File No. 2-26125
As filed on ^ June 30, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1933 X
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Pre-Effective Amendment No.------ ---
Post-Effective Amendment No. ^ 46 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 20 X
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^ INVESCO CAPITAL APPRECIATION FUNDS, INC.
(formerly, 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)
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Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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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 ^ July 3, 1997, 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, ^ 1997, was
filed on or about June ^ 25, 1997.
Page 1 of 136
Exhibit index is located at page 74
<PAGE>
INVESCO ^ CAPITAL APPRECIATION FUNDS, INC.
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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
^ July 3, 1997
INVESCO DYNAMICS FUND^
INVESCO Dynamics Fund^ (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 ^ July 3, 1997, 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; or on the World Wide Web:
http://www.invesco.com.
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
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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..............................................................^ 21
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^ 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, ^ SIMPLE IRA, 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 a series of INVESCO Capital
Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.) (the
"Company"), a diversified, managed, no-load mutual fund. 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 ^ 18 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 ^ subsidiaries of AMVESCAP PLC, an international
investment management company, that manages approximately $165 billion in
assets. AMVESCAP 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 ^ 0.56%
12b-1 Fees 0.25%
Other Expenses ^(1) 0.35%
Total Fund Operating Expenses(1) ^ 1.16%
(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 ^ a regulatory requirement for mutual funds to state their total
operating expenses without crediting any such expense offset arrangement, the
figures shown above DO reflect these reductions. In comparing expenses for
different years, please note that the ratios of Expenses to Average Net Assets
<PAGE>
shown under ^"Financial Highlights^" DO reflect any reductions for periods
prior to the fiscal year ended April 30, ^ 1996. See "The Fund and Its
Management."
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 ^ $37 $64 $142
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 ^ Report of Independent Accountants thereon
appearing in the ^ Fund's 1997 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>
Year Ended April 30^
------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 ^
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value ^
Beginning of ^ Period ^ $13.61 11.38 $10.15 $10.89 $ 9.57 $ 8.50 $ 7.39 $ 7.14 $ 6.65 $ 8.42 ^
------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment ^ Income
(Loss) (0.04) 0.02 0.03 (0.02) (0.03) (0.02) 0.05 0.13 0.13 0.02 ^
Net Gains or (Losses)
on Securities
(Both Realized and
^ Unrealized) (0.19) 3.94 1.34 1.99 1.64 2.05 1.64 0.54 0.48 (1.30) ^
------------------------------------------------------------------------------------------^
Total from Investment
Operations (0.23) 3.96 1.37 1.97 1.61 2.03 1.69 0.67 0.61 (1.28) ^
------------------------------------------------------------------------------------------^
LESS DISTRIBUTIONS
Dividends from Net
Investment^ Income+ 0.00 0.02 0.03 0.00 0.00 0.00 0.05 0.13 0.12 0.02
^ Distributions from
^ Capital Gains 1.36 1.71 0.11 2.71 0.29 0.96 0.53 0.29 0.00 0.47 ^
------------------------------------------------------------------------------------------
<PAGE>
^ Total Distributions 1.36 1.73 0.14 2.71 0.29 0.96 0.58 0.42 0.12 0.49 ^
------------------------------------------------------------------------------------------^
Net Asset Value -
End of Period ^ $12.02 13.61 $11.38 $10.15 $10.89 ^ $ 9.57 $ 8.50 $ 7.39 $ 7.14 $ 6.65
==========================================================================================^
TOTAL RETURN (2.34%) 36.32% 13.57% 17.86% 16.80% 23.47% 23.11% 9.29% 9.20%(14.72%)^
RATIOS
Net Assets -
End of ^ Period
($000 ^ Omitted) $762,396 $778,416 $421,600 $287,293 $231,100 $153,956 $100,860 ^ $60,817 $89,755 $83,651
Ratio of Expenses
to Average
Net Assets# 1.16%@ 1.14%@ 1.20% 1.17% 1.20% 1.18% 1.15% 0.98% 0.98% 1.02% ^
Ratio of Net ^ Investment
Income (Loss) ^ to
Average ^ Net Assets#@ (0.31%) 0.16% 0.33% (0.37%) (0.38%) (0.17%) 0.59% 1.47% 1.77% 0.28% ^
Portfolio Turnover ^ Rate 204% 196% 176% 169% 144% 174% 243% 225% 237% 199%
^ Average Commission
Rate Paid^^ $0.0784 - - - - - - - - -
</TABLE>
+ 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.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<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
the security if the prior owner defaults on its repurchase obligation. To reduce
that risk, the securities underlying each repurchase agreement will be
<PAGE>
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 ^ Policies and 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 ^ Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end, management investment company.
It was incorporated as INVESCO Dynamics Fund, Inc. on February 17, 1967 under
the laws of Colorado and was reorganized as a Maryland corporation on July 1,
1993. ^ The ^ name of the Company was changed to INVESCO Capital Appreciation
Funds, Inc. on June 26, 1997.
The Company'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 ^ Company, 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 ^, 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: ^ co-portfolio
manager of the INVESCO Growth Fund since 1996 and of INVESCO Small Company
Growth Fund since 1997; senior vice president (1995 to present), vice president
(1993 to 1995) and portfolio manager (1992 to present) of INVESCO Trust.
<PAGE>
Formerly (1979 to 1992), analyst and 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, ^ 1997, investment management fees paid by the Fund
amounted to ^ 0.56% of the Fund's average net assets. Out of this fee, IFG paid
an amount equal to ^ 0.21% 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, where applicable, per participant in an
omnibus account ^ per year. 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, ^ 1997, 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, ^ 1997, including investment management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to ^
1.16% 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
<PAGE>
their financial responsibility coupled with their ability to effect
transactions 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.
^ IFG is an indirect wholly-owned subsidiary of AMVESCAP PLC. AMVESCAP PLC
is a publicly-traded holding company ^ that, through its subsidiaries, engages
in the business of investment management on an international basis. INVESCO PLC
changed its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8,
1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M
Management Group Inc., that created one of the largest independent investment
management businesses in the world. IFG and INVESCO Trust will continue to
operate under their existing names. AMVESCAP PLC has approximately $165 billion
in assets under management. IFG was established in 1932 and, as of April 30, ^
1997, managed 14 mutual funds, consisting of ^ 45 separate portfolios, with
combined assets of approximately ^ $14.0 billion on behalf of over ^ 855,000
shareholders. INVESCO Trust (founded in 1969) served as adviser or sub-adviser
to ^ 58 investment portfolios as of April 30, ^ 1997, including ^ 31 portfolios
in the INVESCO group. These ^ 58 portfolios had aggregate assets of
approximately ^ $12.7 billion as of April 30, ^ 1997. 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
<PAGE>
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 back of this prospectus.
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 following chart ^ 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.
<PAGE>
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
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).
HOW TO BUY SHARES
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.
<PAGE>
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.
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.
<PAGE>
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.
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^ to investors. Under the Plan, monthly payments may be
made by the Fund to IFG to permit IFG, at its discretion, to engage in certain
activities, and provide certain services approved by the board of directors in
connection with the distribution of the Fund's shares to investors. These
activities and services may include the payment of compensation (including
incentive compensation and/or continuing compensation based on the amount of
<PAGE>
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 with the Fund.
