<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Chaconia Income & Growth Fund, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
October 20, 1997
To the Shareholders of The Chaconia
Income & Growth Fund, Inc.
Dear Shareholder:
I enclose a Proxy Statement for the November 21, 1997 special meeting
of the shareholders of The Chaconia Income & Growth Fund, Inc. (the "Fund").
The Board of Directors (the "Board") is soliciting this Proxy Statement from
all of the shareholders of the Fund to obtain their approval of the new
investment advisory contract.
INVESCO PLC ("INVESCO"), parent of the Fund's investment advisor,
INVESCO Capital Management, Inc. (the "Advisor"), has merged with A I M
Management Group Inc. ("AIM") and formed a new holding company called AMVESCAP.
As a result of INVESCO's merger with AIM, the Advisor is deemed to have a
change in control, therefore requiring shareholder approval of a new investment
advisory agreement.
Accordingly, shareholders of the Fund are being asked to approve a new
investment advisory agreement with the same parties and on terms identical to
the existing investment advisory agreement in all material respects. The
proposal has been unanimously approved by the Board which recommends that
shareholders approve the new investment advisory agreement as well.
What is most important for you as a shareholder of the Fund is that
approval of the proposal listed above will in no way increase the advisory fees
or expenses of the Fund or change the level, nature or quality of services you
receive.
The Board believes that the proposal is in the best interest 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 800-368-3322. They will be happy to answer any
questions that you might have.
Yours very truly,
The Board of Directors
Encs.
<PAGE> 3
THE CHACONIA INCOME & GROWTH FUND, INC.
c/o Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, Wisconsin 53202
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
Notice is hereby given that a special meeting (the "Meeting") of
stockholders of The Chaconia Income & Growth Fund, Inc. (the "Fund") will be
held at the offices of REINHART, BOERNER, VAN DEUREN, NORRIS & RIESELBACH,
S.C., 1000 NORTH WATER STREET, MILWAUKEE, WISCONSIN 53202 ON FRIDAY, NOVEMBER
21, 1997, AT 5 P.M. (EASTERN TIME) for the following purposes:
1. To approve or disapprove a new investment advisory agreement
between the Fund and INVESCO Capital Management, Inc. (the "Advisor") in light
of the automatic termination of the current agreement upon the merger of AIM
Management Group Inc. into a wholly-owned U.S. subsidiary of INVESCO PLC.
INVESCO PLC is the ultimate parent of the Advisor.
2. To transact any other business as may properly come before the
Meeting.
This proposal is not expected to result in any change in the way the
Fund is managed, in the advisory fees or in the services you receive as a
shareholder.
Stockholders of record at the close of business on October 8, 1997 are
entitled to receive notice of, and to vote at, the Meeting.
All stockholders are cordially invited to attend the Meeting in person,
if possible. Stockholders who are unable to be present in person are requested
to execute and promptly return the accompanying proxy in the enclosed envelope.
The proxy is being solicited by the directors of the Fund. Your attendance at
the Meeting, whether in person or by proxy, is important to ensure a quorum. If
you return the proxy, you still may vote your shares in person by giving
written notice (by subsequent proxy or otherwise) to the Secretary of the Fund
at any time prior to its vote at the Meeting.
By Order of the Board of Directors
Ulice Payne, Jr.
Ulice Payne, Jr., Secretary
Trinidad & Tobago, W.I.
October 20, 1997
<PAGE> 4
THE CHACONIA INCOME & GROWTH FUND, INC.
OCTOBER 20, 1997
- --------------------------------------------------------------------------------
THE CHACONIA INCOME & GROWTH FUND, INC.
C/O AMERICAN DATA SERVICES, INC.
THE HAUPPAUGE CORPORATE CENTER
150 MOTOR PARKWAY
SUITE 109
HAUPPAUGE, NY 11788
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 21, 1997
The enclosed proxy is being solicited by the Board of Directors (the
"Board" or the "Directors") of The Chaconia Income & Growth Fund, Inc. (the
"Fund") for use in connection with the special meeting of shareholders of the
Fund (the "Meeting") to be held at 5 p.m., Eastern Standard Time, on Friday,
November 21, 1997, at the offices of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., 1000 North Water Street, Milwaukee, Wisconsin 53202, and at
any adjournment(s) thereof for the purposes set forth in the foregoing notice.
The approximate mailing date of proxies and this Proxy Statement is October 20,
1997.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The Fund entered into an investment advisory agreement with INVESCO
Capital Management, Inc. (the "Advisor") on October 29, 1992 (the "1992 Advisor
Agreement") upon approval by the Board. Each year the Board regularly reviewed
the performance of the Advisor, including the advisory fees, and approved the
continuation of the 1992 Advisor Agreement.
