File No. 33-38336
As filed on ^ July 23, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
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Post-Effective Amendment No. ^ 7 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 9 X
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INVESCO EMERGING OPPORTUNITY FUNDS, INC.
^(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable
after this post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
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^ on __________________ pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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^X on October 1, 1996, pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on __________________, pursuant to paragraph (a)(2) of rule 485.
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If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
- -- previously filed post-effective amendment.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended May 31, ^ 1996, was
filed on or about July ^ 22, 1996.
Page 1 of 173
Exhibit index is located at page 86
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NOTE
This Post-Effective Amendment (Form N-1A) updates information reflected in the
Prospectus and Statement of Additional Information for the INVESCO Emerging
Growth Fund, a series of INVESCO Emerging Opportunity Funds, Inc. This
Post-Effective Amendment does not update information or the INVESCO Worldwide
Emerging Markets Fund, another series of INVESCO Emerging Opportunity Funds,
Inc., since that Fund has not yet commenced a public offering of its shares. A
new Post-Effective Amendment will be filed for the INVESCO Emerging Markets Fund
prior to commencing a public offering of its shares.
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INVESCO EMERGING OPPORTUNITY FUNDS, INC.
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CROSS-REFERENCE SHEET
Form N-1A
Item Caption
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Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses;
Essential Information
3....................... Financial Highlights; Fund
Price and Performance ^
4....................... Investment Objective and
Strategy; Investment Policies
^ and Risk Factors; The Fund
and Its Management
5....................... The Fund and Its Management^
5A...................... Not Applicable
6....................... Fund Services ^; Taxes,
Dividends and Capital Gain
Distributions; Additional
Information
7....................... How ^ to Buy Shares; Fund
Price and Performance; Fund
Services; The Fund and Its
Management
8....................... Fund Services ^; How to ^ Sell
Shares
9....................... Not Applicable
Part B Statement of Additional
Information
10....................... Cover Page
11....................... Table of Contents
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Form N-1A
Item Caption
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12....................... The Fund and Its Management
13....................... Investment Practices;
Investment Policies and
Restrictions
14....................... The Fund and Its Management
15.^...................... The Fund and Its Management;
Additional Information
^ 16....................... The Fund and Its Management;
Additional Information
17....................... Investment Practices;
Investment Policies and
Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased;
How Shares Are Valued;
Services Provided by the Fund;
Tax-Deferred Retirement Plans;
How to Redeem Shares
20....................... Dividends, Capital Gain
Distributions, and Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23.^...................... Additional Information^
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
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<PAGE>
PROSPECTUS
^ October 1, 1996
INVESCO EMERGING GROWTH FUND
INVESCO ^ Emerging Growth Fund (the "Fund") seeks long^-term capital
growth. ^ Most of its investments are in equity securities of emerging growth
companies with market capitalizations of $1 billion or less at the time of
initial purchase ("small cap companies")^, but the Fund has the flexibility to
invest in other types of securities.
The Fund is a series of INVESCO Emerging Opportunity Funds, Inc.^, a
registered investment company which may offer additional funds in the future.
^ This prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated ^ October 1, 1996, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this ^ prospectus. To
obtain a ^ free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706,
Denver, Colorado^ 80217-3706; or call 1-800-525-8085.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
TABLE OF CONTENTS Page
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ESSENTIAL INFORMATION................................................ 7
ANNUAL FUND EXPENSES............................................... ^ 8
FINANCIAL HIGHLIGHTS............................................... 10 ^
^
INVESTMENT OBJECTIVE AND STRATEGY.................................... 11
INVESTMENT POLICIES AND RISKS...................................... 13 ^
THE FUND AND ITS MANAGEMENT........................................ ^ 16
^ FUND PRICE AND PERFORMANCE......................................... 18
^ HOW TO BUY SHARES.................................................. 18
^ FUND SERVICES...................................................... 23
HOW TO SELL SHARES................................................... 24
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.................... ^ 27
ADDITIONAL INFORMATION............................................. ^ 28
<PAGE>
^ ESSENTIAL INFORMATION
^ Investment Goal And Strategy. INVESCO Emerging Growth Fund
is a diversified mutual fund that seeks long-term capital growth.
It invests primarily in small-capitalization equity securities of
U.S. companies traded "over-the-counter." There is no guarantee
that the Fund will meet its objective. See "Investment Objective
And Strategy."
The Fund is Designed For: Investors seeking capital growth over the
long-term. While not intended as a complete investment program, the Fund may be
a valuable element of your investment portfolio. You also may wish to consider
the Fund as part of a Uniform Gift/Transfer To Minors Account or systematic
investing strategy. The Fund may be a suitable investment for many types of
retirement programs, including IRA, SEP-IRA, SARSEP, 401(k), Profit Sharing,
Money Purchase Pension, and 403(b) plans.
Time Horizon. Potential shareholders should consider this a
long-term investment due to the volatility of the securities held
by the Fund.
Risks. The Fund uses an investment strategy, which at times may include
holdings in foreign securities and rapid portfolio turnover. The returns on
foreign investments may be influenced by currency fluctuations and other risks
of investing overseas. Rapid portfolio turnover may result in higher brokerage
commissions and the acceleration of taxable capital gains. Investors should
consider whether these policies make the Fund unsuitable for that portion of
your savings dedicated to current income or preservation of capital over the
short-term. See "Investment Objective and Strategy" and "Investment Policies and
Risks."
Organization and Management. The Fund is owned by its shareholders. It
employs INVESCO Funds Group, Inc. ("IFG"), founded in 1932, to serve as
investment adviser, administrator, distributor, and transfer agent. INVESCO
Trust Company ("INVESCO Trust"), founded in 1969, serves as sub-adviser.
INVESCO Trust vice president John Schroer, a chartered financial analyst,
has managed INVESCO Emerging Growth Fund since 1995. See "The Fund And Its
Management."
IFG and INVESCO Trust are part of a global firm that managed approximately
$84 billion as of December 31, 1995. The parent company, INVESCO PLC, is based
in London, with money managers located in Europe, North America and the Far
East.
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This Fund offers all of the following services at no charge:
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Telephone purchases
Telephone exchanges
Telephone redemptions
Automatic reinvestment of distributions
Regular investment plans, such as EasiVest (the Fund's
automatic monthly investment program), Direct Payroll
Purchase, and Automatic Monthly Exchange
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans.
Minimum Subsequent Investment: $50 (Minimums are lower for certain
retirement plans.)
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange or redeem
shares. The Fund^ is authorized to pay a ^ Rule 12b-1 distribution fee of one
quarter of one percent each year. (See "How To Buy Shares -- Distribution
Expenses.")
^ Like any company, the Fund has operating expenses, such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts, and other expenses. These expenses are paid from the Fund's assets.
Lower expenses therefore benefit investors by increasing the Fund's total
return.
^ We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, the Fund's manager
voluntarily reimburses the Fund for amounts in excess of 1.50% of average net
assets.
Annual Fund Operating Expenses
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(as a percentage of average net assets)
Management Fee 0.75%
12b^-1 Fees 0.25%
Other Expenses ^(after absorbed expenses)1 0.48% ^
Total Fund Operating Expenses ^(after ^ absorbed expenses)1 1.48%
^ 1Ratio reflects total expenses prior to any expense offset.
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Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming ^ a hypothetical 5% annual return and ^ redemption
at the end of each time period. (Of course, actual operating expenses are paid
from the Fund's assets, and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)^
1 Year 3 Years 5 Years 10 Years
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$15 $47 ^ $81 $178
The purpose of ^ this table is to assist ^ you in understanding the
various costs and expenses that ^ you will bear directly or indirectly. ^ The
example should not be considered a representation of past or future ^
performance, and actual annual returns and expenses may be greater or less than
those shown. ^ For more information on the Fund's expenses, see "The Fund and
Its Management" and "How to Buy Shares - Distribution Expenses."
^ Since the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period) ^
Period
Ended
Year Ended May 31 May 31
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1996 1995 1994 1993 1992^
PER SHARE DATA
Net Asset Value --^
Beginning of Period $9.37 $11.40 $9.89 $7.55 $7.50
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INCOME FROM INVESTMENT ^ OPERATIONS
Net Investment Income ^(Loss) (0.06) 0.04 (0.01) (0.04) (0.02)
Net ^ Gains on Securities
(Both Realized and ^ Unrealized) 5.25 0.46 1.53 2.38 0.07
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Total from Investment ^ Operations 5.19 0.50 1.52 2.34 0.05
^-----------------------------------------
LESS DISTRIBUTIONS
Dividends from Net ^ Investment Income ^ 0.00 0.04 0.00 0.00 0.00
^ Distributions from Capital Gains 0.18 2.49 0.01 0.00 0.00
^-----------------------------------------
Total Distributions 0.18 2.53 0.01 0.00 0.00
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^ Net Asset Value -- End of Period $14.38 $9.37 $11.40 $9.89 $7.55
^=========================================
^ TOTAL RETURN 55.78% 4.98% 15.34% 30.95% 0.68%*
RATIOS
Net Assets ^-- End of Period
($000 Omitted) $370,029 $153,727 $176,510 $103,029 $25,579
Ratio of Expenses to
Average Net Assets# 1.48%@ 1.49% 1.37% 1.54% 1.93%~
Ratio of Net Investment ^ Income
(Loss) to ^ Average Net Assets# (0.78%) 0.41% (0.26%) (0.70%) (0.95%)~
Portfolio Turnover Rate 221% 228% 196% 153% 50%*
^ From December 27, 1991, commencement of operations, to May 31, 1992.
* ^ Based on operations for the period shown and, accordingly, are not
representative of a full year.
^
# Various expenses of the Fund were voluntarily absorbed by IFG for the year
ended May 31, 1995. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 1.52%, and ratio
of net investment income to average net assets would have been 0.38%.
^@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report appearing
in the Fund's 1996 Annual Report to Shareholders, which is incorporated by
reference into the Statement of Additional Information. Both are available
without charge by contacting IFG at the address or telephone number on the cover
of this prospectus. The Annual Report also contains more information about the
Fund's performance.
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
The Fund seeks long-term capital growth. ^ This investment objective is
fundamental and may not be changed without the approval of the Fund's
shareholders. The Fund seeks to achieve this objective through the investment of
65% or more of its assets in equity securities of ^ companies with market
capitalizations ^ of $1 billion or less at the time we purchase them ("small-cap
companies"). ^ The balance of the Fund's assets may be invested in the equity
securities of companies with market capitalizations in excess of $1 billion,
debt securities and short-term investments. With respect to small cap companies,
we are primarily looking for companies ^ in the developing stages of their life
cycle, ^ which are currently undervalued in the marketplace, have earnings which
may be expected to grow faster than the U.S. economy in general, and/or offer
the potential for accelerated earnings growth due to rapid growth of sales, new
products, management changes, or structural changes in the economy. There is no
assurance that the Fund's investment objective will be met.
The majority of the Fund's holdings consists of common stocks traded
"over-the-counter." The Fund also has the flexibility to invest in other U.S.
and foreign securities.
The Fund's investments in debt securities include U.S. government and
corporate debt securities. Investments in U.S. government securities may consist
of securities issued or guaranteed by the U.S. government and any agency or
instrumentality of the U.S. government. In some cases, these securities are
direct obligations of the U.S. government, such as U.S. Treasury bills, notes
and bonds. In other cases, these securities are obligations guaranteed by the
U.S. government, consisting of Government National Mortgage Association
obligations, or obligations of U.S. government authorities, agencies or
instrumentalities, consisting of the Federal National Mortgage Association,
Federal Home Loan Bank, Federal Financing Bank and Federal Farm Credit Bank,
which are supported only by the assets of the issuer. The Fund may invest in
both investment grade and lower-rated corporate debt securities. However, the
Fund will not invest more than 5% of its total assets (measured at the time of
purchase) in corporate debt securities that are rated below BBB by Standard &
Poor's Ratings Group ("Standard & Poor's") or Baa by Moody's Investors Service,
Inc. ("Moody's") or, if unrated, are judged by Fund Management to be equivalent
in quality to debt securities having such ratings. In no event will the Fund
invest in a debt security rated below CCC by Standard & Poor's or Caa by
Moody's. The risks of investing in debt securities are discussed below under
"Risk Factors." For a description of each corporate bond rating category, please
refer to Appendix ^ A to the Statement of Additional Information.
The short-term investments of the Fund may consist of U.S. government and
agency securities, domestic bank certificates of deposit and bankers'
acceptances, and commercial paper rated A-1 by Standard and Poor's or P-1 by
Moody's, as well as repurchase
<PAGE>
agreements with banks and registered broker-dealers and registered government
securities dealers with respect to the foregoing securities. The Fund's assets
invested in U.S. government securities and short-term investments will be used
to meet current cash requirements, such as to satisfy requests to redeem shares
of the Fund and to preserve investment flexibility. A commercial paper rating of
A-1 by Standard & Poor's or P-1 by Moody's is the highest rating category
assigned by such rating organizations and indicates that the issuer has a very
strong capacity to make timely payments of principal and interest on its
commercial paper obligations. All bank certificates of deposit and bankers'
acceptances at the time of purchase by the Fund must be issued by domestic banks
(i) which are members of the Federal Reserve System having total assets in
excess of $5 billion, (ii) which have received at least a B ranking from Thomson
Bank Watch Credit Rating Service or International Bank Credit Analysis, and
(iii) which either directly or through parent holding companies have securities
outstanding which have been rated Aaa, Aa or P-1 by Moody's or AAA, AA or A-1 by
Standard & Poor's.
^ The Fund's investment portfolio is actively traded. Since our strategy
highlights many short-term factors -- current information about a company,
investor interest, price movements of the company's securities and general
market and monetary conditions --securities may be bought and sold relatively
frequently. The Fund's portfolio turnover rate may be higher than many other
mutual funds, sometimes exceeding 200%; this turnover also may result in greater
brokerage commissions and acceleration of capital gains which are taxable when
distributed to shareholders. The Statement of Additional Information includes an
expanded discussion of the Fund's portfolio turnover rate, its brokerage
practices and certain federal income tax matters.
^ When we believe market or economic conditions are unfavorable, the Fund
may assume a ^ defensive position ^ by temporarily investing up to 100% of its
assets in high ^ quality money market instruments, such as short-term U.S.
government obligations, commercial paper or repurchase agreements, seeking to
protect its assets until conditions stabilize.
^ The Fund may invest in illiquid securities, including securities that
are subject to restrictions on resale and securities that are not readily
marketable. The Fund may also invest in restricted securities that may be resold
to institutional investors, known as "Rule 144A Securities." For more
information concerning illiquid and Rule 144A Securities, see "Investment
Policies and Restrictions" in the Statement of Additional Information.
<PAGE>
^ INVESTMENT POLICIES AND RISKS
Investors generally should expect to see their price per share vary with
movements in the stock market, changes in economic conditions and other factors.
The Fund invests in many different companies in a variety of industries; this
diversification reduces the Fund's overall exposure to investment and market
risks, but cannot eliminate these risks.
Small-Cap Stocks. The small-cap companies represented in the Fund's
investment portfolio (particularly those trading "over-the-counter") may be in
the early stages of development; have limited product lines, markets or
financial resources; and/or lack management depth. These factors may lead to
more intense competitive pressures on, greater volatility in earnings of, and
relative illiquidity or erratic price movements for the securities of these
companies, compared to larger-cap companies.
Foreign Securities. Up to 25% of the Fund's total assets, measured at the
time of purchase, may be invested directly in foreign securities. Securities of
Canadian issuers and ^ American Depository Receipts ("ADRs") are not subject to
this 25% limitation. ADRs are receipts representing shares of a foreign
corporation held by a U.S. bank that entitle the holder to all dividends and
capital gains ^. ADRs are denominated in U.S. dollars and trade in the U.S.
securities markets.
^ For U.S. investors, the returns on foreign securities are influenced not
only by the returns on the foreign investments themselves, but also by currency
fluctuations. That is, when the U.S. dollar generally rises against foreign
currencies, returns on foreign securities for a U.S. investor may decrease. By
contrast, in a period when the U.S. dollar generally declines, those returns may
increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally available about U.S.
issuers;
-differences in accounting, auditing and financial reporting standards;
-generally higher commission rates on foreign portfolio transactions and
longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
<PAGE>
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
ADRs are subject to some of the same risks as direct investments in
foreign securities, including the risk that material information about the
issuer may not be disclosed in the United States and the risk that currency
fluctuations may adversely affect the value of the ADR.
The Fund's investments in debt securities generally are subject to both
credit risk and market risk. Credit risk relates to the ability of the issuer to
meet interest or principal payments, or both, as they come due. Market risk
relates to the fact that the market values of the debt securities generally will
be affected by changes in the level of interest rates. An increase in interest
rates will tend to reduce the market values of debt securities, whereas a
decline in interest rates will tend to increase their values. Although Fund
Management limits the Fund's investments in debt securities to securities it
believes are not highly speculative, both kinds of risk are increased by
investing in debt securities rated BBB or lower by Standard & Poor's, Baa or
lower by Moody's or, if unrated, securities determined by Fund Management to be
of equivalent quality.
In addition to these investment performance risks, it should be recognized
that certain of the Fund's investment practices involve various risks. These
include the risks of investing in foreign securities and illiquid securities and
the risks involved in purchasing or selling securities on a when-issued or
delayed delivery basis. When purchasing or selling securities on a when-issued
or delayed delivery basis, the price and yield are normally fixed on the date of
the purchase commitment. During the period between purchase and settlement, no
payment is made by the Fund and no interest accrues to the Fund. At the time of
settlement, the market value of the security may be more or less than the
purchase price, and the Fund bears the risk of such market value fluctuations.
An additional risk is that, when the Fund enters into a repurchase agreement or
makes a securities loan, the other party to the transaction may default on its
obligation to repurchase or return the security involved in such transaction.
See "Foreign Securities" and "Other Investment Practices." The Fund's practice
of obtaining appropriate collateral in these transactions provides protection
against this risk, but the Fund could suffer a loss in the event its ability to
promptly dispose of the collateral is delayed or restricted.
When-Issued Securities. Up to 10% of the value of the Fund's total assets
may be committed to the purchase or sale of securities on a when-issued or
delayed-delivery basis -- that is, with
<PAGE>
settlement taking place in the future. The payment obligation and the interest
rate received on the securities generally are fixed at the time the Fund enters
into the commitment. Between the date of purchase and the settlement date, the
market value of the securities may vary, and no interest is payable to the Fund
prior to settlement.
Put and Call Options. The Fund may purchase and write options on
securities and indices. These practices and their risks are discussed under
"Investment Policies and Restrictions" in the Statement of Additional
Information.
Repurchase Agreements. The Fund may invest money, for as short a time as
overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
the security if the prior owner defaults on its repurchase obligation. To reduce
that risk, the securities underlying each repurchase agreement will be
maintained with the Fund's custodian in an amount at least equal to the
repurchase price under the agreement (including accrued interest). These
agreements are entered into only with member banks of the Federal Reserve
System, registered broker-dealers, and registered U.S. government securities
dealers that are deemed creditworthy under standards established by the Fund's
board of directors.
Securities Lending. The Fund may seek to earn additional income by lending
securities to qualified brokers, dealers, banks, or other financial
institutions, on a fully collateralized basis. For further information on this
policy, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies and Restrictions" and "Investment Practices" in
the Statement of Additional Information.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
the Fund's shareholders. For example, the Fund limits to 5% the portion of its
total assets that may be invested in any one issuer, and to 25% the portion of
its total assets that may be invested in any one industry.
<PAGE>
THE FUND AND ITS MANAGEMENT
The ^ Fund is a no-load mutual fund, registered with the Securities and
Exchange Commission as ^ a diversified, open-end, ^ management investment
company. It was incorporated on December 6, 1990, under the laws of Maryland.
The Fund's board of directors has responsibility for overall supervision
of the Fund, and reviews the services provided by the adviser and sub-adviser.
Under ^ an agreement with the ^ Fund, INVESCO Funds Group, Inc. ^("IFG"), 7800
E. Union Avenue, Denver, Colorado 80237, serves as the Fund's investment ^
manager; it is primarily responsible for providing the Fund with various
administrative services. IFG's ^ wholly-owned subsidiary ^, INVESCO Trust
Company ("INVESCO Trust"), ^ is the Fund's sub-adviser and is primarily
responsible for ^ managing the Fund's investments. ^ Together, IFG and INVESCO
Trust constitute "Fund Management."
^ John Schroer has served as portfolio manager for the Fund since 1995 and
is primarily responsible for the day-to-day management of the Fund's holdings.
His recent career includes these highlights: Portfolio ^ manager of the Health
Sciences Portfolio of INVESCO Strategic Portfolios, Inc.; vice president (since
1995) and portfolio manager (1993 to present) of INVESCO Trust ^. Formerly (1990
to 1993), assistant vice president with Trust Company of the West^. He earned BS
and MBA degrees from the University of Wisconsin-Madison. He is a Chartered
Financial Analyst.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires ^ Fund Management's personnel to
conduct their personal investment activities in a manner that Fund Management
believes is not detrimental to the Fund or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
The Fund pays ^ IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily. The management fee
is computed at the annual rate of 0.75% on the first $350 million of the Fund's
average net assets^ ; 0.65% on the next $350 million of the Fund's average net
assets ^; and 0.55% on the Fund's average net assets over $700 million. For the
fiscal year ended May 31, ^ 1996, investment ^ management fees paid by the Fund
amounted to 0.75% of the Fund's average net assets. ^ Out of ^ this fee, IFG
paid an amount equal to 0.25% of the Fund's average net assets ^ to INVESCO
Trust as a sub-advisory fee. No fee is paid by the Fund to INVESCO Trust.
^ Under a Transfer Agency Agreement, IFG acts as registrar, transfer
agent, and dividend disbursing agent for the Fund. The Fund pays an annual fee
of $20.00 per shareholder account or omnibus account participant for these
<PAGE>
services. Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities may provide equivalent services to the Fund.
In these cases, IFG may pay, out of the fee it receives from the Fund, an annual
sub-transfer agency fee to the third party.
^ In addition, under an Administrative Services Agreement, ^ IFG handles
additional administrative, record-keeping, and internal sub-accounting services
for the Fund. For the fiscal year ended May 31, 1996, the Fund paid IFG a fee
for these services equal to 0.015% of the Fund's average net assets.
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended May 31, ^ 1996, including investment ^ management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to ^
1.48% of the Fund's average net assets. ^ If necessary, certain Fund expenses ^
will be absorbed voluntarily ^ by IFG in order to ensure that the Fund's total ^
operating expenses will not exceed 1.50% of the Fund's average net assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
at the best available prices. As discussed under "How to Buy Shares ^-
Distribution Expenses," the ^ Fund may market its shares ^ through intermediary
brokers or dealers that have entered into Dealer Agreements with ^ IFG, as the ^
Fund's distributor. The Fund may place orders for portfolio transactions with
qualified broker/dealers ^ which recommend the Fund, or sell shares of the Fund,
to clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of the execution of the transaction and
level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices - Placement
of Portfolio Brokerage" in the Statement of Additional Information.
The parent company for IFG and INVESCO Trust is INVESCO PLC, a publicly
traded holding company whose subsidiaries provide investment services around the
world. IFG was established in 1932 and, as of May 31, 1996, managed 14 mutual
funds, consisting of 39 separate portfolios, with combined assets of
approximately $13.3 billion on behalf of over 800,000 shareholders. INVESCO
Trust (founded in 1969) served as adviser or sub-adviser to 45 investment
portfolios as of May 31, 1996, including 27 portfolios in the INVESCO group.
These 45 portfolios had aggregate assets of approximately $12.6 billion as of
May 31, 1996. In addition, INVESCO Trust provides investment management services
to private clients, including employee benefit plans that may be invested in a
collective trust sponsored by INVESCO Trust.
<PAGE>
FUND PRICE AND PERFORMANCE
Determining Price. The value of your investment in the Fund will vary
daily. The price per share is also known as the Net Asset Value ("NAV"). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading (normally, 4:00 p.m., New York time). NAV is calculated
by adding together the current market value of all of the Fund's assets,
including accrued interest and dividends; then subtracting liabilities,
including accrued expenses; and finally dividing that dollar amount by the total
number of Fund shares outstanding.
Performance Data. To keep shareholders and potential investors informed,
we will occasionally advertise the Fund's total return for periods of one-year
and since inception (December 1991), as well as the five-year period when it
becomes available. Total return figures show the rate of return on an investment
in the Fund, assuming reinvestment of all dividends and capital gain
distributions for the periods cited. Cumulative total return shows the actual
rate of return on an investment over a stated period; average annual total
return represents the average annual percentage change in the value of an
investment. Both cumulative and average annual total returns tend to "smooth
out" fluctuations in the Fund's investment results, not showing the interim
variations in performance over the periods cited. More information about the
Fund's recent and historical performance is contained in the Fund's Annual
Report to Shareholders. You can get a free copy by calling or writing to IFG
using the phone number or address on the cover of this prospectus.
When we quote mutual fund rankings published by Lipper Analytical
Services, Inc., we may compare the Fund to others in its category of Small
Company Growth Funds, as well as the broad-based Lipper general fund groupings.
These rankings allow you to compare the Fund to its peers. Other independent
financial media also produce performance- or service-related comparisons, which
you may see in our promotional materials. For more information see "Fund
Performance" in the Statement of Additional Information.
Performance figures are based on historical earnings and are not intended
to suggest future performance.
HOW TO BUY SHARES
The chart on page 20 shows several convenient ways to invest in the Fund.
Your new Fund shares will be priced at the NAV next determined after your order
is received in proper form. There is no charge to invest, exchange, or redeem
shares when you make transactions directly through IFG. However, if you invest
in the Fund through a securities broker, you may be charged a commission or
transaction fee. For all new accounts, please send a completed application form.
Please specify which Fund you wish to purchase.
<PAGE>
Fund Management reserves the right to increase, reduce, or waive the
minimum investment requirements in its sole discretion, where it determines this
action is in the best interests of the Fund. Further, Fund Management reserves
the right in its sole discretion to reject any order for the purchase of Fund
shares (including purchases by exchange) when, in its judgment, such rejection
is in the Fund's best interests. ^
Exchange Privilege. ^ You may exchange your shares in this Fund for those
in another INVESCO fund on the basis of their respective net asset values at the
time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider their differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make up to four exchanges out of each fund during
each calendar year.
3) An exchange is the redemption of shares from one fund followed by
the purchase of shares in another. Therefore, any gain or loss
realized on the exchange is recognizable for federal income tax
purposes (unless, of course, your account is tax-deferred).
4) The Fund reserves the right to reject any exchange request, or to
modify or terminate exchange privileges, in the best interests of
the Fund and its shareholders. Notice of all such modifications or
termination will be given at least 60 days prior to the effective
date of the change in privilege, except for unusual instances (such
as when redemptions of the exchanged shares are suspended under
Section 22(e) of the Investment Company Act of 1940, or when sales
of the fund into which you are exchanging are temporarily stopped).
<PAGE>
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check
Mail to: $1,000 for regular If your check does
INVESCO Funds account; not clear, you will
Group, Inc. $250 for an be responsible for
P.O. Box 173706 Individual any related loss
Denver, CO 80217- Retirement Account; the Fund or IFG
3706. $50 minimum for incurs. If you are
Or you may send each subsequent already a
your check by investment. shareholder in the
overnight courier INVESCO funds, the
to: 7800 E. Union Fund may seek
Ave., Denver, CO reimbursement from
80237. your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or
Wire
Call 1-800-525-8085 $1,000. Payment must be
to request your received within 3
purchase. Then send business days, or
your check by the transaction may
overnight courier be cancelled. If a
to our street purchase is
address: cancelled due to
7800 E. Union Ave., nonpayment, you
Denver, CO 80237. will be responsible
Or you may transmit for any related
your payment by loss the Fund or
bank wire (call IFG IFG incurs. If you
for instructions). are already a
shareholder in the
INVESCO funds, the Fund
may seek reimbursement
from your existing
account(s) for any loss
incurred.
