PRELIMINARY COPY -- TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(C) or (S)240.14a-12
INVESCO INTERNATIONAL FUNDS, INC.
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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DRAFT
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO INTERNATIONAL FUNDS, INC.
__________, 1997
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Dear INVESCO International Funds, Inc. Shareholder:
Enclosed is a Proxy Statement for the [October 28, 1997] special meeting
of shareholders of INVESCO International Growth Fund, INVESCO Pacific Basin Fund
and INVESCO European Fund (collectively, the "Funds"), the three series of
INVESCO International Funds, Inc. (the "Company").
As explained more fully in the attached Proxy Statement, shareholders of
each of the Funds will be asked to approve a change in the corporate sub-adviser
to the Funds from INVESCO Asset Management Limited ("IAML") to INVESCO Global
Asset Management Limited ("IGAM"). This change simply reflects an organizational
change within the structure of AMVESCAP PLC, the ultimate corporate parent of
both IAML and IGAM, and will have no impact on advisory fees, sub-advisory fees
or the personnel actually managing the Funds. Shareholders of each of the Funds
also will be asked to approve a Plan and Agreement of Distribution (the "Plan")
applicable only to shares of the Funds purchased after November 1, 1997.
The board of directors of the Company believes that both the change in
sub-adviser and the Plan are in the best interests of the shareholders.
Therefore, we ask that you read the enclosed materials and vote promptly. Should
you have any questions, please feel free to call our client services
representatives at 1-800-646-8372. They will be happy to answer any questions
that you might have.
YOUR VOTE IS IMPORTANT. THE CHANGE IN SUB-ADVISERS AND THE PLAN WE ARE
SUBMITTING FOR YOUR CONSIDERATION ARE SIGNIFICANT TO THE COMPANY, THE FUNDS AND
TO YOU AS A SHAREHOLDER. IF WE DO NOT RECEIVE SUFFICIENT VOTES TO APPROVE THESE
PROPOSALS, WE MAY HAVE TO SEND ADDITIONAL MAILINGS OR CONDUCT TELEPHONE
CANVASSING WHICH WOULD INCREASE COSTS TO SHAREHOLDERS. THEREFORE, PLEASE TAKE
THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR VOTE ON THE ENCLOSED PROXY
CARD, AND RETURN IT IN THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.
Sincerely,
Dan J. Hesser
President
INVESCO International Funds, Inc.
INVESCO International Growth Fund
INVESCO Pacific Basin Fund
INVESCO European Fund
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO INTERNATIONAL FUNDS, INC.
7800 East Union Avenue
Denver, Colorado 80237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [OCTOBER 28, 1997]
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Notice is hereby given that a special meeting of shareholders (the
"Meeting") of INVESCO International Growth Fund, INVESCO Pacific Basin Fund and
INVESCO European Fund (collectively, the "Funds") of INVESCO International
Funds, Inc. (the "Company") will be held at the Hyatt Regency Tech Center, 7800
E. Tufts Avenue, Denver, Colorado 80237 on [Tuesday, October 28, 1997], at 10:00
a.m., Mountain Time, for the following purposes:
1. To approve or disapprove a change in the corporate sub-adviser to
each Fund from INVESCO Asset Management Limited ("IAML") to INVESCO
Global Asset Management Limited ("IGAM").
2. To approve or disapprove a Plan and Agreement of Distribution (the
"Plan") for each Fund.
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
The board of directors of the Company has fixed the close of business on
[September 4, 1997] as the record date for the determination of shareholders
entitled to notice of and to vote at the Meeting or any adjournment(s) thereof.
A complete list of shareholders of the Funds entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Funds for any purpose germane to the Meeting during ordinary business hours
after ________ __, 1997, at the offices of the Company, 7800 East Union Avenue,
Denver, Colorado 80237.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the enclosed envelope that
requires no postage if mailed in the United States. The enclosed proxy is being
solicited on behalf of the board of directors of the Company.
<PAGE>
IMPORTANT
Please mark, sign, date and return the enclosed proxy in the accompanying
envelope as soon as possible in order to ensure a full representation at the
Meeting.
The Meeting will have to be adjourned without conducting any business if
less than a majority of the eligible shares is represented, and the Company will
have to continue to solicit votes until a quorum is obtained. The Meeting also
may be adjourned, if necessary, to continue to solicit votes if less than the
required shareholder vote has been obtained to approve Proposals 1 and 2.
Your vote, then, could be critical in allowing the Company to hold the
Meeting as scheduled. By marking, signing, and promptly returning the enclosed
proxy, you may eliminate the need for additional solicitation. Your cooperation
is appreciated.
By Order of the Board of Directors,
Glen A. Payne
Secretary
Denver, Colorado
Dated: _________ __, 1997
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange Commission
INVESCO INTERNATIONAL FUNDS, INC.
_________, 1997
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INVESCO INTERNATIONAL FUNDS, INC.
7800 East Union Avenue
Denver, Colorado 80237
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [OCTOBER 28, 1997]
INTRODUCTION
The enclosed proxy is being solicited by the board of directors (the
"Board" or the "Directors") of INVESCO International Funds, Inc. (the "Company")
on behalf of INVESCO International Growth Fund, (the "International Growth
Fund"), INVESCO Pacific Basin Fund (the "Pacific Basin Fund") and INVESCO
European Fund (the "European Fund") (collectively, the "Funds"), the three
series of the Company, for use in connection with the special meeting of
shareholders of the Funds (the "Meeting") to be held at 10:00 a.m., Mountain
Time, on [Tuesday, October 28, 1997], at the Hyatt Regency Tech Center, 7800 E.
Tufts Avenue, Denver, Colorado 80237, and at any adjournment(s) thereof for the
purposes set forth in the foregoing notice. THE COMPANY'S ANNUAL REPORT,
INCLUDING FINANCIAL STATEMENTS OF THE COMPANY FOR THE FISCAL YEAR ENDED OCTOBER
31, 1996, AND SEMI-ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS OF THE COMPANY
FOR THE PERIOD ENDED APRIL 30, 1997, ARE AVAILABLE WITHOUT CHARGE UPON REQUEST
FROM GLEN A. PAYNE, SECRETARY OF THE COMPANY, AT P.O. BOX 173706, DENVER,
COLORADO 80217-3706 (TELEPHONE NUMBER 1-800-646-8372). The approximate mailing
date of proxies and this Proxy Statement is ________ __, 1997.
The primary purposes of the Meeting are to allow shareholders to consider
(I) a change in the corporate sub-adviser to each of the Funds and (ii) a Plan
and Agreement of Distribution (the "Plan") for each of the Funds.
The following factors should be considered by shareholders in determining
whether to approve the change in corporate Sub-Adviser:
o The change in corporate sub-adviser has been approved by the board of
directors of the Company, including the Directors who are completely
independent of any INVESCO-affiliated company (the "Independent
Directors").
o The change, if approved, will have no impact upon present advisory fees,
sub-advisory fees or actual personnel managing the portfolios of the Fund.
The following factors should be considered by shareholders in determining
whether to approve the Plan:
o The Plan has been approved by the board of directors of the Company,
including the Independent Directors.
<PAGE>
o The relationship of the Plan to the overall cost structure of the Funds.
o The potential long-term benefits of the Plan to the Funds and their
shareholders.
o The effect of the Plan on existing shareholders.
If the enclosed form of proxy is duly executed and returned in time to be
voted at the Meeting, and not subsequently revoked, all shares represented by
the proxy will be voted in accordance with the instructions marked thereon. If
no instructions are given, such shares will be voted FOR Proposals 1 and 2. A
majority of the outstanding shares of the Company entitled to vote, represented
in person or by proxy, will constitute a quorum at the Meeting.
Shares held by shareholders present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting. An
abstention by a shareholder, either by proxy or by vote in person at the
Meeting, has the same effect as a negative vote. Shares held by a broker or
other fiduciary as record owner for the account of the beneficial owner are
counted toward the required quorum if the beneficial owner has executed and
timely delivered the necessary instructions for the broker to vote the shares or
if the broker has and exercises discretionary voting power. Where the broker or
fiduciary does not receive instructions from the beneficial owner and does not
have discretionary voting power as to one or more issues before the Meeting, but
grants a proxy for or votes such shares, they will be counted toward the
required quorum but will have the effect of a negative vote on any proposals on
which it does not vote.
Because the proposals being submitted for a vote of the shareholders of
each Fund are similar, the Board determined to combine the proxy materials for
the Funds in order to reduce the cost of preparing, printing and mailing the
proxy materials.
