SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registration [X]
Filed by a party other than the Registration [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
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INVESCO INTERNATIONAL FUNDS, INC.
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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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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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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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INVESCO INTERNATIONAL FUNDS, INC.
^ September 18, 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 ^(each, a "Fund" and 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 ^ Plan and Agreement of
Distribution (the "Plan") applicable ^ to new assets in the Funds ^ after ^ the
Plan is implemented.
The board of directors of the Company believes that ^ adoption of the Plan
is in the best interests of the Funds' 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 ^ Plan we are submitting for your
consideration ^ is significant to the Company, the Funds and to you as a
shareholder. If we do not receive sufficient votes to approve ^ this proposal,
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we may have to send additional mailings or conduct additional telephone
canvassing ^. 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
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^
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 ^(each, a "Fund" and collectively, the "Funds"), the three
series 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 Plan and Agreement of Distribution (the
"Plan") for each Fund.
^ 2. 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 ^ September 18, 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.
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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 ^ Proposal 1 for any
Fund.
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,
/s/ Glen A. Payne
--------------------------------
Glen A. Payne
Secretary
Denver, Colorado
Dated: September 18, 1997
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^
INVESCO INTERNATIONAL FUNDS, INC.
^ September 18, 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") ^(each, a "Fund" and 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 ^ September 18, 1997.
The primary ^ purpose of the Meeting ^ is to allow shareholders to
consider ^ 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 Plan:
o The Plan has been approved by the ^ Board, including the Directors who are
completely independent of any INVESCO-affiliated Company ("the Independent
Directors").
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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 ^ Proposal 1. 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 ^ proposal being submitted for a vote of the shareholders of
each Fund ^ is 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 record of the Funds ^ 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
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to be acted upon at the Meeting. On the Record Date, ^ 32,448,184.173 shares of
beneficial interest of the Company, $.01 par value per share, were outstanding,
including ^ 5,526,167.899 shares of the International Growth Fund, ^
6,985,330.807 shares of the Pacific Basin Fund and ^ 19,936,685.567 shares of
the European Fund.
In addition to the solicitations of proxies by use of the mail, proxies
may be solicited by officers of the Company, ^ by officers and employees of
INVESCO Funds Group, Inc. ("IFG"), the investment adviser and transfer agent of
the Funds ^, and by officers and employees of INVESCO Distributors, Inc.
("IDI"), the distributor of the Funds, personally or by telephone or telegraph,
without special compensation. Until September 29, 1997, ^ IFG is the distributor
of the Funds. Effective on that date, ^ IDI, a wholly-owned subsidiary of ^ IFG,
will become the distributor of the Funds. ^ IFG and IDI 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 ^ proposal listed on the
proxy card, and ask for the shareholder's instructions on ^ the 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.
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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.
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 ^ Proposal 1. 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.
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PROPOSAL 1: APPROVAL OR DISAPPROVAL OF THE ^ PLAN AND AGREEMENT OF
DISTRIBUTION
Background
At the Meeting, shareholders are to consider a Plan and Agreement of
Distribution (the "Plan") approved by the Board on May 16, 1997. The reasons why
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 ^ IDI 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 ^ IDI 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 ^
full-service brokerage firms, discount brokers, 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. ^ According to
Strategic Insight Mutual Fund Research and Consulting LLC ("Strategic Insight"),
retail equity mutual funds with similar capital appreciation objectives to those
of the Funds, which are primarily distributed through financial intermediaries,
offer, with very few exceptions, distribution or service fees to such third
party intermediaries. Among such funds during 1996, Strategic Insight estimated
that 93% of net cash flows (new sales net of redemptions) were captured by funds
with stated annual fees to intermediaries of 25 basis points or higher; only 7%
of net flows were captured by such funds not offering such fees. The INVESCO
Mutual Funds are no different from the rest of the industry in this respect. ^
IFG has advised the Company that nearly 80% of the gross ^ sales of all INVESCO
Mutual Funds in calendar year 1996 came through third party ^ intermediaries.
While the mutual fund industry has evolved increasingly toward fee-based
compensation of third party intermediaries and advisory services asset
allocation, the Company's pricing structure has remained unchanged.