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or
Direct Payroll
Purchase
You may enroll on $50 per month for Like all regular
the fund EasiVest; $50 per investment plans,
application, or pay period for neither EasiVest
call us for the Direct Payroll nor Direct Payroll
correct form and Purchase. You may Purchase ensures a
more details. start or stop your profit or protects
Investing the same regular investment against loss in a
amount on a monthly plan at any time, falling market.
basis allows you to with two weeks' Because you'll
buy more shares notice to IFG. invest continually,
when prices are low regardless of
and fewer shares varying price
when prices are levels, consider
high. This your financial
"dollar-cost ability to keep
averaging" may help buying through low
offset market price levels. And
fluctuations. Over remember that you
a period of time, will lose money if
your average cost you redeem your
per share may be shares when the
less than the market value of all
actual average your shares is less
price per share. than their cost.
- --------------------------------------------------------------------------------
By PAL
Your "Personal $1,000. Be sure to write
Account Line" is down the
available for confirmation number
subsequent provided by PAL.
purchases and Payment must be
exchanges 24 hours received within 3
a day. Simply call business days, or
1-800-424-8085. the transaction may
be cancelled. If a
purchase is cancelled
due to nonpayment, you
will be responsible for
any related loss the
Fund or IFG incurs. If
you are already a
shareholder in the
INVESCO funds, the Fund
may seek reimbursement
from your existing
account(s) for any loss
incurred.
<PAGE>
- --------------------------------------------------------------------------------
By Exchange
Between this and $1,000 to open a See "Exchange
another of the new account; $50 Privilege," page
INVESCO funds. Call for written 14.
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
Automatic Monthly minimum is $250 for
Exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
================================================================================
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of shares. These expenditures may include compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IFG-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers, and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions.
In addition, other reimbursable expenditures include advertising,
preparation and distribution of sales literature, printing and distribution of
prospectuses to prospective investors, public relations efforts, marketing
programs and other services and promotional activities agreed upon from time to
time by the Fund and its board of directors.
IFG is not entitled to reimbursement for overhead expenses under the Plan,
but may be reimbursed for all or a portion of the compensation paid for salaries
and other employee benefits for IFG personnel whose primary responsibilities
involve marketing shares of the INVESCO funds, including the Fund. Also, any
payments made by the Fund may not be used to finance the distribution of shares
of any other mutual fund advised by IFG. Payments made by the Fund under the
Plan for compensation of marketing personnel, as noted above, are based on an
allocation formula designed to ensure that all such payments are appropriate.
Under the Plan, the Fund's reimbursement to IFG is limited to an amount
computed at a maximum rate of 0.25% of the Fund's annual
<PAGE>
average net assets. Payments by the Fund under the Plan, for any month, may only
be made to reimburse expenditures incurred during the rolling 12-month period in
which that month falls. Therefore, any reimbursable expenses incurred by IFG in
excess of the limitation described above are not reimbursable and will be borne
by IFG. In addition, IFG may from time to time make additional payments from its
revenues to securities dealers and other financial institutions that provide
distribution-related and/or administrative services for the Fund. No further
payments will be made by the Fund under the Plan in the event of its
termination.
FUND SERVICES
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges, and redemptions. If you choose certain
recurring transaction plans (for instance, EasiVest), your transactions will be
confirmed on your quarterly Investment Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends and capital gain distributions
are automatically invested in additional Fund shares at the NAV on the
ex-dividend date, unless you choose to have dividends and/or capital gain
distributions automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application, a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if the Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans and IRAs. Fund shares may be purchased for Individual
Retirement Accounts ("IRAs") and many types of tax-deferred retirement plans.
IFG can supply you with information and forms to establish or transfer your
existing plan or account.
<PAGE>
HOW TO SELL SHARES
The chart on page 25 shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at their current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
Please specify from which fund you wish to redeem shares. Shareholders
have a separate account for each fund in which they invest.
While the Fund will attempt to process telephone redemptions promptly,
there may be times -- particularly in periods of severe economic or market
disruption -- when you may experience delays in redeeming shares by phone.
<PAGE>
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone
Call us toll-free $250 (or, if less, This option is not
at 1-800-525-8085. full liquidation of available for
the account) for a shares held in
redemption check; Individual
$1,000 for a wire Retirement Accounts
to bank of record. ("IRAs").
The maximum amount
which may be
redeemed by
telephone is
generally $25,000.
These telephone
redemption
privileges may be
modified or
terminated in the
future at IFG's
discretion.
- --------------------------------------------------------------------------------
In Writing
Mail your request Any amount. The If the shares to be
to INVESCO Funds redemption request redeemed are
Group, Inc., P.O. must be signed by represented by
Box 173706 all registered stock certificates,
Denver, CO 80217- shareholder(s). the certificates
3706. You may also Payment will be must be sent to
send your request mailed to your IFG.
by overnight address of record,
courier to 7800 E. or to a designated
Union Ave., Denver, bank.
CO 80237.
- --------------------------------------------------------------------------------
By Exchange
Between this and $1,000 to open a See "Exchange
another of the new account; $50 Privilege," page
INVESCO funds. Call for written 14.
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
automatic monthly minimum is $250 for
exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal
Plan
You may call us to $100 per payment on You must have at
request the a monthly or least $10,000 total
appropriate form quarterly basis. invested with the
and more The redemption INVESCO funds, with
information at 1- check may be made at least $5,000 of
800-525-8085. payable to any that total invested
party you in the fund from
designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third
Party
Mail your request Any amount. All registered
to INVESCO Funds owners of the
Group, Inc., P.O. account must sign
Box 173706 the request, with a
Denver, CO 80217- signature guarantee
3706. from an eligible
guarantor financial
institution, such as a
commercial bank or a
recognized national or
regional securities
firm.
================================================================================
^ Payments of redemption proceeds will be mailed within seven days
following receipt of the ^ redemption request in proper form. However, payment
may be postponed under unusual circumstances^ -- for instance, if normal trading
is not taking place on the New York Stock Exchange, or during an emergency as
defined by the Securities and Exchange Commission ^. If ^ your shares ^ were
purchased by a check ^ which has not yet cleared, payment will be made promptly
upon clearance of the purchase check (which may take up to 15 days).
If ^ you participate in Easivest, the Fund's automatic monthly investment
program, and ^ redeem all of the shares in ^ your account, ^ we will terminate
any further ^ Easivest purchases unless you instruct us otherwise ^.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to ^ individually redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
^
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state,
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to the withholding of foreign taxes on dividends
or interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund meets the qualifications to
enable it to pass these taxes through to shareholders for use by them as a
foreign tax credit or deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless ^ you are subject to
backup withholding for other reasons, ^ you can avoid backup withholding on ^
your Fund account by ensuring that ^ we have a correct, certified tax
identification number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income, in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders on an annual or semiannual basis, at the discretion of
the ^ Fund's board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of the distribution regardless of how long the shares
have been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase
<PAGE>
price, a portion of which is then returned in the form of a taxable
distribution.
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending on how long the
Fund held the security which gave rise to the gains. The capital gain
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as dividends.
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
^ We encourage you to consult ^ your tax ^ adviser with respect to these
matters. For further information see "Dividends, Capital Gain Distributions and
Taxes" in the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund have equal voting rights^ based on
one vote for each share owned ^. The Fund is not generally required^ and does
not expect^ to hold regular annual meetings of shareholders. However, ^ when
requested to do so in writing by the holders of 10% or more of the outstanding
shares of the ^ Fund or as may be required by applicable law or the ^ Fund's
Articles of Incorporation^, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority ^
of the outstanding shares of the Fund. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940. ^
<PAGE>
INVESCO EMERGING GROWTH FUND A no-load
mutual fund seeking ^ capital growth through
investment in securities of small cap
companies.
^ PROSPECTUS
^ October 1, 1996
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line^ call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
October 1, 1996 ^
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
Address: Mailing Address:
7800 East Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In Continental U.S., 1-800-525-8085
- --------------------------------------------------------------------------------
INVESCO EMERGING OPPORTUNITY FUNDS, Inc. (the "Company") is an open-end,
diversified management investment company ("mutual fund"). As of the date of
this Statement of Additional Information, the Company offers one portfolio of
investments, INVESCO Emerging Growth Fund (the "Fund"). Additional funds may be
offered in the future.
The Fund seeks long-term capital growth. It pursues this objective by
investing its assets principally in a diversified group of equity securities of
emerging growth companies with market capitalizations of $1 billion or less at
the time of initial purchase ("small cap companies"). In managing the Fund's
investments the Fund's investment adviser or sub-adviser seeks to identify
securities that are undervalued in the marketplace, and/or have earnings that
may be expected to grow faster than the U.S. economy in general. Under normal
circumstances, the Fund invests at least 65% of its total assets in the equity
securities of small cap companies (consisting of common and preferred stocks,
convertible debt securities, and other securities having equity features). The
balance of the Fund's assets may be invested in the equity securities of
companies with market capitalizations in excess of $1 billion, debt securities
and short-term investments. The Fund is designed for investors seeking long-term
capital appreciation with little or no current income.
<PAGE>
A Prospectus for the Fund, dated ^ October 1, 1996, which provides the
basic information you should know before investing in the Fund, may be obtained
without charge from INVESCO Funds Group, Inc., Post Office Box 173706, Denver,
Colorado 80217-3706. This Statement of Additional Information is not a
Prospectus, but contains information in addition to and more detailed than that
set forth in the Prospectus. It is intended to provide you with additional
information regarding the activities and operations of the Fund, and should be
read in conjunction with the Prospectus.
Investment Adviser and Distributor: INVESCO Funds Group, Inc.
TABLE OF CONTENTS Page
----
INVESTMENT POLICIES AND RESTRICTIONS ^ 32
THE FUND AND ITS MANAGEMENT ^ 43
HOW SHARES CAN BE PURCHASED ^ 55
HOW SHARES ARE VALUED ^ 59
FUND PERFORMANCE ^ 60
SERVICES PROVIDED BY THE FUND ^ 62
TAX-DEFERRED RETIREMENT PLANS ^ 63
HOW TO REDEEM SHARES ^ 63
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES ^ 64
INVESTMENT PRACTICES ^ 66
ADDITIONAL INFORMATION ^ 69
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
As discussed in the Fund's Prospectus in the section entitled "Investment
Objective and Policies," the Fund may invest in a variety of securities, and
employ a broad range of investment techniques, in seeking to achieve its
investment ^ objective. Such securities and techniques include the following:
Types of Equity Securities
As described in the Prospectus, equity securities which may be purchased
by the Fund consist of common, preferred and convertible preferred stocks, and
securities having equity characteristics such as rights, warrants and
convertible debt securities. Common stocks and preferred stocks represent equity
ownership interests in a corporation and participate in the corporation's
earnings through dividends which may be declared by the corporation. Unlike
common stocks, preferred stocks are entitled to stated dividends payable from
the corporation's earnings, which in some cases may be "cumulative" if prior
stated dividends have not been paid. Dividends payable on preferred stock have
priority over distributions to holders of common stock, and preferred stocks
generally have preferences on the distribution of assets in the event of the
corporation's liquidation. Preferred stocks may be "participating" which means
that they may be entitled to dividends in excess of the stated dividend in
certain cases. The rights of common and preferred stocks are generally
subordinate to rights associated with a corporation's debt securities. Rights
and warrants are securities which entitle the holder to purchase the securities
of a company (generally, its common stock) at a specified price during a
specified time period. Because of this feature, the values of rights and
warrants are affected by factors similar to those which determine the prices of
common stocks and exhibit similar behavior. Rights and warrants may be purchased
directly or acquired in connection with a corporate reorganization or exchange
offer.
Convertible securities which may be purchased by the Fund include
convertible debt obligations and convertible preferred stock. A convertible
security entitles the holder to exchange it for a fixed number of shares of
common stock (or other equity security), usually at a fixed price within a
specified period of time. Until conversion, the holder receives the interest
paid on a convertible bond or the dividend preference of a preferred stock.
Convertible securities have an "investment value" which is the theoretical
value determined by the yield they provide in comparison with similar securities
without the conversion feature. Investment value changes are based upon
prevailing interest rates and other factors. They also have a "conversion value"
which is the worth in market value if the security were exchanged for the
underlying equity security. Conversion value fluctuates directly with the price
of the underlying security. If conversion value is substantially below
investment value, the price of the convertible
<PAGE>
security is governed principally by its investment value. If the conversion
value is near or above investment value, the price of the convertible security
generally will rise above investment value and may represent a premium over
conversion value due to the combination of the convertible security's right to
interest (or dividend preference) and the possibility of capital appreciation
from the conversion feature. A convertible security's price, when price is
influenced primarily by its conversion value, generally will yield less than a
senior non-convertible security of comparable investment value. Convertible
securities may be purchased at varying price levels above their investment
values or conversion values. However, there is no assurance that any premium
above investment value or conversion value will be recovered because prices
change and, as a result, the ability to achieve capital appreciation through
conversion may be eliminated.
Foreign Securities
As discussed in the section of the Fund's Prospectus entitled "Investment
Objective and Policies--Foreign Securities," the Fund may invest up to 25% of
its total assets, measured at the time of purchase, in foreign securities.
Securities of Canadian issuers and securities purchased by means of sponsored
American Depository Receipts ("ADRs") are not subject to this 25% limitation.
There is generally less publicly available information, reports and ratings
about foreign companies and other foreign issuers than that which is available
about companies and issuers in the United States. Foreign issuers are also
generally subject to fewer uniform accounting and auditing and financial
reporting standards, practices, and requirements as compared to those applicable
to United States issuers.
The Fund's investment adviser normally will purchase foreign securities in
over-the-counter ("OTC") markets or on exchanges located in the countries in
which the respective principal offices of the issuers of the various securities
are located, as such markets or exchanges are generally the best available
market for foreign securities. Foreign securities markets are generally not as
developed or efficient as those in the United States. While growing in volume,
they usually have substantially less volume than the New York Stock Exchange,
and securities of some foreign issuers are less liquid and more volatile than
securities of comparable United States issuers. Fixed commissions on foreign
exchanges are generally higher than negotiated commissions on United States
exchanges, although the Fund will endeavor to achieve the most favorable net
results on its portfolio transactions. There is generally less government
supervision and regulation of securities exchanges, brokers and listed issuers
than in the United States.
With respect to certain foreign countries, there is the possibility of
adverse changes in investment or exchange control regulations, expropriation or
confiscatory taxation, limitations on the removal of funds or other assets of
the Fund, political or social instability, or diplomatic developments which
could affect
<PAGE>
United States investments in those countries. Moreover, the economies of foreign
countries may differ favorably or unfavorably from the United States' economy in
such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payment position.
The dividends and interest payable on certain of the Fund's foreign
portfolio securities may be subject to foreign withholding taxes, thus reducing
the net amount of income available for distribution to the Fund's shareholders.
Illiquid and 144A Securities
As discussed in the section of the Fund's Prospectus entitled "Investment
Objective and Policies," the Fund may invest in illiquid securities, including
restricted securities and other investments which are not readily marketable.
Restricted securities are securities which are subject to restrictions on resale
because they have not been registered under the Securities Act of 1933 (the
"1933 Act"). These limitations on resale and marketability may have the effect
of preventing the Fund from disposing of such a security at the time desired or
at a reasonable price. In addition, in order to resell a restricted security,
the Fund might have to bear the expense and incur the delays associated with
effecting registration. In purchasing restricted securities, the Fund does not
intend to engage in underwriting activities, except to the extent the Fund may
be deemed to be a statutory underwriter under the Securities Act in disposing of
such securities. Restricted securities will be purchased for investment purposes
only and not for the purpose of exercising control or management of other
companies.
The Fund also may invest in restricted securities that can be resold to
institutional investors pursuant to Rule 144A under the 1933 Act ("Rule 144A
Securities"). In recent years, a large institutional market has developed for
Rule 144A Securities. Institutional investors generally will not seek to sell
these instruments to the general public, but instead will often depend on an
efficient institutional market in which Rule 144A Securities can readily be
resold or on an issuer's ability to honor a demand for repayment. Therefore, the
fact that there are contractual or legal restrictions on resale to the general
public or certain institutions is not dispositive of the liquidity of such
investments. Institutional markets for Rule 144A Securities may provide both
readily ascertainable values for Rule 144A Securities and the ability to
liquidate an investment in order to satisfy share redemption orders. An
insufficient number of qualified institutional buyers interested in purchasing a
Rule 144A Security held by the Fund, however, could adversely affect the
marketability of such security, and the Fund might be unable to dispose of such
security promptly or at reasonable prices.
The board of directors has delegated to Fund Management the authority to
determine whether a liquid market exists for
<PAGE>
securities eligible for resale pursuant to Rule 144A under the 1933 Act, or any
successor to such rule, and whether such securities are subject to the Fund's
restriction against investing more than 10% of its total assets in illiquid
securities. Under guidelines established by the board of directors, Fund
Management will consider the following factors, among others, in making this
determination: (1) the unregistered nature of a Rule 144A security, (2) the
frequency of trades and quotes for the security; (3) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (4) dealer undertakings to make a market in the security; and (5)
the nature of the security and the nature of marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer).
When-Issued and Delayed Delivery Securities
As discussed in the section of the Fund's Prospectus entitled "Investment
Objective and Policies," the Fund may purchase and sell securities on a
when-issued or delayed delivery basis. When-issued or delayed delivery
transactions arise when securities (normally, equity obligations of issuers
eligible for investment by the Fund) are purchased or sold by the Fund with
payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield. However, the yield on a
comparable security available when delivery takes place may vary from the yield
on the security at the time that the when-issued or delayed delivery transaction
was entered into. When the Fund engages in when-issued and delayed delivery
transactions, it relies on the seller or buyer, as the case may be, to
consummate the sale. Failure to do so may result in the Fund missing the
opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions generally may be expected to
settle within one month from the date the transactions are entered into, but in
no event later than 90 days. However, no payment or delivery is made by the Fund
until it receives delivery or payment from the other party to the transaction.
To the extent that the Fund remains substantially fully invested at the
same time that it has purchased when-issued securities, as it would normally
expect to do, there may be greater fluctuations in its net assets than if the
Fund set aside cash to satisfy its purchase commitments.
When the Fund purchases securities on a when-issued basis, it will
maintain in a segregated account cash, U.S. government securities or other
high-grade debt obligations readily convertible into cash having an aggregate
value equal to the amount of such purchase commitments, until payment is made.
If necessary, additional assets will be placed in the account daily so that the
value of the account will equal or exceed the amount of the Fund's purchase
commitments.
<PAGE>
Repurchase Agreements
As discussed in the section of the Fund's Prospectus entitled "Investment
Objective and Policies," the Fund may invest in repurchase agreements with
commercial banks, registered brokers or registered government securities
dealers. A repurchase agreement is an agreement under which the Fund acquires a
debt instrument (generally a security issued by the U.S. government or an agency
thereof, a banker's acceptance or a certificate of deposit) from a commercial
bank, broker or dealer, subject to resale to the seller at an agreed upon price
and date (normally, the next business day). A repurchase agreement may be
considered a loan collateralized by securities. The resale price reflects an
agreed upon interest rate effective for the period the instrument is held by the
Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by the Fund (including accrued
interest earned thereon) must have a total value in excess of the value of the
repurchase agreement and are held by the Fund's custodian bank until
repurchased. In addition, the Company's board of directors monitors the Fund's
repurchase agreement transactions and has established guidelines and standards
for review by the investment adviser of the creditworthiness of any bank, broker
or dealer party to a repurchase agreement with the Fund. The Fund will not enter
into repurchase agreements maturing in more than seven days if as a result more
than 10% of its total assets would be invested in such repurchase agreements and
other illiquid securities.
The use of repurchase agreements involves certain risks. For example, if
the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, the
Fund may incur a loss upon disposition of the security. If the other party to
the agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by the Fund not within the control
of the Fund and therefore the realization by the Fund on such collateral may
automatically be stayed. Finally, it is possible that the Fund may not be able
to substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement. While the Fund's
management acknowledges these risks, it is expected that they can be controlled
through careful monitoring procedures.
Lending of Securities
The Fund may lend its securities to qualified institutional investors who
need to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities, or completing
arbitrage operations. By lending its securities, the Fund will be attempting to
generate income through the receipt of interest on the loan which, in turn, can
be invested in additional securities to pursue the Fund's investment objective.
Any gain or loss in the market price of the
<PAGE>
securities loaned that might occur during the term of the loan would be for the
account of the Fund. The Fund may lend its portfolio securities to qualified
brokers, dealers, banks or other financial institutions, so long as the terms,
structure and the aggregate amount of such loans are not inconsistent with the
Investment Company Act of 1940, as amended (the "1940 Act") or the rules and
regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder. Loans of securities by the Fund will be collateralized
by cash, letters of credit, or securities issued or guaranteed by the U.S.
government or its agencies equal to at least 100% of the current market value of
the loaned securities, determined on a daily basis. Cash collateral will be
invested only in high quality short-term investments offering maximum liquidity.
Lending securities involves certain risks, the most significant of which is the
risk that a borrower may fail to return a portfolio security. The Fund monitors
the creditworthiness of borrowers in order to minimize such risks. The Fund will
not lend any security if, as a result of the loan, the aggregate value of
securities then on loan would exceed 33-1/3% of the Fund's total assets (taken
at market value).
At the present time, the Fund may pay reasonable negotiated finder's fees
in connection with loaned securities, so long as such fees are set forth in a
written contract and approved by the Company's board of directors. In addition,
voting rights may pass with the loaned securities, but if a material event
(e.g., proposed merger, sale of assets, or liquidation) will occur affecting an
investment on loan, the loan must be called and the securities voted.
U.S. Government Obligations
These securities consist of treasury bills, treasury notes, and treasury
bonds, which differ only in their interest rates, maturities, and dates of
issuance. Treasury bills have a maturity of one year or less. Treasury notes
generally have a maturity of one to ten years, and treasury bonds generally have
maturities of more than ten years. As discussed in the Fund's Prospectus, U.S.
government obligations also include securities issued or guaranteed by agencies
or instrumentalities of the U.S. government.
Some obligations of United States government agencies, which are
established under the authority of an act of Congress, such as Government
National Mortgage Association ^("GNMA") participation certificates, are
supported by the full faith and credit of the United States Treasury. GNMA
Certificates are mortgage-backed securities representing part ownership of a
pool of mortgage loans. These loans -- issued by lenders such as mortgage
bankers, commercial banks and savings and loan associations -- are either
insured by the Federal Housing Administration or guaranteed by the Veterans
Administration. A "pool" or group of such mortgages is assembled and, after
being approved by GNMA, is offered to investors through securities dealers. Once
approved by GNMA, the timely payment of interest and principal on each mortgage
<PAGE>
is guaranteed by GNMA and backed by the full faith and credit of the
U.S. government. The market value of GNMA Certificates is not guaranteed.
GNMA Certificates differ from bonds in that principal is paid back monthly
by the borrower over the term of the loan rather than returned in a lump
sum at maturity. GNMA Certificates are called "pass-through" securities
because both interest and principal payments (including prepayments) are
passed through to the holder of the Certificate. Upon receipt, principal
payments will be used by the Fund to purchase additional securities under its
investment objective and investment policies.
Other United States government obligations, such as securities of the
Federal Home Loan Banks, are supported by the right of the issuer to borrow from
the Treasury to repay its obligations. Still others, such as bonds issued by the
Federal National Mortgage Association, a federally chartered private
corporation, are supported only by the credit of the instrumentality.
Obligations of Domestic Banks
These obligations consist of certificates of deposit ("CDs") and bankers'
acceptances issued by domestic banks (including their foreign branches) having
total assets in excess of $5 billion, which meet the Fund's minimum rating
requirements. CDs are issued against deposits in a commercial bank for a
specified period and rate and are normally negotiable. Eurodollar CDs are
certificates issued by a foreign branch (usually London) of a U.S. domestic
bank, and, as such, the credit is deemed to be that of the domestic bank.
Bankers' acceptances are short-term credit instruments evidencing the
promise of the bank (by virtue of the bank's "acceptance") to pay at maturity a
draft which has been drawn on it by a customer (the "drawer"). These instruments
are used to finance the import, export, transfer, or storage of goods and
reflect the obligation of both the bank and the drawer to pay the face amount.
<PAGE>
Commercial Paper
These obligations are short-term promissory notes issued by domestic
corporations to meet current working capital requirements. Such paper may be
unsecured or backed by a bank letter of credit. Commercial paper issued with a
letter of credit is, in effect, "two party paper," with the issuer directly
responsible for payment, plus a bank's guarantee that if the note is not paid at
maturity by the issuer, the bank will pay the principal and interest to the
buyer. Commercial paper is sold either as interest-bearing or on a discounted
basis, with maturities not exceeding 270 days.
Options on Securities and Indices
As discussed in the section of the Fund's Prospectus entitled "Investment
Policies and Risks," the Fund may purchase and write options on securities and
indices. An option on a security provides the purchaser, or "holder," with the
right, but not the obligation, to purchase, in the case of a "call" option, or
sell, in the case of a "put" option, the security or securities underlying the
option, for a fixed exercise price up to a stated expiration date. The holder
pays a non-refundable purchase price for the option, known as the "premium." The
maximum amount of risk the purchaser of the option assumes is equal to the
premium plus related transaction costs, although the entire amount may be lost.
The risk of the seller, or "writer," however, is potentially unlimited, unless
the option is "covered," which is generally accomplished through the writer's
ownership of the underlying security, in the case of a call option, or the
writer's segregation of an amount of cash or securities equal to the exercise
price, in the case of a put option. If the writer's obligation is not so
covered, it is subject to the risk of the full change in value of the underlying
security from the time the option is written until exercise. The Fund will only
write options if they are covered.
Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security, in the case of a call option, or to deliver
the security in return for the purchase price, in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
In addition to purchasing and writing options on securities, the Fund may
purchase and write put and call options on stock indices. A stock index measures
the movement of a certain group of stocks by assigning relative values to the
common stocks included in the index. Options on stock indices are similar to
options on securities. However, because options on stock indices do not involve
the delivery of an underlying security, the option
<PAGE>
represents the holder's right to obtain from the writer in cash a fixed multiple
of the amount by which the exercise price exceeds (in the case of a put) or is
less than (in the case of a call) the closing value of the underlying index on
the exercise date.
Options on securities and indices are traded on national securities
exchanges, such as the Chicago Board of Options Exchange and the New York Stock
Exchange, which are regulated by the Securities and Exchange Commission. The
Options Clearing Corporation ("OCC") guarantees the performance of each party to
an exchange-traded option, by in effect taking the opposite side of each such
option. A holder or writer may engage in transactions in exchange-traded options
on securities and options on indices of securities only through a registered
broker/dealer which is a member of the exchange on which the option is traded.
An option position in an exchange-traded option may be closed out only on
an exchange which provides a secondary market for an option of the same series.
Although the Fund will generally purchase or write only those options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option at
any particular time. In such event it might not be possible to effect closing
transactions in a particular option, with the result that the Fund would have to
exercise the option in order to realize any profit. This would result in the
Fund incurring brokerage commissions upon the disposition of underlying
securities acquired through the exercise of a call option or upon the purchase
of underlying securities upon the exercise of a put option. If the Fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, unless the Fund is required to deliver the securities
pursuant to the assignment of an exercise notice, it will not be able to sell
the underlying security until the option expires.
Reasons for the potential absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient trading interest
in certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities: (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or a clearing corporation may not at all times be adequate to
handle current trading volume or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options) in which event
the secondary market on that exchange (or in the class or series of options)
would cease to exist, although outstanding options on that exchange which had
been issued by a clearing corporation as a result of trades on that exchange
would continue to be exercisable in accordance with their terms. There is no
assurance that higher than anticipated trading activity
<PAGE>
or other unforeseen events might not, at a particular time, render certain of
the facilities of any of the clearing corporations inadequate and thereby result
in the institution by an exchange of special procedures which may interfere with
the timely execution of customers' orders. However, the OCC, based on forecasts
provided by the U.S. exchanges, believes that its facilities are adequate to
handle the volume of reasonably anticipated options transactions, and such
exchanges have advised such clearing corporation that they believe their
facilities will also be adequate to handle reasonably anticipated volume.
