File No. 2-15382
As filed on ^ October 24, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ________
Post-Effective Amendment No. ^ 58 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 22 X
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INVESCO INDUSTRIAL INCOME 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 November 1, 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 June 30, ^ 1997, was
filed on or about August ^ 27, 1997.
Page 1 of 161
Exhibit index is located at page 74
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INVESCO INDUSTRIAL INCOME FUND, INC.
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CROSS-REFERENCE SHEET
Form N-1A
Item Caption
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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
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<PAGE>
Form N-1A
Item Caption
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12....................... The Fund and Its Management
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.
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<PAGE>
PROSPECTUS
November 1, ^ 1997
INVESCO INDUSTRIAL INCOME FUND, INC.
INVESCO Industrial Income Fund, Inc. (the "Fund") is actively managed to seek
the best possible current income, while following sound investment practices.
Capital growth potential is an additional consideration in the selection of
portfolio securities. The Fund normally invests at least 65% of its total assets
in dividend-paying common stocks. Up to 10% of the Fund's total assets may be
invested in equity securities that do not pay regular dividends. The remaining
assets are invested in other income-producing securities, such as corporate
bonds. The Fund also 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 November 1, ^ 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 ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217- 3706; ^ call 1-800-525-8085; or visit our web site at
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..........................................................10
INVESTMENT OBJECTIVE AND STRATEGY.............................................13
INVESTMENT POLICIES AND RISKS.................................................13
THE FUND AND ITS MANAGEMENT...................................................17
FUND PRICE AND PERFORMANCE....................................................20
HOW TO BUY SHARES.............................................................21
FUND SERVICES.................................................................25
HOW TO SELL SHARES............................................................26
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS...............................29
ADDITIONAL INFORMATION........................................................30
<PAGE>
ESSENTIAL INFORMATION
Investment Goal And Strategy: INVESCO Industrial Income Fund, Inc. is a
diversified mutual fund that seeks the best possible current income, while
following sound investment practices, with the added potential for capital
appreciation. It invests primarily in dividend-paying common stocks of U.S.
companies traded on national securities exchanges or over-the-counter. The Fund
also may invest in equity securities that do not pay regular dividends and other
income-producing securities, such as corporate bonds. There is no guarantee that
the Fund will meet its objective. See "Investment Objective And Strategy."
Designed For: Investors primarily seeking current income, but who do not
wish to sacrifice the potential for capital growth over the long term. While not
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 the IRA, SEP-IRA, ^ SIMPLE IRA, 401(k), Profit Sharing, Money Purchase
Pension, and 403(b) plans.
Time Horizon: Stock and bond prices fluctuate on a daily basis, and the
Fund's price per share therefore varies daily. Potential shareholders should
consider this a long-term investment.
Risks: The Fund generally uses a moderate investment strategy, but may hold
securities rated below investment grade and foreign debt securities, and may
experience relatively rapid portfolio turnover. The Fund's investments in debt
securities are subject to credit risk and market risk, both of which are
increased by investing in lower rated securities. The returns on foreign
investments may be influenced by the 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 preservation of capital over the
short-term. See "Investment Objective and Strategy" and "Investment Policies and
Risks."
Organization and Management: The Fund is owned by its shareholders. It
employs INVESCO Funds Group, Inc. ("IFG")^, founded in 1932^ to serve as
investment adviser, administrator^ and transfer agent; and INVESCO Trust Company
("INVESCO Trust") (founded in 1969) ^ to serve as sub-adviser. Together, IFG and
INVESCO Trust constitute "Fund Management." Prior to September 30, 1997, IFG
served as the Fund's distributor. Effective September 30, 1997, INVESCO
Distributors, Inc. ("IDI"), founded in 1997 as a wholly-owned subsidiary of IFG,
became the Fund's distributor.
The Fund's investments are selected by two experienced INVESCO portfolio
managers: INVESCO senior vice presidents Charles Mayer, who has ^ 27 years of
investment experience, and Donovan J. (Jerry) Paul, with ^ 21 years of
experience. A Chartered Financial Analyst, Mr. Mayer earned his ^ M.B.A. from
<PAGE>
St. John's University and a ^ B.A. from St. Peter's College. Mr. Paul holds an ^
M.B.A. from the University of Northern Iowa and a ^ B.B.A. from the University
of Iowa; he is both a Chartered Financial Analyst and Certified Public
Accountant. See "The Fund And Its Management."
IFG ^, INVESCO Trust and IDI are subsidiaries of AMVESCAP PLC, an
international investment management company, that manages approximately $177.5
billion in assets. AMVESCAP PLC is based in London with money managers located
in Europe, North America^ and the Far East.
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, however, is authorized to pay a Rule 12b-1 distribution fee of
one quarter of one percent of the Fund's average net assets 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 share economies of scale and to keep expenses
competitive, ^ Fund Management voluntarily reduced the management fees on the
Fund's daily net assets over ^ $5 billion.
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee (after expense limitation)^ 0.48%
12b-1 Fees 0.25%
Other ^ Expenses(1),(2) 0.22%
Total Fund Operating Expenses
(after expense ^ limitation)(1),(2) 0.95%
^ (1)It should be noted that the Fund's actual total operating expenses
were lower than the figures shown, because the Fund's custodian ^, transfer
agent and depository fees were reduced under an expense offset ^ arrangement.
However, as a result of an SEC requirement for mutual funds to state their total
operating expenses without crediting any such expense offset arrangement, the
figures shown above do not reflect these reductions. In comparing expenses for
different years, please note that the ratios of Expenses to Average Net Assets
shown under "Financial Highlights" do reflect any reductions for periods prior
to the fiscal year ended June 30, ^ 1996.
(2)Under an expense limitation voluntarily agreed to by IFG, which became
mandatory on May 15, 1997, the management fee paid by the Fund has been reduced
to the following annual rates: 0.45% on daily net assets over $2 billion but
less than $4 billion, 0.40% on daily net assets over $4 billion but less than $5
billion. In addition, in order to share economies of scale and to keep expenses
competitive, Fund Management voluntarily reduced the management fees on the
Fund's daily net assets over $5 billion. In the absence of the voluntary expense
limitation, the Fund's "Management Fee" and "Total Fund Operating Expenses"
would have been 0.51% and 0.98%, respectively, based on the Fund's actual
expenses for the fiscal year ended June 30, 1997.
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
------ ------- ------- --------
$10 $30 ^ $53 $117
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 OR EXPENSES,
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."
<PAGE>
^ Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report 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 ^ IDI at the address or telephone number
on the cover of this prospectus. The Annual Report also contains more
information about the Fund's performance.
INVESCO Industrial Income Fund, Inc
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
<TABLE>
<CAPTION>
Year Ended June 30^
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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 $13.21 $11.92 $11.32 $11.53 $10.67 $9.74 $9.39 $8.88 $7.98 $8.85^
-----------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income 0.35 0.41 0.42 0.36 0.31 0.28 0.36 0.38 0.42 0.35^
Net Gains or
(Losses)
on Securities
(Both Realized
and Unrealized) 3.05 1.53 1.14 0.02 1.33 1.38 0.81 1.43 1.01 (0.51)^
-----------------------------------------------------------------------------------------------------
Total from
Investment
Operations 3.40 1.94 1.56 0.38 1.64 1.66 1.17 1.81 1.43 (0.16)^
-----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from
Net Investment
Income 0.35 0.41 0.42 0.36 0.32 0.29 0.34 0.40 0.39 0.36 ^
In Excess of Net
Investment
Income 0.00 ^ 0.00 0.00 0.11 0.00 0.00 0.00 0.00 0.00 0.00
<PAGE>
Distributions
from Capital
Gains 0.95 0.24 0.54 0.12 0.46 0.44 0.48 0.90 0.14 0.35^
-----------------------------------------------------------------------------------------------------
Total
Distributions 1.30 0.65 0.96 0.59 0.78 0.73 0.82 1.30 0.53 0.71^
-----------------------------------------------------------------------------------------------------
Net Asset Value -^
End of Period $15.31 $13.21 $11.92 $11.32 $11.53 $10.67 $9.74 $9.39 $8.88 $7.98^
=====================================================================================================
TOTAL RETURN 27.33% 16.54% 14.79% 3.24% 15.66% 17.04% 13.06% 21.08% 18.45% (1.21%)^
RATIOS
Net Assets -^
End of Period
($000 Omitted) $4,574,675$4,170,536 $4,009,609$3,913,322 $3,412,527$2,092,955 $881,226 $572,373 $399,538 $380,978^
Ratio of
Expenses to
Average Net
Assets# 0.95%@ 0.93%@ 0.94% 0.92% 0.96% 0.98% 0.94% 0.76% 0.78% 0.78%^
Ratio of Net
Investment
Income to
Average Net
Assets# 2.54% 3.17% 3.61% 3.11% 2.94% 2.75% 3.92% 4.14% 5.08% 4.29%^
Portfolio
Turnover Rate 47% 63% 54% 56% 121% 119% 104% 132% 124% 148%
^ Average Commission
Rate Paid^^ $0.0370 - - - - - - - - -
</TABLE>
#Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended June 30, 1997, 1996, 1995, 1994 and 1993. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have been
0.98%, 0.96%, 0.97%, 0.95% and 0.98%, respectively, and ratio of net investment
income to average net assets would have been 2.51%, 3.14%, 3.58%, 3.08% and
2.92%, respectively.
@ Ratio is based on Total Expenses of the Fund, less ^ Expenses Absorbed by
Investment Adviser, 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 the best possible current income while following sound
investment practices. This investment objective is fundamental and cannot be
changed without the approval of the Fund's shareholders. Capital growth
potential is an additional consideration in the selection of portfolio
securities. The Fund normally invests at least 65% of its total assets in
dividend-paying common stocks. Up to 10% of the Fund's total assets may be
invested in equity securities that do not pay regular dividends. The remaining
assets are invested in other income-producing securities, such as corporate
bonds. The Fund also has the flexibility to invest in preferred stocks and
convertible bonds. There is no maximum limit on the amount of equity or debt
securities in which the Fund may invest. There is no assurance that the Fund's
investment objective will be met.
The Fund's investments in equity securities are limited to those that are
readily marketable in the United States. These securities include American
Depository Receipts ("ADRs"), which represent 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.
The Fund's investment portfolio is actively traded. Economic conditions
and market circumstances vary from day to day; securities may be bought and sold
relatively frequently as their suitability for the Fund's portfolio changes.
This policy may result in increased 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 adverse, the Fund may
assume a defensive position -- that is, temporarily invest up to 100% of its
assets in high quality corporate bonds, notes or U.S. government obligations, or
money market instruments such as commercial paper or repurchase agreements,
seeking to protect its assets until conditions stabilize.
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.
Debt Securities. When we assess an issuer's ability to meet its interest
rate obligations and repay its debt when due, we are referring to "credit risk."
Debt obligations are rated based on their ^ credit risk as estimated by
independent services such as ^ Moody's Investors Service, Inc. ^("Moody's") or
Standard & Poor's Ratings Group, Inc., a division of The McGraw-Hill Companies,
Inc. ("S&P"). "Market risk" refers to ^ interest rates: For instance, when
<PAGE>
interest rates go up, the market value of a previously issued bond
generally declines; on the other hand, when interest rates go down, bonds
generally see their prices increase.
The lower a bond's quality, the more it is subject to credit risk and
market risk, and the more speculative it becomes. This is also true of most
unrated debt securities. Therefore, the Fund does not invest in obligations it
believes to be highly speculative. Corporate bonds rated Aaa, Aa, A or Baa by
Moody's or AAA, AA, A or BBB by S&P ^("investment grade") enjoy strong to
adequate capacity to pay principal and interest. No more than 15% of the Fund's
total assets may be invested in issues rated below investment grade quality
(commonly called "junk bonds^" and rated BB or below by S&P or Ba or below by
Moody's); these include issues which are of poorer quality and may have some
speculative characteristics, according to the ratings services. Never, under any
circumstances, does the Fund invest in bonds rated below ^ Caa by ^ Moody's or
CCC by S&P. Bonds rated Caa or CCC may be in default or there may be present
elements of danger with respect to payment of principal or interest. While Fund
Management continuously monitors all of the debt securities in the Fund's
portfolio for the issuer's ability to make required principal and interest
payments and other quality factors, ^ the Fund may retain a bond whose rating is
changed to one below the minimum rating required for purchase of the security.
For more information on debt securities and the foregoing corporate bond rating
categories, see the Statement of Additional Information.
For the fiscal year ended June 30, ^ 1997, the following percentages of
the Fund's total assets were invested in corporate bonds rated investment grade
^ by Moody's ^ or S&P at the time they were purchased: AAA--0.00%; AA--^ 0.26%;
A--^ 2.92%; and BBB--^ 7.94%, and the following percentages were invested in
corporate bonds rated below investment grade at the time of purchase: BB--^
15.27%; B--^ 23.64%; CCC--^ 2.30%; and D--0.00%. Finally, ^ 1.39% of total
assets were invested in unrated corporate bonds. All of these percentages were
determined on a dollar-weighted basis, calculated by averaging the Fund's
month-end portfolio holdings during the fiscal year. Keep in mind that the
Fund's holdings are actively traded, and bond ratings are occasionally adjusted
by ratings services, so these figures do not represent the Fund's actual
holdings or quality ratings as of June 30, ^ 1997.
