<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
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INVESCO ADVISOR FUNDS, INC.
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------
(3) Filing Party:
-----------------------------------
(4) Date Filed:
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<PAGE>
INVESCO ADVISOR FUNDS, INC.
[LOGO OF INVESCO APPEARS HERE]
DECEMBER 26, 1996
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Dear INVESCO Advisor Funds Shareholder:
Enclosed is a Proxy Statement for the January 31, 1997 special meeting of
shareholders of INVESCO Advisor Cash Management Portfolio, INVESCO Advisor Eq-
uity Portfolio, INVESCO Advisor Flex Portfolio, INVESCO Advisor Income Portfo-
lio, INVESCO Advisor International Value Portfolio, INVESCO Advisor MultiFlex
Portfolio and INVESCO Advisor Real Estate Portfolio (collectively, the "Port-
folios"), the seven series of INVESCO Advisor Funds, Inc. (the "Company").
As you may have heard, INVESCO PLC ("INVESCO") has entered into an agreement
to merge with A I M Management Group Inc. ("AIM"), under which AIM will become
part of INVESCO. INVESCO is the ultimate parent company of: INVESCO Services,
Inc., the investment adviser to the Company; INVESCO Capital Management, Inc.,
the sub-adviser to INVESCO Advisor Cash Management Portfolio, INVESCO Advisor
Equity Portfolio, INVESCO Advisor Flex Portfolio, INVESCO Advisor Income Port-
folio and INVESCO Advisor International Value Portfolio; INVESCO Management &
Research, Inc., the sub-adviser to INVESCO Advisor MultiFlex Portfolio; and
INVESCO Realty Advisors, Inc., the sub-adviser to INVESCO Advisor Real Estate
Portfolio.
As explained more fully in the attached Proxy Statement, at the time the
INVESCO/AIM merger takes effect, the Company's present investment advisory and
sub-advisory contracts will terminate automatically, as a matter of law. Al-
though Company shareholders are not being asked to approve the merger, they
must vote on the necessary new investment advisory and sub-advisory contracts.
Accordingly, to provide continuity of investment advisory services to the Com-
pany, the Board of Directors is asking shareholders to approve the following
proposals:
. All shareholders of the Company will be asked to approve a new investment
advisory agreement for the Company, with the same parties and on terms sub-
stantially identical to the existing investment advisory agreement.
. Shareholders of the Portfolios will be asked to approve new investment sub-
advisory agreements, with the same parties and on terms substantially iden-
tical to the existing investment sub-advisory agreements.
In addition, all shareholders are being asked to elect directors of the Com-
pany and to ratify the selection of Price Waterhouse LLP as the Company's in-
dependent accountants. The accompanying Proxy Statement provides additional
detailed information on these proposals, the INVESCO/AIM merger and the Compa-
ny.
WE ARE REQUIRED BY LAW TO INFORM YOU AS TO CERTAIN DETAILS OF THE TRANSAC-
TION, EVEN THOUGH YOU ARE NOT VOTING TO APPROVE THE MERGER. WHAT IS MOST IM-
PORTANT FOR YOU AS A SHAREHOLDER OF THE PORTFOLIOS IS THAT APPROVAL OF THE
PROPOSALS LISTED ABOVE WILL IN NO WAY INCREASE THE ADVISORY FEES, SUB-ADVISORY
FEES OR EXPENSES OF THE COMPANY OR THE PORTFOLIOS OR CHANGE THE LEVEL, NATURE
OR QUALITY OF SERVICES YOU RECEIVE. EACH OF THESE PROPOSALS HAS BEEN APPROVED
BY THE BOARD OF DIRECTORS OF THE COMPANY, WHICH RECOMMENDS THAT SHAREHOLDERS
APPROVE THEM AS WELL.
9733
<PAGE>
The Board of Directors believes that these proposals are in the best inter-
ests of the shareholders. Therefore, we ask that you read the enclosed materi-
als and vote promptly. Should you have any questions, please feel free to call
our client services representatives at 1-800-972-9030. They will be happy to
answer any questions that you might have.
YOUR VOTE IS IMPORTANT. THE MATTERS WE ARE SUBMITTING FOR YOUR CONSIDERATION
ARE SIGNIFICANT TO THE COMPANY, THE PORTFOLIOS AND TO YOU AS A SHAREHOLDER. IF
WE DO NOT RECEIVE SUFFICIENT VOTES TO APPROVE THESE PROPOSALS, WE MAY HAVE TO
SEND ADDITIONAL MAILINGS OR CONDUCT TELEPHONE CANVASSING. THEREFORE, PLEASE
TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR VOTE ON THE ENCLOSED
PROXY CARD, AND RETURN IT IN THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVE-
LOPE.
Sincerely,
/s/ Hubert L. Harris, Jr.
Hubert L. Harris, Jr.
President
INVESCO Advisor Funds, Inc. --
INVESCO Advisor Cash Management Portfolio
INVESCO Advisor Equity Portfolio
INVESCO Advisor Flex Portfolio
INVESCO Advisor Income Portfolio
INVESCO Advisor International Value Portfolio
INVESCO Advisor MultiFlex Portfolio
INVESCO Advisor Real Estate Portfolio
2
<PAGE>
INVESCO ADVISOR FUNDS, INC.
1315 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 31, 1997
Notice is hereby given that a special meeting of shareholders (the "Meet-
ing") of INVESCO Advisor Cash Management Portfolio (the "Cash Management Port-
folio"), INVESCO Advisor Equity Portfolio (the "Equity Portfolio"), INVESCO
Advisor Flex Portfolio (the "Flex Portfolio"), INVESCO Advisor Income Portfo-
lio (the "Income Portfolio"), INVESCO Advisor International Value Portfolio
(the "International Value Portfolio"), INVESCO Advisor MultiFlex Portfolio
(the "MultiFlex Portfolio") and INVESCO Advisor Real Estate Portfolio (the
"Real Estate Portfolio") (collectively, the "Portfolios") of INVESCO Advisor
Funds, Inc. (the "Company") will be held at 1355 Peachtree Street, N.E., Suite
200, Atlanta, Georgia 30309, on Friday, January 31, 1997, at 10:00 a.m., East-
ern Standard Time, for the following purposes.
1.A. To approve or disapprove a new investment advisory agreement between
the Company and INVESCO Services, Inc. ("ISI"), such agreement to
take effect only if the proposed merger of A I M Management Group
Inc. into a wholly-owned U.S. subsidiary of INVESCO PLC is consum-
mated (the "Merger"). INVESCO PLC is the ultimate parent of ISI.
1.B. FOR SHAREHOLDERS OF THE CASH MANAGEMENT PORTFOLIO, THE EQUITY PORTFO-
LIO, THE FLEX PORTFOLIO, THE INCOME PORTFOLIO AND THE INTERNATIONAL
VALUE PORTFOLIO ONLY: To approve or disapprove a new sub-advisory
agreement between ISI and INVESCO Capital Management, Inc. with re-
spect to the Cash Management Portfolio, the Equity Portfolio, the
Flex Portfolio, the Income Portfolio and the International Value
Portfolio, to take effect only if the Merger is consummated.
1.C. FOR SHAREHOLDERS OF THE MULTIFLEX PORTFOLIO ONLY: To approve or dis-
approve a new sub-advisory agreement between ISI and INVESCO Manage-
ment & Research, Inc., with respect to the MultiFlex Portfolio, to
take effect only if the Merger is consummated.
1.D. FOR SHAREHOLDERS OF THE REAL ESTATE PORTFOLIO ONLY: To approve or
disapprove a new sub-advisory agreement between ISI and INVESCO Re-
alty Advisors, Inc., with respect to the Real Estate Portfolio, to
take effect only if the Merger is consummated.
2. To elect eleven directors of the Company.
3. To ratify or reject the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
4. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
None of these proposals is expected to result in any change in the way the
Portfolios are managed, in the advisory or sub-advisory fees or in the serv-
ices you receive as a shareholder.
<PAGE>
The board of directors of the Company has fixed the close of business on De-
cember 9, 1996, as the record date for the determination of shareholders enti-
tled to notice of and to vote at the Meeting or any adjournment(s) thereof.
A complete list of shareholders of the Portfolios entitled to vote at the
Meeting will be available and open to the examination of any shareholder of
the Portfolios for any purpose germane to the Meeting during ordinary business
hours after December 15, 1996, at the offices of the Company, 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309.
You are cordially invited to attend the Meeting. Shareholders who do not ex-
pect to attend the Meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the enclosed envelope
that requires NO postage if mailed in the United States. The enclosed proxy is
being solicited on behalf of the board of directors of the Company.
2
<PAGE>
IMPORTANT
Please mark, sign, date and return the enclosed proxy in the accompanying
envelope as soon as possible in order to ensure a full representation at the
Meeting.
The Meeting will have to be adjourned without conducting any business if
less than one-third of the eligible shares is represented, and the Company
will have to continue to solicit votes until a quorum is obtained. The Meeting
also may be adjourned, if necessary, to continue to solicit votes if less than
the required shareholder vote has been obtained to elect the specified number
of directors and to approve Proposals 1.A., 1.B., 1.C., 1.D. and 3.
Your vote, then, could be critical in allowing the Company to hold the Meet-
ing as scheduled. By marking, signing, and promptly returning the enclosed
proxy, you may eliminate the need for additional solicitation. Your coopera-
tion is appreciated.
By Order of the Board of Directors,
/s/ Tony D. Green
Tony D. Green
Secretary
Atlanta, Georgia
Dated: December 26, 1996
3
<PAGE>
INVESCO ADVISOR FUNDS, INC.
DECEMBER 26, 1996
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INVESCO ADVISOR FUNDS, INC.
1315 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 31, 1997
INTRODUCTION
The enclosed proxy is being solicited by the board of directors (the "Board"
or the "Directors") of INVESCO Advisor Funds, Inc. (the "Company") on behalf
of INVESCO Advisor Cash Management Portfolio (the "Cash Management Portfo-
lio"), INVESCO Advisor Equity Portfolio (the "Equity Portfolio"), INVESCO Ad-
visor Flex Portfolio (the "Flex Portfolio"), INVESCO Advisor Income Portfolio
(the "Income Portfolio"), INVESCO Advisor International Value Portfolio (the
"International Value Portfolio"), INVESCO Advisor MultiFlex Portfolio (the
"MultiFlex Portfolio") and INVESCO Advisor Real Estate Portfolio (the "Real
Estate Portfolio") (collectively, the "Portfolios"), the seven series of the
Company, for use in connection with the special meeting of shareholders of the
Company (the "Meeting") to be held at 10:00 a.m., Eastern Standard Time, on
Friday, January 31, 1997, at 1355 Peachtree Street, N.E., Suite 200, Atlanta,
Georgia 30309, and at any adjournment(s) thereof for the purposes set forth in
the foregoing notice. THE COMPANY'S ANNUAL REPORT, INCLUDING FINANCIAL STATE-
MENTS OF THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995, AND THE
COMPANY'S SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT ARE AVAILABLE WITH-
OUT CHARGE UPON REQUEST FROM TONY D. GREEN, SECRETARY OF THE COMPANY, AT 1355
PEACHTREE STREET, N.E., SUITE 200, ATLANTA, GEORGIA 30309 (TELEPHONE NUMBER 1-
800-972-9030). The approximate mailing date of proxies and this Proxy State-
ment is December 26, 1996.
The primary purpose of the Meeting is to allow shareholders to consider new
investment advisory and sub-advisory agreements for the Portfolios. As ex-
plained in more detail below, the existing advisory and sub-advisory agree-
ments for the Portfolios will terminate automatically, by operation of law,
upon the consummation of the proposed merger (the "Merger") of A I M Manage-
ment Group Inc. ("AIM") and a direct wholly-owned subsidiary of INVESCO PLC
("INVESCO"). Shareholders are not being asked to approve the Merger; rather,
they are being asked to continue the existing investment advisory relation-
ships for the Portfolios under new contracts which would take effect at the
time of the Merger. Consummation of the Merger is conditioned on, among other
things, shareholder approval of the new investment advisory and sub-advisory
contracts. The transactions contemplated by the Merger and the terms of the
new investment advisory and sub-advisory agreements are discussed below.
OTHER THAN THEIR COMMENCEMENT AND EXPIRATION DATES, THE PROPOSED NEW ADVI-
SORY AND SUB-ADVISORY AGREEMENTS ARE IDENTICAL IN FORM AND TERMS TO THE PRES-
ENT AGREEMENTS.
<PAGE>
Therefore:
(1) Shareholders of all seven Portfolios are being asked to approve a new
investment advisory agreement (the "Proposed Advisory Agreement") be-
tween the Company and its investment adviser, INVESCO Services, Inc.
(the "Adviser" or "ISI"), to replace the existing agreement between
the Company and the Adviser (the "Current Advisory Agreement");
(2) Shareholders of the Cash Management Portfolio, the Equity Portfolio,
the Flex Portfolio, the Income Portfolio and the International Value
Portfolio (collectively, the "ICM Sub-Advised Portfolios") are being
asked to approve a new investment sub-advisory agreement (the "Pro-
posed ICM Agreement") between ISI and these Portfolios' sub-adviser,
INVESCO Capital Management, Inc. ("ICM"), to replace the existing sub-
advisory agreement between ISI and ICM (the "Current ICM Agreement");
(3) Shareholders of the MultiFlex Portfolio are being asked to approve a
new investment sub-advisory agreement (the "Proposed IMR Agreement")
between ISI and that Portfolio's sub-adviser, INVESCO Management & Re-
search, Inc. ("IMR"), to replace the existing sub-advisory agreement
between ISI and IMR (the "Current IMR Agreement"); and
(4) Shareholders of the Real Estate Portfolio are being asked to approve a
new investment sub-advisory agreement (the "Proposed IRA Agreement")
between ISI and that Portfolio's sub-adviser, INVESCO Realty Advisors,
Inc. ("IRA"), to replace the existing sub-advisory agreement between
ISI and IRA (the "Current IRA Agreement").
Elsewhere in this Proxy Statement, the Current ICM Agreement, the Current
IMR Agreement and the Current IRA Agreement are collectively referred to as
the "Current Sub-Advisory Agreements," and, together with the Current Advisory
Agreement, are collectively referred to as the "Current Agreements." Similar-
ly, the Proposed ICM Agreement, the Proposed IMR Agreement and the Proposed
IRA Agreement are collectively referred to as the "Proposed Sub-Advisory
Agreements," and, together with the Proposed Advisory Agreement, are collec-
tively referred to as the "Proposed Agreements." Each of ICM, IMR and IRA is
referred to as a "Sub-Adviser" and collectively as "Sub-Advisers."
The following factors should be considered by shareholders in determining
whether to approve the Proposed Agreements:
. The Proposed Advisory Agreement and each of the Proposed Sub-Advisory
Agreements were approved by the Directors, including the Independent Di-
rectors (as defined below).
. There will be no change in the investment objectives or policies of the
Portfolios.
. There will be no increase in the fees payable to the Adviser or to the
Sub-Advisers as a result of the approval and implementation of the Pro-
posed Agreements.
. No significant changes are contemplated in the personnel of the Adviser
who are responsible for the overall supervision of the Company or of
each of the Sub-Advisers who are responsible for managing the invest-
ments of the Portfolios.
Notwithstanding the foregoing, as discussed in greater detail below under
"Evaluation of the Board," shareholders should note that, if the Merger is
consummated, at some time in the future management may propose making certain
changes to the Company to coordinate marketing and service activities with re-
spect to the Company with AIM's broker-dealer distribution network.