In addition, options on securities and indices may be traded
over-the-counter ("OTC") through financial institutions dealing in such options
as well as the underlying instruments. OTC options are purchased from or sold
(written) to dealers or financial institutions which have entered into direct
agreements with the Fund. With OTC options, such variables as expiration date,
exercise price and premium will be agreed upon between the Fund and the
transacting dealer, without the intermediation of a third party such as the OCC.
If the transacting dealer fails to make or take delivery of the securities
underlying an option it has written, in accordance with the terms of that option
as written, the Fund would lose the premium paid for the option as well as any
anticipated benefit of the transaction. The Fund will engage in OTC option
transactions only with primary U.S. Government securities dealers recognized by
the Federal Reserve Bank of New York.
Investment Restrictions. As described in the section of the Fund's
Prospectus entitled "Investment ^ Policies and Risks," the Fund has adopted
certain fundamental investment restrictions. Under these restrictions, which may
not be changed without prior approval by the holders of a majority, as defined
in the 1940 Act, of the outstanding voting securities of the Fund, the Fund may
not:
(1) sell short or buy on margin, except ^ for the ^ Fund's writing of
put or call options ^ and except for such short^-term credits as are
necessary for the clearance of purchases of securities;
(2) issue senior securities as defined in the Investment Company Act of
1940 or borrow money, except that the Fund may borrow from banks in
an amount not in excess of 10% of the value of its total assets
(including the amount borrowed) less liabilities (not including the
amount borrowed) at the time the borrowing is made, as a temporary
measure for emergency purposes (the Fund will not purchase
securities while any such borrowings exist);
(3) invest in the securities of any other investment company except for
a purchase or acquisition in accordance with a plan of
reorganization, merger or consolidation;
(4) purchase the securities of any one issuer (other than
U.S. government securities) if as a result more than 5% of the
<PAGE>
value of its total assets would be invested in the securities of any
one issuer or the Fund would own more than 10% of the voting
securities of such issuer;
(5) lend money or securities to any person, provided, however, that this
shall not be deemed to prohibit the purchase of debt securities or
entering into repurchase agreements in accordance with the Fund's
investment policies, or to prohibit the Fund from lending portfolio
securities in an amount up to 33-1/3% of the Fund's total assets
(taken at current value);
(6) buy or sell commodities, commodity contracts or real estate
(however, the Fund may purchase securities of companies investing in
real estate);
(7) invest in any company for the purpose of exercising
control or management;
(8) engage in the underwriting of any securities (except to the extent
the Fund may be deemed an underwriter under the Securities Act of
1933 in disposing of a security);
(9) purchase securities of any company in which any officer or director
of the Fund or its investment adviser owns more than 1/2 of 1% of
the outstanding securities, or in which all of the officers and
directors of the Fund and its investment adviser, as a group, own
more than 5% of such securities;
(10) invest more than 25% of the value of the Fund's assets in one
particular industry.
(11) pledge, hypothecate, mortgage or otherwise encumber its
assets, except as necessary to secure permitted
borrowings;
(12) purchase oil, gas or other mineral leases, rights or royalty
contracts or development programs (except that the Fund may invest
in the securities of issuers engaged in the foregoing activities);
(13) purchase the securities (other than United States government
securities) of an issuer having a record, together with
predecessors, of less than three years' continuous operations, if as
a result of such purchase more than 5% of the value of the Fund's
total assets would be invested in such securities.
^
In applying restriction (10) above, the Fund uses an industry
classification system based on the O'Neil Database published by William O'Neil &
Co., Inc.
<PAGE>
The Company also has given the following undertaking to the State of
Texas. The Fund will not buy or sell real property (including limited
partnership interests therein), but may buy or sell readily marketable interests
in real estate investment trusts or readily marketable securities of companies
which invest in real estate.
The Company also has given an undertaking to the State of Arkansas that
the Fund may purchase or write put and call options on securities, or straddles,
spreads, or combinations thereof, only if by reason thereof the value of its
aggregate investment in such classes of securities will be 5% or less of its
total assets.
Unless otherwise noted, the Fund's investment restrictions and its
investment policies are not fundamental and may be changed by action of the
Company's board of directors. Unless otherwise noted, all percentage limitations
contained in the Fund's investment policies and restrictions apply at the time
an investment is made. Thus, subsequent changes in the value of an investment
after purchase or in the value of the Fund's total assets will not cause any
such limitation to have been violated or to require the disposition of any
investment, except as otherwise required by law.
THE FUND AND ITS MANAGEMENT
The Company. The Company was incorporated under the laws of
Maryland on December 6, 1990. On December 2, 1994, the Company's
name was changed from "INVESCO Emerging Growth Fund, Inc." to
"INVESCO Emerging Opportunity Funds, Inc."
The Investment Adviser. INVESCO Funds Group, Inc. ("INVESCO") is employed
as the Fund's investment adviser. INVESCO was established in 1932 and also
serves as an investment adviser to INVESCO Diversified Funds, Inc., INVESCO
Dynamics Fund, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO
Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty
Funds, Inc., INVESCO Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds,
Inc., INVESCO Value Trust and INVESCO Variable Investment Funds, Inc.
The Sub-Adviser. INVESCO, as investment adviser, has contracted with
INVESCO Trust Company ("INVESCO Trust") to provide investment advisory and
research services on behalf of the Fund. INVESCO Trust has the primary
responsibility for providing portfolio investment management services to the
Fund. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO.
INVESCO is an indirect, wholly-owned subsidiary of INVESCO
PLC, a publicly-traded holding company organized in 1935. Through
<PAGE>
subsidiaries located in London, Denver, Atlanta, Boston, Louisville, Dallas,
Tokyo, Hong Kong, and the Channel Islands, INVESCO PLC provides investment
services around the world. INVESCO was acquired by INVESCO PLC in 1982 and as of
May 31, ^ 1996, managed 14 mutual funds, consisting of ^ 39 separate portfolios,
on behalf of approximately ^ 827,000 shareholders. INVESCO PLC's other North
American subsidiaries include the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia,
manages institutional investment portfolios, consisting primarily
of discretionary employee benefit plans for corporations and state
and local governments, and endowment funds. INVESCO Capital
Management, Inc. is the sole shareholder of INVESCO Services, Inc.,
a registered broker-dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. (formerly Gardner and
Preston Moss, Inc.) of Boston, Massachusetts, primarily manages
pension and endowment accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky,
specializes in managing stable return investments, principally on
behalf of Section 401(k) retirement plans.
--INVESCO Realty Advisors of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for INVESCO PLC's clients
worldwide. Clients include corporate plans, public pension funds as well as
endowment and foundation accounts.
The corporate headquarters of INVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Prospectus, INVESCO and INVESCO Trust permit
investment and other personnel to purchase and sell securities for their own
accounts in accordance with a compliance policy governing personal investing by
directors, officers and employees of INVESCO, INVESCO Trust and their North
American affiliates. The policy requires officers, inside directors, investment
and other personnel of INVESCO, INVESCO Trust and their North American
affiliates to pre-clear all transactions in securities not otherwise exempt
under the policy. Requests for trading authority will be denied when, among
other reasons, the proposed personal transaction would be contrary to the
provisions of the policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Fund.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of INVESCO,
INVESCO Trust and their North American affiliates to various trading
restrictions and reporting obligations. All reportable transactions are reviewed
for compliance with the policy. The provisions of this policy are administered
by and subject to exceptions authorized by INVESCO or INVESCO Trust.
<PAGE>
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement (the "Agreement") with the Company
which was approved on April 24, 1991, by a vote cast in person by all of the
directors of the Company, including all of the directors who are not "interested
persons" of the Company or INVESCO at a meeting called for such purpose. The
Agreement was approved by INVESCO on December 31, 1991 as the then sole
shareholder of the Fund, and was approved by the Fund's public shareholders on
May 24, 1993. The Agreement was for an initial term of two years expiring
December 31, 1993, and has been continued by action of the board of directors
until April 30, ^ 1997. Thereafter, the Agreement may be continued from year to
year as to the Fund as long as each such continuance is specifically approved at
least annually by the board of directors of the Company, or by a vote of the
holders of a majority, as defined in the 1940 Act, of the outstanding shares of
the Fund. Each such continuance also must be approved by a majority of the
directors who are not parties to the Agreement or interested persons (as defined
in the 1940 Act) of any such party, cast in person at a meeting called for the
purpose of voting on such continuance. The Agreement may be terminated at any
time without penalty by either party upon sixty (60) days' written notice, and
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolio
of the Fund in conformity with the Fund's investment policies (either directly
or by delegation to a sub-adviser which may be a company affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial,
and all other services necessary or incidental to the administration of the
affairs of the Fund excluding, however, those services that are the subject of
separate agreement between the Company and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency, and registrar services, and services
furnished under an Administrative Services Agreement dated as of April 30, 1991,
with INVESCO. Services provided under the Agreement include, but are not limited
to: supplying the Company with officers, clerical staff and other employees, if
any, who are necessary in connection with the Fund's operations; furnishing
office space, facilities, equipment, and supplies; providing personnel and
facilities required to respond to inquiries related to shareholder accounts;
conducting periodic compliance reviews of the Fund's operations; preparation and
review of required documents, reports and filings by INVESCO's in-house legal
and accounting staff (including the prospectus, statement of additional
information, proxy statements, shareholder reports, tax returns, reports to the
SEC, and other corporate documents of the Fund), except insofar as the
assistance of independent accountants or attorneys is necessary or desirable;
supplying basic telephone
<PAGE>
service and other utilities; and preparing and maintaining certain of the books
and records required to be prepared and maintained by the Fund under the 1940
Act. Expenses not assumed by INVESCO are borne by the Fund.
As full compensation for its advisory services provided to the Company
under the Agreement, INVESCO receives a monthly fee. The fee is based upon a
percentage of the Fund's average net assets, determined daily. With respect to
the Fund, the fee is calculated at an annual rate of 0.75% on the first $350
million of the Fund's average net assets, 0.65% on the next $350 million of the
Fund's average net assets, and 0.55% on the Fund's average net assets over $700
million. For the fiscal years ended May 31, 1996, 1995^ and 1994 ^, the Fund
paid INVESCO advisory fees of $1,572,230, $1,370,549 (prior to the voluntary
absorption of certain Fund expenses by INVESCO), and $1,359,701 ^, respectively.
Certain states in which the shares of the Fund are qualified for sale
currently impose limitations on the expenses of the Fund. At the date of this
Statement of Additional Information, the most restrictive state-imposed annual
expense limitation requires that INVESCO absorb any amount necessary to prevent
the Fund's aggregate ordinary operating expenses (excluding interest, taxes,
Rule 12b-1 fees, brokerage fees and commissions, and extraordinary charges such
as litigation costs) from exceeding in any fiscal year 2.5% on the Fund's first
$30 million of average net assets, 2.0% on the next $70 million of average net
assets and 1.5% on the remaining average net assets. No payment of the
investment advisory fee will be made to INVESCO which would result in the Fund's
expenses exceeding on a cumulative annualized basis this state limitation.
During the past fiscal year, INVESCO did not absorb any amounts under this
provision.
Sub-Advisory Agreement. INVESCO Trust serves as sub-adviser to the Fund
pursuant to a sub-advisory agreement (the "Sub-Agreement") with INVESCO which
was approved on April 24, 1991, by a vote cast in person by all of the directors
of the Company, including all of the directors who are not "interested persons"
of the Company, INVESCO, or INVESCO Trust at a meeting called for such purpose.
The Sub-Agreement was approved on December 31, 1991, by INVESCO as the then sole
shareholder of the Fund, and by the Fund's public shareholders on May 24, 1993.
The Sub-Agreement was for an initial term of two years expiring December 31,
1993, and has been continued by action of the board of directors until April 30,
^ 1997. Thereafter, the Sub-Agreement may be continued from year to year as long
as each such continuance is specifically approved by the board of directors of
the Company, or by a vote of the holders of a majority, as defined in the 1940
Act, of the outstanding shares of the Fund. Each such continuance also must be
approved by a majority of the directors who are not parties to the Sub-Agreement
or interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such continuance. The
Sub-Agreement may be terminated at any time without penalty by either party or
the Company upon
<PAGE>
sixty (60) days' written notice, and terminates automatically in the event of an
assignment to the extent required by the 1940 Act and the rules thereunder.
The Sub-Agreement provides that INVESCO Trust, subject to the supervision
of INVESCO and the Company's board of directors, shall manage the investment
portfolio of the Fund in conformity with the Fund's investment policies. These
management services include: (a) managing the investment and reinvestment of all
the assets, now or hereafter acquired, of the Fund, and executing all purchases
and sales of portfolio securities; (b) maintaining a continuous investment
program for the Fund, consistent with (i) the Fund's investment policies as set
forth in the Company's Articles of Incorporation, Bylaws, and Registration
Statement, as from time to time amended, under the 1940 Act, and in any
prospectus and/or statement of additional information of the Company, as from
time to time amended and in use under the 1933 Act, and (ii) the Company's
status as a regulated investment company under the Internal Revenue Code of
1986, as amended; (c) determining what securities are to be purchased or sold
for the Fund, unless otherwise directed by the directors of the Company or
INVESCO, and executing transactions accordingly; (d) providing the Fund the
benefit of all of the investment analysis and research, the reviews of current
economic conditions and trends, and the consideration of long-range investment
policy now or hereafter generally available to investment advisory customers of
INVESCO Trust; (e) determining what portion of the Fund should be invested in
the various types of securities authorized for purchase by the Fund; and (f)
making recommendations as to the manner in which voting rights, rights to
consent to Company action and any other rights pertaining to the portfolio
securities of the Fund shall be exercised.
The Sub-Agreement provides that as compensation for its services, INVESCO
Trust shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the Fund's net assets at the following annual rate: 0.25%
on the first $200 million of the average net assets of the Fund, and 0.20% on
the Fund's average net assets over $200 million. The Sub-Advisory fees are paid
by INVESCO, NOT the Fund.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, provides certain administrative, sub-accounting, and
recordkeeping services to the Fund pursuant to an Administrative Services
Agreement dated December 31, 1991 (the "Administrative Agreement"). The
Administrative Agreement was approved on April 24, 1991, by a vote cast in
person by all of the directors of the Company, including all of the directors
who are not "interested persons" of the Company or INVESCO at a meeting called
for such purpose. The Administrative Agreement was for an initial term of one
year expiring December 31, 1992, and has been continued by action of the board
of directors until April 30, ^ 1997. The Administrative Agreement may be
continued from year to year thereafter as long as each such continuance is
specifically approved by the board of directors of the Company, including a
<PAGE>
majority of the directors who are not parties to the Administrative Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such continuance. The
Administrative Agreement may be terminated at any time without penalty by
INVESCO on sixty (60) days' written notice, or by the Company upon thirty (30)
days' written notice, and terminates automatically in the event of an assignment
unless the Company's board of directors approves such assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Fund: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Fund; and (B) such sub-accounting, recordkeeping, and administrative services
and functions, which may be provided by affiliates of INVESCO, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants in
such plans.
As full compensation for services provided under the Administrative
Agreement, the Fund pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% per year of the average net assets of the
Fund. For the fiscal years ended May 31, 1996, 1995^ and 1994 ^, the Fund paid
INVESCO administrative services fees in the amount of $41,467, $37,411 (prior to
the voluntary absorption of certain Fund expenses by INVESCO), and $37,194 ^,
respectively.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent, and registrar services for the Fund pursuant to a Transfer
Agency Agreement dated December 31, 1991, which was approved by the board of
directors of the Company, including a majority of the Company's directors who
are not parties to the Transfer Agency Agreement or "interested persons" of any
such party, in April 1992, for a term of one year. The Transfer Agency Agreement
has been continued by action of the board of directors until April 30, ^ 1997,
and thereafter may be continued from year to year as long as such continuance is
specifically approved at least annually by the board of directors of the
Company. Any such continuance also must be approved by a majority of the
Company's directors who are not parties to the Transfer Agency Agreement or
interested persons (as defined by the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such continuance. The
Transfer Agency Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of assignment.
The Transfer Agency Agreement provides that the Fund shall pay to INVESCO
an annual fee of ^ $20.00 per shareholder account or omnibus account
participant. This fee is paid monthly at 1/12 of the annual fee and is based
upon the number of shareholder accounts
<PAGE>
and omnibus account participants in existence at any time during each month. For
the fiscal years ended May 31, 1996, 1995^ and 1994 ^, the Fund paid INVESCO
transfer agency fees of $668,624, $635,770 (prior to the voluntary absorption of
certain Fund expenses by INVESCO), and $362,259 ^, respectively.
Officers and Directors of the Company. The overall direction and
supervision of the Company is the responsibility of the board of directors,
which has the primary duty of seeing that the general investment policies and
programs of the Fund are carried out and that the Fund is properly administered.
The officers of the Company, all of whom are officers and employees of, and are
paid by, INVESCO, are responsible for the day-to-day administration of the
Company and the Fund. The investment adviser for the Fund has the primary
responsibility for making investment decisions on behalf of the Fund. These
investment decisions are reviewed by the investment committee of INVESCO.
All of the officers and directors of the Company hold comparable positions
with INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax^-Free Income Funds, Inc., and INVESCO
Variable Investment Funds, Inc. All of the directors of the Company ^ also serve
as trustees of INVESCO Value Trust. In addition, all of the directors of the
Company also are directors of INVESCO Advisor Funds, Inc. (formerly known as The
EBI Funds, Inc.); and, with the exception of ^ Mr. Hesser ^, trustees of INVESCO
Treasurer's Series Trust ^ . All of the officers of the Company also hold
comparable positions with INVESCO Value Trust. Set forth below is information
with respect to each of the Company's officers and directors. Unless otherwise
indicated, the address of the directors and officers is Post Office Box 173706,
Denver, Colorado 80217^-3706. Their affiliations represent their principal
occupations during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of INVESCO PLC, London, England, and of various subsidiaries thereof^.
Chairman of the Board of ^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's
Series Trust^ and The Global Health Sciences Fund. Address: 1315 Peachtree
Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Advisor Funds, Inc., and INVESCO Treasurer's Series Trust. Trustee of The Global
Health Sciences Fund. Formerly, Chairman of the Executive Committee and Chairman
of the Board of Security Life of Denver Insurance Company, Denver, Colorado;
Director of ^ ING America Life Insurance Company, Urbaine Life Insurance Company
and Midwestern United Life Insurance Company. Address: Security Life Center,
1290 Broadway, Denver, Colorado. Born: January 12, 1928.
<PAGE>
DAN J. HESSER,^+* President and Director. Chairman of the
Board, President, and Chief Executive Officer of INVESCO Funds
Group, Inc.^; Director of INVESCO Trust Company. Trustee of The
Global Health Sciences Fund. Born: December 27, 1939.
VICTOR L. ANDREWS,** Director. ^ Professor Emeritus, Chairman
Emeritus and Chairman of the CFO Roundtable of the Department of
Finance ^ of Georgia State University, Atlanta, Georgia^;
President, Andrews Financial Associates, Inc. (consulting firm);
formerly, member of the faculties of the Harvard Business School
and the Sloan School of Management of MIT. Dr. Andrews is also a
^ Director of The Southeastern Thrift and Bank Fund, Inc. and The
Sheffield Funds, Inc. Address: ^ 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive
Officer of AMC Cancer Research Center, Denver, Colorado, since
January 1989; until mid-December 1988, Vice Chairman of the Board
of First Columbia Financial Corporation (a financial institution),
Englewood, Colorado. Formerly, Chairman of the Board and Chief
Executive Officer of First Columbia Financial Corporation.
Address: 1775 Sherman Street, #1000, Denver, Colorado. Born:
August 7, 1936.
^
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to
June 30, 1987, Senior Vice President and Senior Trust Officer of
InterFirst Bank, Dallas, Texas. Address: 7608 Glen Albens Circle
, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant;
Assistant Treasurer of Colt Industries Inc., New York, New York,
from 1966 to 1988. Address: 15 Sterling Road, Armonk, New York.
Born: August 1, 1923.
^ A.D. FRAZIER, JR.^*,** Director. Chief Operating Officer of
the Atlanta Committee for the Olympic Games. From 1982 to 1991,
Mr. Frazier was employed in various capacities by First Chicago
Bank, most recently as Executive Vice President of the North
American Banking Group. Trustee of The Global Health Sciences
Fund. Director of Magellan Health Services, Inc. and of Charter
Medical Corp. Address: 250 Williams Street, Suite 6000, Atlanta,
Georgia ^. Born: June 23, 1944.
HUBERT L. HARRIS, JR.*, Director. Chairman (since May 1996)
and President (January 1990 to April 1996) of INVESCO Services,
Inc. Director of INVESCO PLC and Chief Financial Officer of
INVESCO Individual Services Group. Member of the Executive
Committee of the Alumni Board of Trustees of Georgia Institute of
Technology. Address: 1315 Peachtree Street, N.E., Atlanta,
Georgia. Born: July 15, 1943.
<PAGE>
KENNETH T. KING,** Director. Formerly, Chairman of the Board
of The Capitol Life Insurance Company, Providence Washington
Insurance Company, and Director of numerous subsidiaries thereof in
the U.S. Formerly, Chairman of the Board of The Providence Capitol
Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until
1987. Address: 4080 North Circulo Manzanillo, Tucson, Arizona.
Born: November 16, 1925.
JOHN W. ^ McINTYRE,# Director. Retired. Formerly, Vice
Chairman of the Board of Directors of ^ The Citizens and Southern
Corporation and Chairman of the Board and Chief Executive Officer
of ^ The Citizens and Southern Georgia ^ Corp. and Citizens and
Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential
Trust. Address: ^ 7 Piedmont Center, Suite 100, Atlanta, Georgia
^. Born: September 14, 1930.
^
GLEN A. PAYNE, Secretary. Senior Vice President, General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO
Trust Company^. Formerly, employee of a U.S. regulatory agency,
Washington, D.C., (June 1973 through May ^ 1989.) Born: September
25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and
Treasurer of INVESCO Funds Group, Inc. and INVESCO Trust Company
since January 1988. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice
President of INVESCO Funds Group, Inc. and Trust Officer of
INVESCO Trust Company ^. Formerly, Vice President of 440 Financial
Group from June 1990 to August 1992; Assistant Vice President of
Putnam Companies from November 1986 to June 1990. Born: August 21,
1956.
ALAN I. WATSON, Assistant Secretary. Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust
Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO
Funds Group, Inc. and Trust Officer of INVESCO Trust Company.
Born: February 3, 1948.
#Member of the audit committee of the Company.
+Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive
<PAGE>
committee may exercise all powers and authority of the board of directors in the
management of the business of the Company. All decisions are subsequently
submitted for ratification by the board of directors.
*These directors are "interested persons" of the Company as
defined in the 1940 Act.
**Member of the management liaison committee of the Company.
As of June 30, ^ 1996, the officers and directors of the Company, as a
group, beneficially owned less than 1% of the Company's outstanding shares and
less than 1% of the Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended May 31, ^ 1996:
the compensation paid by the Company to its eight independent directors for
services rendered in their capacities as directors of the Company; the benefits
accrued as Company expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these directors upon retirement as a result of their service to the
Company. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Funds Group, Inc. (including the
Company), ^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and
The Global Health Sciences Fund (collectively, the "INVESCO Complex") to these
directors for services rendered in their capacities as directors or trustees
during the year ended December 31, ^ 1995. As of December 31, ^ 1995, there were
^ 48 funds in the INVESCO Complex.
<PAGE>
Total
Retirement Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Company Upon Paid To
Company1 Expenses2 Retirement3 Directors1
Fred A.Deering, ^ $1,535 $352 $293 $87,350
Vice Chairman of
the Board
Victor L. Andrews ^ 1,447 310 323 68,000
Bob R. Baker ^ 1,478 319 433 73,000
Lawrence H. Budner ^ 1,418 332 323 68,350
Daniel D. Chabris ^ 1,484 379 229 73,350
A. D. Frazier, ^ Jr.4,5 1,351 0 0 ^ 63,500
Kenneth T. King ^ 1,447 365 266 70,000
John W. McIntyre4 ^ 1,402 0 0 ^ 67,850
Total ^ $11,562 $2,057 $1,867 $571,400
% of Net Assets ^ 0.0031%6 0.0006%6 0.0043%7
1The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
2Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
3These figures represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding the Global Health Sciences
Fund which does not participate in any retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex, and for other reasons during the period in which
retirement benefits are accrued on behalf of the respective directors. This
results in lower estimated benefits for directors who are closer to retirement
and higher estimated benefits for directors who are further from retirement.
With the exception of Messrs. Frazier and McIntyre,
<PAGE>
each of these directors has served as a director/trustee of one or more of the
funds in the INVESCO Complex for the minimum five-year period required to be
eligible to participate in the Defined Benefit Deferred Compensation Plan.
4Messrs. Frazier and McIntyre began serving as directors of the Company on
April 19, 1995.
5Because of the possibility that A.D. Frazier, Jr. may become employed by
a company affiliated with INVESCO at some point in the future, he was deemed to
be an "interested person" of the Company and of the other funds in the INVESCO
Complex effective May 1, 1996. Until such time as Mr. Frazier actually becomes
employed by an INVESCO-affiliated company, however, he will continue to receive
the same director's fees and other compensation as the Company's independent
directors.
6Totals ^ as a percentage of the Company's net assets as of May 31, 1995.
^ 7Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1995.
Messrs. ^ Brady, Harris and Hesser, ^ as "interested persons" of the
Company and other funds in the INVESCO Complex, receive compensation as officers
or employees of INVESCO or its affiliated companies, and do not receive any
director's fees or other compensation from the Company or other funds in the
INVESCO Complex for their services as directors.
The boards of directors/trustees of the mutual funds managed by INVESCO, ^
INVESCO Advisor Funds, Inc. and INVESCO Treasurer's Series Trust have adopted a
Defined Benefit Deferred Compensation Plan for the non-interested directors and
trustees of the funds. Under this plan, each director or trustee who is not an
interested person of the funds (as defined in the 1940 Act) and who has served
for at least five years (a "qualified director") is entitled to receive, upon
retiring from the boards at the retirement age of 72 (or the retirement age of
73 to 74, if the retirement date is extended by the boards for one or two years,
but less than three years) continuation of payment for one year (the "first year
retirement benefit") of the annual basic retainer payable by the funds to the
qualified director at the time of his retirement (the "basic retainer").
Commencing with any such director's second year of retirement, and commencing
with the first year of retirement of a director whose retirement has been
extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to 25% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or to his beneficiary or
<PAGE>
estate. If a qualified director becomes disabled or dies either prior to age 72
or during his/her 74th year while still a director of the funds, the director
will not be entitled to receive the first year retirement benefit; however, the
reduced retainer payments will be made to his beneficiary or estate. The plan is
administered by a committee of three directors who are also participants in the
plan and one director who is not a plan participant. The cost of the plan will
be allocated among the INVESCO, ^ INVESCO Advisor and Treasurer's Series funds
in a manner determined to be fair and equitable by the committee. The Company is
not making any payments to directors under the plan as of the date of this
Statement of Additional Information. The Company has no stock options or other
pension or retirement plans for management or other personnel and pays no salary
or compensation to any of its officers.
The Company has an audit committee comprised of four of the directors who
are not interested persons of the Company. The committee meets periodically with
the Company's independent accountants and officers to review accounting
principles used by the Company, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Company also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Company, and (b) to review
legal and operational matters which have been assigned to the committee by the
board of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis at the net asset value
per share of the Fund next calculated after receipt of a purchase order in good
form. The net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange, but
may also be computed at other times. See "How Shares Are Valued." INVESCO acts
as the Fund's Distributor under a distribution agreement with the Company under
which it receives no compensation and bears all expenses, including the costs of
printing and distributing prospectuses, incident to marketing of the Fund's
shares, except for such distribution expenses which are paid out of Fund assets
under the Company's Plan of Distribution which has been adopted by the Company
in accordance with Rule 12b-1 under the 1940 Act.
