File No. 33-63498
As filed on ^ February 25, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. -----------
Post-Effective Amendment No. ^ 4 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 5 X
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INVESCO INTERNATIONAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable
after this post-effective amendment becomes effective.
It is proposed that this filing will become effective (check
appropriate box)
- --- immediately upon filing pursuant to paragraph (b)
^ X on March 1, 1997, pursuant to paragraph (b)
- ----
- --- 60 days after filing pursuant to paragraph (a)(1)
^
- --- on ------------, pursuant to paragraph (a)(1)
- --- 75 days after filing pursuant to paragraph (a)(2)
- --- on --------------, pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following:
- --- This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended October 31, ^ 1996, was
filed on or about December ^ 24, 1996.
Page 1 of 159
Exhibit index is located at page 99
<PAGE>
INVESCO INTERNATIONAL FUNDS, INC.
-----------------------------------
CROSS-REFERENCE SHEET
Form N-1A
Item Caption
- --------- --------
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses
3....................... Financial Highlights
4....................... Investment Objective and
Policies; The Funds and Their
Management
5....................... The Funds and Their Management;
Additional Information
5A...................... Not Applicable
6....................... Services Provided by the Funds;
Taxes, Dividends and Capital Gain
Distributions; Additional
Information
7....................... How Shares Can Be Purchased;
Services Provided by the Funds
8....................... Services Provided by the Funds;
How to Redeem Shares
9....................... Not Applicable
Part B Statement of Additional
Information
10....................... Cover Page
11....................... Table of Contents
<PAGE>
Form N-1A
Item Caption
- --------- -------
12....................... The Funds and Their Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Funds and Their Management
15....................... The Funds and Their Management
16....................... The Funds and Their Management
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Funds; Tax-
Deferred Retirement Plans; How to
Redeem Shares
20....................... Dividends, Capital Gain
Distributions and Taxes
21....................... How Shares Can Be Purchased
22....................... Calculation of Yield
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PROSPECTUS
^ March 1, 1997
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
INVESCO EUROPEAN FUND seeks to achieve capital appreciation by investing
principally in equity securities of companies domiciled in specified European
countries.
INVESCO PACIFIC BASIN FUND seeks to achieve capital appreciation by
investing principally in equity securities of companies domiciled in specified
Far Eastern or Western Pacific countries.
Each Fund is a series of INVESCO International Funds, Inc. (the "Company"),
an open-end management investment company consisting of three separate funds,
each of which represents a separate portfolio of investments. This ^ prospectus
relates to shares of INVESCO European Fund and INVESCO Pacific Basin Fund (also
sometimes jointly referred to as the "Funds"). A separate ^ prospectus is
available upon request from INVESCO Funds Group, Inc. for the Company's third
fund, INVESCO International Growth Fund. Additional funds may be offered in the
future.
Both Funds' investments may consist in part of securities that may be
deemed to be speculative. (See "Investment Objectives and Policies.")
This ^ prospectus provides you with the basic information you should know
before investing in either of the Funds. You should read it and keep it for
future reference. A Statement of Additional Information containing further
information about the Funds, dated ^ March 1, 1997, has been filed with the
Securities and Exchange Commission^ and is incorporated by reference into this ^
prospectus. To obtain a free copy, write to INVESCO Funds Group, Inc., P. O. Box
173706, Denver, Colorado 80217-3706; or call 1-800-525-8085; or on the World
Wide Web: http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL
INSTITUTION. THE SHARES OF THE FUNDS ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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<PAGE>
TABLE OF CONTENTS
Page
ANNUAL FUND EXPENSES........................................................ 6
FINANCIAL HIGHLIGHTS........................................................ 8
PERFORMANCE DATA............................................................ 12
INVESTMENT OBJECTIVES AND POLICIES.......................................... 12
RISK FACTORS................................................................ 16
THE FUNDS AND THEIR MANAGEMENT.............................................. 18
HOW SHARES CAN BE PURCHASED................................................. 20
SERVICES PROVIDED BY THE FUNDS.............................................. 22
HOW TO REDEEM SHARES........................................................ 25
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS............................. 27
ADDITIONAL INFORMATION...................................................... 28
<PAGE>
ANNUAL FUND EXPENSES
The Funds whose shares are offered through this ^ prospectus are INVESCO
European Fund and INVESCO Pacific Basin Fund. These Funds are 100% no-load;
there are no fees to purchase, exchange or redeem shares, nor any ongoing
marketing ("12b-1") expenses. Lower expenses benefit Fund shareholders by
increasing the Fund's total return.
Shareholder Transaction Expenses European Pacific Basin
- -------------------------------- -------- -------------
Sales load "charge" on purchases None None
Sales load "charge" on reinvested
dividends None None
Redemption fees None None
Exchange fees None None
Annual Fund Operating Expenses
- ------------------------------
(as a percentage of average net assets)
Management Fee 0.75% 0.75%
12b-1 Fees None None
Other Expenses 0.61% 0.85%
Transfer Agency Fee(1) 0.35% 0.47%
General ^ Services, Administrative
^ Services, Registration,
^ Postage(2) 0.26% 0.38%
Total ^ Fund Operating ^ Expenses(3) 1.36% 1.60%
(1) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(2)^ Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and independent accountants, securities pricing
services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
(3) It should be noted that the Funds' actual total operating expenses
were lower than the figures shown because the Funds' custodian fees and transfer
agency fees were reduced under an expense offset arrangement. However, as a
result of an SEC requirement for mutual funds to state their total operating
expenses without crediting any such expense offset arrangement, the figures
shown above DO NOT reflect these reductions. In comparing expenses for different
years, please note that the Ratios of Expenses to Average Net Assets shown under
"Financial Highlights" DO reflect any reductions for periods prior to the fiscal
year ended October 31, 1996. See "The Funds and Their Management."
<PAGE>
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
INVESCO European Fund $14 $43 $75 $164
INVESCO Pacific Basin Fund $16 $51 $88 $191
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly. Such expenses are paid from the Funds' assets. (See "The Funds
and Their Management.") The Funds charge no sales load, redemption fee or
exchange fee and bear no distribution expenses. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with
audited financial statements and the Report of Independent Accountants thereon
appearing in the Funds' ^ 1996 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO Funds Group, Inc. at the address
or telephone number on the cover of this ^ prospectus.
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
European Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $14.09 $12.95 $12.20 $10.14 $11.14 $11.04 $10.03 $ 9.04 $ 7.98 $ 8.31
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.05 0.23 0.16 0.14 0.20 0.22 0.26 0.11 0.09 0.05
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 3.00 1.12 0.75 2.06 (1.00) 0.26 1.01 0.99 1.05 (0.32)
---------------------------------------------------------------------------------------
Total from Investment
Operations 3.05 1.35 0.91 2.20 (0.80) 0.48 1.27 1.10 1.14 (0.27)
---------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.08 0.21 0.16 0.14 0.20 0.21 0.26 0.11 0.08 0.05
Distributions from
Capital Gains 1.21 0.00 0.00 0.00 0.00 0.17 0.00 0.00 0.00 0.01
---------------------------------------------------------------------------------------
Total Distributions 1.29 0.21 0.16 0.14 0.20 0.38 0.26 0.11 0.08 0.06
---------------------------------------------------------------------------------------
Net Asset Value -
End of Period $15.85 $14.09 $12.95 $12.20 $10.14 $11.14 $11.04 $10.03 $9.04 $7.98
=======================================================================================
TOTAL RETURN 23.47% 10.42% 7.43% 21.78% (7.22%) 4.34% 12.70% 12.12% 14.34%(3.25%)
<PAGE>
RATIOS
Net Assets - End of Period
($000 Omitted) $300,588 $224,200 $349,842 $270,544 $117,276 $74,497 $83,521 $10,910 $6,801 $9,537
Ratio of Expenses to Average
Net Assets 1.36%@ 1.40%@ 1.20% 1.28% 1.29% 1.43% 1.29% 1.78% 1.88% 1.50%
Ratio of Net Investment
Income to Average
Net Assets 0.37% 1.26% 1.28% 1.76% 2.23% 1.83% 3.38% 1.57% 1.08% 1.44%
Portfolio Turnover Rate 91% 96% 70% 44% 87% 61% 20% 118% 75% 131%
Average Commission Rate
Paid ^^ $0.0367 - - - - - - - - -
</TABLE>
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold, which is required to be disclosed
for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
----------------------------------------------------------------------------------------
1996 1995 1994 1993< 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pacific Basin Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $13.83 $17.07 $15.11 $11.02 $13.19 $11.95 $14.24 $12.24 $ 9.68 $11.52
----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss) (0.02) 0.06 0.04 0.04 0.07 0.11 0.05 0.02 (0.02) 0.07
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 0.51 (1.45) 2.28 4.09 (2.18) 1.23 (1.97) 2.00 2.58 1.27
----------------------------------------------------------------------------------------
Total from Investment
Operations 0.49 (1.39) 2.32 4.13 (2.11) 1.34 (1.92) 2.02 2.56 1.34
----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.03 0.06 0.04 0.04 0.06 0.10 0.09 0.02 0.00 0.07
Distributions from
Capital Gains 0.18 1.79 0.32 0.00 0.00 0.00 0.28 0.00 0.00 3.11
----------------------------------------------------------------------------------------
Total Distributions 0.21 1.85 0.36 0.04 0.06 0.10 0.37 0.02 0.00 3.18
----------------------------------------------------------------------------------------
Net Asset Value -
End of Period $14.11 $13.83 $17.07 $15.11 $11.02 $13.19 $11.95 $14.24 $12.24 $9.68
========================================================================================
TOTAL RETURN 3.55% (8.31%) 15.63% 37.51% (16.03%) 11.27% (13.47%) 16.54% 26.36% 11.72%
RATIOS
Net Assets - End of Period
($000 Omitted) $149,870 $154,374 $352,888 $299,192 $26,488 $27,683 $16,871 $23,642 $28,364 $35,953
Ratio of Expenses to
Average Net Assets 1.60%@ 1.52%@ 1.24% 1.22% 1.78% 1.87% 1.79% 1.62% 1.62% 1.26%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.04%) 0.37% 0.28% 0.63% 0.66% 0.99% 0.36% 0.13% (0.12%) 0.39%
Portfolio Turnover Rate 70% 56% 70% 30% 123% 89% 93% 86% 69% 155%
Average Commission Rate
Paid ^^ $0.0148 - - - - - - - - -
</TABLE>
<PAGE>
< The per share information was computed based on weighted average shares.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold, which is required to be disclosed
for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
PERFORMANCE DATA
From time to time, the Funds advertise their total return performance.
These figures are based upon historical investment results and are not intended
to indicate future performance. ^ Total return is computed by calculating the
percentage change in value of an investment ^, assuming reinvestment of all
income dividends and capital gain distributions, to the end of a specified
period. ^ Cumulative total return reflects actual performance over a stated
period of time. Average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period.
^ Thus, a given report of total return performance should not be considered
as representative of future performance. The Funds charge no sales load,
redemption fee^ or exchange fee which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Funds, comparative data between the Funds' performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., Lipper Analytical Services, Inc., Lehman Brothers, National Association of
Securities Dealers Automated Quotations, Frank Russell Company, Value Line
Investment Survey, the American Stock Exchange, Morgan Stanley Capital
International, Wilshire Associates, the Financial Times-Stock Exchange, the New
York Stock Exchange, the Nikkei Stock Average and the Deutcher Aktienindex, all
of which are unmanaged market indicators. In addition, rankings, ratings^ and
comparisons of investment performance and/or assessments of the quality of
shareholder service appearing in publications such as Money, Forbes, Kiplinger's
Personal Finance, Morningstar^ and similar sources which utilize information
compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by
other recognized analytical services, may be used in advertising. The Lipper
Analytical Services, Inc. mutual fund rankings and comparisons, which may be
used by the Funds in performance reports, will be drawn from the "European
Region Funds," in the case of INVESCO European Fund, and "Pacific Region Funds,"
in the case of INVESCO Pacific Basin Fund, Lipper mutual fund groupings, in
addition to the broad-based Lipper general fund groupings.
INVESTMENT OBJECTIVES AND POLICIES
The Company consists of three separate portfolios of investments, each
represented by a different class of the Company's common stock. This ^
prospectus relates to the INVESCO European Fund and INVESCO Pacific Basin Fund;
a separate ^ prospectus for INVESCO International Growth Fund is available.
<PAGE>
The investment objective of the INVESCO European and Pacific Basin Funds is
to seek capital appreciation. Each Fund invests primarily in the equity
securities (common stocks and securities convertible into common stocks,
including convertible debt obligations and convertible preferred stock) of
companies domiciled in a particular geographic region, which may be either
established, well-capitalized companies or newly-formed, small- cap companies.
The Funds have not established any minimum investment standards, such as an
issuer's asset level, earnings history, type of industry, dividend payment
history, etc., with respect to the Funds' investments in foreign equity
securities and, therefore, investors in the Funds should consider that
investments may consist in part of securities which may be deemed to be
speculative.
INVESCO European Fund. Under normal conditions, at least 80% of the total
assets of INVESCO European Fund are invested in the equity securities of
companies domiciled in the following European countries: England, France,
Germany, Belgium, Italy, the Netherlands, Switzerland, Denmark, Sweden, Norway,
Finland^ and Spain. The economies of these countries may vary widely in their
condition^ and may be subject to sudden changes that could have a positive or
negative impact on the Fund. The securities in which the Fund invests typically
will be listed on the principal stock exchanges in such countries^ but also may
be traded on regional stock exchanges or on the over-the-counter market in these
countries. There are no limitations on the percentage of the Fund's assets which
may be invested in companies domiciled in any one country.
INVESCO Pacific Basin Fund. Under normal conditions, at least 80% of the
total assets of INVESCO Pacific Basin Fund are invested in the equity securities
of companies domiciled in the following Far Eastern or Western Pacific
countries: Japan, Australia, Hong Kong, Malaysia, Singapore and the Philippines.
The economies of these countries may vary widely in their condition^ and may be
subject to sudden changes that could have a positive or negative impact on the
Fund. The equity securities in which the Fund invests typically will be listed
on the principal stock exchanges in such countries^ but also may be traded on
regional stock exchanges or on the over-the-counter market in these countries.
While it is anticipated that substantial investments will be made in companies
domiciled in Japan, there are no limitations on the percentage of the Fund's
assets which may be invested in companies domiciled in any one Far Eastern or
Western Pacific country.
The balance of each Fund's total assets may be held as cash^ or invested in
any securities or other instruments deemed appropriate at the time of investment
by the Funds' investment adviser and sub-adviser (collectively, "Fund
Management"), consistent with the Funds' investment policies and restrictions.
These investments include debt securities issued by companies domiciled in the
Funds' respective geographic sectors, and debt or
<PAGE>
equity securities issued by companies domiciled outside the Funds'
respective geographic sectors. Such debt securities either will be investment
grade (rated Baa or higher by Moody's Investors Service, Inc. ("Moody's") or BBB
or higher by Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P")) or, if unrated, will have been determined by Fund
Management to be of investment grade quality. The Funds are not required to
dispose of debt securities whose ratings are down-graded below investment grade.
Such equity securities may be issued by either established, well-capitalized
companies or newly-formed, small-cap companies^ and may be traded on national or
regional stock exchanges or in the over-the-counter market. This portion of each
Fund's assets also may be invested in short-term debt obligations maturing no
later than one year from the date of purchase, which are determined by Fund
Management to be of high ^ quality. Investments in high-quality, short-term debt
securities will consist of U.S. government and agency securities, domestic bank
certificates of deposit, commercial paper rated A-2 or higher by S&P or P-2 or
higher by Moody's, and repurchase agreements with banks and securities dealers.
In addition, each Fund may hold cash or invest temporarily in such short-term
securities in an amount up to 100% of its total assets as a temporary defensive
measure if Fund Management determines it to be appropriate for purposes of
enhancing liquidity or preserving capital in light of prevailing market or
economic conditions. While a Fund is in a defensive position, the opportunity to
achieve capital growth will be limited and, to the extent that this assessment
of market conditions is incorrect, the Fund will be foregoing the opportunity to
benefit from capital growth resulting from increases in the value of equity
investments. There can be no assurance that the Funds will be able to achieve
their investment objective.
The investment objective of each Fund and its investment policies, except
where indicated to the contrary, are deemed to be fundamental policies and thus
may not be changed without prior approval by the holders of a majority of the
outstanding voting securities of the Fund, as defined in the Investment Company
Act of 1940 (the "1940 Act"). In addition, each Fund is subject to certain
investment restrictions which are set forth in the Statement of Additional
Information and which may not be altered without similar approval of the Fund's
shareholders. One of those restrictions limits each Fund's borrowing of money to
borrowings from banks for temporary or emergency purposes (but not for
investment) in an amount not to exceed 10% of net assets of the Fund.
Repurchase Agreements. Investments in short-term securities may include
repurchase agreements. The Funds may enter into repurchase agreements with
respect to debt instruments eligible for investment by the Funds. These
agreements are entered into with member banks of the Federal Reserve System,
registered broker-dealers and registered government securities dealers, which
are deemed creditworthy. A repurchase agreement, which may be considered a
"loan" under the 1940 Act, is a means of investing monies for a short period. In
a repurchase agreement, a Fund acquires a debt instrument (generally a security
issued by the U.S. government or an agency thereof, a banker's acceptance^ or a
certificate of deposit) subject to resale to the seller at an agreed-upon price
and date (normally, the next business day). In the event that the original
seller defaults on its obligation to repurchase the security, a Fund could incur
costs or delays in seeking to sell such security. To minimize risk, the
<PAGE>
securities underlying each repurchase agreement will be maintained with the
Funds' custodian in an amount at least equal to the repurchase price under the
agreement (including accrued interest), and such agreements will be effected
only with parties that meet certain creditworthiness standards established by
the Company's board of directors. A Fund will not enter into a repurchase
agreement maturing in more than seven days if as a result more than 10% of its
total assets would be invested in such repurchase agreements and other illiquid
securities. The Funds have not adopted any limit on the amount of their total
assets that may be invested in repurchase agreements maturing in seven days or
less.
Securities Lending. The Funds also may lend their securities to qualified
brokers, dealers, banks^ or other financial institutions. This practice permits
the Funds to earn income^ which, in turn, can be invested in additional
securities to pursue the Funds' investment objectives. Loans of securities by
the Funds will be collateralized by cash, letters of credit, or securities
issued or guaranteed by the U.S. government or its agencies equal to at least
100% of the current market value of the loaned securities, determined on a daily
basis. Lending securities involves certain risks, the most significant of which
is the risk that a borrower may fail to return a portfolio security. The Funds
monitor the creditworthiness of borrowers in order to minimize such risks. The
Funds will not lend any security if, as a result of such loan, the aggregate
value of securities then on loan would exceed 33-1/3% of a Fund's net assets
(taken at market value).
Country Funds. The Funds may invest in companies domiciled in certain
countries by purchasing common shares of closed-end investment companies
organized to invest in the securities markets of particular countries (so-called
"country funds"). They may do so, however, only where it is not possible for
non-residents to make direct investments in securities of companies in those
countries and where the investment objective of the country fund is consistent
with the Funds' objective of seeking capital appreciation. The Funds may not
purchase shares of a country fund if (a) such a purchase would cause a Fund to
own more than 3% of the total outstanding voting stock of a particular country
fund, or (b) such a purchase would cause a Fund to have more than 5% of its
total assets invested in a particular country fund or more than 10% of its total
assets invested in the securities of other investment companies. Investment in
certain country funds may involve the payment of substantial premiums above the
value of such funds' portfolio securities. Investing in shares of such country
funds presents the additional risk that the market price of the funds' shares
may fall below the funds' net asset values (i.e., that the funds will trade at a
discount from their net asset values). The Funds do not intend to invest in
country funds which are trading at a premium unless, in the judgment of Fund
Management, the potential benefits of such investments justify the payment of
the applicable premiums. To the extent the Funds invest in country funds, the
investment return will be reduced by the operating expenses of such funds,
including fees paid to the investment managers of those funds, resulting in
duplication of advisory fees paid on any Fund assets invested in country funds.
At such time as direct investment in a country is allowed, the Funds will invest
directly in securities of companies domiciled in such country.
<PAGE>
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in either of
the Funds. The Funds' policies regarding investments in foreign securities and
foreign currencies are not fundamental and may be changed by vote of the
Company's board of directors.
Foreign Securities. The Funds may invest in foreign securities and may do
so without limitation on the percentage of assets which may be so invested.
Investments in securities of foreign companies and in foreign markets involve
certain additional risks not associated with investments in domestic companies
and markets. For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments themselves^ but
also by currency fluctuations. That is, when the U.S. dollar generally rises
against foreign currencies, returns on foreign securities for a U.S. investor
may decrease. By contrast, in a period when the U.S. dollar generally declines,
those returns may increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally
available about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility;
-less government regulation of stock exchanges, brokers and
listed companies abroad than in the United States; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the ^ Funds experiencing difficulties in pursuing legal
remedies and collecting judgments.
When the Funds invest in foreign securities, such securities are usually
denominated in foreign currency and the Funds may temporarily hold funds in
foreign currencies. Thus, the Funds' share values are affected by changes in
currency exchange rates. Because the Funds' assets will be invested in foreign
<PAGE>
securities and because substantially all revenues will be received in foreign
currencies, the dollar equivalent of the Funds' net assets and distributions
would be adversely affected by a reduction in the value of the foreign currency
relative to the United States dollar. The Funds will pay dividends in dollars
and in such event will incur currency conversion costs.
Forward Foreign Currency Contracts. The Funds may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Funds hold foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed-upon rate.
Although the Funds have not adopted any limitations on their ability to use
forward contracts as a hedge against fluctuations in foreign exchange rates, the
Funds do not attempt to hedge all of their foreign investment positions and will
enter into forward contracts only to the extent, if any, deemed appropriate by
Fund Management. The Funds will not enter into a forward contract for a term of
more than one year or for purposes of speculation. Investors should be aware
that hedging against a decline in the value of a currency in the foregoing
manner does not eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Furthermore, such
hedging transactions preclude the opportunity for gain if the value of the
hedged currency should rise. No predictions can be made with respect to whether
the total of such transactions will result in a better or a worse position than
had the Funds not entered into any forward contracts. Forward contracts may,
from time to time, be considered illiquid, in which case they would be subject
to the Funds' limitation on investing in illiquid securities, discussed below.
For additional information regarding forward foreign ^ currency contracts, see
the Company's Statement of Additional Information.
Illiquid and Rule 144A Securities. The Funds are authorized to invest in
securities which are illiquid because they are subject to restrictions on their
resale ^("restricted securities") or because, based upon their nature or the
market for such securities, they are not readily marketable. However, a Fund
will not purchase any such security if the purchase would cause the Fund to
invest more than 10% of its total assets, measured at the time of purchase, in
illiquid securities. Repurchase agreements maturing in more than seven days will
be considered as illiquid for purposes of this restriction. Investments in
illiquid securities involve certain risks to the extent that the Fund may be
unable to dispose of such a security at the time desired or at a reasonable
price. In addition, in order to resell a restricted security, the Fund might
have to bear the expense and incur the delays associated with effecting
registration.
The securities that may be purchased subject to the foregoing restriction
include restricted securities that are not registered for sale to the general
public^ but that can be resold to institutional investors ("Rule 144A
Securities"). The liquidity of ^ a Fund's investments in Rule 144A Securities
could be impaired if dealers or institutional investors become uninterested in
<PAGE>
purchasing these securities. The Company's board of directors has delegated to
Fund Management the authority to determine the liquidity of Rule 144A Securities
pursuant to guidelines approved by the board. For more information concerning
Rule 144A Securities, see the Statement of Additional Information.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover. Although the Funds do not trade for short-term profits, securities may
be sold without regard to the time they have been held in a Fund when, in the
opinion of Fund Management, investment considerations warrant such action. As a
result, under certain market conditions, the portfolio turnover rate for each
Fund may exceed 100%^ and may be higher than that of other investment companies
seeking capital appreciation. Increased portfolio turnover would cause a Fund to
incur greater brokerage costs than would otherwise be the case^ and may result
in the acceleration of capital gains that are taxable when distributed to
shareholders. The Funds' portfolio turnover rates are set forth under "Financial
Highlights" and, along with the Company's brokerage allocation policies, are
discussed in the Statement of Additional Information.
THE FUNDS AND THEIR MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Company assumed all of the assets and liabilities of the Funds'
predecessor portfolios, the European Portfolio and Pacific Basin Portfolio of
Financial Strategic Portfolios, Inc., which was incorporated under the laws of
Maryland on August 10, 1983. All financial and other information about the Funds
for periods prior to July 1, 1993, relates to such former portfolios. On July 1,
1993, the Company also assumed, through its INVESCO International Growth Fund,
all of the assets and liabilities of that fund's predecessor, the Financial
International Growth Fund of Financial Series Trust, a Massachusetts business
trust organized on July 15, 1987. The overall supervision of each Fund is the
responsibility of the Company's board of directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Company's
investment adviser pursuant to an investment advisory agreement. Under this
agreement, INVESCO is primarily responsible for providing the Funds with various
administrative services^ and supervising the Funds' daily business affairs.
These services are subject to review by the Company's board of directors.
INVESCO is an indirect, wholly-owned subsidiary of AMVESCO PLC. AMVESCO PLC
is a publicly-traded holding company that, through its subsidiaries, engages in
the business of investment management on an international basis. INVESCO PLC
changed its name to AMVESCO PLC on February 28, 1997, as part of a merger
between INVESCO PLC and A I M Management Group, Inc., thus creating one of the
largest independent investment management businesses in the world. INVESCO and
INVESCO Asset Management Limited ("IAML") will continue to operate under their
existing names. AMVESCO PLC has approximately $150 billion in assets under
management. INVESCO was established in 1932 and, as of October 31, 1996, managed
14 mutual funds, consisting of 39 separate portfolios, with combined assets of
approximately $13.4 billion on behalf of over 829,000 shareholders.