2
<PAGE>
The following table indicates the Portfolios being solicited with respect to
the proposals being presented at the Meeting:
<TABLE>
<CAPTION>
PROPOSAL PORTFOLIO
-------- ---------
<S> <C>
1.A. Approval of new Advisory Agreement All seven Portfolios
between the Company and ISI
1.B. Approval of new Sub-Advisory Cash Management Portfolio,
Agreement between ISI and ICM Equity Portfolio, Flex Portfolio,
Income Portfolio,
International Value Portfolio
1.C. Approval of new Sub-Advisory MultiFlex Portfolio
Agreement between ISI and IMR
1.D. Approval of new Sub-Advisory Real Estate Portfolio
Agreement between ISI and IRA
2. Election of Directors All seven Portfolios
3. Ratification or Rejection of All seven Portfolios
Independent Accountants
</TABLE>
If the enclosed form of proxy is duly executed and returned in time to be
voted at the Meeting, and not subsequently revoked, all shares represented by
the proxy will be voted in accordance with the instructions marked thereon. If
no instructions are given, such shares will be voted FOR the nominees for di-
rector hereinafter listed and FOR Proposals 1.A., 1.B., 1.C., 1.D. and 3. One
third of the outstanding shares of the Company entitled to vote, represented
in person or by proxy, will constitute a quorum at the Meeting.
Shares held by shareholders present in person or represented by proxy at the
Meeting will be counted both for the purpose of determining the presence of a
quorum and for calculating the votes cast on the issues before the Meeting. An
abstention by a shareholder, either by proxy or by vote in person at the Meet-
ing, has the same effect as a negative vote. Shares held by a broker or other
fiduciary as record owner for the account of the beneficial owner are counted
toward the required quorum if the beneficial owner has executed and timely de-
livered the necessary instructions for the broker to vote the shares or if the
broker has and exercises discretionary voting power. Where the broker or fidu-
ciary does not receive instructions from the beneficial owner and does not
have discretionary voting power as to one or more issues before the Meeting,
but grants a proxy for or votes such shares, they will be counted toward the
required quorum but will have the effect of a negative vote on any proposals
on which it does not vote.
Because certain of the proposals being submitted for a vote of the share-
holders of each Portfolio are identical, the Board determined to combine the
proxy materials for the Portfolios in order to reduce the cost of preparing,
printing and mailing the proxy materials.
In order to further reduce the cost, the notices to shareholders having more
than one account in a Portfolio listed under the same social security number
at a single address have been combined. The proxy cards have been coded so
that each shareholder's votes will be counted for all such accounts.
Execution of the enclosed proxy card will not affect a shareholder's right
to attend the Meeting and vote in person, and a shareholder giving a proxy has
the power to revoke it (by written notice to the Company, attention
3
<PAGE>
Tony D. Green, at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia
30309, execution of a subsequent proxy card, or oral revocation at the Meet-
ing) at any time before it is exercised.
Shareholders of the Portfolios of record at the close of business on Decem-
ber 9, 1996 (the "Record Date"), are entitled to vote at the Meeting, includ-
ing any adjournment(s) thereof, and are entitled to one vote for each share,
and corresponding fractional votes for fractional shares, on each matter to be
acted upon at the Meeting. On the Record Date, 33,570,637 shares of the
Company's common stock, $.001 par value per share were outstanding, including
18,153,797 shares of the Cash Management Portfolio, 1,686,183 shares of the
Equity Portfolio, 7,002,570 shares of the Flex Portfolio, 538,209 shares of
the Income Portfolio, 930,666 shares of the International Value Portfolio,
4,911,905 shares of the MultiFlex Portfolio and 347,307 shares of the Real Es-
tate Portfolio.
The following table sets forth, as of the Record Date, the beneficial owner-
ship of each Company's issued and outstanding common stock by each 5% or
greater shareholder. The Directors and executive officers of the Company did
not own 1% or more of the outstanding Company shares as of the Record Date.
<TABLE>
<CAPTION>
Name and Address Amount of Percent of
of Beneficial Owner Beneficial Ownership(1) Common Stock
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<S> <C> <C>
CASH MANAGEMENT PORTFOLIO
Southtrust Estate & Trust Co. of GA 8,050,501.770 44.34%
Trst. INVESCO Capital Management, Inc.
79 W. Paces Ferry Road, N.W.
Atlanta, GA 30305-1350
EQUITY PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, 281,330.000 16.68%
Inc. For the Sole Benefit of its
Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
FLEX PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, 817,247.000 11.67%
Inc. For the Sole Benefit of its
Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
INCOME PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, 57,725.000 10.72%
Inc. For the Sole Benefit of its
Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount of Percent of
of Beneficial Owner Beneficial Ownership(1) Common Stock
- ------------------- ----------------------- ------------
<S> <C> <C>
INTERNATIONAL VALUE PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, Inc. 458,933.000 49.31%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
MULTIFLEX PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, Inc. 418,238.000 8.51%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
REAL ESTATE PORTFOLIO
Merrill Lynch, Pierce, Fenner & Smith, Inc. 21,460.000 6.17%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
</TABLE>
(1) Each beneficial owner named above shares investment power with respect
to the shares listed next to its respective row, but its customers re-
tain sole voting power.
In addition to the solicitations of proxies by use of the mail, proxies may
be solicited by officers of the Company, and by officers and employees of ISI,
personally or by telephone or telegraph, without special compensation. In ad-
dition, Shareholder Communications Corporation ("SCC") will be retained to as-
sist in the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes the Company
has not yet received may receive telephone calls from representatives of SCC
requesting that they authorize, by telephonic or electronically transmitted
instructions, SCC to execute proxy cards on their behalf. Telephone authoriza-
tions will be recorded in accordance with the procedures set forth below. The
Adviser believes that these procedures are reasonably designed to ensure that
the identity of the shareholder casting the vote is accurately determined and
that the voting instructions of the shareholder are accurately determined.
SCC has received an opinion of Maryland counsel that addresses the validity,
under the applicable laws of the State of Maryland, of authorization given
orally to execute a proxy. The opinion given by Maryland counsel concludes
that a Maryland court would find that there is no Maryland law or public pol-
icy against the acceptance of proxies signed by an orally-authorized agent,
provided it adheres to the procedures set forth below.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask the shareholder for such shareholder's full name, address,
social security or employer identification number, title (if the person giving
the proxy is authorized to act on behalf of an entity, such as a corporation),
and the number of shares owned, and to
5
<PAGE>
confirm that the shareholder has received the Proxy Statement in the mail. If
the information solicited agrees with the information provided to SCC by the
Company, the SCC representative has the responsibility to explain the process,
read the proposals listed on the proxy card, and ask for the shareholder's in-
structions on each proposal. Although he or she is permitted to answer ques-
tions about the process, the SCC representative is not permitted to recommend
to the shareholder how to vote, other than to read any recommendation set
forth in the proxy statement. SCC will record the shareholder's instructions
on the card. Within 72 hours, SCC will send the shareholder a letter or mail-
gram confirming the shareholder's vote and asking the shareholder to call SCC
immediately if the shareholder's instructions are not correctly reflected in
the confirmation.
If a shareholder wishes to participate in the Meeting, but does not wish to
give a proxy by telephone, such shareholder may still submit the proxy card
originally sent with the Proxy Statement or attend in person. Any proxy given
by a shareholder, whether in writing or by telephone, is revocable. A share-
holder may revoke the accompanying proxy or a proxy given telephonically at
any time prior to its use by filing with the Company a written revocation or
duly executed proxy bearing a later date. In addition, any shareholder who at-
tends the Meeting in person may vote by ballot at the Meeting, thereby cancel-
ing any proxy previously given.
All costs of printing and mailing proxy materials and the costs and expenses
of holding the Meeting and soliciting proxies, including any amount paid to
SCC, will be paid by INVESCO and not by the Company, the Portfolios or their
shareholders.
The Board may seek one or more adjournments of the Meeting to solicit addi-
tional shareholders, if necessary, to obtain a quorum for the Meeting, or to
obtain the required shareholder vote to elect the number of specified direc-
tors and approve Proposals 1.A., 1.B., 1.C., 1.D. and 3. An adjournment would
require the affirmative vote of the holders of a majority of the shares pres-
ent at the Meeting (or an adjournment thereof) in person or by proxy and enti-
tled to vote. If adjournment is proposed in order to obtain the required
shareholder vote on a particular proposal, the persons named as proxies will
vote in favor of adjournment those shares which they are entitled to vote in
favor of such proposal and will vote against adjournment those shares which
they are required to vote against such proposal. A shareholder vote may be
taken on one or more of the proposals discussed herein prior to any such ad-
journment if sufficient votes have been received and it is otherwise appropri-
ate.
PROPOSAL 1: A. APPROVAL OF THE PROPOSED ADVISORY AGREEMENT BETWEEN THE COM-
PANY AND INVESCO SERVICES, INC.
B. WITH RESPECT TO THE CASH MANAGEMENT PORTFOLIO, THE EQUITY
PORTFOLIO, THE FLEX PORTFOLIO, THE INCOME PORTFOLIO AND THE
INTERNATIONAL VALUE PORTFOLIO, APPROVAL OF THE PROPOSED SUB-
ADVISORY AGREEMENT BETWEEN INVESCO SERVICES, INC. AND INVESCO
CAPITAL MANAGEMENT, INC.
C. WITH RESPECT TO THE MULTIFLEX PORTFOLIO, APPROVAL OF THE PRO-
POSED SUB-ADVISORY AGREEMENT BETWEEN INVESCO SERVICES, INC.
AND INVESCO MANAGEMENT & RESEARCH, INC.
D. WITH RESPECT TO THE REAL ESTATE PORTFOLIO, APPROVAL OF THE
PROPOSED SUB-ADVISORY AGREEMENT BETWEEN INVESCO SERVICES,
INC. AND INVESCO REALTY ADVISORS, INC.
6
<PAGE>
BACKGROUND
ISI serves as investment adviser to the Company pursuant to the Current Ad-
visory Agreement. The Current Advisory Agreement provides that the Adviser
upon receipt of written approval of the Company, is authorized to retain com-
panies to provide investment advisory services to the Company. Accordingly,
ISI has entered into a sub-advisory agreement with ICM, pursuant to which ICM
serves as sub-adviser to, and is primarily responsible for, managing the in-
vestments of the Company's ICM Sub-Advised Portfolios. ISI also has entered
into a sub-advisory agreement with IMR, pursuant to which IMR serves as sub-
adviser to, and is primarily responsible for, managing the investments of the
Company's MultiFlex Portfolio. In addition, ISI has entered into a sub-advi-
sory agreement with IRA, pursuant to which IRA serves as sub-adviser to, and
is primarily responsible for, managing the investments of the Company's Real
Estate Portfolio. The Adviser is a wholly-owned subsidiary of ICM. Both the
Adviser and the Sub-Adviser are indirect, wholly-owned subsidiaries of
INVESCO. INVESCO is a publicly traded holding company organized under the laws
of England in 1935. The ordinary shares of INVESCO, 25 pence nominal value per
share (the "Ordinary Shares"), are traded on the London Stock Exchange.
INVESCO's subsidiaries provide investment advisory services throughout the
world. As of September 30, 1996, the total assets advised by INVESCO and its
subsidiaries were approximately $91.1 billion.
AIM is a holding company that has been engaged in the financial services
business since 1976 and, together with its affiliates, advises or manages 38
investment company portfolios comprising the A I M Family of Funds(R). As of
October 31, 1996, the total assets of the registered investment company port-
folios advised or managed by AIM and its affiliates were approximately $57
billion.
On November 4, 1996, INVESCO and INVESCO Group Services, Inc. ("IGS") en-
tered into an agreement of merger (the "Merger Agreement") with AIM pursuant
to which IGS or another wholly-owned U.S. subsidiary of INVESCO ("INVESCO
Sub") will acquire all the issued and outstanding shares of AIM capital stock
for consideration valued on November 4, 1996 at approximately $1.6 billion,
plus the amount of AIM net income from September 1, 1996 through the date on
which the Merger is consummated (the "Closing Date"), minus dividends paid
during such period and subject to adjustments for certain balance sheet items
and transaction expenses. The consideration will include 290 million new Ordi-
nary Shares (including Ordinary Shares issuable in respect of vested and
unvested AIM options) of INVESCO valued on November 4, 1996 at approximately
$1.1 billion. The balance of the consideration will be paid in cash. Upon con-
summation of the Merger, the AIM shareholders will own approximately 45% of
INVESCO's total outstanding capital stock on a fully-diluted basis. Thereaf-
ter, INVESCO will change its name to AMVESCO PLC (the names of the Adviser and
the Sub-Advisers will not change).
The Closing Date is presently expected to occur on or about February 28,
1997, subject to the satisfaction of conditions to closing that include, among
other things: (a) INVESCO having consummated one or more financings and having
received net proceeds of not less than $500 million; (b) the respective aggre-
gate annualized asset management fees of INVESCO and AIM (based on assets un-
der management, excluding the effects of market movements), in respect of
which consents to the Merger have been obtained being equal to or greater than
87.5% of all such fees; (c) INVESCO and AIM having received certain consents
from regulators, lenders and/or other third parties; (d) AIM not having re-
ceived from the holder or holders of more than 2% of the outstanding AIM
shares notices that they intend to exercise dissenters' rights; (e) a Voting
Agreement, Standstill Agreement, Transfer Restriction Agreements, Transfer Ad-
ministration Agreement, Registration Rights Agreement, Indemnification Agree-
ment and employment agreements with approximately thirty AIM employees having
been executed and delivered; (f) AIM having received an opinion from its U.S.
counsel that the Merger will be treated as a tax-free
7
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reorganization; and (g) shareholder resolutions to appoint to INVESCO's board
of directors (the "INVESCO Board") six AIM designees and a resolution of the
INVESCO Board to appoint the seventh AIM designee having been passed and not
revoked.
The Merger Agreement may be terminated at any time prior to the Closing Date
by written notice by AIM or INVESCO to the other after June 1, 1997 or under
other circumstances set forth in the Merger Agreement. In certain circum-
stances occurring on or before September 30, 1997, a termination fee will be
payable by the party in respect of which such circumstances have occurred.
In connection with the Merger, the following agreements, each to be effec-
tive upon the closing of the Merger, have been or will be executed:
Voting Agreement. Certain AIM shareholders and their spouses, the cur-
rent directors of INVESCO and proposed directors of INVESCO (expected to
hold in the aggregate approximately 25% of the Ordinary Shares of INVESCO
outstanding immediately following consummation of the Merger) have agreed
to vote as directors and as shareholders to ensure that: (a) the INVESCO
Board will have fifteen members, consisting of four executive directors
and three non-executive directors designated by INVESCO's current senior
management, four executive directors and three non-executive directors
designated by AIM's current senior management and a Chairman; (b) the ini-
tial Chairman will be Charles W. Brady (INVESCO's current Chairman) and
the initial Vice Chairman will be Charles T. Bauer (AIM's current Chair-
man); and (c) the parties will vote at any INVESCO shareholder meetings on
resolutions (other than those in respect of the election of directors)
supported by two-thirds of the INVESCO Board in the same proportion as
votes are cast by unaffiliated shareholders. The Voting Agreement will
terminate on the earlier of the fourth anniversary of the Closing Date or
the date on which a resolution proposed by an INVESCO-designated board
member is approved by the INVESCO Board despite being voted against by
each AIM-designated board member present at such INVESCO Board meeting.