Distribution Plan. As discussed under "How Shares Can Be Purchased" in the
Prospectus, the Company has adopted a Plan and Agreement of Distribution (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the
Fund may make monthly payments to INVESCO of amounts computed at an annual rate
no greater than 0.25% on the Fund's average net assets to reimburse it
<PAGE>
for expenses incurred by it in connection with the distribution of the Fund's
shares to investors. Payment amounts by the Fund under the Plan, for any month,
may only be made to reimburse or pay expenditures incurred during the rolling
12-month period in which that month falls, although this period is expanded to
24 months for expenses incurred during the first 24 months of a new fund's
operations. For the fiscal year ended May 31, ^ 1996, the Fund made payments to
INVESCO under the Plan in the amount of ^ $486,112. In addition, as of May 31, ^
1996, $72,783 of additional distribution expenses had been incurred for the Fund
and were subject to payment upon approval of the Company's directors, which
approval was obtained on ^ August 14, 1996. As noted in the Prospectuses, one
type of reimbursable expenditure is the payment of compensation to securities
companies and other financial institutions and organizations, which may include
INVESCO- affiliated companies, in order to obtain various distribution-related
and/or administrative services for the Fund. The Fund is authorized by the Plan
to use its assets to finance the payments made to obtain those services.
Payments may be made by INVESCO to broker-dealers, who sell shares of the Fund
and may be made to banks, savings and loan associations and other depository
institutions. Although the Glass-Steagall Act limits the ability of certain
banks to act as underwriters of mutual fund shares, the Company does not believe
that these limitations affect the ability of such banks to enter into
arrangements with INVESCO, but can give no assurance in this regard. However, to
the extent it is determined otherwise in the future, arrangements with banks
might have to be modified or terminated, and, in that case, the size of the Fund
possibly could decrease to the extent that the banks would no longer invest
customer assets in the Fund. Neither the Company nor its investment adviser will
give any preference to banks or other depository institutions which enter into
such arrangements when selecting investments to be made by the Fund.
For the 12 months ended May 31, ^ 1996, allocation of 12b-1 amounts paid
by the Fund for the following categories of expenses were: advertising--^
$30,009; sales literature, printing, and postage--^ $108,516; direct mail--^
$21,604; public relations/promotion--^ $37,934 compensation to securities
dealers and other organizations--^ $150,432; and marketing personnel--^
$137,617.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Company's Transfer Agent computer-processable tapes of the Fund's
transactions by customers, serving as the primary source of information to
customers in answering questions concerning the Fund, and assisting in other
customer transactions with the Fund.
The Plan was approved on April 24, 1991, at a meeting called for such
purpose by a majority of the directors of the Company, including a majority of
the directors who neither are "interested persons" of the Company nor have any
financial interest in the
<PAGE>
operation of the Plan ("12b-1 directors"). The Plan was approved by INVESCO on
December 31, 1991, as the then sole shareholder of the Fund, and by the public
shareholders of the Fund on May 24, 1993. Continuation of the Plan for another
year was approved by the board of directors of the Company, including a majority
of the 12b-1 directors, on April ^ 30, 1996.
The Plan provides that it shall continue in effect for so long as such
continuance is approved at least annually by the vote of the board of directors,
including a majority of the 12b-1 directors of the Company cast in person at a
meeting called for the purpose of voting on such continuance. The Plan can be
terminated at any time with respect to the Fund, without penalty, if a majority
of the 12b-1 directors, or shareholders of the Fund, vote to terminate the Plan.
The Company may, in its absolute discretion, suspend, discontinue or limit the
offering of the shares of the Fund at any time. In determining whether any such
action should be taken, the board of directors intends to consider all relevant
factors including, without limitation, the size of the Fund, the investment
climate for the Fund, general market conditions, and the volume of sales and
redemptions of Fund shares. The Plan may continue in effect and payments may be
made under the Plan following any such temporary suspension or limitation of the
offering of the Fund's shares; however, the Company is not contractually
obligated to continue the Plan for any particular period of time. Suspension of
the offering of the Fund's shares would not, of course, affect a shareholder's
ability to redeem his shares. So long as the Plan is in effect, the selection
and nomination of persons to serve as independent directors of the Company shall
be committed to the independent directors then in office at the time of such
selection or nomination. The Plan may not be amended to increase materially the
amount of the Fund's payments thereunder without approval of the shareholders of
the Fund, and all material amendments to the Plan must be approved by the board
of directors of the Company, including a majority of the 12b-1 directors. Under
the agreement implementing the Plan, INVESCO or the Fund, the latter by vote of
a majority of the 12b-1 directors or of the holders of a majority of the Fund's
outstanding voting securities, may terminate such agreement without penalty upon
30 days' written notice to the other party. No further payments will be made by
the Fund under the Plan in the event of its termination as to the Fund.
To the extent that the Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of the Fund's assets in the amounts and for the purposes
set forth therein, notwithstanding the occurrence of an assignment, as defined
by the 1940 Act, and rules thereunder. To the extent it constitutes an agreement
pursuant to a plan, the Fund's obligation to make payments to INVESCO under the
Plan shall terminate automatically, in the event of an "assignment," in which
event the Fund may continue to make payments, pursuant to the Plan, to INVESCO
or another organization only upon the approval of new arrangements, which may or
may not be with INVESCO, regarding the use of the
<PAGE>
amounts authorized to be paid by it under the Plan, by the directors, including
a majority of the 12b-1 directors, by a vote cast in person at a meeting called
for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by the Fund are provided to, and reviewed by, the directors on a
quarterly basis. In the quarterly review, the directors determine whether, and
to what extent, INVESCO will be reimbursed for expenditures which it has made
that are reimbursable under the Company's Rule 12b-1 Plan. On an annual basis,
the directors consider the continued appropriateness of the Plan and the level
of compensation provided therein.
The only directors or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Company who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the Company listed under "Officers and Directors of the Company" who are also
officers either of INVESCO or companies affiliated with INVESCO. The benefits
which the Company believes will be reasonably likely to flow to the Fund and its
shareholders under the Plan include the following:
(1) Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Fund;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of securities of the Fund in
amounts and at times that are disadvantageous for investment
purposes;
(3) The positive effect which increased Fund assets will have on its
revenues could allow INVESCO:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of the Fund's
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from INVESCO (and support them in their infancy),
and thereby expand the investment choices available to all
shareholders, and
(c) To acquire and retain talented employees who desire
to be associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
fixed expenses over
<PAGE>
a larger asset base) thereby partially offsetting the costs of the
Plan.
HOW SHARES ARE VALUED
As described in the section of the Fund's Prospectus entitled "How Shares
Can Be Purchased," the net asset value of shares of the Fund is computed once
each day that the New York Stock Exchange is open as of the close of regular
trading on that Exchange (usually 4:00 p.m., New York time) and applies to
purchase and redemption orders received prior to that time. Net asset value per
share is also computed on any other day on which there is a sufficient degree of
trading in the securities held by the Fund that the current net asset value per
share of the Fund might be materially affected by changes in the value of the
securities held, but only if on such day the Fund receives a request to purchase
or redeem shares. Net asset value per share is not calculated on days the New
York Stock Exchange is closed, such as federal holidays, including New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas.
The net asset value per share of the Fund is calculated by dividing the
value of all securities held by the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of the Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap Market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over-the-counter market for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities will be valued at their fair values as determined in good
faith by the board of directors or pursuant to procedures adopted by the board
of directors. The above procedures may include the use of valuations furnished
by a pricing service which employs a matrix to determine valuations for normal
institutional- size trading units of debt securities. Prior to utilizing a
pricing service, the Company's board of directors reviews the methods used by
such service to assure itself that securities will be valued at their fair
values. The Company's board of directors also periodically monitors the methods
used by such pricing services. Debt securities with remaining maturities of 60
days or less at the time of purchase are normally valued at amortized cost.
The values of securities held by the Fund, and other assets used in
computing net asset value, generally are determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular
<PAGE>
trading on the New York Stock Exchange, closing prices for foreign securities
usually are available for purposes of computing the Fund's net asset value.
However, in the event that the closing price of a foreign security is not
available in time to calculate the Fund's net asset value on a particular day,
the Company's board of directors has authorized the use of the market price for
the security obtained from an approved pricing service at an established time
during the day which may be prior to the close of regular trading in the
security. The value of all assets and liabilities initially expressed in foreign
currencies will be converted into U.S. dollars at the spot rate of such
currencies against U.S. dollars provided by an approved pricing service.
FUND PERFORMANCE
As discussed in the Fund's Prospectus, the Company advertises the total
return performance of the Fund. Average annual total return performance for the
Fund for the one-year period ended May 31, ^ 1996 and the period December 27,
1991 (commencement of operations of the Fund) to May 31, ^ 1996 (life of the
Fund), was ^ 55.78% and ^ 22.45%, respectively.
Average annual total return performance is computed by finding the average
annual compounded rates of return that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
<PAGE>
P(1 + T)to the nth power = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The total return performance figures shown are determined by solving the
above formula for "T" for a particular time period.
In conjunction with performance reports, comparative data between the
Fund's performance for a given period and other types of investment vehicles,
including certificates of deposit, may be provided to prospective investors and
shareholders.
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
Fund. Sources for Fund performance information and articles about the Fund
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund
Performance Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
The Wall Street Journal
<PAGE>
Wiesenberger Investment Companies Services
Working Woman
Worth
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of the Fund's
Prospectus entitled "Services Provided by the Fund," the Fund offers a Periodic
Withdrawal Plan. All dividends and distributions on shares owned by shareholders
participating in this Plan are reinvested in additional shares. Since withdrawal
payments represent the proceeds from sales of shares, the amount of
shareholders' investments in the Fund will be reduced to the extent that
withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such a Plan do not represent income or a
return on investment.
A Periodic Withdrawal Plan may be terminated at any time by sending a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of the Fund's Prospectus
entitled "Services Provided by the Fund," the Fund offers shareholders the
privilege of exchanging shares of the Fund for shares of certain other no-load
mutual funds advised by INVESCO. Exchange requests may be made either by
telephone or by written request to INVESCO Funds Group, Inc. using the telephone
number or address on the cover of this Statement of Additional Information.
Exchanges made by telephone must be in an amount of at least $250, if the
exchange is being made into an existing account of one of the INVESCO funds. All
exchanges that establish a new account must meet the fund's applicable minimum
initial investment requirements. Written exchange requests into an existing
account have no minimum requirements other than the fund's applicable minimum
subsequent investment requirements. Any gain or loss realized on an exchange is
recognized for federal income tax purposes. This privilege is not an option or
right to purchase securities, but is a revocable privilege permitted under the
present policies of each of the funds and is not available in any state or other
jurisdiction where the shares of the mutual fund into which transfer is to be
made are not qualified for sale, or when the net asset value of the shares
presented for exchange is less than the minimum dollar purchase required by the
appropriate prospectus.
<PAGE>
TAX-DEFERRED RETIREMENT PLANS
As described in the section of the Fund's Prospectus entitled "Services
Provided by the Fund," shares of a Fund may be purchased as the investment
medium for various tax-deferred retirement plans. Persons who request
information regarding these plans from INVESCO will be provided with prototype
documents and other supporting information regarding the type of plan requested.
Each of these plans involves a long-term commitment of assets and is subject to
possible regulatory penalties for excess contributions, premature distributions
or for insufficient distributions after age 70-1/2. The legal and tax
implications may vary according to the circumstances of the individual investor.
Therefore, the investor is urged to consult with an attorney or tax adviser
prior to the establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
the Fund's Prospectus entitled "How to Redeem Shares." The right of redemption
may be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
the Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets; or (d) the Securities and Exchange Commission by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Company's investment adviser, make it undesirable for the Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Company is obligated under the 1940 Act to redeem for cash
all shares of the Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
<PAGE>
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
The Fund intends to conduct its business and satisfy the applicable
diversification of assets and source of income requirements to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. The Fund so qualified in the fiscal year ended May 31, ^ 1996,
and intends to qualify during the current fiscal year. As a result, it is
anticipated that the Fund will pay no federal income or excise taxes and will be
accorded conduit or "pass through" treatment for federal income tax purposes.
Dividends paid by the Fund from net investment income as well as
distributions of net realized short-term capital gains and net- realized gains
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
the Fund sends shareholders information regarding the amount and character of
dividends paid in the year, including the dividends eligible for the
dividends-received deduction for corporations. Such amounts will be limited to
the aggregate amount of qualifying dividends which the Fund derives from its
portfolio investments.
Distributions by the Fund of net capital gain (the excess of long-term
capital gain over net short-term capital loss) are, for federal income tax
purposes, taxable to the shareholder as long-term capital gains regardless of
how long a shareholder has held shares of the Fund. Such distributions are
identified as such and are not eligible for the dividends-received deduction.
All dividends and other distributions are regarded as taxable to the
investor, whether or not such dividends and distributions are reinvested in
additional shares. If the net asset value of the shares of the Fund should be
reduced below a shareholder's cost as a result of a distribution, such
distribution would be taxable to the shareholder although a portion would be, in
effect, a return of invested capital. The net asset value of shares of the Fund
reflects accrued net investment income and undistributed realized capital and
foreign currency gain; therefore, when a distribution is made, the net asset
value is reduced by the amount of the distribution. If shares are purchased
shortly before a distribution, the full price for the shares will be paid and
some portion of the price may then be returned to the shareholder as a taxable
dividend or capital gain. However, the net asset value per share will be reduced
by the amount of the distribution, which would reduce any gain (or increase any
loss) for tax purposes on any subsequent redemption of shares.
Dividends and interest received by the Fund may give rise to withholding
and other taxes imposed by foreign countries. Tax treaties between certain
countries and the United States may reduce or eliminate such taxes.
<PAGE>
INVESCO may provide Fund shareholders with information concerning the
average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders, and will
not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the
use of several methods to determine the cost basis of mutual fund shares. The
cost basis information provided by INVESCO will be computed using the
single-category average cost method, although neither INVESCO nor the Company
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for the Fund in past years, the shareholder must continue to use the
method previously used, unless the shareholder applies to the IRS for permission
to change methods.
If the Fund's shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of any taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign and
U.S. possessions income taxes paid by it. The Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's income from sources within, and taxes paid to, foreign countries and U.S.
possessions if it makes this election.
The Fund may invest in the stock of "passive foreign investment companies"
(PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock of a PFIC or of any gain on disposition of the stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC
<PAGE>
income will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time
the Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of the Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gain
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, for income tax purposes does not entail government
supervision of management or investment policies.
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding the portfolio
turnover of the Fund. The rate of portfolio turnover can fluctuate under
constantly changing economic conditions and market circumstances. Securities
initially satisfying the basic policies and objectives of the Fund may be
disposed of when they are no longer suitable. Brokerage costs to the Fund are
commensurate with the rate of portfolio activity. The portfolio turnover rates
for the Fund for the fiscal years ended May 31, 1996 and 1995, ^ were 221% and
228%, ^ respectively. In computing the portfolio turnover rate, all investments
with maturities or expiration dates at the time of acquisition of one year or
less are excluded. Subject to this exclusion, the turnover rate is calculated by
dividing (A) the lesser of purchases or sales of portfolio securities for the
fiscal year by (B) the monthly average of the value of portfolio securities
owned by the Fund during the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO, as the Company's
investment adviser, or INVESCO Trust, as the Company's sub-adviser, places
orders for the purchase and sale of securities with brokers and dealers based
upon INVESCO's or INVESCO Trust's evaluation of their financial responsibility,
subject to their ability to effect transactions at the best available prices.
INVESCO or INVESCO Trust evaluates the overall reasonableness of brokerage
commissions ^ paid by reviewing the quality of executions obtained on portfolio
transactions of the Fund, viewed in terms of
<PAGE>
the size of transactions, prevailing market conditions in the security purchased
or sold, and general economic and market conditions. In seeking to ensure that
the commissions charged the Fund are consistent with prevailing and reasonable
commissions ^, INVESCO and INVESCO Trust also endeavor to monitor brokerage
industry practices with regard to the commissions ^ charged by brokers and
dealers on transactions effected for other comparable institutional investors.
While INVESCO and INVESCO Trust seek reasonably competitive rates, the Fund does
not necessarily pay the lowest commission^ or spread ^ available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, INVESCO or INVESCO Trust may select brokers that provide
research services to effect such transactions. Research services consist of
statistical and analytical reports relating to issuers, industries, securities
and economic factors and trends, which may be of assistance or value to INVESCO
or INVESCO Trust in making informed investment decisions. Research services
prepared and furnished by brokers through which the Fund effects securities
transactions may be used by INVESCO or INVESCO Trust in servicing all of their
accounts and not all such services may be used by INVESCO or INVESCO Trust in
connection with the Fund.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, INVESCO or INVESCO Trust, consistent with
the standard of seeking to obtain the best execution on portfolio transactions,
may place orders with such brokers for the execution of transactions for the
Fund on which the commissions ^ are in excess of those which other brokers might
have charged for effecting the same transactions.
Portfolio transactions may be effected through qualified broker/dealers
who recommend the Fund to their clients, or who act as agent in the purchase of
the Fund's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Company's adviser or sub-adviser may consider the sale of Fund shares by a
broker or dealer in selecting among qualified broker/dealers.
Certain financial institutions (including brokers who may sell shares of
the Funds, or affiliates of such brokers) are paid a fee (the "Services Fee")
for recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the Funds through no transaction fee
programs ("NTF Programs") offered by the financial institution or its affiliated
broker (an "NTF Program Sponsor"). The Services Fee is based on the average
daily value of the investments in each Fund made in the name of such NTF Program
Sponsor and held in omnibus accounts maintained on behalf of investors
participating in the NTF Program. With respect to certain NTF Programs, the
directors of the Company have authorized the Funds to apply dollars generated
from the Company's Plan and Agreement of Distribution pursuant to Rule 12b-1
under the 1940 Act (the "Plan") to pay the entire Services Fee,
<PAGE>
subject to the maximum Rule 12b-1 fee permitted by the Plan. With respect to
other NTF Programs, the Company's directors have authorized each Fund to pay
transfer agency fees to INVESCO based on the number of investors who have
beneficial interests in the NTF Program Sponsor's omnibus accounts in that Fund.
INVESCO, in turn, pays these transfer agency fees to the NTF Program Sponsor as
a sub-transfer agency or recordkeeping fee in payment of all or a portion of the
Services Fee. In the event that the sub-transfer agency or recordkeeping fee is
insufficient to pay all of the Services Fee with respect to these NTF Programs,
the directors of the Company have authorized the Funds to apply dollars
generated from the Plan to pay the remainder of the Services Fee, subject to the
maximum Rule 12b-1 fee permitted by the Plan. INVESCO itself pays the portion of
a Fund's Services Fee, if any, that exceeds the sum of the sub-transfer agency
or recordkeeping fee and Rule 12b-1 fee. The Company's directors have further
authorized INVESCO to place a portion of each Fund's brokerage transactions with
certain NTF Program Sponsors or their affiliated brokers, if INVESCO reasonably
believes that, in effecting the Fund's transactions in portfolio securities, the
broker is able to provide the best execution of orders at the most favorable
prices. A portion of the commissions earned by such a broker from executing
portfolio transactions on behalf of a specific Fund may be credited by the NTF
Program Sponsor against its Services Fee. Such credit shall be applied first
against any sub-transfer agency or recordkeeping fee payable with respect to
that Fund, and second against any Rule 12b-1 fees used to pay a portion of the
Services Fee, on a basis which has resulted from negotiations between INVESCO
and the NTF Program Sponsor.* Thus, the Fund pays sub-transfer agency or
recordkeeping fees to the NTF Program Sponsor in payment of the Services Fee
only to the extent that such fees are not offset by the Fund's credits. In the
event that the transfer agency fee paid by a Fund to INVESCO with respect to
investors who have beneficial interests in a particular NTF Program Sponsor's
omnibus accounts in that Fund exceeds the Services Fee applicable to that Fund,
after application of credits, INVESCO may carry forward the excess and apply it
to future Services Fees payable to that NTF Program Sponsor with respect to the
Fund. The amount of excess transfer agency fees carried forward will be reviewed
for possible adjustment by INVESCO prior to each fiscal year-end of the Company.
The Company's board of directors has also authorized the Company to pay to
INVESCO the full Rule 12b-1 fees contemplated by the Plan in reimbursement of
expenses incurred by INVESCO in engaging in the activities and providing the
services on behalf of the respective Funds contemplated by the Plan, subject to
the maximum Rule 12b-1 fee permitted by the Plan, notwithstanding that credits
have been applied to reduce the portion of the 12b-1 fee that would have been
used to reimburse INVESCO for payments to such NTF Program Sponsor absent such
credits.
The aggregate dollar amounts of brokerage commissions paid by the Fund for
the fiscal years ended May 31, 1996, 1995^ and 1994 ^ were $3,987,784,
$1,223,859, and $2,276,525 ^, respectively. For the fiscal year ended May 31, ^
1996, brokers providing research
<PAGE>
services received ^ $312,901 in commissions on portfolio transactions effected
for the Fund. The aggregate dollar amount of such portfolio transactions was ^
$122,271,718. Commissions of ^ $0 were allocated to certain brokers in
recognition of their sales of shares of the Fund on portfolio transactions of
the Fund effected during the fiscal year ended May 31, ^ 1996.
At May 31, ^ 1996, the Fund held securities of its regular brokers or
dealers, or their parents, as follows:
Value of Securities
Broker or Dealer at ^ 5/31/96
- ---------------- -------------------
Associates Corporation of North America ^ 10,625,000.00
^
Neither INVESCO nor INVESCO Trust receives any brokerage commissions on
portfolio transactions effected on behalf of the Fund, and there is no
affiliation between INVESCO or INVESCO Trust, or any person affiliated with
INVESCO or INVESCO Trust, or the Fund and any broker or dealer that executes
transactions for the Fund.
ADDITIONAL INFORMATION
Common Stock. The Company was incorporated with 600,000,000 authorized
shares of common stock, with a par value of $0.01 per share. Of the Company's
authorized shares, 200,000,000 shares have been allocated to the Fund. As of May
31, ^ 1996, 25,724,952 shares of the Fund were outstanding. The board of
directors has the authority to designate additional series of common stock
without seeking the approval of shareholders, and may reclassify any authorized
but unissued shares.
Shares of each series represent the interests of the shareholders of such
series in a particular portfolio of investments of the Company. Each series of
the Company's shares is preferred over all other series in respect of the assets
specifically allocated to that series, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that series. The assets of each series are segregated on
the books of account and are charged with the liabilities of that series and
with a share of the Company's general liabilities. The board of directors
determines those assets and liabilities deemed to be general assets or
liabilities of the Company, and these items are allocated among series in a
manner deemed by the board of directors to be fair and equitable. Generally,
such allocation will be made based upon the relative total net assets of each
series. In the unlikely event that a liability allocable to one series exceeds
the assets belonging to the series, all or a portion of such liability may have
to be borne by the holders of shares of the Company's other series.
All shares, regardless of series, have equal voting rights.
Voting with respect to certain matters, such as ratification of
<PAGE>
independent accountants or election of directors, will be by all series of the
Company. When not all series are affected by a matter to be voted upon, such as
approval of an investment advisory contract or changes in a fund's investment
policies, only shareholders of the series affected by the matter may be entitled
to vote. Company shares have noncumulative voting rights, which means that the
holders of a majority of the shares voting for the election of directors can
elect 100% of the directors if they choose to do so. In such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the board of directors. After they have been
elected by shareholders, the directors will continue to serve until their
successors are elected and have qualified or they are removed from office, in
either case by a shareholder vote, or until death, resignation, or retirement.
They may appoint their own successors, provided that always at least a majority
of the directors have been elected the Company's shareholders. It is the
intention of the Company not to hold annual meetings of shareholders. The
directors will call annual or special meetings of shareholders for action by
shareholder vote as may be required by the 1940 Act or the Company's Articles of
Incorporation, or at their discretion.
Principal Shareholders. As of June 30, ^ 1996, the following entities held
more than 5% of the Fund's outstanding equity securities.
Class and
Amount and Nature Percent
Name and Address of Ownership of Class
- ---------------- ----------------- ---------
Charles Schwab & Co. Inc. 4,296,113.5 19.6% ^
101 Montgomery St. Record
San Francisco, CA 94104
Connecticut General Life Ins. ^ 2,347,579.7 10.7%
P.O. Box 2975 Record and
Hartford, CT 06104 Beneficial
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the
Company. The independent accountants are responsible for auditing the financial
statements of the Company.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Company. The bank is also responsible for, among other things,
receipt and delivery of the Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement.
Transfer Agent. The Company is provided with transfer agent,
registrar, and dividend disbursing agent services by INVESCO Funds
<PAGE>
Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237, pursuant to the
Transfer Agency Agreement described in "The Fund and Its Management." Such
services include the issuance, cancellation, and transfer of shares of the Fund,
and the maintenance of records regarding the ownership of such shares.
Reports to Shareholders. The Company's fiscal year ends on May 31. The
Company distributes reports at least semiannually to its shareholders. Financial
statements regarding the Company, audited by the independent accountants, are
sent to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Company. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Company.
Financial Statements. The following audited financial statements of the
Fund and the notes thereto for the fiscal year ended May 31, ^ 1996, and the
report of Price Waterhouse LLP with respect to such financial statements, are
incorporated herein by reference from the Company's Annual Report to
Shareholders for the fiscal year ended May 31, ^ 1996: Statement of Investment
Securities as of May 31, ^ 1996; Statement of Assets and Liabilities as of May
31, ^ 1996; Statement of Operations for the year ended May 31, ^ 1996; Statement
of Changes in Net Assets for each of the two years in the period ended May 31, ^
1996; Financial Highlights for each of the ^ four years ended May 31, ^ 1996 and
the period from commencement of the Fund's operations (December 27, 1991) until
May 31, 1992.
Prospectus. The Company will furnish, without charge, a copy of the Fund's
Prospectus upon request. Such requests should be made to the Company at the
mailing address or telephone number set forth on the first page of this
Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the
related Prospectus do not contain all of the information set forth in the
Registration Statement the Company has filed with the Securities and Exchange
Commission. The complete Registration Statement may be obtained from the
Securities and Exchange Commission upon payment of the fee prescribed by the
rules and regulations of the Commission.
<PAGE>
APPENDIX ^ A
BOND RATINGS
The following is a description of Standard & Poor's Ratings Group
("Standard & Poor's") and Moody's Investors Service, Inc. ("Moody's") bond
rating categories:
Moody's Investors Service, Inc. Corporate Bond Ratings
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risk appear somewhat larger than in Aaa securities.
A - Bonds rated A possess many favorable investment attributes, and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of other
terms of the contract over any longer period of time may be small.
<PAGE>
Caa - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Standard & Poor's Ratings Group Corporate Bond Ratings
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB - Bonds rated BB have less near-term vulnerability to default than
other speculative issues. However, they face major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B - Bonds rated B have a greater vulnerability to default but currently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.
CCC - Bonds rated CCC have a currently identifiable vulnerability to
default and are dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial, or economic conditions, they are not
likely to have the capacity to pay interest and repay principal.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in Prospectus (Part A):
Financial Highlights for the Emerging 10
Growth Fund for each of the ^ four years
ended May 31, ^ 1996 and the period
from commencement of the Fund's
operations (December 27, 1991)
until May 31, 1992.
(2) The following audited financial
statements of the Emerging Growth
Fund and the notes thereto for the
fiscal year ended May 31, ^ 1996,
and the report of Price Waterhouse
LLP with respect to such financial
statements, are incorporated in the
Statement of Additional Information
by reference from the Company's
Annual Report to Shareholders for
the fiscal year ended May 31, ^
1996: Statement of Investment
Securities as of May 31, ^ 1996;
Statement of Assets and Liabilities
as of May 31, ^ 1996; Statement of
Operations for the year ended May
31, ^ 1996; Statement of Changes in
Net Assets for each of the two
years in the period ended May 31, ^
1996; Financial Highlights for each
of the ^ four years ended May 31, ^
1996 and the period from
commencement of the Fund's
operations (December 27, 1991)
until May 31, 1992.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted
as all information has been
presented in the financial
statements.