<PAGE>
Pursuant to an agreement with INVESCO, ^ IAML serves as the sub-adviser to
INVESCO European Fund and INVESCO Pacific Basin Fund. In that capacity, IAML has
the primary responsibility, under the supervision of INVESCO, for providing
portfolio management services to the Funds. IAML also is an indirect,
wholly-owned subsidiary of ^ AMVESCO PLC. IAML also acts as sub-adviser to the
INVESCO International Growth Fund, the INVESCO European Small Company Fund^ and
the INVESCO Latin American Growth Fund. Although the Funds are not parties to
the sub-advisory agreement, that agreement^ has been approved by the
shareholders of the Funds.
^
Each Fund is managed by a team of portfolio managers. A senior investment
policy group determines the country-by-country allocation of each Fund's assets,
overall stock selection methodology and the ongoing implementation and risk
control policies applicable to each Fund's portfolio. Individual country
specialists are responsible for managing security selection for their assigned
country's share of the allocation within the parameters established by the
investment policy group.
Each Fund pays INVESCO a monthly advisory fee which is based upon a
percentage of the average net assets of the Fund, determined daily. The maximum
advisory fee payable under the agreement is computed at the annual rate of 0.75%
on the first $350 million of the average net assets of a Fund; 0.65% on the next
$350 million of a Fund's average net assets; and 0.55% on a Fund's average net
assets in excess of $700 million. For the fiscal year ended October 31, ^ 1996,
the Funds paid fees equal to the following percentage of their net assets as
follows: European Fund, 0.75%; Pacific Basin Fund, 0.75%. ^
Out of the advisory fees which it receives from the Funds, INVESCO pays
IAML, as sub-adviser to these Funds, a monthly fee with respect to each Fund
computed at the following annual rates: 0.45% on the first $350 million of a
Fund's average net assets; 0.40% on the next $350 million of a Fund's average
net assets; and 0.35% on a Fund's average net assets in excess of $700 million.
No fee is paid by either Fund to IAML.
The Company also has entered into an Administrative Services Agreement
dated ^ February 28, 1997 (the "Administrative Agreement"), with INVESCO.
Pursuant to the Administrative Agreement, INVESCO performs certain
administrative, recordkeeping and internal sub-accounting services, including
without limitation, maintaining general ledger and capital stock accounts,
preparing a daily trial balance, calculating net asset value daily, providing
selected general ledger reports, and providing sub-accounting and recordkeeping
<PAGE>
services for shareholder accounts in the Funds maintained by certain retirement
and employee benefit plans for the benefit of participants in such plans. For
such services, each Fund pays INVESCO a fee consisting of a base fee of $10,000
per year, plus an additional incremental fee computed at the annual rate of
0.015% per year of the average net assets of the Fund. INVESCO also is paid a
fee by the Company for providing transfer agent services. See "Additional
Information."
Each Fund's expenses, which are accrued daily, are deducted from its total
income before dividends are paid. Total expenses of the Funds (prior to any
expense offset), including investment advisory fees (but excluding brokerage
commissions, which are a cost of acquiring securities), as a percentage of their
average net assets for the fiscal year ended October 31, ^ 1996, were ^ 1.36%
for INVESCO European Fund and ^ 1.60% for INVESCO Pacific Basin Fund.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon its evaluation of their financial
responsibility coupled with their ability to effect transactions at the best
available prices. The Funds may place orders for portfolio transactions with
qualified broker-dealers that recommend the Funds to clients, or act as agent in
the purchase of Fund shares for clients, if Fund Management believes that the
quality of execution of the transaction and level of commission are comparable
to those available from other qualified brokerage firms.
Fund Management permits investment and other personnel to purchase and sell
securities for their own accounts, subject to compliance policies governing
personal investing. These policies require Fund Management's personnel to
conduct their personal investment activities in a manner that Fund Management
believes is not detrimental to the Funds or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
HOW SHARES CAN BE PURCHASED
Shares of each Fund are sold on a continuous basis by INVESCO, as the
Funds' distributor, at the net asset value per share next calculated after
receipt of a purchase order in good form. No sales charge is imposed upon the
sale of shares of a Fund. To purchase shares of one or both of the Funds, send a
check made payable to INVESCO Funds Group, Inc., together with a completed
application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
<PAGE>
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest account, as described below in the ^ prospectus section
entitled "Services Provided by the Funds^," may open an account without making
any initial investment if they agree to make minimum monthly purchases of $50;
(2) those shareholders investing in an Individual Retirement Account ^("IRA"),
or through omnibus accounts where individual shareholder recordkeeping and
sub-accounting are NOT required, may make initial minimum purchases of $250; (3)
Fund Management may permit a lesser amount to be invested in the Funds under a
federal income tax-sheltered retirement plan (other than an IRA)^ or under a
group investment plan qualifying as a sophisticated investor; and (4) Fund
Management reserves the right to reduce or waive the minimum purchase
requirements in its sole discretion where it determines such action is in the
best interests of the Fund. The minimum initial purchase requirement of $1,000,
as described above, DOES NOT apply to shareholder account(s) in any of the
INVESCO funds opened prior to January 1, 1993, and^ thus^ is not a minimum
balance requirement for those existing accounts. However, for shareholders
already having accounts in any of the INVESCO funds, all initial share purchases
in a new fund account, including those made using the exchange privilege, must
meet the fund's applicable minimum investment requirement.
The purchase of Fund shares can be expedited by placing bank wire,
overnight courier^ or telephone orders. Overnight courier orders must meet the
above minimum investment requirements. In no case can a bank wire order or a
telephone order be in an amount less than $1,000. For further information, the
purchaser may call the Company's office by using the telephone number on the
cover of this ^ prospectus. Orders sent by overnight courier, including Express
Mail, should be sent to the street address, not Post Office Box, of INVESCO
Funds Group, Inc., at 7800 E. Union Avenue, Denver, ^ Colorado 80237.
Orders to purchase shares of either Fund can be placed by telephone. Shares
will be issued at the net asset value next determined after receipt of telephone
instructions. Generally, payments for telephone orders must be received by the
Company within three business days or the transaction may be cancelled. In the
event of such cancellation, the purchaser will be held responsible for any loss
resulting from a decline in the value of the shares. In order to avoid such
losses, purchasers should send payments for telephone purchases by overnight
courier or bank wire. INVESCO has agreed to indemnify the Funds for any losses
resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to non-payment, you will be responsible for any related loss the Company or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the
Company, on behalf of the Funds, has the option to redeem shares from any
identically registered account in the Company or any other INVESCO fund as
reimbursement for any loss incurred. You also may be prohibited or restricted
from making future purchases in any of the INVESCO funds.
<PAGE>
Persons who invest in the Funds through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction, if the broker so elects. Any investor may deal directly with the
Funds in any transaction. In that event, there is no such charge. INVESCO may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Funds.
Each Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York Stock
Exchange is open as of the close of regular trading on that Exchange (usually
4:00 p.m., New York time) and also may be computed on other days under certain
circumstances. Net asset value per share for each Fund is calculated by dividing
the market value of all of the Fund's securities plus the value of its other
assets (including dividends and interest accrued but not collected), less all
liabilities (including accrued expenses), by the number of outstanding shares of
that Fund. If market quotations are not readily available, a security will be
valued at fair value as determined in good faith by the board of directors. Debt
securities with remaining maturities of 60 days or less at the time of purchase
will be valued at amortized cost, absent unusual circumstances, so long as the
Company's board of directors believes that such value represents fair value.
SERVICES PROVIDED BY THE FUNDS
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. ^ Because certificates must be carefully safeguarded^ and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation for each
transaction in shares of the Funds. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Funds' office by using the telephone number on the cover of this ^ prospectus.
Reinvestment of Distributions. Dividends and other ^ distributions are
automatically reinvested in additional shares of the Fund making the
distribution at the net asset value per share of that Fund in effect on the
ex-dividend date. A shareholder may, however, elect to reinvest dividends and
other distributions in certain of the other no-load mutual funds advised and
distributed by INVESCO, or to receive payment of all dividends and other
distributions in excess of ten dollars by check by giving written notice to
INVESCO at least two weeks prior to the ex-dividend date on which the change is
to take effect. Further information concerning these options can be obtained by
contacting INVESCO.
<PAGE>
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by INVESCO at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting INVESCO.
Exchange Privilege. Shares of either Fund may be exchanged for shares of
any other fund of the Company, as well as for shares of any of the following
other no-load mutual funds, which are also advised and distributed by INVESCO,
on the basis of their respective net asset values at the time of the exchange:
INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc.^ and INVESCO Value Trust.
An exchange involves the redemption of shares in a Fund and investment of
the redemption proceeds in shares of another fund of the Company or in one of
the funds listed above. Exchanges will be made at the net asset value per share
next determined after receipt of an exchange request in proper order. Any gain
or loss realized on an exchange is recognizable for federal income tax purposes
by the shareholder. Exchange requests may be made either by telephone or by
written request to INVESCO Funds Group, Inc., using the telephone number or
address on the cover of this ^ prospectus. Exchanges made by telephone must be
in an amount of at least $250^ if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that establish a new account
must meet the Fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the Fund's applicable minimum subsequent investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the New Account
Application^ or a Telephone Transaction Authorization Form or otherwise
utilizing telephone exchange privileges, the investor has agreed that the Funds
will not be liable for following instructions communicated by telephone that
they reasonably believe to be genuine. The Funds employ procedures, which they
believe are reasonable, designed to confirm that exchange instructions are
genuine. These may include recording telephone instructions and providing
written confirmations of exchange transactions. As a result of this policy, the
investor may bear the risk of any loss due to unauthorized or fraudulent
instructions; provided, however, that if a Fund fails to follow these or other
reasonable procedures, the Fund may be liable.
<PAGE>
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Funds reserve the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges a year. The Funds will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder, or group of shareholders, has requested
and the time period over which those exchange requests have been made, together
with the level of expense to the Fund which will result from effecting
additional exchange requests. The exchange privilege also may be modified or
terminated at any time. Except for those limited instances where redemptions of
the exchanged security are suspended under Section 22(e) of the 1940 Act, or
where sales of the fund into which the shareholder is exchanging are temporarily
stopped, notice of all such modifications or termination of the exchange
privilege will be given at least 60 days prior to the date of termination or the
effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
legally be made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in one or more
of the mutual funds distributed by INVESCO may arrange for a fixed dollar amount
of their fund shares to be automatically exchanged for shares of any other
INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis. The
minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder, by notifying the employer. Further
information regarding this service can be obtained by contacting INVESCO.
Tax-Deferred Retirement Plans. Shares of either Fund may be purchased for
self-employed individual retirement plans, IRAs, simplified employee pension
plans^ and corporate retirement plans. In addition, shares can be used to fund
tax-qualified plans established under Section 403(b) of the Internal Revenue
Code of 1986 by educational institutions, including public school systems and
private schools, and certain kinds of non-profit organizations, which provide
deferred compensation arrangements for their employees.
<PAGE>
Prototype forms for the establishment of these various plans ^ including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this ^ prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of either Fund may be redeemed at any time at their net asset value
next determined after a request in proper form is received at the Funds' office.
(See "How Shares Can Be Purchased.") Net asset value per share at the time of
the redemption may be more or less than the price you paid to purchase your
shares, depending primarily upon the Fund's investment performance.
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Denver, ^
Colorado 80237. If no certificates have been issued, a written redemption
request signed by each registered owner of the account may be submitted to
INVESCO at the address noted above. If shares are held in the name of a
corporation, additional documentation may be necessary. Call or write for
specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an eligible guarantor institution. Redemption
procedures with respect to accounts registered in the names of broker-dealers
may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which ^ will take up to 15 days).
<PAGE>
If a shareholder participates in EasiVest, the Funds' automatic monthly
investment program, and redeems all of the shares in a Fund account, INVESCO
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Company reserves the right to effect the involuntary redemption of
all shares in such account, in which case the account would be liquidated and
the proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250)^ held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this ^ prospectus. For
INVESCO Trust Company-sponsored federal income tax-deferred retirement plans,
the term "shareholders" is defined to mean plan trustees that file a written
request to be able to redeem Fund shares by telephone. Unless Fund Management
permits a larger redemption request to be placed by telephone, a shareholder may
NOT place a redemption request by telephone in excess of $25,000. The redemption
proceeds, at the shareholder's option, either will be mailed to the address
listed for the shareholder on its Fund account or wired (minimum of $1,000) or
mailed to the bank which the shareholder has designated to receive the proceeds
of telephone redemptions. The Funds charge no fee for effecting such telephone
redemptions. These telephone redemption privileges may be modified or terminated
in the future at the discretion of Fund Management. Shareholders should
understand that, while the Funds will attempt to process all telephone
redemption requests on an expedited basis, there may be times, particularly in
periods of severe economic or market disruption, when (a) they may encounter
difficulty in placing a telephone redemption request, and (b) processing
telephone redemptions may require up to seven days following receipt of the
redemption request, or additional time because of the unusual circumstances set
forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a New Account
Application^ or a Telephone Transaction Authorization Form or otherwise
utilizing telephone redemption privileges, the shareholder has agreed that the
Funds will not be liable for following instructions communicated by telephone
that they reasonably believe to be genuine. The Funds employ procedures, which
they believe are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if a Fund fails to follow these
or other reasonable procedures, the Fund may be liable.
<PAGE>
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Taxes. Each Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to qualify for tax treatment as a regulated
investment company. Thus, the Funds do not expect to pay any federal income or
excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state^
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of a Fund
or another fund in the INVESCO group.
Each Fund may be subject to the withholding of foreign taxes on dividends
or interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund qualifies and elects to pass
these taxes through to shareholders for use by them as a foreign tax credit or
deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless a shareholder is
subject to backup withholding for other reasons, the shareholder can avoid
backup withholding on a Fund account by ensuring that INVESCO has a correct,
certified tax identification number.
Dividends and Capital Gain Distributions. The Funds earn ordinary or net
investment income in the form of dividends and interest on their investments.
The Funds' policy is to distribute substantially all of this income, less Fund
expenses, to shareholders annually, at the discretion of the Company's board of
directors.
In addition, each Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of the distribution regardless of how long the shares
have been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase price, a portion of which
is then returned in the form of a taxable distribution.
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending on how long a
Fund held the security which gave rise to the gains. The capital gain
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as dividends.
<PAGE>
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
Shareholders are encouraged to consult their tax advisers with respect to
these matters. For further information, see "Dividends, Capital Gain
Distributions and Taxes" in the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all funds of the Company voting together. In other cases, such as voting upon
the investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Company is not
generally required and does not expect to hold regular annual meetings of
shareholders. However, the board of directors will call special meetings of
shareholders for the purpose, among other reasons, of voting upon the question
of removal of a director or directors when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Company or as may be
required by applicable law or the Company's Articles of Incorporation. The
Company will assist shareholders in communicating with other shareholders as
required by the 1940 Act. Directors may be removed by action of the holders of a
majority of the outstanding shares of the Company.
Shareholder Inquiries. All inquiries regarding the Funds should be directed
to the Funds at the telephone number or mailing address set forth on the cover
page of this ^ prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Ave., Denver, Colorado 80237, acts as registrar, transfer agent^ and
dividend disbursing agent for each Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of ^ $20.00 per shareholder
account or omnibus account participant. The transfer agency fee is not charged
to each shareholder's or participant's account^ but is an expense of the Fund to
be paid from the Fund's assets. Registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities, including
affiliates of INVESCO, may provide sub-transfer agency services to the Fund
which reduce or eliminate the need for identical services to be provided by
INVESCO. In such cases, INVESCO may pay the third party an annual sub-transfer
agency or record-keeping fee ^ out of the transfer agency fee which is paid to
INVESCO by the Fund.
<PAGE>
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
Two no-load mutual funds seeking capital
appreciation through investments in
designated geographical sectors
PROSPECTUS
^ March 1, 1997
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information or responses
to other questions, call toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
You can find us on the World Wide Web:
http://www.invesco.com
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street ^;
^ Denver Tech Center,
^ 7800 East Union Avenue, Lobby Level
In addition, all documents filed by the Company with the Securities and Exchange
Commission can be located on a web site maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
^ March 1, 1997
INVESCO INTERNATIONAL GROWTH FUND
INVESCO INTERNATIONAL GROWTH FUND (the "Fund")^ seeks to achieve a high
total return through capital appreciation and current income by investing
substantially all of its assets in foreign securities. This Fund invests
principally in equity securities. The term "foreign securities" refers to
securities of issuers, wherever organized, which in the judgment of management
have their principal business activities outside of the United States. In
determining whether an issuer's principal activities are outside of the United
States, consideration is given to such factors as the location of the issuer's
assets, personnel, sales and earnings. The Fund's investments may consist in
part of securities which may be deemed to be speculative. (See "Investment
Objective and Policies.")
The Fund is a series of INVESCO International Funds, Inc. (the "Company"),
an open-end management investment company consisting of three separate funds,
each of which represents a separate portfolio of investments. This ^ prospectus
relates to shares of INVESCO International Growth Fund. A separate ^ prospectus
is available upon request from INVESCO Funds Group, Inc. for the Company's other
funds, INVESCO European Fund and INVESCO Pacific Basin Fund. Additional funds
may be offered in the future.
This ^ prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated ^ March 1, 1997, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this ^ prospectus. To
obtain a free copy write to INVESCO Funds Group, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800- 525-8085.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION.
THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.
----------
<PAGE>
TABLE OF CONTENTS
Page
ANNUAL FUND EXPENSES....................................................... 32
FINANCIAL HIGHLIGHTS....................................................... 34
PERFORMANCE DATA........................................................... 36
INVESTMENT OBJECTIVE AND POLICIES.......................................... 36
RISK FACTORS............................................................... 39
THE FUND AND ITS MANAGEMENT................................................ 42
HOW SHARES CAN BE PURCHASED................................................ 44
SERVICES PROVIDED BY THE FUND.............................................. 46
HOW TO REDEEM SHARES....................................................... 48
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS............................ 50
ADDITIONAL INFORMATION..................................................... 52
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or redeem
shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses benefit
Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses^
(as a percentage of average net assets)
Management Fee 1.00%
12b-1 Fees None
Other Expenses ^ 0.80%
Transfer Agency Fee(1) ^ 0.43%
General Services, Administrative
Services, Registration, ^ Postage(2) 0.37%
Total Fund Operating ^ Expenses(3) 1.80%
(1) Consists of the transfer agency fee described under
"Additional Information - Transfer and Dividend Disbursing Agent."
(2)^ Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and independent accountants, securities pricing
services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
(3) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees and transfer
agency fees were reduced under an expense offset arrangement. However, as a
result of an SEC requirement for mutual funds to state their total operating
expenses without crediting any such expense offset arrangement, the figures
shown above DO NOT reflect these reductions. In comparing expenses for different
years, please note that the Ratios of Expenses to Average Net Assets shown under
"Financial Highlights" DO reflect any reductions for periods prior to the fiscal
year ended October 31, 1996. See "The Fund and Its Management."
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
<PAGE>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
^ $18 $57 ^ $98 $213
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in this Fund will bear directly
or indirectly. Such expenses are paid from this Fund's assets. (See "The Fund
and Its Management.") This Fund charges no sales load, redemption fee or
exchange fee and bears no distribution expenses. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the ^ three years ended October 31, ^
1996, the period January 1, 1993 to October 31, 1993, and each of the four years
in the period ended December 31, 1992 has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the Report of Independent Accountants
thereon appearing in the Fund's ^ 1996 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO Funds Group, Inc. at the address
or telephone number on the cover of this ^ prospectus. All per share data has
been adjusted to reflect an 80 to 1 stock split which was effected on January 2,
1991.
<TABLE>
<CAPTION>
Period Period
Year Ended Ended
Ended October December
October 31 31 Year Ended December 31 31
-------------------------- ------- ------------------------------------------- ------
1996 1995 1994< 1993^ 1992 1991 1990 1989 1988 1987>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
International Growth Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $15.78 $17.29 $15.75 $12.57 $14.51 $13.69 $16.16 $14.49 $12.51 $12.50
-------------------------- ------- ------------------------------------------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.07 0.08 0.04 0.08 0.12 0.17 0.26 0.18 0.08 0.15
Net Gains (or Losses) on
Securities (Both Realized
and Unrealized) 1.77 (0.61) 1.57 3.16 (1.94) 0.82 (2.65) 2.16 1.98 0.00
-------------------------- ------- ------------------------------------------- ------
Total from Investment
Operations 1.84 (0.53) 1.61 3.24 (1.82) 0.99 (2.39) 2.34 2.06 0.15
-------------------------- ------- ------------------------------------------- ------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.15 0.09 0.07 0.06 0.11 0.17 0.02 0.17 0.08 0.14
In Excess of Net
Investment Income 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 0.56 0.86 0.00 0.00 0.01 0.00 0.06 0.50 0.00 0.00
-------------------------- ------- ------------------------------------------- ------
Total Distributions 0.71 0.98 0.07 0.06 0.12 0.17 0.08 0.67 0.08 0.14
-------------------------- ------- ------------------------------------------- ------
<PAGE>
Net Asset Value -
End of Period $16.91 $15.78 $17.29 $15.75 $12.57 $14.51 $13.69 $16.16 $14.49 $12.51
========================= ======= =========================================== ======
TOTAL RETURN 12.01% (2.84%) 10.21% 29.08%* (12.52%) 7.19% (14.62%) 16.07% 16.61% 1.20%*
RATIOS
Net Assets - End of Period
($000 Omitted) $94,586 $75,391 $161,884 $108,677 $35,192 $42,039 $39,237 $41,456 $12,099 $102
Ratio of Expenses to
Average Net Assets# 1.80%@ 1.81%@ 1.50% 1.43%~ 1.36% 1.48% 1.48% 1.24% 1.26% 0.99%~
Ratio of Net Investment Income
to Average Net Assets# 0.43% 0.41% 0.46% 0.94%~ 0.83% 1.17% 1.85% 1.18% 1.14% 4.32%~
Portfolio Turnover Rate 64% 62% 87% 46%* 50% 71% 78% 35% 73% 0%*
Average Commission Rate Paid^^ $0.0329 - - - - - - - - -
</TABLE>
< The per share information was computed based on weighted average shares.
^ From January 1, 1993 to October 31, 1993, the Fund's current fiscal year-end.
> From September 22, 1987, commencement of operations, to December 31, 1987.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1990, 1989, 1988 and the period ended December 31, 1987. If
such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.49%, 1.71%, 2.00% and 2.00%, respectively, and
ratio of net investment income to average net assets would have been 1.84%,
0.71%, 0.40% and 3.31%, respectively.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold, which is required to be disclosed
for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund ^ advertises its total return performance.
These figures are based upon historical investment results and are not intended
to indicate future performance. ^ Total return is computed by calculating the
percentage change in value of an investment ^, assuming reinvestment of all
income dividends and capital gain distributions, to the end of a specified
period. ^ Cumulative total return reflects actual performance over a stated
period of time. Average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period.
^ Thus, a given report of total return performance should not be considered
as representative of future performance. The Fund charges no sales load,
redemption fee^ or exchange fee which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized bond indices and indices of investment results for
the same period, and/or assessments of the quality of shareholder service, may
be provided to shareholders. Such indices include indices provided by Dow Jones
& Company, Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times-Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and the Deutcher
Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings^ and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar^ and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund ranking and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "International Funds" Lipper mutual fund groupings, in addition to the
broad-based Lipper general fund groupings.
INVESTMENT OBJECTIVE AND POLICIES
The Company consists of three separate portfolios of investments, each
represented by a different class of the Company's common stock. This ^
prospectus relates to INVESCO International Growth Fund; a separate ^ prospectus
for INVESCO European Fund and INVESCO Pacific Basin Fund is available.
<PAGE>
The investment objective of the INVESCO International Growth Fund is to
seek a high total return on investment through capital appreciation and current
income. Funds having an investment objective of seeking a high total return may
be limited in their ability to obtain their objective by the limitations on the
types of securities in which they may invest. Therefore, no assurance can be
given that the Fund will be able to achieve its investment objective.
The Fund intends to accomplish its objective by investing substantially all
of its assets in foreign securities. The term "foreign securities" refers to
securities of issuers, wherever organized, which in the judgment of the Fund's
investment adviser or sub-adviser (collectively, "Fund Management") have their
principal business activities outside of the United States. The determination of
whether an issuer's principal activities are outside of the United States will
be based on the location of the issuer's assets, personnel, sales and earnings,
and specifically whether more than 50% of the issuer's assets are located, or
more than 50% of the issuer's gross income is earned, outside of the United
States. During normal market conditions, at least 65% of the Fund's total assets
will be invested in foreign securities representing at least three different
countries outside of the United States.
The Fund invests principally in equity securities (common stocks and
securities convertible into common stocks, including convertible debt
obligations and convertible preferred stock), although it also may purchase debt
securities. Such debt securities either will be investment grade (rated Baa or
higher by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P")) or, if unrated, will have been determined by Fund Management to be
of investment grade quality. The Fund is not required to dispose of debt
securities whose ratings are downgraded below investment grade. The Fund has not
established any minimum investment standards, such as an issuer's asset level,
earnings history, type of industry, dividend payment history, etc., with respect
to the Fund's equity investments in foreign securities and, therefore, investors
in this Fund should consider that investments may consist in part of securities
which may be deemed to be speculative. When market, business or economic
conditions indicate, in the judgment of Fund Management, that a different
investment stance should be assumed, up to 100% of the assets of the Fund may be
invested temporarily in domestic securities^ consisting of obligations issued or
guaranteed by the United States or any instrumentality thereof, domestic bank
certificates of deposit, commercial paper rated A-2 or higher by S&P^ or P-2 or
higher by Moody's, and repurchase agreements with banks and securities dealers.
While the Fund is in such a defensive position, the opportunity to achieve a
high total return will be limited and, to the extent that this assessment of
market conditions is incorrect, the Fund will be foregoing the opportunity to
benefit from capital appreciation resulting from increases in the value of
equity investments.