In order to further reduce costs, the notices to shareholders having more
than one account in a Fund listed under the same Social Security number at a
single address have been combined. The proxy cards have been coded so that each
shareholder's votes will be counted for all such accounts.
Execution of the enclosed proxy card will not affect a shareholder's right
to attend the Meeting and vote in person, and a shareholder giving a proxy has
the power to revoke it (by written notice to the Company at P.O. Box 173706,
Denver, Colorado 80217-3706, execution of a subsequent proxy card, or oral
revocation at the Meeting) at any time before it is exercised.
Shareholders of the Funds of record at the close of business on [September
4, 1997] (the "Record Date"), are entitled to vote at the Meeting, including any
adjournment(s) thereof, and are entitled to one vote for each share, and
corresponding fractional votes for fractional shares, on each matter to be acted
upon at the Meeting. On the Record Date, [____________] shares of beneficial
interest of the Company, $.01 par value per share, were outstanding, including
[____________] shares of the International Growth Fund, [____________] shares of
the Pacific Basin Fund and [____________] shares of the European Fund.
<PAGE>
In addition to the solicitations of proxies by use of the mail, proxies may
be solicited by officers of the Company, and by officers and employees of
INVESCO Funds Group, Inc., the investment adviser and transfer agent of the
Funds and INVESCO Distributors, Inc., personally or by telephone or telegraph,
without special compensation. Until September 29, 1997, INVESCO Funds Group,
Inc. is also the distributor of the Funds. Effective on that date, INVESCO
Distributors, Inc., a wholly-owned subsidiary of INVESCO Funds Group, Inc., will
become the distributor of the Funds. INVESCO Funds Group, Inc. and INVESCO
Distributors, Inc. are referred to collectively as "INVESCO." In addition,
Shareholder Communications Corporation ("SCC") has been retained to assist in
the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes the
Company has not yet received may receive telephone calls from representatives of
SCC requesting that they authorize SCC, by telephonic or electronically
transmitted instructions, to execute proxy cards on their behalf. Telephone
authorizations will be recorded in accordance with the procedures set forth
below. INVESCO believes that these procedures are reasonably designed to ensure
that the identity of the shareholder casting the vote is accurately determined
and that the voting instructions of the shareholder are accurately determined.
SCC has received an opinion of Maryland counsel that addresses the
validity, under the applicable laws of the State of Maryland, of authorization
given orally to execute a proxy. The opinion given by Maryland counsel concludes
that a Maryland court would find that there is no Maryland law or public policy
against the acceptance of proxies signed by an orally authorized agent, provided
it adheres to the procedures set forth below.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask the shareholder for such shareholder's full name, address,
Social Security or employer identification number, title (if the person giving
the proxy is authorized to act on behalf of an entity, such as a corporation),
and the number of shares owned, and to confirm that the shareholder has received
the Proxy Statement in the mail. If the information solicited agrees with the
information provided to SCC by the Company, the SCC representative has the
responsibility to explain the voting process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on each proposal.
Although he or she is permitted to answer questions about the process, the SCC
representative is not permitted to recommend to the shareholder how to vote,
other than to read any recommendation set forth in the Proxy Statement. SCC will
record the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram confirming the shareholder's vote and
asking the shareholder to call SCC immediately if the shareholder's instructions
are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting, but does not wish
to give a proxy by telephone, such shareholder may still submit the proxy card
originally sent with the Proxy Statement or attend in person. Any proxy given by
a shareholder, whether in writing or by telephone, is revocable. A shareholder
may revoke the accompanying proxy or a proxy given telephonically at any time
prior to its use by filing with the Company a written revocation or duly
executed proxy bearing a later date. In addition, any shareholder who attends
the Meeting in person may vote by ballot at the Meeting, thereby canceling any
proxy previously given.
<PAGE>
All costs of printing and mailing proxy materials and the costs and
expenses of holding the Meeting and soliciting proxies, including any amount
paid to SCC, will be paid by INVESCO.
The Board may seek one or more adjournments of the Meeting to solicit
additional shareholders, if necessary, to obtain a quorum for the Meeting, or to
obtain the required shareholder vote to approve Proposals 1 and 2. An
adjournment would require the affirmative vote of the holders of a majority of
the shares present at the Meeting (or an adjournment thereof) in person or by
proxy and entitled to vote. If adjournment is proposed in order to obtain the
required shareholder vote on a particular proposal, the persons named as proxies
will vote in favor of adjournment those shares which they are entitled to vote
in favor of such proposal and will vote against adjournment those shares which
they are required to vote against such proposal. A shareholder vote may be taken
on one or more of the proposals discussed herein prior to any such adjournment
if sufficient votes have been received and it is otherwise appropriate.
PROPOSAL 1: APPROVAL OR DISAPPROVAL OF THE CHANGE IN SUB-ADVISER
Background
On January 30, 1997, shareholders of the Funds approved new sub-advisory
agreements with INVESCO Asset Management Limited ("IAML") and INVESCO Asia
Limited ("IA"). These agreements were substantially identical to the
sub-advisory agreements that had previously existed between the Funds and IAML.
Approval of the new agreements was sought at that time due to the then-pending
merger of INVESCO PLC and A I M Management Group Inc. (the "Merger"). As a
matter of law under the Investment Company Act of 1940, as amended (the "1940
Act"), when the Merger was consummated on February 28, 1997, the then-existing
sub-advisory agreements were terminated, and the sub-advisory agreements
approved by shareholders on January 30, 1997, became effective. Subsequent to
the Merger, on May 8, 1997, the name of INVESCO PLC was changed to AMVESCAP PLC
("AMVESCAP").
On August 5, 1997, INVESCO Funds Group, Inc., the investment adviser to
the Company and other mutual funds (collectively, the "INVESCO Mutual Funds"),
obtained a no-action letter (the "No-Action Letter") from the Securities and
Exchange Commission (the "SEC"). In substance, the SEC stated that it would
permit INVESCO and the sub-advisers to the INVESCO Mutual Funds that were
affiliates of AMVESCAP, including IAML, to amend the compensation arrangements
between INVESCO and those sub-advisers without first seeking shareholder
approval. The goal of these changes was to provide that all INVESCO Mutual
Funds' sub-advisers that are affiliates of AMVESCAP be paid at the same rate,
which is one-third (33.33%) of the advisory fee charged by INVESCO. Inasmuch as
the fees paid to sub- advisers, including IAML, are paid directly by INVESCO and
are not paid by the Fund, the impact of this change on investors is neutral.
<PAGE>
Acting in reliance upon the No-Action Letter and the approval of the
Board, including a majority of the Independent Directors on May 16, 1997,
INVESCO and IAML executed new sub-advisory agreements (the "Present Agreements")
on September 30, 1997, which were in all respects identical to their
predecessors except for the compensation to IAML. Under the Present Agreement,
IAML is compensated by INVESCO on the following basis for each of the Funds:
European Fund and Pacific Basin Fund
0.2500% of average net assets up to $350 million
0.2166% of average net assets in excess of $350 million but less
than $700 million
0.1833% of average net assets in excess of $700 million
International Growth Fund
0.3333% of average net assets up to $500 million
0.2500% of average net assets in excess of $500 million but less
than $1 billion
0.2167% of average net assets in excess of $1 billion
The Proposed Change In Sub-Adviser
At this meeting, the shareholders of each of the Funds are being asked to
approve a new sub-advisory agreement which would substitute another AMVESCAP
subsidiary, INVESCO Global Asset Management Limited ("IGAM"), for IAML (the
"Proposed Sub-Advisory Agreement").
IGAM, which is located at 12 Bermudiana Road, P.O. Box HM66, Hamilton,
Bermuda, was established in 1995 in order to centralize all global investing by
INVESCO-affiliated companies for U.S. clients into a single company. During the
intervening two years, IGAM has gradually assumed this role for all U.S. clients
advised by INVESCO-affiliated companies, other than the INVESCO Mutual Funds. In
addition, during the past year the advisory operations for the AMVESCAP European
and Pacific Rim regions were reorganized into one international division, with
IGAM serving as the principal investment adviser for international advisory
operations. AMVESCAP and INVESCO have determined that it is now an appropriate
time for IGAM to assume international investment advisory responsibilities for
those INVESCO Mutual Funds that invest primarily outside the United States,
including the Funds. The Board believes that IGAM will provide the Funds with
high quality portfolio management services. Subject to shareholder approvals,
the Board also has selected IGAM to be the sub-adviser to the international
INVESCO Mutual Funds.
