expenses to Average Net Assets shown under
"Financial Highlights" do reflect any reductions for periods prior to the fiscal
year ended April 30, 1995.
<PAGE>
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption at
the end of each time period. (Of course, actual operating expenses are paid from
the Fund's assets ^ and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$12 ^ $36 $63 $139
The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE, AND ACTUAL
ANNUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. For more
information on the Fund's expenses, see "The Fund and Its Management" and "How
to Buy Shares - Distribution Expenses."
^ Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report appearing
in the Fund's ^ 1996 Annual Report to Shareholders which is incorporated by
reference into the Statement of Additional Information^. Both are available
without charge by contacting IFG at the address or telephone number on the cover
of this prospectus. The Annual Report also contains more information about the
Fund's performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended April 30,
-------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
PER SHARE DATA
Net Asset Value -
Beginning of
Period $11.38 $10.15 $10.89 $9.57 $8.50 $7.39 $7.14 $6.65 $8.42 $8.59
-------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment
Income (Loss) 0.02 0.03 (0.02) (0.03) (0.02) 0.05 0.13 0.13 0.02 0.02
Net Gains or (Losses)
on Securities
(Both Realized
and Unrealized) 3.94 1.34 1.99 1.64 2.05 1.64 0.54 0.48 (1.30) 1.58
-------------------------------------------------------------------------------------------------------
Total from Investment
Operations 3.96 1.37 1.97 1.61 2.03 1.69 0.67 0.61 (1.28) 1.60
-------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment
Income+ 0.02 0.03 0.00 0.00 0.00 0.05 0.13 0.12 0.02 0.02
-------------------------------------------------------------------------------------------------------
<PAGE>
Distributions
from Capital
Gains 1.71 0.11 2.71 0.29 0.96 0.53 0.29 0.00 0.47 1.75
-------------------------------------------------------------------------------------------------------
Total
Distributions 1.73 0.14 2.71 0.29 0.96 0.58 0.42 0.12 0.49 1.77
-------------------------------------------------------------------------------------------------------
Net Asset Value -
End of Period $13.61 $11.38 $10.15 $10.89 $9.57 $8.50 $7.39 $7.14 $6.65 $8.42
=======================================================================================================
TOTAL RETURN 36.32% 13.57% 17.86% 16.80% 23.47% 23.11% 9.29% 9.20% (14.72%) 21.65%
RATIOS
Net Assets - End of
Period ($000
Omitted) $778,416 $421,600 $287,293 $231,100 $153,956 $100,860 $60,817 $89,755 $83,651 $91,042
Ratio of Expenses
to Average
Net Assets# 1.14%@ 1.20% 1.17% 1.20% 1.18% 1.15% 0.98% 0.98% 1.02% 0.92%
Ratio of Net
Investment
Income (Loss)
to Average
Net Assets# 0.16% 0.33% (0.37%) (0.38%) (0.17%) 0.59% 1.47% 1.77% 0.28% 0.27%
Portfolio Turnover
Rate 196% 176% 169% 144% 174% 243% 225% 237% 199% 234%
+ Distributions in excess of net investment income for the year ended April 30,
1996, aggregated less than $0.01 on a per share basis.
# Various expenses of the Fund were voluntarily absorbed by IFG for the year
ended April 30, 1995. If such expenses had not been voluntarily absorbed, ratio
of expenses to average net assets would have been 1.22% and ratio of net
investment income to average net assets would have been 0.31%.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
The Fund seeks appreciation of capital through aggressive investment
policies. This investment objective is fundamental and may not be changed ^
without the approval of the Fund's shareholders. The Fund seeks to achieve this
objective through the investment of its assets in a variety of securities that
are believed to present opportunities for capital enhancement. We're primarily
looking for common stocks of companies traded on U.S. securities exchanges, as
well as over-the-counter. The ^ Fund also has the flexibility to invest in ^
preferred stocks ^ and convertible or straight issues of debentures^, as well as
foreign securities. There is no assurance that the Fund's investment objective
will be met.
The Fund's investment portfolio is actively traded. ^ Because our strategy
highlights many short-term factors -- current information about a company,
investor interest, price movements of the company's securities and general
market and monetary conditions -- securities may be bought and sold relatively
frequently. The Fund's portfolio turnover rate may be higher than many other
mutual funds, ^ and may exceed 200%; this turnover also may result in greater
brokerage commissions and acceleration of capital gains which are taxable when
distributed to shareholders. The Statement of Additional Information includes an
expanded discussion of the Fund's portfolio turnover rate, its brokerage
practices and certain federal income tax matters.
When we believe market or economic conditions are unfavorable, the Fund
may assume a defensive position by temporarily investing up to 100% of its
assets in high quality money market instruments, such as short-term U.S.
government obligations, commercial paper or repurchase agreements, seeking to
protect its assets until conditions stabilize.
The Fund may invest in illiquid securities, including securities that are
subject to restrictions on resale and securities that are not readily
marketable. The Fund may also invest in restricted securities that may be resold
to institutional investors, known as "Rule 144A Securities." For more
information concerning illiquid and Rule 144A Securities, see "Investment
Policies and Restrictions" in the Statement of Additional Information.
INVESTMENT POLICIES AND RISKS
Investors generally should expect to see their price per share vary with
movements in the stock market, changes in economic conditions and other factors.
The Fund invests in many different companies in a variety of industries; this
diversification reduces the Fund's overall exposure to investment and market
risks^ but cannot eliminate these risks.
<PAGE>
Foreign Securities. Up to 25% of the Fund's total assets, measured at the
time of purchase, may be invested directly in foreign securities. Securities of
Canadian issuers and American Depository Receipts ("ADRs") are not subject to
this 25% limitation. ADRs are receipts representing shares of a foreign
corporation held by a U.S. bank that entitle the holder to all dividends and
capital gains. ADRs are denominated in U.S. dollars and trade in the U.S.
securities markets.
For U.S. investors, the returns on foreign securities are influenced not
only by the returns on the foreign investments themselves, but also by currency
fluctuations. That is, when the U.S. dollar generally rises against foreign
currencies, returns on foreign securities for a U.S. investor may decrease. By
contrast, in a period when the U.S. dollar generally declines, those returns may
increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally available about U.S.
issuers;
-differences in accounting, auditing and financial reporting standards;
-generally higher commission rates on foreign portfolio transactions and
longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
ADRs are subject to some of the same risks as direct investments in
foreign securities, including the risk that material information about the
issuer may not be disclosed in the United States and the risk that currency
fluctuations may adversely affect the value of the ADR.
Repurchase Agreements. The Fund may invest money, for as short a time as
overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
<PAGE>
the security if the prior owner defaults on its repurchase obligation. To reduce
that risk, the securities underlying each repurchase agreement will be
maintained with the Fund's custodian in an amount at least equal to the
repurchase price under the agreement (including accrued interest). These
agreements are entered into only with member banks of the Federal Reserve
System, registered broker-dealers, and registered U.S. government securities
dealers that are deemed creditworthy under standards established by the Fund's
board of directors.
Securities Lending. The Fund may seek to earn additional income by lending
securities to qualified brokers, dealers, banks, or other financial
institutions, on a fully collateralized basis. For further information on this
policy, see "Investment Policiesand Restrictions" in the Statement of Additional
Information.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies and Restrictions" and "Investment Practices" in
the Statement of Additional Information.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
the Fund's shareholders. For example, the Fund limits to 5% the portion of its
total assets that may be invested in any one issuer, and to 25% the portion of
its total assets that may be invested in any one industry.
THE FUND AND ITS MANAGEMENT
The Fund is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end, management investment company.
It was incorporated on February 17, 1967 under the laws of Colorado and was
reorganized as a Maryland corporation on July 1, 1993.
The Fund's board of directors has responsibility for overall supervision
of the Fund, and reviews the services provided by the adviser and sub-adviser.
Under an agreement with the Fund, INVESCO Funds Group, Inc. ("IFG"), 7800 E.
Union Avenue, Denver, Colorado 80237, serves as the Fund's investment manager;
it is primarily responsible for providing the Fund with various administrative
services. IFG's wholly-owned subsidiary, INVESCO Trust Company ("INVESCO
Trust"), is the Fund's sub-adviser and is primarily responsible for managing the
Fund's investments. Together, IFG and INVESCO Trust constitute "Fund
Management."
Timothy J. Miller, C.F.A., has served as portfolio manager for the Fund
since 1993 and is primarily responsible for the day-to-day management of the
Fund's holdings. His recent career includes these highlights: Portfolio manager
of the Leisure Portfolio of INVESCO Strategic Portfolios, Inc.; senior vice
president (1995 to present), vice president (1993 to 1995) and portfolio manager
(1992 to present) of INVESCO Trust. Formerly (1979 to 1992), analyst and
<PAGE>
portfolio manager with Mississippi Valley Advisors. B.S.B.A., St. Louis
University; M.B.A., University of Missouri. He is a Chartered Financial Analyst.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
The Fund pays IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily. The management fee
is computed at the annual rate of 0.60% on the first $350 million of the Fund's
average net assets; 0.55% on the next $350 million of the Fund's average net
assets; and 0.50% on the Fund's average net assets over $700 million. For the
fiscal year ended April 30, ^ 1996, investment management fees paid by the Fund
amounted to 0.60% of the Fund's average net assets. Out of this fee, IFG paid an
amount equal to ^ 0.22% of the Fund's average net assets to INVESCO Trust as a
sub-advisory fee. No fee is paid by the Fund to INVESCO Trust.
Under a Transfer Agency Agreement, IFG acts as registrar, transfer agent,
and dividend disbursing agent for the Fund. The Fund pays an annual fee of ^
$20.00 per shareholder account or omnibus account participant for these
services. Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities may provide equivalent services to the Fund.
In these cases, IFG may pay, out of the fee it receives from the Fund, an annual
sub-transfer agency fee to the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, record-keeping, and internal sub-accounting services
for the Fund. For the fiscal year ended April 30, ^ 1996, the Fund paid IFG a
fee for these services equal to ^ 0.02% of the Fund's average net assets.
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended April 30, ^ 1996, including investment management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to ^
1.14% of the Fund's average net assets. If necessary, certain Fund expenses will
be absorbed voluntarily by IFG in order to ensure that the Fund's total
operating expenses will not exceed 1.21% of the Fund's average net assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
<PAGE>
at the best available prices. As discussed under "How to Buy Shares -
Distribution Expenses," the Fund may market its shares through intermediary
brokers or dealers that have entered into Dealer Agreements with IFG, as the
Fund's distributor. The Fund may place orders for portfolio transactions with
qualified ^ broker-dealers which recommend the Fund, or sell shares of the Fund,
to clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of the execution of the transaction and
level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices - Placement
of Portfolio Brokerage" in the Statement of Additional Information.
The parent company for IFG and INVESCO Trust is INVESCO PLC, a publicly
traded holding company whose subsidiaries provide investment services around the
world. IFG was established in 1932 and, as of April 30, ^ 1996, managed 14
mutual funds, consisting of ^ 39 separate portfolios, with combined assets of
approximately ^ $13.0 billion on behalf of over ^ 822,000 shareholders. INVESCO
Trust (founded in 1969) served as adviser or sub-adviser to ^ 44 investment
portfolios as of April 30, ^ 1996, including 27 portfolios in the INVESCO group.
These 44 portfolios had aggregate assets of approximately ^ $12.3 billion as of
April 30, ^ 1996. In addition, INVESCO Trust provides investment management
services to private clients, including employee benefit plans that may be
invested in a collective trust sponsored by INVESCO Trust.
FUND PRICE AND PERFORMANCE
Determining Price. The value of your investment in the Fund will vary
daily. The price per share is also known as the Net Asset Value (NAV). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading (normally, 4:00 p.m., New York time). NAV is calculated
by adding together the current market value of all of the Fund's assets,
including accrued interest and dividends; then subtracting liabilities,
including accrued expenses; and finally dividing that dollar amount by the total
number of Fund shares outstanding.
Performance Data. To keep shareholders and potential investors informed, we
will occasionally advertise the Fund's total return for one-, five-, and
ten-year periods. Total return figures show the rate of return on a $1,000
investment in the Fund, assuming reinvestment of all dividends and capital gain
distributions for the periods cited. Cumulative total return shows the actual
rate of return on an investment for the period cited; average annual total
return represents the average annual percentage change in the value of an
investment. Both cumulative and average annual total returns tend to "smooth
out" fluctuations in the Fund's investment results, not showing the interim
variations in performance over the periods cited. More information about the
Fund's recent and historical performance is contained in the Fund's Annual
Report to Shareholders. You can get a free copy by calling or writing to IFG
using the phone number or address on the cover of this prospectus.
<PAGE>
When we quote mutual fund rankings published by Lipper Analytical
Services, Inc., we may compare the fund to others in its category of Capital
Appreciation Funds, as well as the broad-based Lipper general fund groupings.
These rankings allow you to compare the Fund to its peers. Other independent
financial media also produce performance- or service-related comparisons, which
you may see in our promotional materials. For more information see "Fund
Performance" in the Statement of Additional Information.
Performance figures are based on historical earnings and are not intended
to suggest future performance.
HOW TO BUY SHARES
The ^ chart on page 17 shows several convenient ways to invest in the
Fund. Your new Fund shares will be priced at the NAV next determined after your
order is received in proper form ^. There is no charge to invest, exchange, or
redeem shares when you make transactions directly through IFG. However, if you
invest in the Fund through a securities broker, you may be charged a commission
or transaction fee. For all new accounts, please send a completed application
form. Please specify which Fund you wish to purchase.
Fund Management reserves the right to increase, reduce or waive the
minimum investment requirements in its sole discretion, where it determines this
action is in the best interests of the Fund. Further, Fund Management reserves
the right in its sole discretion to reject any order for the purchase of Fund
shares (including purchases by exchange) when, in its judgment, such rejection
is in the Fund's best interests.
Exchange Privilege. You may exchange your shares in this Fund for those in
another INVESCO fund on the basis of their respective net asset values at the
time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider their differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make up to four exchanges out of each fund during
each calendar year.
3) An exchange is the redemption of shares from one fund followed by
the purchase of shares in another. Therefore, any gain or loss
realized on the exchange is recognizable for federal income tax
purposes (unless, of course, your account is tax-deferred).
4) The Fund reserves the right to reject any exchange request, or to
modify or terminate exchange privileges, in the best interests of
the Fund and its shareholders. Notice of all such modifications or
termination will be given at least 60 days prior to the effective
<PAGE>
date of the change in privilege, except for unusual instances (such
as when redemptions of the exchanged shares are suspended under
Section 22(e) of the Investment Company Act of 1940, or when sales
of the fund into which you are exchanging are temporarily stopped).
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check
- --------
Mail to: $1,000 for regular If your check does
INVESCO Funds account; not clear, you will
Group, Inc. $250 for an be responsible for
P.O. Box 173706 Individual any related loss
Denver, CO 80217- Retirement Account; the Fund or IFG
3706. $50 minimum for incurs. If you are
Or you may send each subsequent already a
your check by investment. shareholder in the
overnight courier INVESCO funds, the
to: 7800 E. Union Fund may seek
Ave., Denver, CO reimbursement from
80237. your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or
Wire
- ---------------
Call 1-800-525-8085 $1,000. Payment must be
to request your received within 3
purchase. Then send business days, or
your check by the transaction may
overnight courier be cancelled. If a
to our street purchase is
address: cancelled due to
7800 E. Union Ave., nonpayment, you
Denver, CO 80237. will be responsible
Or you may transmit for any related
your payment by loss the Fund or
bank wire (call IFG IFG incurs. If you
for instructions). are already a
shareholder in the
INVESCO funds, the Fund
may seek reimbursement
from your existing
account(s) for any loss
incurred.
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or
Direct Payroll
Purchase
- ----------------
You may enroll on $50 per month for Like all regular
the fund EasiVest; $50 per investment plans,
application, or pay period for neither EasiVest
call us for the Direct Payroll nor Direct Payroll
correct form and Purchase. You may Purchase ensures a
more details. start or stop your profit or protects
Investing the same regular investment against loss in a
amount on a monthly plan at any time, falling market.
basis allows you to with two weeks' Because you'll
buy more shares notice to IFG. invest continually,
when prices are low regardless of
and fewer shares varying price
when prices are levels, consider
high. This your financial
"dollar-cost ability to keep
averaging" may help buying through low
offset market price levels. And
fluctuations. Over remember that you
a period of time, will lose money if
your average cost you redeem your
per share may be shares when the
less than the market value of all
actual average your shares is less
price per share. than their cost.
- --------------------------------------------------------------------------------
By PAL
- ------
Your "Personal $1,000. Be sure to write
Account Line" is down the
available for confirmation number
subsequent provided by PAL.
purchases and Payment must be
exchanges 24 hours received within 3
a day. Simply call business days, or
1-800-424-8085. the transaction may
be cancelled. If a
purchase is cancelled
due to nonpayment, you
will be responsible for
any related loss the
Fund or IFG incurs. If
you are already a
shareholder in the
INVESCO funds, the Fund
may seek reimbursement
from your existing
account(s) for any loss
incurred.
<PAGE>
- --------------------------------------------------------------------------------
By Exchange
- -----------
Between this and $1,000 to open a See "Exchange
another of the new account; $50 Privilege," ^ page
INVESCO funds. Call for written 16.
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
Automatic Monthly minimum is $250 for
Exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
================================================================================
^
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of shares. These expenditures may include compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IFG-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers, and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions.
In addition, other reimbursable expenditures include advertising,
preparation and distribution of sales literature, printing and distribution of
prospectuses to prospective investors, public relations efforts, marketing
programs and other services and promotional activities agreed upon from time to
time by the Fund and its board of directors.
IFG is not entitled to reimbursement for overhead expenses under the Plan,
but may be reimbursed for all or a portion of the compensation paid for salaries
and other employee benefits for IFG personnel whose primary responsibilities
involve marketing shares of the INVESCO funds, including the Fund. Also, any
payments made by the Fund may not be used to finance the distribution of shares
of any other mutual fund advised by IFG. Payments made by the Fund under the
Plan for compensation of marketing personnel, as noted above, are based on an
allocation formula designed to ensure that all such payments are appropriate.
<PAGE>
Under the Plan, the Fund's reimbursement to IFG is limited to an amount
computed at a maximum rate of 0.25% of the Fund's annual average net assets.
Payments by the Fund under the Plan, for any month, may only be made to
reimburse expenditures incurred during the rolling 12-month period in which that
month falls. Therefore, any reimbursable expenses incurred by IFG in excess of
the limitation described above are not reimbursable and will be borne by IFG. In
addition, IFG may from time to time make additional payments from its revenues
to securities dealers and other financial institutions that provide
distribution-related and/or administrative services for the Fund. No further
payments will be made by the Fund under the Plan in the event of its
termination.
FUND SERVICES
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges, and redemptions. If you choose certain
recurring transaction plans (for instance, EasiVest), your transactions will be
confirmed on your quarterly Investment Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends and capital gain distributions
are automatically invested in additional Fund shares at the NAV on the
ex-dividend date, unless you choose to have dividends and/or capital gain
distributions automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application, a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if the Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans ^ and IRAs. Fund shares may be purchased for Individual
Retirement Accounts (IRAs) and many types of tax-deferred retirement plans. IFG
can supply you with information and forms to establish or transfer your existing
plan or account.
<PAGE>
HOW TO SELL SHARES
The following chart shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at ^ the current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
Please specify from which ^ fund you wish to redeem shares. Shareholders
have a separate account for each fund in which they invest.
While the Fund will attempt to process telephone redemptions promptly,
there may be times -- particularly in periods of severe economic or market
disruption -- when you may experience delays in redeeming shares by phone.
<PAGE>
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone
- ------------
Call us toll-free $250 (or, if less, This option is not
at 1-800-525-8085. full liquidation of available for
the account) for a shares held in
redemption check; Individual
$1,000 for a wire Retirement Accounts
to bank of record. ("IRAs").
The maximum amount
which may be
redeemed by
telephone is
generally $25,000.
These telephone
redemption
privileges may be
modified or
terminated in the
future at IFG's
discretion.
- --------------------------------------------------------------------------------
In Writing
- ----------
Mail your request Any amount. The If the shares to be
to INVESCO Funds redemption request redeemed are
Group, Inc., P.O. must be signed by represented by
Box 173706 all registered stock certificates,
Denver, CO 80217- shareholder(s). the certificates
3706. You may also Payment will be must be sent to
send your request mailed to your IFG.
by overnight address of record,
courier to 7800 E. or to a designated
Union Ave., Denver, bank.
CO 80237.
- --------------------------------------------------------------------------------
By Exchange
- -----------
Between this and $1,000 to open a See "Exchange
another of the new account; $50 Privilege," ^ page
INVESCO funds. Call for written 16.
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
automatic monthly minimum is $250 for
exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal
Plan
- -------------------
You may call us to $100 per payment on You must have at
request the a monthly or least $10,000 total
appropriate form quarterly basis. invested with the
and more The redemption INVESCO funds, with
information at 1- check may be made at least $5,000 of
800-525-8085. payable to any that total invested
party you in the fund from
designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third
Party
- ----------------
Mail your request Any amount. All registered
to INVESCO Funds owners of the
Group, Inc., P.O. account must sign
Box 173706 the request, with a
Denver, CO 80217- signature guarantee
3706. from an eligible
guarantor financial
institution, such as a
commercial bank or a
recognized national or
regional securities
firm.
================================================================================
^
Payments of redemption proceeds will be mailed within seven days following
receipt of the redemption request in proper form. However, payment may be
postponed under unusual circumstances -- for instance, if normal trading is not
taking place on the New York Stock Exchange, or during an emergency as defined
by the Securities and Exchange Commission. If your shares were purchased by a
check which has not yet cleared, payment will be made ^ promptly upon clearance
of ^ the purchase check (which may take up to ^ 15 days).
If you participate in ^ EasiVest, the Fund's automatic monthly investment
program, and redeem all of the shares in your account, we will terminate any
further ^ EasiVest purchases unless you instruct us otherwise.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to individually redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state,
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to the withholding of foreign taxes on dividends
or interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund meets the qualifications to
enable it to pass these taxes through to shareholders for use by them as a
foreign tax credit or deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless you are subject to
backup withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax identification
number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income^ in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders on an annual or semiannual basis, at the discretion of
the Fund's board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of the distribution regardless of how long the shares
have been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase price, a portion of which
is then returned in the form of a taxable distribution.
<PAGE>
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending on how long the
Fund held the security which gave rise to the gains. The capital gain
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as dividends.
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
We encourage you to consult your tax adviser with respect to these
matters. For further information see "Dividends, Capital Gain Distributions and
Taxes" in the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund have equal voting rights based on
one vote for each share owned. The Fund is not generally required and does not
expect to hold regular annual meetings of shareholders. However, when requested
to do so in writing by the holders of 10% or more of the outstanding shares of
the Fund or as may be required by applicable law or the Fund's Articles of
Incorporation, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority of
the outstanding shares of the Fund. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
<PAGE>
INVESCO DYNAMICS FUND, INC.
A no-load mutual fund seeking
capital appreciation through
aggressive investment policies.
PROSPECTUS
^ September 1, 1996
To receive general information and prospectuses on any of ^ INVESCO's funds or
retirement plans, or to obtain current account or price information ^, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line^, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
^ Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
^ September 1, 1996
INVESCO DYNAMICS FUND, INC.
A no-load mutual fund seeking
capital appreciation through
aggressive investment policies
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
- --------------------------------------------------------------------------------
INVESCO DYNAMICS FUND, INC. ("the Fund") seeks to achieve its investment
objective of providing its shareholders appreciation of capital through
aggressive investment policies by investing its assets in a variety of
securities which are believed to present possibilities for capital enhancement.
The Fund normally invests primarily in common stocks but may invest in other
kinds of securities when determined appropriate by management. The Fund should
not be considered by investors seeking current income.
A Prospectus for the Fund dated ^ September 1, 1996, which provides the
basic information you should know before investing in the Fund, may be obtained
without charge from INVESCO Funds Group, Inc., Post Office Box 173706, Denver,
Colorado 80217-3706. This Statement of Additional Information is not a
Prospectus, but contains information in addition to and more detailed than that
set forth in the Prospectus. It is intended to provide additional information
regarding the activities and operations of the Fund, and should be read in
conjunction with the Prospectus.
Investment Adviser and Distributor: INVESCO FUNDS GROUP, INC.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
INVESTMENT POLICIES AND RESTRICTIONS ^ 29
THE FUND AND ITS MANAGEMENT ^ 33
HOW SHARES CAN BE PURCHASED ^ 45
HOW SHARES ARE VALUED ^ 49
FUND PERFORMANCE ^ 50
SERVICES PROVIDED BY THE FUND ^ 52
TAX-DEFERRED RETIREMENT PLANS ^ 53
HOW TO REDEEM SHARES ^ 53
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES ^ 54
INVESTMENT PRACTICES ^ 56
ADDITIONAL INFORMATION ^ 60
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
In the selection of portfolio securities, management seeks to evaluate
fundamental investment factors believed to be favorable to long-term
appreciation of a security, including such factors as the quality of management
of the issuer, the growth rate of its earnings per share, the outlook for future
growth of sales and earnings and the rate of return of profits on its investment
capital. General economic conditions, market trends and conditions within an
industry are also considered in making investment decisions. In the structuring
of the Fund's portfolio, attention is given to the selection of securities of
issuers which, because of their new products, new services or new processes or
because of favorable prospects for future earnings, appear to be in an early
stage of growth.
Illiquid and 144A Securities. The Fund may invest in securities that are
illiquid because they are subject to restrictions on their resale ("restricted
securities") or because, based upon their nature or the market for such
securities, they are not readily marketable. The Fund also may invest in
restricted securities that can be resold to institutional investors pursuant to
Rule 144A under the Securities Act of 1933, as amended (the "1933 Act")
(hereinafter referred to as "Rule 144A Securities"). The Fund's board of
directors has delegated to Fund management the authority to determine the
liquidity of Rule 144A Securities pursuant to guidelines approved by the board.