<PAGE>
It is presently anticipated that the Fund may invest in companies based in
(or governments of or within) various areas of the world, including the Far East
(Japan, Hong Kong, Korea, Singapore and Malaysia), Western Europe (United
Kingdom, Germany, France, Italy and Switzerland), Australia and Canada. The
economies of these countries may vary widely in their condition^ and may be
subject to sudden changes that could have a positive or negative impact on the
Fund. Of course, the Fund may invest in such other areas and countries as Fund
Management may determine from time to time. The securities in which the Fund
invests typically will be traded on the principal stock exchanges in such
countries^ but also may be traded on regional stock exchanges or on the
over-the-counter market in such countries.
The Fund also may invest in companies located in developing countries. In
general, Fund Management considers any country that is not included in the
Morgan Stanley Capital International ("MSCI") World Index to be a developing
country. As of the date of this ^ prospectus, the MSCI World Index consists of
the United States, Canada, Japan, Australia, New Zealand, Hong Kong, Malaysia,
Singapore^ and the nations of Western Europe (other than Greece, Portugal and
Turkey). (In addition, the MSCI World Index includes certain South African gold
mining companies, although Fund Management considers South Africa to be a
developing country.) Thus, with the exceptions noted above, developing countries
generally include the countries located in Central and South America, Middle and
Eastern Europe, Asia and Africa. Investors should recognize that, compared to
the United States and other developed countries, developing countries may have
relatively unstable governments, economies based on only a few industries, and
securities markets which trade a small number of securities. Prices in these
markets tend to be volatile. In addition, investments in developing countries
are subject to the same risks as those involved in foreign investments
generally. See "Risk Factors." The Fund will limit its investments in developing
countries to no more than 20% of its total assets.
When the Fund invests in foreign securities, such securities are usually
denominated in foreign currency and the Fund may temporarily hold funds in
foreign currencies. Thus, the Fund's share value is affected by changes in
currency exchange rates. Because the Fund's assets will be invested in foreign
securities and because substantially all revenues will be received in foreign
currencies, the dollar equivalent of the Fund's net assets and distributions
would be adversely affected by a reduction in the value of the foreign currency
relative to the United States dollar. The Fund will pay dividends in dollars and
in such event will incur currency conversion costs. As one way of managing
exchange rate risk, the Fund may enter into forward foreign currency exchange
contracts (i.e., purchasing or selling foreign currencies at a future date).
The investment objective of the Fund and its investment policies, except
where indicated to the contrary, are deemed to be fundamental policies and thus
may not be changed without prior approval by the holders of a majority of the
outstanding voting securities, as defined in the Investment Company Act of 1940
(the "1940 Act"). In addition, the Fund is subject to certain investment
<PAGE>
restrictions which are set forth in the Statement of Additional Information and
which may not be altered without approval of shareholders. One of those
restrictions limits the Fund's borrowing of money to borrowings from banks for
temporary or emergency purposes (but not for investment) in an amount not to
exceed 5% of total assets of the Fund.
For additional information concerning the investment objectives and
operation of the INVESCO International Growth Fund, see "Investment Objectives
and Policies" in the Statement of Additional Information.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the Fund.
The Fund's policies regarding investments in foreign securities and foreign
currencies are not fundamental and may be changed by vote of the Company's board
of directors.
Foreign Securities. The Fund may invest in foreign securities and may do so
without limitation on the percentage of assets which may be so invested.
Investments in securities of foreign companies and in foreign markets involve
certain additional risks not associated with investments in domestic companies
and markets. For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments themselves^ but
also by currency fluctuations. That is, when the U.S. dollar generally rises
against foreign currencies, returns on foreign securities for a U.S. investor
may decrease. By contrast, in a period when the U.S. dollar generally declines,
those returns may increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally
available about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility;
-less government regulation of stock exchanges, brokers and
listed companies abroad than in the United States; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
<PAGE>
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
Repurchase Agreements. The Fund may enter into repurchase agreements with
respect to debt instruments eligible for investment by the Fund with member
banks of the Federal Reserve System, registered broker-dealers and registered
government securities dealers, which are deemed creditworthy. A repurchase
agreement, which may be considered a "loan" under the 1940 Act, is a means of
investing monies for a short period. In a repurchase agreement, the Fund
acquires a debt instrument (generally a security issued by the U.S. government
or an agency thereof, a banker's acceptance^ or a certificate of deposit),
subject to resale to the seller at an agreed-upon price and date (normally, the
next business day). In the event that the original seller defaults on its
obligation to repurchase the security, the Fund could incur costs or delays in
seeking to sell such security. To minimize risk, the securities underlying each
repurchase agreement will be maintained with the Fund's custodian in an amount
at least equal to the repurchase price under the agreement (including accrued
interest), and such agreements will be effected only with parties that meet
certain creditworthiness standards established by the Company's board of
directors. Although the Fund has not adopted any limit on the amount of its
total assets that may be invested in repurchase agreements, the Fund intends
that at no time will the market value of its securities subject to repurchase
agreements exceed 20% of the total assets of the Fund.
Restricted Securities. The Fund may invest from time to time in securities
subject to legal or contractual restrictions on resale ("restricted
securities")^ or securities without readily available market quotations or
illiquid securities (those which cannot be sold in the ordinary course of
business within seven days at approximately the valuation given to them by the
Fund). However, on the date of purchase, no such investment may increase the
Fund's holdings of restricted securities to more than 2% of the Fund's total
assets or its holdings of illiquid securities or those without readily available
market quotations to more than 5% of the value of the Fund's total assets. The
restricted securities that may be purchased subject to the foregoing 2%
limitation include securities that can be resold to institutional investors
pursuant to Rule 144A under the Securities Act of 1933. The Fund is not required
to receive registration rights in connection with the purchase of restricted
securities and, in the absence of such rights, marketability and value can be
adversely affected because the Fund may be unable to dispose of such securities
at the time desired or at a reasonable price. In addition, in order to resell a
restricted security, the Fund might have to bear the expense and incur delays
associated with effecting registration.
<PAGE>
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed-upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions^ and will enter into
forward contracts only to the extent, if any, deemed appropriate by Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions preclude the opportunity for gain if the value of the hedged
currency should rise. No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. Forward contracts may, from
time to time, be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed above. For
additional information regarding forward contracts, see the Company's Statement
of Additional Information.
Securities Lending. The Fund also may lend its securities to qualified
brokers, dealers, banks^ or other financial institutions. This practice permits
the Fund to earn income^ which, in turn, can be invested in additional
securities to pursue the Fund's investment objective. Loans of securities by the
Fund will be collateralized by cash, letters of credit, or securities issued or
guaranteed by the U.S. government or its agencies equal to at least 100% of the
current market value of the loaned securities, determined on a daily basis.
Lending securities involves certain risks, the most significant of which is the
risk that a borrower may fail to return a portfolio security. The Fund monitors
the creditworthiness of borrowers in order to minimize such risks. The Fund will
not lend any security if, as a result of such loan, the aggregate value of
securities then on loan would exceed 10% of the Fund's total assets (taken at
market value).
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, investment considerations warrant
such action. As a result, under certain market conditions, the portfolio
turnover rate for the Fund may exceed 100%. Increased portfolio turnover would
cause the Fund to incur greater brokerage costs than would otherwise be the
case^ and may result in the acceleration of capital gains that are taxable when
distributed to shareholders. The Fund's portfolio turnover rate is set forth
under "Financial Highlights" and, along with the Company's brokerage allocation
policies, is discussed in the Statement of Additional Information.
<PAGE>
THE FUND AND ITS MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Company assumed all of the assets and liabilities of the Fund's
predecessor portfolio, the Financial International Growth Fund of Financial
Series Trust, a Massachusetts business trust organized on July 15, 1987. All
financial and other information about the Fund for periods prior to July 1,
1993, relates to such former fund. On July 1, 1993, the Company also assumed,
through its INVESCO European and Pacific Basin Funds, all of the assets and
liabilities of those funds' predecessors, the European and Pacific Basin
Portfolios of Financial Strategic Portfolios, Inc., which was incorporated under
the laws of Maryland on August 10, 1983. The overall supervision of the Fund is
the responsibility of the Company's board of directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Company's
investment adviser. Under this agreement, INVESCO is primarily responsible for
providing the Fund with portfolio management and various administrative
services^ and supervising the Fund's daily business affairs. These services are
subject to review by the Fund's board of directors.
INVESCO is an indirect, wholly-owned subsidiary of AMVESCO PLC. AMVESCO PLC
is a publicly-traded holding company that, through its subsidiaries, engages in
the business of investment management on an international basis. INVESCO PLC
changed its name to AMVESCO PLC on February 28, 1997, as part of a merger
between INVESCO PLC and A I M Management Group, Inc., thus creating one of the
largest independent investment management businesses in the world. INVESCO and
INVESCO Asset Management Limited ("IAML") will continue to operate under their
existing names. AMVESCO PLC has approximately $150 billion in assets under
management. INVESCO was established in 1932 and, as of October 31, 1996, managed
14 mutual funds, consisting of 39 separate portfolios, with combined assets of
approximately $13.4 billion on behalf of over 829,000 shareholders.
Pursuant to an agreement with INVESCO, ^ IAML serves as the sub-adviser to
the Fund. In that capacity, IAML has the primary responsibility, under the
supervision of INVESCO, for providing portfolio management services to the Fund.
IAML also is an indirect, wholly-owned subsidiary of ^ AMVESCO PLC. IAML also
acts as sub-adviser to the INVESCO European Fund, the INVESCO Pacific Basin
Fund, the INVESCO European Small Company Fund^ and the INVESCO Latin American
Growth Fund. Although the Fund is not a party to the sub-advisory agreement,
that agreement has been approved by the shareholders of the Fund.
^
The Fund is managed by a team of portfolio managers. A senior investment
policy group determines the country-by-country allocation of the Fund's assets,
overall stock selection methodology and the ongoing implementation and risk
control policies applicable to the Fund's portfolio. Individual country
specialists are responsible for managing security selection for their assigned
country's share of the allocation within the parameters established by the
investment policy group.
<PAGE>
The Fund pays INVESCO a monthly advisory fee which is based upon a
percentage of the average net assets of the Fund, determined daily. The maximum
advisory fee payable under the agreement is computed at an annual rate of 1.00%
on the first $500 million of the Fund's average net assets; 0.75% on the next
$500 million of the Fund's average net assets; and 0.65% on the average net
assets of the Fund in excess of $1 billion. For the fiscal period ended October
31, ^ 1996, the advisory fees paid to INVESCO, amounted to an annual rate of
1.00% of the average net assets of the Fund. While the portions of INVESCO's
fees which are equal to or higher than 0.75% of the Fund's net assets are higher
than those generally charged by investment advisers to mutual funds, they are
not higher than those charged by most other investment advisers to funds of
comparable asset levels to the Fund whose assets are invested primarily in
equity securities of companies located outside the United States.
Out of the advisory fees which it receives from the Fund, INVESCO pays
IAML, as sub-adviser to the Fund, a monthly fee, which is computed at the annual
rates of 0.25% on the first $500 million of the Fund's average net assets,
0.1875% on the next $500 million of the Fund's average net assets and 0.1625% on
the Fund's average net assets in excess of $1 billion. No fee is paid by the
Fund to IAML.
The Company also has entered into an Administrative Services Agreement
dated ^ February 28, 1997 (the "Administrative Agreement"), with INVESCO.
Pursuant to the Administrative Agreement, INVESCO performs certain
administrative, recordkeeping ^ and internal accounting services, including
without limitation, maintaining general ledger and capital stock accounts,
preparing a daily trial balance, calculating net asset value daily, providing
selected general ledger reports, and providing sub-accounting and recordkeeping
services for shareholder accounts in the Fund maintained by certain retirement
and employee benefit plans for the benefit of participants of such plans. For
such services, the Fund pays INVESCO a fee consisting of a base fee of $10,000
per year, plus an additional incremental fee computed at an annual rate of
0.015% per annum of the average net assets of the Fund. INVESCO also is paid a
fee by the Company for providing transfer agent services. See "Additional
Information."
The Fund's expenses, which are accrued daily, are deducted from its total
income before dividends are paid. Total expenses of the Fund (prior to any
expense offset), including investment advisory fees (but excluding brokerage
commissions, which are a cost of acquiring securities), as a percentage of its
average net assets for the fiscal period ended October 31, ^ 1996, were ^ 1.80%.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon its evaluation of broker-dealer
financial responsibility coupled with broker-dealer ability to effect
transactions at the best available prices. The Fund may place orders for
<PAGE>
portfolio transactions with qualified broker-dealers which recommend the Fund to
clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of execution of the transaction and level
of commission are comparable to those available from other qualified brokerage
firms.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to compliance policies governing
personal investing. These policies require Fund Management's personnel to
conduct their personal investment activities in a manner that Fund Management
believes is not detrimental to the Fund or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis by INVESCO, as the Fund's
Distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest account, as described below in the ^ prospectus section
entitled "Services Provided by the Fund," may open an account without making any
initial investment if they agree to make minimum monthly purchases of $50; (2)
those shareholders investing in an Individual Retirement Account ("IRA"), or
through omnibus accounts where individual shareholder recordkeeping and
sub-accounting are not required, may make initial minimum purchases of $250; (3)
Fund Management may permit a lesser amount to be invested in the Fund under a
federal income tax-sheltered retirement plan (other than an IRA)^ or under a
group investment plan qualifying as a sophisticated investor; and (4) Fund
Management reserves the right to reduce or waive the minimum purchase
requirements in its sole discretion where it determines such action is in the
best interests of the Fund. The minimum initial purchase requirement of $1,000,
as described above, DOES NOT apply to shareholder account(s) in any of the
INVESCO funds opened prior to January 1, 1993, and^ thus^ is not a minimum
balance requirement for those existing accounts. However, for shareholders
already having accounts in any of the INVESCO funds, all initial share purchases
in a new fund account, including those made using the exchange privilege, must
meet the fund's applicable minimum investment requirement.
<PAGE>
The purchase of Fund shares can be expedited by placing bank wire,
overnight courier^ or telephone orders. Overnight courier orders must meet the
above minimum investment requirements. In no case can a bank wire order or a
telephone order be in an amount less than $1,000. For further information, the
purchaser may call the Company's office by using the telephone number on the
cover of this ^ prospectus. OrderS sent by overnight courier, including Express
Mail, should be sent to the street address, not Post Office Box, of INVESCO
Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase shares of the Fund can be placed by telephone. Shares
will be issued at the net asset value next determined after receipt of telephone
instructions. Generally, payments for telephone orders must be received by the
Fund within three business days or the transaction may be cancelled. In the
event of such cancellation, the purchaser will be held responsible for any loss
resulting from a decline in the value of the shares. In order to avoid such
losses, purchasers should send payments for telephone purchases by overnight
courier or bank wire. INVESCO has agreed to indemnify the Fund for any losses
resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Company or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the
Company, on behalf of the Fund, has the option to redeem shares from any
identically registered account in the Company or any other INVESCO fund as
reimbursement for any loss incurred. You also may be prohibited or restricted
from making future purchases in any of the INVESCO funds.
Persons who invest in this Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction, if the broker so elects. Any investor may deal directly with the
Company in any transaction. In that event, there is no such charge. INVESCO may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Company reserves the right in its sole discretion to reject any order
for purchase of its shares (including purchases by exchange) when, in the
judgment of Fund Management, such rejection is in the best interest of the
Company.
Net asset value per share is computed once each day that the New York Stock
Exchange is open as of the close of regular trading on that Exchange (usually
4:00 p.m., New York time) and also may be computed on other days under certain
circumstances. Net asset value per share for the Fund is calculated by dividing
the market value of all of ^ the Fund's securities plus the value of its other
assets (including dividends and interest accrued but not collected), less all
liabilities (including accrued expenses), by the number of outstanding shares of
the Fund. If market quotations are not readily available, a security will be
valued at fair value as determined in good faith by the board of directors. Debt
securities with remaining maturities of 60 days or less at the time of purchase
will be valued at amortized cost, absent unusual circumstances, so long as the
Company's board of directors believes that such value represents fair value.
<PAGE>
SERVICES PROVIDED BY THE FUND
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. ^ Because certificates must be carefully safeguarded^ and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation for each
transaction in shares of the Fund. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Fund's office by using the telephone number on the cover of this ^ prospectus.
Reinvestment of Distributions. Dividends and other ^ distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share in effect on the ex- dividend date. A shareholder may, however, elect
to reinvest dividends and other distributions in certain of the other no-load
mutual funds advised and distributed by INVESCO, or to receive payment of all
dividends and other distributions in excess of ten dollars by check by giving
written notice to INVESCO at least two weeks prior to the record date on which
the change is to take effect. Further information concerning these options can
be obtained by contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by INVESCO at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting INVESCO.
Exchange Privilege. Shares of this Fund may be exchanged for shares of any
other fund of the Company, as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc.^ and INVESCO Value Trust.
<PAGE>
An exchange involves the redemption of shares in the Fund and investment of
the redemption proceeds in shares of another fund of the Company or in one of
the funds listed above. Exchanges will be made at the net asset value per share
next determined after receipt of an exchange request in proper order. Any gain
or loss realized on an exchange is recognizable for federal income tax purposes
by the shareholder. Exchange requests may be made either by telephone or by
written request to INVESCO using the telephone number or address on the cover of
this ^ prospectus. Exchanges made by telephone must be in the amount of at least
$250^ if the exchange is being made into an existing account of one of the
INVESCO funds. All exchanges that establish a NEW account must meet the Fund's
applicable minimum initial investment requirements. Written exchange requests
into an existing account have no minimum requirements other than the Fund's
applicable minimum subsequent investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the New Account
Application^ or a Telephone Transaction Authorization Form or otherwise
utilizing telephone exchange privileges, the investor has agreed that the Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that exchange instructions are
genuine. These may include recording telephone instructions and providing
written confirmations of exchange transactions. As a result of this policy, the
investor may bear the risk of any loss due to unauthorized or fraudulent
instructions; provided, however, that if the Fund fails to follow these or other
reasonable procedures, the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder, or group of shareholders, has requested
and the time period over which those exchange requests have been made, together
with the level of expense to the Fund which will result from effecting
additional exchange requests. The exchange privilege also may be modified or
terminated at any time. Except for those limited instances where redemptions of
the exchanged security are suspended under Section 22(e) of the 1940 Act, or
where sales of the fund into which the shareholder is exchanging are temporarily
stopped, notice of all such modifications or ^ terminations of the exchange
privilege will be given at least 60 days prior to the date of termination or the
effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
legally be made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
<PAGE>
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by INVESCO may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis.
The minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder, by notifying the employer. Further
information regarding this service can be obtained by contacting INVESCO.
Tax-Deferred Retirement Plans. Shares of this Fund may be purchased for
self-employed individual retirement plans, IRAs, simplified employee pension
plans^ and corporate retirement plans. In addition, shares can be used to fund
tax-qualified plans established under Section 403(b) of the Internal Revenue
Code by educational institutions, including public school systems and private
schools, and certain kinds of non-profit organizations, which provide deferred
compensation arrangements for their employees.
Prototype forms for the establishment of these various plans ^ including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this ^ prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of this Fund may be redeemed at any time at their net asset value
next determined after a request in proper form is received at the Fund's office.
(See "How Shares Can Be Purchased.") Net asset value per share of the Fund at
the time of the redemption may be more or less than the price originally paid to
purchase shares, depending primarily upon the Fund's investment performance.
<PAGE>
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc., at 7800 E. Union Avenue, Denver, ^
Colorado 80237. If no certificates have been issued, a written redemption
request signed by each registered owner of the account may be submitted to
INVESCO at the address noted above. If shares are held in the name of a
corporation, additional documentation may be necessary. Call or write for
specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an eligible guarantor institution. Redemption
procedures with respect to accounts registered in the names of broker-dealers
may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which ^ will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in a Fund account, INVESCO
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Company reserves the right to effect the involuntary redemption of
all shares in such account, in which case the account would be liquidated and
the proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250)^ held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this ^ prospectus. For
INVESCO Trust Company-sponsored federal income tax-deferred retirement plans,
the term "shareholders" is defined to mean plan trustees that file a written
request to be able to redeem Fund shares by telephone. Unless Fund Management
permits a larger redemption request to be placed by telephone, a shareholder may
not place a redemption request by telephone in excess of $25,000. The redemption
<PAGE>
proceeds, at the shareholder's option, either will be mailed to the address
listed for the shareholder on its Fund account, or wired (minimum $1,000) or
mailed to the bank which the shareholder has designated to receive the proceeds
of telephone redemptions. The Fund charges no fee for effecting such telephone
redemptions. These telephone redemption privileges may be modified or terminated
in the future at the discretion of Fund Management. Shareholders should
understand that, while the Fund will attempt to process all telephone redemption
requests on an expedited basis, there may be times, particularly in periods of
severe economic or market disruption, when (a) they may encounter difficulty in
placing a telephone redemption request, and (b) processing telephone redemptions
will require up to seven days following receipt of the redemption request, or
additional time because of the unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application^ or a Telephone Transaction Authorization Form or otherwise
utilizing telephone redemption privileges, the shareholder has agreed that the
Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to qualify for tax treatment as a regulated
investment company. Thus, the Fund does not expect to pay any federal income or
excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state^
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to the withholding of foreign taxes on dividends or
interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund qualifies and elects to pass
these taxes through to shareholders for use by them as a foreign tax credit or
deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless a shareholder is
subject to backup withholding for other reasons, the shareholder can avoid
backup withholding on a Fund account by ensuring that INVESCO has a correct,
certified tax identification number.
<PAGE>
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders annually, at the discretion of the Company's board of
directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of the distribution regardless of how long the shares
have been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase price, a portion of which
is then returned in the form of a taxable distribution.
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending on how long the
Fund held the security which gave rise to the gains. The capital gain
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as dividends.
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
Shareholders are encouraged to consult their tax advisers with respect to
these matters. For further information, see "Dividends, Capital Gain
Distributions and Taxes" in the Statement of Additional Information.
<PAGE>
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all funds of the Company voting together. In other cases, such as voting upon
the investment advisory contract for an individual fund, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only the shareholders of the fund or
funds affected by the matter will be entitled to vote. The Company is not
generally required and does not expect to hold regular annual meetings of
shareholders. However, the board of directors will call special meetings of
shareholders for the purpose, among other reasons, of voting upon the question
of removal of a director or directors when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Company or as may be
required by applicable law or the Company's Articles of Incorporation. The
Company will assist shareholders in communicating with other shareholders as
required by the 1940 Act. Directors may be removed by action of the holders of a
majority of the outstanding shares of the Company.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Fund at the telephone number or mailing address set forth on the cover
page of this ^ prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Ave., Denver, Colorado 80237, acts as registrar, transfer agent^ and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of ^ $20.00 per shareholder
account or omnibus account participant. The transfer agency fee is not charged
to each shareholder's or participant's account^ but is an expense of the Fund to
be paid from the Fund's assets. Registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities, including
affiliates of INVESCO, may provide sub-transfer agency services to the Fund
which reduce or eliminate the need for identical services to be provided by
INVESCO. In such cases, INVESCO may pay the third party an annual sub-transfer
agency or record-keeping fee ^ out of the transfer agency fee which is paid to
INVESCO by the Fund.
<PAGE>
INVESCO INTERNATIONAL GROWTH FUND
A no-load mutual fund seeking
capital appreciation through
investment in designated
geographical sectors.
PROSPECTUS
^ March 1, 1997
To receive general information and prospectuses on any of INVESCO's funds^ or
retirement plans, or to obtain current account or price information or responses
to other questions, call toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
You can find us on the World Wide Web:
http://www.invesco.com
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street ^;
^ Denver Tech Center,
^ 7800 East Union Avenue, Lobby Level
In addition, all documents filed by the Company with the Securities and Exchange
Commission can be located on a web site maintained by the Commission at
http://www.sec.gov.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
^ March 1, 1997
INVESCO INTERNATIONAL FUNDS, INC.
A no-load mutual fund seeking capital appreciation through
investment in designated geographical sectors.
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
- -------------------------------------------------------------------------------
INVESCO INTERNATIONAL FUNDS, INC. (the "Company") is an open-end management
investment company organized in series form consisting of three funds: the
INVESCO European Fund, the INVESCO Pacific Basin Fund and the INVESCO
International Growth Fund (the "Funds"). The INVESCO European Fund and INVESCO
Pacific Basin Fund seek to provide investors with capital appreciation. The
INVESCO International Growth Fund seeks to achieve a high total return on
investment through capital appreciation and current income. Each of the Funds
invests primarily in equity securities. Investors may purchase shares of any or
all Funds. The following are available:
The INVESCO EUROPEAN FUND seeks to achieve its investment objective by
investing primarily in equity securities of companies domiciled in specific
European countries.
The INVESCO PACIFIC BASIN FUND seeks to achieve its investment objective by
investing primarily in equity securities of companies domiciled in specific Far
Eastern or Western Pacific countries
The INVESCO INTERNATIONAL GROWTH FUND seeks to achieve its investment
objective by investing substantially all of its assets in foreign securities.
This Fund invests principally in equity securities. The term "foreign
securities" refers to securities of issuers, wherever organized, which in the
judgment of management have their principal business activities outside of the
United States. In determining whether an issuer's principal activities are
outside of the United States, consideration is given to such factors as the
location of the issuer's assets, personnel, sales and earnings.
Additional funds may be offered in the future.
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Separate ^ prospectuses for the Funds dated ^ March 1, 1997, which provide
the basic information you should know before investing in the Funds, may be
obtained without charge from INVESCO Funds Group, Inc., Post Office Box 173706,
Denver, Colorado 80217- 3706. This Statement of Additional Information is not a
^ prospectus but contains information in addition to and more detailed than that
set forth in each ^ prospectus. It is intended to provide you additional
information regarding the activities and operations of the Funds and should be
read in conjunction with the ^ prospectus.
Investment Adviser and Distributor: INVESCO Funds Group, Inc.
