INVESCO Emerging Growth Fund
Supplement to Prospectus
Dated September 11, 1995
The section of the Fund's prospectus entitled "Investment Objective and Policies
- -- Other Investment Practices" is hereby amended to add the following as a new
sixth paragraph of such section, without deleting any of the existing
paragraphs:
Put and Call Options. In order to hedge its portfolio, 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.
The third paragraph in the section of the Fund's prospectus entitled "Additional
Information" is hereby amended to read as follows:
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800
E. Union Ave., Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $20.00 per shareholder
account or omnibus account participant. The transfer agency fee is not charged
to each shareholder's or participant's account, but is an expense of the Fund to
be paid from the Fund's assets. Registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities, including
affiliates of INVESCO, may provide sub-transfer agency or record-keeping
services to the Fund which reduce or eliminate the need for identical services
to be provided on behalf of the Fund by INVESCO. In such cases, INVESCO may pay
the third party an annual sub-transfer agency or record-keeping fee out of the
transfer agency fee which is paid to INVESCO by the Fund.
The date of this Supplement is May 1, 1996
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INVESCO Emerging Opportunity Funds, Inc.
Supplement to Statement of Additional Information
Dated September 11, 1995
The section of the Fund's Statement of Additional Information entitled
"Investment Policies and Restrictions" is hereby amended by the addition of the
following paragraphs immediately prior to the sub-heading "Investment
Restrictions," without deleting any of the existing paragraphs:
Options on Securities and Indices
As discussed in the section of the Fund's Prospectus entitled "Investment
Objective and Policies," 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.
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
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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 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)
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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 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 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.
Paragraph number (1) of the section of the Fund's Statement of Additional
Information entitled "Investment Policies and Restrictions - Investment
Restrictions" is hereby amended to read as follows:
(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;
The unnumbered paragraph immediately following paragraph number (13) in the
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section of the Fund's Statement of Additional Information entitled "Investment
Policies and Restrictions - Investment Restrictions" is hereby deleted.
The second paragraph in the section of the Fund's Statement of Additional
Information entitled "The Fund and Its Management -- Transfer Agency
Agreement" is hereby amended to read as follows:
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 actual number of shareholder accounts and omnibus account
participants in existence at any time during each month. For the fiscal
years ended May 31, 1995, 1994 and 1993, the Fund paid INVESCO transfer
agency fees of $635,770 (prior to the voluntary absorption of certain Fund
expenses by INVESCO), $362,259 and $203,346, respectively.
The section of the Fund's Statement of Additional Information entitled "The Fund
and Its Management -- Officers and Directors of the Company" is hereby amended
to (1) delete the second through the nineteenth paragraphs and (2) substitute
the following new paragraphs in their place:
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
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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.
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.
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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. President of INVESCO
Services, Inc. (since January 1990). 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.
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
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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.
The ninth paragraph of the section of the Fund's Statement of Additional
Information entitled "The Fund and Its Management - Director Compensation" (the
paragraph immediately following footnote 6) is hereby amended to read as
follows:
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.
Because 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.
The date of this Supplement is May 1, 1996.