Standstill Agreement and Transfer Restriction Agreements. Certain AIM
shareholders and their spouses and certain significant shareholders of
INVESCO have agreed, under certain circumstances for a maximum period of
five years, not to engage in a number of specified activities that might
result in a change of the ownership or control positions of INVESCO exist-
ing as of the Closing Date. AIM shareholders and INVESCO's current Chair-
man will be restricted in their ability to transfer their shares of
INVESCO for a period of up to five years.
If the conditions to the Merger are not met or waived, or if the Merger
Agreement is terminated, the Merger will not be consummated and the Current
Agreements will remain in effect. If the Proposed Agreements are approved and
the Merger is thereafter consummated, the Proposed Agreements will be executed
and become effective on the Closing Date. In the event the Merger is consum-
mated and: (i) the Proposed Advisory Agreement is not approved by each of the
Portfolios, the Proposed Advisory Agreement will be approved as to those Port-
folios that voted in favor of the Proposed Advisory Agreement and the Board
will determine what action to take as to any Portfolio that voted against the
Proposed Advisory Agreement; (ii) the Proposed ICM Agreement is not approved
by each of the ICM Sub-Advised Portfolios, the Proposed ICM Agreement will be
approved as to those ICM Sub-Advised Portfolios that voted in favor of the
Proposed ICM Agreement and the Board will determine what action to take as to
any ICM Sub-Advised Portfolio that voted against the Proposed ICM Agreement;
(iii) either the Proposed IMR Agreement or the Proposed IRA Agreement is not
approved, the Board will determine what action to take. In
8
<PAGE>
each of the above instances, any such action taken by the Board will be sub-
ject to the approval of the appropriate shareholders.
Under the Merger Agreement, INVESCO and INVESCO Sub have agreed that they
will comply, and use all reasonable efforts to cause compliance on behalf of
their affiliates, with the provisions of Section 15(f) of the Investment Com-
pany Act of 1940, as amended (the "1940 Act"). Section 15(f) provides, in per-
tinent part, that an investment adviser of an investment company and its af-
filiates may receive any amount or benefit in connection with a sale of secu-
rities of, or a sale of any other interest in, such investment adviser that
results in an "assignment" of an investment advisory contract as long as two
conditions are met. First, no "unfair burden" may be imposed on the investment
company as a result of the Merger. The term "unfair burden," as defined in the
1940 Act, includes any arrangement during the two-year period after the trans-
action whereby the investment adviser (or predecessor or successor investment
adviser) or any interested person of any such adviser receives or is entitled
to receive any compensation directly or indirectly from the investment company
or its security holders (other than fees for bona fide investment advisory or
other services) or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the investment company
(other than fees for bona fide principal underwriting services). No such com-
pensation arrangements are contemplated in connection with the Merger.
The second condition is that, for a period of three years after the transac-
tion occurs, at least 75% of the members of the board of directors of the in-
vestment company advised by such adviser are not "interested persons" (as de-
fined in the 1940 Act) of the new or the old investment adviser. The Board you
are being asked to elect in Proposal No. 2 below does not meet this 75% re-
quirement. Nevertheless, as more fully described below under Proposal No. 2,
the composition of the Board, on or prior to the date the Merger is effected,
will comply with the 75% requirement.
INVESCO has advised the Company that the Merger is not expected to have a
material effect on the operations of the Company, on the Portfolios or on
their shareholders. No material change in investment philosophy, policies or
strategies is currently envisioned. The Adviser and the Sub-Advisers will,
following the Merger, continue to be indirect wholly-owned subsidiaries of
INVESCO. The Merger Agreement does not, by its terms, contemplate any changes,
other than changes in the ordinary course of business, in the management or
operation of the Adviser or the Sub-Advisers relating to the Company and its
Portfolios, the personnel managing the Portfolios, or other services provided
to or other business activities of the Company. The Merger also is not ex-
pected to result in material changes in the business, corporate structure or
composition of the senior management or personnel of the Adviser or the Sub-
Advisers. Based on the foregoing, the Adviser does not anticipate that the
Merger will cause a reduction in the quality of services now being provided to
the Company, or have any adverse effect on the Adviser's or a Sub-Adviser's
ability to fulfill its respective obligations under the Proposed Agreements or
to operate its business in a manner consistent with its current practices.
Each of the Current Agreements, as required by Section 15 of the 1940 Act,
provides for its automatic termination in the event of its assignment. Any
change of control of the Adviser and/or the Sub-Advisers is deemed to be an
assignment. Because INVESCO Ordinary Shares constituting more than 25% of the
outstanding voting securities of INVESCO will be issued to the shareholders of
AIM, as a result of the Merger there may be deemed to be a change in control
of INVESCO. Such a change in control would cause an automatic termination of
the Current Advisory Agreement, the Current ICM Agreement, the Current IMR
Agreement and the Current IRA Agreement under the 1940 Act.
9
<PAGE>
Accordingly, in anticipation of the consummation of the Merger and in order
to ensure continuity of investment advisory services to the Company by the Ad-
viser and to the ICM Sub-Advised Portfolios, the MultiFlex Portfolio and the
Real Estate Portfolio, by ICM, IMR and IRA respectively, a new investment ad-
visory agreement between the Company and ISI is proposed to be approved by
shareholders of each of the Portfolios. In addition, it is proposed that:
shareholders of the ICM Sub-Advised Portfolios approve a new sub-advisory
agreement between ISI and ICM, shareholders of the MultiFlex Portfolio approve
a new sub-advisory agreement between ISI and IMR and shareholders of the Real
Estate Portfolio approve a new sub-advisory agreement between ISI and IRA.
The Board, including a majority of those Directors who are not "interested
persons" of the Company as such term is defined under the 1940 Act (the "Inde-
pendent Directors"), has approved the Proposed Advisory Agreement and the Pro-
posed Sub-Advisory Agreements.
EVALUATION OF THE BOARD OF DIRECTORS
At regular or special meetings of the Independent Directors and of the Board
held on October 14, 15, 28 and 30 and on November 6, 1996, at each of which a
majority of the Independent Directors were in attendance, the Directors evalu-
ated the Proposed Advisory Agreement and each of the Proposed Sub-Advisory
Agreements. The Independent Directors had available to them the assistance of
outside counsel throughout the process of determining whether to approve the
Proposed Agreements. Prior to and during the meetings, the Independent Direc-
tors requested and received all information they deemed necessary to enable
them to determine whether each of the Proposed Agreements is in the best in-
terests of the Company, the Portfolios and their shareholders. At the meet-
ings, the Independent Directors reviewed materials furnished by management,
and met with representatives of INVESCO and with representatives of AIM. They
noted that senior members of the management team of the Adviser will continue
to be responsible for managing the day-to-day affairs of the Adviser and se-
nior management members of each of the Sub-Advisers will continue to be re-
sponsible for managing the affairs of those companies. In evaluating the ef-
fects of the Merger, the Independent Directors viewed as significant the fact
that the Adviser and the Sub-Advisers are expected to continue to provide to
the Company, the Portfolios and their shareholders, after the Merger, invest-
ment advisory services of the same nature and quality as before the Merger.
Also, the Independent Directors considered the possible effects of the Merger
on the Company and its Portfolios.
The Board considered the nature, quality and extent of services provided and
expected to be provided by the Adviser to the Company, by ICM to the ICM Sub-
Advised Portfolios, by IMR to the MultiFlex Portfolio and by IRA to the Real
Estate Portfolio, as well as the benefits derived by the Adviser, ICM, IMR and
IRA. In addition, the Board discussed and reviewed the terms and provisions of
the Proposed Advisory Agreement and the Proposed Sub-Advisory Agreements. The
Board specifically noted that, other than the dates of execution, effective-
ness and termination, the terms of each of the Proposed Agreements are the
same, in all material respects, as the terms of the corresponding Current
Agreements. Specifically, the Board noted that the fees and expenses payable
under each of the Proposed Agreements are identical to the fees and expenses
presently in effect under the corresponding Current Agreements.
The Board also took note of the terms of the Merger Agreement and the effect
of the addition of the substantial resources of AIM and its affiliated compa-
nies to the INVESCO group, including the reputation, experience, personnel,
resources, financial condition and performance of A I M Advisors, Inc. The
Board considered the statements made by representatives of INVESCO and AIM
that the capabilities of the Adviser and the Sub-Advisers would not be ad-
versely affected by the Merger and could be enhanced by the resources of AIM,
although there was no assurance of the Adviser or Sub-Advisers obtaining any
particular benefits. In this connection, the Board considered
10
<PAGE>
management's statements that it may, at some time after the Merger is effect-
ed, propose to the Board that certain marketing and service activities with
respect to the Company be coordinated with AIM's broker-dealer distribution
network, as previously discussed. In the event that such a proposal were to be
made, the Board understands that management may request that the members of
the Board resign and that shareholders elect the directors of the AIM Funds as
the Company's directors. The Board was not asked to and has not considered or
approved any of the foregoing changes in the marketing and service arrange-
ments or the composition of the Board with respect to the Company. Moreover,
the Board did not, in determining whether to approve the Proposed Advisory
Agreement and the Proposed Sub-Advisory Agreements, assess the merits of any
such possible changes in the arrangements affecting the Company, the Portfo-
lios or their shareholders. If such changes were proposed to be implemented,
they would have to be separately considered at that time by the Board and, in
the case of investment advisory arrangements and the election of the AIM Funds
directors, the shareholders of the Company.
Based upon the Directors' review and the evaluations of the materials they
received, and in consideration of all factors deemed relevant to them, the Di-
rectors determined that each of the Proposed Agreements is fair, reasonable
and in the best interests of the Company, the Portfolios and their sharehold-
ers. ACCORDINGLY, THE BOARD, INCLUDING ALL OF THE INDEPENDENT DIRECTORS PRES-
ENT AT THE APPLICABLE MEETING, APPROVED EACH OF THE PROPOSED AGREEMENTS AND
VOTED TO RECOMMEND THAT ALL OF THE COMPANY'S SHAREHOLDERS VOTE TO APPROVE THE
PROPOSED ADVISORY AGREEMENT, THAT SHAREHOLDERS OF THE ICM SUB-ADVISED PORTFO-
LIOS VOTE TO APPROVE THE PROPOSED ICM AGREEMENT, THAT SHAREHOLDERS OF THE
MULTIFLEX PORTFOLIO VOTE TO APPROVE THE PROPOSED IMR AGREEMENT AND THAT SHARE-
HOLDERS OF THE REAL ESTATE PORTFOLIO VOTE TO APPROVE THE PROPOSED IRA AGREE-
MENT.
THE PROPOSED ADVISORY AND SUB-ADVISORY AGREEMENTS
If (i) shareholders of each of the Portfolios approve the Proposed Advisory
Agreement; (ii) shareholders of each of the ICM Sub-Advised Portfolios approve
the Proposed ICM Agreement; (ii) shareholders of the MultiFlex Portfolio ap-
prove the Proposed IMR Agreement; and (iii) shareholders of the Real Estate
Portfolio approve the Proposed IRA Agreement, the Proposed Agreements will be-
come effective immediately after the closing of the Merger. This summary of
the Proposed Agreements is qualified in its entirety by reference to the form
of such agreements attached to this Proxy Statement as Exhibits A.1., A.2.,
A.3. and A.4., respectively.
Each of the Proposed Agreements will remain in effect, unless earlier termi-
nated, for an initial term expiring two years from the Closing Date. As previ-
ously discussed, the sole purpose of entering into the Proposed Advisory
Agreement and each of the Proposed Sub-Advisory Agreements is to enable ISI to
continue to serve as the investment adviser to the Company and to enable ICM,
IMR and IRA to continue to serve as sub-advisers to the ICM Sub-Advised Port-
folios, the MultiFlex Portfolio and the Real Estate Portfolio, respectively,
after termination of each of the Current Agreements by virtue of the "assign-
ment" of such agreements that could result from the Merger. THE MATERIAL TERMS
AND PROVISIONS OF EACH OF THE PROPOSED AGREEMENTS, OTHER THAN THEIR RESPECTIVE
EFFECTIVE AND TERMINATION DATES, ARE THE SAME, IN ALL SUBSTANTIVE RESPECTS, AS
THOSE OF THE CORRESPONDING CURRENT AGREEMENTS, EACH OF WHICH IS SUMMARIZED BE-
LOW.
THE CURRENT ADVISORY AGREEMENT
The Current Advisory Agreement, dated July 1, 1993, was unanimously approved
on January 20, 1993, by a vote cast in person by a majority of the Company's
Directors, including a majority of the Independent Directors.
11
<PAGE>
On June 8, 1993, such agreement was approved: by a majority of the outstanding
shares of each of the Equity Portfolio, the Income Portfolio, the Flex Portfo-
lio and the Cash Management Portfolio; by ISI, on November 8, 1993, as the
then sole shareholder of the MultiFlex Portfolio; and by ISI, on April 10,
1995, as the then sole shareholder of the Real Estate Portfolio and the Inter-
national Value Portfolio. On April 19, 1995, the Board, including a majority
of the Independent Directors, approved an amendment to the Current Advisory
Agreement, reflecting, among other things, the unanimous decision made by the
Board on July 19, 1995 to reduce the Income Portfolio's advisory fees (which
are set forth below) and the change of the name of the Company to INVESCO Ad-
visor Funds, Inc. (the "Name Change"). The continuation of the Current Advi-
sory Agreement until April 30, 1997, was approved by the Directors, including
a majority of the Independent Directors, at a meeting held on April 30, 1996,
called for the purpose of approving the Current Advisory Agreement.
The Current Advisory Agreement may be continued from year to year as to each
Portfolio as long as each such continuance is approved at least annually by
the Board, or by a vote of the holders of a majority of the then-outstanding
voting securities (as defined below under "Vote Required") of the Portfolios.
Any such continuance also must be approved by a majority of the Independent
Directors of the Company at a meeting called for the purpose of voting on such
continuance. Upon sixty (60) days' written notice, the Current Advisory Agree-
ment may be terminated at any time without penalty by the Board, or by a ma-
jority of the then-outstanding voting securities of the Company or, with re-
spect to a particular Portfolio, by a majority of the then-outstanding voting
securities of that Portfolio, or by ISI. As discussed earlier, the Current Ad-
visory Agreement terminates automatically in the event of its "assignment" un-
der the 1940 Act.
The Current Advisory Agreement provides that the Adviser shall (either di-
rectly or by delegation to a sub-adviser) maintain a continuous investment
program for the Company and each of the Portfolios that is consistent with the
Company's and the Portfolios' respective investment objectives and policies as
set forth in the Company's registration statement (the "Registration State-
ment") and prospectuses and statements of additional information of each of
the Portfolios (the "Prospectus" and the "SAI") as in effect from time to time
under the 1940 Act and the Securities Act of 1933, as amended. In the perfor-
mance of such duties, the Adviser shall, among other things: (i) manage the
investment and reinvestment of the assets of the Company and the Portfolios;
(ii) determine what securities are to be purchased or sold for the Company and
the Portfolios and execute transactions accordingly; (iii) furnish the Company
and the Portfolios with investment analysis and research, reviews of current
economic conditions and trends and considerations respecting long-range in-
vestment policies; (iv) make recommendations as to the manner in which rights
pertaining to the Portfolios' securities should be exercised; (v) furnish req-
uisite personnel necessary in connection with the Portfolios' operations; (vi)
furnish office space, facilities, equipment and supplies; (vii) conduct peri-
odic reviews of the Portfolios' compliance operations; (viii) prepare and re-
view certain required documents, reports and filings (including filings to the
Securities and Exchange Commission), except insofar as the assistance of inde-
pendent accountants or attorneys is necessary or desirable; (ix) supply basic
telephone service and other utilities; and (x) prepare and maintain the books
and records required under Rule 31a-1(b)(4), (5), (9) and (10) under the 1940
Act. The Adviser, pursuant to the Current Advisory Agreement, pays all of the
costs and expenses associated with the Portfolios' operations and activities,
except those expressly assumed under such agreement by the Portfolios, includ-
ing, among others: (a) brokers' commissions, issue and transfer taxes and
other costs in connection with securities transactions in which the Company is
a party; (b) any interest on indebtedness incurred by the Company; (c) ex-
traordinary expenses (such as unexpected franchise taxes and corporate fees);
(d) distribution expenses permissible under the Portfolios' Plan of Distribu-
tion (other than the
12
<PAGE>
Cash Management Portfolio) adopted pursuant to Rule 12b-1 under the 1940 Act;
and (e) all fees paid by the Portfolios for operational services pursuant to
the Portfolios' Operating Services Agreement (discussed below).