In addition, other ^ permissible activities and services include
advertising, the preparation and distribution of sales literature, printing and
distribution of prospectuses to prospective investors^ and such other services
and promotional activities ^ for the Fund as may from time to time be agreed
upon by the Fund and its board of directors including public relations efforts
and marketing programs to communicate with investors and prospective investors.
These services and activities may be conducted by the staff of IFG or its
affiliates or by third parties.
Under the Plan, the Fund's payments to IFG on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's average
net assets during the month. ^ IFG is not entitled to ^ payment for overhead
expenses under the Plan, but may be ^ paid for all or a portion of the
compensation paid for salaries and other employee benefits for ^ the personnel
of IFG whose primary responsibilities involve marketing shares of the ^ INVESCO
funds, including the Fund. Payment amounts ^ by the Fund under the Plan, for any
month, may ^ be made to compensate IFG for permissible activities engaged in and
services provided by IFG during the rolling 12-month period in which that month
falls. Therefore, any ^ obligations incurred by IFG in excess of the limitation
described above ^ will not be paid by the Fund under the Plan, 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 ^ the Plan's
termination. Also, any payments made by the Fund may not be used to finance
directly the distribution of shares of any other fund or 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. For more information see "How
Shares Can Be Purchased - Distribution Plan" in the Statement of Additional
Information.
<PAGE>
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.
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.
<PAGE>
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.
HOW TO SELL SHARES
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- owners of the the certificates
3706. You may also account. Payment must be sent to
send your request will be mailed to IFG.
by overnight your address of
courier to 7800 E. record, or to a
Union Ave., Denver, designated bank.
CO 80237.
<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.
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 ^ will take up to 15 days).
<PAGE>
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 ^ 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.
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
<PAGE>
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.
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 ^ Company have equal voting rights based
on one vote for each share owned. The ^ Company 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 ^ Company or as may be required by applicable law or the ^
Company'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 ^ Company. The Fund will assist
shareholders in communicating with other shareholders as required by the
Investment Company Act of 1940.
<PAGE>
INVESCO DYNAMICS FUND^ A no-load mutual fund
seeking capital appreciation through
aggressive investment policies.
PROSPECTUS
^ July 3, 1997
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
You can find us on the World Wide Web:
http://www.invesco.com
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
In addition, all documents filed by the Fund with the Securities and Exchange
Commission can be located on a web site maintained by the Commission at
http://www.sec.gov.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
^ July 3, 1997
^ INVESCO CAPITAL APPRECIATION FUNDS, INC.
(Formerly, 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 Capital Appreciation Funds, Inc. (The "Company") is a diversified,
no-load management investment company currently consisting of one portfolio of
investments, the INVESCO Dynamics Fund (the "Fund"). INVESCO Dynamics Fund seeks
capital appreciation through aggressive investment policies.
INVESCO DYNAMICS 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 ^ July 3, 1997, 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..................................................................29
THE FUND AND ITS MANAGEMENT.................................................32
HOW SHARES CAN BE PURCHASED.................................................44
HOW SHARES ARE VALUED.......................................................48
FUND PERFORMANCE............................................................49
SERVICES PROVIDED BY THE FUND...............................................51
TAX-DEFERRED RETIREMENT PLANS...............................................52
HOW TO REDEEM SHARES........................................................53
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES............................53
INVESTMENT PRACTICES........................................................56
ADDITIONAL INFORMATION......................................................59
<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.
^
THE FUND AND ITS MANAGEMENT
The ^ Company. The ^ Company was incorporated as INVESCO Dynamics Fund,
Inc. on April 2, 1993, under the laws of Maryland. On July 1, 1993, the ^
<PAGE>
Company 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 ^ Company for periods prior to July 1,
1993, relates to FDF. The name of the Company was changed to INVESCO Capital
Appreciation Funds, Inc. On June 26, 1997.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
^("IFG"), is employed as the ^ Company's investment adviser. ^ IFG 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 ^ IFG and INVESCO
Trust. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO.
^ IFG is an indirect^ wholly ^ owned subsidiary of ^ AMVESCAP PLC, a
publicly-traded holding company ^ that, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO PLC changed
its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as
part of a merger between a direct subsidiary of INVESCO PLC and A I M Management
Group Inc. that created one of the largest independent investment management
businesses in the world with approximately $165 billion in assets under
management. IFG was established in 1932 and as of April 30, ^ 1997, managed 14
mutual funds, consisting of ^ 45 separate portfolios, on behalf of over ^
855,000 shareholders. ^ AMVESCAP PLC's 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. ^ 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.
<PAGE>
--INVESCO Realty Advisors of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for ^ AMVESCAP PLC's clients
worldwide. Clients include corporate pension plans^ and public pension funds as
well as endowment and foundation accounts.
--A I M Advisors, Inc. of Houston, Texas provides investment advisory and
administrative services for retail and institutional mutual funds.
--A I M Capital Management, Inc. of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-adviser to certain retail
and institutional mutual funds, one Canadian mutual fund and one portfolio of an
open-end registered investment company that is offered to separate accounts of
variable insurance companies.
--A I M Distributors, Inc. and Fund Management Company of Houston, Texas
are registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of ^ AMVESCAP PLC are located at 11 Devonshire
Square, London, ^ EC2M4YR, England.
As indicated in the Prospectus, ^ IFG 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 ^ IFG, INVESCO Trust and their North American
affiliates. The policy requires officers, inside directors, investment and other
personnel of ^ IFG, 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 ^ IFG,
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.
Investment Advisory Agreement. ^ IFG serves as investment adviser pursuant
to an investment advisory agreement dated February 28, 1997 (the "Agreement")
with the ^ Company which was approved ^ by the board of directors on November 6,
1996,by a vote cast in person by a majority of the directors of the ^ Company,
including a majority of the directors who are not "interested persons" of the ^
Company or ^ IFG at a meeting called for such purpose. ^
<PAGE>
Shareholders of the Fund approved the Agreement on ^ January 31, 1997 for
an initial term expiring ^ February 28, 1999. 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 ^ Company, 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 ^ Company'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 ^ IFG 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 ^ IFG).
Further, ^ IFG 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 ^ Company and ^ IFG 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 ^ IFG discussed below. Services
provided under the Agreement include, but are not limited to: supplying the ^
Company 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 ^ IFG'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
the 1940 Act. Expenses not assumed by ^ IFG are borne by the Fund.
As full compensation for its advisory services to the ^ Company, IFG
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, 1997,
<PAGE>
1996 and 1995, the Fund paid IFG advisory fees of $4,550,303, $3,382,286
and $2,012,861, respectively. ^
Sub-Advisory Agreement. INVESCO Trust serves as sub-adviser to the Fund
pursuant to a sub-advisory agreement dated February 28, 1997 (the
"Sub-Agreement") with ^ IFG which was approved ^ by the board of directors on
November 6, 1996, by a vote cast in person by a majority of the directors of the
^ Company, including a majority of the directors who are not "interested
persons" of the ^ Company, IFG, or INVESCO Trust at a meeting called for such
purpose. ^ Shareholders of the Fund approved the Sub-Agreement on ^ January 31,
1997 for an initial term expiring ^ February 28, 1999. 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 ^ Company,
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 ^ Company
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 Sub-Agreement provides that INVESCO Trust, subject to the supervision
of ^ IFG, 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 ^
Company'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 ^ Company'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 ^ Company or ^ IFG, 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.
