PRELIMINARY COPY -- TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(C) or (S)240.14a-12
INVESCO VALUE TRUST
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):
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(4) Proposed maximum aggregate value of transaction:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DRAFT
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO VALUE TRUST
--- --,1997
- --------------------------------------------------------------------------------
Dear INVESCO Value Trust Shareholder:
Enclosed is a Proxy Statement for the [October 28, 1997] special
meeting of shareholders of INVESCO Value Equity Fund (the "Value Equity Fund"),
INVESCO Intermediate Government Bond Fund (the "Intermediate Government Bond
Fund") and INVESCO Total Return Fund (collectively the "Funds"), the three
series of INVESCO Value Trust (the "Trust").
As explained more fully in the attached Proxy Statement, shareholders
of each of the Funds will be asked to approve changes to the investment policies
of each of the Funds, to permit each Fund to invest in futures, options, puts
and calls. In addition, shareholders of the Value Equity and Intermediate
Government Bond Funds will be asked to approve a Plan and Agreement of
Distribution (the "Plan") applicable only to increased assets in the Value
Equity Fund and Intermediate Government Bond Fund purchased after November 1,
1997.
The board of trustees of the Trust believes that both the change in
investment policy and the Plan are in the best interests of the shareholders.
Therefore, we ask that you read the enclosed materials and vote promptly. Should
you have any questions, please feel free to call our client services
representatives at 1-800-646-8372. They will be happy to answer any questions
that you might have.
Your vote is important. The changes in investment policies and the Plan
we are submitting for your consideration is significant to the Trust, the Funds
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 which would increase costs to shareholders. 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 envelope.
Sincerely,
Dan J. Hesser
President
INVESCO Value Trust
INVESCO Value Equity Fund
INVESCO Intermediate Government Bond Fund
INVESCO Total Return Fund
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO VALUE TRUST
7800 East Union Avenue
Denver, Colorado 80237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [OCTOBER 28, 1997]
- --------------------------------------------------------------------------------
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of INVESCO Value Equity Fund, INVESCO Intermediate Government Bond
Fund and INVESCO Total Return Fund (collectively, the "Funds"), the three series
of INVESCO Value Trust (the "Trust") will be held at the Hyatt Regency Tech
Center, 7800 E. Tufts Avenue, Denver, Colorado 80237 on [Tuesday, October 28,
1997], at 10:00 a.m., Mountain Time, for the following purposes:
1. To approve or disapprove a change in the investment policy of
the Funds to allow each Fund to invest in futures, options,
puts and calls.
2. To approve or disapprove a Plan and Agreement of Distribution
(the "Plan) for the Value Equity and Intermediate Government
Bond Funds.
3. To transact such other business as may properly come before
the Meeting or any adjournment(s) thereof.
The board of trustees of the Trust has fixed the close of business on
[September 4, 1997] as the record date for the determination of shareholders
entitled to notice of and to vote at the Meeting or any adjournment(s) thereof.
A complete list of shareholders of the Funds entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Funds for any purpose germane to the Meeting during ordinary business hours
after ------- --, 1997, at the offices of the Trust, 7800 East Union Avenue,
Denver, Colorado 80237.
You are cordially invited to attend the Meeting. Shareholders who do
not expect 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 trustees of the Trust.
<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 a majority of the eligible shares is represented, and the Trust
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 approve Proposals 1 and 2.
Your vote, then, could be critical in allowing the Trust to hold the
Meeting as scheduled. By marking, signing, and promptly returning the enclosed
proxy, you may eliminate the need for additional solicitation. Your cooperation
is appreciated.
By Order of the Board of Trustees,
Glen A. Payne
Secretary
Denver, Colorado
Dated: --------- --, 1997
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO VALUE TRUST
---- --, 1997
- --------------------------------------------------------------------------------
INVESCO VALUE TRUST
7800 East Union Avenue
Denver, Colorado 80237
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [OCTOBER 28, 1997]
INTRODUCTION
The enclosed proxy is being solicited by the board of trustees (the
"Board" or the "Trustees") of INVESCO Value Trust (the "Trust") on behalf of
INVESCO Value Equity Fund (the "Value Equity Fund"), INVESCO Intermediate
Government Bond Fund (the "Intermediate Government Bond Fund") and INVESCO Total
Return Fund (the "Total Return Fund") (collectively, the "Funds"), the three
series of the Trust, for use in connection with the special meeting of
shareholders of the Funds (the "Meeting") to be held at 10:00 a.m., Mountain
Time, on [Tuesday, October 28, 1997], at the Hyatt Regency Tech Center, 7800 E.
Tufts Avenue, Denver, Colorado 80237 and at any adjournment(s) thereof for the
purposes set forth in the foregoing notice. THE TRUST'S ANNUAL REPORT, INCLUDING
FINANCIAL STATEMENTS OF THE TRUST FOR THE FISCAL YEAR ENDED AUGUST 31, 1996, AND
SEMI-ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY
28, 1997, ARE AVAILABLE WITHOUT CHARGE UPON REQUEST FROM GLEN A. PAYNE,
SECRETARY OF THE TRUST, AT P.O. BOX 173706, DENVER, COLORADO 80217-3706
(TELEPHONE NUMBER 1-800-646-8372). The approximate mailing date of proxies and
this Proxy Statement is -------- --, 1997.
The primary purposes of the Meeting are to allow shareholders to
consider (i) a change in the investment policy of each Fund to allow it to
invest in futures, options, puts and calls and (ii) a Plan and Agreement of
Distribution (the "Plan") for the Value Equity Fund and Intermediate Government
Bond Fund.
The following factors should be considered by shareholders in
determining whether to authorize the change in investment policy to permit
investment in futures, options, puts and calls:
o The change in investment policy, if approved, would assist the Funds in
achieving their respective investment objectives.
o The change, if approved, will permit the Funds to invest in these
instruments as a hedge against the volatility associated with
investments in the Funds.
<PAGE>
o If approved, the change could result in additional risks associated
with such investments.
The following factors should be considered by shareholders of the Value
Equity Fund and Intermediate Government Bond Fund in determining whether to
approve the Plan:
o The Plan has been approved by the Board of Trustees of the Trust,
including the Trustees who are completely independent of any
INVESCO-affiliated company (the "Independent Trustees").
o The relationship of the Plan to the overall cost structure of the Value
Equity and Intermediate Government Bond Funds.
o The potential long-term benefits of the Plan to the Value Equity and
Intermediate Government Bond Funds and their shareholders.
o The effect of the Plan on existing shareholders.
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 Proposals 1 and 2. A
majority of the outstanding shares of the Trust 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
Meeting, 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 delivered the necessary instructions for the broker to vote the shares or
if the broker has and exercises discretionary voting power. Where the broker or
fiduciary 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 the proposals being submitted for a vote of the shareholders of
each Fund are similar, the Board determined to combine the proxy materials for
the Funds in order to reduce the cost of preparing, printing and mailing the
proxy materials.
In order to further reduce costs, the notices to shareholders having
more than one account in a Fund listed under the same Social Security number at
a single address have been combined. The proxy cards have been coded so that
each shareholder's votes will be counted for all such accounts.
<PAGE>
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 Trust at P.O. Box 173706,
Denver, Colorado 80217-3706, execution of a subsequent proxy card, or oral
revocation at the Meeting) at any time before it is exercised.
Shareholders of the Funds of record at the close of business on
[September 4, 1997] (the "Record Date"), are entitled to vote at the Meeting,
including 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, [------------] shares of
beneficial interest of the Trust, $.01 par value per share, were outstanding,
all of them being shares of the Funds.
In addition to the solicitations of proxies by use of the mail, proxies
may be solicited by officers of the Trust, and by officers and employees of
INVESCO Funds Group, Inc., the investment adviser and transfer agent of the
Funds and INVESCO Distributors, Inc., personally or by telephone or telegraph,
without special compensation. Until September 29, 1997, INVESCO Funds Group,
Inc. is also the distributor of the Funds. Effective on that date, INVESCO
Distributors, Inc., a wholly-owned subsidiary of INVESCO Funds Group, Inc., will
become the distributor of the Funds. INVESCO Funds Group, Inc. and INVESCO
Distributors, Inc. are referred to collectively as "INVESCO." In addition,
Shareholder Communications Corporation ("SCC") has been retained to assist in
the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes the
Trust has not yet received may receive telephone calls from representatives of
SCC requesting that they authorize SCC, by telephonic or electronically
transmitted instructions, to execute proxy cards on their behalf. Telephone
authorizations will be recorded in accordance with the procedures set forth
below. INVESCO 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 Massachusetts counsel that addresses the
validity, under the applicable laws of the State of Massachusetts, of
authorization given orally to execute a proxy. The opinion given by
Massachusetts counsel concludes that a Massachusetts court would find that there
is no Massachusetts law or public policy 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 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 Trust, the SCC
representative has the responsibility to explain the voting process, read the
proposals listed on the proxy card, and ask for the shareholder's instructions
on each proposal. Although he or she is permitted to answer questions about the
process, the SCC representative is not permitted to recommend to the shareholder
<PAGE>
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 mailgram 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
shareholder may revoke the accompanying proxy or a proxy given telephonically at
any time prior to its use by filing with the Trust a written revocation or duly
executed proxy bearing a later date. In addition, any shareholder who attends
the Meeting in person may vote by ballot at the Meeting, thereby canceling 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 half by INVESCO and half by the Funds except for the
proposal relating to the proposed Plan which will be borne half by INVESCO and
half by the Value Equity and Intermediate Government Bond Funds.