The Fund is authorized to invest up to 10% of its total assets in a combination
of Rule 144A Securities (as discussed below) and illiquid securities (including
repurchase agreements maturing in more than seven days), provided that no more
than 5% of the Fund's total assets, measured at the time of purchase, are
invested in illiquid securities.
Investments in restricted securities involve certain risks to the extent
that the Fund might have to bear the expense and incur the delays associated
with effecting registration in order to sell the security.
In recent years, a large institutional market has developed for Rule 144A
Securities. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend on an efficient
institutional market in which Rule 144A Securities can readily be resold or on
an issuer's ability to honor a demand for repayment. Therefore, the fact that
there are contractual or legal restrictions on resale to the general public or
certain institutions is not dispositive of the liquidity of such investments.
Institutional markets for Rule 144A Securities may provide both readily
ascertainable values for Rule 144A Securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing a Rule 144A Security
<PAGE>
held by the Fund, however, could adversely affect the marketability of such
security, and the Fund might be unable to dispose of such security promptly or
at reasonable prices.
Repurchase Agreements. As discussed in the Prospectus, the Fund may enter
into repurchase agreements with respect to debt instruments eligible for
investment by the Fund with member banks of the Federal Reserve System,
registered broker-dealers, and registered government securities dealers, which
are deemed creditworthy under standards established by the Fund's board of
directors. A repurchase agreement may be considered a loan collateralized by
securities. The resale price reflects an agreed upon interest rate effective for
the period the instrument is held by the Fund and is unrelated to the interest
rate on the underlying instrument. In these transactions, the securities
acquired by the Fund (including accrued interest earned thereon) must have a
total value in excess of the value of the repurchase agreement, and are held as
collateral by the Fund's custodian bank until the repurchase agreement is
completed.
Loans of Portfolio Securities. The Fund also may lend its portfolio
securities to qualified brokers, dealers, banks, or other financial
institutions. This practice permits the Fund to earn income, which, in turn, can
be invested in additional securities to pursue the Fund's investment objective.
Loans of securities by the Fund will be collateralized by cash, letters of
credit, or securities issued or guaranteed by the U.S. government or its
agencies equal to at least 100% of the current market value of the loaned
securities, determined on a daily basis. Lending securities involves certain
risks, the most significant of which is the risk that a borrower may fail to
return a portfolio security. The Fund monitors the creditworthiness of borrowers
in order to minimize such risks. The Fund will not lend any security if, as a
result of such loan, the aggregate value of securities then on loan would exceed
33-1/3% of the Fund's net assets (taken at market value). While voting rights
may pass with the loaned securities, if a material event (e.g., proposed merger,
sale of assets, or liquidation) is to occur affecting an investment on loan, the
loan must be called and the securities voted. Loans of securities made by the
Fund will comply with all other applicable regulatory requirements, including
the rules of the New York Stock Exchange and the requirements of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules of the
Securities and Exchange Commission (the "SEC") thereunder.
Investment Restrictions. As described in the section of the Prospectus
entitled "Investment Policies and Risks," the Fund has adopted certain
fundamental investment restrictions. These restrictions may not be changed
without the prior approval of the holders of a majority, as defined in the 1940
Act, of the outstanding voting securities of the Fund. For purposes of the
following limitations, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
<PAGE>
resulting from fluctuations in value does not require elimination of any
security from the Fund. Under these restrictions, the Fund may not:
(1) issue preference shares or create any funded debt;
(2) sell short or buy on margin;
(3) borrow money (in the event the board of directors should authorize
the borrowing of money for the purpose of exercising permissive
leverage) unless immediately thereafter the Fund's total net assets
equal at least 400% of all borrowings, except that the percentage
may be less than 400% if reduced because of changes in the value of
the Fund's investments, but it is required at all times to comply
with the provisions of the Investment Company Act of 1940 and to
maintain asset coverage of at least 300%. The Fund may borrow only
from banks;
(4) buy or sell real estate (however, the Fund may purchase securities
of companies investing in real estate), commodities or commodity
contracts;
(5) invest in securities of any other investment company except for a
purchase or acquisition in accordance with a plan of reorganization,
merger or consolidation;
(6) invest in any company for the purpose of exercising
control or management;
(7) purchase the securities of any company if as a result of such
purchase more than 10% of total assets would be invested in
securities that are illiquid because of the legal or contractual
restrictions on resale to which they are subject ("restricted
securities"), or because there are no readily available market
quotations for such securities, or enter into a repurchase agreement
maturing in more than seven days, if as a result, such repurchase
agreements, together with illiquid securities, would constitute more
than 10% of total assets;
(8) purchase securities if the purchase would cause the Fund, at the
time, to have more than 5% of its total assets invested in the
securities of any one issuer or to own more than 10% of the voting
securities of any one issuer (except obligations issued or
guaranteed by the U.S.
Government);
(9) engage in the underwriting of any securities;
(10) make loans to any person, except through the purchase of debt
securities in accordance with the Fund's investment policies, or the
lending of portfolio securities to broker-dealers or other
institutional investors, or the entering into repurchase agreements
<PAGE>
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 the Fund's total net assets may be invested
in repurchase agreements maturing in more than seven days;
(11) purchase securities of any company in which any officer or director
of the Fund or its investment adviser owns more than 1/2 of 1% of
the outstanding securities, or in which all of the officers or
directors of the Fund and its investment supervisor, as a group, own
more than 5% of such securities; or
(12) invest more than 25% of the value of the Fund's assets in one
particular industry.
In applying restriction (7) above, the Fund also includes illiquid
securities (those which cannot be sold in the ordinary course of business within
seven days at approximately the valuation given to them by the Fund) among the
securities subject to the 10% of total assets limit. The board of directors has
delegated to the Fund's investment adviser the authority to determine that a
liquid market exists for securities eligible for resale pursuant to Rule 144A
under the 1933 Act, or any successor to such rule, and that such securities are
not subject to the Fund's 5% of total assets limitations on investing in
securities that are not readily marketable, discussed below. Under guidelines
established by the board of directors, the adviser will consider the following
factors, among others, in making this determination: (1) the unregistered nature
of a Rule 144A security, (2) the frequency of trades and quotes for the
security; (3) the number of dealers willing to purchase or sell the security and
the number of other potential purchasers; (4) dealer undertakings to make a
market in the security; and (5) the nature of the security and the nature of
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer). However, Rule 144A
Securities are still subject to the Fund's 10% of total assets limitation on
investments in restricted securities (securities for which there are legal or
contractual restrictions on resale).
In applying restriction (12) above, the Fund uses an industry
classification system based on the O'Neil Database published by William O'Neil &
Co., Inc.
In addition to the foregoing investment restrictions, the Fund has given
the following undertakings to the Texas State Securities Board: (1) The Fund's
investments in unattached warrants, valued at the lower of cost or market, will
not exceed 2% of net assets; and (2) The Fund may not invest in any oil, gas, or
mineral leases, and may not invest in real estate limited partnership interests.
<PAGE>
The Fund has also given an undertaking to the State of Indiana that it
will not purchase any security, if such purchase would cause the Fund to have
more than: (1) 10% of its total assets invested in securities of issuers which
the Fund is restricted from selling to the public without registration under the
1933 Act; or (2) 5% of its total assets invested in securities of unseasoned
issuers, including their predecessors, which have been in operation for less
than three years, and equity securities of issuers which are not readily
marketable. In addition, the Fund has undertaken not to purchase any interest in
oil, gas or other mineral exploration or development programs.
The Fund has also given an undertaking to the State of Arkansas that it
will not invest in securities of unseasoned issuers, including their
predecessors, which have been in operation for less than three years, and equity
securities of issuers which are not readily marketable, if by reason thereof the
value of its aggregate investment in such classes of securities will exceed 5%
of its total assets. In addition, the Fund will not purchase puts, calls,
straddles, spreads, and any combination thereof if by reason thereof the value
of its aggregate investment in such classes of securities will exceed 5% of its
total assets.
THE FUND AND ITS MANAGEMENT
The Fund. The Fund was incorporated on April 2, 1993, under the laws of
Maryland. On July 1, 1993, the Fund assumed all of the assets and liabilities of
Financial Dynamics Fund, Inc. ("FDF"), which was incorporated in Colorado on
February 17, 1967. All financial and other information about the Fund for
periods prior to July 1, 1993, relates to FDF.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("INVESCO"), is employed as the Fund's investment adviser. INVESCO was
established in 1932 and also serves as an investment adviser to INVESCO
Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value
Trust, and INVESCO Variable Investment Funds, Inc.
The Sub-Adviser. INVESCO Trust Company ("INVESCO Trust") serves as the
sub-adviser to the Fund, pursuant to an agreement between INVESCO and INVESCO
Trust. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO.
INVESCO is an indirect, wholly-owned subsidiary of INVESCO PLC, a
publicly-traded holding company organized in 1935. Through subsidiaries located
in London, Denver, Atlanta, Boston, Louisville, Dallas, Tokyo, Hong Kong, and
the Channel Islands, INVESCO PLC provides investment services around the world.
<PAGE>
INVESCO was acquired by INVESCO PLC in 1982 and as of April 30, ^ 1996, managed
14 mutual funds, consisting of ^ 39 separate portfolios, on behalf of over ^
822,000 shareholders. INVESCO PLC's other North American subsidiaries include
the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia, manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker-dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. (formerly Gardner and Preston Moss,
Inc.) of Boston, Massachusetts, primarily manages pension and endowment
accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for INVESCO PLC's clients
worldwide. Clients include corporate plans, public pension funds as well as
endowment and foundation accounts.
The corporate headquarters of INVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Prospectus, INVESCO ^ and INVESCO Trust permit
investment and other personnel to purchase and sell securities for their own
accounts in accordance with a compliance policy governing personal investing by
directors, officers and employees of INVESCO, INVESCO Trust and ^ their North
American affiliates. The policy requires officers, inside directors, investment
and other personnel of INVESCO, INVESCO Trust and ^ their North American
affiliates to pre-clear all transactions in securities not otherwise exempt
under the policy. Requests for trading authority will be denied when, among
other reasons, the proposed personal transaction would be contrary to the
provisions of the policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Fund.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of INVESCO,
INVESCO Trust and ^ their North American affiliates to various trading
restrictions and reporting obligations. All reportable transactions are reviewed
for compliance with the policy. The provisions of the policy are administered by
and subject to exceptions authorized by INVESCO or INVESCO Trust.
<PAGE>
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement (the "Agreement") with the Fund
which was approved on April 21, 1993, by a vote cast in person by a majority of
the directors of the Fund, including a majority of the directors who are not
"interested persons" of the Fund or INVESCO at a meeting called for such
purpose. Pursuant to authorization granted by the public shareholders of FDF on
May 24, 1993, FDF, as the initial shareholder of the Fund, approved the
Agreement on June 24, 1993, for an initial term expiring April 30, 1995. The
Agreement has been continued by action of the board of directors through April
30, ^ 1997. Thereafter, the Agreement may be continued from year to year as long
as each such continuance is specifically approved at least annually by the board
of directors of the Fund, or by a vote of the holders of a majority, as defined
in the 1940 Act, of the outstanding shares of the Fund. Any such continuance
also must be approved by a majority of the Fund's directors who are not parties
to the Agreement or interested persons (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
continuance. The Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of an assignment to the extent required by the 1940 Act and the
rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolio
of the Fund in conformity with the Fund's investment policies (either directly
or by delegation to a sub- adviser which may be a company affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial
and all other services necessary or incidental to the administration of the
affairs of the Fund excluding, however, those services that are the subject of
separate agreement between the Fund and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency, and registrar services, and services
furnished under an Administrative Services Agreement with INVESCO discussed
below. Services provided under the Agreement include, but are not limited to:
supplying the Fund with officers, clerical staff and other employees, if any,
who are necessary in connection with the Fund's operations; furnishing office
space, facilities, equipment, and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Fund's operations; preparation and review of
required documents, reports and filings by INVESCO's in-house legal and
accounting staff (including the prospectus, statement of additional information,
proxy statements, shareholder reports, tax returns, reports to the SEC, and
other corporate documents of the Fund), except insofar as the assistance of
independent accountants or attorneys is necessary or desirable; supplying basic
telephone service and other utilities; and preparing and maintaining certain of
the books and records required to be prepared and maintained by the Fund under
<PAGE>
the 1940 Act. Expenses not assumed by INVESCO are borne by the Fund.
As full compensation for its advisory services to the Fund, INVESCO
receives a monthly fee. The fee is calculated at the annual rate of 0.60% on the
first $350 million of the Fund's average net assets; 0.55% on the next $350
million of the Fund's average net assets; and 0.50% on the Fund's average net
assets in excess of $700 million. For the fiscal years ended April 30, 1996,
1995^ and 1994 ^, the Fund paid INVESCO advisory fees of ^ $3,382,286,
$2,012,861 and $1,749,114, respectively.
Certain states in which the shares of the Fund are qualified for sale
currently impose limitations on the expenses of the Fund. At the date of this
Statement of Additional Information, the most restrictive state-imposed annual
expense limitation requires that INVESCO absorb any amount necessary to prevent
the Fund's aggregate ordinary operating expenses (excluding interest, taxes,
brokerage fees, and commissions, and extraordinary charges such as litigation
costs) from exceeding in any fiscal year 2.5% on the Fund's first $30 million of
average net assets, 2.0% on the next $70 million of average net assets and 1.5%
on the remaining average net assets. No payment of the investment advisory fee
will be made to INVESCO which would result in Fund expenses exceeding on a
cumulative annualized basis this state limitation. During the past year, INVESCO
did not absorb any amounts under this provision.
Sub-Advisory Agreement. INVESCO Trust serves as sub-adviser to the Fund
pursuant to a sub-advisory agreement (the "Sub- Agreement") with INVESCO which
was approved on April 21, 1993, by a vote cast in person by a majority of the
directors of the Fund, including a majority of the directors who are not
"interested persons" of the Fund, INVESCO, or INVESCO Trust at a meeting called
for such purpose. Pursuant to authorization granted by the public shareholders
of FDF on May 24, 1993, FDF, as the initial shareholder of the Fund, approved
the Sub-Agreement on June 24, 1993, for an initial term expiring April 30, 1995.
The Sub- Agreement has been continued by action of the board of directors
through April 30, ^ 1997. Thereafter, the Sub-Agreement may be continued from
year to year as long as each such continuance is specifically approved by the
board of directors of the Fund, or by a vote of the holders of a majority, as
defined in the 1940 Act, of the outstanding shares of the Fund. Each such
continuance also must be approved by a majority of the directors who are not
parties to the Sub-Agreement or interested persons (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such continuance. The Sub-Agreement may be terminated at any time without
penalty by either party or the Fund upon sixty (60) days' written notice, and
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the rules thereunder.
<PAGE>
The Sub-Agreement provides that INVESCO Trust, subject to the supervision
of INVESCO, shall manage the investment portfolio of the Fund in conformity with
the Fund's investment policies. These management services would include: (a)
managing the investment and reinvestment of all the assets, now or hereafter
acquired, of the Fund, and executing all purchases and sales of portfolio
securities; (b) maintaining a continuous investment program for the Fund,
consistent with (i) the Fund's investment policies as set forth in the Fund's
Articles of Incorporation, Bylaws, and Registration Statement, as from time to
time amended, under the 1940 Act, and in any prospectus and/or statement of
additional information of the Fund, as from time to time amended and in use
under the 1933 Act, and (ii) the Fund's status as a regulated investment company
under the Internal Revenue Code of 1986, as amended; (c) determining what
securities are to be purchased or sold for the Fund, unless otherwise directed
by the directors of the Fund or INVESCO, and executing transactions accordingly;
(d) providing the Fund the benefit of all of the investment analysis and
research, the reviews of current economic conditions and trends, and the
consideration of long-range investment policy now or hereafter generally
available to investment advisory customers of the Sub-Adviser; (e) determining
what portion of the Fund should be invested in the various types of securities
authorized for purchase by the Fund; and (f) making recommendations as to the
manner in which voting rights, rights to consent to Fund action and any other
rights pertaining to the Fund's portfolio securities shall be exercised.
The Sub-Agreement provides that as compensation for its services, INVESCO
Trust shall receive from INVESCO, at the end of each month, a fee based upon the
average net assets of the Fund at the following annual rate: 0.25% on the Fund's
average net assets up to $200 million, and 0.20% on the Fund's average net
assets in excess of $200 million. The Sub-Advisory fee is paid by INVESCO, NOT
the Fund.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, also provides certain administrative, sub-accounting, and
recordkeeping services to the Fund pursuant to an Administrative Services
Agreement dated April 30, 1993 (the "Administrative Agreement"). The
Administrative Agreement was approved on April 21, 1993, by a vote cast in
person by all of the directors of the Fund, including all of the directors who
are not "interested persons" of the Fund or INVESCO at a meeting called for such
purpose. The Administrative Agreement was for an initial term expiring April 30,
1994 and has been renewed through April 30, ^ 1997. The Administrative Agreement
may be continued from year to year as long as each such continuance is
specifically approved by the board of directors of the Fund, including a
majority of the directors who are not parties to the Administrative Agreement or
interested persons (as defined in the Investment Company Act of 1940) of any
such party, cast in person at a meeting called for the purpose of voting on such
continuance. The Administrative Agreement may be terminated at any time without
penalty by INVESCO on sixty (60) days' written notice, or by the Fund upon
<PAGE>
thirty (30) days' written notice, and terminates automatically in the event of
an assignment unless the Fund's board of directors approves such assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Fund: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Fund; and (B) such sub-accounting, recordkeeping, and administrative services
and functions, which may be provided by affiliates of INVESCO, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants in
such plans.
As full compensation for services provided under the Administrative
Agreement, the Fund pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% per year of the average net assets of the
Fund. During the fiscal years ended April 30, 1996, 1995^ and 1994 ^, the Fund
paid INVESCO administrative services fees in the amount of $97,509, $60,466
(prior to the voluntary absorption of certain Fund expenses by INVESCO)^ and
$53,729 ^, respectively.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent, and registrar services for the Fund pursuant to a Transfer
Agency Agreement which was approved by the board of directors of the Fund,
including a majority of the Fund's directors who are not parties to the Transfer
Agency Agreement or "interested persons" of any such party, on April 21, 1993,
for an initial term expiring April 30, 1994. The Transfer Agency Agreement has
been continued by action of the board of directors until April 30, ^ 1997, and
thereafter may be continued from year to year as long as such continuance is
specifically approved at least annually by the board of directors of the Fund,
or by a vote of the holders of a majority of the outstanding shares of the Fund.
Any such continuance also must be approved by a majority of the Fund's directors
who are not parties to the Transfer Agency Agreement or interested persons (as
defined by the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such continuance. The Transfer Agency Agreement may
be terminated at any time without penalty by either party upon sixty (60) days'
written notice and terminates automatically in the event of assignment.
The Transfer Agency Agreement provides that the Fund shall pay to INVESCO
a fee of ^ $20.00 per shareholder account or omnibus account participant per
year. This fee is paid monthly at 1/12 of the annual fee and is based upon the
actual number of shareholder accounts or omnibus account participants in
existence at any time during each month. For the fiscal years ended April 30,
1996, 1995^ and 1994 ^, the Fund paid INVESCO transfer agency fees of
$1,108,321, $838,096 (prior to the voluntary absorption of certain Fund expenses
by INVESCO)^ and $485,984 ^, respectively.
<PAGE>
Officers and Directors of the Fund. The overall direction and supervision
of the Fund is the responsibility of the board of directors, which has the
primary duty of seeing that the Fund's general investment policies and programs
of the Fund are carried out and that the Fund's portfolio is properly
administered. The officers of the Fund, all of whom are officers and employees
of, and paid by INVESCO, are responsible for the day-to-day administration of
the Fund. The investment adviser for the Fund has the primary responsibility for
making investment decisions on behalf of the Fund. These investment decisions
are reviewed by the investment committee of INVESCO.
All of the officers and directors of the Fund hold comparable positions
with INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc.,
INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income
Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO
Variable Investment Funds, Inc. ^ All of the directors of the Fund ^ also serve
as trustees of INVESCO Value Trust. In addition, all of the directors of the
Fund also are directors of INVESCO Advisor Funds, Inc. (formerly known as "The
EBI Funds, Inc."); and, with the exception of ^ Mr. Hesser ^, trustees of
INVESCO Treasurer's Series Trust ^. All of the officers of the Fund also hold
comparable positions with INVESCO Value Trust. Set forth below is information
with respect to each of the Fund's officers and directors. Unless otherwise
indicated, the address of the directors and officers is Post Office Box 173706,
Denver, Colorado 80217-3706. Their affiliations represent their principal
occupations during at least the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of INVESCO PLC, London, England, and of various subsidiaries thereof;
Chairman of the Board of ^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's
Series Trust, and The Global Health Sciences Fund. Address: 1315 Peachtree
Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Advisor Funds, Inc. and INVESCO Treasurer's Series Trust. Trustee of The Global
Health Sciences Fund. Formerly, Chairman of the Executive Committee and^
Chairman of the Board of Security Life of Denver Insurance Company, Denver,
Colorado; Director of ^ ING America Life Insurance Co., Urbaine Life Insurance
Company and Midwestern United Life Insurance Company. Address: Security Life
Center, 1290 Broadway, Denver, Colorado. Born: January 12, 1928.
DAN J. HESSER,*+ President and Director. Chairman of the Board, President,
and Chief Executive Officer of INVESCO Funds Group, Inc.^; Director of INVESCO
Trust Company. Trustee of The Global Health Sciences Fund. Born: December 27,
1939.
<PAGE>
VICTOR L. ANDREWS,** Director. ^ Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance ^ of Georgia State
University, Atlanta, Georgia^; 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 Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds, Inc.
Address: ^ 4625 Jettridge Drive, Atlanta, Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
^
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: 15
Sterling Road, Armonk, New York. Born: August 1, 1923.
A. D. FRAZIER, JR.,*, ** Director. Chief Operating Officer of the Atlanta
Committee for the Olympic Games. From 1982 to 1991, Mr. Frazier was employed in
various capacities by First Chicago Bank, most recently as Executive Vice
President of the North American Banking Group. Trustee of The Global Health
Sciences Fund. Director of Magellan Health Services, Inc. and of Charter Medical
Corp. Address: 250 Williams Street, Suite 6000, Atlanta, Georgia. Born: June ^
23, 1944.
HUBERT L. HARRIS, JR.* Director. Chairman (since May 1996) and President
(January 1990 to April 1996) of INVESCO Services, Inc. Director of INVESCO PLC
and Chief Financial Officer of INVESCO Individual Services Group. Member of the
Executive Committee of the Alumni Board of Trustees of Georgia Institute of
Technology. Address: 1315 Peachtree Street, N.E., Atlanta, Georgia. Born: July
15, 1943.
KENNETH T. KING,** Director. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
<PAGE>
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# Director. Retired. Formerly, Vice Chairman of the Board
of Directors of The Citizens and Southern Corporation and Chairman of the Board
and Chief Executive Officer of The Citizens and Southern Georgia Corp. and
Citizens and Southern National Bank. Trustee of The Global Health Sciences Fund
and Gables Residential Trust. Director of Golden Poultry Co., Inc. Address: 7
Piedmont Center, Suite 100, Atlanta, Georgia. Born: September 14, 1930.
^
GLEN A. PAYNE, Secretary. Senior Vice President, General Counsel and
Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company; formerly,
employee of a U.S. regulatory agency, Washington, D.C. (June 1973 through May
1989). Born: September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company since January 1988. Born: October 1,
1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company since
August 1992^. Formerly, Vice President of 440 Financial Group from June 1990 to
August 1992; Assistant Vice President of Putnam Companies from November 1986 to
June 1990. Born: August 21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Fund.
+Member of the executive committee of the Fund. On occasion, the executive
committee acts upon the current and ordinary business of the Fund between
meetings of the board of directors. Except for certain powers which, under
applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Fund. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Fund as defined in the
1940 Act.
**Member of the management liaison committee of the Fund.
<PAGE>
As of August 22, ^ 1996, officers and directors of the Fund, as a group,
beneficially owned less than 1% of the Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended April 30, ^
1996: the compensation paid by the Fund to its eight independent directors for
services rendered in their capacities as directors of the Fund; the benefits
accrued as Fund expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these directors upon retirement as a result of their service to the
Fund. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Funds Group, Inc. (including the Fund),
^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust, and The Global
Health Sciences Fund (collectively, the "INVESCO Complex") to these directors
for services rendered in their capacities as directors or trustees during the
year ended December 31, ^ 1995. As of December 31, ^ 1995, there were ^ 48 funds
in the INVESCO Complex.
<PAGE>
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued Annual INVESCO
Name of Compensa- As Part Benefits Complex
Person, tion From of Fund Upon Re- Paid To
Position Fund(1) Expenses(2) tirement(3) Directors(1)
Fred A.Deering, $ ^ 2,482 $ ^ 1,026 $ ^ 854 $ ^ 87,350
Vice Chairman of
the Board
Victor L. Andrews ^ 2,211 904 941 68,000
Bob R. Baker ^ 2,337 932 1,262 73,000
Lawrence H. Budner ^ 2,178 970 941 68,350
Daniel D. Chabris ^ 2,354 1,107 669 73,350
A. D. Frazier, ^ Jr.4,5 1,980 0 0 ^ 63,500
Kenneth T. King ^ 2,245 1,066 775 70,000
John W. ^ McIntyre5 2,129 0 0 ^ 67,850
------- ------ ----- ----------
Total ^ $17,916 $6,005 5,442 $571,400
% of Net Assets ^.0023%6 .0008%6 .0043%7
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
(2)Represents estimated benefits accrued with respect to the Defined
Benefit Deferred Compensation Plan discussed below, and not compensation
deferred at the election of the directors.
(3)These figures represent the Fund's share of the estimated annual
benefits payable by the INVESCO Complex (excluding The Global Health Sciences
Fund, which does not participate in any retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the funds in the INVESCO Complex. 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 further from retirement.