The Fund's investments in debt securities may include investments in zero
coupon bonds, step-up bonds and asset-backed securities. Zero coupon bonds
("zeros") make no periodic interest payments. Instead, they are sold at a
discount from their face value. The buyer of the zero receives the rate of
return by the gradual appreciation in the price of the security, which is
redeemed at face value at maturity. Step-up bonds initially make no (or low)
cash interest payments^ but begin paying interest (or a higher rate of interest)
at a fixed time after issuance of the bond. ^ Because they are extremely
responsive to changes in interest rates, the market prices of zeros and step-up
bonds may be more volatile than the market prices of other bonds. The Fund may
be required to distribute income recognized on these bonds, even though no cash
interest payments may be received, which could reduce the amount of cash
available for investment by the Fund. Asset-backed securities generally
represent interests in pools of consumer loans and most often are structured as
pass-through securities. Interest and principal payments ultimately depend on
<PAGE>
payment of the underlying loans by individuals, although the securities may be
supported, at least in part, by letters of credit or other credit enhancements.
The underlying loans are subject to prepayments that may shorten the securities'
weighted average life and may lower their returns.
Foreign Securities. The Fund's investments in debt obligations may include
securities issued by foreign governments and foreign corporations. Up to 25% of
the Fund's total assets, measured at the time of purchase, may be invested
directly in foreign debt securities, provided that all such securities are
denominated and pay interest in U.S. dollars (such as Eurobonds and Yankee
bonds). Securities of Canadian issuers and ADRs are not subject to this 25%
limitation. Investments in foreign debt securities involve certain risks.
For U.S. investors, the returns on foreign debt 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 a
foreign ^ currency, returns ^ for a U.S. investor on foreign securities
denominated in that foreign currency may decrease. By contrast, in a period when
the U.S. dollar generally declines, those returns may increase. The Fund
attempts to minimize these risks by limiting its investments in foreign debt
securities to those which are denominated and pay interest in U.S. dollars.
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.
<PAGE>
Rule 144A Securities. The Fund may not purchase securities that are not
readily marketable. However, the Fund may purchase certain securities that are
not registered for sale to the general public^ but that can be resold to
institutional investors ("Rule 144A Securities") if a liquid trading market
exists. 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. In the event that a Rule 144A Security held by
the Fund is subsequently determined to be illiquid, the security will be sold as
soon as that can be done in an orderly fashion consistent with the best
interests of the Fund's shareholders. For more information concerning Rule 144A
Securities, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
^
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 and time. The Fund could incur costs or delays in seeking
to sell the instrument, if the prior owner defaults on its repurchase
obligation. To reduce that risk, the securities that are the subject of ^ each
repurchase agreement will be maintained with the Fund's custodian in an amount
at least equal to the repurchase price under the agreement (including accrued
interest). These agreements are entered into only with member banks of the
Federal Reserve System, registered broker-dealers, and registered U.S.
government securities dealers that are deemed creditworthy under standards
established by the Fund's board of directors.
Securities Lending. The Fund may seek to earn additional income by lending
securities to qualified brokers, dealers, banks, or other financial
institutions, on a fully collateralized basis. For further information on this
policy, see "Investment 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 a single company^ and to 25% the portion
that may be invested in any one industry.
<PAGE>
THE FUND AND ITS MANAGEMENT
The Fund is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end management investment company. It
was incorporated on March 20, 1959, under the laws of Maryland^ and first
publicly offered shares on February 1, 1960.
The Fund's board of directors has responsibility for overall supervision of
the Fund^ and reviews the services provided by the adviser and sub-adviser.
Under an agreement with the Fund, ^ 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. ^
The following managers share responsibility for the day-to-day management
of the Fund's holdings:
Charles P. Mayer has served as co-portfolio manager for the Fund since
1993, focusing on equity investments. He is also co- portfolio manager of
INVESCO Balanced Fund and INVESCO-VIF Industrial Income Portfolio. Mr. Mayer
began his investment career in 1969 and is now a senior vice president of
INVESCO Trust; from 1993 to 1994, he was a vice president of INVESCO Trust. From
1984 to 1993, he was a portfolio manager with Westinghouse Pension. B.A., St.
Peter's College; M.B.A., St. John's University.
Donovan J. (Jerry) Paul has served as co-portfolio manager for the Fund
since 1994, focusing on fixed-income investments. He also is the portfolio
manager of INVESCO High Yield Fund, INVESCO Select Income Fund, and INVESCO
VIF-High Yield Portfolio, as well as co- portfolio manager of INVESCO Short-Term
Bond Fund, INVESCO VIF- Industrial Income Portfolio and INVESCO Balanced Fund. A
senior vice president of INVESCO Trust since 1994, he entered the investment
management industry in 1976. Mr. Paul's ^ career includes these highlights: From
1989 to 1992, he served as senior vice president and director of fixed-income
research, and from 1987 to 1992, as portfolio manager, with Stein, Roe & Farnham
Inc. From 1993 to 1994, he was president of Quixote Investment Management, Inc.
B.B.A., University of Iowa; M.B.A., University of Northern Iowa; Chartered
Financial Analyst; Certified Public Accountant.
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.
<PAGE>
The Fund pays IFG a monthly management fee that is based upon a percentage
of the Fund's average net assets determined daily. ^ Effective May 15, 1997, 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; ^ 0.50% on the Fund's average net assets over $700 million^
but less than $2 billion; 0.45% on the Fund's average net assets over $2 billion
but less than $4 billion; and 0.40% on the Fund's average net assets over $4
billion. From October 15, 1992 through May 14, 1997, IFG voluntarily waived that
portion of its fee which ^ exceeded 0.45% of the average net assets of the Fund
in excess of $2 billion pursuant to a commitment to the Fund. In addition, ^
from October 21, 1993 through May 14, 1997, IFG ^ voluntarily ^ waived that
portion of its fee which ^ exceeded 0.40% of the average net assets of the Fund
in excess of $4 billion pursuant to a commitment to the Fund. In addition,
effective May 15, 1997, the above two voluntary expense limitations became
mandatory, and Fund Management voluntarily reduced management fees on the Fund's
daily net assets over $5 billion. For the fiscal year ended June 30, ^ 1997,
investment advisory fees paid by the Fund amounted to ^ 0.40% of the Fund's
average net assets. In the absence of such voluntary expense limitation, the
investment advisory fees paid by the Fund for the fiscal year ended June 30, ^
1997, would have been ^ 0.43% of the Fund's average net assets. Out of this fee,
IFG paid an amount equal to 0.20% of the Fund's average net assets to INVESCO
Trust as a sub-advisory fee ^(0.19% after INVESCO Trust's voluntary waiver of a
portion of its fee pursuant to a commitment to the Fund). 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 ^. Registered broker-dealers, third party administrators of
tax-qualified retirement plans and other entities, including affiliates of IFG,
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 or ^
recordkeeping fee to the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, ^ recordkeeping, and internal sub-accounting services
for the Fund. For the fiscal year ended June 30, ^ 1997, the Fund paid IFG a fee
for these services equal to ^ 0.015% 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 (prior to any
expense offset arrangement) for the fiscal year ended June 30, ^ 1997, including
investment management fees (but excluding brokerage commissions, which are a
cost of acquiring securities), amounted to ^ 0.95% (after voluntary absorption
of advisory fees by IFG) of the Fund's average net assets. However, in the
absence of the voluntary expense limitation discussed above, the total expenses
of the Fund for the year ended June 30, ^ 1997, would have been ^ 0.98% of the
Fund's average net assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
<PAGE>
at the best available prices. ^ 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, INVESCO Trust and IDI are indirect wholly owned subsidiaries 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 continued to operate under their existing names. AMVESCAP PLC has
approximately $177.5 billion in assets under management. IFG was established in
1932 and, as of June 30, ^ 1997, managed 14 mutual funds, consisting of ^ 46
separate portfolios, with combined assets of approximately ^ $15.4 billion on
behalf of over ^ 857,000 shareholders. INVESCO Trust^, founded in 1969^, served
as adviser or sub-adviser to ^ 59 investment portfolios as of June 30, ^ 1997,
including ^ 31 portfolios in the INVESCO group. These ^ 59 portfolios had
aggregate assets of approximately ^ $14.1 billion as of June 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. IDI was established in 1997 and is the
distributor for 14 mutual funds consisting of 46 separate portfolios.
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 shares outstanding.
Performance Data. To keep shareholders and potential investors informed,
we will occasionally advertise the Fund's total return and yield. 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 one-, five-,
and ten-year periods. Cumulative total return shows the actual rate of return on
an investment for the period cited; average annual total return represents the
<PAGE>
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, because they do not ^ show the interim variations in
performance over the periods cited.
The yield of the Fund refers to the income generated by an investment in
the Fund over a 30 ^ day or one-month period^ and is ^ calculated by dividing
the net investment income per share earned during the period by the net asset
value per share at the end of the period, then adjusting the result to provide
for semi-annual compounding. 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 ^ IDI using the phone number or
address on the cover 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 Equity Income
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 investment results 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's shares 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.
<PAGE>
HOW TO BUY SHARES
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check
Mail to: $1,000 for regular ^ If your check
INVESCO Funds account; does not clear, you
Group, Inc. $250 for an will be responsible
P.O. Box 173706 Individual for any related
Denver, CO 80217- Retirement Account; loss the Fund or
3706. $50 minimum for IFG incurs. If you
Or you may send each subsequent are already a
your check by investment. shareholder in the
overnight courier INVESCO funds, the
to: 7800 E. Union Fund may seek
Ave., reimbursement from
Denver, CO 80237. your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or
Wire $1,000. Payment must be
Call 1-800-525-8085 received within 3
to request your business days, or
purchase. Then send the transaction may
your check by be cancelled. If a
overnight courier telephone purchase
to our street is cancelled due to
address: nonpayment, you
7800 E. Union Ave., will be responsible
Denver, CO 80237. for any related
Or you may transmit loss the Fund or
your payment by IFG incurs. If you
bank wire (call IFG are already a
for instructions). shareholder in the
INVESCO funds, the
Fund may seek
reimbursement from
your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or
Direct Payroll
Purchase
You may enroll on $50 per month for Like all regular
the fund EasiVest; $50 per investment plans,
application, or pay period for neither EasiVest
call us for the Direct Payroll nor Direct Payroll
correct form and Purchase. You may Purchase ensures a
more details. start or stop your profit or protects
Investing the same regular investment against loss in a
amount on a monthly plan at any time, falling market.
basis allows you to with two weeks' Because you'll
buy more shares notice to IFG. invest continually,
when prices are low regardless of
and fewer shares varying price
when prices are levels, consider
high. This "dollar- your financial
cost averaging" may ability to keep
help offset market buying through low
fluctuations. Over price levels. And
a period of time, remember that you
your average cost will lose money if
per share may be you redeem your
less than the shares when the
actual average market value of all
price per share. your shares is less
than their cost.
- --------------------------------------------------------------------------------
By PAL
Your "Personal $1,000. Be sure to write
Account Line" is down the
available for confirmation number
subsequent provided by PAL.
purchases and Payment must be
exchanges 24-hours received within 3
a day. Simply call business days, or
1-800-424-8085. the transaction may
be cancelled. If a
telephone purchase
is cancelled due to
nonpayment, you
will be responsible
for any related
loss the Fund or
IFG incurs. If you
are already a
shareholder in the
INVESCO funds, the
Fund may seek
reimbursement from
your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
By Exchange
Between this and $1,000 to open a See "Exchange ^
another of the new account; $50 Policy" below.
INVESCO funds. Call for written
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 purchases requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
================================================================================
Exchange ^ Policy. 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 four exchanges out of each fund during each calendar
year.
3) An exchange is the redemption of shares from one fund followed by
the purchase of shares in another. Therefore, any gain or loss
realized on the exchange is recognizable for federal income tax
purposes (unless, of course, your account is tax-deferred).
4) The Fund reserves the right to reject any exchange request, or to
modify or terminate the exchange ^ policy, when it is 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).
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
<PAGE>
distribution of ^ its shares to investors. Under the Plan, monthly payments may
be made by the Fund to IDI to permit IDI, at its discretion, to engage in
certain activities, and provide certain services approved by the board of
directors of the Fund 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 customer assets maintained in the Fund) to securities
dealers and other financial institutions and organizations, which may include ^
IDI-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, printing 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 ^ IDI or its affiliates or by third parties.
^ Under the Plan, the Fund's payments to IDI are limited to an amount
computed at an annual rate of 0.25% of the Fund's average net assets. IDI 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 IDI or 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 IDI
for permissible activities engaged in and services provided by IDI during the
rolling 12-month period in which that month falls. Therefore, any obligations
incurred by IDI in excess of the limitations described above will not be paid by
the Fund under the Plan, and will be borne by IDI. In addition, IDI and its
affiliates may from time to time make additional payments from its revenues to
securities dealers and other financial institutions that provide
distribution-related and/or administrative services for the Fund. No further
payments will be made by the Fund under the Plan in the event of its
termination. Also, any payments made by the Fund may not be used to finance
directly the distribution of shares of any other mutual fund advised by IFG.
Payments made by the Fund under the Plan for compensation of marketing
personnel, as noted above, are based on an allocation formula designed to ensure
that all such payments are appropriate. For more information see "How Shares Can
Be Purchased -- Distribution Plan" in the Statement of Additional Information. ^
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.
<PAGE>
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 their 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>
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; IRAs.
$1,000 for a wire
to bank of record.
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 the
discretion of IFG.
- --------------------------------------------------------------------------------
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, pre-designated
CO 80237. bank.
- --------------------------------------------------------------------------------
By Exchange
Between this and $1,000 to open a See "Exchange ^
another of the new account; $50 Policy," page 22.
INVESCO funds. Call for written
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
automatic monthly minimum is $250 for
exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal
Plan
You may call us to $100 per payment, You must have at
request the on 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 recognized
national or
regional securities
firm.
================================================================================
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.