The Board may seek one or more adjournments of the Meeting to solicit
additional shareholders, if necessary, to obtain a quorum for the Meeting, or to
obtain the required shareholder vote to approve Proposals 1 and 2. An
adjournment would require the affirmative vote of the holders of a majority of
the shares present at the Meeting (or an adjournment thereof) in person or by
proxy and entitled 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 adjournment
if sufficient votes have been received and it is otherwise appropriate.
PROPOSAL 1: APPROVAL OR DISAPPROVAL OF THE CHANGE IN
INVESTMENT POLICY PERMITTING INVESTMENTS IN
FUTURES, OPTIONS, PUTS AND CALLS.
Background
The current fundamental investment policies of the Funds concerning
investing in futures contracts and options, as disclosed in the Statement of
Additional Information, are as follows:
Neither the Trust nor any Fund will:
...(7) Make short sales of securities or maintain a short position. The
INVESCO Intermediate Government Bond and Total Return Funds, however,
may write covered call options and cash secured puts. See the section
entitled "Risk Factors" in the Prospectus, and the section entitled
"Investment Policies and Restrictions" in the Statement of Additional
Information.
<PAGE>
...(8) Purchase securities on margin, except that a Fund may obtain
such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
...(9) Purchase or sell real estate or interests in real estate. A Fund
may invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which
invest in real estate or interests therein.
...(10) Purchase or sell commodities or commodity contracts. The
INVESCO Intermediate Government Bond and Total Return Funds, however,
may enter into interest rate futures contracts if immediately after
such a commitment the sum of the then aggregate futures market prices
of financial instruments required to be delivered under open futures
contract sales and the aggregate purchase prices under futures contract
purchases would not exceed 30% of the INVESCO Intermediate Government
Bond Fund's and the INVESCO Total Return Fund's total assets....
Under these fundamental investment policies, the Funds are prohibited
from investing in futures contracts or options. Of the 45 open-end mutual funds
for which INVESCO Funds Group, Inc. serves as investment adviser (the "INVESCO
Mutual Funds"), 21 have the ability to invest in futures contracts and options.
INVESCO Funds Group, Inc. and the Funds' sub-adviser, INVESCO Capital
Management, Inc. ("ICM") (collectively, "Fund Management") are asking
shareholders to amend these policies so that the Funds may invest in such
instruments.
Reasons For The Requested Changes
Futures, options, puts and calls are part of a wider group of financial
instruments commonly known as "derivatives," because their value "derives" from
an underlying security or index. Although derivatives in recent years often have
been characterized as high-risk investments, such descriptions most often are
applied to the use of derivatives in an attempt to increase mutual fund
performance. Fund Management, to the contrary, wishes to utilize futures,
options, puts and calls in an attempt to hedge the risk inherent in any Fund's
portfolio. Although investment in such instruments presents a certain degree of
potential risk, in the opinion of Fund Management and the Board the Funds'
present inability to hedge portfolio risk through the use of such instruments
may itself be a potential risk under certain market conditions. Although hedging
in this manner may potentially increase a Fund's investment return in certain
markets, that, of course, cannot be guaranteed. The primary purpose for the use
of these instruments by the Funds is a defensive one.
Options currently are traded on several companies' securities in which
the Funds invest and, in addition, options are available on several indices that
reflect certain markets in which the Funds invest. The ability to trade in such
instruments may allow a Fund to hedge against downward price movements in these
securities and markets, thus enhancing a Fund's ability to protect the value of
its assets in declining markets.
<PAGE>
Moreover, many of the Funds' competitors are authorized to use, and
actively do utilize futures, options, puts and calls. The Funds' present
inability to utilize these instruments puts the Funds at a competitive
disadvantage, to the potential detriment of their shareholders.
Of course, investment in such instruments is not without risk. The use
of these instruments requires skills and involves risks different from those
involved in trading the other instruments in which the Funds invest. Among these
risks is the possibility that there may be imperfect correlation, or no
correlation at all, between price movements in an option or future and the
underlying instrument being hedged. The successful use of these instruments will
depend upon the ability of Fund Management to forecast price and interest rate
movements correctly. Should prices move in an unexpected manner, a Fund may not
achieve the potential benefits of these instruments or may realize losses and
thus be in a worse position than if such strategies had not been used. Your
attention is directed specifically to the descriptions of these instruments
under this proposal and to Exhibit A attached hereto which further describes
these risks.
Proposed Changes To Investment Policy
Fund Management and the Board have determined that the ability to
invest in futures, options, puts and calls would provide the Funds with an
important additional means for seeking to hedge the value of their portfolios,
i.e., attempting to reduce the overall level of investment risk that normally
would be expected to be associated with a Fund's portfolio and attempting to
protect each Fund against market movements that might adversely affect the value
of a Fund's assets or the price of securities that the Fund is considering
purchasing. The Trustees believe that the Funds would benefit from having the
flexibility to deal in such instruments, in addition to their other investments,
and that the Funds' investments in these instruments would be consistent with
each Fund's respective investment objective and policies. There can be no
assurance, however, that the use of these instruments by a Fund will assist it
in achieving its investment objective.
Accordingly, the Board, including all of the Independent Trustees,
unanimously approved the proposed change in a meeting on May 16, 1997, and is
proposing that shareholders approve the modification of the above-quoted
fundamental investment policies of the Funds. Under the proposal, the language
of these fundamental investment policies would be revised to read, in their
entirety, as follows:
Neither the Fund nor any Portfolio will:
...(7) sell short, except for the Fund's purchase or sale of options or
futures, or writing, purchasing or selling puts and calls.
...(8) buy on margin, except for the Fund's purchase or sale of options
or futures, or writing, purchasing or selling puts and calls.
...(9) buy or sell commodities or commodity contracts (however, the
Fund may purchase securities of companies which invest in the
foregoing). This restriction shall not prevent the Fund from purchasing
or selling options on individual securities, security indexes, and
<PAGE>
currencies, or financial futures or options on financial
futures, or undertaking forward currency contracts.
In order to ensure that the proposed modification of the Funds'
fundamental investment policies will not have the effect of unduly increasing
the investment risk involved in investing in any Fund's shares and to ensure
that each Fund will continue to comply with and adhere to all limitations
imposed by the Commodity Futures Trading Commission (the "CFTC"), the Board also
has approved the following new non-fundamental investment policy for the Funds
which will be effective if Proposal 1 is adopted by the Funds' shareholders:
The Funds will not (i) enter into any futures contracts or
options on futures contracts if immediately thereafter the aggregate
margin deposits on all outstanding futures contracts positions held by
the Fund and premiums paid on outstanding options on futures contracts,
after taking into account unrealized profits and losses, would exceed
5% of the market value of the total assets of the Fund, or (ii) enter
into any futures contracts if the aggregate net amount of the Fund's
commitments under outstanding futures contracts positions of the Fund
would exceed the market value of the total assets of the Fund.
This new non-fundamental investment policy will result in each Fund
being able to invest up to 5% of its respective total assets as margin deposits
for futures contracts or options on futures contracts as long as that Fund's
commitments under any outstanding futures contracts is not greater than the
total assets of the Fund. Making this new policy a non-fundamental investment
policy will give the Board, which includes a majority of Trustees who are
completely independent of any INVESCO-affiliated company, greater flexibility to
modify the policy in the future if any such modification is deemed to be in the
best interests of the Funds' shareholders.
Vote Required
As provided under the Investment Company Act of 1940 (the "1940 Act"),
approval of the investment policy changes will require the affirmative vote of a
majority of the outstanding shares of each Fund voting as a separate 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 Fund are present or represented by proxy, or (b) more
than 50% of the total outstanding shares of each Fund.
If approved, this Proposal will take effect as soon as possible after
any remaining legal prerequisites to implementation of the Proposal have been
satisfied. If the shareholders of any particular Fund fail to approve this
Proposal, the Fund's above-quoted fundamental investment policies will remain
unchanged.
<PAGE>
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND
THAT EACH FUND'S SHAREHOLDERS VOTE
IN FAVOR OF PROPOSAL 1.
PROPOSAL 2: APPROVAL OR DISAPPROVAL OF THE PLAN
Background
At this meeting, shareholders of the Value Equity and Intermediate
Government Bond Funds (the "Plan Funds") are to consider a Plan and Agreement of
Distribution (the "Plan") approved by the Board on May 16, 1997. The reasons why
the Trustees, including all of the Independent Trustees, determined that it was
reasonably likely that the Plan would contribute to an increase in sales of
shares of the Plan Funds, with resulting benefits to the Plan Funds and their
shareholders, are set forth in detail below. Briefly, the Board determined that
an enhanced marketing effort by INVESCO on behalf of the Plan Funds would
benefit each Plan Fund in maintaining and improving its market share, and that
such an effort would be enhanced by adoption of the Plan, under which each Plan
Fund's assets will be available to compensate INVESCO for a portion of the costs
of marketing and distributing shares of the respective Plan Fund.