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TABLE OF CONTENTS
Page
INVESTMENT POLICIES AND RESTRICTIONS....................................... 57
THE FUNDS AND THEIR MANAGEMENT............................................. 64
HOW SHARES CAN BE PURCHASED................................................ 75
HOW SHARES ARE VALUED...................................................... 76
FUND PERFORMANCE........................................................... 77
SERVICES PROVIDED BY THE FUND.............................................. 78
TAX-DEFERRED RETIREMENT PLANS.............................................. 79
HOW TO REDEEM SHARES....................................................... 80
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS^ AND TAXES........................... 80
INVESTMENT PRACTICES....................................................... 83
ADDITIONAL INFORMATION..................................................... 86
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INVESTMENT POLICIES AND RESTRICTIONS
The investment objectives and policies of the Funds are discussed in their
respective ^ prospectuses under the heading "Investment Objectives and
Policies." Further information about the Funds' respective investment policies
and restrictions is set forth below.
Foreign Securities. The Funds invest primarily in foreign securities.
Investments in non-U.S. securities involve certain risks not associated with
investment in U.S. companies. Non-U.S. companies generally are not subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies, and there may be less publicly available
information about a foreign company. Although the volume of trading in foreign
securities markets is growing, securities of many non-U.S. companies may be less
liquid and more volatile than securities of comparable U.S. companies.
Transaction costs on foreign securities exchanges are generally higher than in
the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there is
in the United States. Investment in non- U.S. securities may also be subject to
other risks different from those affecting U.S. investments, including local
political or economic developments, expropriation or nationalization of assets,
confiscatory taxation, and imposition of withholding taxes on dividends or
interest payments. Securities denominated in non-U.S. currencies, whether issued
by a non-U.S. or a U.S. issuer, may be affected favorably or unfavorably by
changes in currency rates and exchange control regulations, and costs will be
incurred in connection with conversions from one currency to another. Foreign
currency exchange rates are determined by forces of supply and demand on the
foreign exchange markets. These forces are, in turn, affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors. Generally, the foreign
currency exchange transactions of the Funds will be conducted on a spot basis
(i.e., cash basis) at the spot rate for purchasing or selling currency
prevailing in the foreign currency exchange market.
Forward Foreign Currency Contracts. The Funds may enter into forward
currency contracts to purchase or sell foreign currencies (i.e., non-U.S.
currencies) as a hedge against possible variations in foreign exchange rates. A
forward foreign currency exchange contract is an agreement between the
contracting parties to exchange an amount of currency at some future time at an
agreed-upon rate. The rate can be higher or lower than the spot rate between the
currencies that are the subject of the contract. A forward contract generally
has no deposit requirement, and such transactions do not involve commissions. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency invested in a foreign security transaction, a Fund can hedge
against possible variations in the value of the dollar versus the subject
currency either between the date the foreign security
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is purchased or sold and the date on which payment is made or received or
during the time the Fund holds the foreign security. Hedging against a decline
in the value of a currency in the foregoing manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
preclude the opportunity for gain if the value of the hedged currency should
rise. The Funds will not speculate in forward currency contracts. The Funds will
not attempt to hedge all of their non-U.S. portfolio positions and will enter
into such transactions only to the extent, if any, deemed appropriate by their
investment adviser and sub-adviser (collectively, "Fund Management"). The Funds
will not enter into forward contracts for a term of more than one year. Forward
contracts may, from time to time, be considered illiquid, in which case they
would be subject to the Funds' limitations on investing in illiquid securities,
discussed in the ^ prospectuses.
Restricted/144A Securities. In recent years, a large institutional market
has developed for certain securities that are not registered under the
Securities Act of 1933 (the "1933 Act"). Institutional investors generally will
not seek to sell these instruments to the general public^ but instead will often
depend on an efficient institutional market in which such unregistered
securities can readily be resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and the Fund might be unable to dispose of such
securities promptly or at reasonable prices.
Loans of Portfolio Securities. All of the Funds may lend their portfolio
securities to brokers, dealers^ and other financial institutions, provided that
such loans are callable at any time by the Funds and are at all times secured by
collateral consisting of cash, letters of credit or securities issued or
guaranteed by the United States Government or its agencies, or any combination
thereof, equal to at least the market value, determined daily, of the loaned
securities. The advantage of such loans is that the Fund continues to ^ own the
loaned securities, while at the same time receiving interest from the borrower
of the securities. Loans will be made only to firms deemed by Fund Management to
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be creditworthy under procedures established by the board of directors^ and
when the amount of interest to be received justifies the inherent risks. A loan
may be terminated by the borrower on one business day's notice^ or by the Fund
at any time. If at any time the borrower fails to maintain the required amount
of collateral (at least 100% of the market value of the borrowed securities),
the Fund will require the deposit of additional collateral not later than the
business day following the day on which a collateral deficiency occurs or the
collateral appears inadequate. If the deficiency is not remedied by the end of
that period, the Fund will use the collateral to replace the securities while
holding the borrower liable for any excess of replacement cost over collateral.
Upon termination of the loan, the borrower is required to return the securities
to the Fund. Any gain or loss, on the security during the loan period would
inure to the Fund.
Repurchase Agreements. All of the Funds may enter into repurchase
agreements with respect to debt instruments eligible for investment by the Funds
with member banks of the Federal Reserve System, registered broker-dealers^ and
registered government securities dealers, which are deemed creditworthy. A
repurchase agreement is a means of investing monies for a short period. The
resale price reflects an agreed-upon interest rate effective for the period the
instrument is held by a Fund and is unrelated to the interest rate on the
underlying instrument. In these transactions, the collateral securities acquired
by a Fund (including accrued interest earned thereon) must have a total value in
excess of the value of the repurchase agreement^ and are held as collateral by
the Company's custodian bank until the repurchase agreement is completed.
Investment Restrictions. As described in the section of each Fund's ^
prospectus entitled "Investment Objectives and Policies," the Funds operate
under certain investment restrictions. These policies are fundamental and may
not be changed with respect to a particular Fund without the prior approval of
the holders of a majority of the outstanding voting securities of that Fund, as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"). For
purposes of the following limitations, all percentage limitations apply
immediately after a purchase or initial investment. Any subsequent change in a
particular percentage resulting from fluctuations in value does not require
elimination of any security from the Fund.
INVESCO Pacific Basin and European Funds
Under these restrictions, neither the INVESCO Pacific Basin or European
Funds, nor the Company on behalf of such Funds, will:
(1) issue senior securities as defined in the 1940 Act
(except insofar as the Company may be deemed to have
issued a senior security by reason of entering into a
repurchase agreement, or borrowing money, in accordance
with the restrictions described below, and in accordance
with the position of the staff of the Securities and
Exchange Commission set forth in Investment Company Act
Release No. 10666);
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(2) mortgage, pledge or hypothecate portfolio securities or borrow
money, except borrowings from banks for temporary or emergency
purposes (but not for investment) are permitted in an amount not
exceeding 10% of total net assets. A Fund will not purchase
additional securities while any borrowings on behalf of that Fund
exist;
(3) buy or sell commodities, commodity contracts, oil, gas or other
mineral interests or exploration programs (however, the Fund may
purchase securities of companies which invest in the foregoing and
may enter into forward contracts for the purchase or sale of foreign
currencies);
(4) purchase the securities of any company if as a result of
such purchase more than 10% of total assets would be
invested in securities which are subject to legal or
contractual restrictions on resale ("restricted
securities") and in securities for which there are no
readily available market quotations; or enter into a
repurchase agreement maturing in more than seven days^ if
as a result, such repurchase agreements, together with
restricted securities and securities for which there are
not readily available market quotations, would constitute
more than 10% of total assets;
(5) sell short or buy on margin, or write, purchase or sell
puts or calls or combinations thereof;
(6) buy or sell real estate or interests therein (however, securities
issued by companies which invest in real estate or interests therein
may be purchased and sold);
(7) invest in the securities of any other investment company except for
a purchase or acquisition in accordance with a plan of
reorganization, merger or consolidation, and except that not more
than 10% of the INVESCO Pacific Basin Fund's and the INVESCO
European Fund's total assets may be invested in shares of closed-end
investment companies within the limits of Section 12(d)(1) of the
1940 Act;
(8) invest in any company for the purpose of exercising
control or management;
(9) engage in the underwriting of any securities, except insofar as the
Company may be deemed an ^"underwriter" under the 1933 Act in
disposing of a portfolio security;
(10) make loans to any person, except through the purchase of
debt securities in accordance with the investment
policies of the Funds, or the lending of portfolio
securities to broker-dealers or other institutional
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investors, or the entering into of repurchase agreements
with member banks of the Federal Reserve System,
registered broker-dealers and registered government
securities dealers. The aggregate value of all portfolio
securities loaned may not exceed 33-1/3% of a Fund's
total net assets (taken at current value). No more than
10% of a Fund's total net assets may be invested in
repurchase agreements maturing in more than seven days;
(11) purchase securities of any company in which any officer or director
of the Company or its investment adviser owns more than 1/2 of 1% of
the outstanding securities of such company and in which the officers
and directors of the Company and its investment adviser, as a group,
own more than 5% of such securities;
(12) purchase securities (except obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities) if the purchase would cause a Fund at
the time to have more than 5% of the value of its total
assets invested in the securities of any one issuer or to
own more than 10% of the outstanding voting securities of
any one issuer;
(13) invest more than 5% of its total assets in an issuer having a
record, together with predecessors, of less than three years'
continuous operation.
In addition to the above restrictions, a fundamental policy of the INVESCO
Pacific Basin Fund and the INVESCO European Fund is not to invest more than 25%
of their respective total assets (taken at market value at the time of each
investment) in the securities of issuers in any one industry.
In applying restriction (1) above, the INVESCO Pacific Basin and European
Funds will enter into repurchase agreements only if such agreements are in
accordance with all applicable positions of the staff of the Securities and
Exchange Commission, including Investment Company Act Release No. 10666.
INVESCO International Growth Fund
Under these restrictions, neither INVESCO International Growth Fund, nor
the Company on behalf of such Fund, will:
(1) other than investments by the Fund in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities, invest in the securities of issuers
conducting their principal business activities in the
same industry (investments in obligations issued by a
foreign government, including the agencies or
instrumentalities of a foreign government, are considered
to be investments in a single industry), if immediately
after such investment the value of the Fund's investments
in such industry would exceed 25% of the value of the
Fund's total assets;
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(2) invest in the securities of any one issuer, other than the United
States Government, if immediately after such investment more than 5%
of the value of the Fund's total assets, taken at market value,
would be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by the Fund;
(3) underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the 1933 Act, as
amended, in connection with the disposition of the Fund's portfolio
securities;
(4) invest in companies for the purpose of exercising control
or management;
(5) issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes not in
excess of 5% of the value of the Fund's total assets at the time the
borrowing is made;
(6) mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to an extent
not greater than 5% of the value of the Fund's total assets;
(7) make short sales of securities or maintain a short
position;
(8) purchase securities on margin, except that the Fund may obtain such
short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities;
(9) purchase or sell real estate or interests in real estate. The Fund
may invest in securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts,
which invest in real estate or interests therein;
(10) purchase or sell commodities or commodity contracts;
(11) make loans to other persons, provided that the Fund may purchase
debt obligations consistent with its investment objectives and
policies and may lend limited amounts (not to exceed 10% of its
total assets) of its portfolio securities to broker-dealers or other
institutional investors;
(12) purchase securities of other investment companies except
(i) in connection with a merger, consolidation,
acquisition or reorganization, or (ii) by purchase in the
open market of securities of other investment companies
involving only customary brokers' commissions and only if
immediately thereafter (i) no more than 3% of the voting
securities of any one investment company are owned by the
Fund, (ii) no more than 5% of the value of the total
assets of the Fund would be invested in any one
investment company, and (iii) no more than 10% of the
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value of the total assets of the Fund would be invested
in the securities of such investment companies. The
Company may invest from time to time a portion of the
Fund's cash in investment companies to which the Adviser
serves as investment adviser; provided that no management
or distribution fee will be charged by the Adviser with
respect to any such assets so invested and provided
further that at no time will more than 3% of the Fund's
assets be so invested. Should the Fund purchase
securities of other investment companies, shareholders
may incur additional management and distribution fees;
(13) invest in securities for which there are legal or
contractual restrictions on resale, except that the Fund
may invest no more than 2% of the value of the Fund's
total assets in such securities, or invest in securities
for which there is no readily available market, except
that the Fund may invest no more than 5% of the value of
the Fund's total assets in such securities.
In applying restriction (13) above, the INVESCO International Growth Fund
also includes illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund) among the securities subject to the 5% of total assets limit.
With respect to investment restriction (4) applicable to the INVESCO
Pacific Basin and European Funds, and restriction (13) applicable to the INVESCO
International Growth Fund, the board of directors has delegated to Fund
Management the authority to determine that a liquid market exists for securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, or
any successor to such rule, and that such securities are not subject to the
Funds' limitations on investing in illiquid securities, securities that are not
readily marketable or securities which do not have readily available market
quotations. Under guidelines established by the board of directors, Fund
Management will consider the following factors, among others, in making this
determination: (1) the unregistered nature of a Rule 144A security^; (2) the
frequency of trades and quotes for the security; (3) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (4) dealer undertakings to make a market in the security; and (5)
the nature of the security and the nature of marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer). However, Rule 144A Securities are still subject to the
Funds' respective limitations on investments in restricted securities
(securities for which there are legal or contractual restrictions on resale),
unless they are readily marketable outside the United States, in which case they
are not deemed to be restricted.
In applying the industry concentration investment restrictions applicable
to the Funds, the Company uses an industry classification system for
international securities based on information obtained from Bloomberg L.P.,
Moody's International and the O'Neil Database published by William O'Neil & Co.,
Inc.
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^
THE FUNDS AND THEIR MANAGEMENT
The Company. The Company was incorporated on April 2, 1993, under the laws
of Maryland. On July 1, 1993, the Company, through the INVESCO European Fund and
INVESCO Pacific Basin Fund, assumed all of the assets and liabilities of the
European Portfolio and Pacific Basin Portfolio, respectively, of Financial
Strategic Portfolios, Inc., which was incorporated under the laws of Maryland on
August 10, 1983. In addition, on July 1, 1993, the Company, through the INVESCO
International Growth Fund, assumed all of the assets and liabilities of the
Financial International Growth Fund, a series of Financial Series Trust, a
Massachusetts business trust organized on July 15, 1987. All financial and other
information about the Funds for periods prior to July 1, 1993, relates to such
former portfolios and series^.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("INVESCO"), is employed as the Company's investment adviser. INVESCO was
established in 1932 and also serves as an investment adviser to INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value Trust^ and
INVESCO Variable Investment Funds, Inc.
^ INVESCO is an indirect, wholly-owned subsidiary of ^ AMVESCO PLC, a
publicly-traded holding company ^ that, through its subsidiaries, engages on an
international basis in the business of investment management. INVESCO PLC
changed its name to AMVESCO PLC on February 28, 1997 as part of a merger between
INVESCO PLC and A I M Management Group, Inc., thus creating one of the largest
independent investment management businesses in the world with approximately
$150 billion in assets under management. INVESCO was established in 1932 and as
of October 31, ^ 1996, managed 14 mutual funds, consisting of ^ 39 separate
portfolios, on behalf of over ^ 829,000 shareholders. ^ AMVESCO PLC's other
North American subsidiaries include the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia, manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker-dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. of Boston, Massachusetts, primarily
manages pension and endowment accounts.
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--PRIMCO Capital Management, Inc. of Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for ^ AMVESCO PLC's clients
worldwide. Clients include corporate plans^ and public pension funds as well as
endowment and foundation accounts.
The corporate headquarters of ^ AMVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
The Sub-Adviser. INVESCO, as investment adviser, has contracted with
INVESCO Asset Management Limited ("IAML") to provide investment advisory and
research services on behalf of INVESCO European Fund, INVESCO Pacific Basin Fund
and INVESCO International Growth Fund. IAML has the primary responsibility for
providing portfolio investment management services to these Funds. IAML is also
an indirect, wholly-owned subsidiary of AMVESCO PLC.
As indicated in the ^ prospectuses, INVESCO and IAML permit investment and
other personnel to purchase and sell securities for their own accounts in
accordance with compliance policies governing personal investing by directors,
officers and employees of INVESCO and IAML. These policies require officers,
inside directors, investment and other personnel of INVESCO and IAML to
pre-clear all transactions in securities not otherwise exempt under the
policies. Requests for trading authority will be denied ^ if, among other
reasons, the proposed personal transaction would be contrary to the provisions
of the applicable policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Funds.
In addition to the pre-clearance requirement described above, the policies
subject officers, inside directors, investment and other personnel of INVESCO
and IAML to various trading restrictions and reporting obligations. All
reportable transactions are reviewed for compliance with the policies. The
provisions of these policies are administered by and subject to exceptions
authorized by INVESCO or IAML.
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement dated February 28, 1997 (the
"Agreement") with the Company which was approved on ^ November 6, 1996, by a
vote cast in person by a majority of the directors of the Company, including a
majority of the directors who are not "interested persons" of the Company or
INVESCO at a meeting called for such purpose. ^ The Agreement was approved by
shareholders of each Fund of the Company on January 31, 1997, for an initial
term expiring ^ February 28, 1999. Thereafter, the Agreement may be continued
from year to year as to each Fund as long as each such continuance is
specifically approved at least annually by the board of directors of the
Company^ or by a vote of the holders of a majority, as defined in the 1940 Act,
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of the outstanding shares of the Fund. Any such continuance must also be
approved by a majority of the Company's directors who are not parties to the
Agreement or interested persons (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
continuance. The Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of an assignment to the extent required by the 1940 Act and the
rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolios
of the Funds in conformity with each Fund's investment policies (either directly
or by delegation to a sub-adviser which may be a company affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial
and all other services necessary or incidental to the administration of the
affairs of the Funds excluding, however, those services that are the subject of
separate agreement between the Company and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency^ and registrar services, and services
furnished under an Administrative Services Agreement with INVESCO discussed
below. Services provided under the Agreement include^ but are not limited to:
supplying the Company with officers, clerical staff and other employees, if any,
who are necessary in connection with the Funds' operations; furnishing office
space, facilities, equipment^ and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Funds' operations; preparation and review of
required documents, reports and filings by INVESCO's in-house legal and
accounting staff (including the prospectuses, statement of additional
information, proxy statements, shareholder reports, tax returns, reports to the
SEC^ and other corporate documents of the Funds), except insofar as the
assistance of independent accountants or attorneys is necessary or desirable;
supplying basic telephone service and other utilities; and preparing and
maintaining certain of the books and records required to be prepared and
maintained by the Funds under the 1940 Act. Expenses not assumed by INVESCO are
borne by the Funds.
As full compensation for its advisory services to the Company, INVESCO
receives a monthly fee. The fee is calculated daily at an annual rate of:
(a) INVESCO Pacific Basin and European Funds: 0.75% on the
first $350 million of each Fund's average net assets;
0.65% on the next $350 million of each Fund's average net
assets; and 0.55% on each Fund's average net assets in
excess of $700 million;
(b) INVESCO International Growth Fund: 1.00% on the first
$500 million of the Fund's average net assets; 0.75% on
the next $500 million of the Fund's average net assets;
and 0.65% on the Fund's average net assets in excess of
$1 billion.
The advisory fee is calculated daily at the applicable annual rate and paid
monthly.
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^ Sub-Advisory Agreement. IAML serves as sub-adviser to the ^ Funds
pursuant to a sub-advisory agreement ^ dated February 28, 1997 (the
Sub-Agreement") with INVESCO ^ which was approved on ^ November 6, 1996, by a
vote cast in person by a majority of the directors of the Company, including a
majority of the directors who are not "interested persons" of the Company,
INVESCO or IAML, at a meeting called for such purpose. The ^ Sub-Agreement ^ was
approved ^ on January 31, 1997, by the shareholders of ^ each of the Funds for
an initial term expiring ^ February 28, 1999. Thereafter, the Sub-Agreement may
be continued from year to year as to each Fund 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 of the outstanding shares of the Fund, as defined
in the 1940 Act. Each such continuance also must be approved by a majority of
the directors who are not parties to the ^ Sub-Agreement or interested persons
(as defined in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such continuance. The ^ Sub-Agreement may be
terminated at any time without penalty by either party or the Company upon sixty
(60) days' written notice^ and terminates automatically in the event of an
assignment to the extent required by the 1940 Act and the rules thereunder.
The ^ Sub-Agreement provides that IAML, subject to the supervision of
INVESCO, shall manage the investment portfolios of the Funds in conformity with
each such Fund's investment policies. These management services would 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 the Funds,
consistent with (i) each Fund's investment policies as set forth in the
Company's Articles of Incorporation, Bylaws^ and Registration Statement, as from
time to time amended, under the 1940 Act, as amended, and in any prospectus
and/or statement of additional information of the Company, as from time to time
amended and in use under the 1933 Act and (ii) the Company's status as a
regulated investment company under the Internal Revenue Code of 1986, as
amended; (c) determining what securities are to be purchased or sold for each
Fund, unless otherwise directed by the directors of the Company 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 IAML; (e)
determining what portion of each applicable Fund should be invested in the
various types of securities authorized for purchase by such Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Company action and any other rights pertaining to the portfolio securities of
each applicable Fund shall be exercised.
The Sub-^ Agreement provides that, as compensation for its services, IAML
shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the applicable Fund's net assets. With respect to the
INVESCO European and Pacific Basin Funds, the fee is calculated at the annual
rate of: 0.45% on the first $350 million of each Fund's average net assets;
0.40% on the next $350 million of each Fund's average net assets; and 0.35% on
<PAGE>
each Fund's average net assets in excess of $700 million. With respect to the
INVESCO International Growth Fund, the fee is computed at the annual rate of:
0.25% on the first $500 million of the Fund's average net assets^; 0.1875% on
the next $500 million of the Fund's average net assets; and 0.1625% on the
Fund's average net assets in excess of $1 billion. The sub-advisory fees are
paid by INVESCO, NOT the Funds.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, also provides certain administrative, sub-accounting^ and
recordkeeping services to the Company pursuant to an Administrative Services
Agreement dated ^ February 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved on ^ November 6, 1996, by a vote cast in
person by all of the directors of the Company, including all of the directors
who are not "interested persons" of the Company or INVESCO, at a meeting called
for such purpose. The Administrative Agreement ^ is for an initial term ^ of one
year. Thereafter, the Administrative 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, including a majority of the directors who are not
parties to the Administrative Agreement or interested persons (as defined in the
1940 Act) of any such party, cast in person at a meeting called for the purpose
of voting on such continuance. The Administrative Agreement may be terminated at
any time without penalty by INVESCO on sixty (60) days' written notice, or by
the Company upon thirty (30) days' written notice, and terminates automatically
in the event of an assignment unless the Company's board of directors approves
such assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Funds: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Fund; and (B) such sub-accounting, recordkeeping^ and administrative services
and functions, which may be provided by affiliates of INVESCO, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants of
such plans. As full compensation for services provided under the Administrative
Agreement, the Company pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year per Fund, plus an additional incremental fee computed daily and
paid monthly at an annual rate of 0.015% per year of the average net assets of
each Fund of the Company.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent^ and registrar services for the Company pursuant to a Transfer
Agency Agreement^ dated February 28, 1997 which was approved by the board of
directors of the Company, including a majority of the Company's directors who
are not parties to the Transfer Agency Agreement or "interested persons" of any
such party, on ^ November 6, 1996, for a term of one year. The Transfer Agency
Agreement ^ may be continued from year to year as to each Fund as long as such
continuance is specifically approved at least annually by the board of directors
of the Company, or by a vote of the holders of a majority of the outstanding
shares of the Fund. Any such continuance also must be approved by a majority of
the Company's directors who are not parties to the Transfer Agency Agreement or
interested persons (as defined by the 1940 Act) of any such party, cast in
<PAGE>
person at a meeting called for the purpose of voting on such continuance. The
Transfer Agency Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of assignment.
The Transfer Agency Agreement provides that the Company shall pay to
INVESCO an annual fee of ^ $20.00 per shareholder account or, where applicable,
per participant in an omnibus account ^. This fee is paid monthly at 1/12 of the
annual fee and is based upon the actual number of shareholder accounts and
omnibus account participants in existence during each month.
For the fiscal years ended October 31, ^ 1996, 1995 and 1994, the Funds
paid the following advisory fees, administrative services fees and transfer
agency fees:
INVESCO European Fund
Fiscal Year
Ended Advisory Administrative Transfer
October 31 Fee Services Fee Agency Fee
- ---------- -------- -------------- ----------
1996 $1,793,380 $45,868 $839,761
1995 1,815,386 46,308 869,684
1994 2,503,180 60,180 698,202
INVESCO Pacific Basin Fund
Fiscal Year
Ended Advisory Administrative Transfer
October 31 Fee Services Fee Agency Fee
- ---------- -------- -------------- ----------
1996 $1,396,490 $37,930 $870,770
1995 1,571,623 41,483 852,343
1994 2,255,967 55,169 615,420
INVESCO International Growth Fund
Fiscal Year
Ended Advisory Administrative Transfer
October 31 Fee Services Fee Agency Fee
- ---------- -------- -------------- ----------
1996 $893,966 $23,409 $383,054
1995 963,765 24,541 361,657
1994 1,307,707 29,616 242,814
Officers and Directors of the Company. The overall direction and
supervision of the Company is the responsibility of the board of directors,
which has the primary duty of seeing that the general investment policies and
programs of each of the Funds are carried out and that the Funds' portfolios are
properly administered. The officers of the Company, all of whom are officers and
<PAGE>
employees of, and are paid by, INVESCO, are responsible for the day-to-day
administration of the Company and each of the Funds. The investment adviser for
the Company has the primary responsibility for making investment decisions on
behalf of the Company. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of the Company hold comparable positions
with INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income
Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds,
Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc.^ and INVESCO
Variable Investment Funds, Inc. All of the directors of the Company also serve
as trustees of INVESCO Value Trust. In addition, all of the directors of the
Fund^ also are directors of INVESCO Advisor Funds, Inc. (formerly known as "The
EBI Funds, Inc.") and trustees of INVESCO Treasurer's Series Trust ^. All of the
officers of the Company also hold comparable positions with INVESCO Value Trust.