As full compensation for its advisory services to the Company, ISI receives
a monthly fee. The fee is based upon a percentage of each Portfolio's average
net assets, determined daily. Specifically, the fee is calculated at the an-
nual rate of: with respect to each of the Equity Portfolio and the Flex Port-
folio, 0.75% of the Portfolio's average net assets; with respect to the Real
Estate Portfolio, 0.90% of the Portfolio's average net assets; with respect to
each of the MultiFlex Portfolio and the International Value Portfolio, 1.0% of
the Portfolio's average net assets; with respect to the Income Portfolio,
0.65% of the Portfolio's average net assets, however, the Adviser has agreed
to waive 0.25% of the advisory fee for a three year period beginning October
1, 1995; and with respect to the Cash Management Portfolio, 0.50% of the Port-
folio's average net assets.
For the fiscal year ended December 31, 1995, total advisory fees paid to ISI
by the Portfolios were as follows: (i) $725,315, with respect to the Equity
Portfolio; (ii) $2,387,908, with respect to the Flex Portfolio; (iii) $13,012,
with respect to the Real Estate Portfolio; (iv) $1,424,150, with respect to
the MultiFlex Portfolio; (v) $24,906, with respect to the International Value
Portfolio; (vi) $177,461, with respect to the Income Portfolio; and (vii)
$85,504, with respect to the Cash Management Portfolio. Net assets of each of
such Portfolios at December 31, 1995 totaled $113,573,309, $399,161,678,
$5,564,860, $174,591,848, $9,466,683, $31,985,534, and $20,438,770, respec-
tively.
THE CURRENT SUB-ADVISORY AGREEMENTS
The Current ICM Agreement, dated July 1, 1993, and the Current IMR Agree-
ment, dated November 1, 1993, were unanimously approved on January 20, 1993 by
a majority of the Directors, including a majority of the Independent Direc-
tors. On June 8, 1993, the Current ICM Agreement was approved by a majority of
the outstanding shares of the Equity Portfolio, the Income Portfolio, the Flex
Portfolio and the Cash Management Portfolio, and on April 10, 1995 by ISI, the
then sole shareholder of the International Value Portfolio. On November 8,
1993, the Current IMR Agreement was approved by ISI, the then sole shareholder
of the MultiFlex Portfolio. On April 19, 1995, the Current IRA Agreement was
unanimously approved by a majority of the Directors, including a majority of
the Independent Directors. On April 10, 1995, the Current IRA Agreement was
approved by ISI, the then sole shareholder of the Real Estate Portfolio.
On February 14, 1996, the Board, including a majority of the Independent Di-
rectors, voted to approve amendments to each of the Current Sub-Advisory
Agreements, the amendments reflecting, among other things, the Name Change.
The continuation of the Current Sub-Advisory Agreements until April 30, 1997,
was approved by the Directors, including a majority of the Independent Direc-
tors, at a meeting held on April 30, 1996, called for the purpose of approving
the Current Sub-Advisory Agreements.
Each of the Current Sub-Advisory Agreements may be terminated at any time
without penalty by ISI, the Board, a vote of a majority of the then-outstand-
ing voting securities of the respective Portfolio or by the applicable Sub-Ad-
viser. Termination by ISI or the Sub-Adviser requires sixty (60) days' written
notice to the other party and to the Company.
Each of the Current Sub-Advisory Agreements provides, as applicable, that
ICM, as sub-adviser for the ICM Sub-Advised Portfolios, IMR, as sub-adviser
for the MultiFlex Portfolio, and IRA, as sub-adviser for the Real Estate Port-
folio, subject to the supervision of ISI and the Board, shall maintain a con-
tinuous investment program for the ICM Sub-Advised Portfolios, the MultiFlex
Portfolio and the Real Estate Portfolio, respectively, that is consistent
13
<PAGE>
with each Portfolio's respective investment objectives and policies as set
forth in the Company's Registration Statement and in the Portfolio's Prospec-
tus and SAI. In the performance of such duties, each Sub-Adviser is obligated
to provide the Portfolio it sub-advises with the same services as those set
forth above in clauses (i) through (iv) with respect to the services provided
to the Company and the Portfolios by the Adviser.
The Current ICM Agreement provides that as compensation for its services,
ICM shall receive from ISI, at the end of each month, a fee based upon each of
the ICM Sub-Advised Portfolios' average daily net asset value. Specifically,
the fee is calculated at the following annual rate(s): with respect to each of
the Equity Portfolio and the Flex Portfolio, 0.20% of each Portfolio's average
net assets; with respect to the Income Portfolio and the Cash Management Port-
folio, 0.10% of each Portfolio's average net assets; and with respect to the
International Value Portfolio, 0.35% of the first $50 million of the Portfo-
lio's net assets, 0.30% on the next $50 million of the Portfolio's average net
assets and 0.25% on net assets in excess of $100 million.
The Current IMR Agreement provides that as compensation for its services,
IMR shall receive from ISI, at the end of each month, a fee based upon the
MultiFlex Portfolio's average net asset value. Specifically, the fee is calcu-
lated at the following annual rates: 0.35% of the first $500 million of the
Portfolio's average net assets and 0.25% on assets in excess of $500 million
of the Portfolio's average net assets.
The Current IRA Agreement provides that as compensation for its services,
IRA shall receive from ISI, at the end of each month, a fee based upon the
Real Estate Portfolio's average net assets. Specifically, the fee is calcu-
lated at the following annual rates: 0.35% of the first $100 million of the
Portfolio's average net assets and 0.25% of the Portfolio's average net assets
in excess of $100 million.
With respect to each of the Current Sub-Advisory Agreements, the sub-advi-
sory fees are paid by ISI, and not paid by the Portfolios or their sharehold-
ers.
INFORMATION CONCERNING ADVISER AND AFFILIATED COMPANIES
ISI, a Georgia corporation, serves as the Company's investment adviser. ISI
is a wholly-owned subsidiary of ICM, 1315 Peachtree Street, N.E., Atlanta,
Georgia 30309. ICM is an indirect wholly-owned subsidiary of INVESCO./1/ The
corporate headquarters of INVESCO are located at 11 Devonshire Square, London
EC2M 4YR, England. ISI's offices are located at 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309. ISI currently serves as investment adviser of one
open-end investment company having aggregate net assets of $957 million. Ex-
hibit B to this Proxy Statement includes a list of investment companies, in-
cluding the Company, for which the Adviser or the Sub-Advisers provide advi-
sory services and which have similar investment objectives to those of the
Portfolios, and sets forth the net assets of and advisory fees payable by such
companies.
The principal executive officer and directors of ISI and their principal oc-
cupations are:
Hubert L. Harris, Jr., Chairman of the Board and Chief Executive Officer,
also, Chief Executive Officer of INVESCO Individual Services Group, Inc.;
Michael J. Hanley, Jr., President, Chief Operating Officer and Director; Frank
M. Bishop, Director, also, President and Chief Executive Officer of INVESCO,
Inc.; Tony D. Green, Senior Vice President, Director of Operations, Secretary
and Director; and John P. Stewart, Jr., Senior Vice President, General Manager
and Director.
- ----------------
/1/ The intermediary companies between ICM and INVESCO are as follows: INVESCO
North American Holdings, Inc., INVESCO, Inc., INVESCO Group Services, Inc.
and INVESCO North American Group, Ltd., each of which is wholly-owned by its
immediate parent.
14
<PAGE>
The address of each of the foregoing officers and directors is 1355
Peachtree Street, N.E., Atlanta, Georgia 30309, other than Messrs. Harris and
Bishop whose address is 1315 Peachtree Street, N.E., Atlanta, Georgia 30309.
ISI also acts as the Company's Distributor. Pursuant to an Operating Serv-
ices Agreement between the Company and ISI, ISI also provides accounting,
transfer agency, legal (except litigation), dividend disbursing, registrar,
custodial, shareholder reporting, sub-accounting and record keeping services
and functions. During the fiscal year ended December 31, 1995, the Company
paid ISI total compensation of $2,985,175 in payment of such services
($483,543, $1,591,939, $134,846, $12,454, $669,660, $4,229 and $85,504 of such
compensation was paid by the Equity Portfolio, the Flex Portfolio, the Income
Portfolio, the International Value Portfolio, the MultiFlex Portfolio, the
Real Estate Portfolio and the Cash Management Portfolio, respectively).
Pursuant to each Portfolio's Plan and Agreement of Distribution pursuant to
Rule 12b-1 under the 1940 Act (except with respect to the Cash Management
Portfolio, which has no such Plan and Agreement of Distribution), the Company
paid ISI during the fiscal year ended December 31, 1995, total reimbursements
of $5,855,817 ($967,086, $3,183,877, $241,340, $24,906, $1,424,150 and $14,458
of such reimbursements were paid by the Equity Portfolio, the Flex Portfolio,
the Income Portfolio, the International Value Portfolio, the MultiFlex Portfo-
lio and the Real Estate Portfolio, respectively).
Once the Merger is consummated and the Proposed Agreements are approved, ISI
fully intends to continue to provide the same level, quality and nature of the
foregoing services to the Company and its Portfolios as are currently being
provided.
INFORMATION CONCERNING SUB-ADVISERS
INVESCO Capital Management, Inc.
INVESCO Capital Management, Inc. ("ICM"), 1315 Peachtree Street, N.E., At-
lanta, Georgia 30309, is a wholly-owned subsidiary of INVESCO North American
Holdings, Inc. ("INAH"). INAH's offices are located at 1315 Peachtree Street,
N.E., Suite 500, Atlanta, Georgia 30309. ISI, as investment adviser, has con-
tracted with ICM for investment advisory and research services on behalf of
the Cash Management Portfolio, the Equity Portfolio, the Flex Portfolio, the
Income Portfolio and the International Value Portfolio. ICM has the primary
responsibility for providing portfolio investment management services to these
portfolios. ICM also acts as adviser to the INVESCO Treasurer's Series Trust,
and as sub-adviser to the INVESCO Intermediate Government Bond Fund, the
INVESCO Total Return Fund, the INVESCO Value Equity Fund and the INVESCO VIF-
Total Return Portfolio and offers investment services to U.S. institutions and
wealthy individuals.
The principal executive officer and directors of ICM and their principal oc-
cupations are:
Wendell M. Starke, Chairman of the Board and Chief Investment Officer, also,
Chairman of the Board of INVESCO, Inc.; Edward C. Mitchell, Jr., President;
Frank M. Bishop, Vice President and Director, also, President and Chief Execu-
tive Officer of INVESCO, Inc.; Thomas W. Norwood, Vice President and Director;
Donald B. Sallee, Vice President and Director; George W. Herring, Vice Presi-
dent and Director; Thomas L. Shields, Vice President and Director; and Stephen
A. Dana, Vice President and Director.
The address of each of the foregoing officers and directors is 1315
Peachtree Street, N.E., Atlanta, Georgia 30309.
15
<PAGE>
INVESCO Management & Research, Inc.
INVESCO Management & Research, Inc. ("IMR"), 101 Federal Street, Boston,
Massachusetts 02110, formerly Gardner and Preston Moss, Inc., is a wholly-
owned subsidiary of INAH. ISI, as investment adviser, has contracted with IMR
for investment advisory and research services on behalf of the MultiFlex Port-
folio. IMR has the primary responsibility for providing portfolio investment
management services to that Portfolio. IMR also acts as sub-adviser to the
INVESCO Multi-Asset Allocation Fund and the INVESCO Small Company Fund and of-
fers investment services to U.S. institutions and wealthy individuals.
The principal executive officer and directors of IMR and their principal oc-
cupations are:
Frank J. Keeler, Chief Executive Officer, President and Director; Frank M.
Bishop, Chairman of the Board, also, President and Chief Executive Officer of
INVESCO, Inc.; and William M. McCarthy, Senior Vice President and Director.
The address of Mr. Bishop is 1315 Peachtree Street, N.E., Atlanta, Georgia
30309. The address of Messrs. Keeler and McCarthy is 101 Federal Street, Bos-
ton, Massachusetts 02110.
INVESCO Realty Advisors, Inc.
INVESCO Realty Advisors, Inc. ("IRA"), One Lincoln Center, Suite 1200, 5400
LBJ Freeway LB2, Dallas, Texas 75240, is a wholly-owned subsidiary of INAH.
ISI, as investment adviser, has contracted with IRA for investment advisory
and research services on behalf of the Real Estate Portfolio. IRA has the pri-
mary responsibility for providing portfolio investment management services to
that Portfolio. IRA also offers investment services to U.S. institutions and
wealthy individuals.
The principal executive officer and directors of IRA and their principal oc-
cupations are:
D. A. Ridley, President and Chairman of the Board; Frank M. Bishop, Direc-
tor, also, President and Chief Executive Officer of INVESCO, Inc.; and David
N. Farmer, Executive Vice President and Director.
The address of Messrs. Farmer and Ridley is One Lincoln Center, Suite 1200,
5400 LBJ Freeway LB2, Dallas, Texas 75240. The address of Mr. Bishop is 1315
Peachtree Street, N.E., Atlanta, Georgia 30309.
VOTE REQUIRED
As provided under the 1940 Act, approval of the Proposed Advisory Agreement
will require the affirmative vote of a majority of the outstanding shares of
each Portfolio voting separately as a class and approval of each of the re-
spective Proposed Sub-Advisory Agreements will require the affirmative vote of
a majority of the outstanding shares of each Portfolio, voting separately as a
class. Such a majority is defined in the 1940 Act as the lesser of: (a) 67% or
more of the shares present at such meeting, if the holders of more than 50% of
the outstanding shares of each Portfolio are present or represented by proxy,
or (b) more than 50% of the total outstanding shares of each Portfolio.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS, RECOMMEND
THAT ALL OF THE COMPANY'S SHAREHOLDERS VOTE TO APPROVE THE PROPOSED ADVISORY
AGREEMENT BETWEEN THE COMPANY AND ISI, THAT SHAREHOLDERS OF THE ICM SUB-AD-
VISED PORTFOLIOS VOTE TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT BETWEEN
ISI AND ICM, THAT SHAREHOLDERS OF THE MULTIFLEX PORTFOLIO VOTE TO APPROVE THE
PROPOSED SUB-ADVISORY AGREEMENT BETWEEN ISI AND IMR AND THAT SHAREHOLDERS OF
THE REAL ESTATE PORTFOLIO VOTE TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT
BETWEEN ISI AND IRA.
16
<PAGE>
PROPOSAL 2: ELECTION OF DIRECTORS OF THE COMPANY
The Company currently has eleven Directors. Vacancies on the Board are gen-
erally filled by appointment by the remaining Directors. However, the 1940 Act
provides that vacancies may not be filled by Directors unless thereafter at
least two-thirds of the Directors shall have been elected by shareholders. To
enable the requirement to be met in the future without the necessity of call-
ing additional shareholder meetings, shareholders are being asked at this
Meeting to elect the current eleven Directors to hold office until the next
meeting of shareholders or until their successors are elected and qualified.