The appointment of IGAM as sub-adviser to the Funds is expected to have no
material effect on the services provided to the Funds. There will be no change
in INVESCO's ultimate legal responsibility for the performance of portfolio
management services to the Fund, since the investment advisory agreement between
the Company and INVESCO will continue in effect without change. There will be no
change in the investment personnel who manage the portfolios of the Funds; these
<PAGE>
persons, who presently are shared employees of IGAM and IAML, will remain shared
employees of these companies if shareholders approve this proposal. Finally,
there will be no change in the fees or expenses presently paid by the Funds
since the sub-advisory fees proposed to be paid to IGAM, like the sub-advisory
fees presently paid to IAML, will continue to be paid by INVESCO, not the Funds.
The Proposed Sub-Advisory Agreement
If shareholders of the Funds approve the Proposed Sub-Advisory Agreement
with respect to their Fund, the Proposed Sub-Advisory Agreement will become
effective [October 28, 1997]. This summary of the Proposed Sub-Advisory
Agreement is qualified in its entirety by reference to the form of such
agreement attached to this Proxy Statement as Exhibit A.
The Proposed Sub-Advisory Agreement will remain in effect, unless earlier
terminated, for an initial term expiring two years from the date it becomes
effective. Other than their effective and termination dates, and the
substitution of IGAM for the present sub-adviser, the material terms and
provisions of the Proposed Sub-Advisory Agreement, which are summarized below,
are the same, in all substantive respects, as those of the Present Agreements.
The Proposed Sub-Advisory Agreement provides that IGAM, subject to the
supervision of INVESCO and the board of directors of the Company, will manage
the investment portfolio of the Funds in conformity with each Fund's respective
investment policies. These management services include: (a) managing the
investment and reinvestment of all the assets, now or hereafter acquired, of
each Fund, and executing all purchases and sales of portfolio securities; (b)
maintaining a continuous investment program for each Fund, consistent with (i)
the Fund's investment policies as set forth in the Company's Articles of
Incorporation, Bylaws and Registration Statement, and in any prospectus and/or
statement of additional information of the Fund, and (ii) each Fund'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 each
Fund, unless otherwise directed by the Directors or INVESCO, and executing
transactions accordingly; (d) providing the Funds 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 IGAM; (e) determining
what portion of each Fund's portfolios should be invested in the various types
of securities authorized for purchase by the Funds; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
action by the Fund and any other rights pertaining to the portfolio securities
of the Funds shall be exercised.
Under the Proposed Sub-Advisory Agreement, IGAM is authorized to select
broker-dealers for the execution of brokerage transactions for the Funds,
subject to the requirement to obtain the most favorable execution and price.
After fulfilling such requirement, IGAM is authorized to consider whether such
firms furnish statistical, research and other information or services to IGAM,
as well as other factors, in selecting broker-dealers. Such information and
services may be of assistance to INVESCO or IGAM in making informed investment
<PAGE>
decisions, and may be used by INVESCO and IGAM in servicing all of their
respective accounts, not just the Fund. IGAM will pay for maintaining the
personnel, office space, equipment and facilities necessary to perform its
obligations under the Proposed Sub-Advisory Agreement. All other expenses in
connection with the operation of the Funds are paid by the Funds or INVESCO. The
Proposed Sub-Advisory Agreement provides that, as compensation for its services,
IGAM will receive from INVESCO, at the end of each month, a fee based upon the
average daily value of each Fund's net assets, computed at the following annual
rate:
European Fund and Pacific Basin Fund
0.2500% of average net assets up to $350 million
0.2166% of average net assets in excess of $350 million but less
than $700 million
0.1833% of average net assets in excess of $700 million
International Growth Fund
0.3333% of average net assets up to $500 million
0.2500% of average net assets in excess of $500 million but less
than $1 billion
0.2167% of average net assets in excess of $1 billion
As noted above, this fee schedule is identical to the fee schedule
contained in the Present Agreement with IAML. The sub-advisory fee for each Fund
is paid by INVESCO, NOT the Funds, and therefore approval of the Proposed
Sub-Advisory Agreement will not have any impact on Fund expenses.
If the shareholders of each of the Funds approve this Proposal, the
Proposed Sub-Advisory Agreement will become effective on [October 28, 1997], and
will remain in force for an initial term expiring two years from the effective
date. After the expiration of the initial term, the Sub-Advisory 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
Independent Directors, cast in person at a meeting called for the purpose of
voting on such continuance. The Proposed Sub-Advisory Agreement may be
terminated at any time without penalty by either party upon 60 days' written
notice, or by each Fund upon notice to INVESCO and IGAM, and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the rules thereunder. Once approved by shareholders, any amendments to
the Sub-Advisory Agreement must be agreed to by IGAM and INVESCO; provided,
however, that no material amendments can be made unless they are approved by a
majority of the Directors, including a majority of the Independent Directors and
a majority of the outstanding voting securities of the Fund (if a shareholder
vote is required by applicable law).
The Proposed Sub-Advisory Agreement contains various other provisions
including a section providing that IGAM will have no liability in connection
with its performance of sub-advisory services, except for situations involving
willful misfeasance, bad faith or negligence.
<PAGE>
Board Action And Recommendation
At a meeting of the Board held on May 16, 1997, the Directors evaluated
the Proposed Sub- Advisory Agreements between INVESCO, the Funds' investment
adviser, and IGAM. The Independent Directors had available to them the
assistance of outside counsel throughout the process of determining whether to
approve the Proposed Sub-Advisory Agreement. Prior to and during the meetings
the Independent Directors requested and received all information they deemed
necessary to enable them to determine whether the proposed Agreement is in the
best interests of the Company, the Funds and their shareholders. At the
meetings, the Independent Directors reviewed materials furnished by Fund
management and met with representatives of INVESCO. The Independent Directors
viewed as significant the fact that, under the Proposed Sub-Advisory Agreement,
the Adviser and the Sub-Advisers are expected to continue to provide to the
Company, the Funds and their shareholders investment advisory services of the
same nature and quality as under the current proposal.
In addition, the Board discussed and reviewed the terms and provisions of
the Proposed Sub-Advisory Agreement. The Board specifically noted that the fees
and expenses payable under the Proposed Sub-Advisory Agreement are identical to
the fees and expenses presently in effect under the corresponding Present
Agreements.
Based upon the Directors' review and the evaluations of the materials they
received, and in consideration of all factors deemed relevant to them, the
Directors determined that the Proposed Sub-Advisory Agreement is fair,
reasonable and in the best interests of the Company, the Funds and their
shareholders.
Vote Required
As provided under the 1940 Act, approval of the Proposed Sub-Advisory
Agreement with respect to a Fund will require the affirmative vote of a majority
of the outstanding shares of each Fund, voting separately as a class. Such a
majority is defined in the 1940 Act as the lesser of: (a) 67% or more of the
shares present at such meeting, if the holders of more than 50% of the
outstanding shares of each Fund are present or represented by proxy, or (b) more
than 50% of the total outstanding shares of each Fund.
If the shareholders of any particular Fund fail to approve the Proposed
Sub-Advisory Agreement, the Agreement will not go into effect for such Fund.
However, the Proposed Sub-Advisory Agreement will go into effect each other Fund
that receives shareholder approval.
THE DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMEND THAT EACH
FUND'S SHAREHOLDERS VOTE IN FAVOR OF PROPOSAL 1.
<PAGE>
PROPOSAL 2: APPROVAL OR DISAPPROVAL OF THE PLAN
Background
At this meeting, shareholders are to consider a Plan and Agreement of
Distribution (the "Plan") approved by the Board on May 16, 1997. The reasons the
Directors, including all of the Independent Directors, determined that it was
reasonably likely that the Plan would contribute to an increase in sales of
shares of the Funds, with resulting benefits to the Funds and their
shareholders, are set forth in detail below. Briefly, the Board determined that
an enhanced marketing effort by INVESCO on behalf of the Funds would benefit
each Fund in maintaining and improving its market share, and that such an effort
would be enhanced by adoption of the Plan, under which each Fund's assets will
be available to compensate INVESCO for a portion of the costs of marketing and
distributing Fund shares.
Changing Mutual Fund Distribution Patterns
In years past, no-load mutual funds such as those offered by the Company
were sold directly by their distributors. Today, no-load mutual funds
increasingly are sold through the efforts of third parties such as
broker-dealers, banks, investment advisers, consultants and others. Some of
these third parties are compensated for sales efforts; others are compensated
for ongoing services that they provide to mutual fund shareholders; still others
are compensated for both. A survey of the mutual fund industry by Lipper
Analytical Services, Inc. ("Lipper") shows that as of __________, ______%
percent of new assets in no-load mutual funds came to those funds via third
party distribution channels during __________. The INVESCO Mutual Funds are no
different from the rest of the industry in this respect. INVESCO has advised the
Company that nearly 80% of the gross purchases of all INVESCO Mutual Funds in
calendar year 1996 came through third party distribution channels.