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 involuntarily 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 distributed in shares of the
Fund or another fund in the INVESCO group.
The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in August 1997,
changed the taxation of capital gains by applying different capital gains rates
depending on the taxpayer's holding period and marginal rate of federal income
tax. Net realized capital gains of the Fund are classified as short-term,
mid-term and long-term gains depending on how long the Fund held the security
which gave rise to the gains. Short-term capital gains are included in income
from dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid.
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders.
The Fund may be subject to 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 ^.
^ Individuals and certain other non-corporate 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
<PAGE>
reasons, you can avoid backup withholding on your Fund account by ensuring that
we have a correct, certified tax identification number.
We encourage you to consult a tax adviser with respect to these matters.
For further information, see "Dividends, Capital Gain Distributions and Taxes"
in the Statement of Additional Information.
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 a quarterly basis, at the discretion of the Fund's
board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of 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 the full purchase price, a portion of
which is then returned in the form of a taxable distribution. ^
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund have equal voting rights based on
one vote for each share owned and a corresponding fractional vote for each
fractional share owned. The Fund is not generally required and does not expect
to hold regular annual meetings of shareholders. However, when requested to do
so in writing by the holders of 10% or more of the outstanding shares of the
Fund or as may be required by applicable law or the Fund's Articles of
Incorporation, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority of
the outstanding shares of the Fund. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
<PAGE>
INVESCO INDUSTRIAL INCOME FUND
A no-load mutual fund seeking current
income with capital growth as an additional
factor.
PROSPECTUS
November 1, ^ 1997
^ INVESCO FUNDS
^ INVESCO Distributors, Inc.
^ Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, ^ 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 Company 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
November 1, ^ 1997
INVESCO INDUSTRIAL INCOME FUND, INC.
A no-load mutual fund seeking current
income with capital growth as an additional factor
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 INDUSTRIAL INCOME FUND, INC.'s ("the Fund") investment objective
is to seek the best possible current income while following sound investment
practices. The Fund will pursue this objective by investing its assets in
securities with the potential to provide a relatively high yield and stable
return and which, over a period of years, may also provide capital appreciation.
Capital growth potential is a secondary factor in the selection of portfolio
securities of the Fund.
A Prospectus for the Fund dated November 1, ^ 1997, which provides the
basic information you should know before investing in the Fund, may be obtained
without charge from INVESCO ^ Distributors, 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 ^: INVESCO FUNDS GROUP, INC.
Distributor: INVESCO DISTRIBUTORS, INC.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS Page
----
INVESTMENT POLICIES AND RESTRICTIONS 32
THE FUND AND ITS MANAGEMENT 36
HOW SHARES CAN BE PURCHASED 47
HOW SHARES ARE VALUED 51
FUND PERFORMANCE 52
SERVICES PROVIDED BY THE FUND 54
TAX-DEFERRED RETIREMENT PLANS 55
HOW TO REDEEM SHARES 55
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES 56
INVESTMENT PRACTICES 58
ADDITIONAL INFORMATION 60
APPENDIX A 63
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INVESTMENT POLICIES AND RESTRICTIONS
In pursuing its investment objective, the Fund endeavors to select and
purchase securities providing reasonably secure dividend or interest income.
Sometimes warrants are acquired when offered with income-producing securities,
but the warrants are disposed of as soon as that can be done in an orderly
fashion consistent with the best interests of the Fund's shareholders. Acquiring
warrants involves a risk that the Fund will lose the premium it pays to acquire
warrants if the Fund does not exercise a warrant before it expires. The major
portion of the investment portfolio normally consists of common stocks,
convertible bonds and debentures, and preferred stocks; however, there may also
be substantial holdings of ^ non-convertible debt securities, including
non-investment grade and unrated debt securities.
Debt Securities. As discussed in the section of the Fund's Prospectus
entitled "Investment Policies and Risks," the straight debt securities in which
the Fund invests are generally subject to two kinds of risk, credit risk and
market risk. The ratings given a straight debt security by Moody's Investors
Service, Inc. ("Moody's")and Standard & Poor's Ratings Group, Inc., a division
of The McGraw-Hill Companies, Inc. ("S&P") provide a generally useful guide as
to such credit risk. The lower the rating given a debt security by such rating
service, the greater the credit risk such rating service perceives to exist with
respect to such security. Increasing the amount of Fund assets invested in
unrated or lower grade (Ba or less by Moody's, BB or less by S&P) ^ debt
securities, while intended to increase the yield produced by the Fund's ^ debt
securities, will also increase the credit risk to which those ^ debt securities
are subject.
Lower rated ^ debt securities and non-rated securities of comparable
quality tend to be subject to wider fluctuations in yields and market values
than higher rated ^ debt securities and may have speculative characteristics.
Although the Fund may invest in ^ debt securities assigned lower grade ratings
by S&P or Moody's, the Fund's investments have generally been limited to ^ debt
securities rated B or higher by either ^ Moody's or S&P. Debt securities rated
lower than B by either ^ Moody's or S&P may be highly speculative. The Fund's
investment adviser intends to limit such Fund investments to straight debt
securities which are not believed by the adviser to be highly speculative and
which are rated at least Caa or CCC ^, respectively, by ^ Moody's or S&P. In
addition, a significant economic downturn or major increase in interest rates
may well result in issuers of lower rated ^ debt securities experiencing
increased financial stress which would adversely affect their ability to ^ meet
their obligations to pay principal and interest ^, to meet projected business
goals, and to obtain additional financing. While the Fund's investment adviser
attempts to limit purchases of lower rated ^ debt securities to securities
having an established retail secondary market, the market for such securities
may not be as liquid as the market for higher rated ^ debt securities. Bonds
rated Caa by Moody's may be in default or there may be present elements of
danger with respect to principal or interest. ^ Bonds that are lower rated by
S&P (categories BB, B, CCC) include those which are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with their terms; BB indicates the lowest
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degree of speculation and CCC a high degree of speculation. While such
bonds will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
For a specific description of each corporate bond rating category, please refer
to Appendix A.
Repurchase Agreements^
As discussed in the section of the Fund's Prospectus^ entitled "Investment
Objective and Policies," the Fund may ^ invest in repurchase agreements with ^
commercial banks, registered brokers or registered government securities
dealers, which are ^ believed to be creditworthy under standards established by
the ^ Company's board of directors. A repurchase agreement is an agreement under
which the Fund acquires a debt instrument (generally a security issued by the
U.S. government or an agency thereof, a banker's acceptance or a certificate of
deposit) from a commercial bank, broker or dealer, subject to resale to the
seller at an agreed-upon price and date (normally, the next business day). 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 ^ at
least equal to the value of the repurchase agreement, and are held as collateral
by the Fund's ^ custodian bank until the repurchase agreement is completed.
The use of repurchase agreements involves certain risks. For example, if
the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, the
Fund may incur a loss upon disposition of the security. If the other party to
the agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, the Fund may experience costs and
delays in realizing on the collateral. Finally, it is possible that the Fund may
not be able to substantiate its interest in the underlying security and may be
deemed an unsecured creditor of the other party to the agreement. While the
Fund's management acknowledges these risks, it is expected that the risks can be
minimized through careful monitoring procedures.
Restricted/144A Securities. In recent years, a large institutional market
has developed for certain securities that are not registered under the
Securities Act of 1933 (the "1933 Act"). Institutional investors will not
generally seek to sell these instruments to the general public, but instead will
often depend on an efficient institutional market in which such unregistered
securities can be readily 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.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
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ascertainable values for restricted 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 Rule
144A-eligible securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be unable to
dispose of such securities promptly or at reasonable prices.
^ Lending of ^ 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^.
Investment Restrictions. As described in the section of the Fund's
Prospectus entitled "Investment Policies and Risks," the Fund has adopted
certain fundamental investment restrictions. The first three restrictions set
forth below are contained in the Fund's charter and may not be changed without
prior approval by the holders of two-thirds of the outstanding shares of the
Fund. The Fund's other investment restrictions may not be changed without the
prior approval of the holders of a majority of the outstanding voting securities
of the Fund as defined in the 1940 Act. For purposes of the following
limitation, all percentage limitations apply immediately after a purchase or
initial investment. Any subsequent change in a particular percentage 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 excess of 5% of the value of its total net assets
and then only from banks, and when borrowing, it is a temporary
measure for emergency purposes;
(4) buy or sell real estate, commodities, commodity contracts (however,
the Fund may purchase securities of companies investing in real
estate);
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(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) buy other than readily marketable securities;
(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 company or to own more than 10% of the voting
securities of any one company (except obligations issued or
guaranteed by the U.S.
Government);
(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
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 and
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.
The Fund has no written policy regarding the writing of put and call
options but has not engaged in such practices and does not anticipate doing so.
With respect to investment restriction (7) above, ^ the board of directors
has delegated to the Fund's investment adviser the authority to determine ^
whether a liquid market exists for securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933, or any successor to such rule, and
whether or not such securities are ^ subject to restriction (7) above. Under
guidelines established by the board of directors, the adviser will consider the
following factors, among others, in making this determination: (1) the
<PAGE>
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).
In applying restriction (12) above, the Fund uses a modified S&P industry
code classification schema which uses various sources to classify. ^
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 duties of their office.
THE FUND AND ITS MANAGEMENT
The Fund. The Fund was incorporated under the laws of Maryland on March 20,
1959.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
^("IFG"), is employed as the Fund's investment adviser. ^ IFG was established in
1932 and also serves as an investment adviser to INVESCO Capital Appreciation
Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds,
Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc.,
INVESCO Income Funds, 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. IFG, as investment adviser, has contracted with INVESCO
Trust Company ("INVESCO Trust") ^ to provide investment advisory and research
services to the Fund. INVESCO Trust has the primary responsibility for providing
portfolio investment management services to the Fund.
^ IFG and INVESCO Trust are indirect wholly owned subsidiaries 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 management
businesses in the world with approximately $177.5 billion in assets under
management. IFG was established in 1932 and as of June 30, 1997, managed 14
mutual funds, consisting of ^ 46 separate portfolios, on behalf of over ^
857,000 shareholders. ^ AMVESCAP PLC's North American subsidiaries include the
following:
--INVESCO ^ Distributors, Inc. of Denver, Colorado is a registered
broker-dealer that acts as the principal underwriter for retail mutual funds.
<PAGE>
--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.
--INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for
providing advisory services in the U.S. real estate markets for ^ 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 Fund's 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
<PAGE>
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 this policy are administered
by and subject to exceptions authorized by ^ IFG 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 Fund which was approved ^ by the board of directors on November 6,
1996, by vote cast in person by a majority of the directors of the Fund,
including a majority of the directors who are not "interested persons" of the
Fund or INVESCO at a meeting called for such purpose. The Agreement was approved
by ^ the Fund's shareholders 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 such continuance is specifically approved at least annually by
the board of directors of the Fund, or by a vote of the holders of a majority,
as defined in the 1940 Act, of the outstanding shares of the Fund. Any such
continuance also must be approved by a majority of the Fund's directors who are
not parties to the Agreement or interested persons (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such continuance. The Agreement may be terminated at any time without penalty
by either party or the Fund upon sixty (60) days' written notice and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the Rules thereunder.
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 Fund 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 Fund with
officers, clerical staff and other employees, if any, who are necessary in
connection with the Fund's operations; furnishing office space, facilities,
equipment, and supplies; providing personnel and facilities required to respond
to inquiries related to shareholder accounts; conducting periodic compliance
reviews of the Fund's operations; preparation and review of required documents,
reports and filings by ^ IFG's in-house legal and accounting staff (including
<PAGE>
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 Fund, ^ IFG receives
a monthly fee. ^ Effective May 15, 1997, the 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; ^ 0.50% of the Fund's
average net assets in excess of $700 million^ but less than $2 billion; 0.45% on
the Fund's average net assets in excess of $2 billion but less than $4 billion;
and 0.40% on the Fund's average net assets in excess of $4 billion. October 15,
1992 through May 14, 1997, IFG voluntarily waived that portion of its fee which
^ exceeded 0.45% of the average net assets of the Fund in excess of $2 billion.
In addition, effective October 21, 1993^ through May 14, 1997, IFG voluntarily ^
waived that portion of its fee which ^ exceeded 0.40% of the average net assets
of the Fund in excess of $4 billion. In addition, effective May 15, 1997, Fund
Management voluntarily reduced management fees on the Fund's daily net assets
over $5 billion. For the fiscal years ended June 30, 1997, 1996^ and 1995 ^, the
Fund paid ^ IFG (prior to the voluntary absorption of certain Fund expenses by
IFG) advisory fees of $21,791,002, $21,541,300 and $19,946,443, 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
Fund, including a majority of the directors who are not "interested persons" of
the Fund, ^ IFG or INVESCO Trust at a meeting called for such purpose. ^
Shareholders of the Fund approved the Sub-Advisory 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 Fund, or
by a vote of the holders of a majority, as defined in the 1940 Act, of the
outstanding shares of the Fund. Each such continuance also must be approved by a
majority of the directors who are not parties to the Sub-Agreement or interested
persons, as defined in the 1940 Act of any such party, cast in person at a
meeting called for the purpose of voting on such continuance. The Sub-Agreement
may be terminated at any time without penalty by either party or the Fund upon
sixty (60) days' written notice, and terminates automatically in the event of an
assignment to the extent required by the 1940 Act and the rules thereunder.