Changing Mutual Fund Distribution Patterns
In years past, no-load mutual funds such as those offered by the Trust
were sold directly by their distributors. Today, no-load mutual funds
increasingly are sold through the efforts of third parties such as
broker-dealers, banks, investment advisers, consultants and others. Some of
these third parties are compensated for sales efforts; others are compensated
for ongoing services that they provide to mutual fund shareholders; still others
are compensated for both. A survey of the mutual fund industry by Lipper
Analytical Services, Inc. ("Lipper") shows that as of --------------------,
- -----% of new assets in no-load mutual funds came to those funds via third party
distribution channels during --------------. The INVESCO Mutual Funds are no
different from the rest of the industry in this respect. INVESCO has advised the
Trust that nearly 80% of the gross purchases of all INVESCO Mutual Funds in
calendar year 1996 came through third party distribution channels.
While the mutual fund industry has evolved increasingly toward
fee-based compensation of third party intermediaries, the Trust's pricing
structure has remained unchanged. Historically, INVESCO Funds Group, Inc., the
Funds' investment adviser, has compensated these third parties, and paid a wide
variety of advertising and other marketing expenses, out of the revenues it
derives from the Plan Funds for portfolio management and other services provided
to the Plan Funds. In the judgment of INVESCO and the Board, continuing this
approach places the Plan Funds at a competitive marketing disadvantage to their
peers.
Although the INVESCO Mutual Funds have grown significantly in the past
five years, INVESCO and the Trust compete against management companies having
far greater resources at their command. The costs of marketing the Plan Funds
<PAGE>
have increased substantially over the last few years. In 1992, INVESCO
spent $6.7 million marketing the INVESCO Mutual Funds; in 1996, INVESCO spent
$11 million on such efforts. Thus, INVESCO must spend a far greater dollar
amount in 1997 simply to maintain the same level of marketing for the Plan Funds
that they had in 199-. While INVESCO cannot outspend its competitors, it must
spend at least enough to provide what its competitors offer to third parties to
distribute their mutual funds and to generally inform investors that the Plan
Funds offer attractive alternatives to other fund groups. INVESCO has advised
the Board that to do both requires a significant increase in the money and
personnel devoted to marketing shares of the Plan Funds.
This is a need that is not unique to the Trust, or to the INVESCO
Mutual Funds as a group. In order to increase revenue available for spending in
the areas of advertising, sales promotion, and maintenance of an effective sales
effort, many competing mutual fund groups, both load and no-load, have adopted
distribution plans pursuant to Rule 12b-1 of the 1940 Act, under which fund
assets are available to pay certain expenses of distributing fund shares.
Several of the INVESCO Mutual Funds adopted 12b-1 plans in 1990, and
most new INVESCO Mutual Funds started since that time have such plans. Again,
this is not unique. Data on the mutual fund industry compiled by Lipper shows
that at December 31, 1996, 6,367 of the 10,118 open-end mutual funds registered
with the SEC (62.9%) were using fund assets to pay for distribution expenses,
either through Rule 12b-1 plans or a direct charge against fund assets. In 1990,
only 54.6% of all such funds had such payments in place. According to INVESCO,
one reason why many no-load funds have adopted Rule 12b-1 plans is to give them
a means, through payment of trail commissions, to compensate third party
broker-dealers for helping to sell fund shares.
It is important to note that adoption of the Plan will NOT result in a
windfall of revenue for INVESCO. INVESCO has committed to the Board that it will
continue bearing expenses of marketing the Plan Funds at least equal to the
level of expenses that it is currently bearing. Thus, adoption of the proposed
Plan will have the effect of making additional moneys available for promotion
and marketing of the Plan Funds, but will not result in increased profits to
INVESCO from INVESCO's reducing its own marketing expenditures.
The Board and INVESCO believe that the adoption of the Plan is likely
to improve the sales of Plan Fund shares by providing third party distributors
with an incentive to sell shares of the Plan Funds, and will allow INVESCO to
embark on an enhanced marketing effort on behalf of the Plan Funds which the
Board and INVESCO believe is required if the Plan Funds are to remain
competitive in the marketplace.
Impact Of The Proposed Plan On The Cost Structures Of The Plan Funds
The proposed Plan would authorize use of a small percentage of assets
of the Plan Funds to compensate INVESCO for expenditures it undertakes to
promote sales of shares of the Plan Funds. The Plan would limit the amount of a
Plan Fund's assets which could be used for this purpose during any 12-month
period to a maximum of 0.25 of 1% (25 basis points) of the assets of that Fund.
Any increase in this rate would require consent of the Board and shareholders of
the Fund. The compensation allowed under the proposed Plan is modest in
comparison to Rule 12b-1 plans that have been adopted by many other mutual
funds. Some funds have adopted distribution plans authorizing in excess of 1%
<PAGE>
of fund assets on an annual basis to be used to reimburse the distributor for
the costs of marketing fund shares.
The proposed Plan is PROSPECTIVE in nature. Thus, it will only apply to
the increase in assets of the Plan Funds which occurs after the Plan is
implemented. If approved by shareholders, the Plan will become effective on
November 1, 1997, and the first payments under the Plan will be made on or about
December 5, 1997. Therefore, the Plan will apply only to the increase in assets
in the Plan Funds on or after November 1, 1997. To illustrate how the Plan will
work, assume that a Plan Fund has $500 million in assets on October 31, 1997.
Assume further that the Fund increases its assets to $550 million in November
1997. Under this illustration, the Plan will apply to $50 million in Fund assets
and the cost of the Plan will be absorbed pro rata by all shareholders.
Adoption of the proposed Plan will only increase expenses a shareholder
would pay on a $1,000 investment in the Plan Funds (assuming a 5% annual return)
by $2.63 for one year. Another way of looking at the effect of this proposal is
to consider the fact that, if a Fund had a net asset value per share of $10, the
deduction of the maximum Rule 12b-1 charge would reduce the price per share by
two and one-half cents ($.025) for the entire year ($.00007 per share per day).
Daily changes in the market price of the Funds' securities often result in a
fluctuation in the Funds' net asset values per share by an amount greater than
the yearly amount of the reduction in the per share net asset values that will
result from the Rule 12b-1 charge. If the Plan had been effective at June 30,
1996, based on the average daily net assets of each Plan Fund's portfolios and
the purchases of Fund shares made after that date, as of June 30, 1997, the
maximum annual payments of the Plan Funds for the twelve months then ended would
have been:
Value Equity Fund $
Intermediate Government Bond Fund $
Shareholders may recall that certain of the INVESCO Mutual Funds
adopted similar plans pursuant to Rule 12b-1 in 1990. In general, mutual funds
with such plans tend to increase assets more rapidly than those without such
plans. The increased assets, in turn, may result in reaching advisory fee
breakpoints more quickly, and in allocating expenses over more accounts and more
assets. Increased assets also may allow the adviser to waive percentages of
advisory fees. Thus, while shareholders in the INVESCO Mutual Funds named below
approved plans allowing for fees of 0.25%, with one exception, the net increase
in fees has not equalled 0.25%.
Fund 1990 Fiscal Year End 1996 Fiscal Year End
Total Expenses Total Expenses
- --------------------------------------------------------------------------------
INVESCO Dynamics Fund 0.98% 1.12%
INVESCO Growth Fund 0.78% 1.05%
<PAGE>
INVESCO High Yield Fund 0.94% 0.98%
INVESCO Industrial Income Fund 0.76% 0.93%*
INVESCO Tax-Free Long-Term Bond Fund 0.75% 0.90%**
INVESCO Select Income Fund 1.01% 1.00%***
INVESCO U.S. Government Securities Fund 1.07% 1.00%****
* Reflects fee waiver of 0.03%
** Reflects fee waiver of 0.13%
*** Reflects fee waiver of 0.15%
**** Reflects fee waiver of 0.46%
INVESCO cannot, of course, promise that the Plan Funds will have a
similar experience. The data provided merely illustrates that if shareholders
agree to impose a 0.25% fee pursuant to Rule 12b-1, the expenses of a fund do
not automatically increase by 0.25%.
Benefits To Existing Shareholders Of The Plan Funds
Shareholders will no doubt observe that adoption of the proposed Plan
may benefit the Plan Funds and INVESCO, but may wonder whether the Plan will
benefit them.
First, as noted above, it is important to understand that the Plan will
only apply to the increase in assets of the Plan Funds which occurs after the
Plan is implemented. Thus, the Plan is prospective in nature, and will only
apply to the increase in assets in the Plan Funds on or after November 1, 1997.