<PAGE>
With the exception of Messrs. Frazier and McIntyre, each of these directors has
served as a director/trustee of one or more of the funds in the INVESCO Complex
for the minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan.
4Messrs. Frazier and McIntyre began serving as directors of
the Fund on April 19, 1995.
5Because of the possibility that A. D. Frazier, Jr. may become employed by
a company affiliated with INVESCO at some point in the future, he was deemed to
be an "interested person" of the Fund and of the other funds in the INVESCO
Complex effective May 1, 1996. Until such time as Mr. Frazier actually becomes
employed by an INVESCO-affiliated company, however, he will continue to receive
the same director's fees and other compensation as the Fund's independent
directors.
6Totals ^ as a percentage of the Fund's net assets as of April 30, ^ 1996.
^ 7Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1995.
Messrs. ^ Brady, Harris and Hesser, ^ as "interested persons" of the Fund
and of the other funds in the INVESCO Complex, receive compensation as officers
or employees of INVESCO or its affiliated companies, and do not receive any
director's fees or other compensation from the Fund or the other funds in the
INVESCO Complex for their service as directors.
^
The boards of directors/trustees of the mutual funds managed by INVESCO, ^
INVESCO Advisor Funds, Inc. and INVESCO Treasurer's Series Trust have adopted a
Defined Benefit Deferred Compensation Plan for the non-interested directors and
trustees of the funds. Under this plan, each director or trustee who is not an
interested person of the funds (as defined in the 1940 Act) and who has served
for at least five years (a "qualified director") is entitled to receive, upon
retiring from the boards at the retirement age of 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 payable by the funds to the
qualified director at the time of his retirement (the "basic retainer").
Commencing with any such director's second year of retirement, and commencing
with the first year of retirement of a 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 25% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
<PAGE>
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or to his beneficiary or estate. If a
qualified director becomes disabled or dies either prior to age 72 or during
his/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
retainer payments will be made to his 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, ^ INVESCO Advisor and Treasurer's Series funds
in a manner determined to be fair and equitable by the committee. Although the
Fund is not making any payments to directors under the plan as of the date of
this Statement of Additional Information, it has begun to accrue, as a current
expense, a proportionate amount of the estimated future cost of these benefits.
The Fund has no stock options or other pension or retirement plans for
management or other personnel and pays no salary or compensation to any of its
officers.
The Fund has an audit committee comprised of four of the directors who are
not interested persons of the Fund. The committee meets periodically with the
Fund's independent accountants and officers to review accounting principles used
by the Fund, the adequacy of internal controls, the responsibilities and fees of
the independent accountants, and other matters.
The Fund also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Fund, and (b) to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis at the net asset value
per share next calculated after receipt of a purchase order in good form. The
net asset value per share is computed once each day that the New York Stock
Exchange is open as of the close of regular trading on that Exchange, but may
also be computed at other times. See "How Shares Are Valued." INVESCO acts as
the Fund's Distributor under a distribution agreement with the Fund under which
it receives no compensation and bears all expenses, including the cost of
printing and distributing prospectuses, incident to marketing of the Fund's
shares, except for such distribution expenses which are paid out of Fund assets
under the Fund's Plan of Distribution which has been adopted by the Fund
pursuant to Rule 12b-1 under the 1940 Act.
Distribution Plan. As discussed under "How to Buy Shares Distribution
Expenses" in the Prospectus, the Fund has adopted a Plan and Agreement of
Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, which was
<PAGE>
implemented on November 1, 1990. The Plan provides that the Fund may make
monthly payments to INVESCO of amounts computed at an annual rate no greater
than 0.25% of the Fund's average net assets during any 12-month period to
reimburse INVESCO for expenses incurred in connection with the distribution of
the Fund's shares to investors. For the fiscal year ended April 30, ^ 1996, the
Fund made payments to INVESCO under the Plan in the amount of ^ $1,390,524. In
addition, as of April 30, ^ 1996, $151,761 of additional distribution expenses
had been incurred for the Fund, subject to payment upon approval of the Fund's
directors, which approval was obtained on August 14, 1996. As noted in the
section of the Fund's Prospectus entitled "How to Buy Shares-Distribution
Expenses," one type of reimbursable expenditure is the payment of compensation
to securities companies and other financial institutions and organizations,
which may include INVESCO-affiliated companies, in order to obtain various
distribution-related and/or administrative services for the Fund. The Fund is
authorized by the Plan to use its assets to finance the payments made to obtain
those services. Payments will be made by INVESCO to broker-dealers who sell
shares of the Fund and may be made to banks, savings and loan associations and
other depository institutions. Although the Glass-Steagall Act limits the
ability of certain banks to act as underwriters of mutual fund shares, the Fund
does not believe that these limitations would affect the ability of such banks
to enter into arrangements with INVESCO, but can give no assurance in this
regard. However, to the extent it is determined otherwise in the future,
arrangements with banks might have to be modified or terminated, and, in that
case, the size of the Fund possibly could decrease to the extent that the banks
would no longer invest customer assets in the Fund. Neither the Fund nor its
investment adviser will give any preference to banks or other depository
institutions which enter into such arrangements when selecting investments to be
made by the Fund.
For the fiscal year ended April 30, ^ 1996, allocation of 12b- 1 amounts
paid by the Fund for the following categories of expenses were: advertising--^
$420,562; sales literature, printing, and postage--^ $228,072; direct mail--^
$43,270; public relations/promotion--^ $63,051; compensation to securities
dealers and other organizations--^ $406,562; and marketing personnel--^
$229,007.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Fund's Transfer Agent computer-processable tapes of all Fund transactions by
customers, serving as the primary source of information to customers in
answering questions concerning the Fund, and assisting in other customer
transactions with the Fund.
The Plan was approved on April 21, 1993, at a meeting called for such
purpose, by a majority of the directors of the Fund, including a majority of the
directors who neither are "interested persons" of the Fund nor have any
<PAGE>
financial interest in the operation of the Plan ("12b-1 directors"). Pursuant to
authorization granted by the public shareholders of FDF on May 24, 1993, FDF, as
the initial shareholder of the Fund, approved the Plan on June 24, 1993 for an
initial term expiring April 30, 1994. The Plan has been continued by action of
the board of directors until April 30, ^ 1997.
The Plan provides that it shall continue in effect with respect to the
Fund for so long as such continuance is approved at least annually by the vote
of the board of directors of the Fund cast in person at a meeting called for the
purpose of voting on such continuance. The Plan can also be terminated at any
time with respect to the Fund, without penalty, if a majority of the 12b-1
directors, or shareholders of the Fund, vote to terminate the Plan. The Fund
may, in its absolute discretion, suspend, discontinue or limit the offering of
its shares at any time. In determining whether any such action should be taken,
the board of directors intends to consider all relevant factors including,
without limitation, the size of the Fund, the investment climate for the Fund,
general market conditions, and the volume of sales and redemptions of Fund
shares. The Plan may continue in effect and payments may be made under the Plan
following any such temporary suspension or limitation of the offering of Fund
shares; however, the Fund is not contractually obligated to continue the Plan
for any particular period of time. Suspension of the offering of Fund shares
would not, of course, affect a shareholder's ability to redeem his shares. So
long as the Plan is in effect, the selection and nomination of persons to serve
as independent directors of the Fund shall be committed to the independent
directors then in office at the time of such selection or nomination. The Plan
may not be amended to increase materially the amount of the Fund's payments
thereunder without approval of the shareholders of the Fund, and all material
amendments to the Plan must be approved by the board of directors of the Fund,
including a majority of the 12b-1 directors. Under the agreement implementing
the Plan, INVESCO or the Fund, the latter by vote of a majority of the 12b-1
directors, or of the holders of a majority of the Fund's outstanding voting
securities, may terminate such agreement without penalty upon 30 days' written
notice to the other party. No further payments will be made by the Fund under
the Plan in the event of its termination.
To the extent that the Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of Fund assets in the amounts and for the purposes set
forth therein, notwithstanding the occurrence of an assignment, as defined by
the 1940 Act, and rules thereunder. To the extent it constitutes an agreement
pursuant to a plan, the Fund's obligation to make payments to INVESCO shall
terminate automatically, in the event of such "assignment," in which event the
Fund may continue to make payments, pursuant to the Plan, to INVESCO or another
organization only upon the approval of new arrangements, which may or may not be
with INVESCO, regarding the use of the amounts authorized to be paid by it under
<PAGE>
the Plan, by the directors, including a majority of the 12b-1 directors, by a
vote cast in person at a meeting called for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by the Fund are provided to, and reviewed by, the directors on a
quarterly basis. In the quarterly review, the directors determine whether, and
to what extent, INVESCO will be reimbursed for expenditures which it has made
that are reimbursable under the Fund's Rule 12b-1 Plan. On an annual basis, the
directors consider the continued appropriateness of the Plan at the level of
compensation provided therein.
The only directors or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Fund who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the Fund listed herein under the section entitled "The Fund And Its
Management-Officers and Directors of the Fund," who are also officers either of
INVESCO or companies affiliated with INVESCO. The benefits which the Fund
believes will be reasonably likely to flow to the Fund and its shareholders
under the Plan include the following:
(1) Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Fund;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of securities of the Fund in
amounts and at times that are disadvantageous for investment
purposes;
(3) The positive effect which increased Fund assets will have on
INVESCO's revenues could allow INVESCO:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of the Fund's
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from INVESCO (and support them in their infancy),
and thereby expand the investment choices available to all
shareholders, and
(c) To acquire and retain talented employees who desire
to be associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
<PAGE>
fixed expenses over a larger asset base), thereby partially
offsetting the costs of the plan.
HOW SHARES ARE VALUED
As described in the section of the Fund's Prospectus entitled "Fund Price
and Performance," the net asset value of shares of the Fund is computed once
each day that the New York Stock Exchange is open as of the close of regular
trading on that Exchange (generally 4:00 p.m., New York time) and applies to
purchase and redemption orders received prior to that time. Net asset value per
share is also computed on any other day on which there is a sufficient degree of
trading in the securities held by the Fund that the current net asset value per
share might be materially affected by changes in the value of the securities
held, but only if on such day the Fund receives a request to purchase or redeem
shares. Net asset value per share is not calculated on days the New York Stock
Exchange is closed, such as federal holidays including New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas.
The net asset value per share of the Fund is calculated by dividing the
value of all securities held by the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of the Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over-the-counter market for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities or other assets will be valued at their fair values as
determined in good faith by the board of directors or pursuant to procedures
adopted by the board of directors. The above procedures may include the use of
valuations furnished by a pricing service which employs a matrix to determine
valuations for normal institutional-size trading units of debt securities. Prior
to utilizing a pricing service, the Fund's board of directors reviews the
methods used by such service to assure itself that securities will be valued at
their fair values. The Fund's board of directors also periodically monitors the
methods used by such pricing services. Debt securities with remaining maturities
of 60 days or less at the time of purchase normally are valued at amortized
cost.
The values of the securities held by the Fund and other assets used in
computing net asset value generally are determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
<PAGE>
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Fund's net asset value. However, in the event that the closing price of a
foreign security is not available in time to calculate the Fund's net asset
value on a particular day, the Fund's board of directors has authorized the use
of the market price for the security obtained from an approved pricing service
at an established time during the day which may be prior to the close of regular
trading in the security. The value of all assets and liabilities initially
expressed in foreign currencies will be converted into U.S. dollars at the spot
rate of such currencies against U.S. dollars provided by an approved pricing
service.
FUND PERFORMANCE
As discussed in the section of the Fund's Prospectus entitled "Fund Price
and Performance," the Fund advertises its total return performance. Average
annual total return performance for the one-, five-, and ten-year periods ended
April 30, ^ 1996, was ^ 36.32%, 21.35% and ^ 14.90%, respectively. Average
annual total return performance for each of the periods indicated was computed
by finding the average annual compounded rates of return that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1 + T)to the nth power = ERV
where: P = initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period indicated.
In conjunction with performance reports, comparative data between the
Fund's performance for a given period and other types of investment vehicles,
including certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex,
<PAGE>
all of which are unmanaged market indicators. In addition, rankings, ratings,
and comparisons of investment performance and/or assessments of the quality of
shareholder service made by independent sources may be used in advertisements,
sales literature or shareholder reports, including reprints of, or selections
from, editorials or articles about the Fund. These sources utilize information
compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by
other recognized analytical services. The Lipper Analytical Services, Inc.
mutual fund rankings and comparisons which may be used by the Fund in
performance reports will be drawn from the "Capital Appreciation Funds" mutual
fund grouping, in addition to the broad-based Lipper general fund groupings.
Sources for Fund performance information and articles about the Fund include,
but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund
Performance Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
The Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
<PAGE>
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of the Prospectus
entitled "How to Sell Shares," the Fund offers a Periodic Withdrawal Plan. All
dividends and distributions on shares owned by shareholders participating in
this Plan are reinvested in additional shares. Since withdrawal payments
represent the proceeds from sales of shares, the amount of shareholders'
investments in the Fund will be reduced to the extent that withdrawal payments
exceed dividends and other distributions paid and reinvested. Any gain or loss
on such redemptions must be reported for tax purposes. In each case, shares will
be redeemed at the close of business on or about the 20th day of each month
preceding payment and payments will be mailed within five business days
thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such Plan do not represent income or a return
on investment.
A Periodic Withdrawal Plan may be terminated at any time by directing a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of the Prospectus entitled
"How to Buy Shares - Exchange Privilege," the Fund offers shareholders the
privilege of exchanging shares of the Fund for shares of certain other no-load
mutual funds advised by INVESCO. Exchange requests may be made either by
telephone or by written request to INVESCO Funds Group, Inc., using the
telephone number or address on the cover of this Statement of Additional
Information. Exchanges made by telephone must be in an amount of at least $250,
if the exchange is being made into an existing account of one of the INVESCO
funds. All exchanges that establish a NEW account must meet the fund's
applicable minimum initial investment requirements. Written exchange requests
into an existing account have no minimum requirements other than the fund's
applicable minimum subsequent investment requirements. Any gain or loss realized
on an exchange is recognized for federal income tax purposes. This privilege is
not an option or right to purchase securities, but is a revocable privilege
permitted under the present policies of each of the funds and is not available
in any state or other jurisdiction where the shares of the mutual fund into
which transfer is to be made are not qualified for sale, or when the net asset
value of the shares presented for exchange is less than the minimum dollar
purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of the Prospectus entitled "Fund Services,"
shares of the Fund may be purchased as the investment medium for various
tax-deferred retirement plans. Persons who request information regarding these
plans from INVESCO will be provided with prototype documents and other
<PAGE>
supporting information regarding the type of plan requested. Each of these plans
involves a long-term commitment of assets and is subject to possible regulatory
penalties for excess contributions, premature distributions or for insufficient
distributions after age 70-1/2. The legal and tax implications may vary
according to the circumstances of the individual investor. Therefore, the
investor is urged to consult with an attorney or tax adviser prior to the
establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
the Prospectus entitled "How to ^ Sell Shares." The right of redemption may be
suspended and payment postponed when: (a) the New York Stock Exchange is closed
for other than customary weekends and holidays; (b) trading on that exchange is
restricted; (c) an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable, or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets; or (d)
the SEC by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Fund's investment adviser, make it undesirable for the Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Fund is obligated under the 1940 Act to redeem for cash all
shares of the Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
The Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. The Fund so qualified in the fiscal year ended
April 30, ^ 1996, and intends to continue to qualify during its current fiscal
year. As a result, it is anticipated that the Fund will pay no federal income or
excise taxes and will be accorded conduit or "pass through" treatment for
federal income tax purposes.
Dividends paid by the Fund from net investment income as well as
distributions of net realized short-term capital gains and net realized gains
<PAGE>
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
the Fund sends shareholders information regarding the amount and character of
dividends paid in the year, including the dividends eligible for the
dividends-received deduction for corporations. Such amounts will be limited to
the aggregate amount of qualifying dividends which the Fund derives from its
portfolio investments.
Distributions by the Fund of net capital gain (the excess of net long-term
capital gain over net short term capital loss) are, for federal income tax
purposes, taxable to the shareholder as long-term capital gains regardless of
how long a shareholder has held shares of the Fund. Such distributions are
identified as such and are not eligible for the dividends-received deduction.
All dividends and other distributions are regarded as taxable to the
investor, whether or not such dividends and distributions are reinvested in
additional shares. If the net asset value of Fund shares should be reduced below
a shareholder's cost as a result of a distribution, such distribution would be
taxable to the shareholder although a portion would be, in effect, a return of
invested capital. The net asset value of shares of the Fund reflects accrued net
investment income and undistributed realized capital and foreign currency gains;
therefore, when a distribution is made, the net asset value is reduced by the
amount of the distribution. If shares are purchased shortly before a
distribution, the full price for the shares will be paid and some portion of the
price may then be returned to the shareholder as a taxable dividend or capital
gain. However, the net asset value per share will be reduced by the amount of
the distribution, which would reduce any gain (or increase any loss) for tax
purposes on any subsequent redemption of shares.
Dividends and interest received by the Fund may give rise to withholding
and other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes.
INVESCO may provide Fund shareholders with information concerning the
average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders, and will
not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the
use of several methods to determine the cost basis of mutual fund shares. The
cost basis information provided by INVESCO will be computed using the
single-category average cost method, although neither INVESCO nor the Fund
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for the Fund in past years, the shareholder must continue to use the
method previously used, unless the shareholder applies to the IRS for permission
to change methods.
<PAGE>
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of any taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign and
U.S. possessions income taxes paid by it. The Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's income from sources within, and taxes paid to, foreign countries and U.S.
possessions if it makes this election.
The Fund may invest in the stock of "passive foreign investment companies"
(PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock of a PFIC or of any gain on disposition of the stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent that income is distributed to its
shareholders.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time
the Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
<PAGE>
decrease the amount of the Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gain
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, for income tax purposes does not entail government
supervision of management or investment policies.
INVESTMENT PRACTICES
Leverage. The Fund's charter permits the Fund to borrow from banks up to
25% of the value of its net assets, excluding the proceeds of any such borrowing
(subject to its investment restrictions), for the purpose of purchasing
portfolio securities. This is a speculative technique commonly known as
leverage. Since the Fund's inception, leverage has never been employed, and it
may not be employed without express authorization of the Fund's board of
directors. Such authorization is not presently contemplated. Should the leverage
technique be employed at some future date, it would be employed with the
expectation that portfolio gains attributable to the investment of borrowed
monies will exceed the interest costs on such monies. If this expectation is not
realized and the market value of securities so purchased declines, however, the
impact of such market decline would be increased by the amount of interest paid
on such borrowings.
Portfolio Turnover. There are no fixed limitations regarding the Fund's
portfolio turnover. Since the Fund started business, the rate of portfolio
turnover has fluctuated under constantly changing economic conditions and market
circumstances. Portfolio turnover rates for the fiscal years ended April 30,
1996 and 1995^ were 196% and 176%, ^ respectively. Securities initially
satisfying the basic policies and objectives of the Fund may be disposed of when
they are no longer suitable. Brokerage costs to the Fund are commensurate with
the rate of portfolio activity. In computing the portfolio turnover rate, all
investments with maturities or expiration dates at the time of acquisition of
one year or less were excluded. Subject to this exclusion, the turnover rate is
calculated by dividing (A) the lesser of purchases or sales of portfolio
securities for the fiscal year by (B) the monthly average of the value of
portfolio securities owned by the Fund during the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO, as the Fund's investment
adviser, or INVESCO Trust, as the Fund's sub- adviser, places orders for the
purchase and sale of securities with brokers and dealers based upon INVESCO's or
INVESCO Trust's evaluation of their financial responsibility, subject to their
ability to effect transactions at the best available prices. INVESCO or INVESCO
Trust evaluates the overall reasonableness of brokerage commissions paid by
<PAGE>
reviewing the quality of executions obtained on the Fund's portfolio
transactions, viewed in terms of the size of transactions, prevailing market
conditions in the security purchased or sold, and general economic and market
conditions. In seeking to ensure that the commissions charged the Fund are
consistent with prevailing and reasonable commissions, INVESCO or INVESCO Trust
also endeavors to monitor brokerage industry practices with regard to the
commissions charged by broker/dealers on transactions effected for other
comparable institutional investors. While INVESCO or INVESCO Trust seeks
reasonably competitive rates, the Fund does not necessarily pay the lowest
commission or spread available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, INVESCO or INVESCO Trust may select brokers that provide
research services to effect such transactions. Research services consist of
statistical and analytical reports relating to issuers, industries, securities
and economic factors and trends, which may be of assistance or value to INVESCO
or INVESCO Trust in making informed investment decisions. Research services
prepared and furnished by brokers through which the Fund effects securities
transactions may be used by INVESCO or INVESCO Trust in servicing all of its
accounts and not all such services may be used by INVESCO or INVESCO Trust in
connection with the Fund.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, INVESCO or INVESCO Trust, consistent with
the standard of seeking to obtain the best execution on portfolio transactions,
may place orders with such brokers for the execution of Fund transactions on
which the commissions are in excess of those which other brokers might have
charged for effecting the same transactions.
Portfolio transactions may be effected through qualified broker/dealers
who recommend the Fund to their clients, or who act as agent in the purchase of
the Fund's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Fund's adviser or sub-adviser may consider the sale of Fund shares by a broker
or dealer in selecting among qualified broker/dealers.
Certain financial institutions (including brokers who may sell shares of
the Fund, or affiliates of such brokers) are paid a fee (the "Services Fee") for
recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the Funds through no transaction fee
programs ("NTF Programs") offered by the financial institution or its affiliated
broker (an "NTF Program Sponsor"). The Services Fee is based on the average
daily value of the investments in each Fund made in the name of such NTF Program
Sponsor and held in omnibus accounts maintained on behalf of investors
participating in the NTF Program. With respect to certain NTF Programs, the
directors of the Fund have authorized the Fund to apply dollars generated from
the Fund's Plan and Agreement of Distribution pursuant to Rule 12b-1 under the
<PAGE>
1940 Act (the "Plan") to pay the entire Services Fee, subject to the maximum
Rule 12b-1 fee permitted by the Plan. With respect to other NTF Programs, the
Fund's directors have authorized the Fund to pay transfer agency fees to INVESCO
based on the number of investors who have beneficial interests in the NTF
Program Sponsor's omnibus accounts in the Fund. INVESCO, in turn, pays these
transfer agency fees to the NTF Program Sponsor as a sub- transfer agency or
recordkeeping fee in payment of all or a portion of the Services Fee. In the
event that the sub-transfer agency or recordkeeping fee is insufficient to pay
all of the Services Fee with respect to these NTF Programs, the directors of the
Fund have authorized the Fund to apply dollars generated from the Plan to pay
the remainder of the Services Fee, subject to the maximum Rule 12b- 1 fee
permitted by the Plan. INVESCO itself pays the portion of the Fund's Services
Fee, if any, that exceeds the sum of the sub- transfer agency or recordkeeping
fee and Rule 12b-1 fee. The Fund's directors have further authorized INVESCO to
place a portion of the Fund's brokerage transactions with certain NTF Program
Sponsors or their affiliated brokers, if INVESCO reasonably believes that, in
effecting the Fund's transactions in portfolio securities, the broker is able to
provide the best execution of orders at the most favorable prices. A portion of
the commissions earned by such a broker from executing portfolio transactions on
behalf of the Fund may be credited by the NTF Program Sponsor against its
Services Fee. Such credit shall be applied first against any sub-transfer agency
or recordkeeping fee payable with respect to the Fund, and second against any
Rule 12b-1 fees used to pay a portion of the Services Fee, on a basis which has
resulted from negotiations between INVESCO and the NTF Program Sponsor.* Thus,
the Fund pays sub-transfer agency or recordkeeping fees to the NTF Program
Sponsor in payment of the Services Fee only to the extent that such fees are not
offset by the Fund's credits. In the event that the transfer agency fee paid by
the Fund to INVESCO with respect to investors who have beneficial interests in a
particular NTF Program Sponsor's omnibus accounts in the Fund exceeds the
Services Fee applicable to the Fund, after application of credits, INVESCO may
carry forward the excess and apply it to future Services Fees payable to that
NTF Program Sponsor with respect to the Fund. The amount of excess transfer
agency fees carried forward will be reviewed for possible adjustment by INVESCO
prior to each fiscal year-end of the Fund. The Fund's board of directors has
also authorized the Fund to pay to INVESCO the full Rule 12b-1 fees contemplated
by the Plan in reimbursement of expenses incurred by INVESCO in engaging in the
activities and providing the services on behalf of the Fund contemplated by the
Plan, subject to the maximum Rule 12b-1 fee permitted by the Plan,
notwithstanding that credits have been applied to reduce the portion of the
12b-1 fee that would have been used to reimburse INVESCO for payments to such
NTF Program Sponsor absent such credits.
The aggregate dollar amount of brokerage commissions paid by the Fund for
the fiscal years ended April 30, 1996, 1995^ and ^ 1994, were $3,891,234,
$1,742,196^ and $2,619,679 ^, respectively. For the fiscal year ended April 30,
<PAGE>
^ 1996, brokers providing research services received ^ $1,821,501 in commissions
on portfolio transactions effected for the Fund. The aggregate dollar amount of
such portfolio transactions was ^ $1,039,860,429. Commissions of ^ $6,500 were
allocated to certain brokers in recognition of their sales of shares of the Fund
on portfolio transactions of the Fund effected during the fiscal year ended
April 30, ^ 1996.
At April 30, ^ 1996, the Fund held debt securities of its regular brokers
or dealers, or their parents, as follows:
Value of Securities
Broker or Dealer at ^ 4/30/96
---------------- --------------------
^ American General Corporation $9,400,000
^ Associates Corporation of North America $38,592,000
Chevron Oil Finance Company $22,188,000
Neither INVESCO nor INVESCO Trust receives any brokerage commissions on
portfolio transactions effected on behalf of the Fund, and there is no
affiliation between INVESCO, INVESCO Trust, or any person affiliated with
INVESCO, INVESCO Trust, or the Fund and any broker or dealer that executes
transactions for the Fund.