On February 28, 1997, INVESCO Group Services, Inc., a wholly-owned
subsidiary of INVESCO PLC ("INVESCO"), consummated a merger with AIM Management
Group, Inc. ("AIM") by acquiring all of the issued and outstanding shares of
AIM capital stock in exchange for shares of INVESCO capital stock (the
"Merger"). As a result of the merger, AIM shareholders own approximately 45%
of INVESCO's total outstanding capital stock. The Advisor is an indirect
wholly-owned subsidiary of INVESCO.
<PAGE> 5
The Merger resulted in an "assignment" of the 1992 Advisory Agreement
within the meaning of section 15 of the Investment Company Act. As required by
the Investment Company Act, the 1992 Advisory Agreement provided for its
automatic termination upon assignment. Under section 15 of the Investment
Company Act, a change of control of an advisor generally is deemed to result in
an assignment of its investment advisory agreements. Because INVESCO capital
stock constituting more than 25% of the outstanding voting securities of
INVESCO was issued to shareholders of AIM in the Merger, there was deemed to be
a change in control of INVESCO and, therefore, a change in control of the
Advisor. Under the Investment Company Act, such a change in control resulted
in an automatic termination of the 1992 Advisory Agreement requiring the need
of a new advisory agreement (the "New Advisory Agreement").
At its regularly scheduled meeting on February 7, 1997, at which all of
the Directors were in attendance, the Board met with a representative of the
Advisor regarding the Merger and discussed whether approval of the New Advisory
Agreement was in the best interests of the Fund and its shareholders. The
Board was informed that the Fund should expect no significant changes in the
management personnel of the Advisor following the Merger, and that the terms of
the New Advisory Agreement would be identical in all material respects to those
contained in the 1992 Advisory Agreement.
Based upon these representations from the Advisor and other factors
described below, the Board unanimously approved the New Advisory Agreement. The
Fund's Prospectus dated February 28, 1997 included a specific disclosure
regarding the pending Merger.
Shareholders of the Fund are being asked to ratify the February 7, 1997
unanimous decision of the Board to continue the advisory services provided by
the Advisor to the Fund on the same terms and conditions as stated in the 1992
Advisory Agreement. The Proxy Statement distributed to shareholders for the
1997 Annual Meeting of Shareholders held on May 13, 1997 also contained a
description of the Merger.
BOARD CONSIDERATION OF ADVISOR AGREEMENTS
The Board considered the following factors when it renewed the 1992
Advisory Agreement and approved the New Advisory Agreement: (1) the past
performance of the Advisor in accordance with the investment objectives and
policies of the Fund; (2) whether there would be any increase in the Advisor's
fee; (3) who was the parent company of the Advisor; (4) whether any persons
owned 10% or more of the outstanding voting securities of the Advisor;
(5) whether there
2
<PAGE> 6
was any material transaction between any of the Directors and the Advisor;
(6) the financial condition of the Advisor; (7) the retention of senior members
of the management team of the Advisor after the Merger who would remain
responsible for the day-to-day affairs of the Advisor; (8) the terms of the New
Advisory Agreement, noting that, other than the dates of execution,
effectiveness and termination, the terms of the New Advisory Agreement were the
same as those of the 1992 Advisory Agreement; and (9) the effects of the
addition of the substantial resources of AIM and its affiliated companies to
INVESCO, including the reputation, experience, personnel and financial
resources of AIM in the mutual fund industry.
Based upon its review and evaluation of the factors listed above, the
Board determined that the New Advisory Agreement was fair, reasonable and in
the best interest of the Fund and its shareholders.
SHAREHOLDINGS
Shareholders of the Fund of record at the close of business on October
8, 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, 1,267,043.470 shares of the
Fund's common stock, $.01 per value per share, were outstanding.
The following table sets forth, as of the Record Date, the beneficial
ownership of the Fund's issued and outstanding common stock by each 5% or
greater shareholder. The Directors and executive officers of the Fund did not
own 1% or more of the outstanding Fund shares as of the Record Date.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT OF BENEFICIAL PERCENT OF COMMON
BENEFICIAL OWNER OWNERSHIP STOCK
- ----------------------- -------------------- --------------------
<S> <C> <C>
Trinidad & Tobago Unit
Trust Corporation
74 Independence Square
Port-of-Spain
Trinidad & Tobago, W.I. 111,677.301 8.81%
First Citizens Bank
45 Ambercromby Street
Port-of-Spain
Trinidad & Tobago, W.I. 65,165.878 5.14%
</TABLE>
3
<PAGE> 7
SPECIAL MEETING PROCEDURES
In addition to the solicitations of proxies by use of the mail, proxies
may be solicited by officers of the Fund personally or by telephone or
telegraph, without special compensation.
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 Fund 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.