Set forth below is information with respect to each of the Company's officers
and directors. Unless otherwise indicated, the address of the directors and
officers is Post Office Box 173706, Denver, Colorado 80217-3706. Their
affiliations represent their principal occupations during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of ^ AMVESCO PLC, London, England, and of various subsidiaries thereof;
Chairman of the Board of INVESCO Advisor Funds, Inc.^ and INVESCO Treasurer's
Series Trust^. Address: 1315 Peachtree Street, NE, Atlanta, Georgia. Born: May
11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of INVESCO
Advisor Funds, Inc.^ and INVESCO Treasurer's Series Trust. Trustee of The Global
Health Sciences Fund. Formerly, Chairman of the Executive Committee and Chairman
of the Board of Security Life of Denver Insurance Company, Denver, Colorado; ^
former director of Midwestern United Life Insurance Company. Director of ING
American Holdings Company and First ING Life Insurance Company of New York.
Address: Security Life Center, 1290 Broadway, Denver, Colorado. Born: January
12, 1928.
DAN J. HESSER,+* President and Director. Chairman of the Board, President,
and Chief Executive Officer of INVESCO Funds Group, Inc.^; President and
Director of INVESCO Trust Company^ and INVESCO Advisor Funds, Inc. President of
The Global Health Sciences Fund and INVESCO Treasurer's Series Trust. Born:
December 27, 1939.
<PAGE>
VICTOR L. ANDREWS,** Director. ^ Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance ^ of Georgia State
University, Atlanta, Georgia^; President, Andrews Financial Associates, Inc.
(consulting firm); formerly, member of the faculties of the Harvard Business
School and the Sloan School of Management of MIT. Dr. Andrews is also a director
of the Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds, Inc.
Address: ^ 4625 Jettridge Drive, Atlanta, Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
^
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: 15
Sterling Road, Armonk, New York. Born: August 1, 1923.
KENNETH T. KING,+** Director. Formerly, Chairman of the Board of The
Capitol Life Insurance Company, Providence Washington Insurance Company, and
Director of numerous subsidiaries thereof in the U.S. Formerly, Chairman of the
Board of The Providence Capitol Companies in the United Kingdom and Guernsey.
Chairman of the Board of the Symbion Corporation (a high technology company)
until 1987. Address: 4080 North Circulo Manzanillo, Tucson, Arizona.Born:
November 16, 1925.
<PAGE>
JOHN W. ^ MCINTYRE,# Director. Retired. Formerly, Vice Chairman of the
Board of Directors of The Citizens and Southern Corporation and Chairman of the
Board and Chief Executive Officer of The Citizens and Southern Georgia Corp. and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential Company.
Address: 7 Piedmont Center, Suite 100, Atlanta, GA. Born: September 14, 1930.
^
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company; ^
Vice President (May 1989 to April 1995) of INVESCO Funds Group, Inc. and INVESCO
Trust Company. Formerly, employee of a U.S. regulatory agency, Washington, D.C.,
(June 1973 through May 1989). Born: September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company since ^
July 1995 and formerly (August 1992 to July 1995) Vice President of INVESCO
Funds Group, Inc. and Trust Officer of INVESCO Trust Company. Formerly, Vice
President of 440 Financial Group from June 1990 to August 1992; Assistant Vice
President of Putnam Companies from November 1986 to June 1990. Born: August 21,
1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Company.
+Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Company as defined in the
Investment Company Act of 1940.
**Member of the management liaison committee of the Company.
<PAGE>
As of ^ February 13, 1997, officers and directors of the Company, as a
group, beneficially owned less than 1% of each Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended October 31, ^
1996: the compensation paid by the Company to its eight independent directors
for services rendered in their capacities as directors of the Company; the
benefits accrued as Company expenses with respect to the Defined Benefit
Deferred Compensation Plan discussed below; and the estimated annual benefits to
be received by these directors upon retirement as a result of their service to
the Company. In addition, the table sets forth the total compensation paid by
all of the mutual funds distributed by INVESCO Funds Group, Inc. (including the
Company), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and The
Global Health Sciences Fund (collectively, the "INVESCO Complex") to these
directors for services rendered in their capacities as directors or trustees
during the year ended December 31, ^ 1996. As of December 31, ^ 1996, there were
^ 49 funds in the INVESCO Complex.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
Name of Person, tion From Company Upon Paid To
Position Company(1) Expenses(2) Retirement(3) Directors(1)
- --------------- ----------- ----------- ------------- ------------
Fred A.Deering, $ 4,309 $ 887 $ 738 $ 98,850
Vice Chairman of
the Board
Victor L. Andrews 4,089 781 813 84,350
Bob R. Baker 4,140 805 1,090 84,850
Lawrence H. Budner 4,026 838 813 80,350
Daniel D. Chabris 4,154 956 578 84,850
A. D. Frazier, Jr.(4) 3,973 0 0 81,500
Kenneth T. King 4,108 921 669 71,350
John W. McIntyre 3,987 0 0 90,350
Total $32,786 $5,188 $4,701 $676,450
% of Net Assets 0.0060%(5) 0.0010%(5) 0.0044%(6)
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
<PAGE>
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below^ and not compensation deferred at the election
of the directors.
(3)These figures represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ The Global Health Sciences
Fund which does not participate in any retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex^ and for other reasons during the period in which
retirement benefits are accrued on behalf of the respective directors. This
results in lower estimated benefits for directors who are closer to retirement
and higher estimated benefits for directors who are further from retirement.
With the exception of Messrs. Frazier and McIntyre, each of these directors has
served as a director/trustee of one or more of the funds in the INVESCO Complex
for the minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan.
(4)Effective November 1, 1996, Mr. Frazier was employed by AMVESCO PLC, a
company affiliated with INVESCO. Because it was possible that Mr. Frazier would
be employed with AMVESCO PLC, he was deemed to be an "interested person" of the
Fund and of the other funds in the INVESCO Complex effective May 1, 1996.
Effective November 1, 1996, Mr. Frazier ceased to receive any director's fees or
other compensation from the Funds or other funds in the INVESCO Complex for his
service as a director.
(5)Total ^ as a percentage of the Company's net assets as of October 31,^
1996.
^ (6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
Messrs. ^ Brady, Harris, Hesser, and ^ effective November 1, 1996, Frazier,
as "interested persons" of the Company and other funds in the INVESCO Complex,
receive compensation as officers or employees of INVESCO or its affiliated
companies^ and do not receive any director's fees or other compensation from the
Company or other funds in the INVESCO Complex for their services as directors.
The boards of directors/trustees of the mutual funds managed by INVESCO,
INVESCO Advisor Funds, Inc. and INVESCO Treasurer's Series Trust have adopted a
Defined Benefit Deferred Compensation Plan for the non-interested directors and
trustees of the funds. Under this plan, each director or trustee who is not an
interested person of the funds (as defined in the 1940 Act) and who has served
for at least five years (a "qualified director") is entitled to receive, upon
retiring from the boards at the retirement age of 72 (or the retirement age of
<PAGE>
73 to 74, if the retirement date is extended by the boards for one or two
years^ but less than three years) continuation of payment for one year (the
"first year retirement benefit") of the annual basic retainer payable by the
funds to the qualified director at the time of his retirement (the "basic
retainer"). Commencing with any such director's second year of retirement, and
commencing with the first year of retirement of a director whose retirement has
been extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to ^ 40% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or to his beneficiary or estate. If a
qualified director becomes disabled or dies either prior to age 72 or during ^
his 74th year while still a director of the funds, the director will not be
entitled to receive the first year retirement benefit; however, the reduced
retainer payments will be made to his beneficiary or estate. The plan is
administered by a committee of three directors who are also participants in the
plan and one director who is not a plan participant. The cost of the plan will
be allocated among the INVESCO, INVESCO Advisor and Treasurer's Series funds in
a manner determined to be fair and equitable by the committee. The Company is
not making any payments to directors under the plan as of the date of this
Statement of Additional Information. The Company has no stock options or other
pension or retirement plans for management or other personnel and pays no salary
or compensation to any of its officers.
The Company has an audit committee which is comprised of four of the
directors who are not interested persons of the Company. The committee meets
periodically with the Company's independent accountants and officers to review
accounting principles used by the Funds, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Company also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Company, and (b) to review
legal and operational matters which have been assigned to the committee by the
board of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The shares of each Fund are sold on a continuous basis at the net asset
value per share next calculated after receipt of a purchase order in good form.
The net asset value for each Fund is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange^ but
may also be computed at other times. See "How Shares Are Valued." INVESCO acts
as the Funds' distributor under a distribution agreement with the Company under
which it receives no compensation and bears all expenses, including the costs of
printing and distribution of prospectuses incident to direct sales and
distribution of each of the Fund's shares on a no-load basis.
<PAGE>
HOW SHARES ARE VALUED
As described in the section of each Fund's ^ prospectus entitled "How
Shares Can Be Purchased," the net asset value of shares of each Fund is computed
once each day that the New York Stock Exchange is open as of the close of
regular trading on that Exchange (usually 4:00 p.m., New York time) and applies
to purchase and redemption orders received prior to that time. Net asset value
per share is also computed on any other day on which there is a sufficient
degree of trading in the securities held by a Fund that the current net asset
value per share might be materially affected by changes in the value of the
securities held, but only if on such day the Fund receives a request to purchase
or redeem shares of that Fund. Net asset value per share is not calculated on
days the New York Stock Exchange is closed, such as federal holidays including
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving^ and Christmas.
The net asset value per share of each Fund is calculated by dividing the
value of all securities held by the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of that Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over-the-counter market for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities will be valued at their fair values as determined in good
faith by the Company's board of directors or pursuant to procedures adopted by
the board of directors. The above procedures may include the use of valuations
furnished by a pricing service which employs a matrix to determine valuations
for normal institutional-size trading units of debt securities. Prior to
utilizing a pricing service, the Fund's board of directors reviews the methods
used by such service to assure itself that securities will be valued at their
fair values. The Fund's board of directors also periodically monitors the
methods used by such pricing services. Debt securities with remaining maturities
of 60 days or less at the time of purchase are normally valued at amortized
cost.
The values of securities held by the Funds, and other assets used in
computing net asset value, generally are determined as of the time regular
trading in such securities or assets is completed each day. ^ Because regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
<PAGE>
the Funds' net asset values. However, in the event that the closing price
of a foreign security is not available in time to calculate a Fund's net asset
value on a particular day, the Company's board of directors has authorized the
use of the market price for the security obtained from an approved pricing
service at an established time during the day which may be prior to the close of
regular trading in the security. The value of all assets and liabilities
initially expressed in foreign currencies will be converted into U.S. dollars at
the spot rate of such currencies against U.S. dollars provided by an approved
pricing service.
FUND PERFORMANCE
As discussed in the section of each Fund's ^ prospectus entitled
"Performance Data," the Company advertises the total return performance of its
Funds. Average annual total return performance for each Fund for the indicated
periods ended October 31, ^ 1996, was as follows:
10 Years/
Life of
Fund 1 Year 5 Years Fund
- --------- ------ ------- ---------
European 23.47% 10.60% 9.21%
Pacific Basin 3.55% 4.86% 7.22%
International Growth 12.01% 5.07% 5.65%(1)
- -----------------
(1) ^ 109 months ^(9.08 yrs.)
^ Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period and Fund
indicated.
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
<PAGE>
Funds. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of each Fund's ^
prospectus entitled "Services Provided By the Funds ," each Fund offers a
Periodic Withdrawal Plan. All dividends and distributions on shares owned by
shareholders participating in this Plan are reinvested in additional shares. ^
Because withdrawal payments represent the proceeds from sales of shares, the
amount of shareholders' investments in that Fund will be reduced to the extent
that withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
<PAGE>
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such a Plan do not represent income or a
return on investment.
A Periodic Withdrawal Plan may be terminated at any time by sending a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of each Fund's ^
prospectus entitled "Services Provided by the Funds," the Funds offer
shareholders the privilege of exchanging shares of the Funds for shares of
certain other mutual funds advised by INVESCO. Exchange requests may be made
either by telephone or by written request to INVESCO Funds Group, Inc., using
the telephone number or address on the cover of this Statement of Additional
Information. Exchanges made by telephone must be in an amount of at least $250^
if the exchange is being made into an existing account of one of the INVESCO
funds. All exchanges that establish a new account must meet the fund's
applicable minimum initial investment requirements. Written exchange requests
into an existing account have no minimum requirements other than the fund's
applicable minimum subsequent investment requirements. Any gain or loss realized
on such an exchange is recognized for federal income tax purposes. This
privilege is not an option or right to purchase securities^ but is a revocable
privilege permitted under the present policies of each of the funds and is not
available in any state or other jurisdiction where the shares of the mutual fund
into which transfer is to be made are not qualified for sale, or when the net
asset value of the shares presented for exchange is less than the minimum dollar
purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of each Fund's ^ prospectus entitled "Services
Provided by the Funds," shares of the Funds may be purchased as the investment
medium for various tax-deferred retirement plans. Persons who request
information regarding these plans from INVESCO will be provided with prototype
documents and other supporting information regarding the type of plan requested.
Each of these plans involves a long-term commitment of assets and is subject to
possible regulatory penalties for excess contributions, premature distributions
or ^ insufficient distributions after age 70-1/2. The legal and tax implications
may vary according to the circumstances of the individual investor. Therefore,
the investor is urged to consult with an attorney or tax adviser prior to the
establishment of such a plan.
<PAGE>
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven days
following receipt of the required documents as described in the section of each
Fund's ^ prospectus entitled "How to Redeem Shares." The right of redemption may
be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
a particular Fund of securities owned by it is not reasonably practicable, or it
is not reasonably practicable for a particular Fund fairly to determine the
value of its net assets; or (d) the Securities and Exchange Commission ("SEC")
by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Company's investment adviser, make it undesirable for a Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Company has obligated itself under the 1940 Act to redeem for
cash all shares of a Fund presented for redemption by any one shareholder up to
$250,000 (or 1% of the Fund's net assets if that is less) in any 90-day period.
Securities delivered in payment of redemptions are selected entirely by the
investment adviser based on what is in the best interests of the Fund and its
shareholders, and are valued at the value assigned to them in computing the
Fund's net asset value per share. Shareholders receiving such securities are
likely to incur brokerage costs on their subsequent sales of the securities.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS^ AND TAXES
The Company intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. The Company so qualified in the fiscal year
ended October 31, ^ 1996, and intends to continue to qualify during its current
fiscal year. As a result, it is anticipated that the Funds will pay no federal
income or excise taxes and will be accorded conduit or "pass through" treatment
for federal income tax purposes.
Dividends paid by each Fund from net investment income, as well as
distributions of net realized short-term capital gains and net realized gains
from certain foreign currency transactions, are, for federal income tax
purposes, taxable as ordinary income to shareholders. After the end of each
calendar year, each Fund sends shareholders information regarding the amount and
character of dividends paid in the year, information on foreign source income
and foreign taxes, and the dividends eligible for the dividends-received
deduction for corporations. Such amounts will be limited to the aggregate amount
of qualifying dividends which each Fund derives from its portfolio investments.
<PAGE>
Distributions by each Fund of net capital gains (the excess of net
long-term capital gain over net short-term capital loss) are, for federal income
tax purposes, taxable to the shareholder as long-term capital gains regardless
of how long a shareholder has held shares of the Fund. Such distributions are
identified as such and are not eligible for the dividends-received deduction.
All dividends and other distributions are regarded as taxable to the
investor, whether or not such dividends and distributions are reinvested in
additional shares. If the net asset value of Fund shares should be reduced below
a shareholder's cost as a result of a distribution, such distribution would be
taxable to the shareholder although a portion would be, in effect, a return of
invested capital. The net asset value of each Fund's shares reflects accrued net
investment income and undistributed realized capital and foreign currency gains;
therefore, when a distribution is made, the net asset value is reduced by the
amount of the distribution. If shares are purchased shortly before a
distribution, the full price for the shares will be paid and some portion of the
price may then be returned to the shareholder as a taxable dividend or capital
gain. However, the net asset value per share will be reduced by the amount of
the distribution, which would reduce any gain (or increase any loss) for tax
purposes on any subsequent redemption of shares.
INVESCO may provide Fund shareholders with information concerning the
average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders^ and will
not be reported to the Internal Revenue Service (the ^"IRS"). The IRS permits
the use of several methods to determine the cost basis of mutual fund shares.
The cost basis information provided by INVESCO will be computed using the
single-category average cost method, although neither INVESCO nor the Company
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for a Fund in past years, the shareholder must continue to use the method
previously used, unless the shareholder applies to the IRS for permission to
change methods.
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
Each Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by each Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of a
Fund's total assets at the close of any taxable year consists of securities of
foreign corporations, the Fund will be eligible to, and may, file an election
<PAGE>
with the IRS that will enable its shareholders, in effect, to receive the
benefit of the foreign tax credit with respect to any foreign and U.S.
possessions income taxes paid by it. Each Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's income
from sources within, and taxes paid to, foreign countries and U.S. possessions
if it makes this election.
The Funds may invest in the stock of "passive foreign investment
companies" ^("PFICs"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) at least 75% of its gross income is passive
or (2) an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, a Fund will be
subject to federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on disposition of the stock (collectively
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC income
will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time a
Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of a Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gains
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, for income tax purposes does not entail government
supervision of management or investment policies.
<PAGE>
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for any of the Funds. Brokerage costs to each Fund are commensurate
with the rate of portfolio activity. During the fiscal years ended October 31,
1996, 1995 and 1994, the INVESCO European Fund's portfolio turnover rates were
91%, 96% and 70%, respectively; the INVESCO Pacific Basin Fund's portfolio
turnover rates were 70%, 56% and 70%, respectively; and the INVESCO
International Growth Fund's portfolio turnover rates were 64%, 62% and 87%,
respectively.
In computing the portfolio turnover rate, all investments with maturities
or expiration dates at the time of acquisition of one year or less are excluded.
Subject to this exclusion, the turnover rate is calculated by dividing (A) the
lesser of purchases or sales of portfolio securities for the fiscal year by (B)
the monthly average of the value of portfolio securities owned by the Fund
during the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO or IAML, as the Company's
investment adviser or sub-adviser, places orders for the purchase and sale of
securities with brokers and dealers based upon their evaluation of ^ the
financial responsibility^ of the brokers and dealers, and considering the
brokers' and dealers' ability to effect transactions at the best available
prices. Fund Management evaluates the overall reasonableness of brokerage
commissions paid by reviewing the quality of executions obtained on portfolio
transactions of each Fund, viewed in terms of the size of transactions,
prevailing market conditions in the security purchased or sold, and general
economic and market conditions. In seeking to ensure that the commissions
charged the Fund are consistent with prevailing and reasonable commissions ^,
Fund Management also endeavors to monitor brokerage industry practices with
regard to the commissions ^ charged by ^ broker-dealers on transactions effected
for other comparable institutional investors. While Fund Management seeks
reasonably competitive rates, the Funds do not necessarily pay the lowest
commission^ or spread^ available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, Fund Management may select brokers that provide research
services to effect such transactions. Research services consist of statistical
and analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to Fund Management in
making informed investment decisions. Research services prepared and furnished
by brokers through which the Funds effect securities transactions may be used by
Fund Management in servicing all of their respective accounts and not all such
services may be used by Fund Management in connection with the Funds.
<PAGE>
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, Fund Management, consistent with the
standard of seeking to obtain the best execution on portfolio transactions, may
place orders with such brokers for the execution of transactions for the Funds
on which the commissions ^ are in excess of those which other brokers might have
charged for effecting the same transactions.
Portfolio transactions may be effected through qualified ^ broker-dealers
that recommend the Funds to their clients^ or who act as agent in the purchase
of any of the Funds' shares for their clients. When a number of brokers and
dealers can provide comparable best price and execution on a particular
transaction, the Company's adviser may consider the sale of Fund shares by a
broker or dealer in selecting among qualified ^ broker-dealers.
Certain brokers are paid a fee (the "Broker's Fee") for recordkeeping,
shareholder communications and other services provided by the brokers to
investors purchasing shares of the Funds through no transaction fee programs
("NTF Programs") offered by the brokers. The Broker's Fee is based on the
average daily value of the investments in each Fund made by a broker and held in
omnibus accounts maintained on behalf of investors participating in the NTF
Program. The Company's directors have authorized each Fund to pay transfer
agency fees to INVESCO based on the number of investors who have beneficial
interests in a broker's omnibus accounts in that Fund. INVESCO, in turn, pays
these transfer agency fees to the broker as a sub-transfer agency or
recordkeeping fee in payment of all or a portion of the Broker's Fee. The
Company's directors have further authorized INVESCO to place a portion of each
Fund's brokerage transactions with certain brokers that sponsor NTF Programs, if
INVESCO reasonably believes that, in effecting the Fund's transactions in
portfolio securities, the broker is able to provide the best execution of orders
at the most favorable prices. A portion of the commissions earned by a broker
from executing portfolio transactions on behalf of a specific Fund may be
credited by the broker against the sub-transfer agency or recordkeeping fee
payable with respect to that Fund, on a basis negotiated between INVESCO and the
broker. INVESCO, in turn, applies any such credits to the transfer agency fee it
charges to the Fund. Thus, the Fund pays sub-transfer agency or recordkeeping
fees to the broker in payment of the Broker's Fee only to the extent that such
fees are not offset by the Fund's credits. INVESCO itself pays the portion of a
Fund's Broker's Fee, if any, that exceeds the sub-transfer agency or
recordkeeping fee. In the event that the transfer agency fee paid by a Fund to
INVESCO with respect to investors who have beneficial interests in a particular
broker's omnibus accounts in that Fund exceeds the Broker's Fee applicable to
that Fund, INVESCO may carry forward the excess through the end of the Company's
fiscal year and apply it to future Broker's Fees payable to that broker with
respect to the Fund. The amount of excess transfer agency fees carried forward
will be reviewed for possible adjustment by INVESCO prior to each fiscal
year-end of the Company.
<PAGE>
The aggregate dollar amounts of brokerage commissions paid by the INVESCO
European and Pacific Basin Funds for the fiscal years ended October 31, 1996,
1995^ and 1994, ^ were $1,070,781, $51,678^ and $486,571, ^ respectively, for
the European Fund and $1,284,787, $18,451^ and $24,970, ^ respectively, for the
INVESCO Pacific Basin Fund. For the fiscal year ended October 31, ^ 1996 ,
brokers providing research services received $1,024 and $0 in commissions on
portfolio transactions effected for the INVESCO European Fund and INVESCO
Pacific Basin Fund, respectively, on aggregate portfolio transactions of ^
$512,291 and $0, respectively. The INVESCO Pacific Basin and European Funds each
paid $0 in compensation to brokers for the sale of shares of these Funds during
the fiscal year ended October 31, ^ 1996.
The aggregate dollar amount of brokerage commissions paid by the INVESCO
International Growth Fund for the fiscal years ended October 31, ^ 1996, 1995
and 1994, were $361,537, $35,623 and $561,639, respectively. During the year
ended October 31, ^ 1996 , no commissions were paid to brokers in connection
with their provision of research services to the Fund.
The increased brokerage commissions paid by the Funds in fiscal ^ 1996
versus the ^ prior fiscal years were primarily the result of the increased
volume of purchases and sales of Fund shares by investors, which resulted in
higher levels of purchases and sales of portfolio securities and corresponding
increases in the amounts of brokerage commissions.
At October 31, ^ 1996, each of the Funds held securities of its regular
brokers or dealers, or their parents, as follows:
Value of
Securities
Fund Broker or Dealer at 10/31/96
- ----- ---------------- -------------
Pacific Basin None
Fund
European Fund Associates Corp. of North America $9,640,000
International State Street Bank and Trust 3,061,000
Growth Fund North America
Neither INVESCO nor IAML receives any brokerage commissions on portfolio
transactions effected on behalf of any of the Funds, and there is no affiliation
between INVESCO, IAML or any person affiliated with INVESCO, IAML or the Funds
and any broker or dealer that executes transactions for the Funds.
<PAGE>
ADDITIONAL INFORMATION
Common Stock. The Company has 500,000,000 authorized shares of common
stock with a par value of $0.01 per share. As of October 31, ^ 1996, 35,184,100
of such shares were outstanding. Of the Company's authorized shares, 100,000,000
shares have been allocated to each of the Company's three Funds. The board of
directors has the authority to designate additional classes of Common Stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.
Shares of each class represent the interests of the shareholders of such
class in a particular portfolio of investments of the Company. Each class of the
Company's shares is preferred over all other classes in respect of the assets
specifically allocated to that class, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that class. The assets of each class are segregated on
the books of account and are charged with the liabilities of that class and with
a share of the Company's general liabilities. The board of directors determines
those assets and liabilities deemed to be general assets or liabilities of the
Company, and these items are allocated among classes in a manner deemed by the
board of directors to be fair and equitable. Generally, such allocation will be
made based upon the relative total net assets of each class. In the unlikely
event that a liability allocable to one class exceeds the assets belonging to
the class, all or a portion of such liability may have to be borne by the
holders of shares of the Company's other classes.
All shares, regardless of class, have equal voting rights. Voting with
respect to certain matters, such as ratification of independent accountants or
election of directors, will be by all classes of the Company. When not all
classes are affected by a matter to be voted upon, such as approval of an
investment advisory contract or changes in a Fund's investment policies, only
shareholders of the class affected by the matter may be entitled to vote.
Company shares have noncumulative voting rights, which means that the holders of
a majority of the shares voting for the election of directors can elect 100% of
the directors if they choose to do so. In such event, the holders of the
remaining shares voting for the election of directors will not be able to elect
any person or persons to the board of directors. After they have been elected by
shareholders, the directors will continue to serve until their successors are
elected and have qualified or they are removed from office,^ or until death,
resignation^ or retirement. Directors may appoint their own successors, provided
that always at least a majority of the directors have been elected by the
Company's shareholders. It is the intention of the Company not to hold annual
meetings of shareholders. The directors will call annual or special meetings of
shareholders for action by shareholder vote as may be required by the 1940 Act
or the Company's Articles of Incorporation, or at their discretion.
