SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
INVESCO INTERNATIONAL FUNDS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[ ] Fee paid previously with preliminary materials.
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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________________________
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4) Date Filed: ___________________________________________________________
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INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
INVESCO INTERNATIONAL BLUE CHIP FUND
(EACH A SERIES OF INVESCO INTERNATIONAL FUNDS, INC.)
March 23, 1999
Dear Shareholder:
The attached proxy materials seek your approval to liquidate INVESCO
Emerging Markets Fund ("Emerging Markets Fund"), a series of INVESCO
International Funds, Inc. ("International Funds"), to effect certain changes to
the fundamental policies of Emerging Markets Fund, INVESCO European Fund
("European Fund"), and INVESCO Pacific Basin Fund ("Pacific Basin Fund"), each a
series of International Funds, to elect directors of International Funds, and to
ratify the appointment of PricewaterhouseCoopers LLP as independent accountants
of Emerging Markets Fund, European Fund, Pacific Basin Fund, and INVESCO
International Blue Chip Fund ("International Blue Chip Fund").
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL proposals.
The board believes that the proposed changes are in the best interests of
Emerging Markets Fund, European Fund, Pacific Basin Fund, and International Blue
Chip Fund, and their respective shareholders. Shareholders of Emerging Markets
Fund are being asked to approve the liquidation of Emerging Markets Fund (please
see the separate letter addressed to you about the proposed liquidation).
Shareholders are also being asked to approve certain changes to the fundamental
investment restrictions of Emerging Markets Fund, European Fund, and Pacific
Basin Fund that will modernize their fundamental investment restrictions and
make them more uniform with those of the other INVESCO Funds. The attached proxy
materials provide more information about the proposed liquidation of Emerging
Markets Fund, the proposed changes in fundamental investment restrictions, and
the other matters you are being asked to vote upon.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit International Funds to avoid costly follow-up mail and
telephone solicitation. After reviewing the attached materials, please complete,
date, and sign your proxy card and mail it in the enclosed return envelope
promptly. As an alternative to using the paper proxy card to vote, you may vote
by telephone, by facsimile, though the Internet, or in person.
Very truly yours,
Mark H. Williamson
President
INVESCO International Funds, Inc.
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INVESCO International Funds, Inc.
INVESCO EMERGING MARKETS FUND
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
INVESCO INTERNATIONAL BLUE CHIP FUND
(EACH A SERIES OF INVESCO INTERNATIONAL FUNDS, INC.)
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
To The Shareholders:
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of INVESCO Emerging Markets Fund ("Emerging Markets Fund"), INVESCO
European Fund ("European Fund"), INVESCO Pacific Basin Fund ("Pacific Basin
Fund"), and INVESCO International Blue Chip Fund (each a "Fund" and,
collectively, the "Funds"), each a series of INVESCO International Funds, Inc.
("International Funds"), will be held on May 20, 1999, at 10:00 a.m., Mountain
Time, at the offices of INVESCO Funds Group, Inc., 7800 East Union Avenue,
Denver, Colorado, for the following purposes:
(1) For Emerging Markets Fund voting separately, to approve a Plan of
Liquidation and Termination for Emerging Markets Fund;
(2) For Emerging Markets Fund, European Fund, and Pacific Basin Fund,
each voting separately, to approve certain changes to the
fundamental investment restrictions of Emerging Markets Fund,
European Fund and Pacific Basin Fund;
(3) For the Funds voting together, to elect directors of International
Funds;
(4) For each Fund voting separately, to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants of each Fund;
and
(5) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
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You are entitled to vote at the Meeting and any adjournment thereof if you
owned shares of a Fund at the close of business on May 12, 1999. IF YOU ATTEND
THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO NOT EXPECT TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors,
Glen A. Payne
Secretary
INVESCO International Funds, Inc.
March 23, 1999
Denver, Colorado
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, date
and sign the card, and return it in the envelope provided. IF YOU DATE, SIGN,
AND RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED "FOR" THE PROPOSALS NOTICED ABOVE. In order to avoid the additional
expense of further solicitation, we ask your cooperation in mailing in your
proxy card promptly. As an alternative to using the paper proxy card to vote,
you may vote by telephone, through the Internet, by facsimile machine, or in
person. To vote by telephone, please call the toll-free telephone number listed
on the enclosed proxy card. Shares that are registered in your name, as well as
shares that are held in "street name" through a broker, may be voted via the
Internet or by telephone. To vote in this manner, you will need the 12-digit
"control" number that appears on your proxy card. To vote via the Internet,
please access http://www.proxyvote.com on the World Wide Web. In addition,
shares that are registered in your name may be voted by faxing your completed
proxy card to 1-516-254-7564. If we do not receive your completed proxy after
several weeks, you may be contacted by our proxy solicitor, Shareholder
Communications Corporation. Our proxy solicitor will remind you to vote your
shares or will record your vote over the phone if you choose to vote in that
manner. You may also call Shareholder Communications Corporation directly at
1-800-525-8085 and vote by phone.