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 the Proposal. 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 the Proposal, the persons named as proxies will
vote in favor of adjournment those shares which they are entitled to vote in
favor of the Proposal and will vote against adjournment those shares which they
are required to vote against the Proposal. A shareholder vote may be taken on
the Proposal discussed herein prior to any such adjournment if sufficient votes
have been received and it is otherwise appropriate.
PROPOSAL: APPROVAL OF THE NEW ADVISORY
AGREEMENT BETWEEN THE FUND AND
INVESCO CAPITAL MANAGEMENT GROUP, INC.
VOTE REQUIRED
As provided in the Investment Company Act, the New Advisory Agreement
must be approved by the affirmative vote of a majority of the outstanding
shares of the Fund. Such a majority is defined as the lessor of: (1) 67% or
more of the shares present at such meeting of shareholders, if the holders of
more than 50% of the outstanding shares of the Fund are present or represented
by proxy, or (2) more than 50% of the total outstanding shares of the Fund.
4
<PAGE> 8
THE BOARD RECOMMENDS THAT FUND SHAREHOLDERS APPROVE THE NEW ADVISORY
AGREEMENT BETWEEN THE ADVISOR AND THE FUND AS UNANIMOUSLY APPROVED BY THE
BOARD.
THE 1992 ADVISORY AGREEMENT
Subject to supervision by the Fund's Board, investment management and
administration services are provided to the Fund by the Advisor pursuant to the
1992 Advisory Agreement. Under the 1992 Advisory Agreement, the Advisor
provides a continuous investment program for the Fund and makes decisions and
places orders to buy, sell or hold particular securities and futures. The
Advisor also supervises all matters relating to the operation of the Fund and
obtains clerical staff, office space, equipment and services. As compensation
for its services, the Advisor receives a monthly fee at an annual rate of the
greater of $50,000 or 0.75% of 1% on the first $10 million, 0.50% of 1% on the
next $10 million and 0.25% of 1% over $20 million of the Fund's average daily
net assets.
Under the 1992 Advisory Agreement, the Advisor is not liable to the
Fund for any error of judgment by the Advisor or any loss sustained by the Fund
except in the case of a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages will be limited
as provided in the 1940 Act) or of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
The 1992 Advisory Agreement was unanimously approved by the Board and
by a majority of the directors who neither are interested persons of the Fund
nor have any direct or indirect financial interest in the Management Contract
or any agreement related thereto, and by the Fund's initial shareholder on
September 25, 1992.
THE NEW ADVISORY AGREEMENT
The New Advisory Agreement contains all of the same terms as the
previous 1992 Advisory Agreement and, similar to the 1992 Advisory Agreement,
the New Advisory Agreement will remain in effect until terminated by either
party. The New Advisory Agreement shall be specifically approved at least
annually: (1) by a majority vote of the Independent Directors cast in person
at a meeting called for the purpose of voting on such approval and (2) by the
Board or by vote of a majority of the outstanding voting securities of the Fund.
5
<PAGE> 9
The New Advisory Agreement is terminable by vote of the Board or by the
holders of a majority of the outstanding voting securities of the Fund at any
time without penalty, on 60 days' written notice to the Advisor. The New
Advisory Agreement also may be terminated by the Advisor on 60 days' written
notice to the Fund. The New Advisory Agreement terminates automatically upon
its assignment, as defined in the Investment Company Act.
INFORMATION CONCERNING INVESCO, AIM AND AMVESCAP PLC
INVESCO is a publicly-traded holding company organized under the laws
of England in 1935. The ordinary shares of INVESCO, 25 pence nominal value per
share (the "Ordinary Shares"), are traded on the London Stock Exchange.
INVESCO's subsidiaries provide investment advisory services throughout the
world. As of September 30, 1996, the total assets advised by INVESCO and its
subsidiaries were approximately $91.1 billion.
AIM is a holding company that has been engaged in the financial
services business since 1976 and, together with its affiliates, advises or
manages 38 investment company portfolios comprising the A I M Family of
Funds(R). As of October 31, 1996, the total assets of the registered
investment company portfolios advised or managed by AIM and its affiliates were
approximately $57 billion.
On November 4, 1996, INVESCO and INVESCO Group Services, Inc. ("IGS")
entered into an agreement of merger with AIM pursuant to which IGS or another
wholly-owned U.S. subsidiary of INVESCO acquired all the issued and outstanding
shares of AIM capital stock for consideration valued on November 4, 1996 at
approximately $1.6 billion, plus the amount of AIM net income from September 1,
1996 through February 28, 1997, the date on which the Merger was consummated,
minus dividends paid during such period and subject to adjustments for certain
balance sheet items and transaction expenses. The consideration included 290
million new Ordinary Shares (including Ordinary Shares issuable in respect of
vested and unvested AIM options) of INVESCO valued on November 4, 1996 at
approximately $1.1 billion. The balance of the consideration was paid in cash.