Therefore, the initial increases in the expenses of the Plan Funds are expected
to be substantially less than the 0.25% maximum amount for which approval is
sought, because payments will be made only as to shares acquired on or after
November 1, 1997. As the proportion of Plan Funds shares purchased on or after
that date to the total number of outstanding shares of the Plan Funds increases,
the actual expenses caused by Plan payments also will increase (but in no event
will exceed 0.25% of the average annual net assets of each Fund).
The Board and INVESCO believe that there is a reasonable likelihood
that there will be benefits to existing shareholders, including:
o Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares
and afford greater resources with which to pursue the
investment objectives of the Plan Funds;
o The sale of additional shares reduces the likelihood that
redemption of shares will require the liquidation of the Plan
Funds' securities in amounts and at times that are
disadvantageous for investment purposes and, therefore,
disadvantageous to the remaining shareholders;
<PAGE>
o The positive effect which increased Plan Fund assets will have
on its revenues could allow INVESCO:
o To have greater resources to make the financial
commitments necessary to improve the quality and
level of Fund and shareholder services (in both
systems and personnel);
o To increase the number and type of mutual funds
available to investors from INVESCO (and support them
in their infancy), and thereby expand the investment
choices available to all shareholders; and
o To acquire and retain talented employees who desire
to be associated with a growing organization.
Moreover, increased assets of Plan Funds may result in reducing each
investor's share of certain expenses through economies of scale (e.g.,
allocating fixed expenses over a larger asset base), thereby partially
offsetting the costs of the Plan.
Protections Afforded Shareholders Under The Proposed Plan
The proposed Plan is described in detail below. However, the Board and
INVESCO believe that shareholders should recognize certain protections that are
either in the proposed Plan itself or are embedded in the proposed Plan under
the terms of Rule 12b-1 under the 1940 Act.
No Carryover Of Expenses
The proposed Plan does NOT permit carrying over distribution expenses
in excess of the above 25 basis points to subsequent periods. As you may know,
many Rule 12b-1 plans of other mutual funds permit the carrying over of such
excess expenses (subject to the approval of those funds' boards), and the
resultant buildup of large expense accruals subject to compensation. Building up
of large expense accruals is a major complaint that is often raised concerning
the operation of Rule 12b-1 plans.
Quarterly Review By The Board of Trustees
INVESCO will be required to submit reports to the Board on a quarterly
basis concerning the marketing expenses that have been compensated under the
Plan; and, very importantly, the Trustees will be able to terminate the Plan at
any time, which would terminate subsequent Plan payments. The Board must approve
annually the continuation of the Plan, or such Plan will terminate automatically
along with the payments under it by the Plan Funds.
Description Of The Plan
On May 16, 1997 the Board adopted the proposed Plan, subject to
approval by shareholders of the Plan Funds. A copy of the Plan is attached as
Exhibit B. The distribution expenses borne by each Plan Fund will be in addition
to the distribution expenses that INVESCO currently bears, and that it intends
to continue bearing, pursuant to a commitment INVESCO has made to the INVESCO
<PAGE>
Mutual Funds. The Plan will obligate INVESCO to submit quarterly reports of
expenditures under the Plan to the Board. Such quarterly reports will be
reviewed by the Board, including a majority of the Independent Trustees. In
addition, INVESCO has made a commitment to the Trustees to provide them with the
proposed annual budget for its marketing efforts on behalf of the INVESCO Mutual
Funds, including the Plan Funds.
Each Plan Fund is authorized under the proposed Plan to use its assets
to finance certain activities relating to the distribution of its shares to
investors. Under the Plan, monthly payments may be made by a Fund to INVESCO to
permit it, at INVESCO's discretion, to engage in certain activities, and provide
certain services approved by the Board in connection with the distribution of
each Plan Fund's shares to investors. These activities and services may include
the payment of compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in the Plan
Funds) to securities dealers and other financial institutions and organizations,
which may include INVESCO-affiliated companies, to obtain various
distribution-related and/or administrative services for the Plan Funds. Such
services may include, among other things, processing new shareholder account
applications, preparing and transmitting to the Plan Funds' Transfer Agent
computer processable tapes of all transactions by customers, and serving as the
primary source of information to customers in answering questions concerning the
Plan Funds and their transactions with the Plan Funds.
In addition, other permissible activities and services include
advertising, the preparation and distribution of sales literature, printing and
distributing prospectuses to prospective investors, and such other services and
promotional activities for the Plan Funds as may from time to time be agreed
upon by the Trust and the Board, including public relations efforts and
marketing programs to communicate with investors and prospective investors.
These services and activities may be conducted by the staff of INVESCO or its
affiliates or by third parties.
Under the Plan, the Trust's payments to INVESCO on behalf of each Plan
Fund are limited to an amount computed at an annual rate of 0.25% of each Plan
Fund's average net assets during the month. INVESCO is not entitled to payment
for overhead expenses under the Plan, but may be paid for all or a portion of
the compensation paid for salaries and other employee benefits for the personnel
of INVESCO whose primary responsibilities involve marketing shares of the
INVESCO Mutual Funds, including the Plan Funds. Payment amounts by each Plan
Fund under the Plan, for any month, may be made to compensate INVESCO for
permissible activities engaged in and services provided by INVESCO during the
rolling 12-month period in which that month falls, although this period is
expanded to 24 months for obligations incurred during the first 24 months of
each Plan Fund's operations. Therefore, any obligations incurred by INVESCO in
excess of the limitations described above will not be paid by the Plan Funds
under the Plan, and will be borne by INVESCO. In addition, INVESCO may from time
to time make additional payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Plan Funds. No further payments will be made by
the Plan Funds under the Plan in the event of its termination. Also, any
payments made by the Plan Funds may not be used to finance directly the
distribution of shares of any other fund of the Trust or other mutual fund
advised by INVESCO. Payments made by each Plan Fund under the Plan for
compensation of marketing personnel, as noted above, are based on an allocation
formula designed to ensure that all such payments are appropriate.
<PAGE>
INVESCO will bear any distribution-related expenses in excess of the
amounts which are compensated pursuant to the Plan. The Plan also authorizes any
financing of distribution which may result from INVESCO's use of its own
resources, including profits from investment advisory fees received from the
Plan Funds, provided that such fees are legitimate and not excessive.
The Plan is subject to the requirements of Rule 12b-1 under the 1940
Act. The Plan has been approved by the Trust's Board, including all of the
Independent Trustees, and is being submitted to the shareholders of the Plan
Funds for approval at this shareholders' meeting. Under Rule 12b-1, the Board
must review expenditures under the Plan no less often than quarterly, and the
Plan may continue in effect only so long as such continuance is approved at
least annually by the Board, including a majority of the Independent Trustees. A
material amendment to the Plan requires approval by the Board, including a
majority of the Independent Trustees, and any amendment which would materially
increase the amount which any of the Plan Funds may expend under the Plan also
requires approval by a majority of the outstanding shares of those Funds. The
Plan and any agreements relating to its implementation may be terminated, in the
case of the Plan, at any time, and in case of any agreements, upon sixty days'
written notice to the other party, by vote of a majority of the Independent
Trustees or by the vote of a majority of the outstanding shares of the Plan
Funds. Such agreements will also terminate automatically if assigned. So long as
the Plan continues in effect, the selection and nomination of the disinterested
Trustees of the Trust are committed to the discretion of the Independent
Trustees.
Basis Of Board Of Trustees Recommendations
The Independent Trustees had available to them the assistance of outside
legal counsel throughout the process of determining whether to approve the Plan.
Prior to and during the meetings the Independent Trustees requested and received
all information they deemed necessary to enable them to determine whether the
Plan is in the best interests of the Trust, the Plan Funds and their
shareholders. At the meetings, the Independent Trustees reviewed materials
furnished by Fund management and also met with representatives of INVESCO.
In connection with their consideration of the proposed Plan, the
Trustees were furnished with a draft of the Plan and related materials,
including a memorandum from INVESCO, which outlined the uses and benefits of
distribution plans under Rule 12b-1 of the 1940 Act currently being used in the
mutual fund industry, and certain data concerning such plans prepared by INVESCO
In addition, the Trust's legal counsel provided additional information,
summarized the provisions of the proposed Plan, and discussed the legal and
regulatory considerations in adopting such Plan.
In approving the Plan, the Trustees determined, in the exercise of their
business judgment and in light of their fiduciary duties under state law and the
1940 Act, that, based upon the material requested and evaluated by them, the
Plan is reasonably likely to benefit the Plan Funds and their shareholders.
The Trustees considered various factors relevant to the Plan Funds'
situation, including the investment and sales history of the Plan Funds, their
marketing experience using INVESCO as distributor, possible ways in which sales
of shares could be increased, and the effect of the proposed Plan on the Plan
Funds and their shareholders. The Board also noted that while shareholders of
<PAGE>
several INVESCO Mutual Funds did not approve distribution plans similar to the
Proposed Plan in 1990, shareholders of several others did approve such plans.