<PAGE>
Principal Shareholders. As of ^ February 1, 1997, the
following entities held more than 5% of the Funds' outstanding
equity securities.
Amount and Nature Percent
Name and Address of Ownership of Class
- ---------------- ----------------- --------
INVESCO Pacific Basin Fund
Charles Schwab & Co., Inc. 4,719,280.403 sh. 45.166%
Special Custody Acct. for the Record
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
INVESCO European Fund
Charles Schwab & Co., Inc. 8,354,270.094 sh. 37.808%
Special Custody Acct. for the Record
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
INVESCO International Growth Fund
Commerce Bank of Kansas 2,098,203.618 sh. 36.316%
City Trustee for Record and
Farmland Industries Beneficial
Coop Retirement Plan
P.O. Box 13366
Kansas City, MO 64199
Charles Schwab & Co., Inc. 628,360.341 sh. 10.876%
Special Custody Acct. for the Record
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
<PAGE>
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the
Company. The independent accountants are responsible for auditing the financial
statements of the Company.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Company. The bank is also responsible for, among other things,
receipt and delivery of each Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement. Under its contract
with the Company, the custodian is authorized to establish separate accounts in
foreign currencies and to cause foreign securities owned by the Company to be
held outside the United States in branches of U.S. banks and, to the extent
permitted by applicable regulations, in certain foreign banks and securities
depositories.
Transfer Agent. The Company is provided with transfer agent, registrar^ and
dividend disbursing agent services by INVESCO Funds Group, Inc., 7800 E. Union
Avenue, Denver, Colorado 80237, pursuant to the Transfer Agency Agreement
described herein. Such services include the issuance, cancellation and transfer
of shares of each of the Funds, and the maintenance of records regarding the
ownership of such shares.
Reports to Shareholders. The Company's fiscal year ends on October 31. The
Fund distributes reports at least semiannually to its shareholders. Financial
statements regarding the Company, audited by the independent accountants, are
sent to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Company. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Funds.
Financial Statements. The Company's audited financial statements and the
notes thereto for the fiscal year ended October 31, ^ 1996 and the report of
Price Waterhouse LLP with respect to such financial statements are incorporated
herein by reference from the Company's Annual Report to Shareholders for the
fiscal year ended October 31, ^ 1996.
Prospectuses. The Company will furnish, without charge, a copy of the ^
prospectus for each of its Funds, upon request. Such requests should be made to
the Company at the mailing address or telephone number set forth on the first
page of this Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the ^
prospectuses do not contain all of the information set forth in the Registration
Statement the Company has filed with the SEC. The complete Registration
Statement may be obtained from the SEC upon payment of the fee prescribed by the
rules and regulations of the SEC.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in Prospectuses (Part A):
Financial Highlights for each of the ten
years in the period ended October 31, ^ 1996
with respect to the INVESCO Pacific 8
Basin Fund ^ and the INVESCO European
Fund; and for the ^ three years ended 34
October 31, ^ 1996, for the period from
January 1, 1993 to October 31, 1993,
for each of the five years in the period
ended December 31, 1992 and for the period
from September 22, 1987 (commencement
of operations) to December 31, 1987
with respect to the INVESCO International
Growth Fund.
Page in
Statement
of Addi-
tional In-
formation
----------
(2) The following audited financial
statements of the INVESCO European Fund,
the INVESCO Pacific Basin Fund and the
INVESCO International Growth Fund and
the notes thereto for the fiscal year
ended October 31, ^ 1996, and the report
of Price Waterhouse LLP with respect to
such financial statements, are
incorporated in the Statement of
Additional Information by reference from
the Company's Annual Report to
Shareholders for the fiscal year ended
October 31, ^ 1996: Statement of
Investment Securities as of October 31,
^ 1996; Statement of Assets and
Liabilities as of October 31, ^ 1996;
Statement of Operations for the year
ended October 31, ^ 1996; Statement of
<PAGE>
Changes in Net Assets for each of the
two years in the period ended October
31, ^ 1996; Financial Highlights for the
INVESCO European Fund and INVESCO
Pacific Basin Fund for the five years
ended October 31, ^ 1996, and for the
INVESCO International Growth Fund for the
^ three years ended October 31, ^ 1996,
the eight-month fiscal period ended
October 31, 1993, and the ^ year ended
December 31, 1992.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as
all information has been presented in
the financial statements.
(b) Exhibits:
(1) Articles of Incorporation (Charter)--
dated April 2, ^ 1993.
(2) Bylaws, as amended July 21, ^ 1993.(4)
(3) Not applicable.
(4) ^ Not required to be filed on EDGAR.
(5) (a) Investment Advisory Agreement--
between the Company and INVESCO Funds
Group, Inc. dated ^ February 28, 1997.
(b) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and INVESCO
Asset Management Limited dated February
28, 1997. ^
(6) General Distribution Agreement, dated ^
February 28, 1997.
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and ^
Trustees.
<PAGE>
(8) Custody Agreement Between Registrant and
State Street Bank and Trust Company
dated July 1, ^ 1993.(3) Amendment to
Custody Agreement dated October 25, ^
1995.(1)
(9) (a) Transfer Agency Agreement dated ^
February 28, 1997.
^(b) Administrative Services Agreement
between the Company and INVESCO Funds
Group, Inc. dated ^ February 28, 1997.
(10) Opinion and consent of counsel as to
each of the three Funds as to the
legality of the securities being
registered, indicating whether they
will, when sold, be legally issued,
fully paid and non-assessable, dated May
21, ^ 1993.(2)
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the
establishment of retirement plans as
follows: Non-standardized Profit
Sharing Plan; Non-standardized Money
Purchase Pension Plan; Standardized
Profit Sharing Plan Adoption Agreement;
Standardized Money Purchase Pension
Plan; Non-standardized 401(k) Plan
Adoption Agreement; Standardized 401(k)
Paired Profit Sharing Plan; Standardized
Simplified Profit Sharing Plan;
Standardized Simplified Money Purchase
Plan; Defined Contribution Master Plan &
Trust Agreement; and Financial 403(b)
Retirement ^ Plan.(2)
(15) Not applicable.
(16) Schedule for computation of performance
data for the Pacific Basin and European
Portfolios--previously filed with Post-
Effective Amendment No. 8 to
Registration Statement No. 2-85905 of
<PAGE>
Financial Strategic Portfolios, Inc.,
dated December 20, 1988, and herein
incorporated by reference.
Schedule for computation of performance
data for the Financial International
Growth Fund--previously filed with Post-
Effective Amendment No. 7 to
Registration Statement No. 33-3429 of
Financial Series Trust, dated April 27,
1988, and herein incorporated by
reference.
(17) (a) Financial Data Schedule for the
period ended October 31, ^
1996 for INVESCO European Fund.
(b) Financial Data Schedule for the
period ended October 31, ^ 1996
for INVESCO Pacific Basin Fund.
(c) Financial Data Schedule for the
period ended October 31, ^ 1996
for INVESCO International Growth Fund.
(18) Not applicable.
- ----------------
(1)Previously filed on EDGAR with Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A on December 22, 1995, and
herein incorporated by reference.
(2)Previously filed with Registrant's original Registration Statement on
Form N-1A on May 27, 1993, and herein incorporated by reference.
^
(3)Previously filed with ^ Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A on ^ June 29, 1993, and herein incorporated
by reference.
(4)Previously filed with Post-Effective Amendment No. ^ 1 to ^ Registrant's
Registration Statement on Form N-1A on February ^ 24, 1994, and herein
incorporated by reference.
<PAGE>
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common control
with Registrant.
Item 26. Number of Holders of Securities
Number of
Record Holders
Title of Class January 31, 1997
-------------- ------------------
INVESCO European Fund 22,333
Common stock
INVESCO Pacific Basin Fund 13,881
Common stock
INVESCO International Growth Fund 8,740
Common Stock
Item 27. Indemnification
Indemnification provisions for officers, directors and employees of
Registrant are set forth in Article VII, Section 2 of the Articles of
Incorporation^ and are hereby incorporated by reference. See Item 24(b)(1)
above. Under this Article, officers and directors will be indemnified to the
fullest extent permitted to directors by the Maryland General Corporation Law,
subject only to such limitations as may be required by the Investment Company
Act of 1940, as amended, and the rules thereunder. Under the Investment Company
Act of 1940, Fund directors and officers cannot be protected against liability
to the Company or its shareholders to which they would be subject because of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties of their office. The Company also intends to maintain liability insurance
policies covering its directors and officers.
Item 28. Business and Other Connections of Investment Adviser
See "The Funds and Their Management" in the Funds' respective ^
prospectuses and in the Statement of Additional Information for information
regarding the business of the investment adviser and sub-adviser. For
information as to the business, profession, vocation or employment of a
substantial nature of each of the officers and directors of INVESCO Funds Group,
Inc., reference is made to the Schedule Ds to the Form ADV filed under the
Investment Advisers Act of 1940 by INVESCO Funds Group, Inc., which schedules
are herein incorporated by reference.
<PAGE>
Item 29. Principal Underwriters
(a) INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
^
Charles W. Brady Chairman of
1315 Peachtree Street, N.E. the Board
Atlanta, GA 30309
Inge Cosby Vice President
7800 E. Union Avenue
Denver, CO 80237
M. Anthony Cox Senior Vice
1315 Peachtree Street, N.E. President
Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Douglas P. Dhom Regional Vice
1355 Peachtree Street, N.E. President
Atlanta, GA 30309
William J. Galvin, Jr. Senior Vice Asst. Sec.
7800 E. Union Avenue President
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Ronald L. Grooms Senior Vice Treasurer
7800 E. Union Avenue President Chief Fin'l
Denver, CO 80237 & Treasurer Officer &
Chief Acctg.
Officer
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
Hubert L. Harris , Jr. Director Director
1315 Peachtree Street, N.E.
Atlanta, GA 30309
Dan J. Hesser Chairman of the President &
7800 E. Union Avenue Board, President, Director
Denver, CO 80237 Chief Executive
Officer, Director
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski Asst. Vice President
7800 E. Union Avenue
Denver, CO 80237
James F. Lummanick Vice President;
7800 E. Union Avenue Assistant
Denver, CO 80237 General Counsel
Brian N. Minturn Executive Vice
7800 E. Union Avenue President
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Robert J. O'Connor Director
1315 Peachtree Street , N.E.
Atlanta, GA 30309
Donald R. Paddack Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President, Secretary
Denver, CO 80237 & General Counsel
Pamela J. Piro Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
Gary S. Ruhl Vice President
7800 E. Union Avenue
Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street , N.E. President
Atlanta, GA 30309
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
Tane T. Tyler Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80237
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant shall furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual report to shareholders, upon
request and without charge.
The Registrant hereby undertakes that the board of directors will call a
special shareholders meeting for the purpose of voting on the question of
removal of a director or directors of the Company if requested to do so in
writing by the holders of at least 10% of the outstanding shares of the Company,
and to assist the shareholders in communicating with other shareholders as
required by the Investment Company Act of 1940.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the ^ 25th day of ^ February, 1997.
Attest: INVESCO International Funds, Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------------ ------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this ^ 25th day of ^
February, 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ ------------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ ------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ ------------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ------------------------------------ ------------------------------------
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ ^ Hubert L. Harris, Jr. /s/ Kenneth T. King
- ------------------------------------ ------------------------------------
^ Hubert L. Harris, Jr., Director Kenneth T. King, Director
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------------------ ------------------------------------
Charles W. Brady, Director John W. McIntyre, Director
By* By*/s/ Glen A. Payne
- ------------------------------------ ------------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
June 29, 1993, February 24, 1994, February 17, 1995 , and December 22, 1995.
<PAGE>
Exhibit Index
-------------
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
1 100
5(a) 109
5(b) 116
^ 6 123
7 131
9(a) 137
9(b) 151
11 155
17(a) 156
17(b) 157
17(c) 158
EX99 POA.HARRIS 159
ARTICLES OF INCORPORATION
OF
INVESCO INTERNATIONAL FUNDS, INC.
THIS IS TO CERTIFY to the Maryland State Department of Assessments that
the undersigned, Dan J. Hesser, whose post office address is 7800 E. Union
Avenue, Suite 800, Denver, Colorado 80237, and being at least 18 years of age,
does hereby declare that he is an incorporator intending to form a corporation
under and by virtue of the general laws of the State of Maryland authorizing the
formation of corporations.
ARTICLE I
NAME AND TERM
The name of the corporation is INVESCO International Funds, Inc. The
corporation shall have perpetual existence.
ARTICLE II
POWERS AND PURPOSES
The nature of the business and the objects and purposes to be transacted,
promoted and carried on by the corporation are as follows:
1. To engage in the business of an incorporated investment company of
open-end management type and to engage in all legally permissible
activities and operations usual, customary, or necessary in
connection therewith.
2. In general, to engage in any other business permitted to
corporations by the laws of the State of Maryland and to have and
exercise all powers conferred upon or permitted to corporations by
the Maryland General Corporation Law and any other laws of the State
of Maryland; provided, however, that the corporation shall be
restricted from engaging in any activities or taking any actions
which would preclude its compliance with applicable provisions of
the Investment Company Act of 1940, as amended, applicable to open-
end management type investment companies or applicable rules
promulgated thereunder.
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares the corporation shall have the
authority to issue is five hundred million (500,000,000) shares of Common Stock,
having a par value of one cent ($0.01) per share. The aggregate par value of all
shares which the corporation shall have the authority to issue is five million
dollars ($5,000,000). Such stock may be issued as full shares or as fractional
shares.
<PAGE>
In the exercise of the powers granted to the board of directors pursuant
to Section 3 of this Article III, the board of directors initially designates
three classes of shares of Common Stock of the corporation, to be designated as
the INVESCO European Fund, INVESCO Pacific Basin Fund and the INVESCO
International Growth Fund, respectively. Initially, one hundred million
(100,000,000) shares of the corporation's Common Stock are classified as and are
allocated to each such designated class.
Unless otherwise prohibited by law, so long as the corporation is
registered as an open-end investment company under the Investment Company Act of
1940, as amended, the total number of shares which the corporation is authorized
to issue may be increased or decreased by the board of directors in accordance
with the applicable provisions of the Maryland General Corporation Law.
Section 2. No holder of stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any shares of the capital stock of
the corporation which it may issue or sell, whether out of the number of shares
authorized by these articles of incorporation, or out of any shares of the
capital stock of the corporation acquired by it after the issue thereof.
Section 3. The corporation is authorized to issue its stock in one or more
series or one or more classes of shares, and, subject to the requirements of the
Investment Company Act of 1940, as amended, particularly Section 18(f) thereof
and Rule 18f-2 thereunder, the different series and classes, if any, shall be
established and designated, and the variations in the relative preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as between the
different series or classes shall be fixed and determined and may be classified
and reclassified by the board of directors; provided that the board of directors
shall not classify or reclassify any of such shares into any class or series of
stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the general assets of, the corporation, except
that there may be variations so fixed and determined between different series or
classes as to investment objective, purchase price, right of redemption, special
rights as to dividends and on liquidation with respect to assets and income
belonging to a particular series or class, voting powers and conversion rights.
All references to shares in these articles of incorporation shall be deemed to
be shares of any or all series and classes of shares of the corporation's
capital stock as the context may require.
(a) The number of authorized shares allocated to each series or class
and the number of shares of each series or of each class that may be
issued shall be in such number as may be determined by the board of
directors. The directors may classify or reclassify any unissued
shares or any shares previously issued and reacquired of any series
or class into one or more series or one or more classes that may be
established and designated by the board of directors from time to
time. The directors may hold as treasury shares (of the same or
some other series or class), reissue for such consideration and on
such terms as they may determine, or cancel any shares of any series
or any class reacquired by the corporation at their discretion from
time to time.
<PAGE>
(b) All consideration received by the corporation for the issue or sale
of shares of a particular series or class, together with all assets
in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that
series or class for all purposes, subject only to the rights of
creditors of that series or class, and shall be so recorded upon the
books of account of the corporation. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any
particular series or class, the directors shall allocate them among
any one or more of the series or classes established and designated
from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable. Each such allocation by
the corporation shall be conclusive and binding upon the
stockholders of all series or classes for all purposes. The
directors shall have full discretion, to the extent not inconsistent
with the Investment Company Act of 1940, as amended, and the
Maryland General Corporation Law to determine which items shall be
treated as income and which items shall be treated as capital; and
each such determination and allocation shall be conclusive and
binding upon the stockholders.
(c) The assets belonging to each particular class or series shall be
charged with the liabilities of the corporation in respect to that
class or series and all expenses, costs, charges and reserves
attributable to that class or series, and any general liabilities,
expenses, costs, charges or reserves of the corporation which are
not readily identifiable as belonging to any particular class or
series shall be allocated and charged by the directors to and among
any one or more of the classes or series established and designated
from time to time in such manner and on such basis as the directors
in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the
directors shall be conclusive and binding upon the stockholders of
all series and classes for all purposes.
(d) Dividends and distributions on shares of a particular series or
class may be paid with such frequency as the directors may
determine, which may be daily or otherwise, pursuant to a standing
resolution or resolutions adopted only once or with such frequency
as the board of directors may determine, to the holders of shares of
that series or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that series or
class, as the directors may determine, after providing for actual
and accrued liabilities belonging to that series or class. All
dividends and distributions on shares of a particular series or
class shall be distributed pro rata to the holders of that series or
class in proportion to the number of shares of that series or class
held by such holders at the date and time of record established for
the payment of such dividends or distributions except that in
connection with any dividend or distribution program or procedure,
<PAGE>
the board of directors may determine that no dividend or
distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment have not been received
by the time or times established by the board of directors under
such program or procedure.
The corporation intends to have each series that may be established
to represent interests of a separate investment portfolio qualify as
a "regulated investment company" under the Internal Revenue Code of
1986, or any successor comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income
and gains for federal income tax purposes may vary from the
computation thereof on the books of the corporation, the board of
directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends
designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the board of directors, to
enable the respective series to qualify as regulated investment
companies and to avoid liability of such series for federal income
tax in respect of that year. However, nothing in the foregoing shall
limit the authority of the board of directors to make distributions
greater than or less than the amount necessary to qualify the series
as regulated investment companies and to avoid liability of such
series for such tax.
(e) Dividends and distributions may be made in cash, property or
additional shares of the same or another class or series, or a
combination thereof, as determined by the board of directors or
pursuant to any program that the board of directors may have in
effect at the time for the election by each stockholder of the mode
of the making of such dividend or distribution to that stockholder.
Any such dividend or distribution paid in shares will be paid at the
net asset value thereof as defined in section (4) below.
(f) In the event of the liquidation or dissolution of the corporation or
of a particular class or series, the stockholders of each class or
series that has been established and designated and is being
liquidated shall be entitled to receive, as a class or series, when
and as declared by the board of directors, the excess of the assets
belonging to that class or series over the liabilities belonging to
that class or series. The holders of shares of any particular class
or series shall not be entitled thereby to any distribution upon
liquidation of any other class or series. The assets so
distributable to the stockholders of any particular class or series
shall be distributed among such stockholders in proportion to the
number of shares of that class or series held by them and recorded
on the books of the corporation. The liquidation of any particular
class or series in which there are shares then outstanding may be
authorized by vote of a majority of the board of directors then in
office, subject to the approval of a majority of the outstanding
securities of that class or series, as defined in the Investment
Company Act of 1940, as amended, and without the vote of the holders
of any other class or series. The liquidation or dissolution of a
particular class or series may be accomplished, in whole or in part,
<PAGE>
by the transfer of assets of such class or series to another class
or series or by the exchange of shares of such class or series for
the shares of another class or series.
(g) On each matter submitted to a vote of the stockholders, each holder
of a share shall be entitled to one vote for each share standing in
his name on the books of the corporation, irrespective of the class
or series thereof, and all shares of all classes or series shall
vote as a single class or series ("single class voting"); provided,
however that (i) as to any matter with respect to which a separate
vote of any class or series is required by the Investment Company
Act of 1940, as amended, or by the Maryland General Corporation Law,
such requirement as to a separate vote by that class or series shall
apply in lieu of single class voting as described above; (ii) in the
event that the separate vote requirements referred to in (i) above
apply with respect to one or more but not all classes or series,
then, subject to (iii) below, the shares of all other classes or
series shall vote as a single class or series; and (iii) as to any
matter which does not affect the interest of a particular class or
series, only the holders of shares of the one or more affected
classes shall be entitled to vote. Holders of shares of the stock
of the corporation shall not be entitled to exercise cumulative
voting in the election of directors or on any other matter.
(h) The establishment and designation of any series or class of shares,
in addition to the initial class of shares which has been
established in section (1) above, shall be effective upon the
adoption by a majority of the then directors of a resolution setting
forth such establishment and designation and the relative rights and
preferences of such series or class, or as otherwise provided in
such instrument and the filing with the proper authority of the
State of Maryland of Articles Supplementary setting forth such
establishment and designation and relative rights and preferences.
Section 4. The corporation shall, upon due presentation of a share or
shares of stock for redemption, redeem such share or shares of stock at a
redemption price prescribed by the board of directors in accordance with
applicable laws and regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such class or series as
determined in accordance with the provisions of this section (4), less such
redemption or other charge as is determined by the board of directors. Subject
to applicable law, the corporation may redeem shares, not offered by a
stockholder for redemption, held by any stockholder whose shares of a class or
series had a value less than such minimum amount as may be fixed by the board of
directors from time to time or prescribed by applicable law other than as a
result of a decline in value of such shares because of market action; provided
that before the corporation redeems such shares it must notify the shareholder
by first-class mail that the value of his shares is less than the required
minimum value and allow him 60 days to make an additional investment in an
amount which will increase the value of his account to the required minimum
value. Unless otherwise required by applicable law, the price to be paid for
shares redeemed pursuant to the preceding sentence shall be the aggregate net
asset value of the shares at the close of business on the date of redemption,
and the shareholder shall have no right to object to the redemption of his
shares. The corporation shall pay redemption prices in cash, except that the
<PAGE>
corporation may at its sole option pay redemption prices in kind in such manner
as is consistent with and not in contravention of Section 18(f) of the
Investment Company Act of 1940, as amended, and any Rules or Regulations
thereunder. Redemption prices shall be paid exclusively out of the assets of the
class or series whose shares are being redeemed.
Notwithstanding the foregoing, the corporation may postpone payment of
redemption proceeds and may suspend the right of the holders of shares of any
class or series to require the corporation to redeem shares of that class or
series during any period or at any time when and to the extent permissible under
the Investment Company Act of 1940, as amended, or any rule or order thereunder.
The net asset value of a share of any class or series of common stock of
the corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the board of directors.
Section 5. The corporation may issue, sell, redeem, repurchase and
otherwise deal in and with shares of its stock in fractional denominations and
such fractional denominations shall, for all purposes, be shares having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the corporation; provided that the issue of shares in fractional
denominations shall be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the bylaws.
Section 6. The corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the bylaws or by the board of directors.
ARTICLE IV
PREEMPTIVE RIGHTS
No stockholder of the corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any share of any class or series of stock, or
shares convertible into, exchangeable for or evidencing the right to purchase
stock of any class or series whatsoever, whether or not the stock in question be
of the same class or series as may be held by such stockholder, and whether now
or hereafter authorized and whether issued for cash, property, services or
otherwise, other than such, if any, as the board of directors in its discretion
may from time to time fix.
ARTICLE V
PRINCIPAL OFFICE AND REGISTERED AGENT
The post office address of the principal office of the corporation in the
State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident
agent of the corporation is The Corporation Trust Incorporated, whose post
office address is 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a corporation of the State of Maryland.
<PAGE>
ARTICLE VI
DIRECTORS
Section 1. The initial board of directors shall consist of three members
who need not be residents of the State of Maryland or stockholders of the
corporation.
Section 2. The names of the persons who shall act as directors until the
first meeting of stockholders or until their successors shall have been elected
and qualified are as follows:
Charles W. Brady 1315 Peachtree Street, N.E., Atlanta, Georgia
John M. Butler 7800 E. Union Avenue, Denver, Colorado
Dan J. Hesser 7800 E. Union Avenue, Denver, Colorado
Section 3. The number of directors may be increased or decreased in
accordance with the bylaws, provided that the number shall not be reduced to
less than three.
Section 4. A majority of the directors shall constitute a quorum for the
transaction of business, unless the bylaws shall provide that a different number
shall constitute a quorum; provided, however, that in no case shall a quorum be
less than one-third (1/3) of the total number of directors or less than two (2)
directors.
Section 5. No person shall serve as a director, unless elected by the
stockholders at an annual meeting or a special meeting called for such purpose;
except that vacancies occurring between such meetings may be filled by the
directors in accordance with the bylaws, and subject to such limitations as may
be set forth by applicable laws and regulations.
Section 6. The board of directors of the corporation is hereby empowered
to authorize the issuance from time to time of shares of stock, whether of a
class or series now or hereafter authorized, for such consideration as it deems
advisable, subject to such limitations as may be set forth herein, in the
bylaws, in the Maryland General Corporation Law, and in the Investment Company
Act of 1940, as amended.
Section 7. The board of directors of the corporation may make, alter or
repeal from time to time any of the bylaws of the corporation except any
particular bylaw which is specified as not subject to alternation or repeal by
the board of directors.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. Directors and officers of the corporation, including persons
who formerly have served in such capacities, shall have limitations on, and/or
immunity from, liability of such directors and officers to the fullest extent
permitted by the Maryland General Corporation Law, subject only to such
restrictions as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Such limitations and/or immunity will apply
<PAGE>
to acts or omissions occurring at the time an individual serves as a director or
officer of the corporation, whether such person is a director or officer of the
corporation at the time of any proceeding in which liability is asserted against
the director or officer. No amendment to these Articles of Incorporation or
repeal of any of its provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
Section 2. The corporation shall indemnify and advance expenses to its
directors and officers, including persons who formerly have served in such
capacities, to the fullest extent permitted to directors by the Maryland General
Corporation Law and the bylaws of the corporation, as such Law and bylaws now or
in the future may be in effect, subject only to such limitations as may be
required by the Investment Company Act of 1940, as amended, and the rules
thereunder.