<PAGE>
(b) Exhibits:
(1) Articles of Incorporation
(Charter);
^(a) Amendment to Articles of
Incorporation^, filed December
6, 1990.
(b) Amendment to Articles of
Incorporation^, filed December
23, 1991.
(c) Amendment to Articles of ^
Incorporation, filed June 28,
1993.
^(d) Articles of Amendment of
Articles of Incorporation,
filed December 2, ^ 1994.
^(e) Articles of Amendment of
Articles of Incorporation,
filed January 20, ^ 1995.
^(f) Articles Supplementary to
Articles of Incorporation,
filed July 7, ^ 1995.
(2) Bylaws, as amended July 21, ^ 1993.
(3) Not applicable.
(4) Revised specimen stock ^
certificate. Not required to be
filed on EDGAR.
(5) (a) Investment Advisory Agreement
Between Registrant and INVESCO
Funds Group, Inc. dated
December 31, ^ 1991.
(i) Amendment to Investment
Advisory Agreement dated
July 11, ^ 1995.2
(b) Sub-Advisory Agreement Between
INVESCO Funds Group, Inc. and
INVESCO Trust Company dated
December 31, ^ 1991.
<PAGE>
(c) Sub-Advisory Agreement Between
INVESCO Funds Group, Inc. and
MIM International Limited,
dated July 11, ^ 1995.2
Superceded by (5)(d).
(d) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and
INVESCO Asset Management
Limited, dated November 10,
1995.
(6) General Distribution Agreement
Between Registrant and INVESCO
Funds Group, Inc. dated December
31, ^ 1991.
(7) Defined Benefit Deferred
Compensation Plan for Non-
Interested Directors and ^
Trustees.
(8) Amended and Restated Custodian
Contract Between Registrant and
State Street Bank and Trust Company
dated August 31, ^ 1995.2
(9) (a) Transfer Agency Agreement
Between Registrant and INVESCO
Funds Group, Inc. dated
December 31, ^ 1991.
(i) Amendment to Fee Schedule
dated April ^ 22, 1993.
(ii) Amendment to Fee Schedule
dated ^ April 1, 1994.
(iii) Amendment to Fee
Schedule dated July 11,
1995.2
(iv) Amendment to Fee Schedule
dated May 1, 1996.
(b) Administrative Services
Agreement Between Registrant
and INVESCO Funds Group, Inc.
dated December 31, ^ 1991.
<PAGE>
(i) Amendment to
Administrative Services
Agreement dated July 11,
^ 1995.2
(10) Opinion and consent of counsel
as to the legality of the securities
being registered, indicating
whether they will, when sold, be
legally issued, fully paid and non-^
assessable.1
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the
establishment of retirement plans
as follows: Non-standardized
Profit Sharing Plan; Non-
standardized Money Purchase Pension
Plan; Standardized Profit Sharing
Plan Adoption Agreement;
Standardized Money Purchase Pension
Plan; Non-standardized 401(k) Plan
Adoption Agreement; Standardized
401(k) Paired Profit Sharing Plan;
Standardized Simplified Profit
Sharing Plan; Standardized
Simplified Money Purchase Plan;
Defined Contribution Master Plan &
Trust Agreement; and Financial
403(b) Retirement Plan, all filed
with Registration Statement of
INVESCO International Funds, Inc.
(File No. 33-63498), filed May 27,
1993, and herein incorporated by
reference.
(15) Plan and Agreement of Distribution
dated April 30, 1991 adopted
pursuant to Rule 12b-1 under the
Investment Company Act of 1940.2
Amendment of Plan and Agreement of
Distribution Pursuant to Rule 12b-1
dated July 19, ^ 1995.2
(16) Schedule for computation of
performance data.3
<PAGE>
(17) ^(a) Financial Data Schedule
for the year ended May 31,
1996 for the Emerging
Growth Fund.
(b) Financial Data Schedule
for the year ended May 31, 1996
for the Worldwide Emerging
Markets Fund.
(18) Not Applicable.
1Previously^ filed with Pre-Effective Amendment No. ^ 2 to the Registrant's
Registration Statement on ^ December 24, 1991, and incorporated herein by
reference.
^ 2Previously filed on EDGAR with Post-Effective Amendment No. ^ 6 to the
Registrant's Registration Statement on ^ September 5, 1995, and incorporated
herein by reference.
Item 25. Persons Controlled by or Under Common Control With
Registrant
No person is presently controlled by or under common control with
Registrant.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class ^ May 31, ^ 1996
-------------- ----------------
Emerging Growth Fund ^ 27,635
Item 27. Indemnification
Indemnification provisions for officers, directors and employees of
Registrant are set forth in Article VII, Section 2 of the Articles of
Incorporation and are hereby incorporated by reference. See Item 24(b)(1) above.
Under this Article, officers and directors will be indemnified to the fullest
extent permitted to directors by the Maryland General Corporation Law, subject
only to such limitations as may be required by the 1940 Act and the rules
thereunder. Under the 1940 Act, directors and officers of the Company cannot be
protected against liability to the Company or its shareholders to which they
would be subject because of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties of their office. The Company also maintains
liability insurance policies covering its directors and officers.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
See "The Fund and Its Management" in the Fund's Prospectus and in
the Statement of Additional Information for information regarding the business
of the investment adviser. For information as to the business, profession,
vocation or employment of a substantial nature of each of the officers and
directors of INVESCO Funds Group, Inc., reference is made to Schedule Ds to Form
ADV, filed under the Investment Advisers Act of 1940 by INVESCO Funds Group,
Inc., which schedules are herein incorporated by reference.
Item 29. Principal Underwriters
(a) INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
^
Frank M. Bishop Director
1315 Peachtree Street NE
Atlanta, GA 30309
Charles W. Brady Chairman of
1315 Peachtree St. NE the Board
Atlanta, GA 30309
^
M. Anthony Cox Senior Vice
1315 Peachtree St. N.E. President
Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell ^ Regional Vice ^
7800 E. Union Ave. ^ President
Denver, CO 80237
Samuel T. DeKinder Director
1315 Peachtree Street NE
Atlanta, GA 30309
^ Douglas P. Dhom Regional Vice
^ 1355 Peachtree St. NE President
^ Atlanta, GA 30309
William J. Galvin, Jr. Senior Vice Asst. Sec.
7800 E. Union Avenue President
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Aenue
Denver, CO 80237
Ronald L. Grooms Sr. Vice President Treasurer &
7800 E. Union Avenue & Treasurer Chief Fin'l.
Denver, CO 80237 Officer and
Chief Acct'g.
Officer
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
^ Hubert L. Harris ^, Jr. Director
1315 Peachtree Street, N.E.
^ Atlanta, GA 30309
^ Leon K. Haydon, Jr. Vice President-
7800 E. Union Avenue Marketing
Denver, CO 80237 Planning & Research
Dan J. Hesser Chairman of the President &
7800 E. Union Avenue Board, President, Director
Denver, CO 80237 Chief Executive
Officer & Director
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
^ Brian H. Minturn Executive Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert J. O'Connor Director
1315 Peachtree Street NE
Atlanta, GA 30309
Donald R. Paddack Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
Glen A. Payne Sr. Vice President, Secretary
7800 E. Union Avenue Secretary &
Denver, CO 80237 General Counsel
^ Pamela J. Piro Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
Gary J. Ruhl Vice President
7800 E. Union Avenue
Denver, CO 80237
R. Dalton Sim Director
7800 E. Union Avenue
Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
^
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
^
Judy P. Wiese Vice President Asst. Treas.
^ 7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The registrant hereby undertakes that the board of
directors will call such meetings of shareholders
for action by shareholder vote, including acting on
the question of removal of a director or directors,
as may be requested in writing by the holders of at
least 10% of the outstanding shares of the Company
or as may be required by applicable law or the
Company's Articles of Incorporation, and to assist
shareholders in communicating with other
shareholders as required by the Investment Company
Act of 1940.
(b) The Registrant shall furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
(c) The Registrant hereby undertakes to file a post-
effective amendment, containing reasonably current
financial statements for INVESCO Worldwide Emerging
Markets Fund which need not be certified, within
four to six months from the later of the effective
date of Post-Effective Amendment No. 4 or the
commencement of operations of INVESCO Worldwide
Emerging Markets Fund.
(d) Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of
the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the
successful defense of any action, suit or
<PAGE>
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant has duly caused this post^-
effective amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, County of Denver, and State of Colorado,
on the ^ 26th day of July, ^ 1996.
Attest: INVESCO EMERGING OPPORTUNITY
FUNDS, INC.
/s/ Glen A. Payne /s/ Dan J. Hesser
----------------------------
^
- ------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this post^-
effective amendment to Registrant's Registration Statement has been signed by
the following persons in the capacities indicated on this ^ 26th day of July, ^
1996.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ -----------------------------
^
Dan J. Hesser, President & Director Lawrence H. Budner, Director
^(Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ -----------------------------
^
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ -----------------------------
^
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ------------------------------------ -----------------------------
^
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ Frank M. Bishop /s/ Kenneth T. King
- ------------------------------------ -----------------------------
^
Frank M. Bishop, Director Kenneth T. King, Director
/s/ ^ Hubert L. Harris, Jr. /s/ John W. McIntyre
- ------------------------------------ ------------------------------
^ Hubert L. Harris, Jr., Director John W. McIntyre, Director
^ By* By*
--------------------------------- ---------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post^-effective amendment to the Registration
Statement of the Registrant on behalf of the above^-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
May 22, 1992, June 9, 1992, October 13, 1992, July 26, 1994 ^, June 27, 1995,
July 12, 1995 and September 5, 1995.
<PAGE>
Exhibit Index
-------------
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
1 87
1(a) 98
1(b) 100
1(c) 102
1(d) 104
1(e) 106
1(f) 108
2 111
5(b) 138
5(d) 144
6 153
7 161
9(a)(i) 165
9(a)(ii) 166
9(a)(iv) 167
11 168
17(a) 170
17(b) 171
ARTICLES OF INCORPORATION
OF
FINANCIAL SOCIAL AWARENESS FUND, INC.
THIS IS TO CERTIFY to the Maryland State Department of Assessments that
the undersigned, JOHN M. BUTLER, whose post office address is 7800 E. Union
Avenue, Suite 800, Denver, Colorado 80237, and being of legal age, does hereby
declare that he is an incorporator intending to form a corporation under and by
virtue of the general laws of the State of Maryland authorizing the formation of
corporations.
ARTICLE I
NAME AND TERM
The name of the corporation is
"FINANCIAL SOCIAL AWARENESS FUND, INC."
and it shall have perpetual existence.
ARTICLE II
POWERS AND PURPOSES
The nature of the business and the objects and purposes to be transacted,
promoted and carried on by the corporation are as follows:
1. To engage in the business of an incorporated investment
company of open-end management type and to engage in all
legally permissible activities and operations usual,
customary, or necessary in connection therewith.
2. In general, to engage in any other business permitted to
corporations by the laws of the State of Maryland and to have
and exercise all powers conferred upon or permitted to
corporations by the Maryland General Corporation Law and any
other laws of the State of Maryland; provided, however, that
the corporation shall be restricted from engaging in any
activities or taking any actions which would preclude its
compliance with applicable provisions of the Investment
<PAGE>
Company Act of 1940, as amended, or applicable rules promulgated
thereunder.
ARTICLE III
CAPITALIZATION
Section 1. The total amount of authorized capital stock of the corporation
is six million dollars ($6,000,000), consisting of six hundred million
(600,000,000) shares having a par value of one cent ($0.01) per share. Such
stock may be issued as full shares or as fractional shares. Until such time as
any additional class or series of stock is established as contemplated by
Section 3 below, all shares of the authorized stock of the corporation shall
constitute shares of the same class and series. Unless otherwise prohibited by
law, so long as the corporation is registered as an open-end investment company
under the Investment Company Act of 1940, as amended, the total number of shares
which the corporation is authorized to issue may be increased or decreased by
the board of directors in accordance with the applicable provisions of the
Maryland General Corporation Law.
Section 2. No holder of stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any shares of the capital stock of
the corporation which it may issue or sell, whether out of the number of shares
authorized by these articles of incorporation, or out of any shares of the
capital stock of the corporation acquired by it after the issue thereof.
Section 3. The corporation is authorized to issue its stock in one or more
series or one or more classes of shares, and, subject to the requirements of the
Investment Company Act of 1940, as amended, particularly Section 18(f) thereof
and Rule 18f-2 thereunder, the different series and classes, if any, shall be
established and designated, and the variations in the relative preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as between the
different series or classes shall be fixed and determined and may be classified
and reclassified by the board of directors; provided that the board of directors
shall not classify or reclassify any of such shares into any class or series of
stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the general assets of, the corporation, except
<PAGE>
that there may be variations so fixed and determined between different series or
classes as to investment objective, purchase price, right of redemption, special
rights as to dividends and on liquidation with respect to assets and income
belonging to a particular series or class, voting powers and conversion rights.
All references to shares in these articles of incorporation shall be deemed to
be shares of any or all series and classes of shares of the corporation's
capital stock as the context may require.
(a) The number of authorized shares and the number of shares of each
series or of each class that may be issued shall be in such number as may be
determined by the board of directors. The directors may classify or reclassify
any unissued shares or any shares previously issued and reacquired of any series
or class into one or more series or one or more classes that may be established
and designated by the board of directors from time to time. The directors may
hold as treasury shares (of the same or some other series or class), reissue for
such consideration and on such terms as they may determine, or cancel any shares
of any series or any class reacquired by the corporation at their discretion
from time to time.
(b) All consideration received by the corporation for the issue or sale of
shares of a particular series or class, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series or class for all purposes, subject only to the
rights of creditors of that series or class, and shall be so recorded upon the
books of account of the corporation. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular series or class, the
directors shall allocate them among any one or more of the series or classes
established and designated from time to time in such manner and on such basis as
they, in their sole discretion, deem fair and equitable. Each such allocation by
the corporation shall be conclusive and binding upon the stockholders of all
series or classes for all purposes. The directors shall have full discretion, to
the extent not inconsistent with the Investment Company Act of 1940, as amended,
and the Maryland General Corporation Law to determine which items shall be
treated as income and which items shall be treated as capital; and each
<PAGE>
such determination and allocation shall be conclusive and binding
upon the stockholders.
(c) The assets belonging to each particular class or series shall be
charged with the liabilities of the corporation in respect to that class or
series and all expenses, costs, charges and reserves attributable to that class
or series, and any general liabilities, expenses, costs, charges or reserves of
the corporation which are not readily identifiable as belonging to any
particular class or series shall be allocated and charged by the directors to
and among any one or more of the classes or series established and designated
from time to time in such manner and on such basis as the directors in their
sole discretion deem fair and equitable. Each allocation of liabilities,
expenses, costs, charges and reserves by the directors shall be conclusive and
binding upon the stockholders of all series and classes for all purposes.
(d) Dividends and distributions on shares of a particular series or class
may be paid with such frequency as the directors may determine, which may be
daily or otherwise, pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the board of directors may determine, to the
holders of shares of that series or class, from such of the income and capital
gains, accrued or realized, from the assets belonging to that series or class,
as the directors may determine, after providing for actual and accrued
liabilities belonging to that series or class. All dividends and distributions
on shares of a particular series or class shall be distributed pro rata to the
holders of that series or class in proportion to the number of shares of that
series or class held by such holders at the date and time of record established
for the payment of such dividends or distributions except that in connection
with any dividend or distribution program or procedure, the board of directors
may determine that no dividend or distribution shall be payable on shares as to
which the stockholder's purchase order and/or payment have not been received by
the time or times established by the board of directors under such program or
procedure.
The corporation intends to have each series that may be established to
represent interests of a separate investment portfolio qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, or any successor
comparable statute thereto, and regulations promulgated thereunder. Inasmuch as
the computation of net income and gains for federal income tax
<PAGE>
purposes may vary from the computation thereof on the books of the corporation,
the board of directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends designated in
whole or in part as capital gains distributions, amounts sufficient, in the
opinion of the board of directors, to enable the respective series to qualify as
regulated investment companies and to avoid liability of such series for federal
income tax in respect of that year. However, nothing in the foregoing shall
limit the authority of the board of directors to make distributions greater than
or less than the amount necessary to qualify the series as regulated investment
companies and to avoid liability of such series for such tax.
(e) Dividends and distributions may be made in cash, property or additional
shares of the same or another class or series, or a combination thereof, as
determined by the board of directors or pursuant to any program that the board
of directors may have in effect at the time for the election by each stockholder
of the mode of the making of such dividend or distribution to that stockholder.
Any such dividend or distribution paid in shares will be paid at the net asset
value thereof as defined in section (4) below.
(f) In the event of the liquidation or dissolution of the corporation or of
a particular class or series, the stockholders of each class or series that has
been established and designated and is being liquidated shall be entitled to
receive, as a class or series, when and as declared by the board of directors,
the excess of the assets belonging to that class or series over the liabilities
belonging to that class or series. The holders of shares of any particular class
or series shall not be entitled thereby to any distribution upon liquidation of
any other class or series. The assets so distributable to the stockholders of
any particular class or series shall be distributed among such stockholders in
proportion to the number of shares of that class or series held by them and
recorded on the books of the corporation. The liquidation of any particular
class or series in which there are shares then outstanding may be authorized by
vote of a majority of the board of directors then in office, subject to the
approval of a majority of the outstanding securities of that class or series, as
defined in the Investment Company Act of 1940, as amended, and without the vote
of the holders of any other class or series. The liquidation or dissolution of a
particular class or series may be accomplished, in whole or in part, by the
transfer of assets of such class or series to another class or series or by
<PAGE>
the exchange of shares of such class or series for the shares of
another class or series.
(g) On each matter submitted to a vote of the stockholders, each holder of
a share shall be entitled to one vote for each share standing in his name on the
books of the corporation, irrespective of the class or series thereof, and all
shares of all classes or series shall vote as a single class or series ("single
class voting"); provided, however that (i) as to any matter with respect to
which a separate vote of any class or series is required by the Investment
Company Act of 1940, as amended, or by the Maryland General Corporation Law,
such requirement as to a separate vote by that class or series shall apply in
lieu of single class voting as described above; (ii) in the event that the
separate vote requirements referred to in (i) above apply with respect to one or
more classes or series, then, subject to (iii) below, the shares of all other
classes or series shall vote as a single class or series; and (iii) as to any
matter which does not affect the interest of a particular class or series, only
the holders of shares of the one or more affected classes shall be entitled to
vote.
(h) The establishment and designation of any series or class of shares, in
addition to the initial class of shares which has been established in section
(1) above, shall be effective upon the adoption by a majority of the then
directors of a resolution setting forth such establishment and designation and
the relative rights and preferences of such series or class, or as otherwise
provided in such instrument and the filing with the proper authority of the
State of Maryland of Articles Supplementary setting forth such establishment and
designation and relative rights and preferences.
Section 4. The corporation shall, upon due presentation of a share or
shares of stock for redemption, redeem such share or shares of stock at a
redemption price prescribed by the board of directors in accordance with
applicable laws and regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such class or series as
determined in accordance with the provisions of this section (4), less such
redemption or other charge as is determined by the board of directors. The
corporation may redeem shares, not offered by a stockholder for redemption, held
by any stockholder whose shares of a class or series have a value of less than
$1,000 (or the then current minimum initial investment requirement, if such
<PAGE>
requirement is less than $1,000), or such lesser amount as may be fixed by the
board of directors; provided that before the corporation redeems such shares it
must notify the shareholder that the value of his shares is less than the
required minimum value and allow him 60 days to make an additional investment in
an amount which will increase the value of his account to the required minimum
value. The corporation shall pay redemption prices in cash, except that the
corporation may at its sole option pay redemption prices in kind in such manner
as is consistent with and not in contravention of Section 18(f) of the
Investment Company Act of 1940, as amended, and any Rules or Regulations
thereunder. Redemption prices shall be paid exclusively out of the assets of the
class or series whose shares are being redeemed.
Notwithstanding the foregoing, the corporation may postpone payment of
redemption proceeds and may suspend the right of the holders of shares of any
class or series to require the corporation to redeem shares of that class or
series during any period or at any time when and to the extent permissible under
the Investment Act of 1940, as amended, or any rule or order thereunder.
The net asset value of a share of any class or series of common stock of
the corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the board of directors.
Section 5. The corporation may issue, sell, redeem, repurchase and
otherwise deal in and with shares of its stock in fractional denominations and
such fractional denominations shall, for all purposes, be shares having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the corporation; provided that the issue of shares in fractional
denominations shall be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the bylaws.
Section 6. The corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the bylaws or by the board of directors.
<PAGE>
ARTICLE IV
PREEMPTIVE RIGHTS
No stockholder of the corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any share of any class or series of stock, or
shares convertible into, exchangeable for or evidencing the right to purchase
stock of any class or series whatsoever, whether or not the stock in question be
of the same class or series as may be held by such stockholder, and whether now
or hereafter authorized and whether issued for cash, property, services or
otherwise, other than such, if any, as the board of directors in its discretion
may from time to time fix.
ARTICLE V
PRINCIPAL OFFICE AND REGISTERED AGENT
The post office address of the principal office of the corporation in the
State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident
agent of the corporation is The Corporation Trust Incorporated, whose post
office address is 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a corporation of the State of Maryland.
ARTICLE VI
DIRECTORS
Section 1. The initial board of directors shall consist of three members
who need not be residents of the State of Maryland or stockholders of the
corporation.
Section 2. The names of the persons who shall act as directors until the
first meeting of stockholders or until their successors shall have been elected
and qualified are as follows:
Charles W. Brady 1315 Peachtree Street, N.E., Atlanta, Georgia
John M. Butler 7800 E. Union Avenue, Denver, Colorado
Dan J. Hesser 7800 E. Union Avenue, Denver, Colorado
<PAGE>
Section 3. The number of directors may be increased or decreased in
accordance with the bylaws, provided that the number shall not be reduced to
less than three.
Section 4. A majority of the directors shall constitute a quorum for the
transaction of business, unless the bylaws shall provide that a different number
shall constitute a quorum; provided, however, that in no case shall a quorum be
less than one-third (1/3) of the total number of directors or less than two (2)
directors.
Section 5. No person shall serve as a director, unless elected by the
stockholders at an annual meeting or a special meeting called for such purpose;
except that vacancies occurring between such meetings may be filled by the
directors in accordance with the bylaws, and subject to such limitations as may
be set forth by applicable laws and regulations.
Section 6. The board of directors of the corporation is hereby empowerea
to authorize the issuance from time to time of shares of stock, whether of a
class or series now or hreafter authorized, for such consideration as it deems
advisable, subject to such limitations as may be set forth herein, in the
bylaws, in the Maryland General Corporation Law, and in the Investment Company
Act of 1940, as amended.
Section 7. The board of directors of the corporation may make, alter or
repeal from time to time any of the bylaws of the corporation except any
particular bylaw which is specified as not subject to alternation or repeal by
the board of directors.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. Currently acting and former directors and officers of the
corporation shall have limitations on and/or immunity from liability of such
directors and officers to the fullest extent permitted by the Maryland General
Corporation Law. Such limitations and/or immunity will apply to events occurring
at the time an individual serves as a director or officer of the corporation,
whether such person is a director or officer of the corporation at the time of
any proceeding in which liability is asserted against the director or officer.
<PAGE>
Section 2. The corporation shall indemnify and advance expenses to its
currently acting and former directors and officers to the fullest extent
permitted by the Maryland General Corporation Law and the bylaws of the
corporation, as such Law and bylaws now or in the future may be in effect,
subject only to such limitations as may be required by the Investment Company
Act of 1940, as amended.
ARTICLE VIII
SPECIAL VOTING AND MEETING PROVISIONS
Section 1. Notwithstanding any provision of Maryland law requiring a
greater proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast to take or authorize any action, the corporation
may take or authorize any such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
Section 2. The presence in person or by proxy of the holders of onethird
of the shares of stock of the corporation entitled to vote without regard to
class shall constitute a quorum at any meeting of stockholders, except with
respect to any matter which by law requires the approval of one or more classes
of stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class entitled to vote on the matter
shall constitute a quorum.
Section 3. So long as the corporation is registered pursuant to the
Investment Company Act of 1940, as amended, the corporation will not be required
to hold annual shareholder meetings in years in which the election of directors
is not required to be acted upon under the Investment Company Act of 1940.
ARTICLE IX
AMENDMENT
The corporation reserves the right from time to time to make any amendment
of its articles of incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in such
articles, of any outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes the terms or rights of any of its
outstanding shares shall be valid unless such
<PAGE>
amendment shall have been authorized by not less than a majority of the
aggregate number of votes enttiled to be cast thereon, by a vote at a meeting or
in writing with or without a meeting.
IN WITNESS WHEREOF, I have signed these articles of incorporation on this
4th day of December, 1990.
/s/ John M. Butler
----------------------------
John M. Butler
Attest: /s/ Glen A. Payne
-------------------------
Glen A. Payne
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I hereby certify that on the 4th day of December, 1990, before me, the
subscriber, a Notary Public of the State of Colorado, in and for the City and
County of Denver, personally appeared John M. Butler who acknowledged the
foregoing articles of incorporation to be his act.
WITNESS my hand and notarial seal, the day and year first above written.
/s/ Cheryl K. Howlett
------------------------------
Notary Public
My commission expires: February 18, 1991.
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FINANCIAL SOCIAL AWARENESS FUND, INC.
Financial Social Awareness Fund, Inc., a corporation organized and
existing under the General Corporation Law of the State of Maryland (the
"Company"), hereby certifies that:
FIRST: Article I of the Articles of Incorporation of the Company is hereby
amended to read as follows:
ARTICLE I
NAME AND TERM
The name of the corporation is "FINANCIAL SMALL CAP EMERGING GROWTH FUND,
INC." and it shall have perpetual existence.
SECOND: The foregoing amendment, in accordance with the requirements of
Section 2-408 of the General Corporation Law of the State of Maryland, was
approved by a majority of the Company's Board of Directors at a meeting on
October 23, 1991. No shares of capital stock entitled to vote on the foregoing
amendment were outstanding or subscribed for at the time of director approval of
said amendment.
THIRD: The foregoing amendment was duly adopted in accordance
with the provisions of Section 2-603 of the General Corporation
Law of the State of Maryland.
The undersigned, President of the Company, who is executing on behalf of
the Company the foregoing Articles of Amendment, of which this paragraph is made
a part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles of Amendment to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, Financial Social Awareness Fund, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf by its
President and witnessed by its Secretary on the 25th day of October, 1991.
<PAGE>
These Articles of Amendment shall be effective upon acceptance by the
Maryland State Department of Assessments and Taxation.
FINANCIAL SOCIAL AWARENESS FUND, INC.
By: /s/ John M. Butler
---------------------------------
John M. Butler, President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- ------------------------------
Glen A. Payne, Secretary
CERTIFICATION
I, Cheryl K. Howlett, a notary public in and for the County of Denver,
City of Denver, and State of Colorado, do hereby certify that John M. Butler,
personally known to me to be the person whose name is subscribed to the
foregoing Articles of Amendment, appeared before me this date in person and
acknowledged that he signed, sealed, and delivered said instrument as his free
and voluntary act and deed for the uses and purposes therein set forth.
Given my hand and official seal this 25th day of October, 1991.
/s/ Cheryl K. Howlett
------------------------------
[SEAL] Notary Public
Address: 7800 East Union Avenue,
Denver, Colorado 80237
My Commission Expires February 22, 1995
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FINANCIAL SMALL CAP EMERGING GROWTH FUND, INC.