Historically, ^ IFG has compensated these third parties, and paid a wide variety
of ^ 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 ^ IFG and the Board, continuing this approach places the Funds at a
competitive marketing disadvantage to their peers.
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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 ^ distributing the INVESCO
Mutual Funds (including the Funds) have increased substantially over the last
few years. In 1992, ^ IFG spent $6.7 million ^ distributing the INVESCO Mutual
Funds; in 1996, ^ IFG spent $11 million on such efforts. ^ While INVESCO cannot
outspend its competitors, it believes it must spend at least enough to provide
what its competitors offer to third parties to distribute and provide services
to 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.
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 and
providing ongoing services to shareholders.
Several of the INVESCO Mutual Funds adopted ^ distribution 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
Analytical Services, Inc. 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 ^ service
fees, to compensate third party ^ intermediaries for helping to sell fund shares
and providing ongoing services to shareholders.
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, and the
Board has acted in reliance on such commitment, that it will continue bearing
expenses of marketing the INVESCO Mutual Funds at least equal to the level of
expenses that it has currently committed to the Board to bear (at least $2.5
million annually). Thus, adoption of the proposed Plan will have the effect of
making additional ^ monies 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 below the commitment level.
The Board and INVESCO believe that the adoption of the Plan is reasonably
likely to improve the sales of Fund shares by providing third party ^
intermediaries with an incentive to provide ongoing services to Fund
shareholders and sell shares of the Funds, and ^ by providing monies for INVESCO
to embark on an enhanced ^ distribution effort on behalf of the Funds which the
Board and INVESCO believe ^ should assist the Funds ^ to remain competitive in
the marketplace.
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Impact Of The Proposed Plan On The Cost Structures Of The Funds
The proposed Plan is prospective in nature. Thus, the fee will only be
assessed based on new sales of shares, exchanges into each Fund and
reinvestments of dividends and capital gains distributions (collectively "New
Assets") of each Fund which occur after the Plan is implemented. If approved by
shareholders, the Plan will become effective on the first day of the month
following the month in which shareholder approval is received, and the first
payments under the Plan will be made in the second month following shareholder
approval. To illustrate how the Plan will work, assume that a Fund has $500
million in assets on October 31, 1997. Assume further that the Plan is
implemented on November 1, 1997 and that the Fund's New Assets are $50 million
in November 1997, for total assets of $550 million. Under this illustration, the
fees assessed under the Plan would be applied to the $50 million New Assets
after adoption of the Plan, and the cost will be absorbed pro rata by all Fund
shareholders. Investment performance of the Fund's assets and redemptions have
no impact on the Plan. Redemptions of shares acquired with New Assets will not
reduce the dollar amounts to which the Plan's fees will be applied. Any increase
or decrease in the net asset value of New Assets will not affect the dollar
amounts to which the Plan's fees will be applied. Increases in the net asset
value of shares of a Fund existing prior to implementation of the Plan also will
not increase the dollar amounts to which the Plan's fees will be applied. At no
time will the fees under the Plan be applied to a level of New Assets higher
than the net assets of the Fund.
The proposed Plan would authorize use of a small percentage of assets of
the Funds to compensate ^ IDI for expenditures it undertakes to promote ^
distribution 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 ^ New Assets of that Fund added after the Plan
is implemented. Any increase in this rate would require consent of the Board and
shareholders of the applicable 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 ^ up
to 1% of fund assets on an annual basis to be used to ^ compensate the
distributor for the costs of distributing fund shares. ^
Adoption of the proposed Plan will ^ increase expenses a shareholder would
pay on a $1,000 investment in ^ a Fund (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 $10, the deduction of the maximum ^ distribution and service fee charge would
reduce the price per share by two and one-half cents ($.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
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share by an amount greater than the yearly amount of the reduction in the per
share net asset values that will result from the ^ distribution and service
charge. If the Plan had been effective at ^ July 1, 1996, based on the average
daily net assets of each Fund's ^ portfolio and the ^ New Assets in each Fund ^
after that date, as of June 30, 1997, the estimated maximum annual payments of
the Funds for the twelve months then ended would have been:
Estimated Maximum
Annual Payments
Fund ($000s omitted)
International Growth Fund $225 ^
^ Pacific Basin Fund $319
^ European Fund $691
^ Operating expenses of each Fund are paid from the Fund's assets. Lower
expenses therefore benefit investors by increasing a Fund's total return. Annual
operating expenses are calculated as a percentage of a Fund's average annual net
assets. The tables below show the expense ratios for each Fund for the twelve
months ended June 30, 1997, and the estimated pro forma expense ratios for each
Fund if the proposed Plan had been in effect from July 1, 1996 through June 30,
1997.