ARTICLE VIII
SPECIAL VOTING AND MEETING PROVISIONS
Section 1. Notwithstanding any provision of Maryland law requiring a
greater proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast to take or authorize any action, the corporation
may take or authorize any such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
Section 2. The presence in person or by proxy of the holders of one-third
of the shares of stock of the corporation entitled to vote without regard to
class shall constitute a quorum at any meeting of stockholders, except with
respect to any matter which by law requires the approval of one or more classes
of stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class entitled to vote on the matter
shall constitute a quorum.
Section 3. So long as the corporation is registered pursuant to the
Investment Company Act of 1940, as amended, the corporation will not be required
to hold annual shareholder meetings in years in which the election of directors
is not required to be acted upon under the Investment Company Act of 1940, as
amended.
ARTICLE IX
AMENDMENT
The corporation reserves the right from time to time to make any amendment
of its articles of incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in such
articles, of any outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes the terms or rights of any of its
outstanding shares shall be valid unless such amendment shall have been
authorized by not less than a majority of the aggregate number of votes entitled
<PAGE>
to be cast thereon, by a vote at a meeting or in writing with or without a
meeting.
IN WITNESS WHEREOF, I have signed these articles of incorporation on this
1st day of April, 1993.
/s/ Dan J. Hesser
---------------------------
Dan J. Hesser
Attest: /s/ Glen A. Payne
-------------------
Glen A. Payne
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I hereby certify that on the 1st day of April, 1993, before me, the
subscriber, a Notary Public of the State of Colorado, in and for the City and
County of Denver, personally appeared Dan J. Hesser who acknowledged the
foregoing articles of incorporation to be his act.
WITNESS my hand and notarial seal, the day and year first above written.
/s/ Cheryl K. Howlett
------------------------
Cheryl K. Howlett
Notary Public
My commission expires: February 22, 1995.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Denver,
Colorado, by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO International Funds, Inc., a Maryland Corporation (the
"Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of
the State of Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open end management
investment company and has one class of shares which is divided into three
series (the "Shares"), each representing an interest in a separate portfolio of
investments (such series initially being the INVESCO European Fund, the INVESCO
Pacific Basin Fund and the INVESCO International Growth Fund (the
"Portfolios")); and
WHEREAS, the Fund desires that the Adviser manage its investment
operations and the Adviser desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby agrees to manage the
investment operations of the Fund's three Portfolios, subject to the terms of
this Agreement and to the supervision of the Fund's directors (the "Directors").
The Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund's three Portfolios;
(b) to maintain a continuous investment program for the Fund's three
Portfolios, consistent with (i) the Portfolios' investment policies as set forth
in the Fund's Articles of Incorporation, Bylaws, and Registration Statement, as
from time to time amended, under the Investment Company Act of 1940, as amended
(the "1940 Act"), and in any prospectus and/or statement of additional
information of the Fund or any Portfolio of the Fund, as from time to time
amended and in use under the Securities Act of 1933, as amended, and (ii) the
Fund's status as a regulated investment company under the Internal Revenue Code
of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund's three Portfolios, unless otherwise directed by the Directors of the Fund,
and to execute transactions accordingly;
<PAGE>
(d) to provide to the Fund's three Portfolios the benefit of all of
the investment analyses 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 Adviser;
(e) to determine what portion of the Fund's three Portfolios should
be invested in the various types of securities authorized for purchase by the
Fund;
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund and/or Portfolio action and any other rights
pertaining to the Portfolios' securities shall be exercised; and
(g) to calculate the net asset value of the Fund and each Portfolio,
as applicable, as required by the 1940 Act, subject to such procedures as may be
established from time to time by the Fund's Directors, based upon the
information provided to the Adviser by the Fund or by the custodian, co
custodian or sub custodian of the Fund's or any of the Portfolios' assets (the
"Custodian") or such other source as designated by the Directors from time to
time.
With respect to execution of transactions for the Fund's three
Portfolios, the Adviser shall place, or arrange for the placement of, all orders
for the purchase or sale of portfolio securities with brokers or dealers
selected by the Adviser. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed at all times to
obtain for the Fund's three Portfolios the most favorable execution and price;
after fulfilling this primary requirement of obtaining the most favorable
execution and price, the Adviser is hereby expressly authorized to consider as a
secondary factor in selecting brokers or dealers with which such orders may be
placed whether such firms furnish statistical, research and other information or
services to the Adviser. Receipt by the Adviser of any such statistical or other
information and services should not be deemed to give rise to any requirement
for adjustment of the advisory fee payable pursuant to paragraph 4 hereof. The
Adviser may follow a policy of considering sales of shares of the Fund as a
factor in the selection of broker/dealers to execute portfolio transactions,
subject to the requirements of best execution discussed above.
The Adviser shall for all purposes herein provided be deemed
to be an independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall reimburse the Fund
monthly for any salaries paid by the Fund to officers, Directors, and full time
employees of the Fund who also are officers, general partners or employees of
the Adviser or its affiliates. Except for such subaccounting, recordkeeping, and
administrative services which are to be provided by the Adviser to the Fund
under the Administrative Services Agreement between theFund and the Adviser
dated April 30, 1993, which was approved on April 21, 1993, by the Fund's board
of directors, including all of the independent directors, at the Fund's request
the Adviser shall also furnish to the Fund, at the expense of the Adviser, such
competent executive, statistical, administrative, internal accounting and
clerical services as may be required in the judgment of the Directors of the
<PAGE>
Fund. These services will include, among other things, the maintenance (but not
preparation) of the Fund's accounts and records, and the preparation (apart from
legal and accounting costs) of all requisite corporate documents such as tax
returns and reports to the Securities and Exchange Commission and Fund
shareholders. The Adviser also will furnish, at the Adviser's expense, such
office space, equipment and facilities as may be reasonably requested by the
Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and
except to the extent required by law to be paid by the Adviser, the Fund shall
pay all costs and expenses in connection with the operations and organization of
the Fund. Without limiting the generality of the foregoing, such costs and
expenses payable by the Fund include the following:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Fund and any Portfolio in connection with securities
transactions to which the Fund or any Portfolio is a party or in connection with
securities owned by the Fund's three Portfolios;
(b) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent, dividend
reinvestment agent, transfer agent, registrar, independent pricing services and
legal counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by
the Fund or any of the Fund's three Portfolios;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund or any Portfolio
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Fund and of its shares under laws administered by the
Securities and Exchange Commission or under other applicable regulatory
requirements;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices, prospectuses,
statements of additional information and other communications to the Fund's
shareholders, as well as all expenses of shareholders' meetings and Directors'
meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Fund's Articles of Incorporation, including its
initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax status
and any rulings obtained for this purpose, the initial registration and
qualification of its securities under the laws of any state and the approval of
the Fund's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of
the Fund;
<PAGE>
(j) insurance premiums;
(k) the costs of designing, printing, and issuing
certificates representing shares of beneficial interest of the
Fund's three Portfolios;
(l) extraordinary expenses, including fees and
disbursements of Fund counsel, in connection with litigation by or
against the Fund or any Portfolio;
(m) premiums for the fidelity bond maintained by the Fund pursuant
to Section 17(g) of the 1940 Act and rules promulgated thereunder (except for
such premiums as may be allocated to the Adviser as an insured thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid by
the Fund pursuant to a Plan and Agreement of Distribution adopted under Rule 12b
1 of the Investment Company Act of 1940.
3. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the
Adviser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of written
approval of the Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this Agreement
and that all costs and expenses associated with the providing of services by any
such companies or employees and required by this Agreement to be borne by the
Adviser shall be borne by the Adviser or its affiliated companies.
4. Compensation of the Adviser. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund shall pay
to the Adviser an advisory fee which will be computed on a daily basis and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of each of the three Portfolios of the Fund,
as determined by valuations made in accordance with the Fund's procedure for
calculating its net asset value as described in the Fund's Prospectus and/or
Statement of Additional Information. The advisory fee to the Adviser with
respect to each of the Portfolios designated as INVESCO European Fund and
INVESCO Pacific Basin Fund shall be computed at the following annual rates:
0.75% of such Portfolio's average net assets up to $350 million; 0.65% of such
Portfolio's average net assets in excess of $350 million but not more than $700
million; and 0.55% of such Portfolio's average net assets in excess of $700
million. The advisory fee to the Adviser with respect to the Portfolio
designated as INVESCO International Growth Fund shall be computed at the
following annual rates: 1.00% of such Portfolio's average net assets up to $500
million; 0.75% of such Portfolio's average net assets in excess of $500 million
but not more than $1 billion; and 0.65% of such Portfolio's average net assets
in excess of $1 billion.
During any period when the determination of the Fund's net asset
value is suspended by the Directors of the Fund, the net asset value of a share
of the Fund as of the last business day prior to such suspension shall, for the
purpose of this Paragraph 4, be deemed to be the net asset value at the close of
<PAGE>
each succeeding business day until it is again determined. However, no such fee
shall be paid to the Adviser with respect to any assets of the Fund or any
Portfolio thereof which may be invested in any other investment company for
which the Adviser serves as investment adviser. The fee provided for hereunder
shall be prorated in any month in which this Agreement is not in effect for the
entire month.
If, in any given year, the sum of a Portfolio's expenses exceeds the
most restrictive state imposed annual expense limitation, the Adviser will be
required to reimburse that Portfolio for such excess expenses promptly.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for purposes of this paragraph and shall be borne by the Fund or
Portfolio in any event. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and shall not be deemed
to be expenses for purposes of this paragraph.
5. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolio of
the Fund's three Portfolios, neither the Adviser nor its officers or employees,
will act as a principal or agent for any party other than the Fund's three
Portfolios or receive any commissions. The 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.
6. Duration and Termination. This Agreement shall become
effective as of the date it is approved by a majority of the
outstanding voting securities of the portfolios of the Fund designated the
INVESCO Pacific Basin Fund, INVESCO European Fund and INVESCO International
Growth Fund, respectively. Thereafter, and unless sooner terminated as
hereinafter provided, this Agreement shall remain in force for an initial term
ending two years from the date of execution, and from year to year thereafter,
but only as long as such continuance is specifically approved at least annually
(i) by a vote of a majority of the outstanding voting securities of the three
Portfolios of the Fund or by the Directors of the Fund, and (ii) by a majority
of the Directors of the Fund who are not interested persons of the Adviser or
the Fund by votes cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may, on 60 days' prior written notice, be terminated
without the payment of any penalty, by the Directors of the Fund, or by the vote
of a majority of the outstanding voting securities of the Fund's three
Portfolios, as the case may be, or by the Adviser. This Agreement shall
immediately terminate in the event of its assignment, unless an order is issued
by the Securities and Exchange Commission conditionally or unconditionally
exempting such assignment from the provisions of Section 15(a) of the 1940 Act,
in which event this Agreement shall remain in full force and effect subject to
the terms and provisions of said order. In interpreting the provisions of this
paragraph 6, the definitions contained in Section 2(a) of the 1940 Act and the
applicable rules under the 1940 Act (particularly the definitions of "interested
person," "assignment" and "vote of a majority of the outstanding voting
securities") shall be applied.
<PAGE>
The Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the compensation described
in paragraph 3 earned prior to such termination.
7. Non Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to others,
including, without limitation, other investment companies with similar
objectives to those of the Fund's three Portfolios. The Adviser may, when it
deems such to be advisable, aggregate orders for its other customers together
with any securities of the same type to be sold or purchased for the Fund's
three Portfolios in order to obtain best execution and lower brokerage
commissions. In such event, the Adviser shall allocate the shares so purchased
or sold, as well as the expenses incurred in the transaction, in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund's three Portfolios and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Fund or any
Portfolio or to the Fund's shareholders or creditors, for any error of judgment,
mistake of law, or for any loss arising out of any investment, nor for any other
act or omission, in the performance of its obligations to the Fund or any
Portfolio not involving willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties hereunder.
9. Miscellaneous Provisions.
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.
Amendments Hereof. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the Fund and the Adviser, and no material amendment of this Agreement
shall be effective unless approved by (1) the vote of a majority of the
Directors of the Fund, including a majority of the Directors who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such amendment, and (2) the vote of
a majority of the outstanding voting securities of any of the Fund's three
Portfolios as to which such amendment is applicable; provided, however, that
this paragraph shall not prevent any immaterial amendment(s) to this Agreement,
which amendment(s) may be made without shareholder approval, if such
amendment(s) are made with the approval of (1) the Directors and (2) a majority
of the Directors of the Fund who are not interested persons of the Adviser or
the Fund.
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.
<PAGE>
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.
Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado and the applicable provisions of the 1940 Act.
To the extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with applicable provisions of the 1940 Act, the
latter shall control.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, the day and year first above written.
INVESCO INTERNATIONAL FUNDS, INC.
ATTEST:
By: /s/ Dan J. Hesser
--------------------------
Dan J. Hesser, President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
--------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- -------------------------
Glen A. Payne, Secretary
SUB ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Asset
Management Limited, a United Kingdom corporation ("the Sub Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO 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 European Fund,
the INVESCO Pacific Basin Fund and INVESCO International Growth 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, the Sub-Adviser is a member of the Investment Management
Regulatory Organization ("IMRO") in the United Kingdom and as such is regulated
by IMRO in the conduct of its business; further the Sub-Adviser shall provide
services to INVESCO as a "Business Investor" as defined under the Rules of IMRO
and as such certain rules designed for the protection of private customers shall
not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB ADVISER
INVESCO hereby employs the Sub Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and on the terms and conditions set forth in this Agreement. The Sub
Adviser hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Company in any way or otherwise be deemed an agent of the Company.
<PAGE>
The Sub Adviser hereby agrees to manage the investment operations of the
Funds, 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 Funds'
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 Funds 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 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
<PAGE>
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.
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. The advisory fee to the Sub Adviser with respect to the INVESCO
European Fund and the INVESCO Pacific Basin Fund shall be computed at the annual
<PAGE>
rate of 0.45% of each Fund's daily net assets up to $350 million; 0.40% of each
Fund's daily net assets in excess of $350 million but not more than $700
million; and 0.35% of each Fund's daily net assets in excess of $700 million.
The advisory fee to the Sub-Adviser with respect to the INVESCO International
Growth Fund shall be computed at the annual rate of 0.25% of the Fund's daily
net assets up to $500 million; 0.1875% of the Fund's daily net assets in excess
of $500 millon but not more than $1 billion; and 0.1625% 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 Funds, 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.
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; the Rules and Regulations of
IMRO; and all rules and regulations duly promulgated under the foregoing.
<PAGE>
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 Funds of the Company
designated the INVESCO Pacific Basin Fund, the INVESCO European Fund, and the
INVESCO International Growth Fund, respectively. 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.
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.
<PAGE>
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.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
Advice. Any recommendation or advice given by the Sub-Adviser to INVESCO
hereunder shall be given in writing or by mail, telex, telefacsimile or by
telephone, such telephone advice to be confirmed by mail, telex, telefacsimile
or in writing to such place as INVESCO shall from time to time require; further
the Sub-Adviser shall be free to telephone INVESCO as it sees fit in the
performance of its duties.
Complaints. The Sub-Adviser has in operation a written procedure for the
proper handling of complaints from clients; if the matter of complaint cannot be
resolved to INVESCO's satisfaction, INVESCO has the right of recourse to IMRO.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
<PAGE>
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Dan J. Hesser
-----------------------
/s/ Glen A. Payne President
- -----------------------
Glen A. Payne, Secretary
INVESCO ASSET MANAGEMENT LIMITED
ATTEST:
By: /s/Tristan Hillgarth
---------------------
/s/ Robert Cackett Chief Executive Officer
- ------------------------
Robert Cackett, Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 between INVESCO
INTERNATIONAL FUNDS, INC., a Maryland corporation (the "Fund"), and INVESCO
FUNDS GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares") which is
divided into three series, and which may be divided into additional series (the
"Series"), each representing an interest in a separate portfolio of investments,
and it is in the interest of the Fund to offer the Shares for sale continuously;
and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the
distribution of Shares of each Series in jurisdictions wherein such
Shares legally may be offered for sale; provided, however, that the
Fund in its absolute discretion may (a) issue or sell Shares of each
Series directly to purchasers, or (b) issue or sell Shares of a
particular Series to the shareholders of any other Series or to the
shareholders of any other investment company, for which the
Underwriter or any affiliate thereof shall act as exclusive
distributor, who wish to exchange all or a portion of their
investment in Shares of such Series or in shares of such other
investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable. The Fund reserves
the right to reject any subscription in whole or in part for any
reason.
2. The Underwriter hereby agrees to serve as agent for the distribution
of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares
remaining unissued as from time to time shall be effectively
registered under the Securities Act of 1933, as amended (the "1933
Act"), at such prices and on such terms as hereinafter set forth,
<PAGE>
all subject to applicable federal and state securities laws and
regulations. Nothing herein shall be construed to prohibit the
Underwriter from engaging in other related or unrelated businesses.
3. In addition to serving as the Fund's agent in the distribution of
the Shares, the Underwriter shall also provide to the holders of the
Shares certain maintenance, support or similar services
("Shareholder Services"). Such services shall include, without
limitation, answering routine shareholder inquiries regarding the
Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging
for bank wires, and providing such other services as the Fund may
reasonably request from time to time. It is expressly understood
that the Underwriter or the Fund may enter into one or more
agreements with third parties pursuant to which such third parties
may provide the Shareholder Services provided for in this paragraph.
Nothing herein shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any registrar,
transfer agent or custodian appointed by the Fund, the computation
of the asset value or offering price of Shares, the preparation and
distribution of notices of meetings, proxy soliciting material,
annual and periodic reports, dividends and dividend notices, or any
other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through
qualified broker-dealers or others, in such manner, not inconsistent
with the provisions hereof and the then effective Registration
Statement of the Fund under the 1933 Act (the "Registration
Statement") and related Prospectus (the "Prospectus") and Statement
of Additional Information ("SAI") of the Fund as the Underwriter may
determine from time to time; provided that no broker-dealer or other
person shall be appointed or authorized to act as agent of the Fund
without the prior consent of the directors (the "Directors") of the
Fund. The Underwriter will require each broker-dealer to conform to
the provisions hereof and of the Registration Statement (and related
Prospectus and SAI) at the time in effect under the 1933 Act with
respect to the public offering price of the Shares of any Series.
The Fund will have no obligation to pay any commissions or other
remuneration to such broker-dealers.
5. The Shares of each Series offered for sale or sold by the
Underwriter shall be offered or sold at the net asset value per
share determined in accordance with the then current Prospectus
and/or SAI relating to the sale of the Shares of the appropriate
Series except as departure from such prices shall be permitted by
the then current Prospectus and/or SAI of the Fund, in accordance
with applicable rules and regulations of the Securities and Exchange
Commission. The price the Fund shall receive for the Shares of each
Series purchased from the Fund shall be the net asset value per
share of such Share, determined in accordance with the Prospectus
and/or SAI applicable to the sale of the Shares of such Series.
<PAGE>
6. Except as may be otherwise agreed to by the Fund, the Underwriter
shall be responsible for issuing and delivering such confirmations
of sales made by it pursuant to this Agreement as may be required;
provided, however, that the Underwriter or the Fund may utilize the
services of other persons or entities believed by it to be competent
to perform such functions. Shares shall be registered on the
transfer books of the Fund in such names and denominations as the
Underwriter may specify.
7. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of
the Fund as a broker-dealer where necessary or advisable) in such
states as the Underwriter may reasonably request (it being
understood that the Fund shall not be required without its consent
to comply with any requirement which in the opinion of the Directors
of the Fund is unduly burdensome). The Underwriter, at its own
expense, will effect all qualifications of itself as broker or
dealer, or otherwise, under all applicable state or Federal laws
required in order that the Shares may be sold in such states or
jurisdictions as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter from time to
time the most recent form of the Prospectus and/or SAI of the Fund
and/or of each Series of the Fund. The Fund authorizes the
Underwriter to use the Prospectus and/or SAI, in the forms furnished
to the Underwriter from time to time, in connection with the sale of
the Shares of the Fund and/or of each Series of the Fund. The Fund
will furnish to the Underwriter from time to time such information
with respect to the Fund, each Series, and the Shares as the
Underwriter may reasonably request for use in connection with the
sale of the Shares. The Underwriter agrees that it will not use or
distribute or authorize the use, distribution or dissemination by
broker-dealers or others in connection with the sale of the Shares
any statements, other than those contained in a current Prospectus
and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under
Federal and state securities laws and regulations, and that it will
promptly furnish the Fund with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may
cause the redemption or repurchase of the Shares at such prices and
upon such terms and conditions as shall be specified in a then
current Prospectus and/or SAI. In selling, redeeming or
repurchasing the Shares for the account of the Fund, the Underwriter
will in all respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale,
redemption or repurchase, as the case may be. The Underwriter will
observe and be bound by all the provisions of the Articles of
<PAGE>
Incorporation or Bylaws of the Fund and of any provisions in the
Registration Statement, Prospectus and SAI, as such may be amended
or supplemented from time to time, notice of which shall have been
given to the Underwriter, which at the time in any way require,
limit, restrict or prohibit or otherwise regulate any action on the
part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any attorney fees
incurred in connection therewith) which the Underwriter, its
officers and directors or any such controlling person, may
incur under the federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration
Statement or any related Prospectus and/or SAI or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against
whom such action is brought within ten (10) days after the
summons or other first legal process shall have been served
upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any such
action shall not relieve the Fund from any liability which it
may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained
in this paragraph. The Fund shall be entitled to assume the
<PAGE>
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Fund and approved by the Underwriter,
which approval shall not be unreasonably withheld. If the Fund
elects to assume the defense of any such suit and retain
counsel approved by the Underwriter, the defendant or
defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the Fund
elect not to assume the defense of any such suit, or should
the Underwriter not approve of counsel chosen by the Fund, the
Fund will reimburse the Underwriter, its officers and
directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Underwriter or
them. In addition, the Underwriter shall have the right to
employ counsel to represent it, its officers and directors and
any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be
sought by the Underwriter against the Fund hereunder if in the
reasonable judgment of the Underwriter it is advisable for the
Underwriter, its officers and directors or such controlling
person to be represented by separate counsel, in which event
the reasonable fees and expenses of such separate counsel
shall be borne by the Fund. This indemnity agreement and the
Fund's representations and warranties in this Agreement shall
remain operative and in full force and effect and shall
survive the delivery of any of the Shares as provided in this
Agreement. This indemnity agreement shall inure exclusively to
the benefit of the Underwriter and its successors, the
Underwriter's officers and directors and their respective
estates and any such controlling person and their successors
and estates. The Fund shall promptly notify the Underwriter of
the commencement of any litigation or proceeding against it
in connection with the issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Fund, its Directors and any person who controls the Fund
within the meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any attorney fees incurred in connection
therewith) which the Fund, its Directors or any such
controlling person may incur under the Federal securities
laws, the common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Directors
or such controlling person resulting from such claims or
demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund
specifically for use in the Registration Statement or any
related Prospectus and/or SAI or shall arise out of or be
based upon any alleged omission to state a material fact in
connection with such information required to be stated in the
Registration Statement or the related Prospectus and/or SAI or
<PAGE>
necessary to make such information not misleading and (b) any
alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the
Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence or reckless disregard of the duties involved
in the conduct of his office.
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado,
and sent to the Underwriter by the person against whom such
action is brought, within ten (10) days after the summons or
other first legal process shall have been served upon the
Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not
relieve the Underwriter from any liability which it may have
to the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Underwriter and approved by the Fund,
which approval shall not be unreasonably withheld. If the
Underwriter elects to assume the defense of any such suit and
retain counsel approved by the Fund, the defendant or
defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the
Underwriter elect not to assume the defense of any such suit,
or should the Fund not approve of counsel chosen by the
Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Fund or them. In
addition, the Fund shall have the right to employ counsel to
represent it, its Directors and any such controlling person
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Fund against
the Underwriter hereunder if in the reasonable judgment of the
Fund it is advisable for the Fund, its Directors or such
<PAGE>
controlling person to be represented by separate counsel, in
which event the reasonable fees and expenses of such separate
counsel shall be borne by the Underwriter. This indemnity
agreement and the Underwriter's representations and warranties
in this Agreement shall remain operative and in full force and
effect and shall survive the delivery of any of the Shares as
provided in this Agreement. This indemnity agreement shall
inure exclusively to the benefit of the Fund and its
successors, the Fund's Directors and their respective estates
and any such controlling person and their successors and
estates. The Underwriter shall promptly notify the Fund of the
commencement of any litigation or proceeding against it in
connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses (including the
fees and disbursements of its own counsel) of any registration of
the Shares under the 1933 Act, as amended, (b) expenses incident to
the issuance of the Shares, and (c) expenses (including the fees and
disbursements of its own counsel) incurred in connection with the
preparation, printing and distribution of the Fund's Prospectuses,
SAIs, and periodic and other reports sent to holders of the Shares
in their capacity as such. The Underwriter shall prepare and
provide necessary copies of all sales literature subject to the
Fund's approval thereof.
13. This Agreement shall become effective as of the date it is approved
by a majority vote of the Directors of the Fund, as well as a
majority vote of the Directors who are not "interested persons" (as
defined in the Investment Company Act) of the Fund, and shall
continue in effect for an initial term expiring February 28, 1998,
and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually (a)(i) by a
vote of the Directors of the Fund or (ii) by a vote of a majority of
the outstanding voting securities of the Fund, and (b) by a vote of
a majority of the Directors of the Fund who are not "interested
persons," as defined in the Investment Company Act, of the Fund cast
in person at a meeting for the purpose of voting on this Agreement.