Financial Small Cap Emerging Growth Fund, Inc., a corporation organized
and existing under the General Corporation Law of the State of Maryland (the
"Company"), hereby certifies that:
FIRST: Article I of the Articles of Incorporation of the Company is hereby
amended to read as follows:
ARTICLE I
NAME AND TERM
The name of the corporation is "FINANCIAL EMERGING GROWTH FUND, INC." and
it shall have perpetual existence.
SECOND: The foregoing amendment, in accordance with the requirements of
Section 2-408 of the General Corporation Law of the State of Maryland, was
approved by the written unanimous consent of the members of the Company's Board
of Directors on December 19, 1991. No shares of capital stock entitled to vote
on the foregoing amendment were outstanding or subscribed for at the time of
director approval of said amendment.
THIRD: The foregoing amendment was duly adopted in accordance
with the provisions of Section 2-603 of the General Corporation
Law of the State of Maryland.
The undersigned, President of the Company, who is executing on behalf of
the Company the foregoing Articles of Amendment, of which this paragraph is made
a part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles of Amendment to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, Financial Small Cap Emerging Growth Fund, Inc. has
caused these Articles of Amendment to be signed in its name and on its behalf by
its President and witnessed by its Secretary on the l9th day of December, 1991.
<PAGE>
These Articles of Amendment shall be effective upon acceptance by the
Maryland State Department of Assessments and Taxation.
FINANCIAL SMALL CAP EMERGING GROWTH
FUND, INC.
By: /s/ John M. Butler
-------------------------------
John M. Butler, President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne, Secretary
CERTIFICATION
I, Cheryl K. Howlett, a notary public in and for the County of Denver,
City of Denver, and State of Colorado, do hereby certify that John M. Butler,
personally known to me to be the person whose name is subscribed to the
foregoing Articles of Amendment, appeared before me this date in person and
acknowledged that he signed, sealed, and delivered said instrument as his free
and voluntary act and deed for the uses and purposes therein set forth.
Given my hand and official seal this l9th day of December, 1991.
/s/ Cheryl K. Howlett
------------------------------
Notary Public
Address: 7800 East Union Avenue
Denver, Colorado 80237
[SEAL]
My Commission Expires February 22, 1995
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FINANCIAL EMERGING GROWTH FUND, INC.
Financial Emerging Growth Fund, Inc., a corporation organized and existing
under the General Corporation Law of the State of Maryland (the "Company"),
hereby certifies that:
FIRST: Article I of the Articles of Incorporation of the Company
is hereby amended to read as follows:
Article I
NAME AND TERM
The name of the corporation is "INVESCO EMERGING GROWTH FUND, INC." and it shall
have perpetual existence.
SECOND: The foregoing amendment, in accordance with the requirements of Section
2-408 of the General Corporation Law of the State of Maryland, was approved by
the Board of Directors of the Company on January 20, 1993, and was approved by
the shareholders of the Company at a Special Meeting of Stockholders held on May
24, 1993, in accordance with the requirements of Section 2-506 of the General
Corporation Law of the State of Maryland.
THIRD: The foregoing amendment was duly adopted in accordance with
the provisions of Section 2-604 of the General Corporation Law of
the State of Maryland.
The undersigned, President of the Company, who is executing on behalf of the
Company the foregoing Articles of Amendment, of which this paragraph is made a
part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles of Amendment to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, Financial Emerging Growth Fund, Inc. has
caused these Articles of Amendment to be signed in its name and on
<PAGE>
its behalf by its President and witnessed by its Secretary on the 28th day of
June, 1993. These Articles of Amendment shall be effective upon acceptance by
the Maryland State Department of Assessments and Taxation.
FINANCIAL EMERGING GROWTH FUND, INC.
BY: /s/ John M. Butler
--------------------------------
JOHN M. BUTLER
President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- ----------------------------
GLEN A. PAYNE, Secretary
CERTIFICATION
I, Cheryl K. Howlett, a notary public in and for the County of Denver, City of
Denver, and State of Colorado, do hereby certify that John M. Butler, personally
known to me to be the person whose name is subscribed to the foregoing Articles
of Amendment, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his free and voluntary act and
deed for the uses and purposes therein set forth.
Given my hand an official seal this 28th day of June, 1993.
/a/ Cheryl K. Howlett
-------------------------
Notary Public
7800 E. Union Avenue
Denver, Colorado 80237
[SEAL]
My Commission expires February 22, 1995
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
INVESCO EMERGING GROWTH FUND, INC.
INVESCO Emerging Growth Fund, Inc., a corporation organized and existing
under the General Corporation Law of the State of Maryland (the "Company"),
hereby certifies that:
FIRST: Article I of the Articles of Incorporation of the Company is hereby
amended to read as follows:
Article I
NAME AND TERM
The name of the corporation is "INVESCO EMERGING OPPORTUNITY FUNDS, INC.", and
it shall have perpetual existence.
SECOND: The foregoing amendment, in accordance with the requirements of Section
2-408 of the General Corporation Law of the State of Maryland, was approved by
the Board of Directors of the Company on October 19, 1994.
THIRD: The foregoing amendment was duly adopted in accordance with the
provisions of Section 2-605 of the General Corporation Law of the State of
Maryland.
The undersigned, President of the Company, who is executing on behalf of the
Company the foregoing Articles of Amendment, of which this paragraph is made a
part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles of Amendment to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, INVESCO Emerging Growth Fund, Inc. has caused these Articles
of Amendment to be signed in its name and on its behalf by its President and
witnessed by its Secretary on the 17th day of November, 1994.
<PAGE>
These Articles of Amendment shall be effective upon acceptance by the Maryland
State Department of Assessments and Taxation.
INVESCO EMERGING GROWTH FUND, INC.
BY: /s/ Dan J. Hesser
----------------------------
DAN J. HESSER
President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- -----------------------------
GLEN A. PAYNE, Secretary
CERTIFICATION
I, Ruth A. Christensen, a notary public in and for the County of Denver, City of
Denver, and State of Colorado, do hereby certify that Dan J. Hesser, personally
known to me to be the person whose name is subscribed to the foregoing Articles
of Amendment, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his free and voluntary act and
deed for the uses and purposes therein set forth.
Given my hand and official seal this 17th day of November, 1994.
/s/ Ruth A. Christensen
--------------------------
Notary Public
7800 E. Union Avenue
Denver, Colorado 80237
[SEAL]
My commission expires March 16, 1998
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
INVESCO Emerging Opportunity Funds, Inc., a corporation organized and
existing under the General Corporation Law of the State of Maryland (the
"Company"), hereby certifies that:
FIRST: Article III, Section 1 of the Articles of
Incorporation of the Company is hereby amended to read as
follows:
ARTICLE III
CAPITALIZATION
Section 1. The total amount of authorized capital stock of the
corporation is six million dollars ($6,000,000), consisting of six hundred
million (600,000,000) shares having a par value of one cent ($0.01) per
share. Such stock may be issued as full shares or as fractional shares. In
the exercise of the powers granted to the board of directors pursuant to
Section 3 of this Article III, the board of directors has designated one
class of shares of capital stock of the corporation, to be designated as
the INVESCO Emerging Growth Fund. Until such time as any additional class
or series of stock is established as contemplated by Section 3 below, all
shares of the authorized stock of the corporation shall constitute shares
of such class. Unless otherwise prohibited by law, so long as the
corporation is registered as an open-end investment company under the
Investment Company Act of 1940, as amended, the total number of shares
which the corporation is authorized to issue may be increased or decreased
by the board of directors in accordance with the applicable provisions of
the Maryland General Corporation Law.
SECOND: The foregoing amendment, in accordance with the requirements of
Section 2-408 of the General Corporation Law of the State of Maryland, was
unanimously approved by the Board of Directors of the Company on October
19, 1994.
THIRD: The foregoing amendment is limited to a change expressly permitted
by Section 2-605(a)(4) of the General Corporation Law of the State of
Maryland to be made without action by the shareholders, and the Company is
registered as an open-end company under the Investment Company Act of
1940.
<PAGE>
The undersigned, President of the Company, who is executing on
behalf of the Company the foregoing Articles of Amendment, of which this
paragraph is made a part, hereby acknowledges, in the name and on behalf
of the Company, the foregoing Articles of Amendment to be the corporate
act of the Company and further verifies under oath that, to the best of
his knowledge, information and belief, the matters and facts set forth
herein are true in all material respects, under the penalties of perjury.
IN WITNESS WHEREOF, INVESCO Emerging Opportunity Funds, Inc. has caused
these Articles of Amendment to be signed in its name and on its behalf by its
President and witnessed by its Secretary on the 18th day of January, 1995. These
Articles of Amendment shall be effective upon acceptance by the Maryland State
Department of Assessments and Taxation.
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
By: /s/ Dan J. Hesser
----------------------------------
Dan J. Hesser
President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
- --------------------------------------
Glen A. Payne
Secretary
CERTIFICATION
I, Ruth A. Christensen, a notary public in and for the County of Denver, City of
Denver, and State of Colorado, do hereby certify that Dan J. Hesser, personally
known to me to be the person whose name is subscribed to the foregoing Articles
of Amendment, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his free and voluntary act and
deed for the uses and purposes therein set forth.
Given my hand and official seal this 18th day of January, 1995.
/s/ Ruth A. Christensen
----------------------------------
Notary Public
7800 E. Union Avenue
Denver, Colorado 80237
[SEAL]
My commission expires March 16, 1998.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION OF
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
INVESCO Emerging Opportunity Funds, Inc., a corporation organized and
existing under the General Corporation Law of the State of Maryland (the
"Company"), hereby certifies that:
FIRST: The total number of shares of capital stock of all classes that the
Company has the authority to issue both immediately before and after the
filing of these Articles Supplementary is six hundred million
(600,000,000) shares of capital stock.
SECOND: Immediately before the filing of these Articles Supplementary, the
Company's capital stock consisted of one (1) class of capital stock
designated as the INVESCO Emerging Growth Fund, consisting of six hundred
million (600,000,000) shares of capital stock. The Company hereby reduces
the number of authorized shares of capital stock allocated to the INVESCO
Emerging Growth Fund class from six hundred million (600,000,000) shares
to two hundred million (200,000,000) shares. All shares of the Company's
capital stock issued and outstanding at the time these Articles
Supplementary are filed shall continue to belong to the INVESCO Emerging
Growth Fund class.
THIRD: Pursuant to Section 3 of Article III of the Company's Articles of
Incorporation, the board of directors of the Company has established and
designated an additional class of capital stock known as the INVESCO
Worldwide Emerging Markets Fund, and has classified two hundred million
(200,000,000) shares of the Company's unissued capital stock as belonging
to such class. The remaining two hundred million (200,000,000) unissued
shares are not being allocated to the INVESCO Emerging Growth Fund class
or the INVESCO Worldwide Emerging Markets Fund class, but such shares
hereafter may be allocated to such classes or to any additional class or
series designated by the board of directors, pursuant to Section 3 of
Article III of the Company's Articles of Incorporation.
FOURTH: Both immediately before and after the filing of these Articles
Supplementary, the par value of the shares of the Company's capital stock,
regardless of series or class, is one cent ($0.01) per share, with the
aggregate par value of the Company's six hundred million authorized shares
of capital stock being six million dollars ($6,000,000.00).
<PAGE>
FIFTH: The Company is registered as an open-end company under the
Investment Company Act of 1940.
SIXTH: The total number of shares of capital stock that the Company has
authority to issue has not been increased or decreased by the board of
directors, but the board of directors has decreased the total number of
authorized shares of capital stock in the INVESCO Emerging Growth Fund
class in accordance with ss.2-105(c) of the General Corporation Law of the
State of Maryland.
The undersigned, President of the Company, who is executing on behalf of
the Company the foregoing Articles Supplementary, of which this paragraph is
made a part, hereby acknowledges, in the name and on behalf of the Company, the
foregoing Articles Supplementary to be the corporate act of the Company and
further verifies under oath that, to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects, under the penalties of perjury.
IN WITNESS WHEREOF, INVESCO Emerging Opportunity Funds, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary on the 6th day of July, 1995.
These Articles of Amendment shall be effective upon acceptance by the Maryland
State Department of Assessments and Taxation.
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
BY: /s/ Dan J. Hesser
------------------------------------
[SEAL] DAN J. HESSER, President
WITNESSED:
/s/ Glen A. Payne
- -----------------------------
GLEN A. PAYNE, Secretary
<PAGE>
CERTIFICATION
I, Allen G. French, a notary public in and for the County of Denver, City of
Denver, and State of Colorado, do hereby certify that Dan J. Hesser, personally
known to me to be the person whose name is subscribed to the foregoing Articles
of Amendment, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his free and voluntary act and
deed for the uses and purposes therein set forth.
Given my hand and official seal this 6th day of July, 1995.
/s/ Allen G. French
--------------------------
[SEAL] Notary Public
7800 E. Union Avenue
Denver, Colorado 80237
My commission expires November 23, 1997
BYLAWS
OF
FINANCIAL SOCIAL AWARENESS FUND, INC.
AS OF DECEMBER 11, 1990
(Name change effective 10/29/91)
ARTICLE I.
SHAREHOLDERS
Section 1. Annual Meeting. Unless otherwise determined by the board of
directors or required by applicable law, no annual meeting of shareholders shall
be held unless one or more of the following is required to be acted on by the
shareholders under the Investment Company Act of 1940: (1) election of
directors; (2) approval of the Investment Advisory Agreement; (3) ratification
of the selection of independent public accountants; and (4) approval of a
distribution agreement. The annual meeting of the corporation, if held, shall be
held in Denver, Colorado, at such time as the board of directors shall direct,
on the final business day in August.
Section 2. Special Meetings. Special meetings of the shareholders entitled
to vote shall be called upon the request in writing of the president or, in his
absence, a vice president, or by a vote of a majority of the board of directors,
or upon the request in writing of shareholders of the Company representing not
less than one-fourth of the outstanding voting stock.
Section 3. Place of Meetings. Each annual and any special meeting of the
shareholders shall be held at the principal office of the corporation in Denver,
Colorado, or such alternate site determined by the board of directors.
Section 4. Notices. Notices of every meeting, annual or special, shall
specify the place, day and hour of the meeting and shall be mailed not less than
ten (10) days nor more than sixty (60) days before such meeting. Notice of every
special meeting shall indicate briefly its purpose, and no business other than
that stated in said notice shall be transacted.
Section 5. Quorum. At every meeting of the shareholders, the holders of a
majority of all of the shares entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for all purposes, unless the
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representation of a larger number shall be required by statute or by the
certificate of incorporation.
Section 6. Voting. At every meeting of the shareholders, each shareholder
entitled to vote shall be entitled to vote in person, or by proxy appointed by
instrument in writing subscribed by such shareholder, or his duly authorized
attorney, and he shall have one (1) vote for each share of stock standing
registered in his name on each matter submitted at the meeting and for each
director to be elected. Every proxy shall be dated and no proxy shall be valid
after eleven (11) months from its date unless otherwise provided in the proxy.
There shall be no cumulative voting in the election of directors. Except as
otherwise provided by law, by the charter of the corporation, or by these
bylaws, at each meeting of stockholders at which a quorum is present, all
matters shall be decided by a majority of the votes cast by the stockholders
present in person or represented by proxy and entitled to vote with respect to
any such matter.
Section 7. Qualification of Voters. At every meeting of shareholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions with respect to the qualification of voters and the
validity of proxies and the acceptance or rejection of votes shall be decided by
the chairman of the meeting. If demanded by shareholders present in person or by
proxy entitled to cast twenty-five per cent (25%) in number of votes, or if
ordered by the chairman, the vote upon any election or question shall be taken
by ballot and, upon such demand or order, the voting shall be conducted by two
(2) inspectors appointed by the chairman, in which event the proxies and ballots
shall be received and all questions with respect to the qualification of votes
and the validity of proxies and the acceptance or rejection of votes shall be
decided by such inspectors. Unless so demanded or ordered, no vote need be by
ballot and the voting need not be conducted by inspectors.
Section 8. Waiver of Notice. A waiver of notice of any meeting of
shareholders signed by any shareholder entitled to such notice filed with the
records of the meeting, whether before or after the holding thereof or actual
attendance at the meeting in person or by proxy, shall be deemed equivalent to
the giving of notice to such shareholder.
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ARTICLE II.
BOARD OF DIRECTORS
Section 1. Powers. The business and property of the corporation shall be
conducted and managed by its board of directors, which may exercise all of the
powers of the corporation, except such as are by statute, by the charter or by
the bylaws, conferred upon or reserved to the shareholders. The board of
directors shall keep full and complete records of its transactions.
Section 2. Number. By vote of a majority of the entire board of directors,
the number of directors may be increased or decreased from time to time;
provided that, in no event, may the number be decreased to less than the minimum
number fixed by the charter.
Section 3. Election. The members of the board of directors shall be
elected by the shareholders by plurality vote at the annual meeting, or at any
special meeting called for such purpose. Each director shall hold office until
his successor shall have been duly chosen and qualified, or until he shall have
resigned or shall have been removed in the manner provided by law. Any vacancy,
including one created by an increase in the number of directors on the board
(except where such vacancy is created by removal by the shareholders) may be
filled by the vote of a majority of the remaining directors, although such
majority is less than a quorum; provided, however, that immediately after
filling any vacancy by such action of the board of directors, at least
two-thirds (2/3) of the directors then holding office shall have been elected by
the shareholders at an annual or special meeting.
Section 4. Regular Meetings. After each meeting of the shareholders at
which a board of directors shall have been elected, the board of directors so
elected shall meet as soon as practicable at the office of the corporation in
Denver, Colorado, or at such other place as they may designate, for the purpose
of organization, the election of officers, and the transaction of other
business.
In addition to such annual meeting, there shall be held in each year at
least three (3) regular meetings at such intervals as the board shall fix and
determine.
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Section 5. Special Meetings. Special meetings of the board of directors may
be called at any time by the president or by a majority of the directors or by a
majority of the executive committee.
Section 6. Notice of Meetings. Notice of the place, day and hour of every
regular and special meeting shall be given to each director two (2) days (or
more) before the meeting, by telephone, telegraph and/or mail addressed to him
at his post office address, according to the records of the corporation. Unless
required by resolution of the board of directors, no notice of any meeting of
the board of directors need state the business to be transacted thereat. No
notice of any meeting of the board of directors need be given to any director
who attends, or to any director who, in writing executed and filed with the
records of the meeting either before or after the holding thereof, waives such
notice. Any meeting of the board of directors may adjourn from time to time to
reconvene at the same or some other place, and no notice need be given of any
such adjourned meeting other than by announcement.
Section 7. Quorum. At all meetings of the board of directors, a majority
of the directors shall constitute a quorum for the transaction of business.
Notwithstanding the presence of a quorum, a majority of the entire board shall
be required to authorize and pass any measure. In the absence of a quorum, the
directors present by a majority vote and without notice other than by
announcement may adjourn the meeting from time to time until a quorum shall be
present. At any such adjourned meeting, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 8. Compensation. Directors not otherwise regularly compensated in
other capacities by the corporation or by its investment adviser or principal
underwriter shall be entitled to reasonable compensation for their personal
services as directors and as members of standing and special committees. All
directors shall be reimbursed their expenses of attendance, if any, at board and
committee meetings. Any director of the corporation may also serve the
corporation in any other capacity and receive compensation therefor.
Section 9. Resignation and Removal of Directors. Any director or member of
any committee may resign at any time. Such resignation shall be made in writing
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and shall take effect at the time specified therein. If no time is specified, it
shall take effect from the time of its receipt by the Secretary, who shall
record such resignation, noting the day and hour of its reception. The
acceptance of a resignation shall not be necessary to make it effective. At any
meeting of shareholders, duly called and at which a quorum is present, the
shareholders may, by affirmative vote of the holders of a majority of the votes
entitled to be cast thereon, remove any director or directors from office and
may elect a successor or successors to fill any resulting vacancies for the
unexpired terms of removed directors.
Section 10. Telephone Meetings. Any member or members of the board of
directors or of any committee designated by the board of directors, may
participate in a meeting of the board, or any such committee, as the case may
be, by means of a conference telephone or similar communications equipment if
all persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means constitutes presence in person at the
meeting. This Section 10 shall not be applicable to meetings held for the
purpose of voting in respect of approval of contracts or agreements whereby a
person undertakes to serve or act as investment adviser of, or principal
underwriter for, the corporation.
Section 11. Action by Directors Without Meeting. The provisions of these
bylaws covering notices and meetings to the contrary notwithstanding, and except
as required by law, any action required or permitted to be taken at any meeting
of the board of directors may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all of the directors entitled to
vote upon the action and such written consent is filed with the minutes of
proceedings of the board of directors.
ARTICLE III.
COMMITTEES
Section 1. Executive Committee. The board of directors, by resolution
adopted by a majority of the whole board of directors, may provide for an
executive committee of three (3) or more directors. If provision be made for an
executive committee, the members thereof shall be elected by the board of
directors to serve during the pleasure of the board of directors. Unless
otherwise provided by resolution of the board of directors, the
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president shall preside at all meetings of the executive committee. During the
intervals between the meetings of the board of directors, the executive
committee shall possess and may exercise all of the powers of the board of
directors in the management of the business and affairs of the corporation
conferred by the bylaws or otherwise, to the extent authorized by the resolution
providing for such executive committee or by subsequent resolution adopted by a
majority of the whole board of directors, in all cases in which specific
directions shall not have been given by the board of directors. The executive
committee shall maintain written records of its transactions. All action by the
executive committee shall be reported to the board of directors at its meeting
next succeeding such action, and shall be subject to ratification, with or
without revision or alteration, by such vote of the board of directors as would
have been required under Article II, Section 7, hereof, had such action been
taken by the board of directors. Vacancies in the executive committee shall be
filled by the board of directors.
Section 2. Meetings of Executive Committee. The executive committee shall
fix its own rules of procedure and shall meet as provided by such rules or by
resolution of the board of directors, and it shall also meet at the call of the
chairman or of any two (2) members of the committee. A majority of the executive
committee shall constitute a quorum. Except in cases in which it is otherwise
provided by resolution of the board of directors, the vote of a majority of such
quorum at a duly constituted meeting shall be sufficient to elect and to pass
any measure, subject to ratification by the board of directors as provided in
Section 1 of this Article III.
Section 3. Other Committees. The board of directors may by resolution
provide for such other standing or special committees as it deems desirable, and
discontinue the same at pleasure. Each such committee shall have such powers and
perform such duties as may be assigned to it by the board of directors.
Section 4. Committee Action Without Meeting. The provisions of these
bylaws covering notices and meetings to the contrary notwithstanding, and except
as required by law, any action required or permitted to be taken at any meeting
of any committee of the board of directors appointed pursuant to Article III,
Section 3 of these bylaws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the committee
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entitled to vote upon the action, and such written consent is filed with the
records of the proceedings of the committee.
ARTICLE IV.
OFFICERS
Section 1. Numbers; Qualifications; Term of Office; Vacancies. The board
of directors may elect one of their number as chairman of the board, and shall
choose a president from among the directors, and a treasurer and a secretary,
who need not be directors. The board of directors may also choose one or more
vice presidents, one or more assistant secretaries and one or more assistant
treasurers, none of whom need be a director. Any two or more of such offices,
except those of president and vice president, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more than
one capacity if such instrument is required by law or by the certificate of
incorporation or by these bylaws or by resolution of the board of directors to
be executed, acknowledged or verified by any two or more officers. Each such
officer shall hold office until the first meeting of the board of directors
after the annual meeting of the shareholders next following his election and
until his successor is chosen and qualified or until he shall have resigned or
died, or until he shall have been removed as hereinafter in Section 3 of this
Article IV provided. Any vacancy in any of the above offices may be filled by
the board of directors at any regular or special meeting. All officers and
agents of the corporation, as between themselves and the corporation, shall have
such authority and perform such duties in the management of the corporation as
may be provided in or pursuant to these bylaws, or, to the extent not so
provided, as may be prescribed by the board of directors; provided, that no
rights of any third party shall be affected or impaired by any such bylaws or
resolution of the board unless he has knowledge thereof.
Section 2. Subordinate Officers. The board of directors, or any officer
thereunto authorized by it, may appoint from time to time such other officers
and agents for such terms of office and with such powers and duties as may be
prescribed by the board of directors or the officer making such appointment.
Section 3. Removal. Any officer or agent may be removed by
the board of directors whenever, in its judgment, the best
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interests of the corporation will be served thereby, but such removal shall be
without prejudice to the contractual rights, if any, of the person so removed.
Section 4. Chairman of the Board. The chairman of the board, if one shall
be elected, shall preside at all meetings of the board of directors, and shall
appoint all committees except such as are required by statute, these bylaws or a
resolution of the board of directors or of the executive committee to be
otherwise appointed, and shall have such other duties as may be assigned to him
from time to time by the board of directors. In recognition of notable and
distinguished services to the corporation, the board of directors may designate
one of its members as honorary chairman, who shall have such duties as the board
may, from time to time, assign to him by appropriate resolution, excluding,
however, any authority or duty vested by law or these bylaws in any other
officer.
Section 5. President. The president shall preside at all meetings of the
shareholders and, in the absence of the chairman of the board or if a chairman
of the board is not elected, at all meetings of the board of directors. Unless
otherwise provided by the board of directors, he shall have direct control of
and any authority over the business and affairs and over the officers of the
corporation, and shall preside at all meetings of the executive committee. The
president shall also perform all such other duties as are incident to his office
and as may be assigned to him from time to time by the board of directors.
Section 6. Vice Presidents. The vice president or vice presidents, at the
request of the president or in his absence or inability to tact, shall perform
the duties and exercise the functions of the president in such manner as may be
directed by the president, the board of directors or the executive committee.
The vice president or vice presidents shall have such other powers and perform
all such other duties as may be assigned to them by the board of directors, the
executive committee, or the president.
Section 7. Secretary. The secretary shall see that all notices are duly
given in accordance with these bylaws; he shall keep the minutes of all meetings
of the shareholders, of the board of directors, and of the executive committee
at which he shall be present; he shall have charge of the books and records and
the corporate seal or seals of the corporation; he shall see that the corporate
seal is affixed to all documents, the execution of which
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under the seal of the corporation is duly authorized; and he shall make such
reports and perform all such other duties as are incident to his office and as
may be assigned to him from time to time by the board of directors, or by the
president.
Section 8. Treasurer. The treasurer shall be the chief financial officer
of the corporation, and as such shall have supervision of the custody of all
funds, securities and valuable documents of the corporation, subject to such
arrangements as may be authorized or approved by the board of directors with
respect to the custody of assets of the corporation; shall receive, or cause to
be received, and give, or cause to be given, receipts for all funds, securities
or valuable documents paid or delivered to, or for the account of, the
corporation, and cause such funds, securities or valuable documents to be
deposited for the account of the corporation with such banks or trust companies
as shall be designated by the board of directors; shall pay or cause to be paid
out of the funds of the corporation all just debts of the corporation upon their
maturity; shall maintain, or cause to be maintained, accurate records of all
receipts, disbursements, assets, liabilities, and transactions of the
corporation; shall see that adequate audits thereof are regularly made; shall,
when required by the board of directors, render accurate statements of the
condition of the corporation; and shall perform all such other duties as are
incident to his office and as may be assigned to him by the board of directors
or by the president.
Section 9. Assistant Secretaries, Assistant Treasurers. The assistant
secretaries and assistant treasurers shall have such duties as from time to time
may be assigned to them by the board of directors, or by the president.
Section 10. Compensation. The board of directors shall have the power to
fix the compensation of all officers and agents of the corporation, but may
delegate to any officer or committee the power of determining the amount of
salary to be paid to any officer or agent of the corporation other than the
chairman of the board, the president, the vice presidents, the secretary and the
treasurer.