Pro Forma
Estimated Expenses
Expenses at Including Proposed
June 30, 1997 Plan
International Growth Fund
Management Fee 1.00% 1.00%
12b-1 Fee None 0.24%
Other Expenses 0.68% 0.68%
Total Fund Operating Expenses 1.68% 1.92%
Pacific Basin Fund
Management Fee 0.75% 0.75%
12b-1 Fee None 0.22%
Other Expenses 0.92% 0.92%
Total Fund Operating Expenses 1.67% 1.89%
European Fund
Management Fee 0.75% 0.75%
12b-1 Fee None 0.22%
Other Expenses 0.47% 0.47%
Total Fund Operating Expenses 1.22% 1.44%
^^
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.
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First, as noted above, it is important to understand that the Plan ^ is
prospective in nature and will only be assessed based on New Assets of the Funds
which ^ accrue after the Plan is implemented. ^ 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 ^ New Assets on or after ^ the date on which the Plan is implemented.
As the proportion of Fund ^ New Assets on or after that date to the total ^ Fund
assets increases, the actual expenses caused by Plan payments also will increase
(but in no event will exceed 0.25% of the average annual net assets of each
Fund).
The Board and INVESCO believe that there is a reasonable likelihood that
there will be benefits to existing shareholders, including:
o Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the 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 continue to improve the quality and level of Fund
and shareholder services (in both systems and personnel) that
Fund shareholders have come to expect;
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
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expenses over a larger asset base), thereby partially offsetting the costs
of the Plan. To the extent that Fund assets are increased as the result of
increased sales, breakpoints in the investment advisory fee schedule (i.e.,
asset levels at which the investment advisory fee rate is reduced) may be
reached which would have the effect of reducing a Fund's management fee. This,
however, may not necessarily lead to a reduction in a Fund's overall expense
ratio compared to the Fund's expense ratio prior to implementation of the Plan.
Although INVESCO believes that there is a reasonable likelihood that these
benefits to shareholders will occur, INVESCO can make no guarantee that these
benefits will have any impact on investment performance of any Fund.
Protections Afforded Shareholders Under The Proposed Plan
The proposed Plan is described in detail below. However, the Board and
INVESCO believe that shareholders should ^ be aware of certain protections that
are either in the proposed Plan itself or are embedded in the proposed Plan
under the terms of Rule 12b-1 under the 1940 Act.
No Carryover Of Expenses
The proposed Plan does not permit carrying over distribution expenses in
excess of the above 25 basis points to subsequent periods. As you may know, many
Rule 12b-1 plans of other mutual funds permit the carrying over of such excess
expenses (subject to the approval of those funds' boards), and the resultant
buildup of large expense accruals subject to compensation. Building up of large
expense accruals is a major complaint that is often raised concerning the
operation of Rule 12b-1 plans.
Quarterly Review By The Board Of 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 ^ a 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 ^ A. The
distribution and service 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
<PAGE>
expenditures under the Plan to the Board. Such quarterly reports will be
reviewed by the Board, including a majority of 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 ^ IDI to
permit it, at ^ IDI'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 (except administrative services already provided
under separate agreements with INVESCO-affiliated companies) 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.