<PAGE>
The Sub-Agreement provides that as compensation for its services, INVESCO
Trust shall receive from ^ IFG, 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 ^ IFG, NOT the
Fund.
Administrative Services Agreement. ^ IFG, 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 ^ February 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved on ^ November 6, 1996, by a vote cast in
person by all of the directors of the ^ Company, including all of the directors
who are not "interested persons" of the ^ Company or INVESCO at a meeting called
for such purpose. The Administrative Agreement ^ is for an initial term expiring
^ February 28, 1998 and has been extended by action of the board of directors
until May 15, 1998. 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 ^ Company, 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 thirty (30) days' written notice, and
terminates automatically in the event of an assignment unless the ^ Company's
board of directors approves such assignment.
The Administrative Agreement provides that ^ IFG 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 ^ IFG, 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, 1997, 1996^ and 1995 ^, the Fund
paid INVESCO administrative services fees in the amount of ^ $130,696, $97,509
and $60,466, respectively.
<PAGE>
Transfer Agency Agreement. ^ IFG also performs transfer agent, dividend
disbursing agent, and registrar services for the Fund pursuant to a Transfer
Agency Agreement dated February 28, 1997 which was approved by the board of
directors of the ^ Company, including a majority of the ^ Company's directors
who are not parties to the Transfer Agency Agreement or "interested persons" of
any such party, on ^ November 6, 1996, for an initial term expiring ^ February
28, 1998 and has been extended by action of the board of directors until ^ May
15, 1998. Thereafter the Transfer Agency Agreement 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 ^ Company, 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 ^ Company'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 ^ IFG an
annual fee of $20.00 per shareholder account ^, or, where applicable, per
participant in an omnibus account ^ per year. This fee is paid monthly at 1/12
of the annual fee and is based upon the actual number of shareholder accounts ^
and omnibus account participants in existence at any time during each month. For
the fiscal years ended April 30, 1997, 1996^ and 1995 ^, the Fund paid INVESCO
transfer agency fees of $1,964,970, $1,108,321^ and $838,096 (prior to the
voluntary absorption of certain Fund expenses by INVESCO) ^, respectively.
Officers and Directors of the ^ Company. The overall direction and
supervision of the ^ Company 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 ^ Company, all of whom are officers
and employees of, and paid by ^ IFG, are responsible for the day-to-day
administration of the Company and 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 ^
IFG.
All of the officers and directors of the ^ Company 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 ^
Company also serve as trustees of INVESCO Value Trust. In addition, all of the
directors of the ^ Company, with the exception of ^ Dan Hesser, serve as
<PAGE>
trustees of INVESCO Treasurer's Series Trust. All of the officers of the ^
Company also hold comparable positions with INVESCO Value Trust. Set forth below
is information with respect to each of the ^ Company'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 ^ AMVESCAP PLC, London, England, and of various subsidiaries
thereof; Chairman of the Board of INVESCO ^ Treasurer's Series Trust^. Address:
1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Treasurer's Series Trust. Trustee of ^ INVESCO 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, CEO and Director. Chairman of the Board,
President, and Chief Executive Officer of INVESCO Funds Group, Inc.; President
and Director of INVESCO Trust Company^; President and Chief Operating Officer of
INVESCO Global Health Sciences Fund. Born: December 27, 1939.
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.
<PAGE>
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19
Kingsbridge Way, Madison, Connecticut. ^ Born: August 1, 1923. ^
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
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 ^ INVESCO 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.
LARRY SOLL, Ph.D., Director. Formerly, Chairman of the Board (1987 to
1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President
(1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in
1982. Director of ISD Pharmaceuticals, Inc. Trustee of INVESCO Global Health
Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26,
1942.
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company;
Vice President (May 1989 to April 1995), Secretary and General Counsel 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 ^
July 1995 and formerly (August 1992 to July 1995) Vice President of INVESCO
Funds Group, Inc. and trust officer of INVESCO Trust Company. 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.
<PAGE>
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 ^ Company.
+Member of the executive committee of the ^ Company. On occasion, the
executive committee acts upon the current and ordinary business of the ^ Company
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 ^ Company. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the ^ Company as defined in
the 1940 Act.
**Member of the management liaison committee of the ^ Company.
As of ^ June 9, 1997, officers and directors of the ^ Company, 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, ^
1997: the compensation paid by the ^ Company to its eight independent directors
for services rendered in their capacities as directors of the ^ Company; the
benefits accrued as ^ Company 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 ^ Company. In addition, the table sets forth the total compensation paid by
all of the mutual funds distributed by INVESCO Funds Group, Inc. (including the
^ Company), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust, and ^
INVESCO 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, ^ 1996. As of December 31, ^ 1996,
there were ^ 49 funds in the INVESCO Complex. Dr. Soll became an independent
director of the Company effective May 15, 1997, and is not included in the
following chart.
<PAGE>
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued Annual INVESCO
Name of Compensa- As Part Benefits Complex
Person, tion From of ^ Company Upon Re- Paid To
Position ^ Company(1) Expenses(2) tirement(3) Directors(1)
Fred A.Deering, $ ^ 3,407 $ 1,634 $1,591 $ 98,850
Vice Chairman of
the Board
Victor L. Andrews ^ 3,089 1,544 1,841 84,350
Bob R. Baker ^ 3,245 1,378 2,468 84,850
Lawrence H. Budner ^ 2,920 1,544 1,841 80,350
Daniel D. Chabris ^ 3,245 1,762 1,309 84,850
A. D. Frazier, ^ Jr.4 1,841 0 0 ^ 81,500
Kenneth T. King ^ 2,413 1,696 1,443 71,350
John W. ^ McIntyre 2,920 0 0 ^ 90,350
------- ------ ----- ---------
Total ^ $23,080 $9,558 10,493 $676,450
% of Net Assets ^ 0.0030%6 0.0013%5 0.0044%6
(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 ^ Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ INVESCO 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
<PAGE>
retirement. 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.
^(4)Effective February 28, 1997, Mr. Frazier resigned as a director of the
Company. Effective November 1, 1996, Mr. Frazier was employed by AMVESCAP PLC, a
company affiliated with INVESCO ^. Because it was possible that Mr. Frazier
would be employed with AMVESCAP PLC, effective May 1, 1996, he was deemed to be
an ^"interested person^" of the ^ Company and of the other funds in the INVESCO
Complex ^. Effective November 1, 1996, Mr. Frazier no longer received any
director's fees or other compensation from the Company or other funds in the
INVESCO Complex for his service as a director.
^(5)Totals as a percentage of the ^ Company's net assets as of April 30,^
1997.
^(6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
Messrs. Brady^ and Hesser, as "interested persons" of the Company, the
Fund and ^ 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 ^ Company or the other funds
in the INVESCO Complex for their service as directors.