During the last five years that those current Rule 12b-1 Plans have been in
effect, there have been positive results. The tables below, prepared by INVESCO,
summarize certain of these results by noting the percentage increase in gross
and net sales during calendar years 1992, 1993, 1994, 1995, and 1996 of both the
INVESCO 12b-1 and non-12b-1 Mutual Funds which were in existence when the
current 12b-1 Plans were instituted. These figures were calculated by comparing
the gross and net sales of the relevant INVESCO 12b-1 and non-12b-1 Funds over
these years to these Funds' gross and net sales during calendar year 1990. They
include exchanges and dividend reinvestments, but do not include information
with respect to INVESCO Value Trust, which was not distributed by INVESCO in
1990.
Percent of Gross Sales Increase
-----------------------------------------------------------------
Type of Funds 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
INVESCO 617.99% 538.96% 442.01% 307.33% 331.58%
12b-1 Funds
INVESCO Non- 146.93% 225.79% 122.27% 147.45% 291.47%
12b-1 Funds
Percent of Net Sales Increase
-----------------------------------------------------------------
Type of Funds 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
INVESCO 1110.61% 747.03% 80.79% 103.23% 18.95%
12b-1 Funds
INVESCO Non- 22.97% 140.41% -89.11% 7.70% 96.93%
12b-1 Funds
These figures show that, except for the net sales figures for 1996, the
gross and net sales of the INVESCO 12b-1 Mutual Funds compare favorably to the
gross and net sales of the INVESCO Mutual Funds without 12b-1 plans over this
entire time period. In short, the addition of 12b-1 plans for certain of the
INVESCO Mutual Funds in 1990 appears to have resulted in increased gross sales,
and, with one exception, increased net sales of those INVESCO Mutual Funds,
compared to the INVESCO Mutual Funds without such plans.
The Board concluded that the changing mutual fund marketplace since
1990, coupled with rising costs, dictated that shareholders should be asked
again to approve the Plan at this time.
It was also represented to the Board that there would be no diminution
of the promotional and marketing efforts currently maintained by INVESCO in
connection with promoting sales of shares of the Plan Funds. At the meeting, it
was suggested that the moneys made available under the proposed Plan could be
used for direct support of targeted advertising and promotional campaigns for
the Plan Funds in specific regional areas, as well as for general promotion and
advertising of the Plan Funds. The Trustees specifically questioned INVESCO's
Management as to why it believed adoption of the proposed Plan could be expected
to stimulate additional sales of shares of the Plan Funds, thereby assisting the
Plan Funds by increasing the present asset base. After discussion, it was agreed
<PAGE>
that it was reasonable to expect that an enhanced marketing effort by INVESCO on
behalf of the Plan Funds, together with the ability to compensate third party
broker-dealers for helping to sell the Plan Funds' shares, would have a
reasonable likelihood of producing these results. The Board also placed
importance on the fact that the Board and, in particular, the Independent
Trustees, would be able to monitor the nature, manner and amount of expenditures
of the Plan Funds under the Plan by reviewing the quarterly reports of INVESCO's
distribution expenditures that INVESCO is obligated to provide the Board, and by
being able to terminate the Plan, and thereby end all obligations of the Plan
Funds to make payments thereunder, at any time.
In approving the proposed Plan, the Board took into account, among
other things, the following factors: the nature and causes of the problems or
circumstances which made implementation of the Plan advisable and appropriate;
the way in which the Plan would address these problems or circumstances,
including the nature and potential amount of the Plan expenditures; the
relationship of such expenditures to the overall cost structure of the Plan
Funds; the nature of the anticipated benefits; the time it might take for those
benefits to be achieved; the merits of possible alternative plans; the
interrelationship between the Plan and the activities of INVESCO; and the effect
of the Plan on existing shareholders.
The Trustees concluded that approval of the Plan was warranted in that
there was reasonable likelihood that the Plan Funds and their shareholders will
benefit from adoption of the Plan in the following ways:
o The sale of additional shares reduces the likelihood that
redemption of shares will require the liquidation of portfolio
securities in amounts and at times that are disadvantageous
for investment purposes;
o Enhanced marketing efforts, if successful, should result in an
increase in net assets and afford greater flexibility in
pursuing the investment objectives of the Plan Funds;
o Increased assets of the Plan Funds could allow INVESCO to:
have greater resources to make the financial commitments
necessary to improve the quality and level of Plan Fund and
shareholder services (in both systems and personnel); increase
the number and type of mutual funds in the group (and support
them in their infancy) and thereby expand the investment
choices available to all shareholders; and acquire and retain
talented employees who desire to be associated with a growing
organization; and
o The cost to the Plan Funds of the Plan would be partly offset
to the extent that increased Plan Fund assets result in
economies of scale (e.g., sharing fixed expenses over a larger
asset base).
The Trustees concluded that the various possible benefits described
above would be of substantially equal significance to both new and existing
shareholders of the Plan Funds, and thus no unfair burden will fall on any group
of Plan Fund shareholders from adoption of the proposed Plan. In addition, while
INVESCO will benefit from increased management fees as a result of growth in
Plan Fund assets, the Trustees concluded that such benefit to INVESCO will not
<PAGE>
be disproportionate to the above-described anticipated benefits to the Plan
Funds and shareholders of the Plan Funds resulting from growth in Trust assets.
Finally, while adoption of the proposed Plan will increase the expense ratio of
the Plan Funds by the amount of the distribution payments from assets of the
Plan Funds (less any economies of scale attributable to the Plan), the Trustees
were satisfied that the increased expense ratio will not be out of line with the
expense ratios of comparable mutual funds.
The Trustees recognized that there is no assurance that the
expenditures of assets of the Plan Funds to finance distribution of shares of
the Plan Funds will result in additional sales of shares or in an increase in
the net assets of the Plan Funds, upon which the above benefits depend. The
Trustees determined, however, that there is a reasonable likelihood that one or
more of such benefits will result and that they will be in a position to monitor
the distribution expenses of the Plan Funds and to evaluate the benefit of such
expenditures in deciding whether to continue the Plan.
Vote Required
As provided under the 1940 Act, approval of the Plan will require the
affirmative vote of a majority of the outstanding shares of each Plan Fund
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 Plan Fund are
present or represented by proxy, or (b) more than 50% of the total outstanding
shares of each Plan Fund.
If the shareholders of any particular Plan Fund fail to approve the
Plan, the Plan will not go into effect for that Plan Fund, and that Plan Fund
will not participate in the enhanced advertising and marketing effort by INVESCO
on behalf of the INVESCO Mutual Funds described above. However, the Plan will go
into effect for the other Plan Fund that receives shareholder approval.
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND
THAT SHAREHOLDERS OF EACH OF THE PLAN FUNDS VOTE
TO APPROVE THE PLAN.
INFORMATION CONCERNING ADVISER, SUB-ADVISER, DISTRIBUTOR AND
AFFILIATED COMPANIES
INVESCO Funds Group, Inc., a Delaware corporation, serves as the
Trust's investment adviser, as well as providing other services to the Trust.
INVESCO Distributors, Inc. is a wholly owned subsidiary of INVESCO Funds Group,
Inc. INVESCO is a wholly-owned subsidiary of INVESCO North American Holdings,
Inc. ("INAH"), 1315 Peachtree Street, N.E., Atlanta, Georgia 30309. INAH is an
indirect wholly-owned subsidiary of AMVESCAP PLC ("AMVESCAP").1 The corporate
headquarters of AMVESCAP PLC are located at 11 Devonshire Square, London EC2M
4YR, England. INVESCO's offices are located at 7800 East Union Avenue, Denver,
Colorado 80237. INVESCO currently serves as investment adviser of 14 open-end
investment companies having aggregate net assets of $16.4 billion as of July 31,
1997.
<PAGE>
The principal executive officers and directors of INVESCO Funds Group,
Inc. and their principal occupations are:
Dan J. Hesser, Chairman of the Board, President, Chief Executive
Officer and Director; Brian N. Minturn, Executive Vice President and Director;
Hubert L. Harris, Jr., Director, also, President of INVESCO Services, Inc.,
Director of AMVESCAP, Chief Financial Officer of INVESCO Individual Services
Group; Charles P. Mayer, Director; Robert J. O'Connor, Director, also, Chief
Executive Officer and Chairman of INVESCO Retirement Plan Services, a division
of INVESCO Funds Group, Inc.
The address of each of the foregoing officers and directors is 7800
East Union Avenue, Denver, Colorado 80237, with the exception of the address of
Messrs. Bishop, DeKinder and Harris, which is 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309 and Mr. O'Connor, whose address is 1355 Peachtree Street,
N.E., Atlanta, Georgia 30309.
- --------
(1)
The intermediary companies between INAH and AMVESCAP PLC are as
follows: INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North American
Group, Ltd., each of which is wholly-owned by its immediate parent.