While the mutual fund industry has evolved increasingly toward fee-based
compensation of third party intermediaries, the Company's pricing structure has
remained unchanged. Historically, INVESCO Funds Group, Inc., the Funds'
investment adviser, has compensated these third parties, and paid a wide variety
of advertising and other marketing expenses, out of the revenues it derives from
the Funds for portfolio management and other services provided to the Funds. In
the judgment of INVESCO and the Board, continuing this approach places the Funds
at a competitive marketing disadvantage to their peers.
Although the INVESCO Mutual Funds have grown significantly in the past
five years, INVESCO and the Company compete against management companies having
far greater resources at their command. The costs of marketing the Funds have
increased substantially over the last few years. In 1992, INVESCO spent $6.7
million marketing the INVESCO Mutual Funds; in 1996, INVESCO spent $11 million
on such efforts. Thus, INVESCO must spend a far greater dollar amount in 1997
simply to maintain the same level of marketing for the Funds that they had in
199__. While INVESCO cannot outspend its competitors, it must spend at least
enough to provide what its competitors offer to third parties to distribute
their mutual funds and to generally inform investors that the Funds offer
attractive alternatives to other fund groups. INVESCO has advised the Board that
to do both requires a significant increase in the money and personnel devoted to
marketing shares of the Funds.
<PAGE>
This is a need that is not unique to the Company, or to the INVESCO Mutual
Funds as a group. In order to increase revenue available for spending in the
areas of advertising, sales promotion, and maintenance of an effective sales
effort, many competing mutual fund groups, both load and no-load, have adopted
distribution plans pursuant to Rule 12b-1 of the 1940 Act, under which fund
assets are available to pay certain expenses of distributing fund shares.
Several of the INVESCO Mutual Funds adopted 12b-1 plans in 1990, and most
new INVESCO Mutual Funds started since that time have such plans. Again, this is
not unique. Data on the mutual fund industry compiled by Lipper shows that at
December 31, 1996, 6,367 of the 10,118 open-end mutual funds registered with the
SEC (62.9%) were using fund assets to pay for distribution expenses, either
through Rule 12b-1 plans or a direct charge against fund assets. In 1990, only
54.6% of all such funds had such payments in place. According to INVESCO, one
reason why many no-load funds have adopted Rule 12b-1 plans is to give them a
means, through payment of trail commissions, to compensate third party
broker-dealers for helping to sell fund shares.
It is important to note that adoption of the Plan will not result in a
windfall of revenue for INVESCO. INVESCO has committed to the Board that it will
continue bearing expenses of marketing the Funds at least equal to the level of
expenses that it has currently committed. Thus, adoption of the proposed Plan
will have the effect of making additional moneys available for promotion and
marketing of the Funds, but will not result in increased profits to INVESCO from
INVESCO's reducing its own marketing expenditures.
The Board and INVESCO believe that the adoption of the Plan is likely to
improve the sales of Fund shares by providing third party distributors with an
incentive to sell shares of the Funds, and will allow INVESCO to embark on an
enhanced marketing effort on behalf of the Funds which the Board and INVESCO
believe is required if the Funds are to remain competitive in the marketplace.
Impact Of The Proposed Plan On The Cost Structures Of The Funds
The proposed Plan would authorize use of a small percentage of assets of
the Funds to compensate INVESCO for expenditures it undertakes to promote sales
of Fund shares. The Plan would limit the amount of a Fund's assets which could
be used for this purpose during any 12-month period to a maximum of 0.25 of 1%
(25 basis points) of the assets of that Fund. Any increase in this rate would
require consent of the Board and shareholders of the Fund. The compensation
allowed under the proposed Plan is modest in comparison to Rule 12b-1 plans that
have been adopted by many other mutual funds. Some funds have adopted
distribution plans authorizing in excess of 1% of fund assets on an annual basis
to be used to reimburse the distributor for the costs of marketing fund shares.
The proposed Plan is PROSPECTIVE in nature. Thus, it will only apply to
the increase in assets of the Funds which occur after the Plan is implemented.
If approved by shareholders, the Plan will become effective on November 1, 1997,
and the first payments under the Plan will be made on or about December 5, 1997.
<PAGE>
Therefore, the Plan will apply only to the increase in assets in the Funds on or
after November 1, 1997. To illustrate how the Plan will work, assume that a Fund
has $500 million in assets on October 31, 1997. Assume further that the Fund
increases its assets to $550 million in November 1997. Under this illustration,
the Plan will apply to $50 million in Fund costs and the cost of the Plan will
be absorbed pro rata by all shareholders.
Adoption of the proposed Plan will only increase expenses a shareholder
would pay on a $1,000 investment in the Funds (assuming a 5% annual return) by
approximately $2.63 for one year. Another way of looking at the effect of this
proposal is to consider the fact that, if a Fund had a net asset value per share
of $10, the deduction of the maximum Rule 12b-1 charge would reduce the price
per share by two and one-half cents ($.025) for the entire year ($.00007 per
share per day). Daily changes in the market price of the Funds' securities often
result in a fluctuation in the Funds' net asset values per share by an amount
greater than the yearly amount of the reduction in the per share net asset
values that will result from the Rule 12b-1 charge. If the Plan had been
effective at June 30, 1996, based on the average daily net assets of each Fund's
portfolios and the purchases of Fund shares made after that date, as of June 30,
1997, the maximum annual payments of the Funds for the twelve months then ended
would have been:
International Growth Fund $
Pacific Basin Fund $
European Fund $
Shareholders may recall that certain of the INVESCO Mutual Funds adopted
similar plans pursuant to Rule 12b-1 in 1990. In general, mutual funds with such
plans tend to increase assets more rapidly than those without such plans. The
increased assets, in turn, may result in reaching advisory fee breakpoints more
quickly, and in allocating expenses over more accounts and more assets.
Increased assets also may allow the adviser to waive percentages of advisory
fees. Thus, while shareholders in the INVESCO Mutual Funds named below approved
plans allowing for fees of 0.25%, with one exception, the net increase in fees
has not equalled 0.25%.
<PAGE>
================================================================================
Fund 1990 Fiscal Year End 1996 Fiscal Year End
Total Expenses Total Expenses
- --------------------------------------------------------------------------------
INVESCO Dynamics Fund 0.98% 1.12%
INVESCO Growth Fund 0.78% 1.05%
INVESCO High Yield Fund 0.94% 0.98%
INVESCO Industrial Income Fund 0.76% 0.93%*
INVESCO Tax-Free Long-Term Bond Fund 0.75% 0.90%**
INVESCO Select Income Fund 1.01% 1.00%***
INVESCO U.S. Government 1.07% 1.00%****
Securities Fund
================================================================================
* Reflects fee waiver of 0.03%
** Reflects fee waiver of 0.13%
*** Reflects fee waiver of 0.15%
**** Reflects fee waiver of 0.46%
INVESCO cannot, of course, promise that the Funds will have a similar
experience. The data provided merely illustrates that if shareholders agree to
impose a 0.25% fee pursuant to Rule 12b-1, the expenses of a fund do not
automatically increase by 0.25%.
Benefits To Existing Shareholders Of The Funds
Shareholders will no doubt observe that adoption of the proposed Plan may
benefit the Funds and INVESCO, but may wonder whether the Plan will benefit
them.
First, as noted above, it is important to understand that the Plan will
ONLY apply to the increase in assets of the Funds which occur after the Plan is
implemented. Thus, the Plan is PROSPECTIVE in nature, and will only apply to the
increase in assets in the Funds on or after November 1, 1997. Therefore, the
initial increases in the expenses of the Funds are expected to be substantially
less than the 0.25% maximum amount for which approval is sought, because
payments will be made only as to shares acquired on or after November 1, 1997.
As the proportion of Fund shares purchased on or after that date to the total
number of outstanding shares of the Funds increases, the actual expenses caused
by Plan payments also will increase (but in no event will exceed 0.25% of the
average annual net assets of each Fund).
The Board and INVESCO believe that there is a reasonable likelihood that
there will be benefits to existing shareholders, including:
<PAGE>
o Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Company's Funds;
o The sale of additional shares reduces the likelihood that
redemption of shares will require the liquidation of a Fund's
securities in amounts and at times that are disadvantageous for
investment purposes and, therefore, disadvantageous to the
remaining shareholders;
o The positive effect which increased Fund assets will have on its
revenues could allow INVESCO:
o To have greater resources to make the financial commitments
necessary to improve the quality and level of Fund and
shareholder services (in both systems and personnel);
o To increase the number and type of mutual funds available to
investors from INVESCO (and support them in their infancy),
and thereby expand the investment choices available to all
shareholders;
o To acquire and retain talented employees who desire to be
associated with a growing organization.