The boards of directors/trustees of the mutual funds managed by ^ IFG 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 ^ 40% 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 director of the funds, the
first year retirement benefit and the reduced retainer payments will be made to
<PAGE>
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 ^ IFG and
Treasurer's Series funds in a manner determined to be fair and equitable by the
committee. Although the ^ Company 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 ^ Company 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 ^ Company has an audit committee comprised of four of the directors who
are not interested persons of the ^ Company. The committee meets periodically
with the ^ Company's independent accountants and officers to review accounting
principles used by the ^ Company, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The ^ Company 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 ^ Company, 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
^ Shares of the Fund 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." ^ IFG acts as
the Fund's Distributor under a distribution agreement with the ^ Company 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 ^ Company'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 ^ Company has adopted a Plan and Agreement of
Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, which was
implemented on November 1, 1990. The Plan provides that the Fund may make
<PAGE>
monthly payments to ^ IFG of amounts computed at an annual rate no greater
than 0.25% of the Fund's average net assets ^ to permit IFG, at its discretion,
to engage in certain activities and provide services in connection with the
distribution of the Fund's shares to investors. Payment amounts by a Fund under
the Plan, for any month, may be made to compensate IFG for permissible
activities engaged in and services provided by INVESCO during the rolling
12-month period in which that month falls. For the fiscal year ended April 30, ^
1997, the Fund made payments to INVESCO under the Plan in the amount of ^
$2,012,429. In addition, as of April 30, ^ 1997, $153,027 of additional
distribution ^ accruals had been incurred by the Fund and will be paid during
the fiscal year ended April 30, 1998. As noted in the section of the Fund's
Prospectus entitled "How to Buy Shares-Distribution Expenses," one type of ^
expenditure is the payment of compensation to securities companies and other
financial institutions and organizations, which may include ^ IFG-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 ^
IFG 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 ^ Company does not believe that these limitations would
affect the ability of such banks to enter into arrangements with ^ IFG, 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 ^ Company 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, ^ 1997, allocation of 12b- 1 amounts
paid by the Fund for the following categories of expenses were: advertising--^
$406,171; sales literature, printing, and postage--^ $260,850; direct mail--^
$85,518; public relations/promotion--^ $28,948; compensation to securities
dealers and other organizations--^ $950,063; and marketing personnel--^
$280,879.
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 ^ Company'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.
<PAGE>
The Plan was approved on April 21, 1993, at a meeting called for such
purpose, by a majority of the directors of the ^ Company, including a majority
of the directors who neither are "interested persons" of the ^ Company nor have
any 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 ^ May 15, 1998. With respect to the Fund,
the board of directors, on February 4, 1997, approved amending the Plan,
effective January 1, 1997, to convert the Plan to a compensation type Rule 12b-1
plan. This amendment of the Plan will not result in increasing the amount of the
Fund's payments thereunder.
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 ^ Company 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 ^
Company 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 ^ Company 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 or her
shares. So long as the Plan is in effect, the selection and nomination of
persons to serve as independent directors of the ^ Company 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 ^ Company, including a majority of the 12b-1 directors. Under the
agreement implementing the Plan, ^ IFG 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
<PAGE>
pursuant to a plan, the Fund's obligation to make payments to ^ IFG shall
terminate automatically, in the event of such "assignment," in which event the
Fund may continue to make payments, pursuant to the Plan, to ^ IFG or another
organization only upon the approval of new arrangements, which may or may not be
with ^ IFG, regarding the use of the amounts authorized to be paid by it under
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.^ 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 ^ Company who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the ^ Company listed herein under the section entitled "The Fund And Its
Management- Officers and Directors of the ^ Company," who are also officers
either of ^ IFG or companies affiliated with ^ IFG. The benefits which the ^
Company 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 ^ IFG:
(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 ^ IFG (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
<PAGE>
scale (e.g. exceeding established breakpoints in the advisory fee
schedule and allocating 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, Martin
Luther King, Jr. 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 Company's 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 ^ Company'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.
<PAGE>
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. ^ Because regular
trading in most foreign securities markets is completed simultaneously with, or
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 ^ Company'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 ^ Company advertises ^ the total return performance of the
Fund. Average annual total return performance for the one-, five-, and ten-year
periods ended April 30, ^ 1997, was ^(2.34%), 15.79% and ^ 12.41%, 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)n = 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
<PAGE>
Capital International, Wilshire Associates, the Financial Times Stock
Exchange, the New York Stock Exchange, the Nikkei Stock Average and Deutcher
Aktienindex, 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:
<PAGE>
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
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. ^ Because 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.
<PAGE>
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under ^ the Periodic Withdrawal Plan do not
represent income or a return on investment.
A participant in the Periodic Withdrawal Plan may be terminated at any
time by directing a written request to ^ IFG. Upon termination, all future
dividends and capital gain distributions will be reinvested in additional shares
unless ^ the 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 ^ IFG. 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 ^ IFG 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 ^ IFG will be provided with prototype documents and other 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.
<PAGE>
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 ^ Company'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 ^ Company 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, ^ 1997, 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
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.
<PAGE>
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.
^ IFG 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 ^ IFG will be computed using the
single-category average cost method, although neither ^ IFG 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.
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
<PAGE>
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
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
<PAGE>
of 1986, as amended, for income tax purposes does not entail government
supervision of management or investment policies.
INVESTMENT PRACTICES
Leverage. The ^ Company'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,
1997 and 1996 ^ were 204% and 196% ^, 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 ^ IFG, 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 ^ IFG's or
INVESCO Trust's evaluation of ^ the financial responsibility^ of the brokers and
dealers, and considering the brokers' and dealers' ability to effect
transactions at the best available prices. ^ IFG or INVESCO Trust evaluates the
overall reasonableness of brokerage commissions paid by 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, ^ IFG or INVESCO Trust also endeavors to monitor brokerage industry
<PAGE>
practices with regard to the commissions charged by ^ broker-dealers on
transactions effected for other comparable institutional investors. While ^ IFG
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, ^ IFG 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 ^ IFG 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 ^ IFG or INVESCO Trust in servicing all of its
accounts and not all such services may be used by ^ IFG 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, ^ IFG 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
that recommend the Fund to their clients, or ^ that 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
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 ^
Company's directors have authorized the Fund to pay transfer agency fees to ^
IFG based on the number of investors who have beneficial interests in the NTF
<PAGE>
Program Sponsor's omnibus accounts in the Fund. ^ IFG, 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
^ Company have authorized the ^ Company 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. ^ IFG 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 ^ Company's directors have further authorized ^ IFG to place
a portion of the Fund's brokerage transactions with certain NTF Program Sponsors
or their affiliated brokers, if ^ IFG 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 ^ IFG 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 ^ IFG 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, ^ IFG 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 ^ IFG
prior to each fiscal year-end of the Fund. The ^ Company's board of directors
has also authorized the Fund to pay to ^ IFG the full Rule 12b-1 fees
contemplated by the Plan ^ to compensate IFG for 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 ^ IFG for payments to such
NTF Program Sponsor absent such credits.