Under the Plan, the Company's payments to ^ IDI 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 ^ added after the Plan is implemented. IDI 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 ^ IDI 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 ^ IDI for permissible activities
engaged in and services provided by ^ IDI during the rolling 12-month period in
which that month falls^. Therefore, any obligations incurred by ^ IDI in excess
of the limitations described above will not be paid by the Funds under the Plan,
and will be borne by ^ IDI. In addition, ^ IDI may from time to time make
additional payments from its revenues to securities dealers ^, financial
advisers and 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
<PAGE>
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 ^ IFG. 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- and service-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 ^ that Fund. 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 ^ May 16, 1997 meeting 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 ^ meeting, the Independent Directors reviewed and
discussed 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 ^ IFG. 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 ^ IFG 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 ^ table below, prepared by INVESCO, ^ summarizes
certain of these results by noting the percentage increase in gross ^ 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 ^ sales of
<PAGE>
the relevant INVESCO 12b-1 and non-12b-1 Funds over these years to these Funds'
gross ^ 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
================================================================================
^ These figures show that^ the gross sales of the INVESCO 12b-1 Mutual
Funds compare favorably to the gross ^ sales of the INVESCO Mutual Funds without
^ such 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 ^ contributed to
increased gross ^ sales of those INVESCO Mutual Funds, compared to the INVESCO
Mutual Funds without such plans. ^
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 ^ monies 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 ^ IFG 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 ^ marketing effort by INVESCO on behalf of
the Funds, together with the ability to compensate third party ^ intermediaries
for helping to sell the Funds' shares and/or providing services to Fund
shareholders, 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 ^
IDI's distribution expenditures that ^ IDI 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.
<PAGE>
In approving the proposed Plan, the Board took into account, among other
things, the following factors: the nature and causes of the problems or
circumstances which made implementation of the Plan advisable and appropriate;
the way in which the Plan would address these problems or circumstances,
including the nature and potential amount of the 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 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 or possibly reaching advisory fee
breakpoints more quickly)^.
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
<PAGE>
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.
Vote Required
As provided under the 1940 Act, approval of the Plan with respect to a
Fund will require the affirmative vote of a majority of the outstanding shares
of ^ that 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 ^ the Fund
are present or represented by proxy, or (b) more than 50% of the total
outstanding shares of ^ the 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 ^ IDI 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
^ IFG, a Delaware corporation, serves as the Company's investment adviser,
^ and provides other services to the Company. ^ IDI, a Delaware corporation, is
a wholly-owned subsidiary of ^ IFG. IFG is a wholly-owned subsidiary of INVESCO
North American Holdings, Inc. ("INAH"), 1315 Peachtree Street, N.E., Atlanta,
Georgia 30309. INAH is an indirect wholly-owned subsidiary of ^ AMVESCAP PLC
("AMVESCAP").(1) The corporate headquarters of AMVESCAP are located at 11
Devonshire Square, London EC2M 4YR, England. ^ IFG's and IDI's offices are
located at 7800 East Union Avenue, Denver, Colorado 80237. ^ IFG currently
serves as investment adviser and, until September 29, 1997, as distributor of 14
open-end investment companies having aggregate net assets of $16.4 billion as of
July 31, 1997. Effective September 29, 1997, IDI will become the distributor of
the Funds.
<PAGE>
The principal executive officers and directors of ^ IFG and their
principal occupations are:
Dan J. Hesser, Chairman of the Board, President^ and Chief Executive
Officer ^, also, President and ^ Director of ITC; Hubert L. Harris, Jr.,
Director, also, ^ Chairman of INVESCO Services, Inc., ^ Chief ^ Executive
Officer of INVESCO Individual Services Group; Charles P. Mayer, Director, also,
Senior Vice President and Director of ITC; Robert J. O'Connor, Director, also,
Chief Executive Officer and Chairman of INVESCO Retirement Plan Services, a
division of ^ IFG. Brian N. Minturn has resigned as an officer and director of
IFG effective June 25, 1998 and no longer has any operational responsibilities
with IFG.
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 ^ Mr.
Harris, which is 1315 Peachtree Street, N.E., Atlanta, Georgia 30309 and Mr.
O'Connor, whose address is ^ 1201 Peachtree Street, N.E., Atlanta, Georgia ^
30361.
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 ^ 117 investment portfolios having aggregate
net assets of ^ $7.83 billion as of July 31, 1997.