ADDITIONAL INFORMATION
Common Stock. The Fund has 300,000,000 authorized shares of common stock
with a par value of $0.01 per share. As of April 30, ^ 1996, 57,186,453 of those
shares were outstanding. All shares are of one class with equal rights as to
voting, dividends and liquidation. All shares issued and outstanding are, and
all shares offered hereby, when issued, will be, fully paid and nonassessable.
The board of directors has the authority to designate additional classes of
common stock without seeking the approval of shareholders and may classify and
reclassify any authorized but unissued shares.
Shares have no preemptive rights, and are freely transferable on the books
of the Fund. Fund shares have noncumulative voting rights, which means that the
holders of a majority of the shares voting for the election of directors of the
Fund can elect 100% of the directors if they choose to do so, and, in such
event, the holders of the remaining shares voting for the election of directors
will not be able to elect any person or persons to the board of directors. After
they have been elected by shareholders, the directors will continue to serve
until their successors are elected and have qualified or they are removed from
office, in either case by a shareholder vote, or until death, resignation or
retirement. ^ Directors may appoint their own successors, provided that always
at least a majority of the directors have been elected by the Fund's
shareholders. It is the intention of the Fund not to hold annual meetings of
shareholders. The directors will call annual or special meetings of shareholders
<PAGE>
for action by shareholder vote as may be required by the 1940 Act or the Fund's
Articles of Incorporation, or at their discretion.
Principal Shareholders. As of ^ July 31, ^ 1996, the following entity held
more than 5% of the Fund's outstanding equity securities.
Amount and Nature Class and Percent
Name and Address of Ownership of Class
- ---------------- ----------------- -----------------
Charles Schwab & Co., Inc. 9,560,213,177 18.20%
Attn: Mutual Funds Special Custody
101 Montgomery Street Account for the
San Francisco, CA 94104 Exclusive Benefit
of Customers
^
<PAGE>
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the Fund.
The independent accountants are responsible for auditing the financial
statements of the Fund.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Fund. The bank is also responsible for, among other things,
receipt and delivery of the Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement.
Transfer Agent. The Fund is provided with transfer agent, registrar, and
dividend disbursing agent services by INVESCO Funds Group, Inc., 7800 E. Union
Avenue, Denver, Colorado, pursuant to the Transfer Agency Agreement described in
"The Fund and Its Management." Such services include the issuance, cancellation
and transfer of shares of the Fund, and the maintenance of records regarding the
ownership of such shares.
Reports to Shareholders. The Fund's fiscal year ends on April 30. The Fund
distributes reports at least semiannually to its shareholders. Financial
statements regarding the Fund, audited by the independent accountants, are sent
to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C.,
is legal counsel for the Fund. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Fund.
Financial Statements. The ^ following audited financial statements of the
Fund and the notes thereto for the fiscal year ended April 30, ^ 1996, and the
report of Price Waterhouse LLP with respect to such financial statements, are
incorporated herein by reference from the Fund's Annual Report to Shareholders
for the fiscal year ended April 30, ^ 1996: Statement of Investment Securities
as of April 30, 1996; Statement of Assets and Liabilities as of April 30, 1996;
Statement of Operations for the year ended April 30, 1996; Statement of Changes
in Net Assets for each of the two years in the period ended April 30, 1996; and
Financial Highlights for each of the five years ended April 30, 1996.
Prospectus. The Fund will furnish, without charge, a copy of the
Prospectus upon request. Such requests should be made to the Fund at the mailing
address or telephone number set forth on the first page of this Statement of
Additional Information.
Registration Statement. This Statement of Additional Information and the
Prospectus do not contain all of the information set forth in the Registration
Statement the Fund has filed with the SEC. The complete Registration Statement
may be obtained from the SEC upon payment of the fee prescribed by the rules and
regulations of the SEC.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in Prospectus (Part A):
Financial Highlights for each of 9
the ten years in the period ended
April 30, ^ 1996.
(2) The ^ following audited financial
statements of the Fund and the
notes thereto for the fiscal year
ended April 30, ^ 1996, and the
report of Price Waterhouse LLP with
respect to such financial
statements, are incorporated in the
Statement of Additional Information
by reference from the Fund's Annual
Report to Shareholders for the
fiscal year ended April 30, 1996;
Statement of Investment Securities
as of April 30, 1996; Statement of
Assets and Liabilities as of April
30, 1996; Statement of Operations
for the year ended April 30, 1996;
Statement of Changes in Net Assets
for each of the two years in the
period ended April 30, 1996; and
Financial Highlights for each of
the five years in the period ended
April 30, 1996.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted
as all information has been
presented in the financial
statements.
(b) Exhibits:
(1) Articles of Incorporation (Charter)
filed April 2, ^ 1993.
(2) Bylaws, as amended July 21, ^ 1993.
(3) Not applicable.
<PAGE>
(4) Form of specimen stock ^
certificate. Not required to be
filed on EDGAR.
(5) (a) Investment Advisory Agreement
between the Fund and INVESCO Funds
Group, Inc. dated April 30, ^ 1993.
(b) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and
INVESCO Trust Company dated April
30, ^ 1993.
(6) General Distribution Agreement
between Registrant and INVESCO
Funds Group, Inc. dated April 30, ^
1993.
(7) Defined Benefit Deferred
Compensation Plan for Non-
Interested Directors and ^
Trustees.
(8) Custody Agreement between
Registrant and State Street Bank
and Trust Company dated July 1, ^
1993.
(9) (a) Transfer Agency Agreement
between Registrant and INVESCO
Funds Group, Inc. dated April
30, ^ 1993.
(i) Amended Fee Schedule
dated ^ May 1, 1996.
(b) Administrative Services Agreement between
Registrant and INVESCO Funds Group, Inc.,
dated April 30, ^ 1993.
(10) Opinion and consent of counsel as
to the legality of the securities
being registered, indicating
whether they will, when sold, be
legally issued, fully paid and
non-assessable, dated June 9, ^
1993.2
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
<PAGE>
(14) Copies of model plans used in the
establishment of retirement plans
as follows: Non-standardized
Profit Sharing Plan; Non-
standardized Money Purchase Pension
Plan; Standardized Profit Sharing
Plan Adoption Agreement;
Standardized Money Purchase Pension
Plan; Non-standardized 401(k) Plan
Adoption Agreement; Standardized
401(k) Paired Profit Sharing Plan;
Standardized Simplified Profit
Sharing Plan; Standardized
Simplified Money Purchase Plan;
Defined Contribution Master Plan &
Trust Agreement; and Financial
403(b) Retirement Plan, all filed
with Registration Statement of
INVESCO International Funds, Inc.
(File No. 33-63498), filed May 27,
1993, and herein incorporated by
reference.
(15) Plan and Agreement of Distribution dated
April 30, 1993, adopted pursuant to Rule
12b-1 under the Investment Company Act
of ^ 1940.2
(16) Schedule for computation of
performance ^ data.3
(17) Financial Data Schedule.
(18) Not Applicable.
- ---------------
1Previously filed on EDGAR with Post-Effective Amendment No. ^ 44 to ^ the
Registration Statement on June ^ 22, 1993 and incorporated herein by reference
^.
2Previously filed with Post^-Effective Amendment No. ^ 42 to this Registration
Statement on June ^ 15, 1993 and incorporated by reference herein.
3Previously filed with Post^-Effective Amendment No. ^ 36 to this Registration
Statement on June ^ 17, 1988 and incorporated by reference herein.
<PAGE>
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common control with
Registrant.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class April 30, ^ 1996
-------------- -------------------
Common Stock ^ 48,583
Item 27. Indemnification
Indemnification provisions for officers and directors of Registrant
are set forth in Article VII, Section 2 of the Articles of Incorporation, and
are hereby incorporated by reference. See Item 24(b)(1) above. Under these
Articles, officers and directors will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the 1940 Act, and the rules thereunder.
Under the 1940 Act, Fund directors and officers cannot be protected against
liability to the Fund or its shareholders to which they would be subject because
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties of their office. The Fund also intends to maintain liability insurance
policies covering its directors and officers.
Item 28. Business and Other Connections of Investment Adviser
See "The Fund and Its Management" in the Prospectus and Statement of
Additional Information for information regarding the business of the investment
adviser. For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and directors of INVESCO Funds
Group, Inc., reference is made to Schedule Ds to the Form ADV filed under the
Investment Advisers Act of 1940 by INVESCO Funds Group, Inc., which schedules
are herein incorporated by reference.
<PAGE>
Item 29. Principal Underwriters
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
^
Frank M. Bishop Director
1315 Peachtree Street, NE
Atlanta, GA 30309
Charles W. Brady Chairman of
1315 Peachtree St. NE the Board
Atlanta, GA 30309
^
M. Anthony Cox Senior Vice
1315 Peachtree St. NE President
Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell ^ Regional Vice ^
7800 E. Union Avenue President^
Denver, CO 80237
Samuel T. DeKinder Director
1315 Peachtree Street NE
Atlanta, GA 30309
^ Douglas P. Dhom Regional Vice
^ 1355 Peachtree Street NE President
^ Atlanta, GA 30309
William J. Galvin, Jr. Senior Vice ^ Asst. Sec.
7800 E. Union Avenue President
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Avenue
Denver, CO 80237
Ronald L. Grooms Sr. Vice President Treasurer &
7800 E. Union Avenue & Treasurer Chief Fin'l
Denver, CO 80237 Officer and
Chief Acct
Officer
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
Hubert L. Harris, Jr. Director Director
1315 Peachtree Street, NE
Atlanta, GA 30309
Leon K. Haydon, Jr. Vice President-
7800 E. Union Avenue Marketing,
Denver, CO 80237 Planning & Research
Dan J. Hesser Chairman of the President
7800 E. Union Avenue Board, President, & Director
Denver, CO 80237 Chief Executive
Officer & Director
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski ^ Assistant Vice ^
7800 E. Union Avenue President ^
^ Denver, CO 80237
^ James F. Lummanick Assistant Vice
7800 E. Union Avenue President, Assistant
Denver, CO 80237 General Counsel
Brian N. Minturn Executive
7800 E. Union Avenue Vice President
Denver, CO 80237
Robert J. O'Connor Director
1355 Peachtree Street NE
Atlanta, GA 30309
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
^ Donald R. Paddack Assistant
7800 E. Union Avenue Vice President
Denver, CO 80237
^
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Sr. Vice President, Secretary
7800 E. Union Avenue Secretary &
Denver, CO 80237 General Counsel
^ Pamela J. Piro Assistant
7800 E. Union Avenue Vice President
Denver, CO 80237
Gary J. Ruhl Vice President
7800 E. Union Avenue
Denver, CO 80237
R. Dalton Sim Director ^
7800 E. Union Avenue
Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
^
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
^ Tane T. Tyler Assistant Vice
^ 7800 E. Union Avenue President
^ Denver, CO 80237
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
^ 7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant shall furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the 27th day of August, 1996.
Attest: INVESCO Dynamics Fund, Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ---------------------------- --------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this 27th day of August,
1996.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ----------------------------- --------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Trustee
Trustee (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ----------------------------- ---------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Trustee
(Chief Financial and
Accounting Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ----------------------------- ---------------------------------
Victor L. Andrews, Trustee Fred A. Deering, Trustee
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ----------------------------- ---------------------------------
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ Kenneth T. King, Director /s/ Charles W. Brady
- ----------------------------- ---------------------------------
Kenneth T. King, Director Charles W. Brady, Director
/s/ John W. McIntyre /s/ Hubert L. Harris, Jr.
- ----------------------------- ---------------------------------
John W. McIntyre, Director Hubert L. Harris, Jr.
By* By* /s/ Glen A. Payne
--------------------------------- -----------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and
Glen A. Payne, and each of them, to execute this post-effective
<PAGE>
amendment to the Registration Statement of the Registrant on behalf of the
above-named directors and officers of the Registrant have been filed with the
Securities and Exchange Commission on June 15, 1993, June 22, 1994, and June 22,
1995, respectively.
<PAGE>
Exhibit Index
-------------
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
^ 1 74
2 83
5(a) 100
5(b) 108
6 114
7 123
8 127
9(a) 171
9(a)(i) 185
9(b) 186
11 190
17 191
ARTICLES OF INCORPORATION
OF
INVESCO DYNAMICS FUND, INC.
THIS IS TO CERTIFY to the Maryland State Department of Assessments that
the undersigned, Dan J. Hesser, whose post office address is 7800 E. Union
Avenue, Suite 800, Denver, Colorado 80237, and being at least 18 years of age,
does hereby declare that he is an incorporator intending to form a corporation
under and by virtue of the general laws of the State of Maryland authorizing the
formation of corporations.
ARTICLE I
NAME AND TERM
The name of the corporation is INVESCO Dynamics Fund, Inc. The corporation
shall have perpetual existence.
ARTICLE II
POWERS AND PURPOSES
The nature of the business and the objects and purposes to be transacted,
promoted and carried on by the corporation are as follows:
1. To engage in the business of an incorporated investment company of
open-end management type and to engage in all legally permissible
activities and operations usual, customary, or necessary in
connection therewith.
2. In general, to engage in any other business permitted to
corporations by the laws of the State of Maryland and to have and
exercise all powers conferred upon or permitted to corporations by
the Maryland General Corporation Law and any other laws of the State
of Maryland; provided, however, that the corporation shall be
restricted from engaging in any activities or taking any actions
which would preclude its compliance with applicable provisions of
the Investment Company Act of 1940, as amended, applicable to open-
end management type investment companies or applicable rules
promulgated thereunder.
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares the corporation shall have the
authority to issue is three hundred million (300,000,000) shares of Common
Stock, having a par value of one cent ($0.01) per share. The aggregate par value
of all shares which the corporation shall have the authority to issue is three
million dollars ($3,000,000). Such stock may be issued as full shares or as
fractional shares.
<PAGE>
In the exercise of the powers granted to the board of directors pursuant
to Section 3 of this Article III, the board of directors initially designates
one class of shares of Common Stock of the corporation, to be designated as the
INVESCO Dynamics Fund. Initially, one hundred million (100,000,000) shares of
the corporation's Common Stock are classified as and are allocated to the
designated class.
Unless otherwise prohibited by law, so long as the corporation is
registered as an open-end investment company under the Investment Company Act of
1940, as amended, the total number of shares which the corporation is authorized
to issue may be increased or decreased by the board of directors in accordance
with the applicable provisions of the Maryland General Corporation Law.
Section 2. No holder of stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any shares of the capital stock of
the corporation which it may issue or sell, whether out of the number of shares
authorized by these articles of incorporation, or out of any shares of the
capital stock of the corporation acquired by it after the issue thereof.
Section 3. The corporation is authorized to issue its stock in one or more
series or one or more classes of shares, and, subject to the requirements of the
Investment Company Act of 1940, as amended, particularly Section 18(f) thereof
and Rule 18f-2 thereunder, the different series and classes, if any, shall be
established and designated, and the variations in the relative preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as between the
different series or classes shall be fixed and determined and may be classified
and reclassified by the board of directors; provided that the board of directors
shall not classify or reclassify any of such shares into any class or series of
stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the general assets of, the corporation, except
that there may be variations so fixed and determined between different series or
classes as to investment objective, purchase price, right of redemption, special
rights as to dividends and on liquidation with respect to assets and income
belonging to a particular series or class, voting powers and conversion rights.
All references to shares in these articles of incorporation shall be deemed to
be shares of any or all series and classes of shares of the corporation's
capital stock as the context may require.
(a) The number of authorized shares allocated to each series or class
and the number of shares of each series or of each class that may be
issued shall be in such number as may be determined by the board of
directors. The directors may classify or reclassify any unissued
shares or any shares previously issued and reacquired of any series
or class into one or more series or one or more classes that may be
established and designated by the board of directors from time to
time. The directors may hold as treasury shares (of the same or
some other series or class), reissue for such consideration and on
such terms as they may determine, or cancel any shares of any series
<PAGE>
or any class reacquired by the corporation at their discretion from
time to time.
(b) All consideration received by the corporation for the issue or sale
of shares of a particular series or class, together with all assets
in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that
series or class for all purposes, subject only to the rights of
creditors of that series or class, and shall be so recorded upon the
books of account of the corporation. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any
particular series or class, the directors shall allocate them among
any one or more of the series or classes established and designated
from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable. Each such allocation by
the corporation shall be conclusive and binding upon the
stockholders of all series or classes for all purposes. The
directors shall have full discretion, to the extent not inconsistent
with the Investment Company Act of 1940, as amended, and the
Maryland General Corporation Law to determine which items shall be
treated as income and which items shall be treated as capital; and
each such determination and allocation shall be conclusive and
binding upon the stockholders.
(c) The assets belonging to each particular class or series shall be
charged with the liabilities of the corporation in respect to that
class or series and all expenses, costs, charges and reserves
attributable to that class or series, and any general liabilities,
expenses, costs, charges or reserves of the corporation which are
not readily identifiable as belonging to any particular class or
series shall be allocated and charged by the directors to and among
any one or more of the classes or series established and designated
from time to time in such manner and on such basis as the directors
in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the
directors shall be conclusive and binding upon the stockholders of
all series and classes for all purposes.
(d) Dividends and distributions on shares of a particular series or
class may be paid with such frequency as the directors may
determine, which may be daily or otherwise, pursuant to a standing
resolution or resolutions adopted only once or with such frequency
as the board of directors may determine, to the holders of shares
of that series or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that series or
class, as the directors may determine, after providing for actual
and accrued liabilities belonging to that series or class. All
dividends and distributions on shares of a particular series or
<PAGE>
class shall be distributed pro rata to the holders of that series or
class in proportion to the number of shares of that series or class
held by such holders at the date and time of record established for
the payment of such dividends or distributions except that in
connection with any dividend or distribution program or procedure,
the board of directors may determine that no dividend or
distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment have not been received
by the time or times established by the board of directors under
such program or procedure.
The corporation intends to have each series that may be established
to represent interests of a separate investment portfolio qualify as
a "regulated investment company" under the Internal Revenue Code of
1986, or any successor comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income
and gains for federal income tax purposes may vary from the
computation thereof on the books of the corporation, the board of
directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends
designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the board of directors, to
enable the respective series to qualify as regulated investment
companies and to avoid liability of such series for federal income
tax in respect of that year. However, nothing in the foregoing shall
limit the authority of the board of directors to make distributions
greater than or less than the amount necessary to qualify the series
as regulated investment companies and to avoid liability of such
series for such tax.
(e) Dividends and distributions may be made in cash, property or
additional shares of the same or another class or series, or a
combination thereof, as determined by the board of directors or
pursuant to any program that the board of directors may have in
effect at the time for the election by each stockholder of the mode
of the making of such dividend or distribution to that stockholder.
Any such dividend or distribution paid in shares will be paid at the
net asset value thereof as defined in section (4) below.
(f) In the event of the liquidation or dissolution of the corporation or
of a particular class or series, the stockholders of each class or
series that has been established and designated and is being
liquidated shall be entitled to receive, as a class or series, when
and as declared by the board of directors, the excess of the assets
belonging to that class or series over the liabilities belonging to
that class or series. The holders of shares of any particular class
or series shall not be entitled thereby to any distribution upon
liquidation of any other class or series. The assets so
distributable to the stockholders of any particular class or series
shall be distributed among such stockholders in proportion to the
number of shares of that class or series held by them and recorded
on the books of the corporation. The liquidation of any particular
<PAGE>
class or series in which there are shares then outstanding may be
authorized by vote of a majority of the board of directors then in
office, subject to the approval of a majority of the outstanding
securities of that class or series, as defined in the Investment
Company Act of 1940, as amended, and without the vote of the holders
of any other class or series. The liquidation or dissolution of a
particular class or series may be accomplished, in whole or in part,
by the transfer of assets of such class or series to another class
or series or by the exchange of shares of such class or series for
the shares of another class or series.
(g) On each matter submitted to a vote of the stockholders, each holder
of a share shall be entitled to one vote for each share standing in
his name on the books of the corporation, irrespective of the class
or series thereof, and all shares of all classes or series shall
vote as a single class or series ("single class voting"); provided,
however that (i) as to any matter with respect to which a separate
vote of any class or series is required by the Investment Company
Act of 1940, as amended, or by the Maryland General Corporation Law,
such requirement as to a separate vote by that class or series shall
apply in lieu of single class voting as described above; (ii) in the
event that the separate vote requirements referred to in (i) above
apply with respect to one or more but not all classes or series,
then, subject to (iii) below, the shares of all other classes or
series shall vote as a single class or series; and (iii) as to any
matter which does not affect the interest of a particular class or
series, only the holders of shares of the one or more affected
classes shall be entitled to vote. Holders of shares of the stock
of the corporation shall not be entitled to exercise cumulative
voting in the election of directors or on any other matter.
(h) The establishment and designation of any series or class of shares,
in addition to the initial class of shares which has been
established in section (1) above, shall be effective upon the
adoption by a majority of the then directors of a resolution setting
forth such establishment and designation and the relative rights and
preferences of such series or class, or as otherwise provided in
such instrument and the filing with the proper authority of the
State of Maryland of Articles Supplementary setting forth such
establishment and designation and relative rights and preferences.
Section 4. The corporation shall, upon due presentation of a share or
shares of stock for redemption, redeem such share or shares of stock at a
redemption price prescribed by the board of directors in accordance with
applicable laws and regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such class or series as
determined in accordance with the provisions of this section (4), less such
redemption or other charge as is determined by the board of directors. Subject
to applicable law, the corporation may redeem shares, not offered by a
stockholder for redemption, held by any stockholder whose shares of a class or
series had a value less than such minimum amount as may be fixed by the board of
directors from time to time or prescribed by applicable law, other than as a
<PAGE>
result of a decline in value of such shares because of market action; provided
that before the corporation redeems such shares it must notify the shareholder
by first-class mail that the value of his shares is less than the required
minimum value and allow him 60 days to make an additional investment in an
amount which will increase the value of his account to the required minimum
value. Unless otherwise required by applicable law, the price to be paid for
shares redeemed pursuant to the preceding sentence shall be the aggregate net
asset value of the shares at the close of business on the date of redemption,
and the shareholder shall have no right to object to the redemption of his
shares. The corporation shall pay redemption prices in cash, except that the
corporation may at its sole option pay redemption prices in kind in such manner
as is consistent with and not in contravention of Section 18(f) of the
Investment Company Act of 1940, as amended, and any Rules or Regulations
thereunder. Redemption prices shall be paid exclusively out of the assets of the
class or series whose shares are being redeemed.
Notwithstanding the foregoing, the corporation may postpone payment of
redemption proceeds and may suspend the right of the holders of shares of any
class or series to require the corporation to redeem shares of that class or
series during any period or at any time when and to the extent permissible under
the Investment Company Act of 1940, as amended, or any rule or order thereunder.
The net asset value of a share of any class or series of common stock of
the corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the board of directors.
Section 5. The corporation may issue, sell, redeem, repurchase and
otherwise deal in and with shares of its stock in fractional denominations and
such fractional denominations shall, for all purposes, be shares having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the corporation; provided that the issue of shares in fractional
denominations shall be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the bylaws.
Section 6. The corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the bylaws or by the board of directors.
ARTICLE IV
PREEMPTIVE RIGHTS
No stockholder of the corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any share of any class or series of stock, or
shares convertible into, exchangeable for or evidencing the right to purchase
stock of any class or series whatsoever, whether or not the stock in question be
of the same class or series as may be held by such stockholder, and whether now
<PAGE>
or hereafter authorized and whether issued for cash, property, services or
otherwise, other than such, if any, as the board of directors in its discretion
may from time to time fix.
ARTICLE V
PRINCIPAL OFFICE AND REGISTERED AGENT
The post office address of the principal office of the corporation in the
State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident
agent of the corporation is The Corporation Trust Incorporated, whose post
office address is 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a corporation of the State of Maryland.
ARTICLE VI
DIRECTORS
Section 1. The initial board of directors shall consist of three members
who need not be residents of the State of Maryland or stockholders of the
corporation.
Section 2. The names of the persons who shall act as directors until the
first meeting of stockholders or until their successors shall have been elected
and qualified are as follows:
Charles W. Brady 1315 Peachtree Street, N.E., Atlanta, Georgia
John M. Butler 7800 E. Union Avenue, Denver, Colorado
Dan J. Hesser 7800 E. Union Avenue, Denver, Colorado
Section 3. The number of directors may be increased or decreased in
accordance with the bylaws, provided that the number shall not be reduced to
less than three.
Section 4. A majority of the directors shall constitute a quorum for the
transaction of business, unless the bylaws shall provide that a different number
shall constitute a quorum; provided, however, that in no case shall a quorum be
less than one-third (1/3) of the total number of directors or less than two (2)
directors.
Section 5. No person shall serve as a director, unless elected by the
stockholders at an annual meeting or a special meeting called for such purpose;
except that vacancies occurring between such meetings may be filled by the
directors in accordance with the bylaws, and subject to such limitations as may
be set forth by applicable laws and regulations.
Section 6. The board of directors of the corporation is hereby empowered
to authorize the issuance from time to time of shares of stock, whether of a
class or series now or hereafter authorized, for such consideration as it deems
advisable, subject to such limitations as may be set forth herein, in the
bylaws, in the Maryland General Corporation Law, and in the Investment Company
Act of 1940, as amended.
<PAGE>
Section 7. The board of directors of the corporation may make, alter or
repeal from time to time any of the bylaws of the corporation except any
particular bylaw which is specified as not subject to alternation or repeal by
the board of directors.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. Directors and officers of the corporation, including persons
who formerly have served in such capacities, shall have limitations on, and/or
immunity from, liability of such directors and officers to the fullest extent
permitted by the Maryland General Corporation Law, subject only to such
restrictions as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Such limitations and/or immunity will apply
to acts or omissions occurring at the time an individual serves as a director or
officer of the corporation, whether such person is a director or officer of the
corporation at the time of any proceeding in which liability is asserted against
the director or officer. No amendment to these Articles of Incorporation or
repeal of any of its provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
Section 2. The corporation shall indemnify and advance expenses to its
directors and officers, including persons who formerly have served in such
capacities, to the fullest extent permitted to directors by the Maryland General
Corporation Law and the bylaws of the corporation, as such Law and bylaws now or
in the future may be in effect, subject only to such limitations as may be
required by the Investment Company Act of 1940, as amended, and the rules
thereunder.