The aggregate dollar amount of brokerage commissions paid by the ^ Company
for the fiscal years ended April 30, 1997, 1996^ and ^ 1995, were $5,707,197,
$3,891,234^ and $1,742,196 ^, respectively. For the fiscal year ended April 30,
^ 1997, brokers providing research services received ^ $2,699,291 in commissions
on portfolio transactions effected for the Fund. The aggregate dollar amount of
such portfolio transactions was ^ $1,591,210,810. Commissions of ^ $1,200 were
allocated to certain brokers in recognition of their sales of shares of the Fund
<PAGE>
on portfolio transactions of the Fund effected during the fiscal year ended
April 30, ^ 1997.
At April 30, ^ 1997, the Fund held debt securities of its regular brokers
or dealers, or their parents, as follows:
Value of Securities
Broker or Dealer at ^ 4/30/97
---------------- -------------------
^ Lehman Brothers Holdings 10,163
^ Cigna Corp. 27,292
^ Neither IFG nor INVESCO Trust receives any brokerage commissions on
portfolio transactions effected on behalf of the Fund, and there is no
affiliation between ^ IFG, INVESCO Trust, or any person affiliated with ^ IFG,
INVESCO Trust, or the Fund and any broker or dealer that executes transactions
for the Fund.
ADDITIONAL INFORMATION
Common Stock. The ^ Company has 300,000,000 authorized shares of common
stock with a par value of $0.01 per share. As of April 30, ^ 1997, 63,412,679 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 transferrable on the
books of the Fund.
Company shares have noncumulative voting rights, which means that the
holders of a majority of the shares voting for the election of directors of the
^ Company 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 for action by
shareholder vote as may be required by the 1940 Act or the ^ Company's Articles
of Incorporation, or at their discretion.
<PAGE>
Principal Shareholders. As of ^ May 31, ^ 1997, 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. 10,149,381.6000 15.858%
Special Custody Account
For The Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the ^
Company. 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 ^ Company. 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. Under the
contract with the Company, the custodian is authorized to establish separate
accounts in foreign countries and to cause foreign securities owned by the Fund
to be held outside the United States in branches of U.S. Banks and, to the
extent permitted by applicable regulations, in certain foreign banks and
securities depositories.
Transfer Agent. The ^ Company 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 ^ Company's fiscal year ends on April 30. The
^ Company 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 ^ Company. The firm of Moye, Giles, O'Keefe, Vermeire
& Gorrell, Denver, Colorado, acts as special counsel to the Fund.
<PAGE>
Financial Statements. The following audited financial statements of the ^
Company and the notes thereto for the fiscal year ended April 30, ^ 1997, and
the report of Price Waterhouse LLP with respect to such financial statements,
are incorporated herein by reference from the ^ Company's Annual Report to
Shareholders for the fiscal year ended April 30, ^ 1997: Statement of Investment
Securities as of April 30, ^ 1997; Statement of Assets and Liabilities as of
April 30, ^ 1997; Statement of Operations for the year ended April 30, ^ 1997;
Statement of Changes in Net Assets for each of the two years in the period ended
April 30, ^ 1997; and Financial Highlights for each of the five years in the
period ended April 30, ^ 1997.
Prospectus. The ^ Company will furnish, without charge, a copy of the ^
Fund's prospectus upon request. Such requests should be made to the ^ Company 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, ^ 1997.
(2) The following audited financial
statements of the ^ Company and the
notes thereto for the fiscal year
ended April 30, ^ 1997, 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 ^ Company's
Annual Report to Shareholders for
the fiscal year ended April 30, ^
1997; Statement of Investment
Securities as of April 30, ^ 1997;
Statement of Assets and Liabilities
as of April 30, ^ 1997; Statement
of Operations for the year ended
April 30, ^ 1997; Statement of
Changes in Net Assets for each of
the two years in the period ended
April 30, ^ 1997; and Financial
Highlights for each of the five
years in the period ended April 30,
^ 1997.
(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
(a) Articles of Amendment to
Articles of Incorporation filed
June 26, 1997.
<PAGE>
(2) Bylaws, as amended July 21, ^
1993.(2)
(3) Not applicable.
(4) ^ Not required to be filed on
EDGAR.
(5) (a) Investment Advisory Agreement
between ^ Registrant and INVESCO
Funds Group, Inc. dated ^ February
28, 1997.
(b) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and
INVESCO Trust Company dated ^
February 28, 1997.
(6) General Distribution Agreement
between Registrant and INVESCO
Funds Group, Inc. dated ^ February
28, 1997.
(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.(1)
(a) Amendment to Custody Agreement
dated October 25, 1995.
(9) (a) Transfer Agency Agreement
between Registrant and INVESCO
Funds Group, Inc. dated February
28, 1997. ^
(b) Administrative Services
Agreement between Registrant and
INVESCO Funds Group, Inc., dated ^ February
28, 1997.
(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
<PAGE>
non-assessable, ^ was filed with
the Securities and Exchange Commission
on or about June 23, 1997, pursuant
to Rule 24f-2 and herein incorporated
by reference.
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(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 ^ January 1, 1997, adopted
pursuant to Rule 12b-1 under the
Investment Company Act of ^ 1940.
(16) Schedule for computation of
performance ^ data.
(17) Financial Data Schedule.
(18) Not Applicable.
- ---------------
(1)Previously filed on EDGAR with Post-Effective Amendment No. 44 to
the Registration Statement on June 22, 1993 and incorporated herein
by reference.
(2)Previously filed on EDGAR with Post-Effective Amendment No. ^ 45
to ^ the Registration Statement on August 27, 1996 and incorporated
herein by reference ^
<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
Title of Class Number of Record
-------------- Holders as of
Common Stock ^ June 1, 1997
----------------
^ 49,135
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
- ------------------ ------------- -------------
^
Charles W. Brady Chairman of
1315 Peachtree St. NE the Board
Atlanta, GA 30309
Darryl Celkupa Vice President
7800 E. Union Avenue
Denver, CO 80237
M. Anthony Cox Senior Vice
1315 Peachtree St. NE President
Atlanta, GA 30309
^ Robert D. Cromwell Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
^
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
- ------------------ ------------- -------------
^
Hubert L. Harris, Jr. Director ^
1315 Peachtree Street, NE
Atlanta, GA 30309
^
Dan J. Hesser Chairman of the President, CEO
7800 E. Union Avenue Board, President, & Director
Denver, CO 80237 Chief Executive
Officer & Director
^ Thomas M. Hurley Vice President
7800 E. Union Avenue
Denver, CO 80237
Gregory E. Hyde Vice President
7800 E. Union Avenue
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
Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Brian N. Minturn Executive
7800 E. Union Avenue Vice President
Denver, CO 80237
Robert J. O'Connor Director
^ 1201 Peachtree Street NE
Atlanta, GA ^ 30361
<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
^ Kent Schmeckpepper Assistant
7800 E. Union Avenue Vice President ^
^ Denver, CO 80237
^
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
Larry Soll Director
345 Poorman Road
Boulder, CO 80302
Tane T. Tyler Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
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
The following is a list of officers of INVESCO Retirement Plan Services, Inc.