INVESCO Capital Management, Inc. ("ICM"), serves as sub-adviser to the
Funds. ICM is a wholly-owned subsidiary of INAH. INVESCO Funds Group, Inc. as
investment adviser, has contracted with ICM for investment advisory and research
services on behalf of the Intermediate Government Bond Fund, the Total Return
Fund and the Value Equity Fund. ICM has the primary responsibility for providing
portfolio investment advisory services to these Funds. ICM also acts as adviser
to the INVESCO Treasurer's Series Trust and as sub-adviser to the INVESCO
Variable Investment Funds, Inc. and offers investment services to U.S.
institutions and wealthy individuals.
The principal executive officer and directors of ICM and their
principal occupations 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 Executive Officer of INVESCO, Inc.; Thomas W. Norwood, Vice President and
Director, Donald B. Shallee, Vice President and Director; George W. Herring,
Vice President and Director; Thomas L. Shields, Vice President and Director; and
Stephen A. Dana, Vice President and Director.
The address of the foregoing officers and directors is 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309.
Pursuant to an Administrative Services Agreement between the Trust and
INVESCO, INVESCO provides administrative services to the Trust, including
distribution, sub-accounting and recordkeeping services and functions. During
the fiscal year ended August 31, 1996, the Trust paid INVESCO total compensation
<PAGE>
of $191,143 in payment for such services ($37,641, $15,879 and $137,623 of such
compensation was paid INVESCO by the Value Equity Fund, the Intermediate
Government Bond Fund and the Total Return Fund, respectively).
During the fiscal year ended August 31, 1996, the Trust paid INVESCO,
which also serves as the Trust's registrar, transfer agent and dividend
disbursing agent, total compensation of $1,391,761 for such services ($282,255,
$156,123 and $953,383 of such compensation was paid INVESCO by the Value Equity
Fund, the Intermediate Government Bond Fund and the Total Return Fund,
respectively).
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS [AND MANAGEMENT]
The following table sets forth, as of the Record Date, the beneficial
ownership of each Fund's issued and outstanding shares of beneficial interest by
each 5% or greater shareholder.
Percent of
Name and Address Amount & Nature of Shares of
of Beneficial Owner Beneficial Ownership(2) Beneficial Interest
- --------------------------------------------------------------------------------
OTHER BUSINESS
The management of the Trust 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.
- --------
(2)
Each beneficial owner named above shares investment power with respect to
the shares listed next to its respective row, but its customers retain sole
voting power.
<PAGE>
SHAREHOLDER PROPOSALS
The Trust does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of proxy
for a subsequent shareholders' meeting should send their written proposals to
the Secretary of the Trust, 7800 East Union Avenue, Denver, Colorado 80237. The
Trust has not received any shareholder proposals to be presented at this
Meeting.
By Order of the Board of Trustees,
Glen A. Payne
Secretary
- ---------------- --, 1997
<PAGE>
EXHIBIT A
SUMMARY CONCERNING FUTURES AND OPTIONS
Futures Contracts and Options on Futures Contracts.
U.S. futures contracts are traded on exchanges which have been
designated "contract markets" by the Commodity Futures Trading Commission
("CFTC") and must be executed through a futures commission merchant (an "FCM"),
or brokerage firm, which is a member of the relevant contract market. Although
futures contracts by their terms call for the delivery or acquisition of the
underlying commodities or a cash payment based on the value of the underlying
commodities, in most cases the contractual obligation is offset before the
delivery date of the contract by buying, in the case of a contractual obligation
to sell, or selling, in the case of a contractual obligation to buy, an
identical futures contract on a commodities exchange. Such a transaction cancels
the obligation to make or take delivery of the commodities.
The acquisition or sale of a futures contract could occur, for example,
if a Fund held or considered purchasing debt securities and sought to protect
itself from fluctuations in prices without buying or selling those securities.
For example, if prices were expected to decrease, the Fund could sell Treasury
Futures, thereby hoping to offset a potential decline in the value of debt
securities in the portfolio by a corresponding increase in the value of the
futures contract position held by the Fund and thereby prevent the Fund's net
asset value from declining as much as it otherwise would have. The Fund also
could protect against potential price declines by selling portfolio securities
and investing in money market instruments. The use of futures contracts as an
investment technique would allow the Fund to maintain a defensive position
without having to sell portfolio securities.
Similarly, when prices of debt securities are expected to increase,
futures contracts could be bought to attempt to hedge against the possibility of
having to buy debt securities at higher prices. This technique is sometimes
known as an anticipatory hedge. Since the fluctuations in the value of futures
contracts should be similar to those of debt securities, the Fund could take
advantage of the potential rise in the value of debt securities without buying
them until the market has stabilized. At that time, the futures contracts could
be liquidated and the Fund could buy debt securities on the cash market.
The ordinary spreads between prices in the cash and futures markets, due
to differences in the nature of those markets, are subject to distortions.
First, the ability of investors to close out futures contracts through
offsetting transactions could distort the normal price relationship between the
cash and futures markets. Second, to the extent participants decide to make or
take delivery, liquidity in the futures market could be reduced and prices in
the futures market distorted. Third, from the point of view of speculators, the
margin deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price distortions. Due to
the possibility of the foregoing distortions, a correct forecast of general
price trends still may not result in a successful use of futures.
<PAGE>
Futures contracts entail risks. Although the Fund believes that use of
such contracts could benefit the Fund, if the judgment of Fund Management was
incorrect, the Fund's overall performance could be worse than if the Fund had
not entered into futures contracts. For example, if the Fund hedged against the
effects of a possible decrease in prices of securities held in the Fund's
portfolio and prices increase instead, the Fund would lose part or all of the
benefit of the increased value of these securities because of offsetting losses
in the Fund's futures positions. In addition, if the Fund had insufficient cash,
it might have to sell securities from its portfolio to meet daily variation
margin requirements. Those sales could be at increased prices which reflect the
rising market and could occur at a time when the sales would be disadvantageous
to the Fund.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to
the Fund would not match exactly the Fund's current or potential investments.
The Fund would be able to buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it would
typically invest -- for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities -- which involves a
risk that the futures position might not correlate precisely with the
performance of the Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with the
Fund's investments. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the contract. Those
factors may affect securities prices differently from futures prices. Imperfect
correlations between the Fund's investments and its futures positions could also
result from differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are traded,
and from imposition of daily price fluctuation limits for futures contracts. The
Fund would be able to buy or sell futures contracts with a greater or lesser
value than the securities it wished to hedge or was considering purchasing in
order to attempt to compensate for differences in historical volatility between
the futures contract and the securities, although this might not be successful
in all cases. If price changes in the Fund's futures positions were poorly
correlated with its other investments, its futures positions could fail to
produce desired gains or result in losses that would not be offset by the gains
in the Fund's other investments.
Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of three business
days for some types of securities, the futures markets can provide superior
liquidity to the securities markets. Nevertheless, there is no assurance a
liquid secondary market will exist for any particular futures contract at any
particular time. In addition, futures exchanges may establish daily price
fluctuation limits for futures contracts and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached, it would be impossible
for the Fund to enter into new positions or close out existing positions. If the
<PAGE>
secondary market for a futures contract were not liquid because of price
fluctuation limits or otherwise, the Fund would not be able to promptly
liquidate unfavorable futures positions and potentially could be required to
continue to hold a futures position until the delivery date, regardless of
changes in its value. As a result, a Fund's access to other assets held to
cover its futures positions also could be impaired.
Although the buyer or seller of a futures contract is not required to
deliver or pay for the underlying instrument unless the contract is held until
the delivery date, both the buyer and seller are required to deposit "initial
margin" for the benefit of an FCM when the contract is entered into equal to a
percentage of the contract's value. If the value of either party's position
declines, that party will be required to make additional "variation margin"
payments with an FCM to settle the change in value on a daily basis. The party
that has a gain may be entitled to receive all or a portion of this amount.
Initial and variation margin payments are similar to good faith deposits or
performance bonds, unlike margin extended by a securities broker, and initial
and variation margin payments do not constitute purchasing securities on margin
for purposes of the Fund's investment policies. In the event of the bankruptcy
of an FCM that holds margin on behalf of the Fund, the Fund would be entitled to
return of margin owed to the Fund only in proportion to the amount received by
the FCM's other customers. Fund Management will attempt to minimize the risk by
careful monitoring of the creditworthiness of the FCMs with which the Fund would
do business and by depositing margin payments in a segregated account with the
custodian when practical or otherwise required by law.
The purchase of a call option on a futures contract is similar in some
respects to the purchase of a call option on an individual security. (See
"Options on Securities" below.) Depending on the pricing of the option compared
to either the price of the futures contract upon which it is based or the price
of the underlying instrument, ownership of the option may or may not be less
risky than ownership of the futures contract or the underlying instrument. As
with the purchase of futures contracts, when the Fund is not fully invested it
could buy a call option on a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security which is deliverable under, or of
the index comprising, the futures contract. If the futures price at the
expiration of the option were below the exercise price, the Fund would retain
the full amount of the option premium which would provide a partial hedge
against any decline that may have occurred in the Fund's portfolio holdings. The
writing of a put option on a futures contract constitutes a partial hedge
against increasing prices of the security which is deliverable under, or of the
index comprising, the futures contract. If the futures price at expiration of
the option was higher than the exercise price, a Fund would retain the full
amount of the option premium which would provide a partial hedge against any
increase in the price of securities which the Fund was considering to buy. If a
call or put option the Fund had written was exercised, the Fund would incur a
loss which would be reduced by the amount of the premium it received. Depending
on the degree of correlation between change in the value of its portfolio
securities and changes in the value of the futures positions, the Fund's losses
from existing options on futures could to some extent be reduced or increased by
changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, the Fund would be able to buy a put option on a futures contract to
hedge the Fund's portfolio against the risk of falling prices.