ARTICLE VIII
SPECIAL VOTING AND MEETING PROVISIONS
Section 1. Notwithstanding any provision of Maryland law requiring a
greater proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast to take or authorize any action, the corporation
may take or authorize any such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
Section 2. The presence in person or by proxy of the holders of one-third
of the shares of stock of the corporation entitled to vote without regard to
class shall constitute a quorum at any meeting of stockholders, except with
respect to any matter which by law requires the approval of one or more classes
of stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class entitled to vote on the matter
shall constitute a quorum.
Section 3. So long as the corporation is registered pursuant to the
Investment Company Act of 1940, as amended, the corporation will not be required
to hold annual shareholder meetings in years in which the election of directors
<PAGE>
is not required to be acted upon under the Investment Company Act of 1940, as
amended.
ARTICLE IX
AMENDMENT
The corporation reserves the right from time to time to make any amendment
of its articles of incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in such
articles, of any outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes the terms or rights of any of its
outstanding shares shall be valid unless such amendment shall have been
authorized by not less than a majority of the aggregate number of votes entitled
to be cast thereon, by a vote at a meeting or in writing with or without a
meeting.
IN WITNESS WHEREOF, I have signed these articles of incorporation on this
___ day of April, 1993.
/s/ Dan J. Hesser
------------------------------------
Dan J. Hesser
Attest: /s/ Glen A. Payne
-----------------------------
Glen A. Payne
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I hereby certify that on the 1st day of April, 1993, before me, the
subscriber, a Notary Public of the State of Colorado, in and for the City and
County of Denver, personally appeared Dan J. Hesser who acknowledged the
foregoing articles of incorporation to be his act.
WITNESS my hand and notarial seal, the day and year first above written.
/s/ Cheryl K. Howlett
------------------------------
Notary Public
My commission expires: February 22, 1995.
-----------------
BYLAWS
OF
INVESCO DYNAMICS FUND, INC.
AS OF JULY 21, 1993
ARTICLE I.
SHAREHOLDERS
Section 1. Annual Meeting. Unless otherwise determined by the board of
directors or required by applicable law, no annual meeting of
shareholders shall be required to be held in any year in which
the election of directors is not required under the Investment
Company Act of 1940. If the corporation is required to hold
a meeting of shareholders to elect directors, the meeting
shall be designated as the annual meeting of shareholders for
that year, and shall be held no later than 120 days after
occurrence of the event requiring the meeting at a place
within or without the State of Maryland.
Section 2. Special Meetings. Special meetings of the shareholders
entitled to vote shall be called upon the request in writing
of the president or, in his absence, a vice president, or by a
vote of a majority of the board of directors, or upon the
request in writing of shareholders of the Company representing
not less than ten percent (10%) of the votes entitled to be
cast at the meeting.
Section 3. Place of Meetings. Each annual and any special meeting of
the shareholders shall be held at the principal office of the
corporation in Denver, Colorado, or at such alternate site as
may be determined by the board of directors.
Section 4. Notices. Notices of every meeting, annual or special, shall
specify the place, day and hour of the meeting and shall be
mailed not less than ten (10) days nor more than ninety (90)
days before such meeting. Such notice shall be given by the
Secretary of the Corporation to each shareholder entitled to
notice of and entitled to vote at the meeting. In the event
that a special meeting is called by the shareholders entitled
to vote, the Secretary of the Corporation shall inform the
shareholders who make the request of the reasonably estimated
cost of preparing and mailing a notice of the meeting, and
upon payment of these costs to the Corporation, shall notify
each shareholder entitled to notice of the meeting. Notice of
every special meeting shall indicate briefly its purpose.
Notice shall be deemed delivered where it is personally
delivered to the individual, left at the individual's usual
place of business, or mailed to the individual at the
individual's address as it appears on the records of the
Corporation.
Section 5. Quorum. At every meeting of the shareholders, the presence in
person or by proxy of the holders of one-third of all of the
<PAGE>
shares of stock of the corporation issued and outstanding and
entitled to vote without regard to class shall constitute a
quorum, except with respect to any matter which by law
requires the approval of one or more classes of stock, in
which case the presence in person or by proxy of the holders
of one-third of the shares of stock of each class entitled to
vote on the matter shall constitute a quorum; provided,
however, that at every meeting of the shareholders, the
representation of a larger number of shareholders shall
constitute a quorum if required by the Investment Company Act
of 1940, as amended, other applicable law, or by the Articles
of Incorporation.
Section 6. Voting. At every meeting of the shareholders at which a
quorum is present, each shareholder entitled to vote shall be
entitled to vote in person, or by proxy appointed by
instrument in writing subscribed by such shareholder, or his
duly authorized attorney, and he shall have one (1) vote for
each share of stock standing registered in his name on each
matter submitted at the meeting on which such share is
entitled to vote and for each director to be elected.
Fractional shares shall be entitled to proportionate
fractional votes. Every proxy shall be dated and no proxy
shall be valid after eleven (11) months from its date unless
otherwise provided in the proxy. There shall be no cumulative
voting in the election of directors. Except as otherwise
provided by law, by the charter of the corporation, or by
these bylaws, at each meeting of stockholders at which a
quorum is present, all matters shall be decided by a majority
of the votes cast by the stockholders present in person or
represented by proxy and entitled to vote with respect to any
such matter.
Section 7. Qualification of Voters. At every meeting of shareholders,
unless the voting is conducted by inspectors, the proxies and
ballots shall be received, and all questions with respect to
the qualification of voters and the validity of proxies and
the acceptance or rejection of votes shall be decided by the
chairman of the meeting. If demanded by shareholders present
in person or by proxy entitled to cast twenty-five per cent
(25%) in number of votes, or if ordered by the chairman of the
meeting, the vote upon any election or question shall be taken
by ballot and, upon such demand or order, the voting shall be
conducted by two (2) inspectors appointed by the chairman, in
which event the proxies and ballots shall be received and all
questions with respect to the qualification of votes and the
validity of proxies and the acceptance or rejection of votes
shall be decided by such inspectors. Unless so demanded or
ordered, no vote need be by ballot and the voting need not be
conducted by inspectors.
Section 8. Waiver of Notice. A waiver of notice of any meeting of
shareholders signed by any shareholder entitled to such notice
filed with the records of the meeting, whether before or after
the holding thereof or actual attendance at the meeting in
<PAGE>
person or by proxy, shall be deemed equivalent to the giving
of notice to such shareholder.
Section 9. Adjournment. A meeting of shareholders convened on the date
for which it was called may be adjourned from time to time
without further notice to a date not more than 120 days after
the original record date of the meeting.
Section 10. Action by Shareholders Without Meeting. Except as
otherwise provided by law, the provisions of these bylaws
relating to notices and meetings to the contrary
notwithstanding, any action required or permitted to be taken
at any meeting of shareholders may be taken without a meeting
if a consent in writing setting forth the action shall be
signed by all the shareholders entitled to vote upon the
action and such consent shall be filed with the records of the
corporation.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Powers. The business and property of the corporation shall
be conducted and managed by its board of directors, which may
exercise all of the powers of the corporation, except such as
are by statute, by the charter or by the bylaws, conferred
upon or reserved to the shareholders. The board of directors
shall keep full and complete records of its transactions.
Section 2. Number. By vote of a majority of the entire board of
directors, the number of directors may be increased or
decreased from time to time; provided that, in no event, may
the number be decreased to less than three.
Section 3. Election. The members of the board of directors shall be
elected by the shareholders by plurality vote at the annual
meeting, or at any special meeting called for such purpose.
Each director shall hold office until his successor shall have
been duly chosen and qualified, or until he shall have
resigned or shall have been removed in the manner provided by
law. Any vacancy, including one created by an increase in the
number of directors on the board (except where such vacancy is
created by removal by the shareholders), may be filled by the
vote of a majority of the remaining directors, although such
majority is less than a quorum; provided, however, that
immediately after filling any vacancy by such action of the
board of directors, at least two-thirds (2/3) of the directors
then holding office shall have been elected by the
shareholders at an annual or special meeting.
Section 4. Regular Meetings. The board of directors shall schedule an
Annual Meeting at such place and time as they may designate
for the purpose of organization, the election of officers, and
the transaction of other business. Other regular meetings may
be held as scheduled by a majority of the directors.
<PAGE>
Section 5. Special Meetings. Special meetings of the board of directors
may be called at any time by the president or by a majority of
the directors or by a majority of the executive committee.
Section 6. Notice of Meetings. Notice of the place, day and hour of
every special meeting shall be given to each director at least
two (2) days before the meeting, by written announcement,
telephone, telegraph and/or mail addressed to him at his post
office address, according to the records of the corporation.
Unless required by resolution of the board of directors, no
notice of any meeting of the board of directors need state the
business to be transacted thereat. No notice of any meeting
of the board of directors need be given to any director who
attends, or to any director who, in writing executed and filed
with the records of the meeting either before or after the
holding thereof, waives such notice. Any meeting of the board
of directors may adjourn from time to time to reconvene at the
same or some other place, and no notice need be given of any
such adjourned meeting other than by announcement.
Section 7. Quorum. At all meetings of the board of directors, one-third
of the total number of directors or not less than two (2)
directors shall constitute a quorum for the transaction of
business. In the absence of a quorum, the directors present
by a majority vote and without notice other than by
announcement may adjourn the meeting from time to time until
a quorum shall be present. At any such adjourned meeting, any
business may be transacted which might have been transacted at
the meeting as originally notified.
Section 8. Compensation of Directors. Directors shall be entitled to
receive such compensation from the corporation for their
services as may from time to time be voted by the board of
directors. All directors shall be reimbursed for their
reasonable expenses of attendance, if any, at the board and
committee meetings. Any director of the corporation may also
serve the corporation in any other capacity and receive
compensation therefor.
Section 9. Vacancies. Any vacancy occurring in the board of directors
may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the board of
directors. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the board of
directors for a term of office continuing only until the next
election of directors by the shareholders.
Section 10. Resignation and Removal of Directors. Any director or
member of any committee may resign at any time. Such
resignation shall be made in writing and shall take effect at
the time specified therein. If no time is specified, it shall
take effect from the time of its receipt by the Secretary, who
shall record such resignation, noting the day and hour of its
<PAGE>
reception. The acceptance of a resignation shall not be
necessary to make it effective. Notwithstanding anything to
the contrary in Article I, Section 2 hereof, a meeting for
removing a director shall be called in accordance with the
procedures specified in Section 16(c) of the Investment
Company Act of 1940, and the shareholder communications
provisions of said Section 16(c) shall be following by the
corporation. At any meeting of shareholders, duly called and
at which a quorum is present, the shareholders may, by
affirmative vote of the holders of a majority of the votes
entitled to be cast thereon, remove any director or directors
from office and may elect a successor or successors to fill
any resulting vacancies to hold office until the next annual
meeting of shareholders or until a successor or successors are
elected and qualify.
Section 11. Telephone Meetings. Any member or members of the board of
directors or of any committee designated by the board of
directors, may participate in a meeting of the board, or any
such committee, as the case may be, by means of a conference
telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same
time. Participation in a meeting by these means constitutes
presence in person at the meeting. This Section 11 shall not
be applicable to meetings held for the purpose of voting in
respect of approval of contracts or agreements whereby a
person undertakes to serve or act as investment adviser of, or
principal underwriter for, the corporation or in respect to
other matters as to which the Investment Company Act of 1940
or the rules thereunder require that votes be cast in person.
Section 12. Action by Directors Without Meeting. The provisions of
these bylaws covering notices and meetings to the contrary
notwithstanding, and except as required by law (including
Section 15 of the Investment Company Act of 1940), any action
required or permitted to be taken at any meeting of the board
of directors may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the
directors entitled to vote upon the action and such written
consent is filed with the minutes of proceedings of the board
of directors.
ARTICLE III.
COMMITTEES
Section 1. Executive Committee. The board of directors, by resolution
adopted by a majority of the whole board of directors, may
provide for an executive committee of three (3) or more
directors. If provision be made for an executive committee,
the members thereof shall be elected by the board of directors
to serve during the pleasure of the board of directors.
Unless otherwise provided by resolution of the board of
directors, the president shall be a member and the chairman of
<PAGE>
the executive committee shall preside at all meetings thereof.
During the intervals between the meetings of the board of
directors, the executive committee shall possess and may
exercise all of the powers of the board of directors in the
management of the business and affairs of the corporation
conferred by the bylaws or otherwise, to the extent authorized
by the resolution providing for such executive committee or by
subsequent resolution adopted by a majority of the whole board
of directors, in all cases in which specific directions shall
not have been given by the board of directors. Notwithstanding
the foregoing, the executive committee shall not have the
power to: (i) declare dividends or distributions on stock;
(ii) issue stock other than as provided by the Maryland
General Corporation Law; (iii) recommend to the shareholders
any action which requires shareholder approval; (iv) amend
these bylaws; or (v) approve any merger or share exchange
which does not require shareholder approval. The executive
committee shall maintain written records of its transactions.
All action by the executive committee shall be reported to the
board of directors at its meeting next succeeding such action,
and shall be subject to ratification, with or without revision
or alteration, by such vote of the board of directors as would
have been required under Article II, Section 7, hereof, had
such action been taken by the board of directors. Vacancies in
the executive committee shall be filled by the board of
directors.
Section 2. Meetings of the Executive Committee. The executive committee
shall fix its own rules of procedure and shall meet as
provided by such rules or by resolution of the board of
directors, and it shall also meet at the call of the chairman
or of any two (2) members of the committee. A majority of the
executive committee shall constitute a quorum. Except in
cases in which it is otherwise provided by resolution of the
board of directors, the vote of a majority of such quorum at
a duly constituted meeting shall be sufficient to elect and to
pass any measure, subject to ratification by the board of
directors as provided in Section 1 of this Article III.
Section 3. Other Committees. The board of directors may by resolution
provide for such other standing or special committees as it
deems desirable, and discontinue the same at its pleasure.
Each such committee shall have such powers and perform such
duties as may be assigned to it by the board of directors.
Section 4. Committee Action Without Meeting. The provisions of these
bylaws covering notices and meetings to the contrary
notwithstanding, and except as required by law, any action
required or permitted to be taken at any meeting of any
committee of the board of directors appointed pursuant to
these bylaws may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all
members of the committee entitled to vote upon the action, and
such written consent is filed with the records of the
proceedings of the committee.
<PAGE>
ARTICLE IV.
OFFICERS
Section 1. Numbers; Qualifications; Term of Office; Vacancies. The board
of directors may select one of their number as chairman of the
board and may select one of their number as vice chairman of
the board (neither of which positions shall be considered to
be the designation of a position as an officer of the
corporation), and shall choose as officers a president from
among the directors and a treasurer and a secretary who need
not be directors. The board of directors may also choose one
or more vice presidents, one or more assistant secretaries and
one or more assistant treasurers, none of whom need be a
director. Any two or more of such offices, except those of
president and vice president, may be held by the same person,
but no officer shall execute, acknowledge or verify any
instrument in more than one capacity if such instrument is
required by law or by the certificate of incorporation or by
these bylaws or by resolution of the board of directors to be
executed, acknowledged or verified by any two or more
officers. Each such officer shall hold office until the first
meeting of the board of directors after the annual meeting of
the shareholders next following his election or, if no such
annual meeting of the shareholders is held, until the annual
meeting of the board of directors in the year following his
election, and, until his successor is chosen and qualified or
until he shall have resigned or died, or until he shall have
been removed as hereinafter provided in Section 3 of this
Article IV. Any vacancy in any of the above offices may be
filled by the board of directors at any regular or special
meeting. All officers and agents of the corporation, as
between themselves and the corporation, shall have such
authority and perform such duties in the management of the
corporation as may be provided in or pursuant to these bylaws,
or, to the extent not so provided, as may be prescribed by the
board of directors; provided, that no rights of any third
party shall be affected or impaired by any such bylaws or
resolution of the board unless the third party has knowledge
thereof.
Section 2. Subordinate Officers. The board of directors, or any
officer thereunto authorized by it, may appoint from time to
time such other officers and agents for such terms of office
and with such powers and duties as may be prescribed by the
board of directors or the officer making such appointment.
Section 3. Removal. Any officer or agent may be removed by the board
of directors whenever, in its judgment, the best interests of
the corporation will be served thereby, but such removal shall
be without prejudice to the contractual rights, if any, of the
person so removed.
<PAGE>
Section 4. Chairman of the Board. The chairman of the board, if one
shall be elected, shall preside at all meetings of the board
of directors, and shall appoint all committees except such as
are required by statute, these bylaws or a resolution of the
board of directors or of the executive committee to be
otherwise appointed, and shall have other such duties as may
be assigned to him from time to time by the board of
directors. In recognition of notable and distinguished
services to the corporation, the board of directors may
designate one of its members as honorary chairman, who shall
have such duties as the board may, from time to time, assign
him by appropriate resolution, excluding, however, any
authority or duty vested by law or these bylaws in any other
officer.
Section 5. Vice Chairman of the Board. The vice chairman of the board,
if one shall be elected, shall preside at all meetings of the
board of directors at which the chairman of the board is not
present, shall call at his discretion and shall preside at
meetings of those directors of the corporation who are not
affiliated with the corporation's investment adviser,
distributor, or affiliates thereof, and shall perform such
other duties as may be assigned to the vice chairman from time
to time by the board of directors.
Section 6. President. The president shall preside at all meetings of the
shareholders and, in the absence of the chairman and the vice
chairman of the board or if a chairman and vice chairman of
the board are not elected, at all meetings of the board of
directors. Unless otherwise provided by the board of
directors, he shall have direct control of and any authority
over the business and affairs and over the officers of the
corporation, and shall preside at all meetings of the
executive committee. The president shall also perform all
such other duties as are incident to his office and as may be
assigned to him from time to time by the board of directors.
Section 7. Vice Presidents. The vice president or vice presidents, at
the request of the president or in his absence or inability to
act, shall perform the duties and exercise the functions of
the president in such manner as may be directed by the
president, the board of directors or the executive committee.
The vice president or vice presidents shall have such other
powers and perform all such other duties as may be assigned to
them by the board of directors, the executive committee, or
the president.
Section 8. Secretary. The secretary shall see that all notices are duly
given in accordance with these bylaws; he shall keep the
minutes of all meetings of the shareholders and, if directed
to do so by the chairman of the meeting, of meetings of the
board of directors and of the executive committee at which he
shall be present; he shall have charge of the books and
records and the corporate seal or seals of the corporation; he
shall see that the corporate seal is affixed to all documents,
<PAGE>
the execution of which under the seal of the corporation is
duly authorized and is necessary; and he shall make such
reports and perform all such other duties as are incident to
his office and as may be assigned to him from time to time by
the board of directors or by the president.
Section 9. Treasurer. The treasurer shall be the chief financial officer
of the corporation, and as such shall have supervision of the
custody of all funds, securities and valuable documents of the
corporation, subject to such arrangements as may be authorized
or approved by the board of directors with respect to the
custody of assets of the corporation; shall receive, or cause
to be received, and give, or cause to be given, receipts for
all funds, securities or valuable documents paid or delivered
to, or for the account of, the corporation, and cause such
funds, securities or valuable documents to be deposited for
the account of the corporation with such banks or trust
companies as shall be designated by the board of directors;
shall pay or cause to be paid out of the funds of the
corporation all just debts of the corporation upon their
maturity; shall maintain, or cause to be maintained, accurate
records of all receipts, disbursements, assets, liabilities,
and transactions of the corporation; shall see that adequate
audits thereof are regularly made; shall, when required by the
board of directors, render accurate statements of the
condition of the corporation; and shall perform all such other
duties as are incident to his office and as may be assigned to
him by the board of directors or by the president.
Section 10. Assistant Secretaries, Assistant Treasurers. The assistant
secretaries and assistant treasurers shall have such duties as
from time to time may be assigned to them by the board of
directors, or by the president.
Section 11. Compensation. The board of directors shall have the power
to fix the compensation of all officers and agents of the
corporation, but may delegate to any officer or committee the
power of determining the amount of salary to be paid to any
officer or agent of the corporation other than the chairman of
the board, the president, the vice presidents, the secretary
and the treasurer.
Section 12. Contracts. Except as otherwise provided by law or by the
charter, no contract or transaction between the corporation
and any partnership or corporation, and no act of the
corporation, shall in any way be affected or invalidated by
the fact that any officer or director of the corporation is
pecuniarily or otherwise interested therein or is a member,
officer or director of such other partnership or corporation
if such interest shall be known to the board of directors of
the corporation. Specifically, but without limitation of the
foregoing, the corporation may enter into one or more
contracts appointing INVESCO Funds Group, Inc. investment
adviser of the corporation, and may otherwise do business with
INVESCO Funds Group, Inc., notwithstanding the fact that one
<PAGE>
or more of the directors of the corporation and some or all of
its officers are, have been or may become directors, officers,
members, employees, or shareholders of INVESCO Funds Group,
Inc. and may deal freely with each other, and neither such
contract appointing INVESCO Funds Group, Inc. investment
adviser to the corporation nor any other contract or
transaction between the corporation and INVESCO Funds Group,
Inc. shall be invalidated or in any way affected thereby, nor
shall any director or officer of the corporation by reason
thereof be liable to the corporation or to any shareholder or
creditor of the corporation or to any other person for any
loss incurred under or by reason of any such contract or
transaction. For purposes of this paragraph, any reference to
"INVESCO Funds Group, Inc." shall be deemed to include said
company and any parent, subsidiary or affiliate of said
company and any successor (by merger, consolidation or
otherwise) to said company or any such parent, subsidiary or
affiliate.
Section 13. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the board of directors
may deem it desirable, the board may delegate the powers and
duties of an officer to any other officer or officers or to
any director or directors.
ARTICLE V.
CAPITAL STOCK
Section 1. Issuance of Stock. The corporation shall not issue its shares
of capital stock except as approved by the board of directors.
Upon the sale of each share of its common stock, except as
otherwise permitted by applicable laws and regulations, the
corporation shall receive in cash or in securities valued as
provided in Article VIII of these bylaws, not less than the
current net asset value thereof, exclusive of any distributing
commission or discount, and in no event less than the par
value thereof.
Section 2. Certificates. Certificates for the Corporation's classes of
Common Stock shall be issued only upon the specific request of
a shareholder. If certificates are requested, they shall be
issued in such a form as may be approved by the board of
directors, they shall be respectively numbered serially for
each class of shares, or series thereof, as they are issued,
and shall be signed by, or bear a facsimile of the signatures
of, the president or a vice president, and shall also be
signed by, or bear a facsimile of the signature of some other
person who is one of the following: the treasurer, an
assistant treasurer, the secretary, or an assistant secretary;
and shall be sealed with, or bear a facsimile of, the seal of
the corporation. In case any officer of the corporation whose
signature or facsimile signature appears on such certificates
shall cease to be such officer, whether because of death,
<PAGE>
resignation or otherwise, certificates may nevertheless be
issued and delivered as though such person had not ceased to
be an officer.
Section 3. Transfers. Subject to the Maryland General Corporation Law,
the board of directors shall have power and authority to make
all such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of
certificates of stock; and may appoint transfer agents and
registrars thereof. The duties of transfer agent and registrar
may be combined.
Section 4. Stock Ledgers. Original or duplicate stock ledgers,
containing the names and addresses of the shareholders of the
corporation and the number of shares of each class held by
them respectively, shall be kept at an office or agency of the
corporation in such city or town as may be designated by the
board of directors.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders
for any other purpose, the board of directors of the
Corporation may provide that the share transfer books shall be
closed for a stated period but not to exceed, in any case,
twenty days. If the share transfer books shall be closed for
the purpose of determining shareholders entitled to notice of
or to vote at a meeting of shareholders, such books shall be
closed for at least ten days immediately preceding such
meeting. In lieu of closing the share transfer books, the
board of directors may fix in advance a date as the record
date for any such determination of shareholders, such date in
any case to be not more than ninety days and, in case of a
meeting of shareholders, not less than ten days prior to the
date on which the particular action, requiring such
determination of shareholders, is to be taken. If the share
transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, the later of the close of
business on the date on which notice of the meeting is mailed
or the thirtieth day before the meeting shall be the record
date for determining shareholders entitled to notice of or to
vote at a meeting of shareholders. The record date for
determining shareholders entitled to receive payment of a
dividend or an allotment of any rights shall be the close of
business on the day on which the resolution of the board of
directors declaring such dividend or allotment of rights is
adopted. But the payment or allotment may not be made more
than 60 days after the date on which the resolution is
adopted. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided
in this section, such determination shall apply to any
adjournment thereof.
<PAGE>
Section 6. New Certificates. In case any certificate of stock is lost,
stolen, mutilated or destroyed, the board of directors may
authorize the issue of a new certificate in place thereof upon
such terms and conditions as it may deem advisable; or the
board of directors may delegate such power to any officer or
officers of the corporation; but the board of directors or
such officer or officers, in their discretion, may refuse to
issue such new certificate, save upon the order of some court
having jurisdiction in the premises.
Section 7. Registered Owners of Stock. The corporation shall be entitled
to recognize the exclusive right of a person registered on its
books as the owner of shares of stock to receive dividends,
and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of
shares of stock, and shall not be bound to recognize any
equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
Section 8. Fractional Denominations. Subject to any applicable
provisions of law and the charter of the corporation, the
corporation may issue shares of its capital stock in
fractional denominations, provided that the transactions in
which and the terms and conditions upon which shares in
fractional denominations may be issued from time to time be
limited or determined by or under the authority of the board
of directors.
ARTICLE VI.
FINANCES
Section 1. Checks, drafts, etc. All instruments, documents, and other
papers shall be executed in the name and on behalf of the
corporation, and all drafts, checks, notes and other
obligations for the payment of money by the corporation shall,
unless otherwise provided by resolution of the board of
directors, be signed by the president or vice president and
countersigned by the secretary or treasurer.