The principal executive ^ officers and directors of IAML and their
principal occupations are as follows:
- ---------------------------
(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>
Jeffrey C. Attfield, Deputy Chief Executive, Chairman of the Board and Fund
Manager; Tristan P. A. Hillgarth, Chief Executive and Director; 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; ^ 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 and Chief
Investment Officer; J-B de Franssu, Director; and P. Lockwood, Director.
The address of each of the foregoing ^ officers and directors is 11
Devonshire Square, London EC2M 4YR, England.
^
Pursuant to an Administrative Services Agreement between the Company and ^
IFG, IFG provides administrative services to the Company, including ^
sub-accounting and recordkeeping services and functions. During the fiscal year
ended October 31, 1996, the Company paid ^ IFG total compensation of ^ $107,207
in payment for such services ($23,409, $37,930 and $45,868 of such compensation
was paid ^ IFG by the International Growth Fund, the Pacific Basin Fund and the
European Fund, respectively).
During the fiscal year ended October 31, 1996, the Company paid ^ IFG,
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 ^ IFG by the International
Growth Fund, the Pacific Basin Fund and the European Fund, respectively).
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ^ AND FUND
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
Commerce Bank of Kansas City 2,098,203.6180 38.804
TTEE For Farmland Industries
Coop Retirement Plan
P.O. Box 13366
Kansas City, MO 64199
<PAGE>
Charles Schwab & Co., Inc. 579,638.2620 10.720
Special Custody Acct. For The
Exclusive Benefit of Customers
101 Montgomery St.
San Francisco, CA 94104
Pacific Basin Fund
Charles Schwab & Co., Inc. 2,814,011.1660 51.500
Special Custody Acct. For The
Exclusive Benefit of Customers
101 Montgomery St.
San Francisco, CA 94104
European Fund
Charles Schwab & Co., Inc. 7,764,180.6000 39.058
Special Custody Acct. For The
Exclusive Benefit of Customers
101 Montgomery St.
San Francisco, CA 94104
As of the Record Date, officers and directors of the Company, as a group,
beneficially owned less than 1% of the Company's outstanding shares and less
than 1% of each Fund's outstanding shares.
- -----------------------
(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>
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.
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
^ September 18, 1997
<PAGE>
EXHIBIT A
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.
<PAGE>
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 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
<PAGE>
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.
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 ^[October 28], 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.
<PAGE>
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.
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 Tuesday,
October 28, 1997 at 10:00 a.m. (Mountain ^ Time) and at any adjournment thereof,
upon the ^ matter set forth below, all in accordance with and as more fully
described in the Notice of Special Meeting and Proxy Statement, dated ^
September 18, 1997, receipt of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ^ PROPOSAL 1.
^ INVIGF
INVESCO INTERNATIONAL FUND, INC.
INVESCO International Growth Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
^
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.
^ Vote On Proposal For Against Abstain
^ 1. Proposal to approve a Plan and Agreement ___ ___ ___
of Distribution for the Fund.
- --------------------------------------- --------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date 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 Tuesday, October
28, 1997 at 10:00 a.m. (Mountain ^ Time) and at any adjournment thereof, upon
the ^ matter set forth below, all in accordance with and as more fully described
in the Notice of Special Meeting and Proxy Statement, dated ^ September 18,
1997, receipt of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ^ PROPOSAL 1.
^ INVPBF
INVESCO INTERNATIONAL FUND, INC.
INVESCO Pacific Basin Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
^
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
^ Vote On Proposal For Against Abstain
^ 1. Proposal to approve a Plan and Agreement ___ ___ ___
of Distribution ^ for the Fund.
- --------------------------------------- -----------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date 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 Tuesday, October 28, 1997 at
10:00 a.m. (Mountain ^ Time) and at any adjournment thereof, upon the ^ matter
set forth below, all in accordance with and as more fully described in the
Notice of Special Meeting and Proxy Statement, dated ^ September 18, 1997,
receipt of which is hereby acknowledged.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ^ PROPOSAL 1.
^ INVEVF
INVESCO INTERNATIONAL FUND, INC.
INVESCO European Fund
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS A VOTE "FOR":
^
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.
^ Vote On Proposal For Against Abstain
^ 1. Proposal to approve a Plan and Agreement ___ ___ ___
of Distribution for the Fund.
- --------------------------------------- -----------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