Moreover, increased Fund assets may result in reducing each investor's
share of certain expenses through economies of scale (e.g., allocating fixed
expenses over a larger asset base), thereby partially offsetting the costs of
the Plan.
Protections Afforded Shareholders Under The Proposed Plan
The proposed Plan is described in detail below. However, the Board and
INVESCO believe that shareholders should recognize certain protections that are
either in the proposed Plan itself or are embedded in the proposed Plan under
the terms of Rule 12b-1 under the 1940 Act.
No Carryover Of Expenses
The proposed Plan does NOT permit carrying over distribution expenses in
excess of the above 25 basis points to subsequent periods. As you may know, many
Rule 12b-1 plans of other mutual funds permit the carrying over of such excess
expenses (subject to the approval of those funds' boards), and the resultant
buildup of large expense accruals subject to compensation. Building up of large
expense accruals is a major complaint that is often raised concerning the
operation of Rule 12b-1 plans.
<PAGE>
Quarterly Review By The Board Of Directors
INVESCO will be required to submit reports to the Board on a quarterly
basis concerning the marketing expenses that have been compensated under the
Plan; and, very importantly, the Directors will be able to terminate the Plan at
any time, which would terminate subsequent Plan payments. The Board must approve
annually the continuation of the Plan, or such Plan will terminate automatically
along with the payments under it by the Fund.
Description Of The Plan
On May 16, 1997, the Board adopted the proposed Plan, subject to approval
by shareholders of the Funds. A copy of the Plan is attached as Exhibit B. The
distribution expenses borne by each Fund will be in addition to the distribution
expenses that INVESCO currently bears, and that it intends to continue bearing,
pursuant to a commitment INVESCO has made to the INVESCO Mutual Funds. The Plan
will obligate INVESCO to submit quarterly reports of expenditures under the Plan
to the Board. Such quarterly reports will be reviewed by the Board, including a
majority of the Directors who are not "interested persons" of the Company and
who have no direct or indirect financial interest in operation of the Plan (the
"Independent Directors"). In addition, INVESCO has made a commitment to the
Directors to provide them with the proposed annual budget for its marketing
efforts on behalf of the INVESCO Mutual Funds, including the Company's Funds.
Each Fund is authorized under the proposed Plan to use its assets to
finance certain activities relating to the distribution of its shares to
investors. Under the Plan, monthly payments may be made by a Fund to INVESCO to
permit it, at INVESCO's discretion, to engage in certain activities, and provide
certain services approved by the Board in connection with the distribution of
each Fund's shares to investors. These activities and services may include the
payment of compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in the Funds) to
securities dealers and other financial institutions and organizations, which may
include INVESCO-affiliated companies, to obtain various distribution-related
and/or administrative services for the Funds. Such services may include, among
other things, processing new shareholder account applications, preparing and
transmitting to the Funds' Transfer Agent computer processable tapes of all
transactions by customers, and serving as the primary source of information to
customers in answering questions concerning the Funds and their transactions
with the Funds.
In addition, other permissible activities and services include
advertising, the preparation and distribution of sales literature, printing and
distributing prospectuses to prospective investors, and such other services and
promotional activities for the Funds as may from time to time be agreed upon by
the Company and the Board, including public relations efforts and marketing
programs to communicate with investors and prospective investors. These services
and activities may be conducted by the staff of INVESCO or its affiliates or by
third parties.
<PAGE>
Under the Plan, the Company's payments to INVESCO on behalf of each Fund
are limited to an amount computed at an annual rate of 0.25% of each Fund's
average net assets during the month. INVESCO is not entitled to payment for
overhead expenses under the Plan, but may be paid for all or a portion of the
compensation paid for salaries and other employee benefits for the personnel of
INVESCO whose primary responsibilities involve marketing shares of the INVESCO
Mutual Funds, including the Funds. Payment amounts by each Fund under the Plan,
for any month, may be made to compensate INVESCO for permissible activities
engaged in and services provided by INVESCO during the rolling 12-month period
in which that month falls, although this period is expanded to 24 months for
obligations incurred during the first 24 months of each Fund's operations.
Therefore, any obligations incurred by INVESCO in excess of the limitations
described above will not be paid by the Funds under the Plan, and will be borne
by INVESCO. In addition, INVESCO may from time to time make additional payments
from its revenues to securities dealers and other financial institutions that
provide distribution-related and/or administrative services for the Funds. No
further payments will be made by the Funds under the Plan in the event of its
termination. Also, any payments made by the Funds may not be used to finance
directly the distribution of shares of any other fund of the Company or other
mutual fund advised by INVESCO. Payments made by each 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.
INVESCO will bear any distribution-related expenses in excess of the
amounts which are compensated pursuant to the Plan. The Plan also authorizes any
financing of distribution which may result from INVESCO's use of its own
resources, including profits from investment advisory fees received from the
Funds, provided that such fees are legitimate and not excessive.
The Plan is subject to the requirements of Rule 12b-1 under the 1940 Act.
The Plan has been approved by the Company's Board, including all of the
Independent Directors, and is being submitted to the shareholders of the Funds
for approval at this shareholders' meeting. Under Rule 12b-1, the Board must
review expenditures under the Plan no less often than quarterly, and the Plan
may continue in effect only so long as such continuance is approved at least
annually by the Board, including a majority of the Independent Directors. A
material amendment to the Plan requires approval by the Board, including a
majority of the Independent Directors, and any amendment which would materially
increase the amount which any of the Funds may expend under the Plan also
requires approval by a majority of the outstanding shares of those Funds. The
Plan and any agreements relating to its implementation may be terminated, in the
case of the Plan, at any time, and in case of any agreements, upon sixty days'
written notice to the other party, by vote of a majority of the Independent
Directors or by the vote of a majority of the outstanding shares of the Funds.
Such agreements will also terminate automatically if assigned. So long as the
Plan continues in effect, the selection and nomination of the disinterested
Directors of the Company are committed to the discretion of the Independent
Directors.
<PAGE>
Basis Of Board Of Directors' Recommendations
The Independent Directors had available to them the assistance of outside
legal counsel throughout the process of determining whether to approve the Plan.
Prior to and during the meetings the Independent Directors requested and
received all information they deemed necessary to enable them to determine
whether the Plan is in the best interests of the Company, the Funds and their
shareholders. At the meetings, the Independent Directors reviewed materials
furnished by Fund management and also met with representatives of INVESCO.
In connection with their consideration of the proposed Plan, the Directors
were furnished with a draft of the Plan and related materials, including a
memorandum from INVESCO, which outlined the uses and benefits of distribution
plans under Rule 12b-1 of the 1940 Act currently being used in the mutual fund
industry, and certain data concerning such plans prepared by INVESCO In
addition, the Company's legal counsel provided additional information,
summarized the provisions of the proposed Plan, and discussed the legal and
regulatory considerations in adopting such Plan.
In approving the Plan, the Directors determined, in the exercise of their
business judgment and in light of their fiduciary duties under state law and the
1940 Act, that, based upon the material requested and evaluated by them, the
Plan is reasonably likely to benefit the Funds and their shareholders.
The Directors considered various factors relevant to the Funds' situation,
including the investment and sales history of the Funds, their marketing
experience using INVESCO as distributor, possible ways in which sales of shares
could be increased, and the effect of the proposed Plan on the Funds and their
shareholders. The Board also noted that while shareholders of several INVESCO
Mutual Funds did not approve distribution plans similar to the Proposed Plan in
1990, shareholders of several others did approve such plans. During the last
five years that those current Rule 12b-1 Plans have been in effect, there have
been positive results. The tables below, prepared by INVESCO, summarize certain
of these results by noting the percentage increase in gross and net sales during
calendar years 1992, 1993, 1994, 1995, and 1996 of both the INVESCO 12b-1 and
non-12b-1 Mutual Funds which were in existence when the current 12b-1 Plans were
instituted. These figures were calculated by comparing the gross and net sales
of the relevant INVESCO 12b-1 and non-12b-1 Funds over these years to these
Funds' gross and net sales during calendar year 1990. They include exchanges and
dividend reinvestments, but do not include information with respect to INVESCO
Value Trust, which was not distributed by INVESCO in 1990.