Section 11. Contracts. Except as otherwise provided by law or
by the charter, no contract or transaction between the corporation
and any partnership or corporation, and no act of the corporation,
shall in any way be affected or invalidated by the fact that any
officer or director of the corporation is pecuniarily or otherwise
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interested therein or is a member, officer or director of such other partnership
or corporation if such interest shall be known to the board of directors of the
corporation. Specifically, but without limitation of the foregoing, the
corporation may enter into one or more contracts appointing Financial Programs,
Inc. investment adviser of the corporation, and may otherwise do business with
Financial Programs, Inc., notwithstanding the fact that one or more of the
directors of the corporation and some or all of its officers are, have been or
may become directors, officers, members, employees, or stockholders of Financial
Programs, Inc. and may deal freely with each other, and neither such contract
appointing Financial Programs, Inc. investment adviser to the corporation nor
any other contract or transaction between the corporation and Financial
Programs, Inc. shall be invalidated or in any way affected thereby, nor shall
any director or officer of the corporation by reason thereof be liable to the
corporation or to any stockholder or creditor of the corporation or to any other
person for any loss incurred under or by reason of any such contract or
transaction. For purposes of this paragraph, any reference to "Financial
Programs, Inc." shall be deemed to include said company and any parent,
subsidiary or affiliate of said company and any successor (by merger,
consolidation or otherwise) to said company or any such parent, subsidiary or
affiliate.
Section 12. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the board of directors may deem it
desirable, the board may delegate the powers and duties of an officer to any
other officer or officers or to any director or directors.
ARTICLE V.
CAPITAL STOCK
Section 1. Certificates. Certificates for stock shall be issued in such
form as may be approved by the board of directors and shall be signed by, or
bear a facsimile of the signatures of, the president or a vice president, and
shall also be signed by, or bear a facsimile of the signature of some other
person who is one of the following: the treasurer, an assistant treasurer, the
secretary, or an assistant secretary; and shall be sealed with, or bear a
facsimile of, the seal of the corporation. In case any officer of the
corporation whose signature or facsimile signature appears on such certificates
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shall cease to be such officer, whether because of death, resignation or
otherwise, certificates may nevertheless be issued and delivered as though such
person had not ceased to be an officer.
Section 2. Transfers. Subject to the Maryland Corporation Law (1951 Code,
Article 23, Sections 96-118 inclusive, constituting the Uniform Stock Transfer
Act), the board of directors shall have power and authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates of stock; and may appoint transfer agents and
registrars thereof. The duties of transfer agent and registrar may be combined.
Section 3. Stock Ledgers. Original or duplicate stock ledgers, containing
the names and addresses of the shareholders of the corporation and the number of
shares of each class held by them respectively, shall be kept at an office or
agency of the corporation in such city or town as may be designated by the board
of directors.
Section 4. Record Dates. The board of directors is hereby authorized to
fix the period of time, not exceeding twenty (20) days preceding the date of any
meeting of shareholders, any dividend payment date or any date for the allotment
of rights, during which the books or the corporation shall be closed against
transfer of stock. In lieu of providing for the closing of the books against
transfers of stock as aforesaid, the board of directors is hereby authorized to
fix a date, as a record date for the determination of the shareholders, entitled
to notice of and to vote at such meeting, or entitled to receive such dividends
or rights, as the case may be. Such record date shall be not more than forty
(40) days, and in case of a meeting of shareholders, not less than ten (10)
days, prior to the date on which the particular action is to be taken. Only
shareholders of record on such dates, when fixed as herein provided, shall be
entitled to notice of and to vote at such meetings, or to receive such dividends
or rights, as the case may be.
Section 5. New Certificates. In case any certificate of stock is lost,
stolen, mutilated or destroyed, the board of directors may authorize the issue
of a new certificate in place thereof upon such terms and conditions as it may
deem advisable; or the board of directors may delegate such power to any officer
or officers of the corporation; but the board of directors or such officer or
officers, in their discretion, may refuse to issue such new
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certificate, save upon the order of some court having jurisdiction
in the premises.
Section 6. Registered Owners of Stock. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares of stock to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares of stock, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
Section 7. Fractional Denominations. Subject to any applicable provisions
of law and the charter of the corporation, the corporation may issue shares of
its capital stock in fractional denominations, provided that the transactions in
which and the terms and conditions upon which shares in fractional denominations
may be issued may from time to time be limited or determined by or under the
authority of the board of directors.
ARTICLE VI.
FINANCES
Section 1. Checks, drafts, etc. All drafts, checks and orders for the
payment of money, notes and other evidence of indebtedness issued in the name of
the corporation shall, unless otherwise provided by resolution of the board of
directors, be signed by the president or vice president and countersigned by the
secretary or treasurer.
Section 2. Annual Reports. A statement of the affairs of the corporation
shall be submitted at the annual meeting of the shareholders and filed within
twenty (20) days thereafter at the office of the corporation in Baltimore. Such
statement shall be prepared by such executive officer of the corporation as may
be designated by resolution of the board of directors. If no other executive
officer is so designated, it shall be the duty of the president to prepare such
statement.
Section 3. Fiscal Year. The fiscal year of the corporation
shall begin on the 1st day of June in each year and end on the
31st day of May following.
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Section 4. Dividends and Distributions. Subject to any applicable
provisions of law and the charter of the corporation, dividends and
distributions upon the common stock of the corporation may be declared at such
intervals as the board of directors may determine, in cash, in securities or
other property, or in shares of stock of the corporation, from any sources
permitted by law, all as the board of directors shall from time to time
determine. Inasmuch as the computation of net income and net profits from the
sale of securities or other properties for federal income tax purposes may vary
from the computation thereof on the books of the corporation, the board of
directors shall have power, in its discretion, to distribute as income dividends
and as capital gain distributions, respectively, amounts sufficient to enable
the corporation to avoid or reduce liability for federal income taxes.
Section 5. Location of Books and Records. The books and records of the
corporation may be kept outside the State of Maryland at such place or places as
the board of directors may from time to time determine, except as otherwise
required by law.
ARTICLE VII.
REDEMPTION OF STOCK
The registered owner of the outstanding stock of the corporation shall
have the right to require the corporation to redeem his shares at the asset
value thereof, as hereinafter defined in Article VIII of these bylaws, upon
delivery to the corporation of the certificate, or certificates, properly
endorsed, and a written request for redemption in a form satisfactory to the
corporation.
Determination of the asset value for the redemption of stock shall be made
as of the close of business on the first business day next following the
business day on which certificates properly surrendered for redemption are
received at the designated principal place of business of the corporation. Any
certificates delivered at the designated principal place of business of the
corporation on a day which is not a business day as herein defined, shall be
deemed to have been received on the business day next succeeding the day of such
delivery. Subject to the limitations of the Investment Company Act of 1940, the
board of directors shall have authority to fix a reasonable service charge
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for redemption of its stock, including redemption pursuant to any periodic
withdrawal or variable payment plan or contract.
ARTICLE VIII.
DETERMINATION OF ASSET VALUE
Section 1. The "asset value" of any share of stock of this corporation
outstanding on any day shall be the proportionate interest in the corporation at
the time of determination on such day and shall be determined by or pursuant to
the direction of the board of directors, in the following manner:
(a) The value of the gross assets at the time of
determination on such day (securities being taken at
their market value determined as hereinafter provided)
less the amount determined by or pursuant to the
direction of the board of directors of all debts,
obligations and liabilities of the corporation (which
debts, obligations and liabilities shall include,
without limitation of the generality of any of the
foregoing, any or all debts, obligations, liabilities
or claims, of any and every kind and nature, fixed
accrued, unmatured or contingent, whether for taxes,
expenses, contingencies or otherwise) but excluding the
corporation's liability upon its capital stock and
surplus.
Shall be divided by:
(b) The total number of shares of capital stock of the corporation
outstanding (exclusive of any shares of treasury stock) as of the
time of determination.
Section 2. For the purposes of this Article, the value of the "gross
assets" of the corporation at the time of determination shall be established by
the following rules:
(a) The market value of each security which shall be listed or traded in
upon the New York Stock Exchange, or the American Stock Exchange,
shall be determined by the last sale price thereon, except that if
there was no sale or such security on the day of such determination
and prior to the time of such determination or on the date next
preceding such determination, thereby the
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mean between the closing bid and asked prices for such security on
the last preceding date upon which such exchange on which such
security is listed or traded in shall have been open and upon which
such closing bid and asked prices shall have been quoted.
(b) The market value of such security which shall not be
listed or traded in upon the New York Stock Exchange or
the American Stock Exchange, or with respect to which
trading upon such exchanges has been suspended, shall
be determined by the closing sale price of such
security on the day next preceding the time of
determination upon any national securities exchange (as
defined by the federal Securities Exchange Act of 1934,
as amended) upon which such security is listed or
traded in.
(c) The market value of any security, no provision for the valuation of
which is contained in either (a) or (b) above, shall be determined
by the best readily available market quotation or, if there be none,
shall be set at an amount deemed best to reflect such security's
fair value under a method determined by or pursuant to the direction
of the board of directors.
(d) Dividends declared but not yet received, or rights, in respect of
securities which are quoted I x-dividend or ex-rights, shall be
included at the value thereof as determined by or pursuant to the
direction of the board of directors.
(e) The value of any of the assets of the corporation during a period of
emergency as defined in Article IX of the bylaws shall be determined
by or pursuant to the direction of the board of directors.
All quotations, sale prices, bid and asked prices and other information
shall be obtained from such sources as the persons making such determination
believe to be reliable and any determination of net asset value based thereon
shall be conclusive.
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ARTICLE IX.
PERIOD OF EMERGENCY
During any period of emergency, the board of directors, at its option, may
suspend the computation of asset value for the purpose of issuing or redeeming
its stock, and may suspend any obligation to accept payments for the acquisition
of additional stock of the corporation, or may suspend the obligation of the
corporation to redeem stock. A period of emergency is defined to be:
(a) A period during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, or during which trading
on the New York Stock Exchange is restricted;
(b) A period during which disposal by the corporation of securities
owned by it is not reasonably practicable, or during which it is not
reasonably practicable for the corporation fairly to determine the
value of its net assets; or
(c) Such other periods as the Securities and Exchange Commission
pursuant to the provisions of the Investment Company Act of 1940 may
by order declare as an emergency period or periods.
ARTICLE X.
RESTRICTIONS ON INVESTMENTS AND PROHIBITED TRANSACTIONS
The following restrictions and provisions with respect to the investments
which may be made by the corporation and the transactions which may be entered
into by the corporation are in amplification and not in limitation of the
provisions set forth in Article VII of the certificate of incorporation.
Section 1. The corporation may not purchase securities of any one issuer
if immediately after such purchase more than five percent (5%) of the
assets, taken at market value, would be invested in securities of such issuer,
but this limitation shall not apply to investments in obligations of the United
States or in obligations of any corporation organized under general act of
<PAGE>
Congress if such corporation be an instrumentality of the United States.
Section 2. The corporation shall not purchase securities of any issuer if
immediately after and as a result of such purchase the corporation would own
more than ten percent (10%) of the outstanding voting securities of such issuer.
Section 3. The corporation shall not purchase or acquire securities of any
other investment company as defined in Section 3 of the federal Investment
Company Act of 1940, except reorganization, merger or consolidation.
Section 4. The corporation shall not lend any of its funds or assets to
any officer or director of the corporation, any investment manager or principal
underwriter, or any officer or director of such investment manager or principal
underwriter.
Section 5. The officers and directors of the corporation shall not deal
for or on behalf of the corporation with themselves as principal or agent or
with any corporation or partnership in which they have a financial interest,
except that, subject to the provisions of the certificate of incorporation, this
shall not prohibit:
(a) officers or directors of the corporation from having a financial
interest in the corporation or in its investment manager; or in any
corporation, firm or association rendering services in connection
with the distribution and sale of securities issued by the
corporation.
(b) the purchase of securities for the corporation or the
sale of securities owned by the corporation through a
security broker or dealer, one or more of whose
partners, officers or directors is an officer or
director of the corporation, provided such transactions
are handled in the capacity of broker only and provided
commissions charged do not exceed customary brokerage
charges for such service.
(c) the employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian, having a partner, officer or director
who is an officer or director of the corporation, provided that only
<PAGE>
customary fees are charged for services rendered to or
for the benefit of the corporation.
(d) the purchase for the investment portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer
or director of the corporation or of the investment
manager of the corporation; provided, however, that no
such officer or director of the corporation or of its
investment manager may own beneficially more than
one-half (1/2) of one percent ( 1%) of any class of
outstanding securities of such issuer, nor may such
officers and directors of the corporation or its
investment manager, as a group, own beneficially more
than five percent (5%) of any class of outstanding
securities of such issuer.
ARTICLE XI.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Section 1. Definitions. The following definitions shall apply
to the terms as used in this Article:
(a) "Corporation" includes this corporation and any
domestic or foreign predecessor entity of the
corporation in a merger, consolidation, or other
transaction in which the predecessor's existence ceased
upon consummation of the transaction.
(b) "Directors" means an individual who is or was a
director of the corporation and an individual who,
while a director of the corporation, is or was serving
at the corporation's request as a director, officer,
partner, trustee, employee, or agent of any other
foreign or domestic corporation or of any partnership,
joint venture, trust, other enterprise, or employee
benefit plan. A director shall be considered to be
serving an employee benefit plan at the corporation's
request if his or her duties to the corporation also
impose duties on or otherwise involve services by him
or her to the plan or to participants in or
beneficiaries of the plan.
(c) "Expenses" includes attorney fees.
<PAGE>
(d) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to
an employee benefit plan), or reasonable expense incurred with
respect to a proceeding.
(e) "Official capacity," when used with respect to a
director, means the office of director in the
corporation, and, when used with respect to an
individual other than a director, means the office in
the corporation held by the officer or the employment
or agency relationship undertaken by the employee or
agent on behalf of the corporation. "Official capacity"
does not include service for any other foreign or
domestic corporation or for any partnership, joint
venture, trust, other enterprise, or employee benefit
plan.
(f) "Party" includes an individual who was, s, or is threatened to be
made a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether
formal or informal.
Section 2. Indemnification for Liability.
(a) Except as provided in paragraph (d) of this Section (2), the
corporation shall indemnify against liability incurred in any
proceeding any individual made a party to the proceeding because he
or she is or was a director or officer if:
(I) He or she conducted himself or herself in good
faith;
(II) He or she reasonably believed:
(A) In the case of conduct in his or her official capacity
with the corporation, that his or her conduct was in the
corporation's best interests; or
<PAGE>
(B) In all other cases, that his or her conduct
was at least not opposed to the corporation's
best interests; and
(III) In the case of any criminal proceeding, he or
she had no reasonable cause to believe his or
her conduct was unlawful.
(b) A director's or officer's conduct with respect to an
employee benefit plan for a purpose he or she
reasonably believed to be in the interests of the
participants in or beneficiaries of the plan is conduct
that satisfies the requirements or this Section (2). A
director's or officer's conduct with respect to an
employee benefit plan for a purpose that he or she did
not reasonably believe to be in the interests of the
participants in or beneficiaries of the plan shall be
deemed not to satisfy the requirements of this Section
(2).
(c) The termination of any proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent,
creates a rebuttable presumption that the individual did not meet
the standard of conduct set forth in paragraph (a) of this Section
(2).
(d) The corporation may not indemnify a director or officer under this
Section (2) either:
(I) In connection with a proceeding by or in the right of the
corporation in which the director or officer was adjudged liable
to the corporation; or
(II) In connection with any proceeding charging improper personal
benefit to the director or officer, whether or not involving
action in his or her official capacity, in which he or she was
adjudged liable on the basis that personal benefit was
improperly received by him or her.
(e) Indemnification permitted under this Section (2) in connection with
a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
<PAGE>
Section 3. Indemnification for Expenses.
(a) Except as limited by these bylaws or the charter, the corporation
shall be required to indemnify a person who is or was a director or
officer of the corporation and who was wholly successful, on the
merits or otherwise, in defense of any proceeding to which he or she
was a party against reasonable expenses incurred by him or her in
connection with the proceeding.
Section 4. Court-Ordered Indemnification. Except as otherwise limited by
these bylaws or the charter, a director or officer who is or was a party to a
proceeding may apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt of an application, the
court, after giving any notice the court considers necessary, may order
indemnification in the following manner:
(a) If it determines the director or officer is entitled to mandatory
indemnification, the court shall order indemnification, in which
case the court shall also order the corporation to pay the
director's or officer's reasonable expenses incurred to obtain
court-ordered indemnification.
(b) If it determines that the director or officer is fairly
and reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not he or
she met the standard of conduct set forth in paragraph
(a) of Section (2) of this Article or was adjudged
liable in the circumstances described in paragraph (d)
of Section (2) of this Article, the court may order
such indemnification as the court deems proper; except
that the indemnification with respect to any proceeding
in which liability shall have been adjudged in the
circumstances described in paragraph (d) of Section (2)
of this Article is limited to reasonable expenses
incurred.
Section 5. Limitation on Indemnification.
(a) The corporation may not indemnify a director or officer under
Section (2) of this Article unless authorized in the specific case
after a determination has been made
<PAGE>
that indemnification of the director or officer is mandatory in the
circumstances because he or she has met the standard of conduct set
forth in paragraph (a) of Section (2) of this Article.
(b) The determination required to be made by paragraph (a) of this
Section (5) shall be made:
(I) By the board of directors by a majority vote of a quorum,
which quorum shall consist of directors not parties to the
proceeding; or
(II) If a quorum cannot be obtained, by a majority vote of a
committee of the board designated by the board, which
committee shall consist of two or more directors not parties
to the proceeding; except that directors who are parties to
the proceeding may participate in the designation of directors
for the committee.
(c) If the quorum cannot be obtained or the committee cannot be
established under paragraph (b) of this Section (5), or even if a
quorum is obtained or a committee designated if such quorum or
committee so directs, the determination required to be made by
paragraph (a) of this Section (5) shall be made:
(I) By independent legal counsel selected by a vote of
the board of directors or the committee in the
manner specified in subparagraph (I) or (II) of
paragraph (b) of this Section (5) or, if a quorum
of the full board cannot be obtained and a
committee cannot be established, by independent
legal counsel selected by a majority vote of the
full board; or
(II) By the shareholders.
(d) Authorization of indemnification and evaluation as to reasonableness
of expenses shall be made in the same manner as the determination
that indemnification in mandatory; except that, if the determination
that indemnification is mandatory is made by independent legal
counsel, authorization of indemnification and
<PAGE>
evaluation as to reasonableness of expenses shall be made by the
body that selected said counsel.
Section 6. Advance Payment of Expenses.
(a) The corporation shall pay for or reimburse the reasonable expenses
incurred by a director, officer, employee or agent who is a party to
a proceeding in advance of the final disposition of the proceeding
if:
(I) The director, officer, employee or agent furnishes the
corporation a written affirmation of his or her good-faith
belief that he or she has met the standard of conduct
described in subparagraph (I) of paragraph (a) of Section (2)
of this Article;
(II) The director, officer, employee or agent furnishes the
corporation a written undertaking, executed personally or on
his or her behalf, to repay the advance if it is determined
that he or she did not meet such standard of conduct; and
(III) A determination is made that the facts then known to those
making the determination would not preclude indemnification
under this Section (6).
(b) The undertaking required by subparagraph (II) of paragraph (a) of
this Section (6) shall be an unlimited general obligation of the
director, officer, employee or agent, but need not be secured and
may be accepted without reference to financial ability to make
repayment.
Section 7. Reimbursement of Witness Expenses. The corporation shall pay or
reimburse expenses incurred by a director or officer in connection with his or
her appearance as a witness in a proceeding at a time when he or she has not
been made a named defendant or respondent in the proceeding.
Section 8. Insurance for Indemnification. The corporation may purchase and
maintain insurance on behalf of an individual who is or was a director, officer,
employee, fiduciary, or agent of the corporation and who, while a director,
officer, employee, fiduciary, or agent of the corporation, is or was serving at
the request of the corporation as a director, officer, partner,
<PAGE>
trustee, employee, fiduciary, or agent of any other foreign or domestic
corporation of any partnership, joint venture, trust, other enterprise, or
employee benefit plan against any liability asserted against or incurred by him
or her in any such capacity or arising out of his or her status as such, whether
or not the corporation would have the power to indemnify him or her against such
liability under the provisions of this Article.
Section 9. Notice of Indemnification. Any indemnification of or advance of
expenses to a director or officer in accordance with this Article, if arising
out of a proceeding by or on behalf of the corporation, shall be reported in
writing to the shareholders with or before the notice of the next shareholders'
meeting.
Section 10. Indemnification of Officers, Employees, and Agents of the
Corporation. The board of directors may indemnify and advance expenses to an
officer, employee or agent of the corporation who is not a director of the
corporation to the same or greater extent as to a director if such
indemnification and advance expense payment is provided for in these bylaws, the
charter, by resolution of the shareholders or directors or by contract, in a
manner consistent with the Maryland Corporation Code.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
Section 1. Seal. The board of directors shall provide a suitable seal,
bearing the name of the corporation, which shall be in the charge of the
secretary. The board of directors may authorize one or more duplicate seals and
provide for the custody thereof.
Section 2. Bonds. The board of directors may require any officer, agent or
employee of the corporation to give a bond to the corporation, conditioned upon
the faithful discharge of his duties, with one or more sureties and in such
amount as may be satisfactory to the board of directors.
Section 3. Voting upon Stock in Other Corporations. Any stock in other
corporations or associations, which may from time to time be held by the
corporation, may be voted at any meeting of the shareholders thereof by the
president or a vice president of the corporation or by proxy or proxies
<PAGE>
appointed by the president or one of the vice presidents of the corporation. The
board of directors, however, may by resolution appoint some other person or
persons to vote such stock, in which case, such person or persons shall be
entitled to vote such stock upon the production of a certified copy of such
resolution.
Section 4. Bylaws. The board of directors by a majority vote shall have
the power to make, amend and repeal the bylaws of the corporation which may
contain any provision for the regulation and management of the affairs of the
corporation not inconsistent with law or the certificate of incorporation;
provided, however, that Articles VII, VIII and X may not be altered or repealed
except by the affirmative vote of the holders of a majority of the outstanding
stock of the corporation; and provided further, that any and all other
provisions of the bylaws, notwithstanding the power of the directors to act with
respect thereto, may be altered or repealed, and new provisions may be adopted
by the shareholders or at any annual meeting or any special meeting called for
that purpose.
Section 5. Appointment and Duties of Custodian. The corporation shall at
all times employ a bank or trust company having the qualifications specified by
the Investment Company Act of 1940, as amended, as custodian with authority as
its agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these bylaws and the Investment Company Act of
1940, as amended:
(1) to receive and hold the securities owned by the
corporation and deliver the same upon written order;
(2) to receive and receipt for any moneys due to the
corporation and deposit the same in its own banking
department or elsewhere as the board of directors may
direct;
(3) to disburse such funds upon orders or vouchers;
(4) and to provide such additional services as may be requested by the
corporation, including keeping the books and accounts of the
corporation and furnishing clerical and accounting services, and
computing the net income of the corporation and the net asset value
of the corporation's shares;
<PAGE>
all upon such basis of compensation as may be agreed upon between the board of
directors and the custodian. If so directed by a vote of a majority of the
shares of stock outstanding, the custodian shall deliver and pay over all
property of the corporation held by it as specified in such vote.
The board of directors may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and services
of the custodian and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the board of
directors.
Section 6. Central Certificate System. Subject to such rules, regulations
and orders as the U.S. Securities and exchange Commission may adopt, the board
of directors may direct the custodian to deposit all or any part of the
securities owned by the corporation in a system for the central handling of
securities established by a a national securities exchange or a national
securities association registered with the SEC under the Securities exchange Act
of 1934, or such other person as may be permitted by the SEC or its staff in
accordance with the Investment Company Act of 1940, as amended, and any rule or
staff interpretation thereof, pursuant to which system all securities of any
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the corporation.
Section 7. Compliance with Federal Regulations. The board of directors is
hereby empowered to take such action as it may deem to be necessary, desirable
or appropriate so that the corporation is or shall be in compliance with any
federal or state statute, rule or regulation with which compliance by the
corporation is required.
Section 8. Definitions. For all purposes of the certificate
of incorporation and these bylaws, the terms:
(a) "business day" shall be defined as a day with respect to which the
New York Stock Exchange is open for business, and with respect to
which the actual time of closing of such exchange is that time which
shall have been scheduled for such closing in advance of the opening
of such exchange;
<PAGE>
(b) "the close of business" shall be defined as the time of closing of
the New York Stock Exchange.
The Bylaws have been adopted and approved by the board of directors on
December 11, 1990.
SUB-ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1991, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Trust
Company, a Colorado corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, FINANCIAL SMALL CAP EMERGING GROWTH FUND, INC. (the "Fund") is
engaged in business as a diversified, open-end management investment company
registered under the Investment Company Act of 1940, as amended (hereinafter
referred to as the "Investment Company Act") and has one class of shares (the
"Shares"), which may be divided into additional series, each representing an
interest in a separate portfolio of investments; and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Fund (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Fund, and,
upon receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Fund and to furnish the investment advisory services described below, subject to
the broad supervision of INVESCO and Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be independent contractors and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund.
<PAGE>
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Fund's directors (the "Directors") and
INVESCO. Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and to execute all purchases and
sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund, consistent
with (i) the Fund's investment policies as set forth in the Fund's
Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, as
amended (the "1940 Act"), and in any prospectus and/or statement of
additional information of the Fund, as from time to time amended and
in use under the Securities Act of 1933, as amended, and (ii) the
Fund's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund,
unless otherwise directed by the Directors of the Fund or INVESCO, and
to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment analysis
and research, the reviews of current economic conditions and trends,
and the consideration of long-range investment policy now or hereafter
generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Fund should be invested in the
various types of securities authorized for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility, Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
<PAGE>
Sub-Adviser in connection with the Fund. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
particular transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the commission
rate reflects services, reliability and other relevant factors in addition to
the cost of execution, the Sub-Adviser shall have the burden of demonstrating
that such expenditures were bona fide and for the benefit of the Fund.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Fund shall pay all costs and
expenses in connection with the operations of the Fund.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.25% of the Fund's daily net assets up to $200 million, and 0.20; of
the Fund's daily net assets in excess of $200 million. During any period when
the determination of the Fund's net asset value is suspended by the Directors of
the Fund, the net asset value of a share of the Fund as of the last business day
prior to such suspension shall, for the purpose of this Article III, be deemed
to be the net asset value at the close of each succeeding business day until it
is again determined. However, no such fee shall be paid to the Sub-Adviser with
respect to any assets of the Fund which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub-adviser.
<PAGE>
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the INVESCO
Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article V referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH
APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Fund or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund, and shall remain in
force for an initial term of two years from the date of execution, and from year
to year thereafter until its termination in accordance with this Article VI, but
only so long as such continuance is specifically approved at least annually by
(i) the Directors of the Fund, or by the vote of a majority of the outstanding
voting securities of the Fund, and (ii) a majority of those Directors who are
not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Fund, or by vote
of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the
<PAGE>
other party and to the Fund, and a termination by the Fund shall require such
notice to each of the parties. This Agreement shall automatically terminate in
the event of its assignment to the extent required by the Investment Company Act
of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such amendment and (2) the vote of a majority of the outstanding
voting securities of the Fund (other than an amendment which can be effective
without shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE>
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Dan J. Hesser
--------------------------
Dan J. Hesser
President
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne
Secretary
INVESCO TRUST COMPANY
By: /s/ R. Dalton Sim
--------------------------
R. Dalton Sim
President
ATTEST:
/s/ Glen A. Payne
- ---------------------------
Glen A. Payne
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 10th day of November, 1995, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Asset
Management Limited, a United Kingdom corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO EMERGING OPPORTUNITY FUNDS, INC. (the "Company") is
engaged in business as a diversified, open-end management investment company
registered under the Investment Company Act of 1940, as amended (hereinafter
referred to as the "Investment Company Act") and has one class of shares (the
"Shares"), which is divided into series, each representing an interest in a
separate portfolio of investments, with one such series being designated the
INVESCO Worldwide Emerging Markets Fund (the "Fund"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, the Sub-Adviser is a member of the Investment Management
Regulatory Organization Limited ("IMRO") in the United Kingdom and as such is
regulated by IMRO in the conduct of its business; further the Sub-Adviser shall
provide services to INVESCO as a "Business Investor" as defined under the Rules
of IMRO and as such certain rules designed for the protection of private
customers shall not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
<PAGE>
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and on the terms and conditions set forth in this Agreement. The Sub-
Adviser hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Company in any way or otherwise be deemed an agent of the Company.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund, and to
execute all purchases and sales of portfolio
securities;
(b) to maintain a continuous investment program for the
Fund, consistent with (i) the Fund's investment
policies as set forth in the Company's Articles of
Incorporation, Bylaws, and Registration Statement, as
from time to time amended, under the Investment Company
Act of 1940, as amended (the "1940 Act"), and in any
prospectus and/or statement of additional information
of the Fund, as from time to time amended and in use
under the Securities Act of 1933, as amended, and (ii)
the Company's status as a regulated investment company
under the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the
investment analysis and research, the reviews of
current economic conditions and trends, and the
consideration of long-range investment policy now or
<PAGE>
hereafter generally available to investment advisory
customers of the Sub-Adviser;
(e) to determine what portion of the Fund should be
invested in the various types of securities authorized
for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Fund. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
particular transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the commission
rate reflects services, reliability and other relevant factors in addition to
the cost of execution, the Sub-Adviser shall have the burden of demonstrating
that such expenditures were bona fide and for the benefit of the Fund.