("IRPS"), a division of INVESCO Funds Group, Inc., the underwriter:
Name and Principal Positions and Offices
Business Address with IRPS
- ------------------ ---------------------
Fredrick W. Braley Chief Financial Officer
400 Colony Square, Suite 2200 and Treasurer
1201 Peachtree St., N.E.
Atlanta, GA 30361
Scott P. Brogan Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Rayane S. Clark Vice President - Defined
400 Colony Square, Suite 2200 Contributions Operations
1201 Peachtree St., N.E.
Atlanta, GA 30361
M. Anthony Cox Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Mary Ann Dallenbach Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
<PAGE>
Name and Principal Positions and Offices
Business Address with IRPS
- ------------------ ---------------------
Douglas P. Dohm Regional Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Joseph B. Jennings Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Mark A. Jones Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Barbara L. March Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Robert J. O'Connor Chief Executive Officer
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
E. Eric Starr Secretary and General
400 Colony Square, Suite 2200 Counsel
1201 Peachtree St., N.E.
Atlanta, GA 30361
(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 ^ 30th day of ^ June, 1997.
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 ^ 30th day of ^
June, 1997.
/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/ ^ Larry Soll
- ------------------------- ----------------------------
Bob R. Baker, Director ^ Larry Soll, Director
/s/ Charles W. Brady /s/ Kenneth T. King
- ------------------------- ----------------------------
^ Charles W. Brady, Director Kenneth T. King, Director ^
/s/ John W. McIntyre
- ------------------------------------
John W. McIntyre, Director
By*/s/ Edward F. O'Keefe 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(a) 75
5(a) 78
5(b) 86
6 92
7 102
8(a) 108
9(a) 109
^ 9(b) 123
11 127
15 128
16 133
17 134
Ex-99.POA SOLL 135
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
INVESCO DYNAMICS FUND, INC.
INVESCO Dynamics Fund, Inc., a corporation organized and existing under
the General Corporation Law of the State of Maryland (the "Company"), hereby
certifies that:
FIRST: Article I of the Articles of Incorporation of
the Company is hereby amended to read as follows:
ARTICLE I
NAME AND TERM
The name of the corporation is "INVESCO CAPITAL APPRECIATION FUNDS, INC.",
and it shall have perpetual existence.
SECOND: Article III of the Articles of Incorporation of
the Company is hereby amended to read as follows:
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares of stock of all series
which the Company 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
Company 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.
In the exercise of the powers granted to the board of directors
pursuant to section 3 of this Article III, the board of directors
designates two series of shares of common stock of the Company to be
designated as the INVESCO Dynamics Fund and the INVESCO Growth & Income
Fund, respectively. Initially, one hundred million (100,000,000) shares of
<PAGE>
the Company's Common Stock are classified as and are allocated to each
such designated series.
Unless otherwise prohibited by law, so long as the Company is
registered as an open-end investment company under the Investment Company
Act of 1940, as amended, the total number of shares which the Company 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.
THIRD: The foregoing amendment, in accordance with the requirements of
Section 2-605 of the General Corporation Law of the State of Maryland, was
approved by a majority of the Board of Directors of the Company on May 16,
1997.
FOURTH: The foregoing amendment was duly adopted in accordance with the
requirements of Section 2-408 of the General Corporation Law of the State
of Maryland.
The undersigned, President of the Company, who is executing on behalf of
the Company the foregoing Articles of Amendment, of which this paragraph is made
a part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles of Amendment to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, INVESCO Dynamics Fund, Inc. has caused these Articles
of Amendment to be signed in its name and on its behalf by its President and
witnessed by its Secretary on the 23rd day of June, 1997.
<PAGE>
These Articles of Amendment shall be effective upon acceptance by the
Maryland State Department of Assessments and Taxation.
INVESCO DYNAMICS FUND, INC.
By:/s/ Dan J. Hesser
-------------------------
Dan J. Hesser, President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- ---------------------------
Glen A. Payne, Secretary
CERTIFICATION
I, Ruth A. Christensen, a notary public in and for the County of Denver,
City of Denver, and State of Colorado, do hereby certify that Dan J. Hesser,
personally known to me to be the person whose name is subscribed to the
foregoing Articles of Amendment, appeared before me this date in person and
acknowledged that he signed, sealed and delivered said instrument as his free
and voluntary act and deed for the uses and purposes therein set forth.
Given my hand and official seal this 23rd day of June, 1997.
/s/ Ruth A. Christensen
-----------------------
Ruth A. Christensen
Notary Public
7800 East Union Avenue
Denver, Colorado 80237
[SEAL]
My commission expires March 16, 1998.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in 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 sub-accounting, 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 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
<PAGE>
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 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;
<PAGE>
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates represent-
ing 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 Fund shall be
as follows: 0.60% on the first $350 million of 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
<PAGE>
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
date it is approved by a majority of the outstanding voting Securities of the
Fund, and 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.
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.
<PAGE>
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.
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
<PAGE>
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.
By:/s/ Dan J. Hesser
---------------------
President
ATTEST:
/s/ Glen A. Payne
- ------------------
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-----------------------
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ---------------------
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO TRUST
COMPANY, a Colorado corporation ("the Sub-Adviser").
WITNESSETH:
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:
<PAGE>
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and to execute all purchases and 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
<PAGE>
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
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.
<PAGE>
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
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 date it is approved by a
majority of the outstanding voting securities of the Fund, and 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.
<PAGE>
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.
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
<PAGE>
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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By:/s/ Ronald L. Grooms
---------------------
Senior Vice President
ATTEST:
/s/ Glen A. Payne
------------------
Secretary
INVESCO TRUST COMPANY
By:/s/ Dan J. Hesser
---------------------
President
ATTEST:
/s/ Glen A. Payne
------------------
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 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 has one class of shares (the "Shares")
representing an interest in a 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 legally
may 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 of such other investment
company for the Shares of the Fund. 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
<PAGE>
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.
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
<PAGE>
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; 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
<PAGE>
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
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 juris-
diction 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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 as of the date it is
approved by a majority vote of the Directors of the Fund, as well as
a majority vote of the Directors who are not "interested persons"
(as defined in the Investment Company Act) of the Fund, and shall
continue in effect for an initial term expiring February 28, 1998,
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 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.
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, it will
look solely to the assets of the Fund for any obligations of the
<PAGE>
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/ Dan J. Hesser
--------------------
Dan J. Hesser
President
/s/ Glen A. Payne
- -----------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
--------------------
Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- -----------------
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").
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
a. Service Termination. Service Termination means 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.
b. Service Termination Date. An Independent Director's Service Termination
Date is normally the last day of the calendar quarter in which such Director's
seventy-second birthday occurs. A majority of the Board of a Fund may annually
extend a Director's Service Termination Date for a maximum period of three
years, through the date not later than the last day of the calendar quarter in
which such Director's seventy-fifth birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean an Independent Director's normal Service Termination Date, or the
Director's extended Service Termination Date, whichever may be applicable to the
Independent Director.
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not later than the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director will receive
four quarterly payments during the first twelve months subsequent to his Service
Termination Date (the "First Year Retirement Payments"), with each payment to be
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).