Under the provisions of the Company's by-laws, as permitted by Maryland law,
the Company does not anticipate holding annual shareholder meetings. Thus, the
Directors will be elected for indefinite terms.
Seven of the current Directors are "Independent Directors," i.e., Directors
who are not "interested persons" of the Company as that term is defined in the
1940 Act. The nominees for election as Directors have been proposed by the Di-
rectors now serving or, in the case of nominees for positions as Independent
Directors, by the Independent Directors now serving. It is possible that the
Board will consider the election of one additional Independent Director at its
February 1997 meeting.
The persons named as attorneys-in-fact in the enclosed proxy have advised
the Company that unless a proxy instructs them to withhold authority to vote
for all listed nominees or for any individual nominee, they will vote all val-
idly executed proxies for the election of the nominees named below. All of the
nominees have consented to being named in this Proxy Statement and to serve,
if elected, and no circumstances now known will prevent any of the nominees
from serving. If any nominee should be unable or unwilling to serve, the proxy
will be voted for a substitute nominee proposed by the present Directors or,
in the case of an Independent Director nominee, by the Independent Directors.
Set forth below is information concerning the nominees for Directors to be
elected at this Meeting:
<TABLE>
<CAPTION>
NUMBER OF
COMPANY SHARES
POSITION, IF ANY, WITH THE COMPANY, DIRECTOR OR BENEFICIALLY
PRINCIPAL OCCUPATION AND EXECUTIVE OFFICER OWNED DIRECTLY OR
BUSINESS EXPERIENCE OF THE INDIRECTLY ON
NAME AND AGE (DURING PAST FIVE YEARS) COMPANY SINCE DEC. 9, 1996(1)
------------ ----------------------------------- ----------------- -----------------
<S> <C> <C> <C>
Charles W. Brady*(3),(5),(6) Chairman of the Board of the Company. 1993 None
Age 61 Chief Executive Officer and Director
of INVESCO and of various subsidiaries
thereof; Chairman of the Board of
INVESCO Treasurer's Series Trust
("Treasurer Series Trust") and The
Global Health Sciences Fund ("GHSF").
Hubert L. Harris, Jr.*(3),(5) President, Chief Executive Officer and 1996 None
Age 53 Chief Financial Officer of the Compa-
ny; Chairman of the Board and Chief
Executive Officer of INVESCO Services,
Inc.; Chief Executive Officer of
INVESCO Individual Services Group; Di-
rector of INVESCO; President and
Trustee of GHSF; President of the
Georgia
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
COMPANY SHARES
DIRECTOR OR BENEFICIALLY
POSITION, IF ANY, WITH THE COMPANY, EXECUTIVE OWNED DIRECTLY
PRINCIPAL OCCUPATION AND OFFICER OF OR
BUSINESS EXPERIENCE THE COMPANY INDIRECTLY ON
NAME AND AGE (DURING PAST FIVE YEARS) SINCE DEC. 9, 1996(1)
------------ ----------------------------------- ----------- ---------------
<S> <C> <C> <C>
Institute of Technology Alumni Associ-
ation and member of the Alumni Board
of Trustees thereof.
Fred A. Deering(2),(3),(5) Vice Chairman of the Board of the Com- 1993 None
Age 68 pany. Vice Chairman of the Board of
Treasurer's Series Trust; Trustee of
GHSF; formerly, Chairman of the Execu-
tive Committee and Chairman of the
Board of Security Life of Denver In-
surance Company, Denver, Colorado; Di-
rector of ING American Holding Company
and ING Life Insurance Company of New
York.
Dr. Victor L. Andrews(4),(6) Director of the Company. Professor 1993 None
Age 66 Emeritus, Chairman Emeritus and Chair-
man of the CFO Roundtable of the De-
partment of Finance of Georgia State
University, Atlanta, Georgia; Presi-
dent, Andrews Financial Associates,
Inc. (consulting firm); formerly, mem-
ber 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., Sheffield
Total Return Fund and Sheffield Inter-
mediate-Term Bond Fund.
Bob R. Baker(3),(4),(5) Director of the Company. President and 1993 None
Age 60 Chief Executive Officer of AMC Cancer
Research Center, Denver, Colorado,
since January 1989.
Lawrence H. Budner(2),(6) Director of the Company. Trust Consul- 1993 None
Age 66 tant; prior to June 30, 1987, Senior
Vice President and Senior Trust Offi-
cer of InterFirst Bank, Dallas, Texas.
Daniel D. Chabris(2),(3),(5) Director of the Company. Financial 1993 None
Age 73 Consultant; Assistant Treasurer of
Colt Industries, Inc., New York, New
York, from 1966 to 1988.
A. D. Frazier, Jr.*(4) Director of the Company. Executive 1995 1,073.1900
Age 52 Vice President of INVESCO; from 1991
to 1996, Senior Executive Vice Presi-
dent and Chief Operating Officer of
the Atlanta Committee for the Olympic
Games; Trustee of GHSF; Director of
Charter Medical Corp.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
COMPANY SHARES
DIRECTOR OR BENEFICIALLY
POSITION, IF ANY, WITH THE COMPANY, EXECUTIVE OWNED DIRECTLY
PRINCIPAL OFFICER OF OR
OCCUPATION AND BUSINESS EXPERIENCE THE COMPANY INDIRECTLY ON
NAME AND AGE (DURING PAST FIVE YEARS) SINCE DEC. 9, 1996(1)
------------ ----------------------------------- ------------ ---------------
<S> <C> <C> <C>
Dan J. Hesser* Director of the Company. Chairman of 1993 None
Age 56 the Board, President and Chief Execu-
tive Officer of INVESCO Funds Group,
Inc.; Director of INVESCO Trust Compa-
ny; Trustee of GHSF; Chairman and Di-
rector of Britannia, North America
Holdings, Inc.
Kenneth T. King(3),(4),(5),(6) Director of the Company. Formerly, 1993 None
Age 71 Chairman of the Board of The Capitol
Life Insurance Company, Providence
Washington Insurance Company, and Di-
rector of numerous subsidiaries
thereof in the U.S.; formerly, Chair-
man of the Board of The Providence
Capitol Companies in the United King-
dom and in Guernsey; Chairman of the
Board of the Symbion Corporation (a
high technology company) until 1987.
John W. McIntyre(2) Director of the Company. Retired; for- 1995 None
Age 66 merly, Vice Chairman of the Board of
Directors of The Citizens and Southern
Corporation and Chairman of the Board
and Chief Executive Officer of The
Citizens and Southern Georgia Corp.
and Citizens and Southern National
Bank; Director of Golden Poultry Co.,
Inc.; Trustee of GHSF and of Gables
Residential Trust.
</TABLE>
(1) As interpreted by the Securities and Exchange Commission, a security is
beneficially owned by a person if that person has or shares voting power
or investment power with respect to the security. The persons listed
have partial or complete voting and investment power with respect to
their respective Fund shares.
(2) Member of Audit Committee.
(3) Member of Executive Committee.
(4) Member of Management Liaison Committee.
(5) Member of Compensation Committee.
(6) Member of Valuation Committee.
* Because of his affiliation with INVESCO, with the Company's investment
advisers or with companies affiliated with INVESCO, this individual is
deemed to be an "interested person" of the Company as that term is defined
in the 1940 Act.
19
<PAGE>
As discussed above under Proposal No. 1, the terms of the Merger Agreement
require that immediately after the Merger is effected, 75% of the members of
the Board not be "interested persons" of the Company, as that term is defined
in the 1940 Act. As noted above, seven of the current Directors (63%) are In-
dependent Directors. Thus, the composition of the Board you are being asked to
elect would not meet the 75% requirement. Therefore, prior to the closing of
the Merger, it is the current intention that a sufficient number of "interest-
ed" Directors would resign from the Board so that the Board would be in com-
pliance with the 75% requirement at the time the Merger is effected.
The committees of the Board are the compensation committee, executive com-
mittee, audit committee, management liaison committee and valuation committee.
The Company does not have a nominating committee. During the intervals between
the meetings of the Board, and except for certain powers which, under applica-
ble law and/or the Company's by-laws, may only be exercised by the full Board,
the executive committee may exercise all powers and authority of the Board in
the management of Company business. All decisions are subsequently submitted
for ratification by the full Board. The audit committee, consisting of four
Independent Directors, meets periodically with the Company's independent ac-
countants and the executive officers of the Company. This committee reviews
the accounting principles being applied by the Company in financial reporting,
the scope and adequacy of internal controls, the responsibilities and fees of
the independent accountants and other matters. All of the recommendations of
the audit committee are reported to the full Board. During the past fiscal
year, the Board met three times, the audit committee met four times, the man-
agement liaison committee met three times and the compensation committee met
once. During the Company's last fiscal year, each director nominee attended
75% or more of the aggregate of the Board meetings and meetings of the commit-
tees of the Board on which he served.
The Company pays its Independent Directors the directors' fees and board
vice chairman and committee chairmen fees described below and reimburses Inde-
pendent Directors for travel expenses incurred in attending meetings. Messrs.
Brady, Harris, Hesser and, as of November 1, 1996, Frazier, as "interested
persons" of the Company and of other funds in the INVESCO Fund Complex,/2/ re-
ceive compensation and are reimbursed for travel expenses incurred in attend-
ing meetings as officers or employees of ISI or of its affiliated companies,
and do not receive any directors' fees or other compensation from the Company
or from other companies in the INVESCO Fund Complex for their services as Di-
rectors.
- ----------------
/2/The following investment companies comprise the INVESCO Fund Complex:
INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerg-
ing 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. (collectively, the "IFG-Distributed Funds"); INVESCO
Advisor Funds, Inc., The Global Health Sciences Fund; and INVESCO Treasur-
er's Series Trust.
20
<PAGE>
The following table sets forth, for the fiscal year ended December 31, 1995:
the compensation paid by the Company to its seven current Independent Direc-
tors (and to Mr. Frazier, for the period before he became an employee of
INVESCO on November 1, 1996) for services rendered in their capacities as Di-
rectors of the Company; the benefits accrued as Company expenses with respect
to the Defined Benefit Deferred Compensation Plan discussed below; and the es-
timated annual benefits to be received by these Directors upon retirement as a
result of their service to the Company. In addition, the table sets forth the
total compensation paid by all of the mutual funds in the INVESCO Fund Complex
to these Directors for services rendered in their capacities as directors or
trustees during the year ended December 31, 1995. As of December 31, 1995,
there were 48 funds in the INVESCO Fund Complex.
<TABLE>
<CAPTION>
PENSION / TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM INVESCO
COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX PAID
NAME AND POSITION THE COMPANY(1) COMPANY EXPENSES(2) RETIREMENT(3) TO DIRECTORS(1)
----------------- ----------------- ------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Fred A. Deering, 15,305 2,293 1,022 87,350
Vice Chairman of
the Board
Victor L. Andrews, 12,652 2,018 1,127 68,000
Director
Bob R. Baker, 14,953 2,033 1,511 73,000
Director
Lawrence H. Budner, 14,463 2,166 1,127 68,350
Director
Daniel D. Chabris, 14,992 2,472 801 73,350
Director
A. D. Frazier, Jr., 21,346 0 0 63,500
Director(4)
Kenneth T. King, 14,632 2,382 927 70,000
Director
John W. McIntyre, 21,713 0 0 67,850
Director(4) ------- ------ ----- -------
TOTAL 130,056 13,414 6,515 571,400
======= ====== ===== =======
% OF NET ASSETS 0.0173%(5) 0.0018%(5) N/A 0.0043%(6)
</TABLE>
(1) The vice chairman of the Board, the chairmen of the audit, management
liaison and compensation committees, and the members of the audit, man-
agement liaison, executive and valuation committees 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.
21
<PAGE>
(3) These amounts represent the Company's share of the estimated annual ben-
efits payable by the INVESCO Fund Complex (excluding GHSF, 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 Fund 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 Fund 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, each of these Directors has served as a
director/trustee of one or more of the funds in the INVESCO Fund Complex
for the minimum five-year period required to be eligible to participate
in the Defined Benefit Deferred Compensation Plan.
(4) Messrs. Frazier and McIntyre began serving as Directors of the Company
on April 19, 1995.
(5) Total as a percentage of the Company's net assets as of December 31,
1995.
(6) Total as a percentage of the net assets of the INVESCO Fund Complex as
of December 31, 1995.
The officers of the Company, all of whom are officers and employees of, and
paid by, ISI, are responsible for the day-to-day administration of the Company
and of each of the Portfolios. Each of the Sub-Advisers has the primary re-
sponsibility for making investment decisions on behalf of those Portfolios
such Sub-Adviser sub-advises. These investment decisions are reviewed by the
investment policy committee of each of the Sub-Advisers.
All of the officers and Directors of the Company hold comparable positions
with each of the IFG-Distributed Funds. In addition, all of the Directors of
the Company, with the exception of Mr. Hesser, are also trustees of INVESCO
Treasurer's Series Trust.
VOTE REQUIRED
The Directors must be elected by a majority of the votes present at the
Meeting in person or by proxy and entitled to vote, provided a quorum is pres-
ent.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS VOTE TO
ELECT ALL OF THE NOMINEES LISTED ABOVE.
PROPOSAL 3: RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Directors of the Company, including a majority of its Independent Direc-
tors, have selected Price Waterhouse LLP to continue to serve as independent
accountants of the Company for the fiscal year ending December 31, 1997, sub-
ject to ratification by the Company's shareholders. This firm has no direct
financial interest or material indirect financial interest in the Company.
Representatives of this firm are not expected to attend the Meeting, but have
been given the opportunity if they so desire, and will be available should any
matter arise requiring their presence.
The following summarizes Price Waterhouse LLP's audit services for the fis-
cal year ended December 31, 1995: audit of annual financial statements; prepa-
ration of the Company's federal and state income tax returns; preparation of
the Company's federal excise tax return; consultation with the Company's audit
committee; and routine consultation on financial accounting and reporting mat-
ters.
22
<PAGE>
The Board authorized all services performed by Price Waterhouse LLP on be-
half of the Company. In addition, the Board annually reviews the scope of
services to be provided by Price Waterhouse LLP and considers the effect, if
any, that performance of any non-audit services might have on audit indepen-
dence.
An audit committee, consisting of four Independent Directors, meets periodi-
cally with the Company's independent accountants to review accounting and re-
porting requirements.
VOTE REQUIRED
The ratification of the selection of the independent accountants must be ap-
proved by a majority of the shares present at the Meeting in person or by
proxy and entitled to vote, provided a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS VOTE IN
FAVOR OF PROPOSAL 3.
OTHER BUSINESS
The management of the Company has no business to bring before the Meeting
other than the matters described above. Should any other business be presented
at the Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Company does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of
proxy for a subsequent shareholders' meeting should send their written propos-
als to the Secretary of the Company, 1355 Peachtree Street, N.E., Suite 200,
Atlanta, Georgia 30309. The Company has not received any shareholder proposals
to be presented at this Meeting.