===============================================================================
Percent of Gross Sales Increase
- -------------------------------------------------------------------------------
Type of Funds 1992 1993 1994 1995 1996
- -------------------------------------------------------------------------------
INVESCO 617.99% 538.96% 442.01% 307.33% 331.58%
12b-1 Funds
- -------------------------------------------------------------------------------
INVESCO Non- 146.93% 225.79% 122.27% 147.45% 291.47%
12b-1 Funds
================================================================================
<PAGE>
================================================================================
Percent of Net Sales Increase
- --------------------------------------------------------------------------------
Type of Funds 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
INVESCO 1110.61% 747.03% 80.79% 103.23% 18.95%
12b-1 Funds
- --------------------------------------------------------------------------------
INVESCO Non- 22.97% 140.41% -89.11% 7.70% 96.93%
12b-1 Funds
================================================================================
These figures show that, except for the net sales figures for 1996, the
gross and net sales of the INVESCO 12b-1 Mutual Funds compare favorably to the
gross and net sales of the INVESCO Mutual Funds without 12b-1 plans over this
entire time period. In short, the addition of 12b-1 plans for certain of the
INVESCO Mutual Funds in 1990 appear to have resulted in increased gross sales,
and, with one exception, increased net sales of those INVESCO Mutual Funds,
compared to the INVESCO Mutual Funds without such plans.
The Board concluded that the changing mutual fund marketplace since 1990,
coupled with rising costs, dictated that shareholders should be asked again to
approve the Plan at this time.
It was also represented to the Board that there would be no diminution of
the promotional and marketing efforts currently maintained by INVESCO in
connection with promoting sales of shares of the Funds. At the meeting, it was
suggested that the moneys made available under the proposed Plan could be used
for direct support of targeted advertising and promotional campaigns for the
Funds in specific regional areas, as well as for general promotion and
advertising of the Funds. The Directors specifically questioned INVESCO's
Management as to why it believed adoption of the proposed Plan could be expected
to stimulate additional sales of shares of the Funds, thereby assisting the
Funds by increasing the present asset base. After discussion, it was agreed that
it was reasonable to expect that an enhanced advertising and marketing effort by
INVESCO on behalf of the Funds, together with the ability to compensate third
party broker-dealers for helping to sell the Funds' shares, would have a
reasonable likelihood of producing these results. The Board also placed
importance on the fact that the Board and, in particular, the Independent
Directors, would be able to monitor the nature, manner and amount of
expenditures of the Funds under the Plan by reviewing the quarterly reports of
INVESCO's distribution expenditures that INVESCO is obligated to provide the
Board, and by being able to terminate the Plan, and thereby end all obligations
of the Funds to make payments thereunder, at any time.
In approving the proposed Plan, the Board took into account, among other
things, the following factors: the nature and causes of the problems or
circumstances which made implementation of the Plan advisable and appropriate;
the way in which the Plan would address these problems or circumstances,
<PAGE>
including the nature and potential amount of the expenditures; the relationship
of such expenditures to the overall cost structure of the Funds; the nature of
the anticipated benefits; the time it might take for those benefits to be
achieved; the merits of possible alternative plans; the interrelationship
between the Plan and the activities of INVESCO; and the effect of the Plan on
existing shareholders.
The Directors concluded that approval of the Plan was warranted in that
there was reasonable likelihood that the Funds and their shareholders will
benefit from the adoption of the Plan in the following ways:
o The sale of additional shares reduces the likelihood that redemption of
shares will require the liquidation of portfolio securities in amounts and
at times that are disadvantageous for investment purposes;
o Enhanced marketing efforts, if successful, should result in an increase in
net assets and afford greater flexibility in pursuing the investment
objectives of the Funds;
o Increased Fund assets could allow INVESCO to: have greater resources to
make the financial commitments necessary to improve the quality and level
of Fund and shareholder services (in both systems and personnel); increase
the number and type of mutual funds in the group (and support them in
their infancy) and thereby expand the investment choices available to all
shareholders; and acquire and retain talented employees who desire to be
associated with a growing organization; and
o The cost to the Funds of the Plan would be partly offset to the extent
that increased Fund assets result in economies of scale (e.g., sharing
fixed expenses over a larger asset base).
The Directors concluded that the various possible benefits described above
would be of substantially equal significance to both new and existing
shareholders of the Funds, and thus no unfair burden will fall on any group of
Fund shareholders from adoption of the proposed Plan. In addition, while INVESCO
will benefit from increased management fees as a result of growth in Fund
assets, the Directors concluded that such benefit to INVESCO will not be
disproportionate to the above-described anticipated benefits to the Funds and
shareholders of the Funds resulting from growth in Company assets. Finally,
while adoption of the proposed Plan will increase the expense ratio of the Funds
by the amount of the distribution payments from assets of the Funds (less any
economies of scale attributable to the Plan), the Directors were satisfied that
the increased expense ratio will not be out of line with the expense ratios of
comparable mutual funds.
The Directors recognized that there is no assurance that the expenditures
of assets of the Funds to finance distribution of shares of the Funds will
result in additional sales of shares or in an increase in the net assets of the
Funds, upon which the above benefits depend. The Directors determined, however,
that there is a reasonable likelihood that one or more of such benefits will
result and that they will be in a position to monitor the distribution expenses
of the Funds and to evaluate the benefit of such expenditures in deciding
whether to continue the Plan.
<PAGE>
Vote Required
As provided under the 1940 Act, approval of the Plan will require the
affirmative vote of a majority of the outstanding shares of each Fund voting
separately as a class. Such a majority is defined in the 1940 Act as the lesser
of: (a) 67% or more of the shares present at such meeting, if the holders of
more than 50% of the outstanding shares of each Fund are present or represented
by proxy, or (b) more than 50% of the total outstanding shares of each Fund.
If the shareholders of any particular Fund fail to approve the Plan, the
Plan will not go into effect for that Fund, and that Fund will not participate
in the enhanced advertising and marketing effort by INVESCO on behalf of the
INVESCO Mutual Funds described above. However, the Plan will go into effect for
each Fund that receives shareholder approval.
THE DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMEND THAT
EACH FUND'S SHAREHOLDERS VOTE TO APPROVE THE PLAN.
INFORMATION CONCERNING ADVISER, SUB-ADVISER, DISTRIBUTOR AND AFFILIATED
COMPANIES
INVESCO Funds Group, Inc., a Delaware corporation, serves as the Company's
investment adviser, as well as providing other services to the Company. INVESCO
Distributors, Inc. is a wholly-owned subsidiary of INVESCO Funds Group, Inc.
INVESCO Funds Group, Inc. is a wholly-owned subsidiary of INVESCO North American
Holdings, Inc. ("INAH"), 1315 Peachtree Street, N.E., Atlanta, Georgia 30309.
INAH is an indirect wholly-owned subsidiary of AMVESCAP.(1) The corporate
headquarters of AMVESCAP are located at 11 Devonshire Square, London EC2M 4YR,
England. INVESCO's offices are located at 7800 East Union Avenue, Denver,
Colorado 80237. INVESCO currently serves as investment adviser and distributor
of 14 open-end investment companies having aggregate net assets of $16.4 billion
as of July 31, 1997.
The principal executive officers and directors of INVESCO Funds Group, Inc.
and their principal occupations are:
Dan J. Hesser, Chairman of the Board, President, Chief Executive Officer
and Directors; Brian N. Minturn, Executive Vice President and Directors; Hubert
L. Harris, Jr., Director, also, President of INVESCO Services, Inc., Director of
AMVESCAP, Chief Financial Officer of INVESCO Individual Services Group; Charles
P. Mayer, Director; Robert J. O'Connor, Director, also, Chief Executive Officer
and Chairman of INVESCO Retirement Plan Services, a division of INVESCO Funds
Group, Inc.
The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237, with the exception of the address of
Messrs. Bishop, DeKinder and Harris, which is 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309 and Mr. O'Connor, whose address is 1355 Peachtree Street,
N.E., Atlanta, Georgia 30309.
- --------
(1) The intermediary companies between INAH and AMVESCAP are as follows:
INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North American Group,
Ltd., each of which is wholly-owned by its immediate parent.
<PAGE>
INVESCO Asset Management Limited ("IAML") serves as the sub-adviser to the
Funds. IAML is a direct wholly-owned subsidiary of INVESCO Europe Limited
("IEL"), 11 Devonshire Square, London EC2M 4YR, England. IEL is a direct
wholly-owned subsidiary of AMVESCAP. IAML has the primary responsibility for
providing portfolio investment advisory services to the Funds. IAMl currently
serves as adviser or sub-adviser to _____ investment portfolios having aggregate
net assets of $_____ billion as of July 31, 1997.