<PAGE>
b. Benefit. Commencing with the first anniversary of the Service
Termination Date of any Independent Director who has received the First Year
Retirement Payments, and commencing as of the Service Termination Date of an
Independent Director whose Service Termination Date is subsequent to the date of
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurred, the Independent Director will receive, for the remainder of
his life, a benefit (the "Benefit"), payable quarterly, with each quarterly
payment to be equal to 10 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).
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, 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 death prior to the last day of the calendar quarter in which such Director's
seventy-second birthday occurs or subsequent to the last day of the calendar
quarter in which such Director's seventy-fourth birthday occurred, 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 commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his disability subsequent to the last day of
the calendar quarter in which such Director's seventy-second birthday occurred
and prior to the last day of the calendar quarter in which such Director's
seventy-fourth birthday occurs, the Independent Director shall receive the First
Year Retirement Payments and shall, commencing with the quarter following the
quarter in which the last First Year Retirement Payment is made, 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 the First Year Retirement Payments are completed and before forty
quarterly Benefit payments are made, such payments will continue to be made to
the Independent Director's designated beneficiary until the aggregate of the
First Year Retirement Payments and forty quarterly Benefit payments have been
made to the disabled Independent Director and the Director's designated
beneficiary.
If an Independent Director's service as a Director is terminated because of
his disability prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
Independent Director shall receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
<PAGE>
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If the Independent
Director and his designated beneficiary should die before the First Year
Retirement Payments and/or a total of forty quarterly Benefit payments are made,
the remaining value of the Independent Director's First Year Retirement Payments
and/or 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 First Year Retirement Payments
and/or 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
First Year Retirement Payments and/or Benefit shall be determined as of the date
of the death of the Independent Director by the Committee and shall be paid as
promptly as possible in one lump sum to the Independent Director's estate.
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
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will be
paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit: Allocation of
Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or 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 First Year
Retirement Payments and/or Benefit and expenses will not be secured or funded in
any manner, and such obligations will not have any preference over the lawful
<PAGE>
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or 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 four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. 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.
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 Committee's
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 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, termination 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.
<PAGE>
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 Termination 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. Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
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.
The INVESCO Advisor Funds, Inc.
INVESCO Treasurer's Series Trust
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and INVESCO Dynamics Fund, Inc. (The "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated July 1, 1993 (the "Custodian Contract") governing the terms and conditions
under which the Custodian maintains custody of the securities and other assets
of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers,PROVIDED HOWEVER, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by bookentry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 25th day of October, 1995.
INVESCO DYNAMICS FUNDS, INC.
By:/s/ Glen A. Payne
--------------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By:/s/ Charles R. Whittemore, Jr.
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Title: Vice President
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, 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 East Union Avenue,
Denver, Colorado 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;
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(i) "Written Instructions" shall mean a written communication
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.
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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
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Transfer Agent;
(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
<PAGE>
Agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares 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
<PAGE>
and issue new certificates for a like number of Shares and deliver
the same. If the Shares to be transferred are not represented by
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
<PAGE>
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
(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
<PAGE>
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
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
<PAGE>
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
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,
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,
<PAGE>
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
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 February 28, 1997
after approval by vote of a majority (as defined in the 1940
Act) of the Fund's board of directors, including a majority of
the directors who are not interested persons of the Fund (as
defined in the 1940 Act), and shall continue in effect for an
initial term expiring February 28, 1998 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
<PAGE>
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.
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: Dan J. Hesser, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Ronald L. Grooms, Senior Vice 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/ 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
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated February 28, 1997,
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 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 28th day of February, 1997.
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
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 28th day of February, 1997, 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 is authorized to issue one class of shares;
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 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
<PAGE>
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 a wholly-owned subsidiary 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. 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 Portfolios.
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
<PAGE>
Portfolios 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 the
Fund's 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 remain in effect until no later than February 28,
1998 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 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 INVESCO; (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) INVESCO 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
pre-paid, 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.
<PAGE>
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/Dan J. Hesser
--------------------
ATTEST: Dan J. Hesser
/s/ Glen A. Payne President
- ------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
By:/s/ Ronald L. Grooms
--------------------
ATTEST: Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- -----------------
Glen A. Payne
Secretary
Consent of Independent Accountants
We hereby conssent to to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 46 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated May 30, 1997, relating to the financial
statements and financial highlights appearing in the April 30, 1997 Annual
report to Shareholders of INVESCO Dynamics Fund, Inc. (now known as INVESCO
Capital Appreciation 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
June 25, 1997
AMENDED PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of 1st day of January, 1997, by and between
INVESCO Dynamics Fund, Inc., a Maryland corporation (hereinafter called the
"Company"), and INVESCO FUNDS GROUP, Inc., a Delaware corporation ("INVESCO").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of its shares in
accordance with this Plan and Agreement of Distribution pursuant to Rule 12b-1
under the Act (the "Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Disinterested Directors") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b- 1 under the Act and
authorizes payments as described herein. The Agreement is defined
as those provisions of this document by which the Company retains
INVESCO to provide distribution services beyond those required by
the General Distribution Agreement between the parties, as are
described herein. The Company may retain the Plan notwithstanding
termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. The Company is hereby
authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's shares.
2. Subject to the supervision of the board of directors, the Company
hereby retains INVESCO to promote the distribution of the Company's
shares by providing services and engaging in activities beyond those
specifically required by the Distribution Agreement between the
Company and INVESCO and to provide related services. The activities
and services to be provided by INVESCO hereunder shall include one
or more of the following: (a) the payment of compensation
(including trail commissions and incentive compensation) to
securities dealers, financial institutions and other organizations,
which may include INVESCO-affiliated companies, that render
distribution and administrative services in connection with the
distribution of the Company's shares; (b) the printing and
<PAGE>
distribution of reports and prospectuses for the use of potential
investors in the Company; (c) the preparing and distributing of
sales literature; (d) the providing of advertising and engaging in
other promotional activities, including direct mail solicitation,
and television, radio, newspaper and other media advertisements; and
(e) the providing of such other services and activities as may from
time to time be agreed upon by the Company. Such reports and
prospectuses, sales literature, advertising and promotional
activities and other services and activities may be prepared and/or
conducted either by INVESCO's own staff, the staff of INVESCO-
affiliated companies, or third parties.
3. INVESCO hereby undertakes to use its best efforts to promote sales
of shares of the Company to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and
as it from time to time believes will best further sales of such
shares.
4. The Company is hereby authorized to expend, out of its assets, on a
monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below) in
the activities and provide the services specified in paragraph (2)
above, an amount computed at an annual rate of .25 of 1% of the
average daily net assets of the Company during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by the Company
hereunder, for any month, may be used to compensate INVESCO for: (a)
activities engaged in and services provided by INVESCO during the
rolling twelve-month period in which that month falls, or (b) to the
extent permitted by applicable law, for any month during the first
twenty-four months following the Company's commencement of
operations, activities engaged in and services provided by INVESCO
during the rolling twenty-four month period in which that month
falls, and any obligations incurred by INVESCO in excess of the
limitation described above shall not be paid for out of Company
assets. The Company shall not be authorized to expend, for any
month, a greater percentage of its assets to pay INVESCO for
activities engaged in and services provided by INVESCO during the
rolling twenty-four month period referred to above than it would
otherwise be authorized to expend out of its assets to pay INVESCO
for activities engaged in and services provided by INVESCO during
the rolling twelve-month period referred to above, and the Company
shall not be authorized to expend, for any month, a greater
percentage of its assets to pay INVESCO for activities engaged in
and services provided by INVESCO pursuant to the Plan and Agreement
than it would otherwise have been authorized to expend out of its
assets to reimburse INVESCO for expenditures incurred by INVESCO
pursuant to the Plan and Agreement as it existed prior to February
5, 1997. No payments will be made by the Company hereunder after
the date of termination of the Plan and Agreement.