The Sub-Agreement provides that INVESCO Trust, subject to the supervision
of ^ IFG and the Fund's board of directors, 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
<PAGE>
purchases and sales of portfolio securities; (b) maintaining a continuous
investment program for the Fund, consistent with (i) the Fund's investment
policies as set forth in the Fund's Articles of Incorporation, Bylaws, and
Registration Statement, as from time to time amended, under the 1940 Act and in
any prospectus and/or statement of additional information of the Fund, as from
time to time amended and in use under the 1933 Act and (ii) the Fund's status as
a regulated investment company under the Internal Revenue Code of 1986, as
amended; (c) determining what securities are to be purchased or sold for the
Fund, unless otherwise directed by the directors of the Fund or ^ 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.
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 rates: 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. Effective October 15, 1992, INVESCO Trust
has voluntarily agreed to waive that portion of its sub-advisory fee which
exceeds 0.18% of the average net assets of the Fund in excess of $2 billion. In
addition, effective October 21, 1993, INVESCO Trust has voluntarily agreed to
waive that portion of its sub-advisory fee which exceeds 0.16% of the average
net assets of the Fund in excess of $4 billion. 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 ^ by the board of directors on November 6,
1996 by a vote cast in person by all of the directors of the Fund, including all
of the directors who are not "interested persons" of the Fund or ^ IFG at a
meeting called for such purpose. The Administrative Agreement ^ is for an
initial term ^ expiring ^ February 28, 1998, and has been continued 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 Fund, including a majority of the
directors who are not parties to the Administrative 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 Administrative
Agreement may be terminated at any time without penalty by ^ IFG 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 Fund's board
of directors approves such assignment.
<PAGE>
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 fee to ^ IFG 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 June 30, 1997, 1996^ and 1995 ^, the Fund paid ^ IFG
administrative services fees in the amount of $648,015, $640,468^ and $592,643
^, respectively.
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 Fund, including a majority of the Fund's directors who are not
parties to the Transfer Agency Agreement or "interested persons" of any such
party, ^ on 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 Fund, or by a vote of the holders of a majority of the
outstanding shares of the Fund. Any such continuance also must be approved by a
majority of the Fund's directors who are not parties to the Transfer Agency
Agreement or interested persons (as defined by the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
continuance. The Transfer Agency Agreement may be terminated at any time without
penalty by either party upon sixty (60) days' written notice and terminates
automatically in the event of assignment.
The Transfer Agency Agreement provides that the Fund shall pay to ^ IFG a
fee of $20.00 per shareholder account ^ or where applicable per participant in
an omnibus account ^. This fee is paid monthly at a rate of 1/12 of the annual
fee and is based upon the actual number of shareholder accounts or omnibus
account participants in existence at any time ^.
For the fiscal years ended June 30, 1997, 1996^ and 1995 ^, the Fund paid
^ IFG transfer agency fees of $6,785,271, $5,698,274^ and $5,386,968 ^,
respectively.
Officers and Directors of the Fund. The overall direction and supervision
of the Fund is the responsibility of the board of directors, which has the
primary duty of seeing that the Fund's general investment policies and programs
of the Fund are carried out and that the Fund's portfolio is properly
administered. The officers of the Fund, all of whom are officers and employees
of and paid by ^ IFG, are responsible for the day-to-day administration of the
<PAGE>
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 Fund hold comparable positions
with INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund,
Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds,
Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO
International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple
Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios,
Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment
Funds, Inc. All of the directors of the Fund also serve as trustees of INVESCO
Value Trust. In addition, all of the directors of the Fund ^ with the exception
of Mr. Hesser, serve as trustees of INVESCO Treasurer's Series Trust. All of the
officers of the Fund also hold comparable positions with INVESCO Value Trust.
Set forth below is information with respect to each of the Fund's officers and
directors. Unless otherwise indicated, the address of the directors and officers
is Post Office Box 173706, Denver, Colorado 80217-3706. Their affiliations
represent their principal occupations during 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 ^ Company, 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. ^ and
INVESCO Distributors, 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 at Georgia State
University, Atlanta, Georgia; President, Andrews Financial Associates, Inc.
(consulting firm); since October 1984, Director of the Center for the Study of
Regulated Industry at Georgia State University; 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.
<PAGE>
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19
Kingsbridge Way, Madison Connecticut. Born: August 1, 1923.
^ WENDY L. GRAMM, Ph.D.,** Director. Self-employed (since 1993); Professor
of Economics and Public Administration, University of Texas at Arlington.
Formerly, Chairman, Commodity Futures Trading Commission from 1988 to 1993,
administrator for Information and Regulatory Affairs at the Office of Management
and Budget from 1985 to 1988, Executive Director of the Presidential Task Force
on Regulatory Relief and Director of the Federal Trade Commission's Bureau of
Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange,
Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life
Insurance Company, Kinetic Concepts, Inc., Independant Women's Forum,
International Republic Institute, and the Republican Women's Federal Forum. Dr.
Gramm is also a member of the Board of Visitors, College of Business
Administration, University of Iowa, and a member of the Board of Visitors,
Center for Study of Public Choice, George Mason University. Address: 4201 Yuma
Street, N.W., Washington, D.C. Born: January 10, 1945.
HUBERT L. HARRIS, JR.,* Director^. Chairman (since ^ 1996) and President
(January 1990 to ^ May 1996) of INVESCO Services, Inc. ^; Chief ^ Executive
Officer of INVESCO Individual Services Group. Member of the Executive Committee
of the Alumni Board of Trustees of Georgia Institute of Technology. Address:
1315 Peachtree Street, ^ NE, Atlanta, Georgia. Born: July 15, 1943.
KENNETH T. KING,^# Director. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
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 Corporation and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of ^ INVESCO Global Health Sciences Fund and Gables Residential Trust.
Address: ^ 7 Piedmont Center, Suite 100, Atlanta, Georgia ^. Born: September 14,
1930.
<PAGE>
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
(since 1989) and INVESCO Distributors, Inc. (since 1997); Vice President (May
1989 to April 1995), Secretary and General Counsel of INVESCO Funds Group, Inc.;
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 1988). Senior Vice President
and Treasurer of INVESCO Distributors, Inc. (since 1997). Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. (since 1995) and of INVESCO Distributors, Inc. (since
1997) 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.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) and Trust
Officer of INVESCO Trust Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) 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 Investment Company Act of 1940.
**Member of the management liaison committee of the ^ Company.
As of ^ October 7, 1997, officers and directors of the Fund, as a group,
beneficially owned less than 1% of the Fund's outstanding shares.
<PAGE>
Director Compensation
The following table sets forth, for the fiscal year ended June 30, ^ 1997,
the compensation paid by the Fund to its independent directors for services
rendered in their capacities as directors of the Fund; the benefits accrued as
Fund expenses with respect to the Defined Benefit Deferred Compensation Plan
discussed below; and the estimated annual benefits to be received by these
directors upon retirement as a result of their service to the Fund. In addition,
the table sets forth the total compensation paid by all of the mutual funds
distributed by INVESCO Funds Group, Inc. (including the Fund), INVESCO Advisor
Funds, Inc., INVESCO Treasurer's Series Trust and ^ 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. Dr. Gramm became an independent director of the Company
effective July 29, 1997 and is not included in the table below.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Fund Upon Paid To
Fund(1) Expenses(2) Retirement(3) Directors(1)
Fred ^ A. Deering, $13,406 $ 8,039 $ 7,827 $98,850
Vice Chairman of
the Board
Victor L. Andrews ^ 12,755 7,596 9,061 84,350
Bob R. Baker ^ 13,477 6,783 12,142 84,850
Lawrence H. Budner ^ 12,082 7,596 9,061 80,350
Daniel D. Chabris 12,819 8,669 6,439 84,850
A. D. Frazier, Jr.(4) 4,602 0 0 81,500
Kenneth T. King 9,356 8,347 7,099 71,350
John W. McIntyre 11,662 0 0 90,350
Larry Soll 1,578 0 0 17,500
------- ------- ------- --------
Total $91,737 $47,030 $51,629 $693,950
% of Net Assets 0.0020%(5) 0.0010%(5) 0.0045%(6)
<PAGE>
(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, and the members of specially approved task forces of the
board of directors each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
(3)These figures represent the Fund's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ INVESCO Global Health
Sciences Fund which does not participate in any retirement plan) upon the
directors' retirement, calculated using the current method of allocating
director compensation among the funds in the INVESCO Complex. These estimated
benefits assume retirement at age 72 and that the basic retainer payable to the
directors will be adjusted periodically for inflation, for increases in the
number of funds in the INVESCO Complex, and for other reasons during the period
in which retirement benefits are accrued on behalf of the respective directors.
This results in lower estimated benefits for directors who are closer to
retirement and higher estimated benefits for directors who are further from
retirement. With the exception of Messrs. Frazier and McIntyre and Drs. Soll and
Gramm, each of these directors has served as a ^ director 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 INVESCO PLC
(the predecessor to AMVESCAP PLC), a company affiliated with ^ IFG, and did not
receive any director's fees or other compensation from the Fund or other funds
in the INVESCO Complex ^ for his service as a director.
^(5)Total as a percentage of the Fund's net assets as of June 30, ^ 1997.
^(6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
Messrs. Brady, Harris and Hesser, as "interested persons" of the Fund and
of the other funds in the INVESCO Complex, receive compensation as officers or
employees of ^ IFG or its affiliated companies, and do not receive any
director's fees or other compensation from the Fund or other funds in the
INVESCO Complex for their services 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
<PAGE>
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 to 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 him or to his beneficiary or estate. If a qualified director becomes
disabled or dies either prior to age 72 or during his/her 74th year while still
a director of the funds, the director will not be entitled to receive the first
year retirement benefit; however, the reduced retainer payments will be made to
his beneficiary or estate. The plan is administered by a committee of three
directors who are also participants in the plan and one director who is not a
plan participant. The cost of the plan will be allocated among the INVESCO^ and
Treasurer's Series Trust funds in a manner determined to be fair and equitable
by the committee. The Fund is not making any payments to directors under the
plan as of the date of this Statement of Additional Information. The Fund has no
stock options or other pension or retirement plans for management or other
personnel and pays no salary or compensation to any of its officers.
The Fund has an audit committee that is comprised of ^ five of the
directors who are not interested persons of the Fund. The committee meets
periodically with the Fund's independent accountants and officers to review
accounting principles used by the Fund, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Fund also has a management liaison committee which meets quarterly
with various management personnel of ^ IFG in order (a) to facilitate better
understanding of management and operations of the Fund, and (b) to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis at the net asset value
per share of the Fund 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
<PAGE>
may also be computed at other times. See "How Shares Are Valued." ^ IDI acts as
the Fund's Distributor under a distribution agreement with the Fund under which
it receives no compensation and bears all expenses, including the cost of
printing and distributing prospectuses, incident to marketing of the Fund's
shares, except for such distribution expenses which are paid out of Fund assets
under the Fund's Plan of Distribution which has been adopted by the Fund
pursuant to Rule 12b-1 under the 1940 Act.
Distribution Plan. As ^ described in the section of the Fund's Prospectus
entitled "How To Buy Shares - Distribution Expenses^," the Fund 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 initial Plan was
approved on April 17, 1990, at a meeting called for such purpose by a majority
of the directors of the Fund, including a majority of the directors who neither
are "interested persons" of the Fund nor have any financial interest in the
operation of the Plan ("12b-1 directors"). The board of directors, on February
4, 1997, approved amending the Plan to a compensation type 12b-1 plan. This
amendment of the Plan did not result in increasing the amount of the Fund's
payments thereunder. The Plan was continued by action of the board of directors
until May 15, 1998. Pursuant to authorization granted by the Fund's board of
directors on September 2, 1997, a new Plan became effective on September 30,
1997, under which IDI has assumed all obligations related to distribution which
previously were performed by IFG.
The Plan provides that the Fund may make monthly payments to ^ IDI of
amounts computed at an annual rate no greater than 0.25% of the Fund's average
net assets ^ to permit IDI, 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 the Fund under the Plan, for any month, may be
made to compensate IDI for permissible activities engaged in and services
provided by IDI during the rolling 12-month period in which that month falls.
For the fiscal year ended June 30, ^ 1997 the Fund made payments to ^ IFG (the
predecessor of IDI as distributor of shares of the Funds) under the 12b-1 Plan
(prior to the voluntary absorption of certain Fund expenses by IFG) in the
amount of $14,751,573. In addition, as of June 30, ^ 1997, $899,644 of
additional distribution ^ accruals had been incurred under the Plan for the
Fund, and will be paid to IDI during the fiscal year ended June 30, 1998. As
noted in the Prospectus, one type of expenditure permitted by the Plan is the
payment of compensation to securities companies, and other financial
institutions and organizations, which may include ^ IDI-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 ^ IDI to
broker-dealers who sell shares of ^ the Fund and may be made to banks, savings
and loan associations and other depository institutions. Although the
Glass-Steagall Act limits the ability of certain banks to act as underwriters of
mutual fund shares, the Fund does not believe that these limitations would
affect the ability of such banks to enter into arrangements with ^ IDI, but can
give no assurance in this regard. However, to the extent it is determined
<PAGE>
otherwise in the future, arrangements with banks might have to be modified or
terminated, and, in that case, the size of the Fund possibly could decrease to
the extent that the banks would no longer invest customer assets in the Fund.
Neither the Fund nor its investment adviser will give any preference to banks or
other depository institutions which enter into such arrangements when selecting
investments to be made by the Fund.
For the fiscal year ended June 30, ^ 1997, allocations of 12b^-1 amounts
paid by the Fund for the following categories of expenses were: advertising ^--
$2,260,783; sales literature, printing^ and postage ^-- $1,163,948; direct mail
^-- $505,485; public relations/promotion ^-- $369,836; compensation to
securities dealers and other organizations ^-- $8,137,253; marketing personnel
^--$2,314,268.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Fund's Transfer Agent computer-processable tapes of ^ the Fund's
transactions by customers, serving as the primary source of information to
customers in answering questions concerning the Fund, and assisting in other
customer transactions with the Fund.