The principal executive officer and directors of IAML and their principal
occupations are as follows:
Jeffrey C. Attfield, Deputy Chief Executive, Chairman of the Board and Fund
Manager; Sarah C. Bates, Director and Managing Director, Investment Trust
Division; Francesco Bertoni, Director and Investment Manager; Roy N. Bracher,
Director and Investment Director; Anthony Broccardo, Director and Fund Manager;
Ian A. Carstairs, Director and Investment Manager; Adam D. Cooke, Director and
Marketing Manager of Investment Services; Andre J. Crossley, Director and Fund
Manager; Olivier de Faramond, Director and Fund Manager; David C. Gillan,
Director and Investment Director; Peter J. Glynne-Percy, Director and Investment
Manager; P.A. Hillgarth, Director and Investment Manager; David C. Hypher,
Director and Investment Director; Martin R. Kraus, Director and Investment
Manager; Jeremy C. Lambourne, Director and Finance Director; Rory S. Powe,
Director and Investment Manager; Ricardo Ricciardi, Director; J-B de Franssu,
Director; and P. Lockwood, Director.
The address of each of the foregoing officer and directors is 11
Devonshire Square, London EC2M 4YR, England.
INVESCO Global Asset Management, Limited ("IGAM"), a ____________
corporation, will serve as the Funds' sub-adviser. IGAM is a wholly-owned
subsidiary of INAH. IGAM's offices are located at 12 Bermudiana Road, P.O. Box
HM 66, Hamilton, HM AX. IGAM will have the primary responsibility for providing
portfolio investment advisory services to the Funds. IGAM also serves as adviser
or sub-adviser to _____ investment portfolios having aggregate net assets of
$_______________ as of July 31, 1997.
The principal executive officer and directors of IGAM and their principal
occupations are:
The address of each of the foregoing officers and directors is:
Pursuant to an Administrative Services Agreement between the Company and
INVESCO, INVESCO provides administrative services to the Company, including
distribution, sub-accounting and recordkeeping services and functions. During
the fiscal year ended October 31, 1996, the Company paid INVESCO total
compensation of $102,207 in payment for such services ($23,409, $37,930 and
$45,868 of such compensation was paid INVESCO by the International Growth Fund,
the Pacific Basin Fund and the European Fund, respectively).
<PAGE>
During the fiscal year ended October 31, 1996, the Company paid INVESCO,
which also serves as the Company's registrar, transfer agent and dividend
disbursing agent, total compensation of $2,093,585 for such services ($383,054,
$870,770 and $839,761 of such compensation was paid INVESCO by the International
Growth Fund, the Pacific Basin Fund and the European Fund, respectively).
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS [AND MANAGEMENT]
The following table sets forth, as of the Record Date, the beneficial
ownership of each Fund's issued and outstanding shares of beneficial interest by
each 5% or greater shareholder.
Percent of
Name and Address Amount & Nature of Shares of
of Beneficial Owner Beneficial Ownership(2) Beneficial Interest
- --------------------------------------------------------------------------------
International
Growth Fund
Pacific Basin Fund
European Fund
OTHER BUSINESS
The management of the Company has no business to bring before the Meeting
other than the matters described above. Should any other business be presented
at the Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
- --------
(2) Each beneficial owner named above shares investment power with respect to
the shares listed next to its respective row, but its customers retain sole
voting power.
<PAGE>
SHAREHOLDER PROPOSALS
The Company does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of proxy
for a subsequent shareholders' meeting should send their written proposals to
the Secretary of the Company, 7800 East Union Avenue, Denver, Colorado 80237.
The Company has not received any shareholder proposals to be presented at this
Meeting.
By Order of the Board of Directors,
Glen A. Payne
Secretary
__________________ __, 1997
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
AGREEMENT made the [28th] day of [October], 1997, by and between INVESCO
FUNDS GROUP, INC. ("INVESCO"), a Delaware corporation, and INVESCO GLOBAL ASSET
MANAGEMENT LIMITED, a Bermuda corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO INTERNATIONAL 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 three such series being designated the INVESCO International
Growth Fund, INVESCO Pacific Basin Fund and INVESCO European Fund, (collectively
the "Funds"); 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 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:
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 the 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.
<PAGE>
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 Funds, and to execute all purchases and
sales of portfolio securities;
(b) to maintain a continuous investment program for the Funds,
consistent with (i) the Funds 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 Funds,
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
Funds, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Funds 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 Funds should be invested in the
various types of securities authorized for purchase by the Funds;
and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Funds action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Funds, 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
Funds, 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 Funds 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 Funds. 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
<PAGE>
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 Funds 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 Funds.
The Sub-Adviser may recommend transactions in which it has directly or
indirectly a material interest, in unregulated collective investment schemes
including any operated or advised by the Sub- Adviser or in margined
transactions. 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 Funds.
<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 Funds, 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. With regard to the European and Pacific Basin Funds the advisory
fee to the Sub-Adviser shall be computed at the annual rate of 0.2500% of the
Fund's daily net assets up to $350 million; 0.2166% of the Fund's daily net
assets in excess of $350 million but not more than $700 million; and 0.1833% of
the Fund's daily net assets in excess of $700 million. With regard to the
International Growth Fund, the advisory fee to the Sub- Adviser shall be
computed at the annual rate of 0.3333% of the Fund's daily net assets up to $500
million; 0.2500% of the Fund's daily net assets in excess of $500 million but
not more than $1 billion; and 0.2167% of the Fund's daily net assets in excess
of $1 billion. During any period when the determination of the Funds' net asset
value is suspended by the Directors of the Fund, the net asset value of a share
of the Funds 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 Funds 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 Funds 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 Funds 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 Funds 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
portfolios of the Funds, 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 Funds 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 of the Company, unless
sooner terminated, as hereinafter provided. Thereafter, this Agreement 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 Company, or by the vote of a majority
of the outstanding voting securities of the Funds, 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 Funds by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Funds, 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 compensation
described in Article III hereof earned prior to such termination.
<PAGE>
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 funds 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 which may be incurred by or asserted against the
Sub-Adviser for which it is responsible pursuant to Article I hereof provided
always 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 who 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 Funds (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.
<PAGE>
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.
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By:___________________________________
President
ATTEST:
- --------------------------------------
Secretary
INVESCO GLOBAL ASSET MANAGEMENT
LIMITED
By:_____________________________________
John Rodgers, Chief Executive Officer
ATTEST:
- --------------------------------------
Secretary
<PAGE>
EXHIBIT B
PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of the [28th] day of [October], 1997, by and
between INVESCO INTERNATIONAL FUNDS, INC., a Maryland corporation (hereinafter
called the "Company"), and INVESCO DISTRIBUTORS, Inc., a Delaware corporation
("INVESCO").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of the shares of
each of its three classes or series of common stock, each of which represents an
interest in a separate portfolio of investments, together with any additional
such classes or series that may hereafter be offered to the public
(individually, a "Fund" and collectively, the "Funds"), in accordance with this
Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Act (the
"Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Disinterested Directors") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b- 1 under the Act and
authorizes payments as described herein. The Agreement is defined as
those provisions of this document by which the Company retains
INVESCO to provide distribution services beyond those required by
the General Distribution Agreement between the parties, as are
described herein. The Company may retain the Plan notwithstanding
termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. The Company is hereby
authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's shares.
2. Subject to the supervision of the board of directors, the Company
hereby retains INVESCO to promote the distribution of shares of each
of the Funds by providing services and engaging in activities beyond
those specifically required by the Distribution Agreement between
the Company and INVESCO and to provide related services. The
<PAGE>
activities and services to be provided by INVESCO hereunder shall
include one or more of the following: (a) the payment of
compensation (including trail commissions and incentive
compensation) to securities dealers, financial institutions and
other organizations, which may include INVESCO-affiliated companies,
that render distribution and administrative services in connection
with the distribution of the shares of each of the Funds; (b) the
printing and distribution of reports and prospectuses for the use of
potential investors in each Fund; (c) the preparing and distributing
of sales literature; (d) the providing of advertising and engaging
in other promotional activities, including direct mail solicitation,
and television, radio, newspaper and other media advertisements; and
(e) the providing of such other services and activities as may from
time to time be agreed upon by the Company. Such reports and
prospectuses, sales literature, advertising and promotional
activities and other services and activities may be prepared and/or
conducted either by INVESCO's own staff, the staff of INVESCO-
affiliated companies, or third parties.
3. INVESCO hereby undertakes to use its best efforts to promote sales
of shares of each of the Funds to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and
as it from time to time believes will best further sales of such
shares.