The AIM shareholders now own approximately 45% of INVESCO's total outstanding
capital stock on a fully-diluted basis. INVESCO's name has been changed to
"AMVESCAP PLC." AMVESCAP PLC is the holding company. The name of the Advisor
will not change.
6
<PAGE> 10
INFORMATION CONCERNING THE ADVISOR
The Advisor serves as the Fund's investment advisor pursuant to the
1992 Advisory Agreement. The Advisor is an indirect, wholly-owned subsidiary
of INVESCO, 1315 Peachtree Street, N.E., Atlanta, Georgia 30309. The corporate
headquarters of INVESCO are located at 11 Devonshire Square, London, EC2M 4YR,
England. As of August 31, 1997, the Advisor had $38 billion of net assets
under management. The principal executive officer and directors of the Advisor
are:
<TABLE>
<CAPTION>
OFFICERS DIRECTORS
-------- ---------
<S> <C>
Edward C. Mitchell, Jr.--Chairman Frank M. Bishop
Frank M. Bishop--President and Stephen A. Dana
Chief Executive Officer
Luis A. Aguilar--Executive Vice Edward C. Mitchell, Jr.--Chairman
President and Assistant
Secretary
Stephen A. Dana--Vice President Thomas W. Norwood
Thomas W. Norwood--Vice President Donald B. Sallee
Donald B. Sallee--Vice President Thomas L. Shields
Thomas L. Shields--Vice President Wendell M. Starke
Julie Skaggs--Vice President, Terrence J. Miller
Secretary and General Counsel
Deborah Lamb--Assistant Secretary Timothy J. Culler
David Hartley--Chief Financial A.D. Frazier
Officer or Treasurer
Terry Miller--Deputy President
Tim Culler--Chief Investment
Officer and Vice President
</TABLE>
7
<PAGE> 11
During the current fiscal year from January 1, 1997 to September 30,
1997, the Fund paid the Advisor total compensation of $23,062.71 for its
services.
Since the Merger was consummated, the Advisor has continued and intends
to continue to provide the same level, quality and nature of the foregoing
services to the Fund as are currently being provided.
SHAREHOLDER REPORTS
A copy of the Fund's 1996 Annual Report and the June 30, 1997
Semi-Annual Report are available without charge upon the request of any
shareholder. Please call 1-800-368-3322 or write to the following address to
request the Annual Report or the Semi-Annual Report:
The Chaconia Income & Growth Fund, Inc.
c/o American Data Services, Inc.
The Hauppauge Corporate Center
150 Motor Parkway
Suite 109
Hauppauge, NY 11788
8
<PAGE> 12
INVESTMENT ADVISOR
INVESCO Capital Management, Inc.
Atlanta, Georgia
CUSTODIAN
Star Bank, N.A.
Cincinnati, Ohio
TRANSFER AGENT
American Data Services, Inc.
Hauppauge, New York
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
New York, New York
LEGAL COUNSEL
Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
Milwaukee, Wisconsin
9
<PAGE> 13
THE CHACONIA INCOME & GROWTH FUND, INC.
c/o Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, Wisconsin 53202
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Revoking any such prior appointments, the undersigned appoints Clarry Benn as
proxy with the power of substitution to vote all the common stock of The
Chaconia Income & Growth Fund, Inc. (the "Fund") registered in the name of the
undersigned at the special meeting of stockholders to be held at the offices of
REINHART, BOERNER, VAN DEUREN, NORRIS & RIESELBACH, S.C., 1000 NORTH WATER
STREET, MILWAUKEE, WISCONSIN 53202 ON FRIDAY, NOVEMBER 21, 1997, AT 5 P.M.
(EASTERN TIME) and at any adjournments thereof.
1. To approve or disapprove the new investment advisory agreement between
the Fund and INVESCO Capital Management, Inc.
____ APPROVE ____ DISAPPROVE ____ ABSTAIN
2. To transact such other business as may properly come before the meeting.
The shares of common stock represented by this Proxy will be voted in
accordance with the specifications made above. If no specifications are made,
such shares will be voted to APPROVE Proposal 1.
NOTE: Please sign exactly as name appears on this card. All joint owners
should sign. When signing as executor, administrator, attorney, trustee
or guardian or as custodian for a minor, please give full title as such.
If a corporation, please sign in full corporate name and indicate the
title of the signing officer. If a partner, please sign in the
partnership name.
Receipt acknowledged of the Proxy
Statement for the annual meeting of
stockholders to be held on November 21,
1997
________________________________________
(Signature of Shareholder)
________________________________________
(Print First Name Print Last Name)
Date _____________________________, 1997
I(we) do ____ do not ____ expect to be
present at the meeting.