By Order of the Board of
Directors,
/s/ Tony D. Green
Tony D. Green
Secretary
December 26, 1996
23
<PAGE>
EXHIBIT A.1.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, as made the 28th day of February, 1997, by and between
INVESCO SERVICES, INC. (the "Adviser"), a Georgia corporation, and INVESCO Ad-
visor Funds, Inc., a Maryland corporation (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of the State of
Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end management
investment company and is divided into seven series (the "Shares"), and
which may be divided into additional series, each representing an interest in
a separate portfolio of investments (such series as are presently structured
being designated as the INVESCO Advisor Equity Portfolio, INVESCO Advisor In-
come Portfolio, INVESCO Advisor Flex Portfolio, INVESCO Advisor MultiFlex
Portfolio, INVESCO Advisor Real Estate Portfolio, INVESCO Advisor Interna-
tional Value Portfolio and INVESCO Advisor Cash Management Portfolio, herein-
after referred to as the "Series"); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and provide it with certain other services, and the Adviser desires to manage
said operations and to provide such other services;
NOW, THEREFORE, in consideration 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's Series, 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 follow-
ing specific services for the Fund:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' 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 (hereinafter referred to as the "Investment Company 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's Series, unless otherwise directed by the Directors of the Fund, and
to execute transactions accordingly;
(d) to provide to the Fund's Series 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 hereaf-
ter generally available to investment advisory customers of the Adviser;
A.1.-1
<PAGE>
(e) to determine what portion of the Fund's Series 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 Se-
ries' securities shall be exercised.
With respect to execution of transactions for the Fund's Series, 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 exe-
cution 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, reli-
ability of performance, sale of Fund shares, and financial soundness and re-
sponsibility. 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 serv-
ices 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 avail-
able at the time as to the level of commissions known to be charged on compa-
rable 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 rele-
vant 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 ben-
efit of the Fund. Fund transactions may be effected through qualified broker-
dealers who recommend the Fund to their clients, or who act as agent in the
purchase of the Fund's shares for their clients. When a number of brokers and
dealers can provide comparable best price and execution on a particular trans-
action, the Adviser may consider the sale of Fund shares by a broker or dealer
in selecting among qualified broker-dealers.
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's Series
(except those associated with the preparation and maintenance of certain re-
quired books and records and certain sub-accounting services, which services
and facilities are provided under separate Accounting Services, Transfer
Agency and Administrative Services Agreements between the Adviser and FPS
Services, Inc., and those operational services which are necessary for the
day-to-day operations of the Fund's Series, which services are provided under
a separate Operating Services Agreement dated July 1, 1993 as amended November
1, 1993 and April 19, 1995, between the Fund and the Adviser (the "Operating
Services Agreement")). 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; conducting periodic compliance re-
views of the Fund's operations; preparation and review of certain required
documents, reports and filings (including required reports to the Securities
and Exchange Commission (the "SEC"), and other corporate documents of the
Fund), except insofar as the assistance of independent accountants or attor-
neys is necessary or desirable; supplying basic telephone service and other
utilities; and preparing and maintaining the
A.1.-2
<PAGE>
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. 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 re-
quested.
3. Payment of Costs and Expenses. The Adviser shall bear the costs and ex-
penses of all personnel, facilities, equipment and supplies reasonably neces-
sary to provide the services required to be provided by the Adviser under this
Agreement. The Adviser shall pay all of the costs and expenses associated with
the Fund's operations and activities, except those expressly assumed by the
Fund under this Agreement, which shall consist of:
(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's Se-
ries;
(b) the interest on indebtedness, if any, incurred by the Fund;
(c) extraordinary expenses, including unexpected franchise or income tax-
es, or business license and other corporate fees (not including SEC and
state securities registration fees) that are not anticipated which the Fund
will be required to pay to federal, state, county, city, or other governmen-
tal agents, and fees and disbursements of Fund counsel in connection with
litigation by or against the Fund;
(d) 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 under the Investment Company Act; and
(e) all fees paid by the Fund for operational services which are necessary
for the day-to-day operations of the Fund's Series under the Operating Serv-
ices Agreement.
4. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the Ad-
viser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of writ-
ten approval of the Fund, make use of its affiliated companies and their em-
ployees; provided that the Adviser shall supervise and remain fully responsi-
ble for all such services in accordance with and to the extent provided by
this Agreement, and further provided 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 each of the Fund's Series, as determined by val-
uations 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 Addi-
tional Information. The advisory fee to the Adviser shall be computed at the
following annual rates: 0.75% of the daily net assets of the INVESCO Advisor
Equity Portfolio and INVESCO Advisor Flex Portfolio; 0.90% of the daily net
assets of the INVESCO Advisor Real Estate Portfolio; 1.0% of the daily net as-
sets of the INVESCO Advisor MultiFlex Portfolio and the INVESCO Advisor Inter-
national Value Portfolio; 0.65% of the daily net assets of the INVESCO Advisor
Income Portfolio; and 0.50% of the daily net assets of the INVESCO Advisor
Cash Management Portfolio. During any period when the determination of the
Fund's net asset value is suspended by the Directors of the Fund, the net as-
set value of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this
A.1.-3
<PAGE>
Paragraph 5, be deemed to be the net asset value at the close of each suc-
ceeding business day until it is again determined.
No advisory fee shall be paid to the Adviser with respect to any assets of
the Fund's Series 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 a Series' expenses exceeds
the state-imposed annual expense limitation to which the Fund is subject, the
Adviser will be required to reimburse that Series for such excess expenses
promptly. Interest, taxes and extraordinary items such as litigation costs are
not deemed expenses for purposes of this paragraph and shall be borne by that
Series in any event. Expenditures, including costs incurred in connection with
the purchase or sale of portfolio securities, which are capitalized in accor-
dance 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 connec-
tion with purchases or sales of securities for the investment portfolios of
the Fund's Series, neither the Adviser nor its officers or employees will ei-
ther act as a principal or agent for any party other than the Fund's Series or
receive any commissions. The Adviser will comply with all applicable laws in
acting hereunder including, without limitation, the Investment Company 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 has been approved by a majority
of the outstanding voting securities of the Fund's Series, and shall become
effective as of the date so written above, 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's Series
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's Series, 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 SEC condition-
ally or unconditionally exempting such assignment from the provisions of Sec-
tion 15(a) of the Investment Company 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 Investment Company Act and the applicable
rules under the Investment Company Act (particularly the definitions of "in-
terested person," "assignment" and "vote of a majority of the outstanding vot-
ing 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 para-
graph 5 earned prior to such termination.
8. Non-Exclusive Services. The Adviser shall, during the term of this Agree-
ment, be entitled to render investment advisory services to others, including,
without limitation, other investment companies with similar
A.1.-4
<PAGE>
objectives to those of the Fund's Series. The Adviser may, when it deems such
to be advisable, aggregate orders for its other customers together with any
securities of the same type to be sold or purchased for the Fund's Series 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 ex-
penses incurred in the transaction, in the manner it considers to be most eq-
uitable and consistent with its fiduciary obligations to the Fund's Series and
the Adviser's other customers. It is understood that directors, officers, em-
ployees and shareholders of the Fund are or may become interested in the Ad-
viser and its affiliates, as directors, officers, employees and shareholders
or otherwise and that directors, officers, employees and shareholders of the
Adviser, INVESCO Capital Management, Inc., and their affiliates are or may be-
come interested in the Fund as directors, officers and employees.
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 ef-
fective 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 Agree-
ment 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 ma-
jority of the outstanding voting securities of any of the Fund's Series as to
which such amendment is applicable (other than an amendment which can be ef-
fective 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 Georgia. To the extent that the applicable laws of the
State of Georgia, or any of the provisions herein, conflict with applicable
provisions of the Investment Company Act, the latter shall control.
A.1.-5
<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 ADVISOR FUNDS, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
INVESCO SERVICES, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
A.1.-6
<PAGE>
EXHIBIT A.2.
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO Serv-
ices, Inc. ("ISI"), a Georgia corporation, and INVESCO CAPITAL MANAGEMENT,
INC., a Delaware corporation (the "Sub-Adviser").
WITNESSETH:
WHEREAS, INVESCO Advisor Funds, Inc. (the "Fund"), is engaged in business as
a diversified, open-end management investment company registered under the In-
vestment Company Act of 1940, as amended (hereinafter referred to as the "In-
vestment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, ISI and the Sub-Adviser are engaged principally in rendering in-
vestment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, ISI has entered into an Investment Advisory Agreement with the Fund
(the "ISI Investment Advisory Agreement"), pursuant to which ISI is required
to provide investment and advisory services to the Fund's series, and, upon
receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with ISI to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to five of the Fund's seven series (the INVESCO Advisor Equity Portfolio, the
INVESCO Advisor Income Portfolio, the INVESCO Advisor Flex Portfolio, the
INVESCO Advisor International Value Portfolio and the INVESCO Advisor Cash
Management Portfolio series, hereinafter referred to as the "Series"), on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter con-
tained, ISI and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
ISI 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 ISI and the Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The Sub-
Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless other-
wise expressly provided or authorized herein, shall have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the
Fund. The Sub-Adviser hereby agrees to manage the investment operations of the
Fund's Series, subject to the supervision of the Fund's directors (the "Direc-
tors") and ISI. Specifically, the Sub-Adviser agrees to perform the following
services:
A.2.-1
<PAGE>
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolios securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' 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, 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's Series, unless otherwise directed by the Directors of the Fund or
ISI, and to execute transactions accordingly;
(d) to provide to the Fund's Series 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 hereaf-
ter generally available to investment advisory customers of the Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; 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 Se-
ries' securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the Sub-Ad-
viser is authorized to employ such brokers or dealers as may, in the Sub-Ad-
viser's best judgment, implement the policy of the Fund to obtain prompt and
reliable execution at the most favorable price obtainable. In assigning an ex-
ecution 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 capa-
bilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by bro-
kers 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 negoti-
ated transaction, the Sub-Adviser shall have no duty or obligation to seek ad-
vance competitive bidding for the most favorable negotiated commission rate
for such transaction, or to select any broker solely on the basis of its pur-
ported 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, in-
cluding the size of any contemporaneous market in such securities, the impor-
tance to the Fund of speed, efficiency, and confidentiality of execution, the
execution capabilities required by the circumstances of the particular trans-
actions, and the apparent knowledge or familiarity with sources from or to
whom such securities may be purchased or sold. Where the commission rate re-
flects 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. Fund trans-
actions may be effected through qualified broker-dealers who recommend the
Fund to their clients, or who act as agent in the purchase of the Fund's
shares for their clients. When a number of brokers and dealers can provide
comparable best price and execution on a particular transaction, the Sub-Ad-
viser may consider the sale of Fund shares by a broker or dealer in selecting
among qualified broker-dealers.
A.2.-2
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and person-
nel 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 ex-
pressly assumed by the Sub-Adviser herein and except to the extent required by
law to be paid by the Sub-Adviser, ISI and/or the Fund shall pay all costs and
expenses in connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, ISI 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's Series, 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: 0.20% of the INVESCO Advisor Equity Portfolio
and the INVESCO Advisor Flex Portfolio Series' daily net assets; 0.10% of the
INVESCO Advisor Income Portfolio and INVESCO Advisor Cash Management Portfolio
Series' daily net assets; and the following for the INVESCO Advisor Interna-
tional Value Portfolio Series: 0.35% on the first $50 million of assets, 0.30%
on the next $50 million of assets and 0.25% on daily net assets in excess of
$100 million. During any period when the determination of the Series' net as-
set value is suspended by the Directors of the Fund, the net asset value of a
share of the Fund's Series as of the last business day prior to such suspen-
sion 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 deter-
mined. However, no such fee shall be paid to the Sub-Adviser with respect to
any assets of the Fund's Series 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 en-
titled to receive fees hereunder only for such periods as the ISI 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 ex-
clusive, 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 "affili-
ates") being free to render services to others. It is understood that direc-
tors, officers, employees and shareholders of the Fund are or may become in-
terested in the Sub-Adviser and its affiliates, as directors, officers, em-
ployees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, ISI and their affiliates are or may be-
come interested in the Fund as directors, officers and employees.
A.2.-3
<PAGE>
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment port-
folio of the Fund's Series, neither the Sub-Adviser nor any of its directors,
officers or employees will either act as a principal or agent for any party
other than the Fund's Series or receive any commissions. The Sub-Adviser will
comply with all applicable laws in acting hereunder including, without limita-
tion, the Investment Company 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 having been approved by a majority of the outstanding voting
securities of the Fund's Series, shall become effective as of the date so
written above, 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's
Series, 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 ISI, by the Fund by vote of the Directors of the Fund or by vote
of a majority of the outstanding voting securities of the Fund's Series, or by
the Sub-Adviser. A termination by ISI 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 re-
quired by the Investment Company Act and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such informa-
tion 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 Ar-
ticle 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
ISI. In addition, no amendment to this Agreement shall be effective unless ap-
proved 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 any of the Fund's Series as to which such amendment is
applicable (other than an amendment which can be effective without shareholder
approval under applicable law).
A.2.-4
<PAGE>
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a ma-
jority of the outstanding voting securities," "assignments," "affiliated per-
son" and "interested person," when used in this Agreement, shall have the re-
spective 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 Georgia and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Georgia, or any of the provi-
sions herein, conflict with the applicable provisions of the Investment Com-
pany 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.
A.2.-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
<TABLE>
<CAPTION>
<S> <C>
INVESCO SERVICES, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
INVESCO CAPITAL MANAGEMENT, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
</TABLE>
A.2.-6
<PAGE>
EXHIBIT A.3.
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO Serv-
ices, Inc. ("ISI"), a Georgia corporation, and INVESCO MANAGEMENT & RESEARCH,
INC., a Massachusetts corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO ADVISOR FUNDS, INC. (the "Fund") is engaged in business as
a diversified, open-end management investment company registered under the In-
vestment Company Act of 1940, as amended (hereinafter referred to as the "In-
vestment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, ISI and the Sub-Adviser are engaged principally in rendering in-
vestment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, ISI has entered into an Investment Advisory Agreement with the Fund
(the "ISI Investment Advisory Agreement"), pursuant to which ISI is required
to provide investment and advisory services to the Fund's series, and, upon
receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with ISI to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to one of the Fund's series (the INVESCO Advisor MultiFlex Portfolio, herein-
after referred to as the "Series") on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants hereinaf-
ter contained, ISI and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
ISI 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 ISI and the Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The Sub-
Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless other-
wise expressly provided or authorized herein, shall have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund's Series, subject to the supervision of the Fund's directors (the "Direc-
tors") and ISI. 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's Series, and to execute all purchases and
sales of portfolios securities;
A.3.-1
<PAGE>
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' 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, 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's Series, unless otherwise directed by the Directors of the Fund or
ISI, and to execute transactions accordingly;
(d) to provide to the Fund's Series 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 hereaf-
ter generally available to investment advisory customers of the Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; 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 Se-
ries' securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the Sub-Ad-
viser is authorized to employ such brokers or dealers as may, in the Sub-Ad-
viser's best judgment, implement the policy of the Fund to obtain prompt and
reliable execution at the most favorable price obtainable. In assigning an ex-
ecution 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 capa-
bilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by bro-
kers 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 negoti-
ated transaction, the Sub-Adviser shall have no duty or obligation to seek ad-
vance competitive bidding for the most favorable negotiated commission rate
for such transaction, or to select any broker solely on the basis of its pur-
ported 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, in-
cluding the size of any contemporaneous market in such securities, the impor-
tance to the Fund of speed, efficiency, and confidentiality of execution, the
execution capabilities required by the circumstances of the particular trans-
actions, and the apparent knowledge or familiarity with sources from or to
whom such securities may be purchased or sold. Where the commission rate re-
flects 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. Fund trans-
actions may be effected through qualified broker-dealers who recommend the
Fund to their clients, or who act as agent in the purchase of the Fund's
shares for their clients. When a number of brokers and dealers can provide
comparable best price and execution on a particular transaction, the Fund's
adviser may consider the sale of Fund shares by a broker or dealer in select-
ing among qualified broker-dealers.