4. Each Fund is hereby authorized to expend, out of its assets, on a
monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below) in
the activities and provide the services specified in paragraph (2)
above, an amount computed at an annual rate of 0.25 of 1% of the
average daily net assets of each Fund during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by a Fund hereunder, for
any month, may be used to compensate INVESCO for: (a) activities
engaged in and services provided by INVESCO during the rolling
twelve-month period in which that month falls, or (b) to the extent
permitted by applicable law, for any month during the first
twenty-four months following a Fund's commencement of operations,
activities engaged in and services provided by INVESCO during the
rolling twenty-four month period in which that month falls, and any
obligations incurred by INVESCO in excess of the limitation
described above shall not be paid for out of Fund assets. No Fund
shall be authorized to expend, for any month, a greater percentage
of its assets to pay INVESCO for activities engaged in and services
provided by INVESCO during the rolling twenty-four month period
referred to above than it would otherwise be authorized to expend
out of its assets to pay INVESCO for activities engaged in and
services provided by INVESCO during the rolling twelve-month period
referred to above. No payments will be made by the Company hereunder
after the date of termination of the Plan and Agreement.
<PAGE>
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in
the sale of shares of a Fund, pursuant to this Plan and Agreement or
otherwise, may be deemed to constitute the indirect use of Fund
assets, such indirect use of Fund assets is hereby authorized in
addition to, and not in lieu of, any other payments authorized under
this Plan and Agreement.
6. The Treasurer of INVESCO shall provide to the board of directors of
the Company, at least quarterly, a written report of all moneys
spent by INVESCO on the activities and services specified in
paragraph (2) above pursuant to the Plan and Agreement. Each such
report shall itemize the activities engaged in and services provided
by INVESCO to a Fund as authorized by the penultimate sentence of
paragraph (4) above. Upon request, but no less frequently than
annually, INVESCO shall provide to the board of directors of the
Company such information as may reasonably be required for it to
review the continuing appropriateness of the Plan and Agreement.
7. This Plan and Agreement shall each become effective immediately upon
approval by a vote of a majority of the outstanding voting
securities of the Company as defined in the Act, and shall continue
in effect until __________, 1998 unless terminated as provided
below. Thereafter, the Plan and Agreement shall continue in effect
from year to year, provided that the continuance of each is
approved at least annually by a vote of the board of Directors of
the Company, including a majority of the Disinterested Directors,
cast in person at a meeting called for the purpose of voting on
such continuance. The Plan may be terminated at any time, without
penalty, by the vote of a majority of the Disinterested Directors or
by the vote of a majority of the outstanding voting securities of
that Fund. INVESCO, or the Company, by vote of a majority of the
Disinterested Directors or of the holders of a majority of the
outstanding voting securities of each Fund, may terminate the
Agreement under this Plan as to such Fund, without penalty, upon 30
days' written notice to the other party. In the event that neither
INVESCO nor any affiliate of INVESCO serves the Company as
investment adviser, the agreement with INVESCO pursuant to this
Plan shall terminate at such time. The board of directors may
determine to approve a continuance of the Plan, but not a
continuance of the Agreement, hereunder.
8. So long as the Plan remains in effect, the selection and nomination
of persons to serve as directors of the Company who are not
"interested persons" of the Company shall be committed to the
discretion of the directors then in office who are not "interested
persons" of the Company. However, nothing contained herein shall
prevent the participation of other persons in the selection and
nomination process, provided that a final decision on any such
selection or nomination is within the discretion of, and approved
by, a majority of the directors of the Company then in office who
are not "interested persons" of the Company.
<PAGE>
9. This Plan may not be amended to increase the amount to be spent by a
Fund hereunder without approval of a majority of the outstanding
voting securities of that Fund. All material amendments to the Plan
and Agreement must be approved by the vote of the board of directors
of the Company, including a majority of the Disinterested Directors,
cast in person at a meeting called for the purpose of voting on such
amendment.
10. To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall
remain in effect as such, so as to authorize the use by each Fund
of its assets in the amounts and for the purposes set forth herein,
notwithstanding the occurrence of an "assignment," as defined by the
Act and the rules thereunder. To the extent it constitutes an
agreement with INVESCO pursuant to a plan, it shall terminate
automatically in the event of such "assignment." Upon a termination
of the agreement with INVESCO, the Funds may continue to make
payments pursuant to the Plan only upon the approval of a new
agreement under this Plan and Agreement, which may or may not be
with INVESCO, or the adoption of other arrangements regarding the
use of the amounts authorized to be paid by the Funds hereunder, by
the Company's board of directors in accordance with the procedures
set forth in paragraph 7 above.
11. The Company shall preserve copies of this Plan and Agreement and all
reports made pursuant to paragraph 6 hereof, together with minutes
of all board of directors meetings at which the adoption, amendment
or continuance of the Plan were considered (describing the factors
considered and the basis for decision), for a period of not less
than six years from the date of this Plan and Agreement, or any such
reports or minutes, as the case may be, the first two years in an
easily accessible place.
12. This Plan and Agreement shall be construed in accordance with the
laws of the State of Colorado and applicable provisions of the Act.
To the extent the applicable laws of the State of Colorado, or any
provisions herein, conflict with the applicable provisions of the
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the _th day of __________, 1997.
INVESCO INTERNATIONAL FUNDS, INC.
By: _________________________
Dan J. Hesser, President
ATTEST: ________________________
Glen A. Payne, Secretary
INVESCO DISTRIBUTORS, INC.
By: _________________________
Ronald L. Grooms,
Senior Vice President
ATTEST: ________________________
Glen A. Payne, Secretary
<PAGE>
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Growth Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO International Growth Fund
(the "Fund") of INVESCO International Funds, Inc., to be held at the Hyatt
Regency Tech Center, 7800 E. Tufts Avenue, Denver, Colorado 80237, on October
28, 1997 at 10:00 a.m. (Mountain Time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated ___________, 1997,
receipt of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 and 2.
INVIIF
INVESCO INTERNATIONAL FUND, INC.
INVESCO International Growth Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
Vote On Proposals For Against Abstain
1. Proposal to approve a change in the corporate ___ ___ ___
sub-adviser to the Fund from INVESCO Asset
Management Limited ("IAML") to INVESCO Global
Asset Management Limited ("IGAM").
2. Proposal to approve a Plan and Agreement of ___ ___ ___
Distribution for the Fund under the Investment
Company Act of 1940.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
- ---------------------- ---------------------------- -----------------
Signature Signature (Joint Owners) Date
<PAGE>
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO Pacific Basin Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO Pacific Basin Fund (the
"Fund") of INVESCO International Funds, Inc., to be held at the Hyatt Regency
Tech Center, 7800 E. Tufts Avenue, Denver, Colorado 80237, on October 28, 1997
at 10:00 a.m. (Mountain Time) and at any adjournment thereof, upon the matters
set forth below, all in accordance with and as more fully described in the
Notice of Special Meeting and Proxy Statement, dated ___________, 1997, receipt
of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 and 2.
INVIIF
INVESCO INTERNATIONAL FUND, INC.
INVESCO Pacific Basin Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
Vote On Proposals For Against Abstain
1. Proposal to approve a change in the corporate ___ ___ ___
sub-adviser to the Fund from INVESCO Asset
Management Limited ("IAML") to INVESCO Global
Asset Management Limited ("IGAM").
2. Proposal to approve a Plan and Agreement of ___ ___ ___
Distribution for the Fund under the Investment
Company Act of 1940.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
- ---------------------- ---------------------------- -------------------
Signature Signature (Joint Owners) Date
<PAGE>
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO European Fund
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 28, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of the INVESCO European Fund (the "Fund") of
INVESCO International Funds, Inc., to be held at the Hyatt Regency Tech Center,
7800 E. Tufts Avenue, Denver, Colorado 80237, on October 28, 1997 at 10:00 a.m.
(Mountain Time) and at any adjournment thereof, upon the matters set forth
below, all in accordance with and as more fully described in the Notice of
Special Meeting and Proxy Statement, dated ___________, 1997, receipt of which
is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 and 2.
INVIIF
INVESCO INTERNATIONAL FUND, INC.
INVESCO European Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
Vote On Proposals For Against Abstain
1. Proposal to approve a change in the corporate ____ ____ ___
sub-adviser to the Fund from INVESCO Asset
Management Limited ("IAML") to INVESCO Global
Asset Management Limited ("IGAM").
2. Proposal to approve a Plan and Agreement of ____ ____ ___
Distribution for the Fund under the Investment
Company Act of 1940.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc., should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
- ---------------------- ---------------------------- -----------------
Signature Signature (Joint Owners) Date