^
The Plan provides that it shall continue in effect with respect to the Fund
for so long as such continuance is approved at least annually by the vote of the
board of directors of the Fund cast in person at a meeting called for the
purpose of voting on such continuance. The Plan can also be terminated at any
time with respect to the Fund, without penalty, if a majority of the 12b-1
directors, or shareholders of the Fund, vote to terminate the Plan. The Fund
may, in its absolute discretion, suspend, discontinue or limit the offering of
its shares of the Fund 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
^ the Fund's 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 ^ the Fund's shares; however, the Fund is not contractually
obligated to continue the Plan for any particular period of time. Suspension of
the offering of ^ the Fund's 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
Fund shall be committed to the independent directors then in office at the time
of such selection or nomination. The Plan may not be amended to increase
materially the amount of the Fund's payments thereunder without approval of the
shareholders of the Fund, and all material amendments to the Plan must be
approved by the board of directors of the Fund, including a majority of the
12b-1 directors. Under the agreement implementing the Plan, ^ IDI 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.
<PAGE>
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 ^ the Fund's assets in the amounts and for the
purposes set forth therein, notwithstanding the occurrence of an assignment, as
defined by the 1940 Act, and rules thereunder. To the extent it constitutes an
agreement pursuant to a plan, the Fund's obligation to make payments to ^ IDI
shall terminate automatically, in the event of such "assignment," in which ^
case the Fund may continue to make payments pursuant to the Plan to ^ IDI or
another organization only upon the approval of new arrangements, which may or
may not be with ^ IDI, 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 and the level of compensation provided therein.
The only directors or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Fund who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the Fund listed herein under the section entitled "The Fund ^ And Its
Management--Officers and Directors of the Fund" who are also officers either of
^ IDI or companies affiliated with ^ IDI. The benefits which the Fund believes
will be reasonably likely to flow to it 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 its
revenues could allow ^ IDI and its affiliated companies:
(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 ^ IDI and its affiliated companies (and support
them in their infancy), and thereby expand the investment
choices available to all shareholders, and
<PAGE>
(c) To acquire and retain talented employees who desireto be
associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
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 of
the Fund 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
^ plus 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 markets 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 value
as determined in good faith by the Fund's board of directors or pursuant to
procedures adopted by the board of directors. The above procedures may include
the use of valuations furnished by a pricing service which employs a matrix to
determine valuations for normal institutional-size trading units of debt
securities. Prior to a pricing service, the Fund's board of directors reviews
the methods used by such service to assure itself that securities will be valued
at their fair values. The Fund's board of directors also periodically monitors
the methods used by such pricing services. Debt securities with remaining
maturities of 60 days or less at the time of purchase normally are valued at
amortized cost.
<PAGE>
The values of securities held by the Fund and other assets used in
computing net asset value generally are determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Fund's net asset value. However, in the event that the closing price of a
foreign security is not available in time to calculate the Fund's net asset
value on a particular day, the Fund's board of directors has authorized the use
of the market price for the security obtained from an approved pricing service
at an established time during the day which may be prior to the close of regular
trading in the security.
FUND PERFORMANCE
As discussed in the section of the Fund's Prospectus entitled "Fund Price
and Performance," the Fund advertises its yield and total return performance. In
calculating yield quotations for the Fund, interest earned is determined by
computing yield to maturity (or yield to call, if applicable) of each obligation
held by the Fund, based upon the market value of each obligation (including
actual accrued interest) at the close of business on the last business day of
each month, or, with respect to an obligation purchased during the month, the
purchase price plus accrued interest. The resultant yield to maturity is divided
by 360 and multiplied by the market value of the obligation (including actual
accrued interest), and the result is multiplied by the number of days in the
subsequent month that the obligation is in the Fund (assuming that each month
has 30 days). Dividends received held by the Fund are recognized, for purposes
of yield calculations, on a daily accrual basis. The Fund's yield for the 30
days ended June 30, ^ 1997, was ^ 2.47%.
Average annual total return performance for the one-, five-and ten-year
periods ended June 30, ^ 1997, was ^ 27.33%, 15.26% and ^ 14.32%, 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 $1000
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.
<PAGE>
In conjunction with performance reports, comparative data between the
Fund's performance for a given period and other types of investment vehicles,
including certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex,
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 "Equity Income Funds" mutual fund
grouping, in addition to the broad-based Lipper general fund groupings. Sources
for Fund performance information and articles about the Fund include, but are
not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
<PAGE>
No-Load Analyst
No-Load Fund X
Performance Analysis
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
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 Fund's
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.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such Plan do not represent income or a return
on investment.
^ Participation in the Periodic Withdrawal Plan may be terminated at any
time by sending a written request to ^ IFG. Upon termination, all future
dividends and capital gain distributions will be reinvested in additional shares
unless a shareholder requests otherwise.
Exchange ^ Policy. As discussed in the section of the Prospectus entitled
"How ^ To Buy Shares--Exchange ^ Policy," the Fund offers shareholders the ^
ability to exchange shares of the Fund for shares of certain other mutual funds
advised by ^ IFG. Exchange requests may be made either by telephone or by
written request to ^ IFG using the telephone number or address on the cover of
this Statement of Additional Information. Exchanges made by telephone must be in
an amount of at least $250, if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that establish a NEW account
must meet the fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the fund's applicable minimum subsequent investment requirements. Any gain
or loss realized on an exchange is recognized for federal income tax purposes.
<PAGE>
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.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
the Prospectus entitled "How ^ To Sell Shares." The right of redemption may be
suspended and payment postponed when: (a) the New York Stock Exchange is closed
for other than customary weekends and holidays; (b) trading on that exchange is
restricted; ^(c) an emergency exists as a result of which disposal by the Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets; or (d)
the SEC by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Fund's investment adviser, make it undesirable for the Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Fund is obligated under the 1940 Act to redeem for cash all
shares of the Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
<PAGE>
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
June 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 are, for federal income
tax purposes, taxable as ordinary income to shareholders. After the end of each
calendar year, the Fund sends shareholders information regarding the amount and
character of dividends paid in the year, including the dividends eligible for
the dividends-received deduction for corporations. Such amounts will be limited
to the aggregate amount of qualifying dividends which the Fund derives from its
portfolio investments.
Distributions by the Fund of net capital gains (the excess of long-term
and mid-term capital ^ gains 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 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.
^ 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
<PAGE>
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 ^ with respect to shares of 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 ^ the method.
If the Fund's shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of any taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign and
U.S. possessions income taxes paid by it. The Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's income from sources within, and taxes paid to, foreign countries and U.S.
possessions if it makes this election.
The Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock of a PFIC or of any gain on disposition of the stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent that income is distributed to its
shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gain
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended for income tax purposes does not entail government
supervision of management or investment policies.
<PAGE>
INVESTMENT PRACTICES
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 June 30,
1997, 1996^ and 1995 ^ were 47%, 63%^ and 54% ^, 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 their financial responsibility subject to their
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 ^ any commissions charged the Fund are
consistent with prevailing and reasonable commissions or discounts, ^ IFG or
INVESCO Trust also endeavor to monitor brokerage industry practices with regard
to the commissions or discounts charged by brokers and dealers on transactions
effected for other comparable institutional investors. While ^ IFG or INVESCO
Trust seek reasonably competitive rates, the Fund does not necessarily pay the
lowest commission, spread, or discount 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 or discounts are in excess of those which other brokers
might have charged for effecting the same transactions.
<PAGE>
Portfolio transactions may be effected through qualified ^ broker-dealers
that recommend the Fund to their clients, or who act as agent in the purchase of
the Fund's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Fund's adviser or sub-adviser may consider the sale of Fund shares by a broker
or dealer in selecting among qualified ^ broker-dealers.
Certain financial institutions (including brokers who may sell shares of
the Fund, or affiliates of such brokers) are paid a fee (the "Services Fee") for
recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the ^ Fund 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
Fund'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
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
Fund have authorized the Fund to apply dollars generated from the Plan to pay
the remainder of the Services Fee, subject to the maximum Rule 12b- 1 fee
permitted by the Plan. ^ 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 Fund'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 ^ may be applied ^ against any sub- transfer agency or
recordkeeping fee payable with respect to the Fund, ^ or 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 or IDI 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
<PAGE>
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 Fund's board of directors has
also authorized the Fund to pay to ^ IDI the full Rule 12b-1 fees contemplated
by the Plan in ^ compensation of expenses incurred by ^ IDI 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 ^ compensate IDI for payments to such NTF
Program Sponsor absent such credits.
The aggregate dollar amounts of brokerage commissions paid by the Fund for
the fiscal years ended June 30, 1997, 1996^ and 1995 ^ were $4,594,928,
$4,668,404^ and $5,098,664 ^, respectively. For the fiscal year ended June 30, ^
1997, brokers providing research services received ^ $2,236,892 in commissions
on portfolio transactions effected for the Fund. The aggregate dollar amount of
such portfolio transactions was ^ $1,826,392,715. As a result of selling shares
of the Fund, brokers received ^ $15,000 in commissions on portfolio transactions
effected for the Fund during the fiscal year ended June 30, ^ 1997.
At June 30, ^ 1997, the Fund held securities of its regular brokers or
dealers, or their parents, as follows:
Value of Securities
Broker or Dealer at ^ 6/30/97
- ---------------- -------------------
^ Chevron Oil Finance $18,741,000
American Express Credit ^ 30,190,000
^ Donaldson Lufkin & Jennette 6,000,000
^ Neither IFG nor INVESCO Trust receive 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 Fund has one billion authorized shares of common stock
with a par value of $1.00 per share. As of June 30, ^ 1997, 298,771,934 of the
Fund's shares of common stock 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. ^ Shares have no preemptive rights and are freely
transferable on the books of the Fund.
Fund shares have noncumulative voting rights, which means that the holders
of a majority of the shares voting for the election of directors of the Fund can
elect 100% of the directors if they choose to do so^. In such event, the holders
<PAGE>
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 may call annual or special meetings of shareholders for action by
shareholder vote as may be required by the Investment Company Act of 1940 or the
Fund's Articles of Incorporation, or at their discretion.
Principal Shareholders. As of ^ September 30, 1997, the following entities
held more than 5% of the Fund's outstanding equity securities.
Amount and ^ Class and
Nature of Percent
Name and Address ^ Ownership of Class
- ---------------- ----------- -----------
Charles Schwab & Co.^ Inc. 40,547,453.400 13.752
Special Custody Acct.
^ For The Exclusive Benefit
of Customers
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 Fund.
The independent accountants are responsible for auditing the financial
statements of the Fund.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Fund. The bank is also responsible for, among other things,
receipt and delivery of the Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement. Under its contract
with the Fund, 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 Fund is provided with transfer agent services by
INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237,
pursuant to the Transfer Agency Agreement described ^ herein. Such services
include the issuance, cancellation and transfer of shares of the Fund, and the
maintenance of records regarding the ownership of such shares.
<PAGE>
Reports to Shareholders. The Fund's fiscal year ends on June 30. The Fund
distributes reports at least semiannually to its shareholders. Financial
statements regarding the Fund, audited by the independent accountants, are sent
to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Fund. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Fund.
Financial Statements. The ^ Fund's audited financial statements ^ and the
notes thereto for the fiscal year ended June 30, ^ 1997 and the report of Price
Waterhouse LLP with respect to such financial statements, are incorporated
herein by reference from the Fund's Annual Report to Shareholders for the fiscal
year ended June 30, ^ 1997.
Prospectus. The Fund will furnish, without charge, a copy of the
Prospectus upon request. Such requests should be made to the Fund at the mailing
address or telephone number set forth on the first page of this Statement of
Additional Information.
Registration Statement. This Statement of Additional Information and the
related 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>
APPENDIX A
BOND RATINGS
The following is a description of ^ Moody's and S&P's bond ratings:
Moody's Investors Service, Inc. Corporate Bond Ratings
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risk appear somewhat larger than in Aaa securities.
A - Bonds rated A possess many favorable investment attributes, and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of other
terms of the contract over any longer period of time may be small.
Caa - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
^ S&P Corporate Bond Ratings
<PAGE>
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB - Bonds rated BB have less near-term vulnerability to default than
other speculative issues. However, they face major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B - Bonds rated B have a greater vulnerability to default but currently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.
CCC - Bonds rated CCC have a currently identifiable vulnerability to
default and are dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial, or economic conditions, they are not
likely to have the capacity to pay interest and repay principal.
<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 10
the ten years in the period ended
June 30, ^ 1997.
Page in
Statement
of Addi-
tional In-
formation
----------
(2) The following audited financial
statements of the INVESCO
Industrial Income Fund and the
notes thereto for the fiscal
year ended June 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 Fund's
Annual Report to Shareholders
for the fiscal year ended June
30, ^ 1997: Statement of
Investment Securities as of June
30, ^ 1997; Statement of Assets
and Liabilities as of June 30, ^
1997; Statement of Operations
for the year ended June 30, ^
1997; Statement of Changes in
Net Assets for each of the two
years ^ ended June 30, 1997 and
1996; and Financial Highlights
for each of the five years ended
June 30, ^ 1997, 1996, 1995,
1994 and 1993.
<PAGE>
(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) (a) Restatement of the Articles
of Incorporation of Financial
Industrial Income Fund dated
November 3, ^ 1989.(2)
(i) Articles Supplementary to
the Articles of
Incorporation dated July
17, ^ 1992.(2)
(ii) Articles of Amendment of
Articles of Restatement of
the Articles of
Incorporation of Financial
Industrial Income Fund,
Inc. dated November 17,
1994.(1)
(2) Bylaws--(amended) as of 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.