<PAGE>
The amount of risk the Fund would assume if it bought an option on a
futures contract would be the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value of the
underlying futures contract will not be fully reflected in the value of the
options bought.
Options on Securities.
A put option gives the holder the right, upon payment of a premium, to
deliver a specified amount of a security to the writer of the option on or
before a fixed date at a predetermined price. A call option gives the holder the
right, upon payment of a premium, to call upon the writer to deliver a specified
amount of a security on or before a fixed date at a predetermined price. In
purchasing an option, the Fund would be in a position to realize a gain if,
during the option period, the price of the underlying security increased (in the
case of a call) or decreased (in the case of a put) by an amount in excess of
the premium paid and would realize a loss if the price of the underlying
security did not increase (in the case of a call) or decrease (in the case of a
put) during the period by more than the amount of the premium. If a put or call
option bought by a Fund were permitted to expire without being sold or
exercised, the Fund would lose the amount of the premium.
If a put option or call option written by a Fund were exercised, the
Fund would be obligated to buy or sell the underlying security at the exercise
price. Writing a put option involves the risk of a decrease in the market value
of the underlying security, in which case the option could be exercised and the
underlying security would then be sold by the option holder to the Fund at a
higher price than its current market value. Writing a call option involves the
risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the Fund to the option holder at a lower price than its current market
value. Those risks could be reduced by entering into an offsetting transaction.
The Fund would retain the premium received from writing a put or call option
whether or not the option were exercised.
The Fund also would be able to buy or write options in privately
negotiated transactions on the types of securities and indexes based on the
types of securities in which the Fund were permitted to invest directly. The
Fund would effect such transactions only with investment dealers and other
financial institutions (such as commercial banks or savings and loan
institutions) deemed creditworthy, and only pursuant to procedures adopted by
Fund Management for monitoring the creditworthiness of those entities. The Fund
is not permitted to invest in securities for which there is no readily available
market. Therefore, the Fund could not invest in illiquid options.
A put option written by a Fund would be "covered" if the Fund (i)
maintained cash not available for investment or high-grade liquid assets with a
value equal to the exercise price in a segregated account with its custodian or
(ii) held a put on the same security and in the same principal amount as the put
written and the exercise price of the put held were equal to or greater than the
exercise price of the put written. A call option written by a Fund would be
"covered" if the Fund owned the underlying security covered by the call or had
an absolute and immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other securities held in its
<PAGE>
portfolio. A call option also would be deemed to be covered if a Fund held a
call on the same security and in the same principal amount as the call written
and the exercise price of the call held (i) were equal to or less than the
exercise price of the call written or (ii) were greater than the exercise price
of the call written if the difference were maintained by the Fund in cash and
high-grade liquid assets in a segregated account with its custodian.
The Fund also would be able to write covered call options for
cross-hedging purposes. A call option is written for cross-hedging purposes if
the Fund does not own the underlying security, and the option is designed to
provide a hedge against a decline in value in another security which the Fund
owns or has the right to acquire.
The Fund would collateralize its obligation under a written call option
for cross-hedging purposes by maintaining in a segregated account with its
custodian cash or high-grade liquid assets in an amount not less than the market
value of the underlying security, marked to market daily. The Fund would write a
call option for cross-hedging purposes, instead of writing a covered call
option, when the premium to be received from the cross-hedge transaction would
exceed that which would be received from writing a covered call option and when
the Fund believed that writing the option would achieve the desired hedge.
The writer of an option may have no control when the underlying
securities must be sold, in the case of a call option, or bought, in the case of
a put option, since with regard to certain options, the writer may be assigned
an exercise notice at any time prior to the termination of the obligation.
Whether or not an option expires unexercised, the writer retains the amount of
the premium. This amount, of course, may, in the case of a covered call option,
be offset by a decline in the market value of the underlying security during the
option period. If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option is exercised, the
writer must fulfill the obligation to buy the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction". This is accomplished by buying an
option of the same series as the option previously written. The effect of the
purchase is that the writer's position will be canceled by the clearing
corporation. However, a writer may not effect a closing purchase transaction
after being notified of the exercise of an option. Likewise, an investor who is
the holder of an option may liquidate its position by effecting a "closing sale
transaction". This is accomplished by selling an option of the same series as
the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected. Effecting a closing
transaction in the case of a written call option would permit the Fund to write
another call option on the underlying security with either a different exercise
price or expiration date or both or, in the case of a written put option, would
permit the Fund to write another put option to the extent that the exercise
price thereof is secured by deposited high-grade liquid assets.
The Fund would realize a profit from a closing transaction if the price
of the purchase transaction were less than the premium received from writing the
option or the price received from a sale transaction were more than the premium
<PAGE>
paid to buy the option; the Fund would realize a loss from a closing transaction
if the price of the purchase transaction were more than the premium received
from writing the option or the price received from a sale transaction were less
than the premium paid to buy the option. Because increases in the market of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option
likely would be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
Risk Factors of Investing in Futures and Options.
The successful use of the investment practices described above with
respect to futures contracts, options on futures contracts and options on draws
upon skills and experience which are different from those needed to select the
other instruments in which the Fund invests. Should interest rates or the prices
of securities or financial indexes move in an unexpected manner, the Fund may
not achieve the desired benefits of futures and options or may realize losses
and thus be in a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on futures contracts,
there are no daily price fluctuation limits with respect to negotiated or
over-the-counter instruments, and adverse market movements could therefore
continue to an unlimited extent over a period of time. In addition, the
correlation between movements in the price of the securities hedged or used for
cover will not be perfect and could produce unanticipated losses.
The Fund's ability to dispose of its positions in the foregoing
instruments will depend on the availability of liquid markets in the
instruments. Markets in a number of the instruments are relatively new and still
developing, and it is impossible to predict the amount of trading interest that
may exist in those instruments in the future. Particular risks exist with
respect to the use of each of the foregoing instruments and could result in such
adverse consequences to the Fund as the possible loss of the entire premium paid
for an option bought by the Fund, the inability of the Fund, as the writer of a
covered call option, to benefit from the appreciation of the underlying
securities above the exercise price of the option and the possible need to defer
closing out positions in certain instruments to avoid adverse tax consequences.
As a result, no assurance can be given that the Fund will be able to use those
instruments effectively for the purposes set forth above.
In connection with its transactions in futures and option writing, the
Fund would be required to place assets in a segregated account with the Fund's
custodian bank to ensure that the Fund would be able to meet its obligations
under these instruments. Assets held in a segregated account generally may not
be disposed of for so long as the Fund maintains the positions giving rise to
the segregation requirement. Segregation of a large percentage of the Fund's
assets could impede implementation of the Fund's investment policies or the
Fund's ability to meet redemption requests or other current obligations.
<PAGE>
EXHIBIT B
PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of the [28th] day of [October], 1997, by and
between INVESCO VALUE TRUST, a Massachusetts business trust (hereinafter called
the "Trust"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation
("INVESCO").
WHEREAS, the Trust engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Trust desires to finance the distribution of the shares of
two of its three classes or series of common stock, namely, INVESCO Value Equity
Fund and INVESCO Intermediate Government Bond Fund, each of which represents an
interest in a separate portfolio of investments, together with any additional
such classes or series that may hereafter be offered to the public
(individually, a "Fund" and collectively, the "Funds"), in accordance with this
Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Act (the
"Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in
accordance with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the
board of trustees of the Trust, including a majority of the trustees who are not
interested persons of the Trust, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Disinterested Trustees") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Trust hereby adopts the Plan set forth herein and
the Trust and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which the
Trust adopts a Plan pursuant to Rule 12b-1 under the Act and
authorizes payments as described herein. The Agreement is defined as
those provisions of this document by which the Trust retains
INVESCO to provide distribution services beyond those required by the
General Distribution Agreement between the parties, as are described
herein. The Trust may retain the Plan notwithstanding termination of
the Agreement. Termination of the Plan will automatically
terminate the Agreement. The Trust is hereby authorized to utilize the
assets of the Trust to finance certain activities in connection with
distribution of the Trust's shares.
2. Subject to the supervision of the board of trustees, the Trust hereby
retains INVESCO to promote the distribution of shares of each of the
Funds by providing services and engaging in activities beyond those
<PAGE>
specifically required by the Distribution Agreement between the
Trust and INVESCO and to provide related services. The activities and
services to be provided by INVESCO hereunder shall include one or more
of the following: (a) the payment of compensation (including trail
commissions and incentive compensation) to securities dealers,
financial institutions and other organizations, which may include
INVESCO-affiliated companies, that render distribution and
administrative services in connection with the distribution of
the shares of each of the Funds; (b) the printing and distribution
of reports and prospectuses for the use of potential investors in
each Fund; (c) the preparing and distributing of sales literature;
(d) the providing of advertising and engaging in other promotional
activities, including direct mail solicitation, and
television, radio, newspaper and other media advertise-
ments; and (e) the providing of such other services and
activities as may from time to time be agreed upon by the Trust.