A.3.-2
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and person-
nel 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 ex-
pressly assumed by the Sub-Adviser herein and except to the extent required by
law to be paid by the Sub-Adviser, ISI and/or the Fund shall pay all costs and
expenses in connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, ISI 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's Series, as determined
by a valuation made in accordance with the Fund's procedures for calculating
its net asset value as described in the Fund's Prospectus and/or Statement of
Additional Information. The advisory fee to the Sub-Adviser shall be computed
at the annual rate of 0.35% of the Series' daily net assets on the first $500
million of net assets and 0.25% of daily net assets on assets in excess of
$500 million. During any period when the determination of the Series' net as-
set value is suspended by the Directors of the Fund, the net asset value of a
share of the Fund's Series as of the last business day prior to such suspen-
sion 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 deter-
mined. However, no such fee shall be paid to the Sub-Adviser with respect to
any assets of the Fund's Series 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 en-
titled to receive fees hereunder only for such periods as the ISI 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 ex-
clusive, 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 "affili-
ates") being free to render services to others. It is understood that direc-
tors, officers, employees and shareholders of the Fund are or may become in-
terested in the Sub-Adviser and its affiliates, as directors, officers, em-
ployees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, ISI and their affiliates are or may be-
come interested in the Fund as directors, officers and employees.
A.3.-3
<PAGE>
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS
AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment port-
folio of the Fund's Series, neither the Sub-Adviser nor any of its directors,
officers or employees will either act as a principal or agent for any party
other than the Fund's Series or receive any commissions. The Sub-Adviser will
comply with all applicable laws in acting hereunder including, without limita-
tion, the Investment Company 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 having been approved by a majority of the outstanding voting
securities of the Fund's Series, shall become effective as of the date so
written above, 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's
Series, 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 ISI, the Fund by vote of the Directors of the Fund, or by vote of
a majority of the outstanding voting securities of the Fund's Series, or by
the Sub-Adviser. A termination by ISI 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 re-
quired by the Investment Company Act and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such informa-
tion 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 Ar-
ticle 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
ISI. In addition, no amendment to this Agreement shall be effective unless ap-
proved 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 any of the Fund's Series as to which such amendment is
applicable (other than an amendment which can be effective without shareholder
approval under applicable law).
A.3.-4
<PAGE>
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a ma-
jority of the outstanding voting securities," "assignments," "affiliated per-
son" and "interested person," when used in this Agreement, shall have the re-
spective 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 Georgia and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Georgia, or any of the provi-
sions herein, conflict with the applicable provisions of the Investment Com-
pany 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.
A.3.-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
<TABLE>
<CAPTION>
<S> <C>
INVESCO SERVICES, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
INVESCO MANAGEMENT & RESEARCH, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
</TABLE>
A.3.-6
<PAGE>
EXHIBIT A.4.
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO Serv-
ices, Inc. ("ISI"), a Georgia corporation, and INVESCO REALTY ADVISORS, INC.,
a Texas corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO Advisor Funds, Inc. (the "Fund") is engaged in business as
a diversified, open-end management investment company registered under the In-
vestment Company Act of 1940, as amended (hereinafter referred to as the "In-
vestment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, ISI and the Sub-Adviser are engaged principally in rendering in-
vestment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, ISI has entered into an Investment Advisory Agreement with the Fund
(the "ISI Investment Advisory Agreement"), pursuant to which ISI is required
to provide investment and advisory services to the Fund's series, and, upon
receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with ISI to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to those series of the Fund set forth in the appendix hereto, hereinafter re-
ferred to as the "Series") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter con-
tained, ISI and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
ISI hereby employs the Sub-Adviser to act as investment adviser to the Se-
ries and to furnish the investment advisory services described below, subject
to the broad supervision of ISI and the Board of Directors of the Fund, for
the period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at
its own expense, to render such services and to assume the obligations herein
set forth for the compensation provided for herein. The Sub-Adviser shall for
all purposes herein be deemed to be an independent contractor and, unless oth-
erwise expressly provided or authorized herein, shall have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the Se-
ries, subject to the supervision of the Fund's directors (the "Directors") and
ISI. 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 Series, and to execute all purchases and sales of
portfolios securities;
A.4.-1
<PAGE>
(b) to maintain a continuous investment program for the Series, consistent
with (i) the Series' 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, 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 Reve-
nue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Se-
ries, unless otherwise directed by the Directors of the Fund or ISI, and to
execute transactions accordingly;
(d) to provide to the Series 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 Series should be invested in the var-
ious types of securities authorized for purchase by the Series; 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 Se-
ries' securities shall be exercised.
With respect to execution of transactions for the Series, 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 exe-
cution 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, sale of Fund shares, and financial soundness and
responsibility. Research services prepared and furnished by brokers through
which the Sub-Adviser effects securities transactions on behalf of the Series
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 transac-
tion, the Sub-Adviser shall have no duty or obligation to seek advance compet-
itive 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 commis-
sions known to be charged on comparable transactions by other qualified bro-
kerage firms, as well as all other relevant factors and circumstances, includ-
ing the size of any contemporaneous market in such securities, the importance
to the Fund of speed, efficiency, and confidentiality of execution, the execu-
tion capabilities required by the circumstances of the particular transac-
tions, 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. Transactions may
be effected through qualified broker-dealers who recommend the Fund to their
clients, or who act as agent in the purchase of the Fund's shares for their
clients. When a number of brokers and dealers can provide comparable best
price and execution on a particular transaction, the Sub-Adviser may consider
the sale of Fund shares by a broker or dealer in selecting among qualified
broker-dealers.
A.4.-2
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and person-
nel 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 ex-
pressly assumed by the Sub-Adviser herein and except to the extent required by
law to be paid by the Sub-Adviser, ISI and/or the Fund shall pay all costs and
expenses in connection with the operations of the Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, ISI 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 Series, 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 Ad-
ditional Information. The advisory fee to the Sub-Adviser shall be computed at
the annual rates set forth in the appendix hereto. During any period when the
determination of the Series' net asset value is suspended by the Directors of
the Fund, the net asset value of a share of the Series 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 Series which may be invested in any
other investment company for which the Sub-Adviser serves as investment ad-
viser 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 ISI 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 ex-
clusive, 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 "affili-
ates") being free to render services to others. It is understood that direc-
tors, officers, employees and shareholders of the Fund are or may become in-
terested in the Sub-Adviser and its affiliates, as directors, officers, em-
ployees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, ISI and their affiliates are or may be-
come interested in the Fund as directors, officers and employees.
A.4.-3
<PAGE>
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS
AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment port-
folio of the Series, neither the Sub-Adviser nor any of its directors, offi-
cers or employees will either act as a principal or agent for any party other
than the Series or receive any commissions. The Sub-Adviser will comply with
all applicable laws in acting hereunder including, without limitation, the In-
vestment Company 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 having been approved by a majority of the outstanding voting
securities of the Series, shall become effective as of the date so written
above, 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 spe-
cifically 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 Series, 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 ISI, by the Fund by vote of the Directors of the Fund or by vote
of a majority of the outstanding voting securities of the Series, or by the
Sub-Adviser. A termination by ISI 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 and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such informa-
tion 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 Ar-
ticle 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
ISI. In addition, no amendment to this Agreement shall be effective unless ap-
proved 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 Series (other than an amendment which can be effec-
tive without shareholder approval under applicable law).
A.4.-4
<PAGE>
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a ma-
jority of the outstanding voting securities," "assignments," "affiliated per-
son" and "interested person," when used in this Agreement, shall have the re-
spective 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 Georgia and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Georgia, or any of the provi-
sions herein, conflict with the applicable provisions of the Investment Com-
pany 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.
A.4.-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
<TABLE>
<CAPTION>
<S> <C>
INVESCO SERVICES, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
INVESCO REALTY ADVISORS, INC.
By: ________________________________
President
ATTEST:
____________________________________
Secretary
</TABLE>
A.4.-6
<PAGE>
APPENDIX TO SUB-ADVISORY AGREEMENT
Sub-Adviser: INVESCO Realty Advisors, Inc.
<TABLE>
<CAPTION>
Fund Series Fee*
---- ------ ----
<S> <C> <C>
INVESCO Advisor Funds, INVESCO Advisor Real Estate Portfolio 0.35% (on assets up to $100 million);
Inc. .................. 0.25% (on assets in excess of $100 million)
</TABLE>
- --------
* Expressed as a percentage of the average daily value of net assets of the Se-
ries.
A.4.-7
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; EQUITY INCOME FUNDS
<TABLE>
<CAPTION>
EQUITY 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
INCOME FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL Current INVESCO INVESCO .60% of the first .25% of the first $4,206,106,717
INCOME FUND Income Funds Group, Trust $350 million; $200 million;
Inc. Company .55% of the next .20% over
$350 million; $200 million
.50% over
$700 million
- -------------------------------------------------------------------------------------------------------------
UTILITIES PORTFOLIO* Capital INVESCO INVESCO .75% of the first .25% of the first $152,742,377
Appreciation Funds Group, Trust $350 million; $200 million;
and Income Inc. Company .65% of the next .20% over
$350 million; $200 million
.55% over
$700 million
- -------------------------------------------------------------------------------------------------------------
VIF-INDUSTRIAL Current INVESCO INVESCO .75% of the first .375% of the first $19,167,082
INCOME PORTFOLIO* Income Funds Group, Trust $500 million; $500 million;
Inc. Company .65% of the next .325% of the next
$500 million; $500 million;
.55% over .275% over
$1 billion $1 billion
- -------------------------------------------------------------------------------------------------------------
VIF-UTILITIES Capital INVESCO INVESCO .60% of the first .30% of the first $1,295,949
PORTFOLIO* Appreciation Funds Group, Trust $500 million; $500 million;
and Income Inc. Company .55% of the next .275% of the next
$500 million; $500 million;
.45% over .225% over
$1 billion $1 billion
</TABLE>
B-1
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; EQUITY INCOME FUNDS
<TABLE>
<CAPTION>
EQUITY 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
INCOME FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AMERICAN High American INVESCO .75% .50% of the first $320,023,507
SKANDIA TRUST -- Current Skandia Trust $25 million;
EQUITY INCOME Income; Investment Company .45% of the next
PORTFOLIO Capital Services, $50 million;
Growth Inc. .40% of the next
Secondary $25 million;
.35% over
$100 million
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
B-2
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; GROWTH & VALUE FUNDS
<TABLE>
<CAPTION>
GROWTH & 1940 ACT ADVISER SUB-ADVISER ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
VALUE OBJECTIVE RATE (BASED ON FEE RATE OCTOBER 31,
FUNDS AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VALUE EQUITY Capital INVESCO INVESCO .75% of the first .20% of the first $221,736,052
FUND Appreciation Funds Group, Capital $500 million; $500 million;
and Income Inc. Management, .65% of the next .17% of the next
Inc. $500 million; $500 million;
.50% over .13% over
$1 billion $1 billion
- ----------------------------------------------------------------------------------------------------------
GROWTH FUND Long-Term INVESCO INVESCO .60% of the first .25% of the first $650,140,716
Capital Funds Group, Trust $350 million; $200 million;
Growth; Inc. Company .55% of the next .20% over
Current $350 million; $200 million
Income .50% over
Secondary $700 million
- ----------------------------------------------------------------------------------------------------------
DYNAMICS Capital INVESCO INVESCO .60% of the first .25% of the first $836,458,920
FUND Appreciation Funds Group, Trust $350 million; $200 million;
Inc. Company .55% of the next .20% over
$350 million; $200 million
.50% over
$700 million
- ----------------------------------------------------------------------------------------------------------
EMERGING Long-Term INVESCO INVESCO .75% of the first .25% of the first $275,668,167
GROWTH FUND Capital Funds Group, Trust $350 million; $200 million;
Growth Inc. Company .65% of the next .20% over
$350 million; $200 million
.55% over
$700 million
- ----------------------------------------------------------------------------------------------------------
SMALL Long-Term INVESCO INVESCO .75% .375% $47,292,558
COMPANY Capital Funds Group, Management
FUND* Growth Inc. & Research,
Inc.
- ----------------------------------------------------------------------------------------------------------
EQUITY Capital INVESCO INVESCO .75% .20% $134,188,186
PORTFOLIO Appreciation Services, Inc. Management
and Income & Research,
Inc.