(i) Amendment dated May 15, 1997,
to Advisory Agreement.
(b) Sub-Advisory Agreement
between INVESCO Funds Group,
Inc. and INVESCO Trust Company
dated ^ February 28, 1997.
<PAGE>
(6) (a) General Distribution
Agreement between Registrant and
INVESCO Funds Group, Inc. dated
February 28, 1997.
(b) General Distribution
Agreement between Registrant and
INVESCO Distributors, Inc. dated
September 30, 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.(2)
(a) Amendment to Custody
Agreement dated October 25,
1995.
(b) Data Access Service Addendum
dated May 19, 1997.
(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 non-assessable
was filed with the Securities
and Exchange Commission on or
about August ^ 27, 1997,
pursuant to Rule 24f-2 and
herein incorporated by
reference.
<PAGE>
(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 No.
33-63498 of INVESCO
International Funds, Inc. filed
May 27, 1993, and herein
incorporated by reference.
(15) Plan and Agreement of Distribution
dated April 16, 1990, adopted
pursuant to Rule 12b-1 under the
Investment Company Act of ^ 1940,
dated April 30, 1993.(2)
(a) Amendment of Plan and Agreement
of Distribution pursuant to 12b-1
under the Investment Company Act of
1940, dated July 19, 1995.(1)
(b) Amended Plan and Agreement of
Distribution adopted pursuant to
Rule 12b-1 under the Investment
Company Act of 1940 dated January
1, 1997.
<PAGE>
(c) Amended Plan and Agreement of
Distribution adopted pursuant to
12b-1 under the Investment Company
Act of 1940 dated September 30, 1997.
(16) (a) Schedule for computation of
performance ^ data.
(b) Schedule for Computation of
^ Yield.
(17) Financial Data Schedule.
(18) Not Applicable.
(1)Previously filed on EDGAR with Post-Effective Amendment No. 55 to the
Registration Statement on August 29, 1995 and incorporated herein by reference.
(2)Previously filed on EDGAR with Post-Effective Amendment No. ^ 56 to ^ the
Registration Statement on August 30, 1996 and incorporated herein by reference.
^
Item 25. Persons Controlled by or Under Common Control with Registrant
No person is presently controlled by or under common control with
Registrant.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class September 30, ^ 1997
-------------- --------------------
Common Stock ^ 202,903
Item 27. Indemnification
Indemnification provisions for officers, directors and employees of
Registrant are set forth in Article XI of the amended bylaws. See Item 24(b)2
above. Under this Article, such persons will not be indemnified for any acts for
which the Investment Company Act of 1940 would not permit indemnification.
<PAGE>
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.
Item 29. Principal Underwriters
(a) INVESCO Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, Inc.
^ INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, 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
- ------------------ ------------- -------------
^ William J. Galvin, Jr. Senior Vice Assistant
7800 E. Union Avenue President Secretary
Denver, CO 80237
^ Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President & Chief Fin'l
Denver, CO 80237 Treasurer Officer, and
Chief Acctg.
Off.
Dan J. Hesser Chairman of President,
7800 E. Union Avenue the Board, CEO & Dir.
Denver, CO 80237 President ,
Chief Executive
Officer, &
Director
Gregory E. Hyde Vice President
7800 E. Union Avenue
Denver, CO 80237
Charles P. Mayer Director ^
7800 E. Union Avenue
Denver, CO 80237
^ Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President ^,
^ Denver, CO 80237 Secretary &
^ General Counsel
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
^
<PAGE>
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) 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 the 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 ^24th day of ^ October, 1997.
Attest: INVESCO Industrial Income 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 ^24th day of ^
October, 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ ------------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ ------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ ------------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ ^ Larry Soll
- ------------------------------------ ------------------------------------
Bob R. Baker, Director ^ Larry Soll, Director
/s/ Hubert L. Harris, Jr. /s/ Kenneth T. King
- ------------------------------------ ------------------------------------
Hubert L. Harris, Jr., Director Kenneth T. King, Director
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------------------ ------------------------------------
Charles W. Brady, Director John W. McIntyre, Director
/s/ Wendy L. Gramm
- ------------------------------------
Wendy L. Gramm, Director
By* By* /s/ Glen A. Payne
--------------------------------- ---------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant (with the exception of Larry Soll and Wendy L. Gramm) have
been filed with the Securities and Exchange Commission on July 20, 1989, January
9, 1990, May 22, 1992, ^ October 25, 1993, August 25, 1995 and October 18, 1996.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
^ 5(a) 75
5(a)(i) 82
5(b) 84
6(a) 90
6(b) 99
7 108
8(a) 114
8(b) 115
9(a) 129
9(b) 142
11 146
15(b) 147
15(c) 152
16(a) 157
16(b) 158
17 159
99.POA GRAMM 160
99.POA SOLL 161
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 Industrial Income Fund, Inc., a Maryland corporation
(the "Fund").
WITNESSETH:
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 to provide certain other services, and the Adviser desires to manage said
operations and to provide such other services;
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, 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, 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 of trends, and
the consideration of long-range investment policy now or hereafter generally
available to investment advisory customers of the 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
securities shall be exercised.
<PAGE>
With respect to execution of transactions for the Fund, the Adviser is
authorized to employ such brokers or dealers as may, in the 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 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 Adviser effects
securities transactions on behalf of the Fund may be used by the Adviser in
servicing all of its accounts, and not all such services may be used by the
Adviser in connection with the Fund. In the selection of a broker or dealer for
execution of any negotiated transaction, the 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 Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
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 Adviser shall have the burden of demonstrating that
such expenditures were bona fide and for the benefit of the Fund.
2. Other Services and Facilities. The Adviser shall, in addition, supply at
its own expense all supervisory and administrative services and facilities
necessary in connection with the day-to-day operations of the Fund (except those
associated with the preparation and maintenance of certain required books and
records, and recordkeeping and administrative functions relating to employee
benefit and retirement plans, which services and facilities are provided under a
separate Administrative Services Agreement between the Fund and the Adviser).
These services shall include, but not be limited to: supplying the Fund with
officers, clerical staff and other employees, if any, who are necessary in
connection with the Fund's operations; furnishing office space, facilities,
equipment, and supplies; providing personnel and facilities required to respond
to inquiries related to shareholder accounts; conducting periodic compliance
reviews of the Fund's operations; preparation and review of required documents,
reports and filings by the Adviser'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 the books
and records required to be prepared and maintained by the Fund pursuant to Rule
31a-1(b)(4), (5), (9), and (10) under the Investment Company Act of 1940. All
books and records prepared and maintained by the Adviser for the Fund under this
Agreement shall be the property of the Fund and, upon request therefor, the
Adviser shall surrender to the Fund such of the books and records so requested.
<PAGE>
3. Payment of Costs and Expenses. The Adviser shall bear the costs and
expenses of all personnel, facilities, equipment and supplies reasonably
necessary to provide the services required to be provided by the Adviser under
this Agreement. The Fund shall pay all of the costs and expenses associated with
its operations and activities, except those expressly assumed by the Adviser
under this Agreement, including but not limited to:
(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;
(f) the compensation and expenses of its independent Directors, and the
compensation of any employees and officers of the Fund who are not employees
of the Adviser or one of its affiliated companies and compensated as such;
(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;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interest of the Fund;
(l) extraordinary expenses, including fees and disbursements of Fund
counsel, in connection with litigation by or against the Fund;
<PAGE>
(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;
(o) the expenses of distributing shares of the Fund but only if and to the
extent permissible under a plan of distribution adopted by the Fund pursuant
to Rule 12b-1 of the Investment Company Act of 1940; and
(p) all fees paid by the Fund for administrative, recordkeeping, and sub-
accounting services under the Administrative Services Agreement between the
Fund and the Adviser dated April 30, 1991.
4. 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.
5. 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 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 valuations 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 Adviser shall be computed at the following annual rates:
0.60% of the Fund's daily net assets up to $350 million; 0.55% of the Fund's
daily net assets in excess of $350 million but not more than $700 million; and
0.50% of the Fund's daily 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
5, be deemed to be the net asset value at the close of each succeeding business
day until it is again determined.
However, no such fee shall be paid to the Adviser with respect to any assets
of the Fund which may be invested in any other investment company for which the
Adviser serves as investment adviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect for the entire
month.
If, in any given year, the sum of the Fund's expenses exceeds the
state-imposed annual expense limitation to which the Fund is subject, the
Adviser will be required to reimburse the Fund for such excess expenses
promptly. Interest, taxes and extraordinary items such as litigation costs are
<PAGE>
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.
6. 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.
7. 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, 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 7, the definitions
contained in Section 2(a) of the 1940 Act and the applicable rules under the
1940 Act (particularly the definitions of "interested person," "assignment" and
"vote of a majority of the outstanding voting securities") shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such information on
an annual basis as may reasonably be necessary to evaluate the terms of this
Agreement.
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation described in
paragraph 5 earned prior to such termination.
8. 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
<PAGE>
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.
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 orally changed or
discharged, but may only be modified by an instrument in writing signed by the
Fund and the Adviser. 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).
Severability. Each provision of this Agreement is intended to be severable. If
any provision of this Agreement shall be held illegal or made invalid by a court
decision, statute, rule or otherwise, such illegality or invalidity shall not
affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with the laws
of the State of Colorado. 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, on the
date first above written.
INVESCO INDUSTRIAL INCOME 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
AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
This is an Amendment to the Investment Advisory Agreement made and entered
into between INVESCO Industrial Income Fund, Inc., a Maryland corporation (the
"Fund") and INVESCO Funds Group, Inc., a Delaware corporation (the "Adviser"),
as of the 28th day of February, 1997 (the "Agreement").
WHEREAS, the Company and IFG desire to amend the Investment Advisory
agreement dated February 28, 1997 by and between the Company and IFG, to provide
for additional expense limitation breakpoints in the advisory fee;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in the Agreement, it is agreed that paragraph 1 of section 5 of the
Agreement shall be amended to read as follows:
5. 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
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 valuations 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 Adviser shall be computed at the following
annual rates: 0.60% of the Fund's daily net assets up to $350
million; 0.55% of the Fund's daily net assets in excess of $350
million but not more than $700 million; 0.50% of the Fund's daily
net assets in excess of $700 million but not more than $2 billion;
0.45% of the Fund's daily net assets in excess of $2 billion but not
more than $4 billion; and 0.40% of the Fund's daily net assets in
excess of $4 billion but not more than $5 billion. The advisory fee
to the Adviser on daily net assets of the Fund in excess of $5
billion shall be computed at such annual rate that will be agreed to
by the Fund and the Adviser to deal with that level of Fund assets.
IN WITNESS WHEREOF, the parties have executed this Agreement on this 15th
day of May, 1997.
INVESCO INDUSTRIAL INCOME FUND, INC.
By: /s/ Dan H. Hesser
------------------------
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
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 INDUSTRIAL INCOME 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 and 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 shall, unless
otherwise expressly provided or authorized herein, have no authority to act for
or represent the Fund in any way or otherwise be deemed an agent of the Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the Fund,
subject to the supervision of the Fund's directors (the "Directors") and
INVESCO. Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and to execute all purchases and sales of
portfolio securities;
<PAGE>
(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 of 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
securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Fund. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
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.
<PAGE>
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, the 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
following annual rates: 0.25% of the Fund's daily net assets up to $200 million,
and 0.20% of the Fund's daily net assets in excess of $200 million. During any
period when the determination of the Fund's net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the Fund as of the last
business day prior to such suspension shall, for the purpose of this Article
III, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined. However, no such fee shall be paid to
the Sub-Adviser with respect to any assets of the Fund which may be invested in
any other investment company for which the Sub-Adviser serves as investment
adviser or sub-adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month. The
Sub-Adviser shall be entitled to receive fees hereunder only for such periods as
the INVESCO Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub- Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
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.
<PAGE>
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.
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
<PAGE>
approved by (1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such amendment and (2) the vote of a majority of the outstanding
voting securities of the Fund (other than an amendment which can be effective
without shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable. If
any provision of this Agreement shall be held illegal or made invalid by a court
decision, statute, rule or otherwise, such illegality or invalidity shall not
affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO TRUST COMPANY
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
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 between INVESCO
INDUSTRIAL INCOME 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
set forth, all subject to applicable federal and state securities
laws and regulations. Nothing herein shall be construed to prohibit
the Underwriter from engaging in other related or unrelated
businesses.
<PAGE>
3. In addition to serving as the Fund's agent in the
distribution of the Shares, the Underwriter shall also
provide to the holders of the Shares certain
maintenance, support or similar services ("Shareholder
Services"). Such services shall include, without
limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in
considering whether to change dividend options and
helping to effectuate such changes, arranging for bank
wires, and providing such other services as the Fund may
reasonably request from time to time. It is expressly
understood that the Underwriter or the Fund may enter
into one or more agreements with third parties pursuant
to which such third parties may provide the Shareholder
Services provided for in this paragraph. Nothing herein
shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any
registrar, transfer agent or custodian appointed by the
Fund, the computation of the asset value or offering
price of Shares, the preparation and distribution of
notices of meetings, proxy soliciting material, annual
and periodic reports, dividends and dividend notices, or
any other responsibility of the Fund.