Such reports and prospectuses, sales literature, advertising and
promotional activities and other services and activities may be
prepared and/or conducted either by INVESCO's own staff, the
staff of INVESCO-affiliated companies, or third parties.
3. INVESCO hereby undertakes to use its best efforts to promote sales of
shares of each of the Funds to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and as
it from time to time believes will best further sales of such shares.
4. Each Fund is hereby authorized to expend, out of its assets, on a
monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below)
in the activities and provide the services specified in paragraph
(2) above, an amount computed at an annual rate of 0.25 of 1% of the
average daily net assets of each Fund during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by a Fund hereunder, for
any month, may be used to compensate INVESCO for: (a) activities
engaged in and services provided by INVESCO during the rolling twelve-
month period in which that month falls, or (b) to the extent permitted
by applicable law, for any month during the first twenty-four
months following a Fund's commencement of operations, activities
engaged in and services provided by INVESCO during the rolling twenty-
four month period in which that month falls, and any obligations
incurred by INVESCO in excess of the limitation described above
shall not be paid for out of Fund assets. No Fund shall be authorized
to expend, for any month, a greater percentage of its assets to pay
INVESCO for activities engaged in and services provided by INVESCO
during the rolling twenty-four month period referred to above than
it would otherwise be authorized to expend out of its assets to pay
INVESCO for activities engaged in and services provided by INVESCO
during the rolling twelve-month period referred to above. No payments
will be made by the Trust hereunder after the date of termination of the
Plan and Agreement.
<PAGE>
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in the
sale of shares of a Fund, pursuant to this Plan and Agreement or
otherwise, may be deemed to constitute the indirect use of Fund assets,
such indirect use of Fund assets is hereby authorized in addition
to, and not in lieu of, any other payments authorized under this Plan
and Agreement.
6. The Treasurer of INVESCO shall provide to the board of trustees of the
Trust, at least quarterly, a written report of all moneys spent by
INVESCO on the activities and services specified in paragraph (2)
above pursuant to the Plan and Agreement. Each such report shall
itemize the activities engaged in and services provided by INVESCO to a
Fund as authorized by the penultimate sentence of paragraph (4) above.
Upon request, but no less frequently than annually, INVESCO shall
provide to the board of trustees of the Trust such information as may
reasonably be required for it to review the continuing appropriateness
of the Plan and Agreement.
7. This Plan and Agreement shall each become effective immediately upon
approval by a vote of a majority of the outstanding voting securities
of the Trust as defined in the Act, and shall continue in effect
until [October 28, 1997], 1998 unless terminated as provided
below. Thereafter, the Plan and Agreement shall continue in effect
from year to year, provided that the continuance of each is
approved at least annually by a vote of the board of trustees of the
Trust, including a majority of the Disinterested Trustees, cast
in person at a meeting called for the purpose of voting on such
continuance. The Plan may be terminated at any time, without penalty,
by the vote of a majority of the Disinterested Trustees or by the vote
of a majority of the outstanding voting securities of that Fund.
INVESCO, or the Trust, by vote of a majority of the Disinterested
Trustees or of the holders of a majority of the outstanding voting
securities of each Fund, may terminate the Agreement under this Plan as
to such Fund, without penalty, upon 30 days' written notice to the
other party. In the event that neither INVESCO nor any affiliate of
INVESCO serves the Trust as investment adviser, the agreement with
INVESCO pursuant to this Plan shall terminate at such time. The board
of trustees may determine to approve a continuance of the Plan, but
not a continuance of the Agreement, hereunder.
8. So long as the Plan remains in effect, the selection and nomination of
persons to serve as trustees of the Trust who are not "interested
persons" of the Trust shall be committed to the discretion of the
trustees then in office who are not "interested persons" of the Trust.
However, nothing contained herein shall prevent the participation of
other persons in the selection and nomination process, provided that a
final decision on any such selection or nomination is within the
discretion of, and approved by, a majority of the trustees of the
Trust then in office who are not "interested persons" of the Trust.
<PAGE>
9. This Plan may not be amended to increase the amount to be spent by a
Fund hereunder without approval of a majority of the outstanding
voting securities of that Fund. All material amendments to the Plan and
Agreement must be approved by the vote of the board of trustees of
the Trust, including a majority of the Disinterested Trustees, cast
in person at a meeting called for the purpose of voting on such
amendment.
10.To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall
remain in effect as such, so as to authorize the use by each Fund of
its assets in the amounts and for the purposes set forth herein,
notwithstanding the occurrence of an "assignment," as defined by the
Act and the rules thereunder. To the extent it constitutes an
agreement with INVESCO pursuant to a plan, it shall terminate
automatically in the event of such "assignment." Upon a termination
of the Agreement with INVESCO, the Funds may continue to make payments
pursuant to the Plan only upon the approval of a new agreement under
this Plan and Agreement, which may or may not be with INVESCO, or the
adoption of other arrangements regarding the use of the amounts
authorized to be paid by the Funds hereunder, by the Trust's board of
trustees in accordance with the procedures set forth in paragraph 7
above.
11.The Trust shall preserve copies of this Plan and Agreement and all
reports made pursuant to paragraph 6 hereof, together with minutes of
all board of trustees meetings at which the adoption, amendment or
continuance of the Plan were considered (describing the factors
considered and the basis for decision), for a period of not less than
six years from the date of this Plan and Agreement, or any such
reports or minutes, as the case may be, the first two years in an
easily accessible place.
12.This Plan and Agreement shall be construed in accordance with the laws
of the State of Colorado and applicable provisions of the Act. To the
extent the applicable laws of the State of Colorado, or any provisions
herein, conflict with the applicable provisions of the Act, the latter
shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the ---th day of --------------, 1997.
INVESCO VALUE TRUST
By: -------------------------
Dan J. Hesser, President
ATTEST: ------------------------
Glen A. Payne, Secretary
INVESCO DISTRIBUTORS, INC.
By: -------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: ------------------------
Glen A. Payne, Secretary
<PAGE>
INVESCO VALUE TRUST
INVESCO Total Return Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, 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 Total Return Fund (the
"Fund") of INVESCO Value Trust, to be held at the Hyatt Regency Tech Center,
7800 E. Tufts Avenue, Denver, Colorado 80237, on October 28, 1997 at 10:00 a.m.
(Mountain 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 ---------, 1997, receipt of which is
hereby acknowledged.
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" PROPOSAL 1.
INVIVT
INVESCO VALUE TRUST
INVESCO Total Return Fund
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE "FOR":
Vote On Proposal
For Against Abstain
1.Proposal to approve changes to the investment policies --- --- ---
of the Fund, to permit the Fund to invest in futures,
options, puts and calls.
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.
- ---------------------- ---------------------------- ------------------
Signature Signature (Joint Owners) Date
<PAGE>
INVESCO VALUE TRUST
INVESCO Intermediate Government Bond Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, 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 Intermediate Government Bond
Fund (the "Fund") of INVESCO Value Trust, to be held at the Hyatt Regency Tech
Center, 7800 E. Tufts Avenue, Denver, Colorado 80237, on October 28, 1997 at
10:00 a.m. (Mountain 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 ----------, 1997, receipt of which is
hereby acknowledged.
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 and 2.
INVIVT
INVESCO VALUE TRUST
INVESCO Intermediate Government Bond Fund
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE "FOR":
Vote On Proposals For Against Abstain
1.Proposal to approve changes to the investment policies ---- ---- ----
of the Fund, to permit the Fund to invest in futures,
options, puts and calls.
2.Proposal to approve a Plan and Agreement of Distribution ---- ---- ----
for the Fund under the Investment Company Act of 1940.
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.
- ---------------------- ---------------------------- ------------------
Signature Signature (Joint Owners) Date
<PAGE>
INVESCO VALUE TRUST
INVESCO Value Equity Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, 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 Value Equity Fund (the
"Fund") of INVESCO Value Trust, to be held at the Hyatt Regency Tech Center,
7800 E. Tufts Avenue, Denver, Colorado 80237, on October 28, 1997 at 10:00 a.m.
(Mountain 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 -----------, 1997, receipt of which
is hereby acknowledged.
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 and 2.
INVIVT
INVESCO VALUE TRUST
INVESCO Value Equity Fund
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE "FOR":
Vote On Proposals For Against Abstain
1.Proposal to approve changes to the investment policies --- --- ---
of the Fund, to permit the Fund to invest in futures,
options, puts and calls.
2 Proposal to approve a Plan and Agreement of Distribution --- --- ---
for the Fund under the Investment Company Act of 1940.
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.
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Signature Signature (Joint Owners) Date