<PAGE>
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in
the sale of shares of the Company, pursuant to this Plan and
Agreement or otherwise, may be deemed to constitute the indirect use
of Company assets, such indirect use of Company assets is hereby
authorized in addition to, and not in lieu of, any other payments
authorized under this Plan and Agreement.
6. The Treasurer of INVESCO shall provide to the board of directors of
the Company, at least quarterly, a written report of all moneys
spent by INVESCO on the activities and services specified in
paragraph (2) above pursuant to the Plan and Agreement. Each such
report shall itemize the activities engaged in and services provided
by INVESCO to a Fund as authorized by the penultimate sentence of
paragraph (4) above. Upon request, but no less frequently than
annually, INVESCO shall provide to the board of directors of the
Company such information as may reasonably be required for it to
review the continuing appropriateness of the Plan and Agreement.
7. This Plan and Agreement shall each become effective immediately upon
approval by a vote of a majority of the outstanding voting
securities of the Company as defined in the Act, and shall continue
in effect until February 5, 1998 unless terminated as provided
below. Thereafter, the Plan and Agreement shall continue in effect
from year to year, provided that the continuance of each is approved
at least annually by a vote of the board of directors of the
Company, including a majority of the Disinterested Directors, cast
in person at a meeting called for the purpose of voting on such
continuance. The Plan may be terminated at any time, without
penalty, by the vote of a majority of the Disinterested Directors or
by the vote of a majority of the outstanding voting securities of
the Company. INVESCO, or the Company, by vote of a majority of the
Disinterested Directors or of the holders of a majority of the
outstanding voting securities of the Company, may terminate the
Agreement under this Plan, without penalty, upon 30 days' written
notice to the other party. In the event that neither INVESCO nor
any affiliate of INVESCO serves the Company as investment adviser,
the agreement with INVESCO pursuant to this Plan shall terminate at
such time. The board of directors may determine to approve a
continuance of the Plan, but not a continuance of the Agreement,
hereunder.
8. So long as the Plan remains in effect, the selection and nomination
of persons to serve as directors of the Company who are not
"interested persons" of the Company shall be committed to the
discretion of the directors then in office who are not "interested
persons" of the Company. However, nothing contained herein shall
prevent the participation of other persons in the selection and
nomination process, provided that a final decision on any such
selection or nomination is within the discretion of, and approved
by, a majority of the directors of the Company then in office who
are not "interested persons" of the Company.
<PAGE>
9. This Plan may not be amended to increase the amount to be spent by
the Company hereunder without approval of a majority of the
outstanding voting securities of the Company. All material
amendments to the Plan and to the Agreement must be approved by the
vote of the board of directors of the Company, including a majority
of the Disinterested Directors, cast in person at a meeting called
for the purpose of voting on such amendment.
10. To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall
remain in effect as such, so as to authorize the use by the Company
of its assets in the amounts and for the purposes set forth herein,
notwithstanding the occurrence of an "assignment," as defined by the
Act and the rules thereunder. To the extent it constitutes an
agreement with INVESCO pursuant to a plan, it shall terminate
automatically in the event of such "assignment." Upon a termination
of the agreement with INVESCO, the Company may continue to make
payments pursuant to the Plan only upon the approval of a new
agreement under this Plan and Agreement, which may or may not be
with INVESCO, or the adoption of other arrangements regarding the
use of the amounts authorized to be paid by the Company hereunder,
by the Company's board of directors in accordance with the
procedures set forth in paragraph 7 above.
11. The Company shall preserve copies of this Plan and Agreement and all
reports made pursuant to paragraph 6 hereof, together with minutes
of all board of directors meetings at which the adoption, amendment
or continuance of the Plan were considered (describing the factors
considered and the basis for decision), for a period of not less
than six years from the date of this Plan and Agreement, or any such
reports or minutes, as the case may be, the first two years in an
easily accessible place.
12. This Plan and Agreement shall be construed in accordance with the
laws of the State of Colorado and applicable provisions of the Act.
To the extent the applicable laws of the State of Colorado, or any
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
Plan and Agreement on the 5th day of February, 1997.
INVESCO DYNAMICS FUND, INC.
/s/ Dan J. Hesser
By: ----------------------
Dan J.Hesser, President
ATTEST: /s/ Glen A. Payne
-----------------------
Glen A. Payne, Secretary
<PAGE>
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
COMPUTATION OF PERFORMANCE DATA
Total return performance for the one-, five-, and ten-year periods ended
April 30, 1988, was -14.72%, 4.86%, and 13.43%, respectively. 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)n = 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 total return performance figures shown above were determined by
solving the above formula for "T" for each time period and Portfolio indicated.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000035692
<NAME> INVESCO DYNAMICS FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 745683445
<INVESTMENTS-AT-VALUE> 762594853
<RECEIVABLES> 29770522
<ASSETS-OTHER> 92091
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 792457466
<PAYABLE-FOR-SECURITIES> 28654808
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1407039
<TOTAL-LIABILITIES> 30061847
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 713749397
<SHARES-COMMON-STOCK> 63412679
<SHARES-COMMON-PRIOR> 57186453
<ACCUMULATED-NII-CURRENT> (9165)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 31744567
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16910820
<NET-ASSETS> 762395619
<DIVIDEND-INCOME> 5003726
<INTEREST-INCOME> 1943404
<OTHER-INCOME> (163415)
<EXPENSES-NET> 9247863
<NET-INVESTMENT-INCOME> (2464148)
<REALIZED-GAINS-CURRENT> 40252470
<APPREC-INCREASE-CURRENT> (65105461)
<NET-CHANGE-FROM-OPS> (24852991)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 80828360
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 61735689
<NUMBER-OF-SHARES-REDEEMED> 61637091
<SHARES-REINVESTED> 6127628
<NET-CHANGE-IN-ASSETS> (16020139)
<ACCUMULATED-NII-PRIOR> 430
<ACCUMULATED-GAINS-PRIOR> 72316047
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4550303
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9356563
<AVERAGE-NET-ASSETS> 803572
<PER-SHARE-NAV-BEGIN> 13.61
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (0.19)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.02
<EXPENSE-RATIO> 1.00
<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 4th day of June, 1997.
/s/ Larry Soll
------------------------------------------
Larry Soll
STATE OF WASHINGTON )
)
COUNTY OF SAN JUAN )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Larry Soll, as a
director or trustee of each of the above-described entities, this 4th day of
June, 1997.
Mary Paulette Weaver
------------------------------------------
Notary Public
My Commission Expires: 1-27-99