</TABLE>
B-3
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR
INVESTMENT OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY;
GROWTH & VALUE FUNDS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
GROWTH & 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
VALUE OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
FUNDS AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JOHN HANCOCK Aggressive John INVESCO .80% of the first .55% of the first $9,621,404
VARIABLE SERIES Growth Hancock Management $100 million; $100 million;
TRUST -- SMALL Mutual Life & Research, .75% of the next .50% of the next
CAP VALUE Insurance Inc. $100-$200 million; $100 million;
FUND Company .65% over .40% over
$200 million $200 million
- ---------------------------------------------------------------------------------------------------------
MAXIM Long-Term Great West INVESCO 1% .55% of the first $2,997,147
INVESCO Capital Life Trust $25 million;
SMALL-CAP Growth Assurance Company .50% of the next
GROWTH Company $50 million;
PORTFOLIO .40% of the next
$25 million;
.35% over
$100 million
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
B-4
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; SECTOR FUNDS
<TABLE>
<CAPTION>
SECTOR FUNDS 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ENERGY Capital INVESCO INVESCO .75% of the first .25% of the first $236,169,412
PORTFOLIO Appreciation Funds Trust $350 million; $200 million;
Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- ------------------------------------------------------------------------------------------------
ENVIRONMENTAL Capital INVESCO INVESCO .75% of the first .25% of the first $26,793,694
SERVICES Appreciation Funds Trust $350 million; $200 million;
PORTFOLIO Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- ------------------------------------------------------------------------------------------------
FINANCIAL Capital INVESCO INVESCO .75% of the first .25% of the first $542,687,937
SERVICES Appreciation Funds Trust $350 million; $200 million;
PORTFOLIO* Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- ------------------------------------------------------------------------------------------------
GOLD Capital INVESCO INVESCO .75% of the first .25% of the first $277,892,364
PORTFOLIO Appreciation Funds Trust $350 million; $200 million;
Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- ------------------------------------------------------------------------------------------------
HEALTH Capital INVESCO INVESCO .75% of the first .25% of the first $933,828,112
SCIENCES Appreciation Funds Trust $350 million; $200 million;
PORTFOLIO Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
</TABLE>
B-5
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; SECTOR FUNDS
<TABLE>
<CAPTION>
SECTOR FUNDS 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LEISURE Capital INVESCO INVESCO .75% of the first .25% of the first $252,297,128
PORTFOLIO Appreciation Funds Trust $350 million; $200 million;
Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- -------------------------------------------------------------------------------------------------------
TECHNOLOGY Capital INVESCO INVESCO .75% of the first .25% of the first $789,610,651
PORTFOLIO Appreciation Funds Trust $350 million; $200 million;
Group, Company .65% of the next .20% over
Inc. $350 million; $200 million
.55% over
$700 million
- -------------------------------------------------------------------------------------------------------
WORLDWIDE Capital INVESCO INVESCO .65% of the first .325% of the first $4,225,087
CAPITAL Appreciation Funds Trust $500 million; $500 million;
GOODS FUND* Group, Company .55% of the next .275% of the next
Inc. $500 million; $500 million;
.45% over .225% over
$1 billion $1 billion
- -------------------------------------------------------------------------------------------------------
WORLDWIDE Capital INVESCO INVESCO .65% of the first .325% of the first $51,218,075
COMMUNICATIONS Appreciation Funds Trust $500 million; $500 million;
FUND and Income Group, Company .55% of the next .275% of the next
Inc. $500 million; $500 million
.45% over .225% over
$1 billion $1 billion
- -------------------------------------------------------------------------------------------------------
REAL ESTATE Capital INVESCO INVESCO .90% .35% of the first $15,293,490
PORTFOLIO Appreciation Services, Realty $100 million;
and Income Inc. Advisers, .25% over
Inc. $100 million
- -------------------------------------------------------------------------------------------------------
THE GLOBAL Capital INVESCO None 1.0% N/A $455,821,034
HEALTH SCIENCES Appreciation Trust
FUND** Company
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
** Closed-end Fund
B-6
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; INTERNATIONAL FUNDS
<TABLE>
<CAPTION>
INTERNATIONAL 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL Capital INVESCO INVESCO 1.0% of the first .25% of the first $94,586,594
GROWTH Appreciation Funds Asset $500 million; $500 million;
FUND and Income Group, Management .75% of the next .1875% of the next
Inc. Limited $500 million; $500 million;
.65% over .1625% over
$1 billion $1 billion
- -----------------------------------------------------------------------------------------------------
EUROPEAN Capital INVESCO INVESCO .75% of the first .45% of the first $300,588,228
FUND Appreciation Funds Asset $350 million; $350 million;
Group, Management .65% of the next .40% of the next
Inc. Limited $350 million; $350 million;
.55% over .35% over
$700 million $700 million
- -----------------------------------------------------------------------------------------------------
PACIFIC Capital INVESCO INVESCO .75% of the first .45% of the first $149,869,919
BASIN Appreciation Funds Asset $350 million; $350 million;
FUND Group, Management .65% of the next .40% of the next
Inc. Limited $350 million; $350 million;
.55% over .35% over
$700 million $700 million
- -----------------------------------------------------------------------------------------------------
EUROPEAN Capital INVESCO INVESCO .75% of the first .375% of the first $117,484,141
SMALL Appreciation Funds Asset $500 million; $500 million;
COMPANY Group, Management .65% of the next .325% of the next
FUND Inc. Limited $500 million; $500 million;
.55% over .275% over
$1 billion $1 billion
</TABLE>
B-7
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; INTERNATIONAL FUNDS
<TABLE>
<CAPTION>
INTERNATIONAL 1940 ACT ADVISER SUB-ADVISER ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
FUNDS OBJECTIVE RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LATIN Capital INVESCO INVESCO .75% of the first .375% of the first $32,864,679
AMERICAN Appreciation Funds Asset $500 million; $500 million;
GROWTH Group, Management .65% of the next .325% of the next
FUND Inc. Limited $500 million; $500 million;
.55% over .275% over
$1 billion $1 billion
- --------------------------------------------------------------------------------------------------------
ASIAN Capital INVESCO INVESCO .75% of the first .375% of the first $16,483,400
GROWTH Appreciation Funds Asia $500 million; $500 million;
FUND* Group, Limited .65% of the next .325% of the next
Inc. $500 million; $500 million;
.55% over .275% over
$1 billion $1 billion
- --------------------------------------------------------------------------------------------------------
INTERNATIONAL Capital INVESCO INVESCO 1.0% .35% of the first $42,820,898
VALUE Appreciation Services, Capital $50 million;
PORTFOLIO and Income Inc. Management, .30% of the next
Inc. $50 million;
.25% over
$100 million
</TABLE>
* Indicates whether the fee has been waived or absorbed during the Fund's
past fiscal year.
B-8
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; BALANCED FUNDS
<TABLE>
<CAPTION>
BALANCED 1940 ACT ADVISER SUB-ADVISER ADVISORY FEE SUB-ADVISORY NET ASSETS
FUNDS OBJECTIVE RATE (BASED ON FEE RATE (BASED ON (AT OCTOBER 31,
AVERAGE NET AVERAGE NET 1996)
ASSETS) ASSETS)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCED Capital INVESCO INVESCO .60% of the first .30% of the first $130,629,237
FUND* Appreciation Funds Trust $350 million; $350 million;
and Income Group, Company .55% of the next .275% of the next
Inc. $350 million; $350 million;
.50% over .25% over
$700 million $700 million
- ------------------------------------------------------------------------------------------------------
MULTI-ASSET Capital INVESCO INVESCO .75% of the first .375% of the first $12,702,769
ALLOCATION Appreciation Funds Management $500 million; $500 million;
FUND* and Income Group, & Research, .65% of the next .325% of the next
Inc. Inc. $500 million; $500 million;
.50% over .25% over
$1 billion $1 billion
- ------------------------------------------------------------------------------------------------------
TOTAL Capital INVESCO INVESCO .75% of the first .20% of the first $1,129,593,849
RETURN Appreciation Funds Capital $500 million; $500 million;
FUND and Income Group, Management, .65% of the next .17% of the next
Inc. Inc. $500 million; $500 million;
.50% over .13 over
$1 billion $1 billion
- ------------------------------------------------------------------------------------------------------
MULTIFLEX Capital INVESCO INVESCO 1% .35 of the first $243,766,866
PORTFOLIO Appreciation Services, Management $500 million;
and Income Inc. & Research, .25% over
Inc. $500 million
- ------------------------------------------------------------------------------------------------------
FLEX Capital INVESCO INVESCO .75% .20% $473,695,882
PORTFOLIO Appreciation Services, Capital
and Income Inc. Management,
Inc.
- ------------------------------------------------------------------------------------------------------
VIF-TOTAL Capital INVESCO INVESCO .75% of the first .375% of the first $12,525,451
RETURN Appreciation Funds Capital $500 million; $500 million;
PORTFOLIO* and Income Group, Management, .65% of the next .325% of the next
Inc. Inc. $500 million; $500 million;
.55% over .275% over
$1 billion $1 billion
- ------------------------------------------------------------------------------------------------------
MAXIM Capital Great INVESCO 1% .55% of first $5,909,241
INVESCO Appreciation West Trust $50 million;
ADR and Income Life Company .50% of next
PORTFOLIO Assurance $50 million;
Company .40% over
$100 million
</TABLE>
B-9
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR
INVESTMENT OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY;
BALANCED FUNDS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
BALANCED 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS
FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE (AT OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MAXIM Capital Great West INVESCO 1% .50% of first $2,997,147
INVESCO Appreciation Life Trust $25 million;
BALANCED and Income Assurance Company .45% of next
PORTFOLIO Company $50 million;
.40% of next
$25 million;
.35% over
$100 million
- -----------------------------------------------------------------------------------------
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
B-10
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; INCOME FUNDS
<TABLE>
<CAPTION>
INCOME FUNDS 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM BOND Current INVESCO INVESCO .50% of the first .25% of the first $10,884,689
FUND* Income; Funds Trust $300 million; $300 million;
Liquidity Group, Company .40% of the next .20% of the next
Inc. $200 million; $200 million;
.30% over .15% over
$500 million $500 million
- ------------------------------------------------------------------------------------------------------
INTERMEDIATE Capital INVESCO INVESCO .60% of the first .16% of the first $44,684,053
GOVERNMENT Appreciation Funds Capital $500 million; $500 million;
BOND FUND* and Income Group, Management, .50% of the next .13% of the next
Inc. Inc. $500 million; $500 million;
.40% over .11% over
$1 billion $1 billion
- ------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT Current INVESCO INVESCO .55% of the first .25% of the first $58,176,601
SECURITIES Income Funds Trust $300 million; $200 million;
FUND* Group, Company .45% of the next .20% over
Inc. $200 million; $200 million
.35% over
$500 million
- ------------------------------------------------------------------------------------------------------
SELECT INCOME Current INVESCO INVESCO .55% of the first .25% of the first $265,380,728
FUND* Income Funds Trust $300 million; $200 million;
Group, Company .45% of the next .20% over
Inc. $200 million; $200 million
.35% over
$500 million
- ------------------------------------------------------------------------------------------------------
HIGH YIELD Current INVESCO INVESCO .50% of the first .25% of the first $398,615,748
FUND* Income Funds Trust $300 million; $200 million;
Group, Company .40% of the next .20% over
Inc. $200 million; $200 million
.30% over
$500 million
</TABLE>
B-11
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR
INVESTMENT OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY;
INCOME FUNDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
INCOME FUNDS 1940 ACT ADVISER SUB-ADVISER ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
OBJECTIVE RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VIF-HIGH YIELD Current INVESCO INVESCO .60% of the first .30% of the first $11,404,398
FUND* Income Funds Trust $500 million; $500 million;
Group, Company .55% of the next .275% of the next
Inc. $500 million; $500 million;
.45% over .225% over
$1 billion $1 billion
- -------------------------------------------------------------------------------------------------------
INCOME Capital INVESCO INVESCO .65% * .10% $27,752,586
PORTFOLIO Appreciation Services, Capital
and Income Inc. Management,
Inc.
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
B-12
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; MONEY MARKET FUNDS
<TABLE>
<CAPTION>
MONEY 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
MARKET FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TAX-FREE High Level of INVESCO INVESCO .50% of the first .15% $58,199,973
MONEY FUND* Current Income; Funds Trust $300 million;
Preservation of Group, Company .40% of the next
Capital and Inc. $200 million;
Liquidity; .30% over
Exempt from $500 million
Federal Tax
- --------------------------------------------------------------------------------------------------------
CASH High Level of INVESCO INVESCO .50% of the first .15% $703,240,532
RESERVES Current Income; Funds Trust $300 million;
FUND* Preservation of Group, Company .40% of the next
Capital and Inc. $200 million;
Liquidity .30% over
$500 million
- --------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT High Level of INVESCO INVESCO .50% of the first .15% $77,458,340
MONEY FUND* Current Income; Funds Trust $300 million;
Preservation of Group, Company .40% of the next
Capital and Inc $200 million;
Liquidity .30% over
$500 million
- --------------------------------------------------------------------------------------------------------
CASH High Level of INVESCO INVESCO .50% .10% $19,283,604
MANAGEMENT Current Income; Services, Capital
PORTFOLIO Preservation of Inc. Management,
Capital and Inc.
Liquidity
- --------------------------------------------------------------------------------------------------------
TREASURER'S High Level of INVESCO None .25% N/A $155,101,615
MONEY MARKET Current Income; Capital
RESERVE Preservation of Management,
FUND Capital and Inc.
Liquidity
</TABLE>
B-13
<PAGE>
EXHIBIT B
FUNDS ADVISED BY THE ADVISER OR THE SUB-ADVISERS WITH SIMILAR INVESTMENT
OBJECTIVES AND STRATEGIES TO THOSE OF THE COMPANY; MONEY MARKET FUNDS
<TABLE>
<CAPTION>
MONEY 1940 ACT ADVISER SUB- ADVISORY FEE SUB-ADVISORY NET ASSETS (AT
MARKET FUNDS OBJECTIVE ADVISER RATE (BASED ON FEE RATE OCTOBER 31,
AVERAGE NET (BASED ON 1996)
ASSETS) AVERAGE NET
ASSETS)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TREASURER'S High Level of INVESCO None .25% N/A $23,039,126
TAX-EXEMPT Current Income; Capital
RESERVE FUND Preservation of Management,
Capital and Inc.
Liquidity;
Exempt from
Federal Tax
</TABLE>
* Indicates whether fee has been waived or absorbed during the Fund's past
fiscal year.
B-14
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO CASH MANAGEMENT PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr. and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Cash Management Portfolio
of INVESCO Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree
Street N.E., Suite 200, Atlanta, Georgia 30309 on Friday, January 31, 1997, at
10:00 a.m. (Eastern Standard Time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated December 26, 1996,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Capital Management, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc. into a wholly-owned U.S.
subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
--------------------------------------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO EQUITY PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Equity Portfolio of INVESCO
Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree Street
N.E., Suite 200, Atlanta, Georgia 30309 on Friday, January 31, 1997, at 10:00
a.m. (Eastern Standard Time) and at any adjournment thereof, upon the matters
set forth below, all in accordance with and as more fully described in the
Notice of Special Meeting and Proxy Statement, dated December 26, 1996, receipt
of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Capital Management, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc. into a wholly-owned U.S.
Subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
--------------------------------------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO FLEX PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Flex Portfolio of INVESCO
Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree Street
N.E., Suite 200, Atlanta, Georgia 30309, on Friday, January 31, 1997, at 10:00
a.m. (Eastern Standard Time) and at any adjournment thereof, upon the matters
set forth below, all in accordance with and as more fully described in the
Notice of Special Meeting and Proxy Statement, dated December 26, 1996, receipt
of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Capital Management, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc. into a wholly-owned U.S.
Subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For all Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
-------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- -----------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO INCOME PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Income Portfolio of INVESCO
Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree Street
N.E., Suite 200, Atlanta, Georgia 30309 on Friday, January 31, 1997, at 10:00
a.m. (Eastern Standard Time) and at any adjournment thereof, upon the matters
set forth below, all in accordance with and as more fully described in the
Notice of Special Meeting and Proxy Statement, dated December 26, 1996, receipt
of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Capital Management, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc. into a wholly-owned U.S.
Subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
---------------------------------------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO INTERNATIONAL VALUE PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO International Value Portfolio
of INVESCO Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree
Street N.E., Suite 200, Atlanta, Georgia 30309, on Friday, January 31, 1997, at
10:00 a.m. (Eastern Standard Time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated December 26, 1996,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Capital Management, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc., into a wholly-owned U.S.
subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
---------------------------------------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO MULTIFLEX PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO MultiFlex Portfolio of
INVESCO Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree
Street N.E., Suite 200, Atlanta, Georgia 30309, on Friday, January 31, 1997, at
10:00 a.m. (Eastern Standard Time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated December 26, 1996,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Management & Research, Inc., such agreement to take effect only if the
proposed merger of A I M Management Group, Inc. into a wholy-owned U.S.
subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to elect eleven directors of the Company: Charles W. Brady, Dan J.
Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withold authority to vote, mark "For All Except" and write the nominee's
name on the line below.
--------------------------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY.
INVESCO ADVISOR FUNDS, INC.
INVESCO REAL ESTATE PORTFOLIO
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Hubert L. Harris, Jr., and Tony
D. Green, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Real Estate Portfolio of
INVESCO Advisor Funds, Inc. (the "Company"), to be held at the 1355 Peachtree
Street N.E. Suite 200, Atlanta, Georgia 30309, on Friday, January 31, 1997, at
10:00 a.m. (Eastern Standard Time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated December 26, 1996,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR":
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between the Company
and INVESCO Services, Inc. ("ISI"), such agreement to take effect only if
the proposed merger of A I M Management Group, Inc. into a wholly-owned
U.S. subsidiary of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
1.B. Proposal to approve a new sub-advisory agreement between ISI and INVESCO
Realty Advisors, Inc., such agreement to take effect only if the proposed
merger of A I M Management Group, Inc. into a wholly-owned U.S. subsidiary
of INVESCO PLC is consummated.
Vote on Proposal
For [_] Against [_] Abstain [_]
2. Proposal to select eleven directors of the Company: Charles W. Brady, Dan
J. Hesser, Fred A. Deering, Victor L. Andrews, Bob R. Baker, Lawrence H.
Budner, Daniel D. Chabris, A.D. Frazier, Jr., Hubert L. Harris, Jr.,
Kenneth T. King and John W. McIntyre.
Vote on Directors
For All [_] Withhold All [_] For All Except [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
--------------------------------------
<PAGE>
3. Proposal to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending December 31, 1997.
Vote on Proposal
For [_] Against [_] Abstain [_]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1.A., 1.B., 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE AS
SOON AS POSSIBLE. THANK YOU.
- --------------------------------------------------------------------------------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