4. Except as otherwise specifically provided for in this
Agreement, the Underwriter shall sell the Shares
directly to purchasers, or through qualified
broker-dealers or others, in such manner, not
inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the
1933 Act (the "Registration Statement") and related
Prospectus (the "Prospectus") and Statement of
Additional Information ("SAI") of the Fund as the
Underwriter may determine from time to time; provided
that no broker-dealer or other person shall be appointed
or authorized to act as agent of the Fund without the prior consent
of the directors (the "Directors") of the Fund. The Underwriter will
require each broker-dealer to conform to the provisions hereof and
of the Registration Statement (and related Prospectus and SAI) at
the time in effect under the 1933 Act with respect to the public
offering price of the Shares. The Fund will have no obligation to
pay any commissions or other remuneration to such broker-dealers.
5. The Shares offered for sale or sold by the Underwriter
shall be offered or sold at the net asset value per
share determined in accordance with the then current
Prospectus and/or SAI relating to the sale of the Shares
except as departure from such prices shall be permitted
by the then current Prospectus and/or SAI of the Fund,
in accordance with applicable rules and regulations of
the Securities and Exchange Commission. The price the
Fund shall receive for the Shares purchased from the
<PAGE>
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 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.
<PAGE>
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 jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
<PAGE>
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 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.
<PAGE>
(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 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
<PAGE>
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 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.
<PAGE>
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 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
<PAGE>
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.
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 INDUSTRIAL
INCOME FUND, INC.
ATTEST:
By: /s/ Dan H. Hesser
-------------------------------
/s/ Glen A. Payne Dan J. Hesser
- ------------------------- President
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
-------------------------------
/s/ Glen A. Payne Ronald L. Grooms
- ------------------------- Senior Vice President
Glen A. Payne
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of September, 1997 between INVESCO
INDUSTRIAL INCOME FUND, INC., a Maryland corporation (the "Fund"), and INVESCO
DISTRIBUTORS, 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
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
<PAGE>
Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging
for bank wires, and providing such other services as the Fund may
reasonably request from time to time. It is expressly understood
that the Underwriter or the Fund may enter into one or more
agreements with third parties pursuant to which such third parties
may provide the Shareholder Services provided for in this paragraph.
Nothing herein shall be construed to impose upon the Underwriter
any duty or expense in connection with the services of any
registrar, transfer agent or custodian appointed by the Fund, the
computation of the asset value or offering price of Shares, the
preparation and distribution of notices of meetings, proxy
soliciting material, annual and periodic reports, dividends and
dividend notices, or any other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through
qualified broker-dealers or others, in such manner, not inconsistent
with the provisions hereof and the then effective Registration
Statement of the Fund under the 1933 Act (the "Registration
Statement") and related Prospectus (the "Prospectus") and Statement
of Additional Information ("SAI") of the Fund as the Underwriter may
determine from time to time; provided that no broker-dealer or other
person shall be appointed or authorized to act as agent of the Fund
without the prior consent of the directors (the "Directors") of the
Fund. The Underwriter will require each broker-dealer to conform to
the provisions hereof and of the Registration Statement (and related
Prospectus and SAI) at the time in effect under the 1933 Act with
respect to the public offering price of the Shares. The Fund will
have no obligation to pay any commissions or other remuneration to
such broker-dealers.
5. The Shares offered for sale or sold by the Underwriter shall be
offered or sold at the net asset value per share determined in
accordance with the then current Prospectus and/or SAI relating to
the sale of the Shares except as departure from such prices shall be
permitted by the then current Prospectus and/or SAI of the Fund, in
accordance with applicable rules and regulations of the Securities
and Exchange Commission. The price the Fund shall receive for the
Shares purchased from the Fund shall be the net asset value per
share of such Share, determined in accordance with the Prospectus
and/or SAI applicable to the sale of the Shares.
6. Except as may be otherwise agreed to by the Fund, the Underwriter
shall be responsible for issuing and delivering such confirmations
of sales made by it pursuant to this Agreement as may be required;
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.
<PAGE>
7. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of
the Fund as a broker-dealer where necessary or advisable) in such
states as the Underwriter may reasonably request (it being
understood that the Fund shall not be required without its
consent to comply with any requirement which in the opinion of the
Directors of the Fund is unduly burdensome). The Underwriter, at its
own expense, will effect all qualifications of itself as broker or
dealer, or otherwise, under all applicable state or Federal laws
required in order that the Shares may be sold in such states or
jurisdictions as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter from time to
time the most recent form of the Prospectus and/or SAI of the Fund.
The Fund authorizes the Underwriter to use the Prospectus and/or
SAI, in the forms furnished to the Underwriter from time to time, in
connection with the sale of the Shares of the Fund. The Fund will
furnish to the Underwriter from time to time such information with
respect to the Fund and the Shares as the Underwriter may reasonably
request for use in connection with the sale of the Shares. The
Underwriter agrees that it will not use or distribute or authorize
the use, distribution or dissemination by broker-dealers or others
in connection with the sale of the Shares any statements, other than
those contained in a current Prospectus and/or SAI of the Fund
except such supplemental literature or advertising as shall be
lawful under Federal and state securities laws and regulations, and
that it will promptly furnish the Fund with copies of all such
material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may
cause the redemption or repurchase of the Shares at such prices and
upon such terms and conditions as shall be specified in a then
current Prospectus and/or SAI. In selling, redeeming or repurchasing
the Shares for the account of the Fund, the Underwriter will in all
respects conform to the requirements of all state and federal laws
and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale, redemption or
repurchase, as the case may be. The Underwriter will 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.
<PAGE>
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any attorney fees
incurred in connection therewith) which the Underwriter, its
officers and directors or any such controlling person, may
incur under the federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration
Statement or any related Prospectus and/or SAI or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against
whom such action is brought within ten (10) days after the
summons or other first legal process shall have been served
upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any 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
<PAGE>
liability, but in such case the defense shall be conducted by
counsel chosen by the Fund and approved by the Underwriter,
which approval shall not be unreasonably withheld. If the Fund
elects to assume the defense of any such suit and retain
counsel approved by the Underwriter, the defendant or
defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the Fund
elect not to assume the defense of any such suit, or should
the Underwriter not approve of counsel chosen by the Fund, the
Fund will reimburse the Underwriter, its officers and
directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Underwriter or
them. In addition, the Underwriter shall have the right to
employ counsel to represent it, its officers and directors and
any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be
sought by the Underwriter against the Fund hereunder if in the
reasonable judgment of the Underwriter it is advisable for the
Underwriter, its officers and directors or such controlling
person to be represented by separate counsel, in which event
the reasonable fees and expenses of such separate counsel
shall be borne by the Fund. This indemnity agreement and the
Fund's representations and warranties in this Agreement shall
remain operative and in full force and effect and shall
survive the delivery of any of the Shares as provided in this
Agreement. This indemnity agreement shall inure exclusively to
the benefit of the Underwriter and its successors, the
Underwriter's officers and directors and their respective
estates and any such controlling person and their successors
and estates. The Fund shall promptly notify the Underwriter of
the commencement of any litigation or proceeding against it in
connection with the issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Fund, its Directors and any person who controls the Fund
within the meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any attorney fees incurred in connection
therewith) which the Fund, its Directors or any such
controlling person may incur under the Federal securities
laws, the common law or otherwise, but only to the extent
that such liability or expense incurred by the Fund, its
Directors 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
<PAGE>
connection with such information required to be stated in the
Registration Statement or the related Prospectus and/or SAI or
necessary to make such information not misleading and (b) any
alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the
Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence or reckless disregard of the duties involved
in the conduct of his office.
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado,
and sent to the Underwriter by the person against whom such
action is brought, within ten (10) days after the summons or
other first legal process shall have been served upon the
Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not
relieve the Underwriter from any liability which it may have
to the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Underwriter and approved by the Fund,
which approval shall not be unreasonably withheld. If the
Underwriter elects to assume the defense of any such suit and
retain counsel approved by the Fund, the defendant or
defendants in such suit shall bear the fees and expenses of an
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
<PAGE>
the Underwriter hereunder if in the reasonable judgment of the
Fund it is advisable for the Fund, its Directors or such
controlling person to be represented by separate counsel, in
which event the reasonable fees and expenses of such separate
counsel shall be borne by the Underwriter. This indemnity
agreement and the Underwriter's representations and warranties
in this Agreement shall remain operative and in full force and
effect and shall survive the delivery of any of the Shares as
provided in this Agreement. This indemnity agreement shall
inure exclusively to the benefit of the Fund and its
successors, the Fund's Directors and their respective estates
and any such controlling person and their successors and
estates. The Underwriter shall promptly notify the Fund of the
commencement of any litigation or proceeding against it in
connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses (including the
fees and disbursements of its own counsel) of any registration of
the Shares under the 1933 Act, as amended, (b) expenses incident to
the issuance of the Shares, and (c) expenses (including the fees and
disbursements of its own counsel) incurred in connection with the
preparation, printing and distribution of the Fund's Prospectuses,
SAIs, and periodic and other reports sent to holders of the Shares
in their capacity as such. The Underwriter shall prepare and provide
necessary copies of all sales literature subject to the Fund's
approval thereof.
13. This Agreement shall become effective 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.
<PAGE>
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 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 INDUSTRIAL
INCOME FUND, INC.
ATTEST:
By: /s/ Dan J. Hesser
-------------------------------
Dan J. Hesser
/s/ Glen A. Payne President
- -------------------------
Glen A. Payne
Secretary
INVESCO DISTRIBUTORS, INC.
ATTEST:
By: /s/ Ronald L. Grooms
-------------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- --------------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
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
<PAGE>
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
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
<PAGE>
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
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 Industrial Income Fund (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated July 7, 1988 (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 INDUSTRIAL INCOME FUND, INC.
By: /s/ Glen A. Payne
------------------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By: /s/ Charles R. Whittemore, Jr.
------------------------------
Title: Vice President
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between each Fund listed on Appendix A, (individually a
"Customer" and collectively, the "Customers") and State Street Bank and Trust
Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
each Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Customers;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZONR
Accounting System, in its role as custodian of each Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Customer with access to State Street's
Multicurrency HORIZONR Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Customer and
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Customer to originate
electronic instructions to State Street on behalf of each Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
<PAGE>
c. Additional Services. State Street may from time to time agree to make
available to a Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, a Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, each Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of a Customer or the Investment Advisor or
Independent Auditor located in Denver, Colorado ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Customer agree
that each will engage or retain the services of trained personnel to enable both
State Street and the Customer to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. Each Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
<PAGE>
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Customer's access to services performed by the System or
to Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, a
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
g. Security Procedures. Each Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. Each Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Agreement. The on-site inspections shall
be upon prior written notice to Customer and the Investment Advisor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's business.
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
<PAGE>
Access Services and through the use of the System constitute copyrighted,
trade secret, or other proprietary information of substantial value to State
Street. Any and all such information provided by State Street to each Customer
shall be deemed proprietary and confidential information of State Street
(hereinafter "Proprietary Information"). Each Customer agrees that it will hold
such Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. Each Customer further acknowledges that State Street
shall not be required to provide the Investment Advisor or the Investment
Auditor with access to the System unless it has first received from the
Investment Advisor of the Investment Auditor an undertaking with respect to
State Street's Proprietary Information in the form of Attachment C and/or
Attachment C-1 to this Agreement. Each Customer shall use all commercially
reasonable efforts to assist State Street in identifying and preventing any
unauthorized use, copying or disclosure of the Proprietary Information or any
portions thereof or any of the logic, formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and each Customer will, at its expense,
cooperate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief. Each Customer acknowledges that the disclosure of
any Proprietary Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing irreparable
injury to State Street inadequately compensable in damages at law. In addition,
State Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive the termination
of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. Each Customer agrees
any liability of State Street to the Customer or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
<PAGE>
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither State Street or a Customer shall be liable for
any costs or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including without
limitation, cessation of services hereunder or any damages resulting therefrom
to the other party, or the Customer as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
Each Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor or the Independent Auditor of the Customer and (ii) any loss
resulting from incorrect Client Originated Electronic Financial Instructions.
State Street shall be entitled to rely on the validity and authenticity of
Client Originated Electronic Financial Instructions without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Agreement, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by each Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
<PAGE>
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. Each Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely acquisition
and maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services at
the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this
Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date of
its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i)
for any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of the Agreement by giving the other
party written notice of termination. In the event the Customer shall cease doing
business, shall become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Agreement and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Customer.
Termination of this Agreement with respect to any given Customer shall in no way
affect the continued validity of this Agreement with respect to any other
<PAGE>
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Agreement for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Agreement for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Customer terminates this Agreement or
the Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by State Street and the Customer.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations
of each Customer and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Agreement is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
or any right hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned Funds severally has
caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
----------------------------
Title: Executive Vice President
----------------------------
Date: ____________________________
EACH FUND LISTED ON APPENDIX A
By: /s/ Glen A. Payne
----------------------------
Title: Secretary
----------------------------
Date: May 19, 1997
----------------------------
<PAGE>
APPENDIX A
INVESCO FUNDS
INVESCO Diversified Funds, Inc.
INVESCO Small Company Value Fund
INVESCO Dynamics Fund, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Small Company Growth Fund
INVESCO Worldwide Emerging Markets Fund
INVESCO Growth Fund, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO High Yield Fund
INVESCO Select Income Fund
INVESCO Short-Term Bond Fund
INVESCO U.S. Government Bond Fund
INVESCO Industrial Income Fund, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO European Fund
INVESCO International Growth Fund
INVESCO Pacific Basin Fund
INVESCO Money Market Funds, Inc.
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
INVESCO U.S. Government Money Fund
INVESCO Multiple Asset Funds, Inc.
INVESCO Balanced Fund
INVESCO Multi-Asset Allocation Fund
<PAGE>
INVESCO Specialty Funds, Inc.
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Realty Fund
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
INVESCO Strategic Portfolios, Inc.