Section 2. Annual Reports. A statement of the affairs of the corporation
shall be submitted at the annual meeting of the shareholders
and, within twenty (20) days after the meeting, shall be
placed on file at the corporation's principal office. If the
corporation is not required to hold an annual meeting of
shareholders, the corporation's statement of affairs shall be
placed on file at the corporation's principal office within
one hundred and twenty (120) days after the end of its fiscal
year. Such statement shall be prepared by such executive
officer of the corporation as may be designated by resolution
of the board of directors. If no other executive officer is
<PAGE>
so designated, it shall be the duty of the president to
prepare such statement.
Section 3. Fiscal Year. The fiscal year of the corporation shall begin
on 1st day of May in each year and end on the 30th day of
April following.
Section 4. Dividends and Distributions. Subject to any applicable
provisions of law and the charter of the corporation,
dividends and distributions upon the common stock of the
corporation may be declared at such intervals as the board of
directors may determine, in cash, in securities or other
property, or in shares of stock of the corporation, from any
sources permitted by law, all as the board of directors shall
from time to time determine.
Section 5. Location of Books and Records. The books and records of the
corporation may be kept outside the State of Maryland at the
principal office of the corporation or at such place or places
as the board of directors may from time to time determine,
except as otherwise required by law.
ARTICLE VII.
REDEMPTION OF STOCK
The registered owner of the outstanding stock of the corporation shall
have the right to require the corporation to redeem his shares at the asset
value thereof, as hereinafter defined in Article VIII of these bylaws, upon
delivery to the corporation of any certificate, or certificates, properly
endorsed, which have been issued as evidence of ownership of such stock, and a
written request for redemption in a form satisfactory to the corporation.
Stock of the corporation shall be redeemed at the current net asset value
per share next determined after a request in proper form has been received from
the registered owner or owner's designee at the office of the corporation
designated to receive redemption requests. Any certificates delivered at the
designated principal place of business of the corporation on a day which is not
a business day as herein defined, shall be deemed to have been received on the
business day next succeeding the day of such delivery. Subject to the
limitations of the Investment Company Act of 1940, the board of directors shall
have authority to fix a reasonable service charge for redemption of its stock,
including redemption pursuant to any periodic withdrawal or variable payment
plan or contract.
ARTICLE VIII.
DETERMINATION OF ASSET VALUE
Section 1. Net Asset Value. The net asset value of a share of common
stock of the corporation shall be determined in accordance
with applicable laws and regulations under the supervision of
such persons and at such time or times, including the close of
<PAGE>
business on each business day, as shall be prescribed by the
board of directors. Each such determination shall be made by
subtracting from the value of the assets of the corporation
(as determined pursuant to Section 2 of this Article of the
bylaws) the amount of its liabilities, dividing the remainder
by the number of shares of common stock issued and
outstanding, and adjusting the results to the nearest full
cent per share.
Section 2. Valuation of Portfolio Securities and Other Assets. Except
as otherwise required by any applicable law or regulation of
any regulatory agency having jurisdiction over the activities
of the corporation, the corporation shall determine the value
of its portfolio securities and other assets as follows:
(a) securities for which market quotations are readily
available shall be valued at current market value
determined in such manner as the board of directors may
from time to time prescribe;
(b) all other securities and assets shall be valued at
amounts deemed best to reflect their fair value as
determined in good faith by or under the supervision of
such persons and at such time or times as shall from
time to time be prescribed by the board of directors;
All quotations, sale prices, bid and asked prices and other
information shall be obtained from such sources as the persons
making such determination believe to be reliable, and any
determination of net asset value based thereon shall be
conclusive.
ARTICLE IX.
PERIOD OF EMERGENCY
During any period of emergency, the board of directors, at its option, may
suspend the computation of asset value for the purpose of issuing or redeeming
it stock, and may suspend any obligation to accept payments for the acquisition
of additional stock of the corporation and may suspend the obligation of the
corporation to redeem stock. A period of emergency is defined to be:
(a) A period during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, or during which trading
on the New York Stock Exchange is restricted;
(b) A period during which disposal by the corporation of securities
owned by it is not reasonably practicable, or during which it is not
reasonably practicable for the corporation to fairly to determine
the value of its net assets; or
(c) Such other periods as the Securities and Exchange Commission
pursuant to the provisions of the Investment Company Act of 1940 may
by order declare as an emergency period or periods.
14
<PAGE>
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 1. Seal. The board of directors shall provide a suitable seal,
bearing the name of the corporation, which shall be in the
charge of the secretary. The board of directors may authorize
one or more duplicate seals and provide for the custody
thereof.
Section 2. Bonds. The board of directors may require any officer,
agent or employee of the corporation to give a bond to the
corporation, conditioned upon the faithful discharge of his
duties, with one or more sureties and in such amount as may be
satisfactory to the board of directors.
Section 3. Voting upon Stock in Other Corporations. Any stock in other
corporations or associations, which may from time to time be
held by the corporation, may be voted at any meeting of the
shareholders thereof by the president or a vice president of
the corporation or by proxy or proxies appointed by the
president or one of the vice presidents of the corporation.
The board of directors, however, may by resolution appoint
some other person or persons to vote such stock, in which
case, such person or persons shall be entitled to vote such
stock upon the production of a certified copy of such
resolution.
Section 4. Bylaws. The board of directors shall have the power to make,
amend and repeal the bylaws of the corporation which may
contain any provision for regulation and management of the
affairs of the corporation not inconsistent with law or the
certificate of incorporation; provided that any and all
provisions of the bylaws, notwithstanding the power of the
directors to act with respect thereto, may be altered or
repealed, and new provisions may be adopted by the
shareholders or at any annual meeting or any special meeting
called for that purpose.
Section 5. Appointment and Duties of Custodian. The corporation shall
at all times employ a bank or trust company having the
qualifications specified by the Investment Company Act of
1940, as amended, as custodian with authority as its agent,
but subject to such restrictions, limitations and other
requirements, if any, as may be contained in these bylaws and
the Investment Company Act of 1940, as amended:
(1) to receive and hold the securities owned by the
corporation and deliver the same upon written order;
(2) to receive and receipt for any moneys due to the
corporation and deposit the same in its own banking
department or elsewhere as the board of directors may
direct;
<PAGE>
(3) to disburse such funds upon orders or vouchers;
(4) and to provide such additional services as may be
requested by the corporation;
all upon such basis of compensation as may be agreed upon
between the board of directors and the custodian.
The board of directors may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may be
agreed upon between the custodian and such sub-custodian and approved by
the board of directors.
Section 6. Central Certification System. Subject to such rules,
regulations and orders as the U.S. Securities and Exchange
Commission may adopt, the board of directors may direct the
custodian to deposit all or any part of the securities owned
by the corporation in a system for the central handling of
securities established by a national securities exchange or a
national securities association registered with the SEC under
the Securities Exchange Act of 1934, or such other person as
may be permitted by the SEC or its staff in accordance with
the Investment Company Act of 1940, as amended, and any rule
or staff interpretation thereof, pursuant to which system all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of such securities, provided that all such deposits
shall be subject to withdrawal only upon the order of the
corporation.
Section 7. Compliance with Federal Regulations. The board of directors
is hereby empowered to take such action as it may deem to be
necessary, desirable or appropriate so that the corporation is
or shall be in compliance with any federal or state statute,
rule or regulation with which compliance by the corporation is
required.
Section 8. Waiver of Notice. Whenever any notice of the time, place or
purpose of any meeting of shareholders, directors, or of any
committee is required to be given under the provisions of
statute or under the provisions of the charter of the
corporation or these bylaws, a waiver thereof in writing,
signed by the person or person entitled to such notice and
filed with the records of the meeting, whether before or after
the holding thereof, or actual attendance at the meeting of
directors or committee in person, shall be deemed equivalent
to the giving of such notice to such person.
Section 9. Offices. The principal office of the corporation in the State
of Maryland shall be in the City of Baltimore. In addition to
its principal office in the State of Maryland, the corporation
may have an office or offices in the City of Denver, State of
Colorado, and at such other places as the board of directors
<PAGE>
may from time to time designate or the business of the
corporation may require.
Section 10. Definitions. For all purposes of the certificate of
incorporation and these bylaws, the terms:
(a) "business day" shall be defined as a day with respect to
which the New York Stock Exchange is open for business,
and with respect to which the actual time of closing of
such exchange is that time which shall have been
scheduled for such closing in advance of the opening of
such exchange;
(b) "the close of business" shall be defined as the time of
closing of the New York Stock Exchange.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 30th day of April 1993, Denver, Colorado, by
and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware corporation,
and INVESCO Dynamics Fund, Inc., a Maryland Corporation (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of the State
of Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares"); and
WHEREAS, the Fund desires that the Adviser manage its investment
operations and the Adviser desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby agrees to manage
the investment operations of the Fund, subject to the terms of this
Agreement and to the supervision of the Fund's directors (the
"Directors"). The Adviser agrees to perform, or arrange for the
performance of, the following specific services for the Fund:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Fund;
(b) to maintain a continuous investment program for the Fund,
consistent with (i) the Fund's investment policies as set
forth in the Fund's Articles of Incorporation, Bylaws, and
Registration Statement, as from time to time amended, under
the Investment Company Act of 1940, as amended (the "1940
Act"), and in any prospectus and/or statement of additional
information of the Fund, as from time to time amended and in
use under the Securities Act of 1933, as amended, and (ii) the
Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for
the Fund, unless otherwise directed by the Directors of the
Fund, and to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment
analyses and research, the reviews of current economic
conditions and trends, and the consideration of long-range
investment policy now or hereafter generally available to
investment advisory customers of the Adviser;
<PAGE>
(e) to determine what portion of the Fund should be invested in
the various types of securities authorized for purchase by the
Fund;
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Fund action and any other rights
pertaining to the Fund's portfolio securities shall be
exercised; and
(g) to calculate the net asset value of the Fund as applicable, as
required by the 1940 Act, subject to such procedures as may be
established from time to time by the Fund's Directors, based
upon the information provided to the Adviser by the Fund or by
the custodian, co-custodian or sub-custodian of the Fund's
assets (the "Custodian") or such other source as designated by
the Directors from time to time.
With respect to execution of transactions for the Fund, the Adviser
shall place, or arrange for the placement of, all orders for the
purchase or sale of portfolio securities with brokers or dealers
selected by the Adviser. In connection with the selection of such
brokers or dealers and the placing of such orders, the Adviser is
directed at all times to obtain for the Fund the most favorable
execution and price; after fulfilling this primary requirement of
obtaining the most favorable execution and price, the Adviser is
hereby expressly authorized to consider as a secondary factor in
selecting brokers or dealers with which such orders may be placed
whether such firms furnish statistical, research and other
information or services to the Adviser. Receipt by the Adviser of
any such statistical or other information and services should not be
deemed to give rise to any requirement for adjustment of the
advisory fee payable pursuant to paragraph 4 hereof. The Adviser may
follow a policy of considering sales of shares of the Fund as a
factor in the selection of broker/dealers to execute portfolio
transactions, subject to the requirements of best execution
discussed above.
The Adviser shall for all purposes herein provided be deemed to be
an independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall reimburse the
Fund monthly for any salaries paid by the Fund to officers,
Directors, and full-time employees of the Fund who also are
officers, general partners or employees of the Adviser or its
affiliates. Except for such subaccounting, recordkeeping, and
administrative services which are to be provided by the Adviser to
the Fund under the Administrative Services Agreement between the
Fund and the Adviser dated April 30, 1993, which was approved on
April 21, 1993, by the Fund's board of directors, including all of
the independent directors, at the Fund's request the Adviser shall
also furnish to the Fund, at the expense of the Adviser, such
competent executive, statistical, administrative, internal
<PAGE>
accounting and clerical services as may be required in the judgment
of the Directors of the Fund. These services will include, among
other things, the maintenance (but not preparation) of the Fund's
accounts and records, and the preparation (apart from legal and
accounting costs) of all requisite corporate documents such as tax
returns and reports to the Securities and Exchange Commission and
Fund shareholders. The Adviser also will furnish, at the Adviser's
expense, such office space, equipment and facilities as may be
reasonably requested by the Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and
except to the extent required by law to be paid by the Adviser, the
Fund shall pay all costs and expenses in connection with the
operations and organization of the Fund. Without limiting the
generality of the foregoing, such costs and expenses payable by the
Fund include the following:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Fund in connection with securities
transactions to which the Fund is a party or in connection
with securities owned by the Fund;
(b) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent,
dividend reinvestment agent, transfer agent, registrar,
independent pricing services and legal counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by the Fund;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Fund and of its shares under laws
administered by the Securities and Exchange Commission or
under other applicable regulatory requirements, including the
preparation and printing of prospectuses and statements of
additional information;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices,
prospectuses, statements of additional information and other
communications to the Fund's shareholders, as well as all
expenses of shareholders' meetings and Directors' meetings;
(h) all costs, fees or other expenses arising in connection with
the organization and filing of the Fund's Articles of
Incorporation, including its initial registration and
qualification under the 1940 Act and under the Securities Act
<PAGE>
of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial
registration and qualification of its securities under the
laws of any state and the approval of the Fund's operations by
any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Fund;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund;
(l) extraordinary expenses, including fees and disbursements of
Fund counsel, in connection with litigation by or against the
Fund;
(m) premiums for the fidelity bond maintained by the Fund pursuant
to Section 17(g) of the 1940 Act and rules promulgated
thereunder (except for such premiums as may be allocated to
third parties as insureds thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid
by the Fund pursuant to a Plan and Agreement of Distribution
adopted under Rule 12b-1 of the Investment Company Act of
1940.
3. Use of Affiliated Companies. In connection with the rendering of
the services required to be provided by the Adviser under this
Agreement, the Adviser may, to the extent it deems appropriate and
subject to compliance with the requirements of applicable laws and
regulations, and upon receipt of written approval of the Fund, make
use of its affiliated companies and their employees; provided that
the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this
Agreement and that all costs and expenses associated with the
providing of services by any such companies or employees and
required by this Agreement to be borne by the Adviser shall be borne
by the Adviser or its affiliated companies.
4. Compensation of the Adviser. For the services to be rendered and
the charges and expenses to be assumed by the Adviser hereunder, the
Fund shall pay to the Adviser an advisory fee which will be computed
on a daily basis and paid as of the last day of each month, using
for each daily calculation the most recently determined net asset
value of the Fund, as determined by valuations made in accordance
with the Fund's procedure for calculating its net asset value as
described in the Fund's Prospectus and/or Statement of Additional
Information. On an annual basis the advisory fee applicable to the
Portfolio shall be as follows: 0.60% on the first $350 million of
<PAGE>
the Fund's average net assets as so determined, 0.55% of the Fund's
average net asset value for net assets in excess of $350 million but
not more than $700 million, and 0.50% of the Fund's average net
assets in excess of $700 million.
During any period when the determination of the Fund's net asset
value is suspended by the Directors of the Fund, the net asset value
of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this Paragraph 4, be deemed to
be the net asset value at the close of each succeeding business day
until it is again determined. However, no such fee shall be paid to
the Adviser with respect to any assets of the Fund which may be
invested in any other investment company for which the Adviser
serves as investment adviser. The fee provided for hereunder shall
be prorated in any month in which this Agreement is not in effect
for the entire month.
If, in any given year, the sum of the Fund's expenses exceeds the
most restrictive state imposed annual expense limitation, the
Adviser will be required to reimburse the Fund for such excess
expenses promptly. Interest, taxes and extraordinary items such as
litigation costs are not deemed expenses for purposes of this
paragraph and shall be borne by the Fund in any event. Expenditures,
including costs incurred in connection with the purchase or sale of
portfolio securities, which are capitalized in accordance with
generally accepted accounting principles applicable to investment
companies, are accounted for as capital items and shall not be
deemed to be expenses for purposes of this paragraph.
5. Avoidance of Inconsistent Positions and Compliance with Laws.
In connection with purchases or sales of securities for the
investment portfolio of the Fund, neither the Adviser nor its
officers or employees will act as a principal or agent for any party
other than the Fund or receive any commissions. The Adviser will
comply with all applicable laws in acting hereunder including,
without limitation, the 1940 Act; the Investment Advisers Act of
1940, as amended; and all rules and regulations duly promulgated
under the foregoing.
6. Duration and Termination. This Agreement shall become effective as
of the effective date of the reorganization of Financial Dynamics
Fund, Inc. into INVESCO Dynamics Fund, Inc. Thereafter, unless
sooner terminated as hereinafter provided, this Agreement shall
remain in force for an initial term ending two years from the date
of execution, and from year to year thereafter, but only as long as
such continuance is specifically approved at least annually (i) by
a vote of a majority of the outstanding voting securities of the
Fund or by the Directors of the Fund, and (ii) by a majority of the
Directors of the Fund who are not interested persons of the Adviser
or the Fund by votes cast in person at a meeting called for the
purpose of voting on such approval.
<PAGE>
This Agreement may, on 60 days' prior written notice, be terminated
without the payment of any penalty, by the Directors of the Fund, or
by the vote of a majority of the outstanding voting securities of
the Fund, as the case may be, or by the Adviser. This Agreement
shall immediately terminate in the event of its assignment, unless
an order is issued by the Securities and Exchange Commission
conditionally or unconditionally exempting such assignment from the
provisions of Section 15(a) of the 1940 Act, in which event this
Agreement shall remain in full force and effect subject to the terms
and provisions of said order. In interpreting the provisions of this
paragraph 6, the definitions contained in Section 2(a) of the 1940
Act and the applicable rules under the 1940 Act (particularly the
definitions of "interested person," "assignment" and "vote of a
majority of the outstanding voting securities") shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to
evaluate the terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation described in paragraph 4 earned prior to such
termination.
7. Non-Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to
others, including, without limitation, other investment companies
with similar objectives to those of the Fund. The Adviser may, when
it deems such to be advisable, aggregate orders for its other
customers together with any securities of the same type to be sold
or purchased for the Fund in order to obtain best execution and
lower brokerage commissions. In such event, the Adviser shall
allocate the shares so purchased or sold, as well as the expenses
incurred in the transaction, in the manner it considers to be most
equitable and consistent with its fiduciary obligations to the Fund
and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Fund or to the
Fund's shareholders or creditors, for any error of judgment, mistake
of law, or for any loss arising out of any investment, nor for any
other act or omission, in the performance of its obligations to the
Fund not involving willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties hereunder.
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
<PAGE>
Amendments Hereof. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument
in writing signed by the Fund and the Adviser, and no material
amendment of this Agreement shall be effective unless approved by
(1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote
of a majority of the outstanding voting securities of the Fund;
provided, however, that this paragraph shall not prevent any
immaterial amendment(s) to this Agreement, which amendment(s) may be
made without shareholder approval, if such amendment(s) are made
with the approval of (1) the Directors and (2) a majority of the
Directors of the Fund who are not interested persons of the Adviser
or the Fund.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal
or made invalid by a court decision, statute, rule or otherwise,
such illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended to
describe, interpret, define or limit the size, extent or intent of
this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of
Colorado, or any of the provisions herein, conflict with applicable
provisions of the 1940 Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, the day and year first above written.
INVESCO DYNAMICS FUND, INC.
ATTEST:
By: /s/ John M. Butler
------------------------------
John M. Butler
/s/ Glen A. Payne President
- -----------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
----------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- ------------------------------
Glen A. Payne
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 30th day of April, 1993, by and between INVESCO Funds
Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Trust Company, a
Colorado corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO DYNAMICS FUND, INC. (the "Fund") is engaged in business
as a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") and currently has one class of shares (the "Shares");
and
WHEREAS, INVESCO and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Fund (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Fund, and,
upon receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Fund and to furnish the investment advisory services described below, subject to
the broad supervision of INVESCO and Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Fund's directors (the "Directors") and
INVESCO. Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and to execute all purchases and
<PAGE>
sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund, consistent
with (i) the Fund's investment policies as set forth in the Fund's
Articles of Incorporation, Bylaws, and Registration Statement, as
from time to time amended, under the Investment Company Act of 1940,
as amended (the "1940 Act"), and in any prospectus and/or statement
of additional information of the Fund, as from time to time amended
and in use under the Securities Act of 1933, as amended, and (ii)
the Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund, unless otherwise directed by the Directors of the Fund or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment analysis
and research, the reviews of current economic conditions and trends,
and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of
the Sub-Adviser;
(e) to determine what portion of the Fund should be invested in the
various types of securities authorized for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Fund. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
<PAGE>
particular transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the commission
rate reflects services, reliability and other relevant factors in addition to
the cost of execution, the Sub-Adviser shall have the burden of demonstrating
that such expenditures were bona fide and for the benefit of the Fund.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Fund shall pay all costs and
expenses in connection with the operations of the Fund.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.25% of the Fund's daily net assets up to $200 million, and 0.20% of
the Fund's daily net assets in excess of $200 million. During any period when
the determination of the Fund's net asset value is suspended by the Directors of
the Fund, the net asset value of a share of the Fund as of the last business day
prior to such suspension shall, for the purpose of this Article III, be deemed
to be the net asset value at the close of each succeeding business day until it
is again determined. However, no such fee shall be paid to the Sub-Adviser with
respect to any assets of the Fund which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub-adviser.
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the INVESCO
Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
<PAGE>
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Fund or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the effective date of the
reorganization of Financial Dynamics Fund, Inc. into INVESCO Dynamics Fund, Inc.
Thereafter, this Agreement shall remain in force for an initial term of two
years from the date of execution, and from year to year thereafter until its
termination in accordance with this Article VI, but only so long as such
continuance is specifically approved at least annually by (i) the Directors of
the Fund, or by the vote of a majority of the outstanding voting securities of
the Fund, and (ii) a majority of those Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Fund, or by vote
of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Fund, and a termination by
the Fund shall require such notice to each of the parties. This Agreement shall
automatically terminate in the event of its assignment to the extent required by
the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
<PAGE>
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such amendment and (2) the vote of a majority of the outstanding
voting securities of the Fund (other than an amendment which can be effective
without shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
-----------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- ---------------------------------
Glen A. Payne
Secretary
INVESCO TRUST COMPANY
ATTEST:
By: /s/ John J. Kaweske
-----------------------------
John J. Kaweske
/s/ Glen A. Payne Executive Vice President
- ----------------------------------
Glen A. Payne
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of April, 1993 between INVESCO
DYNAMICS FUND, INC., a Maryland corporation (the "Fund"), and INVESCO FUNDS
GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently proposes to have one class or series of
outstanding shares (the "Shares"), which shares may be divided into additional
classes or series, each representing an interest in a separate portfolio of
investments, and it is in the interest of the Fund to offer the Shares for sale
continuously; and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares in order to
promote growth of the Fund and facilitate the distribution of the Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the
distribution of Shares in jurisdictions wherein such Shares may
legally be offered for sale; provided, however, that the Fund in its
absolute discretion may (a) issue or sell Shares directly to
purchasers, or (b) issue or sell Shares to the shareholders of any
other investment company, for which the Underwriter or any affiliate
thereof shall act as exclusive distributor, who wish to exchange all
or a portion of their investment in Shares or in shares of such
other investment company for the Shares. Notwithstanding any other
provision hereof, the Fund may terminate, suspend or withdraw the
offering of Shares whenever, in its sole discretion, it deems such
action to be desirable. The Fund reserves the right to reject any
subscription in whole or in part for any reason.
2. The Underwriter hereby agrees to serve as agent for the distribution
of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares
remaining unissued as from time to time shall be effectively
registered under the Securities Act of 1933, as amended (the "1933
Act"), at such prices and on such terms as hereinafter set forth,
all subject to applicable federal and state securities laws and
regulations. Nothing herein shall be construed to prohibit the
Underwriter from engaging in other related or unrelated businesses.
<PAGE>
3. In addition to serving as the Fund's agent in the distribution of
the Shares, the Underwriter shall also provide to the holders of the
Shares certain maintenance, support or similar services
("Shareholder Services"). Such services shall include, without
limitation, answering routine shareholder inquiries regarding the
Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging
for bank wires, and providing such other services as the Fund may
reasonably request from time to time. It is expressly understood
that the Underwriter or the Fund may enter into one or more
agreements with third parties pursuant to which such third parties
may provide the Shareholder Services provided for in this paragraph.
Nothing herein shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any registrar,
transfer agent or custodian appointed by the Fund, the computation
of the asset value or offering price of Shares, the preparation and
distribution of notices of meetings, proxy soliciting material,
annual and periodic reports, dividends and dividend notices, or any
other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through
qualified broker-dealers or others, in such manner, not inconsistent
with the provisions hereof and the then effective Registration
Statement of the Fund under the 1933 Act (the "Registration
Statement") and related Prospectus (the "Prospectus") and Statement
of Additional Information ("SAI") of the Fund as the Underwriter may
determine from time to time; provided that no broker-dealer or other
person shall be appointed or authorized to act as agent of the Fund
without the prior consent of the directors (the "Directors") of the
Fund. The Underwriter will require each broker-dealer to conform to
the provisions hereof and of the Registration Statement (and related
Prospectus and SAI) at the time in effect under the 1933 Act with
respect to the public offering price of the Shares. The Fund will
have no obligation to pay any commissions or other remuneration to
such broker-dealers.
5. The Shares offered for sale or sold by the Underwriter shall be
offered or sold at the net asset value per share determined in
accordance with the then current Prospectus and/or SAI relating to
the sale of the Shares except as departure from such prices shall be
permitted by the then current Prospectus and/or SAI of the Fund, in
accordance with applicable rules and regulations of the Securities
and Exchange Commission. The price the Fund shall receive for the
Shares purchased from the Fund shall be the net asset value per
share of such Share, determined in accordance with the Prospectus
and/or SAI applicable to the sale of the Shares.
6. Except as may be otherwise agreed to by the Fund, the Underwriter
shall be responsible for issuing and delivering such confirmations
of sales made by it pursuant to this Agreement as may be required;
<PAGE>
provided, however, that the Underwriter or the Fund may utilize the
services of other persons or entities believed by it to be competent
to perform such functions. Shares shall be registered on the
transfer books of the Fund in such names and denominations as the
Underwriter may specify.
7. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of
the Fund as a broker-dealer where necessary or advisable) in such
states as the Underwriter may reasonably request (it being
understood that the Fund shall not be required without its consent
to comply with any requirement which in the opinion of the Directors
of the Fund is unduly burdensome). The Underwriter, at its own
expense, will effect all qualifications of itself as broker or
dealer, or otherwise, under all applicable state or Federal laws
required in order that the Shares may be sold in such states or
jurisdictions as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter from time to
time the most recent form of the Prospectus and/or SAI of the Fund.
The Fund authorizes the Underwriter to use the Prospectus and/or
SAI, in the forms furnished to the Underwriter from time to time, in
connection with the sale of the Shares of the Fund. The Fund will
furnish to the Underwriter from time to time such information with
respect to the Fund and the Shares as the Underwriter may reasonably
request for use in connection with the sale of the Shares. The
Underwriter agrees that it will not use or distribute or authorize
the use, distribution or dissemination by broker-dealers or others
in connection with the sale of the Shares any statements, other than
those contained in a current Prospectus and/or SAI of the Fund,
except such supplemental literature or advertising as shall be
lawful under Federal and state securities laws and regulations, and
that it will promptly furnish the Fund with copies of all such
material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may
cause the redemption or repurchase of the Shares at such prices and
upon such terms and conditions as shall be specified in a then
current Prospectus and/or SAI. In selling, redeeming or
repurchasing the Shares for the account of the Fund, the Underwriter
will in all respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale,
redemption or repurchase, as the case may be. The Underwriter will
<PAGE>
observe and be bound by all the provisions of the Articles of
Incorporation or Bylaws of the Fund and of any provisions in the
Registration Statement, Prospectus and SAI, as such may be amended
or supplemented from time to time, notice of which shall have been
given to the Underwriter, which at the time in any way require,
limit, restrict or prohibit or otherwise regulate any action on the
part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any attorney fees
incurred in connection therewith) which the Underwriter, its
officers and directors or any such controlling person, may
incur under the federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration
Statement or any related Prospectus and/or SAI or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against
whom such action is brought within ten (10) days after the
summons or other first legal process shall have been served
upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any
<PAGE>
such action shall not relieve the Fund from any liability
which it may have to the person against whom such action is
brought by reason of any such alleged untrue statement or
omission otherwise than on account of the indemnity agreement
contained in this paragraph. The Fund shall be entitled to
assume the defense of any suit brought to enforce such claim,
demand, or liability, but in such case the defense shall be
conducted by counsel chosen by the Fund and approved by the
Underwriter, which approval shall not be unreasonably
withheld. If the Fund elects to assume the defense of any such
suit and retain counsel approved by the Underwriter, the
defendant or defendants in such suit shall bear the fees and
expenses of an additional counsel obtained by any of them.
Should the Fund elect not to assume the defense of any such
suit, or should the Underwriter not approve of counsel chosen
by the Fund, the Fund will reimburse the Underwriter, its
officers and directors or the controlling person or persons
named as defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained by the
Underwriter or them. In addition, the Underwriter shall have
the right to employ counsel to represent it, its officers and
directors and any such controlling person who may be subject
to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriter against the Fund
hereunder if in the reasonable judgment of the Underwriter it
is advisable for the Underwriter, its officers and directors
or such controlling person to be represented by separate
counsel, in which event the reasonable fees and expenses of
such separate counsel shall be borne by the Fund. This
indemnity agreement and the Fund's representations and
warranties in this Agreement shall remain operative and in
full force and effect and shall survive the delivery of any of
the Shares as provided in this Agreement. This indemnity
agreement shall inure exclusively to the benefit of the
Underwriter and its successors, the Underwriter's officers and
directors and their respective estates and any such
controlling person and their successors and estates. The Fund
shall promptly notify the Underwriter of the commencement of
any litigation or proceeding against it in connection with the
issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Fund, its Directors and any person who controls the Fund
within the meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any attorney fees incurred in connection
therewith) which the Fund, its Directors or any such
controlling person may incur under the Federal securities
laws, the common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Directors
<PAGE>
or such controlling person resulting from such claims or
demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund
specifically for use in the Registration Statement or any
related Prospectus and/or SAI or shall arise out of or be
based upon any alleged omission to state a material fact in
connection with such information required to be stated in the
Registration Statement or the related Prospectus and/or SAI or
necessary to make such information not misleading and (b) any
alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the
Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence or reckless disregard of the duties involved
in the conduct of his office.
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado,
and sent to the Underwriter by the person against whom such
action is brought, within ten (10) days after the summons or
other first legal process shall have been served upon the
Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not
relieve the Underwriter from any liability which it may have
to the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Underwriter and approved by the Fund,
which approval shall not be unreasonably withheld. If the
Underwriter elects to assume the defense of any such suit and
retain counsel approved by the Fund, the defendant or
defendants in such suit shall bear the fees and expenses of an
<PAGE>
additional counsel obtained by any of them. Should the
Underwriter elect not to assume the defense of any such suit,
or should the Fund not approve of counsel chosen by the
Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Fund or them. In
addition, the Fund shall have the right to employ counsel to
represent it, its Directors and any such controlling person
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Fund against
the Underwriter hereunder if in the reasonable judgment of the
Fund it is advisable for the Fund, its Directors or such
controlling person to be represented by separate counsel, in
which event the reasonable fees and expenses of such separate
counsel shall be borne by the Underwriter. This indemnity
agreement and the Underwriter's representations and warranties
in this Agreement shall remain operative and in full force and
effect and shall survive the delivery of any of the Shares as
provided in this Agreement. This indemnity agreement shall
inure exclusively to the benefit of the Fund and its
successors, the Fund's Directors and their respective estates
and any such controlling person and their successors and
estates. The Underwriter shall promptly notify the Fund of the
commencement of any litigation or proceeding against it in
connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses (including the
fees and disbursements of its own counsel) of any registration of
the Shares under the 1933 Act, as amended, (b) expenses incident to
the issuance of the Shares, and (c) expenses (including the fees and
disbursements of its own counsel) incurred in connection with the
preparation, printing and distribution of the Fund's Prospectuses,
SAIs, and periodic and other reports sent to holders of the Shares
in their capacity as such. The Underwriter shall prepare and
provide necessary copies of all sales literature subject to the
Fund's approval thereof.
13. This Agreement shall become effective on the effective date of the
reorganization of Financial Dynamics Fund, Inc. into INVESCO
Dynamics Fund, Inc. Thereafter, this Agreement shall continue in
effect for an initial term expiring April 30, 1995, and from year to
year thereafter, but only so long as such continuance is
specifically approved at least annually (a)(i) by a vote of the
Directors of the Fund or (ii) by a vote of a majority of the
outstanding voting securities of the Fund, and (b) by a vote of a
majority of the Directors of the Fund who, except for their
positions as Directors of the Fund, are not "interested persons," as
defined in the Investment Company Act, of the Fund cast in person at
a meeting for the purpose of voting on this Agreement.
<PAGE>
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at least
60 days' prior written notice of such termination specifying the
date fixed therefor. In particular, this Agreement may be terminated
at any time, without payment of any penalty, by vote of a majority
of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for in
this Agreement or otherwise, the Fund may terminate this Agreement
at any time immediately upon the Underwriter's failure to fulfill
any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to
the contrary herein, or in any applicable law, that it will look
solely to the assets of the Fund for any obligations of the Fund
hereunder and nothing herein shall be construed to create any
personal liability on the part of any Director or any shareholder of
the Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15, the
definition of "assignment" contained in the Investment Company Act
shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Fund and the Underwriter and, if applicable, approved in the
manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If any
provision of this Agreement shall be held illegal or made invalid by
a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the
remainder of this Agreement.
19. This Agreement and the application and interpretation hereof shall
be governed exclusively by the laws of the State of Colorado.
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO DYNAMICS FUND, INC.
ATTEST:
By: /s/ John M. Butler
---------------------------
John M. Butler
/s/ Glen A. Payne President
- ---------------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
---------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- ---------------------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN FOR NON-INTERESTED
DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
The Plan has been adopted as an alternative to providing an increase in
the present compensation payable to each Fund's Independent Directors for
serving in such capacity. The increase in present compensation was considered by
all directors of each Fund and was determined to be reasonable in relation to
the services which are currently being performed by the Independent Directors
and the responsibilities and obligations which are imposed upon the directors in
the performance of such services.
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
Service Termination includes termination of service (other than by
disability or death) of an Independent Director which results from the
Director's having reached his Service Termination Date, which is the date not
later than the last day of the calendar quarter in which such Director's
seventy-second birthday occurs.
3. Defined Benefit
Commencing as of his Service Termination Date, each Independent Director
will receive, for the remainder of his life, a benefit (the "Benefit"), payable
quarterly, at an annual rate equal to 25 percent of the annual basic retainer
payable by each Fund to the Independent Director on his Service Termination Date
(excluding any fees relating to attending meetings or chairing committees). If
an Independent Director should die after his Service Termination Date and before
forty quarterly payments are
<PAGE>
made, payments will continue to be made to the Independent Director's designated
beneficiary until the aggregate of forty quarterly payments has been made to the
Independent Director and the Director's beneficiary.
If an Independent Director's service as a Director is terminated because
of his death prior to the occurrence of his Service Termination Date, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary.
If an Independent Director's service as a Director is terminated because
of his disability prior to the occurrence of his Service Termination Date, the
Independent Director will receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director. If the
disabled Independent Director should die before forty quarterly payments are
made, payments will continue to be made to the Independent Director's designated
beneficiary until the aggregate of forty quarterly payments has been made to the
disabled Independent Director and the Director's beneficiary.
If the Independent Director and his designated beneficiary
should die before a total of forty quarterly payments are made, the
remaining value of the Independent Director's benefit shall be
determined as of the date of the death of the Independent
Director's designated beneficiary and shall be paid to the estate
of the designated beneficiary in one lump sum or in periodic
payments, with the determinations with respect to the value of the
benefit and the method and frequency of payment to be made by the
Committee (as defined in paragraph 8 . a. ) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
benefit shall be determined as of the date of the death of the Independent
Director and shall be paid as promptly as possible in one lump sum to the estate
of the designated beneficiary.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
<PAGE>
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The Benefit for each year will be paid in quarterly installments that are
as nearly equal as possible.
7. Payment of Benefit: Allocation of Costs
Each Fund is responsible for the payment of the amount of the Benefit
applicable to the Fund, as well as its proportionate share of all expenses of
administration of the Plan, including without limitation all accounting and
legal fees and expenses and fees and expenses of any Actuary. The obligations of
each Fund to pay such Benefits and expenses will not be secured or funded in any
manner, and such obligations will not have any preference over the lawful claims
of each Fund's creditors and shareholders. To the extent that the Benefit is
paid by more than one Fund, such costs and expenses will be allocated among such
Funds in a manner that is determined by the Committee to be fair and equitable
under the circumstances. To the extent that one or more of such Funds consist of
one or more separate portfolios, such costs and expenses allocated to any such
Fund will thereafter be allocated among such portfolios by the Board of the Fund
in a manner that is determined by such Board to be fair and equitable under the
circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a committee (the "Committee")
of three Independent Directors designated by all of the Independent Directors of
the Funds. Except as otherwise provided herein, the Committee will make all
interpretations and determinations necessary or desirable for the Plan's
administration, and such interpretations and determinations will be final and
conclusive. Committee members will be elected annually by the Independent
Directors.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committeees
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically
provided in paragraph 3, the right to receive any payment under the
<PAGE>
Plan is not transferable or assignable, and nothing in the Plan shall create any
benefit, cause of action, right of sale, transfer, assignment, pledge,
encumbrance, or other such right in any heirs or the estate of any Independent
Director.
b. Amendment etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, te D ination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any
obligation on the part of the Board of any Fund to nominate any
Independent Director for reelection.
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Te D ination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993.
EXHIBIT 8
CUSTODIAN CONTRACT
Between
INVESCO DYNAMICS FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
21D593
WP2309C
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be
Held By It............................................. l
2. Duties of the Custodian with Respect to Property of
the Fund Held by the Custodian in the United States.... 2
2.1 Holding Securities................................. 2
2.2 Delivery of Securities............................. 3
2.3 Registration of Securities......................... 7
2.4 Bank Accounts...................................... 8
2.5 Availability of Federal Funds...................... 9
2.6 Collection of Income............................... 9
2.7 Payment of Fund Monies............................. 10
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased.................... 13
2.9 Appointment of Agents.............................. 13
2.10 Deposit of Securities in Securities System......... 14
2.10A Fund Assets Held in the Custodian's Direct
Paper System...................................... 17
2.11 Segregated Account................................. 18
2.12 Ownership Certificates for Tax Purposes............ 20
2.13 Proxies............................................ 20
2.14 Communications Relating to Fund
Portfolio Securities............................... 20
2.15 Reports to Fund by Independent Public
Accountants........................................ 21
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States.............. 22
3.1 Appointment of Foreign Sub-Custodians............... 22
3.2 Assets to be Held................................... 22
3.3 Foreign Securities Depositories..................... 23
3.4 Agreements with Foreign Banking Institutions........ 23
3.5 Access of Independent Accountants of the Fund....... 24
3.6 Reports by Custodian................................ 24
3.7 Transactions in Foreign Custody Account............. 25
3.8 Liability of Foreign Sub-Custodians................. 25
3.9 Liability of Custodian.............................. 26
3.10 Reimbursement for Advances......................... 27
3.11 Monitoring Responsibilities........................ 28
3.12 Branches of U.S. Banks............................. 28
3.13 Tax Law............................................ 29
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund................................... 30
5. Proper Instructions..................................... 31
6. Actions Permitted Without Express Authority............. 31
<PAGE>
7. Evidence of Authority................................... 32
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income.............................................. 33
9. Records................................................. 33
10. Opinion of Fund's Independent Accountant................ 34
11. Compensation of Custodian............................... 34
12. Responsibility of Custodian............................. 34
13. Effective Period, Termination and Amendment............. 36
14. Successor Custodian..................................... 38
15. Interpretive and Additional Provisions.................. 39
16. Massachusetts Law to Apply.............................. 40
17. Prior Contracts......................................... 40
18. Shareholder Communications.............................. 40
<PAGE>
CUSTODIAN CONTRACT
This Contract between INVESCO Dynamics Fund, Inc., a corporation organized
and existing under the laws of Maryland, having its principal place of business
at 7800 East Union Avenue, Denver, Colorado 80237, hereinafter called the
"Fund", and State Street Bank and Trust Company, a Massachusetts trust company,
having its principal place of business at 225 Franklin Street, Boston,
Massachusetts 02110, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as
follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of :its
assets, including securities it desires to be held in places within the United
States ("domestic securities") and securities it desires to be held outside the
United States ("foreign securities") pursuant to the provisions of the Articles
of Incorporation. The Fund agrees to deliver to the Custodian all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, $.01 par value, ("Shares") of the Fund as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
<PAGE>
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall from time to time employ one or more sub-custodians located
in the United States, but only .n accordance with an applicable vote by the
Board of Directors of the Fund, and provided that the Custodian shall have no
more or less responsibility or liability to the Fund on account of any actions
or omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian. The Custodian may employ as sub-custodians for the Fund's
securities and other assets the foreign banking institutions and foreign
securities depositories designated in Schedule "A" hereto but only in accordance
with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, to be held by
it in the United States, including all domestic securities owned by the
Fund, other than (a) securities which are maintained pursuant to Section
2.10 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.10A.
<PAGE>
2.2 Delivers of Securities. The Custodian shall release and deliver domestic
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper
book-entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the
Fund and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Fund;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of
Section 2.10 hereof;
4) To the depository agent in connection with tender
or other similar offers for portfolio securities of
the Fund;
5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that, in any
such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer
into the name of the Fund or into
<PAGE>
the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to
Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange
for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number
of units; provided that, in any such case, the new securities
are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer
<PAGE>
of such securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or
instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held
liable or responsible for
<PAGE>
the delivery of securities owned by the Fund prior
to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge Of assets by the Fund, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act@@) and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations,
<PAGE>
regarding account deposits in connection with
transactions by the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus and statement of
additional information ("prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption;
and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by
the Custodian (other than bearer securities) shall be
<PAGE>
registered in the name of the Fund or in the name of any nominee of the
Fund or of any nominee of the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Fund has authorized in writing the
appointment of a nominee to be used in common with other registered
investment companies having the same investment adviser as the Fund, or in
the name or nominee name of any agent appointed pursuant to Section 2.9 or
in the name or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on behalf of the Fund
under the terms of this Contract shall be in "street name" or other good
delivery form. If, however, the Fund directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its best efforts
only to timely collect income due the Fund on such securities and to
notify the Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of the
Fund, other than cash maintained by the Fund in a bank account established
and
<PAGE>
used in accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Custodian for the Fund may be deposited by it to
its credit as Custodian in the Banking Department of the Custodian or in
such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds
to be deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Directors of the Fund. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund and
the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in the
amount of checks received in payment for Shares of the Fund which are
deposited into the Fund's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to United States registered securities held hereunder to
which the Fund shall be entitled either by law or pursuant to custom in
the securities business, and shall
<PAGE>
collect on a timely basis all income and other payments with respect to
United States bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to the Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach and
present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when
due on securities held hereunder. Income due the Fund on United States
securities loaned pursuant to the provisions of Section 2.2 (10) shall be
the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which
the Fund is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options~
futures contracts or options on futures contracts
for the account of the Fund but only (a) against
the delivery of such securities, or evidence of
title to such
<PAGE>
options, futures contracts or options on futures contracts, to
the Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the
name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the case of
repurchase agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the Custodian
along with
<PAGE>
written evidence of the agreement by the Custodian to
repurchase such securities from the Fund or (e) for transfer
to a time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer may be effected prior to
receipt of a confirmation from a broker and/or the applicable
bank pursuant to Proper Instructions from the Fund as defined
in Article 5;
2) In connection with conversion, exchange or
surrender of securities owned by the Fund as set
forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued
by the Fund as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends declared pursuant
to the governing documents of the Fund;
<PAGE>
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but onlY upon receipt of, in
addition to Proper Instructions, a certified copy of a ~
resolution of the Board of Directors or of the Executive
Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of ReceiPt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Fund to
so pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any
other bank or trust company which is itself
<PAGE>
qualified under the Investment Company Act of 1940, as amended, to act as
a custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the Custodian
of its responsibilities or liabilities hereunder.
2.10 DePosit of Securities in Securities Systems. The Custodian may deposit
and/or maintain domestic securities owned by the Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S. Department
of the Treasury and certain federal agencies, collectively referred to
herein as "Securities System" in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep domestic securities of the
Fund in a Securities System provided that such
securities are represented in an account
("Account") of the Custodian in the Securities
System which shall not include any assets of the
Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
<PAGE>
2) The records of the Custodian with respect to
domestic securities of the Fund which are
maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for
the account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer domestic
securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies
of all advices from the Securities System of transfers of
domestic securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
provided to the Fund at its request. Upon request, the
Custodian shall furnish the
<PAGE>
Fund confirmation of each transfer to or from the account of
the Fund in the form of a written advice or notice and shall
furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System
for the account of the Fund
4) The Custodian shall provide the Fund with any
report obtained by the Custodian on the Securities
System's accounting system, internal accounting
control and procedures for safeguarding domestic
securities deposited in the Securities System;
5) The Custodian shall have received the initial or
annual certificate, as the case may be, required by
Article 13 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage
to the Fund resulting from use of the Securities System by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent
to enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of
<PAGE>
the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Fund has not Been made whole for any such loss or
damage.
2.10 A Fund Assets Held in the Custodian's Direct PaPer System The Custodian
may deposit and/or maintain securities owned by the Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of
Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the Fund which are maintained in the
Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
<PAGE>
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the records
of the Custodian to reflect such payment and transfer of
securities to the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon the
making of an entry on the records of the Custodian to reflect
such transfer and receipt of payment for the account of the
Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of a
written advice or notice, of Direct Paper on the nest business
day following such transfer and shall furnish to the Fund
copies of daily trans-action sheets reflecting each day's
transaction in the Securities System for the account of the
Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may
reasonably request from time to time;
2.11 Segregated Account.The Custodian shall upon receipt of Proper Instructions
establish and maintain a segregated account or accounts for and on behalf
of the Fund, into
<PAGE>
which account or accounts may be transferred cash and/or. securities,
including securities maintained in an account by the Custodian pursuant to
Section 2.10 hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating
cash or government securities in connection with options purchased, sold
or written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the
Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee signed by an officer of
<PAGE>
the Fund and certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in connection
with transfers of such securities.
2.13 Proxies. The Custodian shall, with respect to the domestic securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of
the Fund or a nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver
to the Fund such proxies, all prosy soliciting materials and all notices
relating to such securities.
2.14 Communications Relating to Fund Portfolio Securities Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including, without limitation, pendency of
calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or
sold
<PAGE>
by the Fund) received by the Custodian from issuers of the domestic
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic
securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.15 Reports to Fund by Independent Public Accountants The Custodian shall
provide the Fund, at such times as the Fund may reasonably require, with
reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including domestic
securities deposited and/or maintained in a Securities System, relating to
the services provided by the Custodian under this Contract; such reports
shall be of sufficient scope and in sufficient detail, as may reasonably
be required by the Fund to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if there are no
such inadequacies, the reports shall so state.
<PAGE>
3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained
outside the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign
sub-custodians@ss.). Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Directors, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper Instructions, the Fund may instruct
the Custodian to cease the employment of any one or more such
sub-custodians for maintaining custody of the Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(l) of Rule 17f-5 under
the Investment Company Act of 1940, and (b.) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Fund's foreign securities transactions. The
Custodian
<PAGE>
shall identify on its books as belonging to the Fund, the foreign
securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as sub-custodians
pursuant to the terms hereof. Where possible, such arrangements shall
include entry into agreements containing the provisions set forth in
Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the Fund's assets will not
be subject to any right, charge, security interest, lien or claim of any
kind in favor of the foreign banking institution or its creditors or
agent, except a claim of payment for their safe custody or administration;
(b) beneficial ownership of the Fund's assets will be freely transferable
without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the
assets as belonging to the Fund; (d) officers of or auditors employed by,
or other representatives of the Custodian, including to the extent
permitted under applicable law the independent
<PAGE>
public accountants for the Fund, will be given access to the books and
records of the foreign banking institution relating to its actions under
its agreement with the Custodian; and (e) assets of the Fund held by the
foreign sub-custodian will be subject only to the instructions of the
Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities and
other assets of the Fund held by foreign sub-custodians, including but not
limited to an identification of entities having possession of the Fund's
securities and other assets and advices or notifications of any transfers
of securities to or from each custodial account maintained by a foreign
banking institution for the Custodian on behalf of the Fund indicating, as
to securities acquired for the Fund, the identity of the entity having
physical possession of such securities.
<PAGE>
3.7 Transactions in Foreign Custody Account (a) Except as otherwise provided
in paragraph (b) of this Section 3.7, the provision of Sections 2.2 and
2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians. (b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the account
of the Fund and delivery of securities maintained for the account of the
Fund may be effected in accordance with the customary established
securities trading or securities processing practices and procedures in
the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer. (c) Securities maintained in the
custody of a foreign sub-custodian may be maintained in the name of such
entity's nominee to the same extent as set forth in Section 2.3 of this
Contract, and the Fund agrees to hold any such nominee harmless from any
liability as a holder of record of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign sub-custodian
shall require the
<PAGE>
institution to exercise reasonable care in the performance of its duties
and to indemnify, and hold harmless, the Custodian and each Fund from and
against any loss, damage, cost, expense, liability or claim arising out of
or in connection with the institution's performance of such obligations.
At the election of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims against a foreign
banking institution as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Fund has not
been made whole for any such loss, damage, cost, expense, liability or
claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set forth
with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
contemplated by paragraph 3.12 hereof, the Custodian shall not be liable
for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.9, in delegating custody duties to State Street London Ltd.,
the Custodian
<PAGE>
shall not be relieved of any responsibility to the Fund for any loss due
to such delegation, except such loss as may result from (a) political risk
(including, but not limited to, exchange control restrictions,
confiscation, expropriation, nationalization, insurrection, civil strife
or armed hostilities) or (b) other losses (excluding a bankruptcy or
insolvency of State Street London Ltd. not caused by political risk) due
to Acts of God, nuclear incident or other losses under circumstances where
the Custodian and State Street London Ltd. have exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to advance
cash or securities for any purpose including the purchase or sale of
foreign exchange or of contracts for foreign exchange, or in the event
that the Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund
shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain
reimbursement.
<PAGE>
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection with
the initial approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders~ equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders~ equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.12 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions hereof
shall not apply where the custody of the Fund assets are maintained in
a foreign branch of a banking institution which is a "bank" as defined
by Section 2(a)(5) of the Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act. The appointment
of any such branch as a
<PAGE>
sub-custodian shall be governed by paragraph 1 of this Contract. (b) Cash
held for the Fund in the United Kingdom shall be maintained in an interest
bearing account established for the Fund with the Custodian's London
branch, which account shall be subject to the direction of the Custodian,
State Street London Ltd. or both.
3.13 Tax Law
The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the responsibility
of the Fund to notify the Custodian of the obligations imposed on the Fund
or the Custodian as custodian of the Fund by the tax law of jurisdictions
other than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to
use reasonable efforts to assist the Fund with respect to any claim for
exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.
<PAGE>
4. Payments for Repurchases or Redemptions and Sales of Shares
of the Fund
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
The Custodian shall receive from the distributor for the Fund's Shares or
from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
<PAGE>
5. Proper Instructions
Proper Instructions as used herein means a writing signed ar initialled by
one or more person or persons as the Board of Directors shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type-of transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three-party
agreement which requires a segregated asset account in accordance with Section
2.11. 6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
<PAGE>
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and 4) in general, attend to all non-discretionary
details in connection with the sale, exchange, substitution, purchase, transfer
and other dealings with the securities and property of the Fund except as
otherwise directed by the Board of Directors of the Fund. 7. Evidence of
Authority The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
<PAGE>
8. Duties of custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of. the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
9. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents
<PAGE>
of the Fund and employees and agents of the Securities and Exchange Commission.
The Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian and shall, when requested
to do so by the Fund and for such compensation as shall be agreed upon between
the Fund and the Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
11. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
12. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party
<PAGE>
or parties, including any futures commission merchant acting pursuant to the
terms of a three-party futures or options agreement. The Custodian shall be held
to the exercise of reasonable care in carrying out the provisions of this
Contract, but shall be kept indemnified by and shall be without liability to the
Fund for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of
<PAGE>
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund being liable for the payment of
money or incurring liability of some other form, the Fund, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund assets to
the extent necessary to obtain reimbursement. 13. Effective Period, Termination
and Amendment This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not
<PAGE>
sooner than thirty (30) days after the date of such delivery or mailing;
Provided, however that the Custodian shall not act under Section 2.10 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Directors of the Fund has approved the
initial use of a particular Securities System and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act of 1940, as
amended and that the Custodian shall not act under Section 2.10A hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors has approved the initial use of the Direct
Paper System and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by the Fund
of the Direct Paper System; provided further, however, that the Fund shall not
amend or terminate this Contract in contravention of any applicable federal or
state regulations, or any provision of the Articles of Incorporation, and
further provided, that the Fund may at any time by action of its Board of
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver for
the Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
<PAGE>
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
14. Successor Custodian
If a successor custodian shall be appointed by the Board of Directors of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by
<PAGE>
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation of the Fund. No interpretive or
<PAGE>
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Contract.
16. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of-the Commonwealth of Massachusetts.
17. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
18. Shareholder Communications
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, we need you to indicate whether you authorize us to provide your name,
address, and share position to requesting companies whose stock you own. If you
tell us "no", we will not provide this information to requesting companies. If
you tell us "yes" or do not check either "yes" or "no" below, we are required by
the rule to treat you as consenting to disclosure of this information for all
securities owned by you or any funds or accounts established by you. For your
protection, the Rule prohibits the requesting company from using your name and
address for any purpose other than corporate communications. Please
<PAGE>
indicate below whether you consent or object by checking one of
the alternatives below.
YES [ ] You are authorized to release our name, address, and share
positions.
NO [X] You are not authorized to release our name, address, and share
positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 1st day of July , 1993.
ATTEST INVESCO DYNAMICS FUND, INC.
/s/ Glen A. Payne By /s/ John M. Butler
- ------------------- --------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Thomas A. Forester
---------------------- By /s/ Ronald E. Logue
Assistant Secretary ---------------------------
Executive Vice President
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 30th day of April, 1993, between INVESCO
Dynamics Fund, Inc., a Maryland corporation, having its principal office and
place of business at 7800 East Union Avenue, Denver, Colorado, 80237
(hereinafter referred to as the "Fund") and INVESCO Funds Group, Inc., a
Delaware corporation, having its principal place of business at 7800 E. Union
Avenue, Denver, CO 80237 (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, Treasurer, or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund as
indicated in a certification as may be received by the
Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent, which is actually
received by the Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in the 1940 Act;
(d) "Custodian" refers to the custodian of all of the securities
and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions actually
received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person;
(f) "Prospectus" shall mean the currently effective prospectus
relating to the Fund's Shares registered under the Securities
Act of 1933;
(g) "Shares" refers to the shares of common stock, $.01 par value,
of the Fund;
(h) "Shareholder" means a record owner of Shares;
(i) "Written Instructions" shall mean a written communication
<PAGE>
actually received by the Transfer Agent where the receiver is
able to verify with a reasonable degree of certainty the
authenticity of the sender of such communication; and
(j) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time.
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it has an effective
registration statement on SEC Form TA-1 and, accordingly, has duly
registered as a transfer agent as provided in Section 17A(c) of the
Securities Exchange Act of 1934.
3. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent for all of the
Shares of the Fund authorized as of the date hereof, and the
Transfer Agent accepts such appointment and agrees to perform the
duties herein set forth. If the board of directors of the Fund
hereafter reclassifies the Shares, by the creation of one or more
additional series or otherwise, the Transfer Agent agrees that it
will act as transfer agent for the Shares so reclassified on the
terms set forth herein.
4. Compensation.
(a) The Fund will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the
fees set forth in the Fee Schedule annexed hereto and
incorporated herein.
(b) The parties hereto will agree upon the compensation for acting
as transfer agent for any series of Shares hereafter
designated and established at the time that the Transfer Agent
commences serving as such for said series, and such agreement
shall be reflected in a Fee Schedule for that series, dated
and signed by an authorized officer of each party hereto, to
be attached to this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Fee Schedule,
dated and signed by an authorized officer of each party
hereto, and a certified copy of the resolution of the board of
directors of the Fund authorizing such revised Fee Schedule.
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
<PAGE>
5. Documents. In connection with the appointment of the Transfer
Agent, the Fund shall, on or before the date this Agreement goes
into effect, file with the Transfer Agent the following documents:
(a) A certified copy of the Articles of Incorporation of the Fund,
including all amendments thereto, as then in effect;
(b) A certified copy of the Bylaws of the Fund, as then in effect;
(c) Certified copies of the resolutions of the board of directors
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the board of directors, with a certificate of
the Secretary of the Fund as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the Fund with the name,
address and tax identification number of each Shareholder, and
the number of Shares held by each, certificate numbers and
denominations (if any certificates have been issued), lists of
any accounts against which stops have been placed, together
with the reasons for said stops, and the number of Shares
redeemed by the Fund;
(g) Copies of all agreements then in effect between the Fund and
any agent with respect to the issuance, sale, or cancellation
of Shares; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares.
6. Further Documentation. The Fund will also furnish from time to time
the following documents:
(a) Each resolution of the board of directors authorizing the
original issue of Shares;
(b) Each Registration Statement filed with the Commission, and
amendments and orders with respect thereto, in effect with
respect to the sale of Shares of the Fund;
(c) A certified copy of each amendment to the Articles of
Incorporation and the Bylaws of the Fund;
(d) Certified copies of each resolution of the board of directors
designating Authorized Persons to give instructions to the
Transfer Agent;
<PAGE>
(e) Certificates as to any change in any officer, director, or
Authorized Person of the Fund;
(f) Specimens of all new certificates for Shares accompanied by
the Fund's resolutions of the board of directors approving
such forms; and
(g) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for the Transfer Agent in
the proper performance of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent shall maintain
an adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such share
certificates shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death, resignation, or
removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent may continue to
countersign certificates which bear such signatures until
otherwise directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and mail
certificates as requested by the Shareholders for Shares of
the Fund in accordance with the instructions of the Fund and
to confirm such issuance to the Shareholder and the Fund or
its designee.
(c) The Fund hereby authorizes the Transfer Agent to issue
replacement share certificates in lieu of certificates which
have been lost, stolen or destroyed, without any further
action by the board of directors or any officer of the Fund,
upon receipt by the Transfer Agent of properly executed
affidavits or lost certificate bonds, in form satisfactory to
the Transfer Agent, with the Fund and the Transfer Agent as
obligees under any such bond.
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
<PAGE>
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall sell or cause
to be sold any Shares, the Fund or its authorized agent shall
provide or cause to be provided to the Transfer Agent
information including: (i) the number of Shares sold, trade
date, and price; (ii) the amount of money to be delivered to
the Custodian for the sale of such Shares; (iii) in the case
of a new account, a new account application or sufficient
information to establish an account.
(b) The Transfer Agent will, upon receipt by it of a check or
other payment identified by it as an investment in Shares of
the Fund and drawn or endorsed to the Transfer Agent as agent
for, or identified as being for the account of, the Fund,
promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the
investment. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related
account adjustments.
(c) Upon receipt of the notification required under paragraph (a)
hereof and the notification from the Custodian that such money
has been received by it, the Transfer Agent shall issue to the
purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue any Shares
of the Fund where it has received Written Instructions from
the Fund or written notification from any appropriate federal
or state authority that the sale of the Shares of the Fund has
been suspended or discontinued, and the Transfer Agent shall
be entitled to rely upon such Written Instructions or written
notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer
Agent will: (i) give prompt notice of such return to the Fund or
its designee; (ii) place a stop transfer order against all Shares
<PAGE>
issued or held on deposit as a result of such check or order; (iii)
in the case of any Shareholder who has obtained redemption checks,
place a stop payment order on the checking account on which such
checks are issued; and (iv) take such other steps as the Transfer
Agent may, in its discretion, deem appropriate or as the Fund or its
designee may instruct.
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the Fund will be
redeemed upon receipt by the Transfer Agent of: (i) a written
request for redemption, signed by each registered owner
exactly as the Shares are registered; (ii) certificates
properly endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the extent required
by the Transfer Agent as described in the Prospectus for the
Fund; and (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer Agent
will, consistent with procedures which may be established by
the Fund from time to time for redemption by wire or
telephone, upon receipt of such a wire order or telephone
redemption request, redeem Shares and transmit the proceeds of
such redemption to the redeeming Shareholder as directed. All
wire or telephone redemptions will be subject to such
additional requirements as may be described in the Prospectus
for the Fund. Both the Fund and the Transfer Agent reserve
the right to modify or terminate the procedures for wire order
or telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all necessary
information and documentation relating to a redemption, the
Transfer Agent will issue to the Custodian an advice setting
forth the number of Shares of the Fund received by the
Transfer Agent for redemption and that such shares are valid
and in good form for redemption. The Transfer Agent shall,
upon receipt of the moneys paid to it by the Custodian for the
redemption of Shares, pay such moneys to the Shareholder, his
authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized to review
and process transfers of Shares of the Fund and to the extent, if
any, permitted in the Prospectus for the Fund, exchanges between the
Fund and other mutual funds advised by INVESCO Funds Group, Inc., on
the records of the Fund maintained by the Transfer Agent. If Shares
to be transferred are represented by outstanding certificates, the
Transfer Agent will, upon surrender to it of the certificates in
proper form for transfer, and upon cancellation thereof, countersign
and issue new certificates for a like number of Shares and deliver
the same. If the Shares to be transferred are not represented by
<PAGE>
outstanding certificates, the Transfer Agent will, upon an order
therefor by or on behalf of the registered holder thereof in proper
form, credit the same to the transferee on its books. If Shares are
to be exchanged for Shares of another mutual fund, the Transfer
Agent will process such exchange in the same manner as a redemption
and sale of Shares, except that it may in its discretion waive
requirements for information and documentation.
12. Right to Seek Assurances. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers
or redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall
furnish to the Transfer Agent a resolution of the board of
directors of the Fund certified by the Secretary authorizing
the declaration of dividends and authorizing the Transfer
Agent to rely on Oral Instructions or a Certificate specifying
the date of the declaration of such dividend or distribution,
the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined, the
amount payable per share to Shareholders of record as of that
date, and the total amount payable to the Transfer Agent on
the payment date.
(b) The Transfer Agent will, on or before the payable date of any
dividend or distribution, notify the Custodian of the
estimated amount of cash required to pay said dividend or
distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall
instruct the Custodian to place in a dividend disbursing
account funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder instructions,
will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
<PAGE>
(c) The Transfer Agent will replace lost checks upon receipt of
properly executed affidavits and maintain stop payment orders
against replaced checks.
(d) The Transfer Agent will maintain all records necessary to
reflect the crediting of dividends which are reinvested in
Shares of the Fund.
(e) The Transfer Agent shall not be liable for any improper
payments made in accordance with the resolution of the board
of directors of the Fund.
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
14. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and
functions as are set forth in the Fee Schedules(s) hereto from time
to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
investor's account the following: (i) names, addresses, tax
identifying numbers and assigned account numbers; (ii) numbers
of Shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date
and price of all transactions on a Shareholder's account; (iv)
any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings in the
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a
Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; and
(viii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by
this Agreement.
(b) Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule
<PAGE>
31a-2 under the 1940 Act. Such records may be inspected by the
Fund at reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the
Transfer Agent's files, records and documents created and
maintained by the Transfer Agent in performance of its
services or for its protection. At the end of the six-year
retention period, such records and documents will either be
turned over to the Fund, or destroyed in accordance with the
Fund's authorization.
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
(b) The Transfer Agent will address and mail all communications to
Shareholders or their nominees, including proxy material and
periodic reports to Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper
or document believed by it to be genuine and to have been
signed by an Authorized Person and shall not be held to have
any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates which
it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions, and, at the
expense of the Fund, may seek advice from legal counsel for
the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any action
taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or with the opinion
of such counsel. In addition, the Transfer Agent, its
officers, agents or employees, shall accept instructions or
requests given to them by any person representing or acting on
behalf of the Fund only if said representative is known by the
Transfer Agent, its officers, agents or employees, to be an
<PAGE>
Authorized Person. The Transfer Agent shall have no duty or
obligation to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it upon the
request or direction of Authorized Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for: (i)
the legality of the issue or sale of any Shares of the Fund,
or the sufficiency of the amount to be received therefor; (ii)
the legality of the redemption of any Shares of the Fund, or
the propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares of the Fund in payment
of any stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Transfer Agent
may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by the Transfer
Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized Person of the Fund or upon the
opinion of legal counsel for the Fund or its own counsel; or
(ii) any action taken or omitted to be taken by the Transfer
Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of
the same even though the same may thereafter have been
altered, changed, amended or repealed. However,
indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its directors, officers,
employees or agents in cases of its own gross negligence,
willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the directors, officers, employees, agents and Shareholders of the
<PAGE>
Fund, and the officers, directors, employees, agents and
shareholders of the Fund's investment adviser, INVESCO Funds Group,
Inc. (the "Adviser"), are or may be interested in the Transfer Agent
as directors, officers, employees, agents, shareholders, or
otherwise, and that the directors, officers, employees, agents or
shareholders of the Transfer Agent may be interested in the Fund as
directors, officers, employees, agents, shareholders, or otherwise,
or in the Adviser as officers, directors, employees, agents,
shareholders or otherwise.
21. Term.
(a) This Agreement shall become effective on the effective date of
the reorganization of Financial Dynamics Fund, Inc. into
INVESCO Dynamics Fund, Inc. Thereafter, this Agreement shall
continue in effect for an initial term expiring April 30,
1994, and from year to year thereafter, so long as such
continuance is specifically approved at least annually both:
(i) by either the board of directors or the vote of a majority
of the outstanding voting securities of the Fund; and (ii) by
a vote of the majority of the directors who are not interested
persons of the Fund (as defined in the 1940 Act) cast in
person at a meeting called for the purpose of voting upon such
approval.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the
date of such termination, which shall not be less than 60 days
after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a
resolution of the board of directors, certified by the
Secretary, electing to terminate this Agreement and
designating a successor transfer agent.
22. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with
the formality of this Agreement, and (i) authorized or approved by
the resolution of the board of directors, including a majority of
the directors of the Fund who are not interested persons of the Fund
as defined in the 1940 Act, or (ii) authorized and approved by such
other procedures as may be permitted or required by the 1940 Act.
23. Subcontracting. The Fund agrees that the Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided
hereunder; provided, however, that the transfer agent will be liable
to the Fund for any loss arising out of or in connection with the
actions of any subcontractor, if the subcontractor fails to act in
good faith and with due diligence or is negligent or guilty of any
willful misconduct.
<PAGE>
24. Miscellaneous.
(a) Any notice and other instrument in writing, authorized or
required by this Agreement to be given to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to
that party and mailed or delivered to it at its office set
forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
INVESCO Dynamics Fund, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: John M. Butler, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
(b) This Agreement shall not be assignable and in the event of its
assignment (in the sense contemplated by the 1940 Act), it
shall automatically terminate.
(c) This Agreement shall be construed in accordance with the laws
of the State of Colorado.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
INVESCO DYNAMICS FUND, INC.
By: /s/ John M. Butler
---------------------------
John M. Butler, President
ATTEST:
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------------
Ronald L. Grooms,
ATTEST: Senior Vice President
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne, Secretary
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated April 30, 1993,
between INVESCO Dynamics Fund, Inc. (the "Fund") and INVESCO Funds Group, Inc.
as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $14.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $14.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of April, 1994.
INVESCO DYNAMICS FUND, INC.
By: /s/ Dan J. Hesser
----------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------------
Ronald L. Grooms,
ATTEST: Senior Vice President
/s/ Glen A. Payne
- --------------------------
Glen A. Payne, Secretary
AMENDMENT NO. 2
to
FEE SCHEDULE
for
Services pursuant to a Transfer Agency Agreement, dated April 30, 1993
between INVESCO Dynamics Fund, Inc. (the "Fund") and INVESCO Funds Group, Inc.
as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that is opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of May, 1996.
INVESCO DYNAMICS FUNDS, INC.
By: /s/ Dan J. Hesser
---------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
---------------------------------
Ronald L. Grooms, Senior Vice President
ATTEST:
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 30th day of April, 1993, in Denver, Colorado, by
and between INVESCO Dynamics Fund, Inc., a Maryland corporation (the "Fund"),
and INVESCO Funds Group, Inc., a Delaware corporation (hereinafter referred to
as "INVESCO").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting,
and recordkeeping services to certain investment companies, including the Fund;
and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting, and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon receipt of
written approval of the Fund arrange for other companies, including
affiliates of INVESCO, to provide to the Fund: A) such
sub-accounting and recordkeeping services and functions as are
reasonably necessary for the operation of the Fund. Such services
shall include, but shall not be limited to, preparation and
maintenance of the following required books, records and other
documents: (1) journals containing daily itemized records of all
purchases and sales, and receipts and deliveries of securities and
all receipts and disbursements of cash and all other debits and
credits, in the form required by Rule 31a-1(b)(1) under the Act; (2)
general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, in the form required
by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities
record or ledger reflecting separately for each portfolio security
as of trade date all "long" and "short" positions carried by the
Fund for the account of the Fund, if any, and showing the location
of all securities long and the off-setting position to all
securities short, in the form required by Rule 31a-1(b)(3) under the
Act; (4) a record of all portfolio purchases or sales, in the form
required by Rule 31a-1(b)(6) under the Act; (5) a record of all
puts, calls, spreads, straddles and all other options, if any, in
which the Fund has any direct or indirect interest or which the Fund
has granted or guaranteed, in the form required by Rule 31a-1(b)(7)
under the Act; (6) a record of the proof of money balances in all
<PAGE>
ledger accounts maintained pursuant to this Agreement, in the form
required by Rule 31a-1(b)(8) under the Act; and (7) price make-up
sheets and such records as are necessary to reflect the
determination of the Fund's net asset value. The foregoing books and
records shall be maintained and preserved by INVESCO in accordance
with and for the time periods specified by applicable rules and
regulations, including Rule 31a-2 under the Act. All such books and
records shall be the property of the Fund and, upon request
therefor, INVESCO shall surrender to the Fund such of the books and
records so requested; and B) such sub-accounting, recordkeeping, and
administrative services and functions, which shall be furnished by
INVESCO's wholly-owned subsidiary, INVESCO Solutions, Inc., as are
reasonably necessary for the operation of Fund shareholder accounts
maintained by certain retirement plans and employee benefit plans
for the benefit of participants in such plans. Such services and
functions shall include, but shall not be limited to: (1)
establishing new retirement plan participant accounts; (2) receipt
and posting of weekly, bi-weekly and monthly retirement plan
contributions; (3) allocation of contributions to each participant's
individual Fund account; (4) maintenance of separate account
balances for each source of retirement plan money (i.e., Company,
Employee, Voluntary, Rollover) invested in the Fund; (5) purchase,
sale, exchange or transfer of monies in the retirement plan as
directed by the relevant party; (6) distribution of monies for
participant loans, hardships, terminations, death or disability
payments; (7) distribution of periodic payments for retired
participants; (8) posting of distributions of interest, dividends
and long-term capital gains to participants by the Fund; (9)
production of monthly, quarterly and/or annual statements of all
Fund activity for the relevant parties; (10) processing of
participant maintenance information for investment election changes,
address changes, beneficiary changes and Qualified Domestic
Relations Orders; (11) responding to telephone and written inquiries
concerning Fund investments, retirement plan provisions and
compliance issues; (12) performing discrimination testing and
counseling employers on cure options on failed tests; (13)
preparation of 1099R and W2P participant IRS tax forms; (14)
preparation of, or assisting in the preparation of, 5500 Series tax
forms, Summary Plan Descriptions and Determination Letters; and (15)
reviewing legislative and IRS changes to keep the retirement plan in
compliance with applicable law.
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without
limiting the generality of the foregoing, such staff and personnel
shall be deemed to include officers of INVESCO and persons employed
or otherwise retained by INVESCO to provide or assist in providing
the Services to the Fund.
<PAGE>
3. INVESCO shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer
equipment, communication lines and supplies) and such clerical help
and other services as shall be necessary to provide the Services to
the Fund. In addition, INVESCO may arrange on behalf of the Fund to
obtain pricing information regarding the Fund's investment
securities from such company or companies as are approved by a
majority of the Fund's board of directors; and, if necessary, the
Fund shall be financially responsible to such company or companies
for the reasonable cost of providing such pricing information.
4. The Fund will, from time to time, furnish or otherwise make
available to INVESCO such information relating to the business and
affairs of the Fund as INVESCO may reasonably require in order to
discharge its duties and obligations hereunder.
5. For the services rendered, facilities furnished, and expenses
assumed by INVESCO under this Agreement, the Fund shall pay to
INVESCO a $10,000 per year base fee, plus an additional fee,
computed on a daily basis and paid on a monthly basis. For purposes
of each daily calculation of this additional fee, the most recently
determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedure for calculating Fund
net asset value as described in the Fund's Prospectus and/or
Statement of Additional Information, shall be used. The additional
fee to INVESCO under this Agreement shall be computed at the annual
rate of 0.015% of the Fund's daily net assets as so determined.
During any period when the determination of the Fund's net asset
value is suspended by the directors of the Fund, the net asset value
of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this Paragraph 5, be deemed to
be the net asset value at the close of each succeeding business day
until it is again determined.
6. INVESCO will permit representatives of the Fund including the Fund's
independent auditors to have reasonable access to the personnel and
records of INVESCO in order to enable such representatives to
monitor the quality of services being provided and the level of fees
due INVESCO pursuant to this Agreement. In addition, INVESCO shall
promptly deliver to the board of directors of the Fund such
information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination
regarding continuation of this Agreement and the payments
contemplated to be made hereunder.
7. This Agreement shall become effective on the effective date of the
reorganization of Financial Dynamics Fund, Inc. into INVESCO
Dynamics Fund, Inc. Thereafter, this Agreement shall remain in
effect until no later than April 30, 1994 and from year to year
thereafter provided such continuance is approved at least annually
by the vote of a majority of the directors of the Fund who are not
parties to this Agreement or "interested persons" (as defined in the
<PAGE>
Act) of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval; and
further provided, however, that (a) the Fund may, at any time and
without the payment of any penalty, terminate this Agreement upon
thirty days written notice to the Investment Adviser; (b) the
Agreement shall immediately terminate in the event of its assignment
(within the meaning of the Act and the Rules thereunder) unless the
Board of Directors of the Fund approves such assignment; and (c) the
Investment Adviser may terminate this Agreement without payment of
penalty on sixty days written notice to the Fund. Any notice under
this Agreement shall be given in writing, addressed and delivered,
or mailed postage prepaid, to the other party at the principal
office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the
extent the applicable law of the State of Colorado or any of the
provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO DYNAMICS FUND, INC.
By: /s/ John M. Butler
----------------------------
John M. Butler
President
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------------
Ronald L. Grooms
Senior Vice President
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 45 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated May 17, 1996, relating to the financial
statements and financial highlights appearing in the December 31, 1995 Annual
Report to Shareholders of INVESCO Dynamics Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" and "Financial Statements" in
the Statement of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------
Price Waterhouse LLP
Denver, Colorado
August 27, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000035692
<NAME> INVESCO DYNAMICS FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 716574696
<INVESTMENTS-AT-VALUE> 798591714
<RECEIVABLES> 12745902
<ASSETS-OTHER> 46649
<OTHER-ITEMS-ASSETS> 82400
<TOTAL-ASSETS> 811466665
<PAYABLE-FOR-SECURITIES> 29819539
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3231368
<TOTAL-LIABILITIES> 33050907
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 624083000
<SHARES-COMMON-STOCK> 57186453
<SHARES-COMMON-PRIOR> 37061629
<ACCUMULATED-NII-CURRENT> 430
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 72316047
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 82016281
<NET-ASSETS> 778415758
<DIVIDEND-INCOME> 4425369
<INTEREST-INCOME> 3146635
<OTHER-INCOME> (112579)
<EXPENSES-NET> 6538084
<NET-INVESTMENT-INCOME> 921341
<REALIZED-GAINS-CURRENT> 123157502
<APPREC-INCREASE-CURRENT> 54919111
<NET-CHANGE-FROM-OPS> 178076613
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 972800
<DISTRIBUTIONS-OF-GAINS> 76317721
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 54748807
<NUMBER-OF-SHARES-REDEEMED> 40733273
<SHARES-REINVESTED> 6109290
<NET-CHANGE-IN-ASSETS> 356815732
<ACCUMULATED-NII-PRIOR> 1889
<ACCUMULATED-GAINS-PRIOR> 25234334
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3382286
<INTEREST-EXPENSE> 28
<GROSS-EXPENSE> 6635805
<AVERAGE-NET-ASSETS> 586661650
<PER-SHARE-NAV-BEGIN> 11.38
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 3.94
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 1.71
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.61
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 23rd day of July, 1996.
/s/ Hubert L. Harris, Jr.
--------------------------
Hubert L. Harris, Jr.
STATE OF GEORGIA )
)
COUNTY OF DeKalb )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Hubert L. Harris, Jr.,
as a director or trustee of each of the above-described entities, this 23rd day
of July, 1996.
/s/ Cecilia Underwood
--------------------------
Notary Public
My Commission Expires October 14, 1996