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at least
60 days' prior written notice of such termination specifying the
date fixed therefor. In particular, this Agreement may be terminated
at any time, without payment of any penalty, by vote of a majority
of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter. Without
prejudice to any other remedies of the Fund provided for in
this Agreement or otherwise, the Fund may terminate this Agreement
at any time immediately upon the Underwriter's failure to fulfill
any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to
the contrary herein, or in any applicable law, it will look solely
to the assets of the Fund for any obligations of the Fund hereunder
<PAGE>
and nothing herein shall be construed to create any personal
liability on the part of any Director or any shareholder of the
Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15, the
definition of "assignment" contained in the Investment Company Act
shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Fund and the Underwriter and, if applicable, approved in the
manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If any
provision of this Agreement shall be held illegal or made invalid by
a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the
remainder of this Agreement.
19. This Agreement and the application and interpretation hereof shall
be governed exclusively by the laws of the State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO INTERNATIONAL FUNDS, INC.
ATTEST:
By:/s/ Dan J. Hesser
----------------------
Dan J. Hesser
/s/ Glen A. Payne President
- --------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:/s/ Ronald L. Grooms
--------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- --------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
a. Service Termination. Service Termination means termination of service
(other than by disability or death) of an Independent Director which results
from the Director's having reached his Service Termination Date.
b. Service Termination Date. An Independent Director's Service Termination
Date is normally the last day of the calendar quarter in which such Director's
seventy-second birthday occurs. A majority of the Board of a Fund may annually
extend a Director's Service Termination Date for a maximum period of three
years, through the date not later than the last day of the calendar quarter in
which such Director's seventy-fifth birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean an Independent Director's normal Service Termination Date, or the
Director's extended Service Termination Date, whichever may be applicable to the
Independent Director.
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not later than the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director will receive
four quarterly payments during the first twelve months subsequent to his Service
Termination Date (the "First Year Retirement Payments"), with each payment to be
equal to 25 percent of the annual basic retainer payable by each Fund to the
Independent Director on his Service Termination Date (excluding any fees
relating to attending meetings or chairing committees).
<PAGE>
b. Benefit. Commencing with the first anniversary of the Service
Termination Date of any Independent Director who has received the First Year
Retirement Payments, and commencing as of the Service Termination Date of an
Independent Director whose Service Termination Date is subsequent to the date of
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurred, the Independent Director will receive, for the remainder of
his life, a benefit (the "Benefit"), payable quarterly, with each quarterly
payment to be equal to 10 percent of the annual basic retainer payable by each
Fund to the Independent Director on his Service Termination Date (excluding any
fees relating to attending meetings or chairing committees).
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for a period of ten years, with quarterly payments to
be made to the designated beneficiary.
If an Independent Director's service as a Director is terminated because of
his death prior to the last day of the calendar quarter in which such Director's
seventy-second birthday occurs or subsequent to the last day of the calendar
quarter in which such Director's seventy-fourth birthday occurred, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his disability subsequent to the last day of
the calendar quarter in which such Director's seventy-second birthday occurred
and prior to the last day of the calendar quarter in which such Director's
seventy-fourth birthday occurs, the Independent Director shall receive the First
Year Retirement Payments and shall, commencing with the quarter following the
quarter in which the last First Year Retirement Payment is made, receive the
Benefit for the remainder of his life, with quarterly payments to be made to the
disabled Independent Director. If the disabled Independent Director should die
before the First Year Retirement Payments are completed and before forty
quarterly Benefit payments are made, such payments will continue to be made to
the Independent Director's designated beneficiary until the aggregate of the
First Year Retirement Payments and forty quarterly Benefit payments have been
made to the disabled Independent Director and the Director's designated
beneficiary.
If an Independent Director's service as a Director is terminated because of
his disability prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
Independent Director shall receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
<PAGE>
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If the Independent
Director and his designated beneficiary should die before the First Year
Retirement Payments and/or a total of forty quarterly Benefit payments are made,
the remaining value of the Independent Director's First Year Retirement Payments
and/or Benefit shall be determined as of the date of the death of the
Independent Director's designated beneficiary and shall be paid to the estate of
the designated beneficiary in one lump sum or in periodic payments, with the
determinations with respect to the value of the First Year Retirement Payments
and/or Benefit and the method and frequency of payment to be made by the
Committee (as defined in paragraph 8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
First Year Retirement Payments and/or Benefit shall be determined as of the date
of the death of the Independent Director by the Committee and shall be paid as
promptly as possible in one lump sum to the Independent Director's estate.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will be
paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit: Allocation of
Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or Benefit applicable to the Fund, as well as its
proportionate share of all expenses of administration of the Plan, including
without limitation all accounting and legal fees and expenses and fees and
expenses of any Actuary. The obligations of each Fund to pay such First Year
Retirement Payments and/or Benefit and expenses will not be secured or funded in
any manner, and such obligations will not have any preference over the lawful
<PAGE>
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or Benefit is paid by more than one Fund, such
costs and expenses will be allocated among such Funds in a manner that is
determined by the Committee to be fair and equitable under the circumstances. To
the extent that one or more of such Funds consist of one or more separate
portfolios, such costs and expenses allocated to any such Fund will thereafter
be allocated among such portfolios by the Board of the Fund in a manner that is
determined by such Board to be fair and equitable under the circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. Except as
otherwise provided herein, the Committee will make all interpretations and
determinations necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive. Committee
members will be elected annually.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board of any Fund to nominate any Independent Director for
reelection.
<PAGE>
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993. Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
The INVESCO Advisor Funds, Inc.
INVESCO Treasurer's Series Trust
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, between INVESCO
International Funds, Inc., a Maryland corporation, having its principal office
and place of business at 7800 East Union Avenue, Denver, Colorado 80237
(hereinafter referred to as the "Fund") and INVESCO Funds Group, Inc., a
Delaware corporation, having its principal place of business at 7800 East Union
Avenue, Denver, Colorado 80237 (hereinafter referred to as the "Transfer
Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, Treasurer, or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund as
indicated in a certification as may be received by the
Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent, which is actually
received by the Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in the 1940 Act;
(d) "Custodian" refers to the custodian of all of the securities
and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions actually
received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person;
(f) "Prospectus" shall mean the currently effective prospectus
relating to the Fund's Shares registered under the Securities
Act of 1933;
(g) "Shares" refers to the shares of common stock, $.01 par value,
of the Fund;
(h) "Shareholder" means a record owner of Shares;
<PAGE>
(i) "Written Instructions" shall mean a written communication
actually received by the Transfer Agent where the receiver is
able to verify with a reasonable degree of certainty the
authenticity of the sender of such communication; and
(j) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time.
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it has an effective
registration statement on SEC Form TA-1 and, accordingly, has duly
registered as a transfer agent as provided in Section 17A(c) of the
Securities Exchange Act of 1934.
3. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent for all of the
Shares of the Fund authorized as of the date hereof, and the
Transfer Agent accepts such appointment and agrees to perform the
duties herein set forth. If the board of directors of the Fund
hereafter reclassifies the Shares, by the creation of one or more
additional series or otherwise, the Transfer Agent agrees that it
will act as transfer agent for the Shares so reclassified on the
terms set forth herein.
4. Compensation.
(a) The Fund will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the
fees set forth in the Fee Schedule annexed hereto and
incorporated herein.
(b) The parties hereto will agree upon the compensation for acting
as transfer agent for any series of Shares hereafter
designated and established at the time that the Transfer Agent
commences serving as such for said series, and such agreement
shall be reflected in a Fee Schedule for that series, dated
and signed by an authorized officer of each party hereto, to
be attached to this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Fee Schedule,
dated and signed by an authorized officer of each party
hereto, and a certified copy of the resolution of the board of
directors of the Fund authorizing such revised Fee Schedule.
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
<PAGE>
5. Documents. In connection with the appointment of the Transfer Agent,
the Fund shall, on or before the date this Agreement goes into
effect, file with the Transfer Agent the following documents:
(a) A certified copy of the Articles of Incorporation of the Fund,
including all amendments thereto, as then in effect;
(b) A certified copy of the Bylaws of the Fund, as then in effect;
(c) Certified copies of the resolutions of the board of directors
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the board of directors, with a certificate of
the Secretary of the Fund as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the Fund with the name,
address and tax identification number of each Shareholder, and
the number of Shares held by each, certificate numbers and
denominations (if any certificates have been issued), lists of
any accounts against which stops have been placed, together
with the reasons for said stops, and the number of Shares
redeemed by the Fund;
(g) Copies of all agreements then in effect between the Fund and
any agent with respect to the issuance, sale, or cancellation
of Shares; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares.
6. Further Documentation. The Fund will also furnish from time to time
the following documents:
(a) Each resolution of the board of directors authorizing the
original issue of Shares;
(b) Each Registration Statement filed with the Commission, and
amendments and orders with respect thereto, in effect with
respect to the sale of Shares of the Fund;
(c) A certified copy of each amendment to the Articles of
Incorporation and the Bylaws of the Fund;
(d) Certified copies of each resolution of the board of directors
designating Authorized Persons to give instructions to the
Transfer Agent;
(e) Certificates as to any change in any officer, director, or
Authorized Person of the Fund;
<PAGE>
(f) Specimens of all new certificates for Shares accompanied by
the Fund's resolutions of the board of directors approving
such forms; and
(g) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for the Transfer Agent in
the proper performance of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent shall maintain
an adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such share
certificates shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death, resignation, or
removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent may continue to
countersign certificates which bear such signatures until
otherwise directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and mail
certificates as requested by the Shareholders for Shares of
the Fund in accordance with the instructions of the Fund and
to confirm such issuance to the Shareholder and the Fund or
its designee.
(c) The Fund hereby authorizes the Transfer Agent to issue
replacement share certificates in lieu of certificates which
have been lost, stolen or destroyed, without any further
action by the board of directors or any officer of the Fund,
upon receipt by the Transfer Agent of properly executed
affidavits or lost certificate bonds, in form satisfactory to
the Transfer Agent, with the Fund and the Transfer Agent as
obligees under any such bond.
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall sell or cause
to be sold any Shares, the Fund or its authorized agent shall
provide or cause to be provided to the Transfer Agent
information including: (i) the number of Shares sold, trade
<PAGE>
date, and price; (ii) the amount of money to be delivered to
the Custodian for the sale of such Shares; (iii) in the case
of a new account, a new account application or sufficient
information to establish an account.
(b) The Transfer Agent will, upon receipt by it of a check or
other payment identified by it as an investment in Shares of
the Fund and drawn or endorsed to the Transfer Agent as agent
for, or identified as being for the account of, the Fund,
promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the
investment. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related
account adjustments.
(c) Upon receipt of the notification required under paragraph (a)
hereof and the notification from the Custodian that such money
has been received by it, the Transfer Agent shall issue to the
purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue any Shares
of the Fund where it has received Written Instructions from
the Fund or written notification from any appropriate federal
or state authority that the sale of the Shares of the Fund has
been suspended or discontinued, and the Transfer Agent shall
be entitled to rely upon such Written Instructions or written
notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer
Agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares issued
or held on deposit as a result of such check or order; (iii) in the
case of any Shareholder who has obtained redemption checks, place a
stop payment order on the checking account on which such checks are
issued; and (iv) take such other steps as the Transfer Agent may, in
its discretion, deem appropriate or as the Fund or its designee may
instruct.
<PAGE>
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the Fund will be
redeemed upon receipt by the Transfer Agent of: (i) a written
request for redemption, signed by each registered owner
exactly as the Shares are registered; (ii) certificates
properly endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the extent required
by the Transfer Agent as described in the Prospectus for the
Fund; and (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer Agent will,
consistent with procedures which may be established by the
Fund from time to time for redemption by wire or telephone,
upon receipt of such a wire order or telephone redemption
request, redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as directed. All wire
or telephone redemptions will be subject to such additional
requirements as may be described in the Prospectus for the
Fund. Both the Fund and the Transfer Agent reserve the right
to modify or terminate the procedures for wire order or
telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all necessary
information and documentation relating to a redemption, the
Transfer Agent will issue to the Custodian an advice setting
forth the number of Shares of the Fund received by the
Transfer Agent for redemption and that such shares are valid
and in good form for redemption. The Transfer Agent shall,
upon receipt of the moneys paid to it by the Custodian for the
redemption of Shares, pay such moneys to the Shareholder, his
authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized to review
and process transfers of Shares of the Fund and to the extent, if
any, permitted in the Prospectus for the Fund, exchanges between the
Fund and other mutual funds advised by INVESCO Funds Group, Inc., on
the records of the Fund maintained by the Transfer Agent. If Shares
to be transferred are represented by outstanding certificates, the
Transfer Agent will, upon surrender to it of the certificates in
proper form for transfer, and upon cancellation thereof, countersign
and issue new certificates for a like number of Shares and deliver
the same. If the Shares to be transferred are not represented by
outstanding certificates, the Transfer Agent will, upon an order
therefor by or on behalf of the registered holder thereof in proper
form, credit the same to the transferee on its books. If Shares are
to be exchanged for Shares of another mutual fund, the Transfer
Agent will process such exchange in the same manner as a redemption
and sale of Shares, except that it may in its discretion waive
requirements for information and documentation.
<PAGE>
12. Right to Seek Assurances. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers
or redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall
furnish to the Transfer Agent a resolution of the board of
directors of the Fund certified by the Secretary authorizing
the declaration of dividends and authorizing the Transfer
Agent to rely on Oral Instructions or a Certificate specifying
the date of the declaration of such dividend or distribution,
the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined, the
amount payable per share to Shareholders of record as of that
date, and the total amount payable to the Transfer Agent on
the payment date.
(b) The Transfer Agent will, on or before the payable date of any
dividend or distribution, notify the Custodian of the
estimated amount of cash required to pay said dividend or
distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall
instruct the Custodian to place in a dividend disbursing
account funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder instructions,
will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
(c) The Transfer Agent will replace lost checks upon receipt of
properly executed affidavits and maintain stop payment orders
against replaced checks.
(d) The Transfer Agent will maintain all records necessary to
reflect the crediting of dividends which are reinvested in
Shares of the Fund.
(e) The Transfer Agent shall not be liable for any improper
payments made in accordance with the resolution of the board
of directors of the Fund.
<PAGE>
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
14. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and
functions as are set forth in the Fee Schedules(s) hereto from time
to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
investor's account the following: (i) names, addresses, tax
identifying numbers and assigned account numbers; (ii) numbers
of Shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date
and price of all transactions on a Shareholder's account; (iv)
any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings in the
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a
Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; and
(viii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by
this Agreement.
(b) Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act. Such records may be inspected by the
Fund at reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the
Transfer Agent's files, records and documents created and
maintained by the Transfer Agent in performance of its
services or for its protection. At the end of the six-year
retention period, such records and documents will either be
turned over to the Fund, or destroyed in accordance with the
Fund's authorization.
<PAGE>
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
(b) The Transfer Agent will address and mail all communications to
Shareholders or their nominees, including proxy material and
periodic reports to Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper
or document believed by it to be genuine and to have been
signed by an Authorized Person and shall not be held to have
any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates which
it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions, and, at the
expense of the Fund, may seek advice from legal counsel for
the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any action
taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or with the opinion
of such counsel. In addition, the Transfer Agent, its
officers, agents or employees, shall accept instructions or
requests given to them by any person representing or acting on
behalf of the Fund only if said representative is known by the
Transfer Agent, its officers, agents or employees, to be an
Authorized Person. The Transfer Agent shall have no duty or
obligation to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it upon the
request or direction of Authorized Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for: (i)
the legality of the issue or sale of any Shares of the Fund,
or the sufficiency of the amount to be received therefor; (ii)
the legality of the redemption of any Shares of the Fund, or
the propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares of the Fund in payment
<PAGE>
of any stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Transfer Agent
may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by the Transfer
Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized Person of the Fund or upon the
opinion of legal counsel for the Fund or its own counsel; or
(ii) any action taken or omitted to be taken by the Transfer
Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of
the same even though the same may thereafter have been
altered, changed, amended or repealed. However,
indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its directors, officers,
employees or agents in cases of its own gross negligence,
willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the directors, officers, employees, agents and Shareholders of the
Fund, and the officers, directors, employees, agents and
shareholders of the Fund's investment adviser, INVESCO Funds Group,
Inc. (the "Adviser"), are or may be interested in the Transfer Agent
as directors, officers, employees, agents, shareholders, or
otherwise, and that the directors, officers, employees, agents or
shareholders of the Transfer Agent may be interested in the Fund as
directors, officers, employees, agents, shareholders, or otherwise,
or in the Adviser as officers, directors, employees, agents,
shareholders or otherwise.
21. Term.
(a) This Agreement shall become effective on February 28, 1997
after approval by vote of a majority (as defined in the 1940
Act) of the Fund's board of directors, including a majority of
the directors who are not interested persons of the Fund (as
defined in the 1940 Act), and shall continue in effect for an
<PAGE>
initial term expiring February 28, 1998 and from year to year
thereafter, so long as such continuance is specifically
approved at least annually both: (i) by either the board of
directors or the vote of a majority of the outstanding voting
securities of the Fund; and (ii) by a vote of the majority of
the directors who are not interested persons of the Fund (as
defined in the 1940 Act) cast in person at a meeting called
for the purpose of voting upon such approval.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the
date of such termination, which shall not be less than 60 days
after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a
resolution of the board of directors, certified by the
Secretary, electing to terminate this Agreement and
designating a successor transfer agent.
22. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with
the formality of this Agreement, and (i) authorized or approved by
the resolution of the board of directors, including a majority of
the directors of the Fund who are not interested persons of the Fund
as defined in the 1940 Act, or (ii) authorized and approved by such
other procedures as may be permitted or required by the 1940 Act.
23. Subcontracting. The Fund agrees that the Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided
hereunder; provided, however, that the transfer agent will be liable
to the Fund for any loss arising out of or in connection with the
actions of any subcontractor, if the subcontractor fails to act in
good faith and with due diligence or is negligent or guilty of any
willful misconduct.
24. Miscellaneous.
(a) Any notice and other instrument in writing, authorized or
required by this Agreement to be given to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to
that party and mailed or delivered to it at its office set
forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
INVESCO International Funds, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Ronald L. Grooms, Senior Vice President
<PAGE>
(b) This Agreement shall not be assignable and in the event of its
assignment (in the sense contemplated by the 1940 Act), it
shall automatically terminate.
(c) This Agreement shall be construed in accordance with the laws
of the State of Colorado.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
INVESCO INTERNATIONAL FUNDS, INC.
By: /s/ Dan J. Hesser
----------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-------------------------------
Ronald L. Grooms, Senior Vice
ATTEST: President
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated February 28, 1997,
between INVESCO International Funds, Inc. (the "Fund") and INVESCO Funds Group,
Inc. as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 28th day of February, 1997.
INVESCO INTERNATIONAL FUNDS, INC.
By: /s/ Dan J. Hesser
-------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------
Ronald L. Grooms,
ATTEST: Senior Vice President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 28th day of February, 1997, in Denver, Colorado,
by and between INVESCO International Funds, Inc., a Maryland corporation (the
"Fund"), and INVESCO Funds Group, Inc., a Delaware corporation (hereinafter
referred to as "INVESCO").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"), and is authorized to issue shares representing
interests in the following separate portfolios of investments: (1) INVESCO
European Fund, (2) INVESCO Pacific Basin Fund and (3) INVESCO International
Growth Fund (the "Portfolios"); and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting
and recordkeeping services to certain investment companies, including the Fund;
and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon receipt of written
approval of the Fund arrange for other companies, including affiliates of
INVESCO, to provide to the Portfolios: A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Portfolios. Such services shall include, but shall not be limited to,
preparation and maintenance of the following required books, records and other
documents: (1) journals containing daily itemized records of all purchases and
sales, and receipts and deliveries of securities and all receipts and
disbursements of cash and all other debits and credits, in the form required by
Rule 31a-1(b)(1) under the Act; (2) general and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, in the form
required by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities record
or ledger reflecting separately for each portfolio security as of trade date all
"long" and "short" positions carried by the Portfolios for the account of the
Portfolios, if any, and showing the location of all securities long and the
off-setting position to all securities short, in the form required by Rule
31a-1(b)(3) under the Act; (4) a record of all portfolio purchases or sales, in
the form required by Rule 31a-1(b)(6) under the Act; (5) a record of all puts,
calls, spreads, straddles and all other options, if any, in which the Portfolios
have any direct or indirect interest or which the Portfolios have granted or
guaranteed, in the form required by Rule 31a-1(b)(7) under the Act; (6) a record
of the proof of money balances in all ledger accounts maintained pursuant to
this Agreement, in the form required by Rule 31a- 1(b)(8) under the Act; and (7)
<PAGE>
price make-up sheets and such records as are necessary to reflect the
determination of the Portfolios' net asset value. The foregoing books and
records shall be maintained and preserved by INVESCO in accordance with and for
the time periods specified by applicable rules and regulations, including Rule
31a-2 under the Act. All such books and records shall be the property of the
Fund and, upon request therefor, INVESCO shall surrender to the Fund such of the
books and records so requested; and B) such sub-accounting, recordkeeping and
administrative services and functions, which shall be furnished by a
wholly-owned subsidiary of INVESCO, as are reasonably necessary for the
operation of Portfolio shareholder accounts maintained by certain retirement
plans and employee benefit plans for the benefit of participants in such plans.
Such services and functions shall include, but shall not be limited to: (1)
establishing new retirement plan participant accounts; (2) receipt and posting
of weekly, bi-weekly and monthly retirement plan contributions; (3) allocation
of contributions to each participant's individual Portfolio account; (4)
maintenance of separate account balances for each source of retirement plan
money (i.e., Company, Employee, Voluntary, Rollover) invested in the Portfolios;
(5) purchase, sale, exchange or transfer of monies in the retirement plan as
directed by the relevant party; (6) distribution of monies for participant
loans, hardships, terminations, death or disability payments; (7) distribution
of periodic payments for retired participants; (8) posting of distributions of
interest, dividends and long-term capital gains to participants by the
Portfolios; (9) production of monthly, quarterly and/or annual statements of all
Portfolio activity for the relevant parties; (10) processing of participant
maintenance information for investment election changes, address changes,
beneficiary changes and Qualified Domestic Relations Orders; (11) responding to
telephone and written inquiries concerning Portfolio investments, retirement
plan provisions and compliance issues; (12) performing discrimination testing
and counseling employers on cure options on failed tests; (13) preparation of
1099R and W2P participant IRS tax forms; (14) preparation of, or assisting in
the preparation of, 5500 Series tax forms, Summary Plan Descriptions and
Determination Letters; and (15) reviewing legislative and IRS changes to keep
the retirement plan in compliance with applicable law.
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, such staff and personnel shall be deemed to include officers of
INVESCO and persons employed or otherwise retained by INVESCO to provide or
assist in providing of the Services to the Portfolios.
3. INVESCO shall, at its own expense, provide such office space, facilities
and equipment (including, but not limited to, computer equipment, communication
lines and supplies) and such clerical help and other services as shall be
necessary to provide the Services to the Portfolios. In addition, INVESCO may
arrange on behalf of the Fund to obtain pricing information regarding the
Portfolios' investment securities from such company or companies as are approved
by a majority of the Fund's board of directors; and, if necessary, the Fund
shall be financially responsible to such company or companies for the reasonable
cost of providing such pricing information.
<PAGE>
4. The Fund will, from time to time, furnish or otherwise make available to
INVESCO such information relating to the business and affairs of the Portfolios
as INVESCO may reasonably require in order to discharge its duties and
obligations hereunder.
5. For the services rendered, facilities furnished, and expenses assumed by
INVESCO under this Agreement, the Fund shall pay to INVESCO a $10,000 per year
per Portfolio base fee, plus an additional fee, computed on a daily basis and
paid on a monthly basis. For purposes of each daily calculation of this
additional fee, the most recently determined net asset value of each Portfolio,
as determined by a valuation made in accordance with the Fund's procedure for
calculating each Portfolio's net asset value as described in the Portfolios'
Prospectus and/or Statement of Additional Information, shall be used. The
additional fee to INVESCO under this Agreement shall be computed at the annual
rate of 0.015% of each Portfolio's daily net assets as so determined. During any
period when the determination of a Portfolio's net asset value is suspended by
the directors of the Fund, the net asset value of a share of that Portfolio as
of the last business day prior to such suspension shall, for the purpose of this
Paragraph 5, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
6. INVESCO will permit representatives of the Fund including the Fund's
independent auditors to have reasonable access to the personnel and records of
INVESCO in order to enable such representatives to monitor the quality of
services being provided and the level of fees due INVESCO pursuant to this
Agreement. In addition, INVESCO shall promptly deliver to the board of directors
of the Fund such information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination regarding
continuation of this Agreement and the payments contemplated to be made
hereunder.
7. This Agreement shall remain in effect until no later than February 28,
1998 and from year to year thereafter provided such continuance is approved at
least annually by the vote of a majority of the directors of the Fund who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; and further provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days written notice to INVESCO; (b) the Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Act and the Rules thereunder) unless the Board of Directors of the Fund approves
such assignment; and (c) INVESCO may terminate this Agreement without payment of
penalty on sixty days written notice to the Fund. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed postag
pre-paid, to the other party at the principal office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the extent the
applicable law of the State of Colorado or any of the provisions herein conflict
with the applicable provisions of the Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO INTERNATIONAL FUNDS, INC.
By: /s/ Dan J. Hesser
----------------------
ATTEST: Dan J. Hesser
President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------
ATTEST: Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- -------------------------
Glen A. Payne, Secretary
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 4 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 6, 1996, relating to the financial
statements and financial highlights appearing in the October 31, 1996 Annual
Report to Shareholders of INVESCO International Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" and "Financial Statements" in
the Statement of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------------------
Denver, Colorado
February 18, 1997.
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</TABLE>
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 23rd day of July, 1996.
/s/ Hubert L. Harris, Jr.
------------------------------------------
Hubert L. Harris, Jr.
STATE OF GEORGIA )
)
COUNTY OF DEKALB )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Hubert L. Harris, Jr.,
as a director or trustee of each of the above-described entities, this 23rd day
of July, 1996.
/s/ Cecilia Underwood
------------------------------------------
Notary Public
My Commission Expires: October 14, 1997