Energy Portfolio
Environmental Services Portfolio
Financial Services Portfolio
Gold Portfolio
Health Sciences Portfolio
Leisure Portfolio
Technology Portfolio
Utilities Portfolio
INVESCO Tax-Free Income Funds, Inc.
INVESCO Tax-Free Intermediate Bond Fund
INVESCO Tax-Free Long-Term Bond Fund
INVESCO Treasurer's Series Trust
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Prime Reserve Fund
INVESCO Treasurer's Special Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
INVESCO Value Trust
INVESCO Intermediate Government Bond Fund
INVESCO Total Return Fund
INVESCO Value Equity Fund
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Dynamics Portfolio
INVESCO VIF-Health Sciences Portfolio
INVESCO VIF-High Yield Portfolio
INVESCO VIF-Industrial Income Portfolio
INVESCO VIF-Small Company Growth Portfolio
INVESCO VIF-Technology Portfolio
INVESCO VIF-Total Return Portfolio
INVESCO VIF-Utilities Portfolio
INVESCO VIF-Growth Portfolio*
*Effective May 1, 1997.
<PAGE>
ATTACHMENT A
Multicurrency HORIZON(R) Accounting System
System Product Description
I. The Multicurrency HORIZON(R) Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general
ledger entries; 2) calculation of daily income and expense; 3) reconciliation
of daily activity with the trial balance, and 4) appropriate automated feeding
mechanisms to (i) domestic and international settlement systems, (ii) daily,
weekly and monthly evaluation services, (iii) portfolio performance and analytic
services, (iv) customer's internal computing systems and (v) various State
Street provided information services products.
II. GlobalQuest(R) GlobalQuest(R) is designed to provide customer access to
the following information maintained on The Multicurrency HORIZON(R) Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund receivables; 5) daily priced positions; 6) open
trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.
III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the
ability to (i) generate reports using information maintained on the
Multicurrency HORIZON(R) Accounting System which may be viewed or printed at the
customer's location; (ii) extract and download data from the Multicurrency
HORIZON(R) Accounting System; and (iii) access previous day and historical data.
The following information which may be accessed for these purposes: 1) holdings;
2) holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general
ledger and 7) cash.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to each of the Funds (individually a, "Customer" ,
collectively, the "Customers") it will have access to State Street Bank and
Trust Company's ("State Street") Multicurrency HORIZON Accounting System and
other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
By: /s/ Glen A. Payne
----------------------------
Title: Secretary
----------------------------
Date: May 19, 1997
----------------------------
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's HORIZON(R) Help Desk and Customer Assistance Center between the hours
of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of
obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to support
the Customer's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, between INVESCO
INDUSTRIAL INCOME 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, $1.00 par
value, of the Fund;
(h) "Shareholder" means a record owner of Shares;
(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
<PAGE>
(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.
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;
<PAGE>
(b) A certified copy of the Bylaws of the Fund, as then in effect;
(c) Certified copies of the resolutions of the board of directors
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the board of directors, with a certificate of
the Secretary of the Fund as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the Fund with the name,
address and tax identification number of each Shareholder, and
the number of Shares held by each, certificate numbers and
denominations (if any certificates have been issued), lists of
any accounts against which stops have been placed, together
with the reasons for said stops, and the number of Shares
redeemed by the Fund;
(g) Copies of all agreements then in effect between the Fund and
any agent with respect to the issuance, sale, or cancellation
of Shares; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares.
6. Further Documentation. The Fund will also furnish from time to time
the following documents:
(a) Each resolution of the board of directors authorizing the
original issue of Shares;
(b) Each Registration Statement filed with the Commission, and
amendments and orders with respect thereto, in effect with
respect to the sale of Shares of the Fund;
(c) A certified copy of each amendment to the Articles of
Incorporation and the Bylaws of the Fund;
(d) Certified copies of each resolution of the board of directors
designating Authorized Persons to give instructions to the
Transfer Agent;
(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
<PAGE>
(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.
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.
<PAGE>
(b) The Transfer Agent will, upon receipt by it of a check or
other payment identified by it as an investment in Shares of
the Fund and drawn or endorsed to the Transfer Agent as agent
for, or identified as being for the account of, the Fund,
promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the
investment. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related
account adjustments.
(c) Upon receipt of the notification required under paragraph (a)
hereof and the notification from the Custodian that such money
has been received by it, the Transfer Agent shall issue to the
purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue any Shares
of the Fund where it has received Written Instructions from
the Fund or written notification from any appropriate federal
or state authority that the sale of the Shares of the Fund
has been suspended or discontinued, and the Transfer Agent
shall be entitled to rely upon such Written Instructions or
written notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer
Agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares 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
<PAGE>
properly endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the extent required
by the Transfer Agent as described in the Prospectus for the
Fund; and (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer Agent will,
consistent with procedures which may be established by the
Fund from time to time for redemption by wire or telephone,
upon receipt of such a wire order or telephone redemption
request, redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as directed. All wire
or telephone redemptions will be subject to such additional
requirements as may be described in the Prospectus for the
Fund. Both the Fund and the Transfer Agent reserve the right
to modify or terminate the procedures for wire order or
telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all necessary
information and documentation relating to a redemption, the
Transfer Agent will issue to the Custodian an advice setting
forth the number of Shares of the Fund received by the
Transfer Agent for redemption and that such shares are valid
and in good form for redemption. The Transfer Agent shall,
upon receipt of the moneys paid to it by the Custodian for the
redemption of Shares, pay such moneys to the Shareholder, his
authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized to review
and process transfers of Shares of the Fund and to the extent, if
any, permitted in the Prospectus for the Fund, exchanges between
the Fund and other mutual funds advised by INVESCO Funds Group,
Inc., on the records of the Fund maintained by the Transfer Agent.
If Shares to be transferred are represented by outstanding
certificates, the Transfer Agent will, upon surrender to it of the
certificates in proper form for transfer, and upon cancellation
thereof, countersign and issue new certificates for a like number
of Shares and deliver the same. If the Shares to be transferred are
not represented by 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
<PAGE>
improper or unauthorized, or until it is satisfied that there is no
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall
furnish to the Transfer Agent a resolution of the board of
directors of the Fund certified by the Secretary authorizing
the declaration of dividends and authorizing the Transfer
Agent to rely on Oral Instructions or a Certificate specifying
the date of the declaration of such dividend or distribution,
the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined, the
amount payable per share to Shareholders of record as of that
date, and the total amount payable to the Transfer Agent on
the payment date.
(b) The Transfer Agent will, on or before the payable date of any
dividend or distribution, notify the Custodian of the
estimated amount of cash required to pay said dividend or
distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall
instruct the Custodian to place in a dividend disbursing
account funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder instructions,
will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
(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.
<PAGE>
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
14. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and
functions as are set forth in the Fee Schedules(s) hereto from
time to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
investor's account the following: (i) names, addresses, tax
identifying numbers and assigned account numbers; (ii) numbers
of Shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date
and price of all transactions on a Shareholder's account; (iv)
any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings in the
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a
Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; and
(viii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by
this Agreement.
(b) Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule
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.
<PAGE>
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
(b) The Transfer Agent will address and mail all communications to
Shareholders or their nominees, including proxy material and
periodic reports to Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper
or document believed by it to be genuine and to have been
signed by an Authorized Person and shall not be held to have
any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates which
it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions, and, at the
expense of the Fund, may seek advice from legal counsel for
the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or with the opinion
of such counsel. In addition, the Transfer Agent, its
officers, agents or employees, shall accept instructions or
requests given to them by any person representing or acting
on behalf of the Fund only if said representative is known by
the Transfer Agent, its officers, agents or employees, to be
an 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
<PAGE>
the propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares of the Fund in payment
of any stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Transfer Agent
may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by the Transfer
Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized Person of the Fund or upon the
opinion of legal counsel for the Fund or its own counsel; or
(ii) any action taken or omitted to be taken by the Transfer
Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of
the same even though the same may thereafter have been
altered, changed, amended or repealed. However,
indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its directors, officers,
employees or agents in cases of its own gross negligence,
willful misconduct, bad faith, or reckless disregard of its
or their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the directors, officers, employees, agents and Shareholders of the
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.
<PAGE>
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
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.
<PAGE>
To the Fund:
INVESCO Industrial Income 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.
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 INDUSTRIAL INCOME FUND, INC.
By: /s/ Dan H. 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 Industrial Income 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 INDUSTRIAL INCOME FUND, INC.
By: /s/ Dan H. 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 INDUSTRIAL INCOME 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
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
<PAGE>
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 Fund.
3. INVESCO shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer equipment,
communication lines and supplies) and such clerical help and other services as
shall be necessary to provide the Services to the Fund. In addition, INVESCO may
arrange on behalf of the Fund to obtain pricing information regarding the Fund's
investment securities from such company or companies as are approved by a
majority of the Fund's board of directors; and, if necessary, the Fund shall be
financially responsible to such company or companies for the reasonable cost of
providing such pricing information.
4. The Fund will, from time to time, furnish or otherwise make available
to INVESCO such information relating to the business and affairs of the Fund as
INVESCO may reasonably require in order to discharge its duties and obligations
hereunder.
<PAGE>
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 a 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 INDUSTRIAL INCOME FUND, INC.
By: /s/ Dan J. Hesser
-------------------------------
ATTEST: Dan J. Hesser
President
/s/ Glen A. Payne
- ----------------------
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 consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 58 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 1, 1997, relating to the financial
statements and financial highlights appearing in the June 30, 1997 Annual Report
to Shareholders of INVESCO Industrial Income Fund, 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
October 23, 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 Industrial Income 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 shares of the Company 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
<PAGE>
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 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 Fund 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
<PAGE>
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.
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
<PAGE>
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.
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 Funds 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
<PAGE>
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 INDUSTRIAL INCOME
FUND, INC.
By: /s/ Dan H. 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
AMENDED PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of 30th day of September, 1997, by and between
INVESCO INDUSTRIAL INCOME FUND, INC., a Maryland corporation (hereinafter called
the "Company"), and INVESCO DISTRIBUTORS, 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 shares of the
Company 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
<PAGE>
with the distribution of the Company's shares; (b) the printing
and 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 Fund 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
since the predecessotr Plan and Agreement had already been approved
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
September 30, 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 Funds 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the 30th day of September, 1997.
INVESCO INDUSTRIAL INCOME
FUND, INC.
By: /s/ Dan J. Hesser
--------------------------
Dan J. Hesser, President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
INVESCO DISTRIBUTORS, INC.
By: Ronald L. Grooms
--------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
TOTAL RETURN
Formula in release:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1+T)exponent n = ERV
for the year July 1, 1996 to June 30, 1997
1,000 (1 + 27.33%) = $1,273.30
The formula given on page 48 of the release is written to solve for Ending
Redeemable Value. However, the quantity to be reported is T (Average Annual
Total Return).
Because P, n and ERV are known values, we have solved for T as follows:
n
-------
T = (ERV/P) - 1
for the year July 1, 1996 to June 30, 1997:
.2733 = (1,273.30/1,000) - 1
and have reported those amounts as the total return.
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
YIELD
Formula in release:
a = dividends and interest earned during the period.
b = expenses accrued for the period) net of reimbursements).
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period.
YIELD = 2[(a-b) + 1)exponent 6 - 1]
-----
cd
for the month ended June 30, 1997:
2[(12,16,190.91 - 3,274,738.61 + 1)exponent 6 - 1] = 2.47
----------------------------
308,138,450.25(15.31)
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000035732
<NAME> INVESCO INDUSTRIAL INCOME FUND, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 3367016003
<INVESTMENTS-AT-VALUE> 4560005990
<RECEIVABLES> 26114661
<ASSETS-OTHER> 274204
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4586394855
<PAYABLE-FOR-SECURITIES> 3480750
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8239498
<TOTAL-LIABILITIES> 11720248
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3064468943
<SHARES-COMMON-STOCK> 298771934
<SHARES-COMMON-PRIOR> 315632152
<ACCUMULATED-NII-CURRENT> (184298)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 317399975
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1192989987
<NET-ASSETS> 4574674607
<DIVIDEND-INCOME> 82618687
<INTEREST-INCOME> 66445412
<OTHER-INCOME> (557461)
<EXPENSES-NET> 40194735
<NET-INVESTMENT-INCOME> 108311903
<REALIZED-GAINS-CURRENT> 372025901
<APPREC-INCREASE-CURRENT> 550539412
<NET-CHANGE-FROM-OPS> 922565313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 108045224
<DISTRIBUTIONS-OF-GAINS> 283864499
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 49408506
<NUMBER-OF-SHARES-REDEEMED> 93580782
<SHARES-REINVESTED> 27312058
<NET-CHANGE-IN-ASSETS> 404138804
<ACCUMULATED-NII-PRIOR> 91364
<ACCUMULATED-GAINS-PRIOR> 229476110
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21791002
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 41731420
<AVERAGE-NET-ASSETS> 4261714365
<PER-SHARE-NAV-BEGIN> 13.21
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 3.05
<PER-SHARE-DIVIDEND> 0.35
<PER-SHARE-DISTRIBUTIONS> 0.95
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.31
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Capital Appreciation Funds, Inc.
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.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 25th day of August, 1997.
/s/ Wendy L. Gramm
------------------------------------------
Wendy L. Gramm
STATE OF District of )
Columbia )
COUNTY OF )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Wendy L.
Gramm, as a director or trustee of each of the above-described entities, this
25th day of August, 1997.
/s/ Margaret Foster
------------------------------------------
Notary Public
My Commission Expires: Feb. 14, 2000
-------------
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
-------