<PAGE>
Advice on investments may extend to investments not traded or
exchanges recognized or designated by the Securities and
Investments Board.
Both parties acknowledge that the advice given under this Agreement may
involve liabilities in one currency matched by assets in another currency and
that accordingly movements in rates of exchange may have a separate effect,
unfavorable as well as favorable on the gain or loss experienced on an
investment.
In carrying out its duties hereunder, the Sub-Adviser shall comply with
all instructions of INVESCO in connection therewith such instructions may be
given by letter, telex, telephone or facsimile by any Director or Officer of
INVESCO or by any other person authorized by INVESCO.
Any instructions which appear to conflict with the terms of this Agreement
may be confirmed by the Sub-Adviser with INVESCO prior to execution.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Fund.
<PAGE>
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.375% of the Fund's daily net assets up to $500 million; 0.325% of the
Fund's daily net assets in excess of $500 million but not more than $1 billion;
and 0.275% of the Fund's daily net assets in excess of $1 billion. During any
period when the determination of the Fund's net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the Fund as of the last
business day prior to such suspension shall, for the purpose of this Article
III, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined. However, no such fee shall be paid to
the Sub-Adviser with respect to any assets of the Fund which may be invested in
any other investment company for which the Sub-Adviser serves as investment
adviser or sub-adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month. The
Sub-Adviser shall be entitled to receive fees hereunder only for such periods as
the INVESCO Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub- Adviser, INVESCO and their affiliates are or may
become interested in the Fund as directors, officers and employees.
<PAGE>
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE
LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as an agent for any party other than the Fund or
receive any commissions. The Sub-Adviser will comply with all applicable laws in
acting hereunder including, without limitation, the 1940 Act; the Investment
Advisers Act of 1940, as amended; the Rules and Regulations of IMRO; and all
rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund of the Company.
Thereafter, this Agreement shall remain in force for an initial term expiring
April 30, 1996, and from year to year thereafter until its termination in
accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Company, or
by the vote of a majority of the outstanding voting securities of the Fund, and
(ii) a majority of those Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser.
A termination by INVESCO or the Sub-Adviser shall require sixty days' written
notice to the other party and to the Company, and a termination by the Company
shall require such notice to each of the parties. This Agreement shall
automatically terminate in the event of its assignment to the extent required by
the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of
the Sub-Adviser to receive payments on any unpaid balance of the
<PAGE>
compensation described in Article III hereof earned prior to such
termination.
ARTICLE VII
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and due care
in carrying out its duties under this Agreement provided however that the
Sub-Adviser shall not be liable to INVESCO for any loss suffered by INVESCO or
the Fund advised in connection with the subject matter of this Agreement unless
such loss arises from the willful misfeasance, bad faith or negligence in the
performance of the Sub-Adviser's duties and subject and without prejudice to the
foregoing. INVESCO hereby undertakes to indemnify and to keep indemnified the
Sub-Adviser from and against any and all liabilities, obligations, losses,
damages, suits and expenses (collectively, "Losses") which may be incurred by or
asserted against the Sub-Adviser for which it is responsible pursuant to Article
I hereof; provided, that INVESCO shall not be required to indemnify the
Sub-Adviser for any Losses arising from the willful misfeasance, bad faith or
negligence of Sub-Adviser and, provided futher, that the Sub-Adviser shall send
to INVESCO as soon as possible all claims, letters, summonses, writs or
documents which it receives from third parties and provide whatever information
and assistance INVESCO may require and no liability of any sort shall be
admitted and no undertaking shall be given nor shall any offer, promise or
payment be made or legal expenses incurred by the Sub-Adviser without written
consent of INVESCO which shall be entitled if it so desires to take over and
conduct in the name of the Sub-Adviser the defense of any action or to prosecute
any claim for indemnity or damages or otherwise against any third party.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the
<PAGE>
Fund (other than an amendment which can be effective without shareholder
approval under applicable law).
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
Advice. Any recommendation or advice given by the Sub- Adviser to INVESCO
hereunder shall be given in writing or by mail, telex, telefacsimile or by
telephone, such telephone advice to be confirmed by mail, telex, telefacsimile
or in writing to such place as INVESCO shall from time to time require; further
the Sub- Adviser shall be free to telephone INVESCO as it sees fit in the
performance of its duties.
Complaints. The Sub-Adviser has in operation a written procedure for the
proper handling of complaints from clients; if the matter of complaint cannot be
resolved to INVESCO's satisfaction, INVESCO has the right of recourse to IMRO.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
<PAGE>
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Dan J. Hesser
--------------------------
Dan J. Hesser
/s/ Glen A. Payne President
- -------------------------------
Glen A. Payne
Secretary INVESCO ASSET MANAGEMENT LIMITED
By: /s/ Norman Riddell
----------------------------
Norman Riddell
ATTEST: Chairman
/s/ Graeme J. Proudfoot
- -------------------------------
Graeme J. Proudfoot
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 31st day of December, 1991 between FINANCIAL
SMALL CAP EMERGING GROWTH FUND, INC., a Maryland corporation (the "Fund"), and
INVESCO FUNDS GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently proposes to have one class or series of
outstanding shares (the "Shares"), which shares may be divided into additional
classes or series, each representing an interest in a separate portfolio of
investments, and it is in the interest of the Fund to offer the Shares for sale
continuously; and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares in order to
promote growth of the Fund and facilitate the distribution of the Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the distribution
of Shares in jurisdictions wherein such Shares may legally be offered for sale;
provided, however, that the Fund in its absolute discretion may (a) issue or
sell Shares directly to purchasers, or (b) issue or sell Shares to the
shareholders of any other investment company, for which the Underwriter or any
affiliate thereof shall act as exclusive distributor, who wish to exchange all
or a portion of their investment in Shares or in shares of such other investment
company for the Shares. Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable. The Fund reserves the right to
reject any subscription in whole or in part for any reason.
2. The Underwriter hereby agrees to serve as agent for the distribution of
the Shares and agrees that it will use its best efforts with reasonable
promptness to sell such part of the authorized Shares remaining unissued as from
time to time shall be effectively registered under the Securities Act of 1933,
as amended (the "1933 Act"), at such prices and on such terms as hereinafter set
forth, all subject to applicable federal and state securities laws and
regulations. Nothing herein shall be construed to prohibit the Underwriter from
engaging in other related or unrelated businesses.
<PAGE>
3. In addition to serving as the Fund's agent in the distribution of the
Shares, the Underwriter shall also provide to the holders of the Shares certain
maintenance, support or similar services ("Shareholder Services"). Such services
shall include, without limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging for bank
wires, and providing such other services as the Fund may reasonably request from
time to time. It is expressly understood that the Underwriter or the Fund may
enter into one or more agreements with third parties pursuant to which such
third parties may provide the Shareholder Services provided for in this
paragraph. Nothing herein shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any registrar, transfer agent
or custodian appointed by the Fund, the computation of the asset value or
offering price of Shares, the preparation and distribution of notices of
meetings, proxy soliciting material, annual and periodic reports, dividends and
dividend notices, or any other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through qualified
broker-dealers or others, in such manner, not inconsistent with the provisions
hereof and the then effective Registration Statement of the Fund under the 1933
Act (the "Registration Statement") and related Prospectus (the "Prospectus") and
Statement of Additional Information ("SAI") of the Fund as the Underwriter may
determine from time to time; provided that no broker-dealer or other person
shall be appointed or authorized to act as agent of the Fund without the prior
consent of the directors (the "Directors") of the Fund. The Underwriter will
require each broker-dealer to conform to the provisions hereof and of the
Registration Statement (and related Prospectus and SAI) at the time in effect
under the 1933 Act with respect to the public offering price of the Shares. The
Fund will have no obligation to pay any commissions or other remuneration to
such broker-dealers.
5. The Shares offered for sale or sold by the Underwriter shall be offered
or sold at the net asset value per share determined in accordance with the then
current Prospectus and/or SAI relating to the sale of the Shares except as
departure from such prices shall be permitted by the then current Prospectus
and/or SAI of the Fund, in accordance with applicable rules and regulations of
the Securities and Exchange Commission. The price the Fund shall receive for the
Shares purchased from the Fund shall be the net asset value per share of such
Share, determined in accordance with the Prospectus and/or SAI applicable to the
sale of the Shares.
6. Except as may be otherwise agreed to by the Fund, the Underwriter shall
be responsible for issuing and delivering such confirmations of sales made by it
pursuant to this Agreement as may be required; provided, however, that the
Underwriter or the Fund may utilize the services of other persons or entities
believed by it to be competent to perform such functions. Shares shall be
registered on the transfer books of the Fund in such names and denominations as
the Underwriter may specify.
<PAGE>
7. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of the Fund as
a broker-dealer where necessary or advisable) in such states as the Underwriter
may reasonably request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in the opinion of the
Directors of the Fund is unduly burdensome). The Underwriter, at its own
expense, will effect all qualifications of itself as broker or dealer, or
otherwise, under all applicable state or Federal laws required in order that the
Shares may be sold in such states or jurisdictions as the Fund may reasonably
request.
8. The Fund shall prepare and furnish to the Underwriter from time to time
the most recent form of the Prospectus and/or SAI of the Fund. The Fund
authorizes the Underwriter to use the Prospectus and/or SAI, in the forms
furnished to the Underwriter from time to time, in connection with the sale of
the Shares of the Fund. The Fund will furnish to the Underwriter from time to
time such information with respect to the Fund and the Shares as the Underwriter
may reasonably request for use in connection with the sale of the Shares. The
Underwriter agrees that it will not use or distribute or authorize the use,
distribution or dissemination by broker-dealers or others in connection with the
sale of the Shares any statements, other than those contained in a current
Prospectus and/or SAI of the Fund, except such supplemental literature or
advertising as shall be lawful under Federal and state securities laws and
regulations, and that it will promptly furnish the Fund with copies of all such
material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or otherwise make any
sales of the Shares unless such sales are made in accordance with a then current
Prospectus and/or SAI relating to the sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may
cause the redemption or repurchase of the Shares at such prices and upon such
terms and conditions as shall be specified in a then current Prospectus and/or
SAI. In selling, redeeming or repurchasing the Shares for the account of the
Fund, the Underwriter will in all respects conform to the requirements of all
state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale, redemption or
repurchase, as the case may be. The Underwriter will observe and be bound by all
the provisions of the Declaration of Trust or Bylaws of the Fund and of any
provisions in the Registration Statement, Prospectus and SAI, as such may be
amended or supplemented from time to time, notice of which shall have been given
to the Underwriter, which at the time in any way require, limit, restrict or
prohibit or otherwise regulate any action on the part of the Underwriter.
11(a). The Fund shall indemnify, defend and hold harmless the Underwriter,
its officers and directors and any person who controls the Underwriter within
the meaning of the 1933 Act, from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any attorney fees incurred in connection
therewith) which the Underwriter, its officers and
<PAGE>
directors or any such controlling person, may incur under the federal securities
laws, the common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Registration Statement or
any related Prospectus and/or SAI or arising out of or based upon any alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
Notwithstanding the foregoing, this indemnity agreement, to the extent
that it might require indemnity of the Underwriter or any person who is an
officer, director or controlling person of the Underwriter, shall not inure to
the benefit of the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall determine, or it shall
have been determined by controlling precedent, that such result would not be
against public policy as expressed in the federal securities laws and in no
event shall anything contained herein be so construed as to protect the
Underwriter against any liability to the Fund, the Directors or the Fund's
shareholders to which the Underwriter would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement.
This indemnity agreement is expressly conditioned upon the Fund's being
notified of any action brought against the Underwriter, its officers or
directors or any such controlling person, which notification shall be given by
letter or by telegram addressed to the Fund at its principal address in Denver,
Colorado and sent to the Fund by the person against whom such action is brought
within ten (10) days after the summons or other first legal process shall have
been served upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any such action shall not
relieve the Fund from any liability which it may have to the person against whom
such action is brought by reason of any such alleged untrue statement or
omission otherwise than on account of the indemnity agreement contained in this
paragraph. The Fund shall be entitled to assume the defense of any suit brought
to enforce such claim, demand, or liability, but in such case the defense shall
be conducted by counsel chosen by the Fund and approved by the Underwriter,
which approval shall not be unreasonably withheld. If the Fund elects to assume
the defense of any such suit and retain counsel approved by the Underwriter, the
defendant or defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the Fund elect not to assume
the defense of any such suit, or should the Underwriter not approve of counsel
chosen by the Fund, the Fund will reimburse the Underwriter, its officers and
directors or the controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained by the
Underwriter or them. In addition, the Underwriter shall have the right to employ
counsel to represent it, its officers and directors and any such controlling
person who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriter against the Fund hereunder if
in the reasonable judgment of the Underwriter it is advisable for the
Underwriter, its officers and directors or such controlling person to be
represented by separate counsel, in which event the fees and expenses of such
separate counsel shall be borne by the Fund. This indemnity agreement and the
Fund's representations and warranties in this Agreement shall remain operative
and in full force and effect and shall
<PAGE>
survive the delivery of any of the Shares as provided in this Agreement. This
indemnity agreement shall inure exclusively to the benefit of the Underwriter
and its successors, the Underwriter's officers and directors and their
respective estates and any such controlling person and their successors and
estates. The Fund shall promptly notify the Underwriter of the commencement of
any litigation or proceeding against it in connection with the issue and sale of
the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless the
Fund, its Directors and any person who controls the Fund within the meaning of
the 1933 Act, from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any attorney fees incurred in connection therewith) which the
Fund, its Directors or any such controlling person may incur under the Federal
securities laws, the common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its Directors or such controlling
person resulting from such claims or demands shall arise out of or be based upon
(a) any alleged untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund specifically for use in the
Registration Statement or any related Prospectus and/or SAI or shall arise out
of or be based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or the
related Prospectus and/or SAI or necessary to make such information not
misleading and (b) any alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to the extent
that it might require indemnity of the Fund or any Director or controlling
person of the Fund, shall not inure to the benefit of the Fund or Director or
controlling person thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling precedent, that such
result would not be against public policy as expressed in the federal securities
laws and in no event shall anything contained herein be so construed as to
protect any Director of the Fund against any liability to the Fund or the Fund's
shareholders to which the Director would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence or reckless disregard of the
duties involved in the conduct of his office.
This indemnity agreement is expressly conditioned upon the Underwriter's
being notified of any action brought against the Fund, its Directors or any such
controlling person, which notification shall be given by letter or telegram
addressed to the Underwriter at its principal office in Denver, Colorado, and
sent to the Underwriter by the person against whom such action is brought,
within ten (10) days after the summons or other first legal process shall have
been served upon the Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not relieve the
Underwriter from any liability which it may have to the person against whom such
action is brought by reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the defense of any suit
brought to enforce such claim, demand, or liability, but in such case the
defense shall be conducted by counsel chosen
<PAGE>
by the Underwriter and approved by the Fund, which approval shall not be
unreasonably withheld. If the Underwriter elects to assume the defense of any
such suit and retain counsel approved by the Fund, the defendant or defendants
in such suit shall bear the fees and expenses of an additional counsel obtained
by any of them. Should the Underwriter elect not to assume the defense of any
such suit, or should the Fund not approve of counsel chosen by the Underwriter,
the Underwriter will reimburse the Fund, its Directors or the controlling person
or persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Fund or them. In addition, the Fund
shall have the right to employ counsel to represent it, its Directors and any
such controlling person who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Fund against the Underwriter
hereunder if in the reasonable judgment of the Fund it is advisable for the
Fund, its Directors or such controlling person to be represented by separate
counsel, in which event the fees and expenses of such separate counsel shall be
borne by the Underwriter. This indemnity agreement and the Underwriter's
representations and warranties in this Agreement shall remain operative and in
full force and effect and shall survive the delivery of any of the Shares as
provided in this Agreement. This indemnity agreement shall inure exclusively to
the benefit of the Fund and its successors, the Fund's Directors and their
respective estates and any such controlling person and their successors and
estates. The Underwriter shall promptly notify the Fund of the commencement of
any litigation or proceeding against it in connection with the issue and sale of
the Shares.
12. The Fund will pay or cause to be paid (a) expenses (including the fees
and disbursements of its own counsel) of any registration of the Shares under
the 1933 Act, as amended, (b) expenses incident to the issuance of the Shares,
and (c) expenses (including the fees and disbursements of its own counsel)
incurred in connection with the preparation, printing and distribution of the
Fund's Prospectuses, SAIs, and periodic and other reports sent to holders of the
Shares in their capacity as such. The Underwriter shall prepare and provide
necessary copies of all sales literature subject to the Fund's approval thereof.
13. This Agreement shall become effective as of the date it is approved by
a majority vote of the Directors of the Fund, as well as a majority vote of the
Directors who, except for their positions as Directors of the Fund, are not
"interested persons" (as defined in the Investment Company Act) of the Fund, and
shall continue in effect for an initial term of two years from the date of
execution, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually (a)(i) by a vote of the
Directors of the Fund or (ii) by a vote of a majority of the outstanding voting
securities of the Fund, and (b) by a vote of a majority of the Directors of the
Fund who, except for their positions as Directors of the Fund, are not
"interested persons," as defined in the Investment Company Act, of the Fund cast
in person at a meeting for the purpose of voting on this Agreement.
Either party hereto may terminate this Agreement on any date, without the
payment of a penalty, by giving the other party at least 60 days' prior written
notice of such termination specifying the date fixed therefor. In particular,
this Agreement may be
<PAGE>
terminated at any time, without payment of any penalty, by vote of a majority of
the members of the Directors of the Fund or by a vote of a majority of the
outstanding voting securities of the Fund on not more than 60 days' written
notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for in this
Agreement or otherwise, the Fund may terminate this Agreement at any time
immediately upon the Underwriter's failure to fulfill any of the obligations of
the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to the
contrary herein, or in law, that it will look solely to the assets of the Fund
for any obligations of the Fund hereunder and nothing herein shall be construed
to create any personal liability of any Director or any shareholder of the Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15, the definition of
"assignment" contained in the Investment Company Act shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the Fund and
the Underwriter and, if applicable, approved in the manner required by the
Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If any
provision of this Agreement shall be held illegal or made invalid by a court
decision, statute, rule or otherwise, such illegality or invalidity shall not
affect the validity or enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation hereof shall be
governed exclusively by the laws of the State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
FINANCIAL SMALL CAP EMERGING GROWTH
FUND INC.
By: /s/ John M. Butler
-------------------------------
John M. Butler
President
<PAGE>
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne
Secretary
[CORPORATE SEAL] INVESCO FUNDS GROUP, INC.
By: /s/ Dan J. Hesser
--------------------------------
Dan J. Hesser
President
ATTEST:
/s/ Glen A. Payne
- ---------------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
The Plan has been adopted as an alternative to providing an increase in
the present compensation payable to each Fund's Independent Directors for
serving in such capacity. The increase in present compensation was considered by
all directors of each Fund and was determined to be reasonable in relation to
the services which are currently being performed by the Independent Directors
and the responsibilities and obligations which are imposed upon the directors in
the performance of such services.
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
Service Termination includes termination of service (other than by
disability or death) of an Independent Director which results from the
Director's having reached his Service Termination Date, which is the date not
later than the last day of the calendar quarter in which such Director's
seventy-second birthday occurs.
3. Defined Benefit
Commencing as of his Service Termination Date, each Independent Director
will receive, for the remainder of his life, a benefit (the "Benefit"), payable
quarterly, at an annual rate equal to 25 percent of the annual basic retainer
payable by each Fund to the Independent Director on his Service Termination Date
excluding any fees relating to attending meetings or chairing
<PAGE>
committees). If an Independent Director should die after his Service Termination
Date and before forty quarterly payments are made, payments will continue to be
made to the Independent Director's designated beneficiary until the aggregate of
forty quarterly payments has been made to the Independent Director and the
Director's beneficiary.
If an Independent Director's service as a Director is terminated because
of his death prior to the occurrence of his Service Termination Date, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary.
If an Independent Director's service as a Director is terminated because
of his disability prior to the occurrence of his Service Termination Date, the
Independent Director will receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director. If the
disabled Independent Director should die before forty quarterly payments are
made, payments will continue to be made to the Independent Director's designated
beneficiary until the aggregate of forty quarterly payments has been made to the
disabled Independent Director and the Director's beneficiary.
If the Independent Director and his designated beneficiary should die
before a total of forty quarterly payments are made, the remaining value of the
Independent Director's benefit shall be determined as of the date of the death
of the Independent Director's designated beneficiary and shall be paid to the
estate of the designated beneficiary in one lump sum or in periodic payments,
with the determinations with respect to the value of the benefit and the method
and frequency of payment to be made by the Committee (as defined in paragraph
8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
benefit shall be determined as of the date of the death of the Independent
Director and shall be paid as promptly as possible in one lump sum to the estate
of the designated beneficiary.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall
<PAGE>
find on the basis of medical evidence satisfactory to it that the Independent
Director is disabled, mentally or physically, as a result of an accident or
illness, so as to be prevented from performing each of the duties which are
incumbent upon an Independent Director in fulfilling his responsibilities as
such.
6. Time of Payment
The Benefit for each year will be paid in quarterly installments that are
as nearly equal as possible.
7. Payment of Benefit: Allocation of Costs
Each Fund is responsible for the payment of the amount of the Benefit
applicable to the Fund, as well as its proportionate share of all expenses of
administration of the Plan, including without limitation all accounting and
legal fees and expenses and fees and expenses of any Actuary. The obligations of
each Fund to pay such Benefits and expenses will not be secured or funded in any
manner, and such obligations will not have any preference over the lawful claims
of each Fund's creditors and shareholders. To the extent that the Benefit is
paid by more than one Fund, such costs and expenses will be allocated among such
Funds in a manner that is determined by the Committee to be fair and equitable
under the circumstances. To the extent that one or more of such Funds consist of
one or more separate portfolios, such costs and expenses allocated to any such
Fund will thereafter be allocated among such portfolios by the Board of the Fund
in a manner that is determined by such Board to be fair and equitable under the
circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a committee (the "Committee")
of three Independent Directors designated by all of the Independent Directors of
the Funds. Except as otherwise provided herein, the Committee will make all
interpretations and determinations necessary or desirable for the Plan's
administration, and such interpretations and determinations will be final and
conclusive. Committee members will be elected annually by the Independent
Directors.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
<PAGE>
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment. etc. The Committee, with the concurrence of the
Board of any Fund, may as to the specific Fund at any time amend or
terminate the Plan or waive any provision of the Plan; provided,
however, that subject to the limitations imposed by paragraph 7, no
amendment, termination or waiver will impair the rights of an
Independent Director to receive the payments which would have been
made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any
obligation on the part of the Board of any Fund to nominate any
Independent Director for reelection.
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993.
AMENDED FEE SCHEDULE
for
Services pursuant to Transfer Agency Agreement, dated December 31, 1991,
between Financial Emerging Growth Fund, Inc. (the "Fund") and INVESCO Funds
Group, Inc., as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account for account maintenance, as described in the
Agreement. This charge, in the amount of $14.00 per account per year, or in the
case of omnibus accounts that are funding employee participation of 401(k) or
other tax-qualified retirement plans, $14.00 per participant in such accounts
per year, is billable monthly at the rate of one-twelfth (1/12) of the annual
fee. A charge is made for an account in the month that it opens or closes, as
well as in each month in which the account remains open, regardless of the
account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 22nd day of April, 1993.
Financial Emerging Growth Fund, Inc.
By: /s/ John M. Butler
------------------------------
John M. Butler, President
ATTEST:
/s/ Glen A. Payne
- ------------------------------
Glen A. Payne, Secretary
INVESCO Funds Group, Inc.
By: /s/ Dan J. Hesser
-------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -------------------------------
Glen A. Payne, Secretary
AMENDMENT NO. 2
to
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated December 31, 1991,
between INVESCO Emerging Growth Fund, Inc. (formerly, Financial Emerging Growth
Fund, Inc.) (the "Fund") and INVESCO Funds Group, Inc. as Transfer Agent (the
"Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $14.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $14.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of April, 1994.
INVESCO EMERGING GROWTH FUND, INC.
By: /s/ Dan J. Hesser
------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne, Secretary
AMENDMENT NO. 3
to
FEE SCHEDULE
for
Services pursuant to a Transfer Agency Agreement, dated December 31, 1991
between INVESCO Emerging Opportunity Funds, Inc. (formerly INVESCO Emerging
Growth Fund) (the "Fund") and INVESCO Funds Group, Inc. as Transfer Agent (the
"Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that is opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of May, 1996.
INVESCO EMERGING OPPORTUNITY FUNDS, INC.
By: /s/ Dan J. Hesser
------------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-----------------------------------
Ronald L. Grooms, Senior Vice President
ATTEST:
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne, Secretary
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 7 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated June 21, 1996, relating to the financial
statements and financial highlights appearing in the May 31, 1996 Annual Report
to Shareholders of INVESCO Emerging Opportunity Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" and "Financial Statements" in
the Statement of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------
Price Waterhouse LLP
Denver, Colorado
July 25, 1996
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 23rd day of July, 1996.
/s/ Hubert L. Harris, Jr.
--------------------------
Hubert L. Harris, Jr.
STATE OF GEORGIA )
)
COUNTY OF DeKalb )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Hubert L. Harris, Jr.,
as a director or trustee of each of the above-described entities, this 23rd day
of July, 1996.
/s/ Cecilia Underwood
--------------------------
Notary Public
My Commission Expires October 14, 1996
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<SERIES>
<NUMBER> 1
<NAME> INVESCO EMERGING GROWTH FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 294060036
<INVESTMENTS-AT-VALUE> 374044033
<RECEIVABLES> 4582835
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<OTHER-ITEMS-ASSETS> 276932
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<OTHER-ITEMS-LIABILITIES> 2950814
<TOTAL-LIABILITIES> 8937614
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<PAID-IN-CAPITAL-COMMON> 283333605
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<EXPENSES-NET> 3074938
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<REALIZED-GAINS-CURRENT> 15778132
<APPREC-INCREASE-CURRENT> 80619041
<NET-CHANGE-FROM-OPS> 96397173
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3120041
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55676741
<NUMBER-OF-SHARES-REDEEMED> 46615111
<SHARES-REINVESTED> 261428
<NET-CHANGE-IN-ASSETS> 216301795
<ACCUMULATED-NII-PRIOR> 15532
<ACCUMULATED-GAINS-PRIOR> (4337372)
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<GROSS-EXPENSE> 3105147
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<PER-SHARE-NAV-BEGIN> 9.37
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 5.25
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.18
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<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> INVESCO WORLDWIDE EMERGING MARKETS FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<RETURNS-OF-CAPITAL> 0
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</TABLE>