Unless proxy cards submitted by corporations and partnerships are signed by
the appropriate persons as indicated in the voting instructions on the proxy
card, they will not be voted.
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March 23, 1999
Dear Emerging Markets Fund Shareholder:
Enclosed with this letter you will find an important proxy statement for
the upcoming shareholder meeting on May 20. The main reason for this meeting is
so that you and the other investors in INVESCO Emerging Markets Fund can vote on
a proposal by management to liquidate your fund.
It's important to us that you understand why we are recommending this step
- - which we believe is in your best interests as an investor. Here are answers to
some questions you may have about this proposal:
WHY IS INVESCO PROPOSING THIS LIQUIDATION?
We value our relationship with you - and we won't offer an investment we
don't believe provides you with the potential you deserve. The reasons for the
proposal are explained in more detail in the enclosed proxy statement, but they
can be summed up as INVESTMENT OUTLOOK and COST.
We introduced this fund because we believed there were significant
opportunities around the globe for aggressive investors. While there are solid
values still to be found in emerging economies, exceptional turbulence in
overseas financial markets over the past two years makes it difficult to justify
a mutual fund which invests PRIMARILY in those markets.
In addition, because of the limited potential, we have simply been unable
to attract enough shareholders and assets to run this fund efficiently on your
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behalf. Small funds tend to have higher expense ratios, shared by relatively few
investors. It does not make economic sense for either our shareholders or
INVESCO to keep managing Emerging Markets Fund.
For the foreseeable future, the investment risks and costs may simply
outweigh the potential long-term rewards. Aggressive investors may be better
served by choosing international funds which invest only a portion of their
assets in these markets.
WHAT HAPPENS IF SHAREHOLDERS DECIDE IN FAVOR OF LIQUIDATION?
If that happens, the fund's net assets will be distributed among the
remaining shareholders on the liquidation date following the shareholder
meeting. You may decide your best investment choice is to exchange your shares
into another INVESCO fund on or before that date.
INVESCO offers numerous aggressive growth opportunities, including other
international funds. For example, to keep some exposure to emerging markets, you
might consider either INVESCO Pacific Basin Fund or INVESCO Latin American
Growth Fund. To diversify more broadly overseas, take a look at our new
International Blue Chip Fund. Like Emerging Markets Fund, these funds seek
growth overseas. They are subject to the risks all international investments
share, such as currency fluctuations, as well as differences in securities
regulation and accounting practices. However, these funds also offer
considerable opportunity for strong performance in the coming years.
Or, if you are not ready to make a long-term investment decision, INVESCO
Cash Reserves Fund may be a good place to "park" your cash temporarily. (An
investment in this fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although this fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the fund.)
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You may obtain more information about your INVESCO fund choices, including
management fees, expenses, and risks, by calling 1-800-646-8372 for a free
prospectus, or consult your financial advisor. Please read the prospectus
carefully before you invest or send money. We also encourage you to visit our
Web site for prospectuses and current information about all of our funds,
including performance figures and updates from the portfolio managers:
WWW.INVESCO.COM.
If you are still an investor in the fund on the liquidation date, you will
automatically receive a check for the value of the shares which you owned on
that date.
IF THE FUND LIQUIDATES, WILL THERE BE TAX CONSEQUENCES FOR ME?
In order to liquidate, the fund will sell all of its holdings. This may
result in capital gain distributions to shareholders, which are usually taxable
if your investment is not in a tax-advantaged account (like an IRA or other
retirement plan). In addition, the final price per share of the fund may be more
or less than you originally paid for your shares; if more, then you may have
taxable gains there as well. And, as always, if you exchange into another fund,
that is considered a sale and may have tax consequences.
You should consult your own tax advisor about how a liquidation might
affect you, given your personal circumstances.
WHAT DOES THE FUND'S BOARD OF DIRECTORS RECOMMEND?
The Board believes you should vote in favor of the liquidation. More
important, though, the directors recommend that you study the issues involved,
call us with any questions, and vote promptly to ensure that a quorum of
Emerging Markets Fund shares will be represented at the shareholders meeting.
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I hope this has helped you in better understanding why we are making this
proposal. If you have any questions, I encourage you to call us at
1-800-646-8372, and one of our Investor Specialists will assist you.
Sincerely,
Mark H. Williamson
Chairman & CEO, INVESCO Funds
P.S. Remember that you have two decisions to make very soon: how to vote on the
enclosed proxy, and how to invest if the fund does liquidate. If we can provide
you with any information to make those choices easier, please call us.
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INVESCO INTERNATIONAL FUNDS, INC.
INVESCO EMERGING MARKETS FUND
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIC FUND
INVESCO INTERNATIONAL BLUE CHIP FUND
7800 EAST UNION AVENUE
DENVER, COLORADO 80237
(TOLL FREE) 1-800-646-8372
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
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VOTING INFORMATION
This Proxy Statement is being furnished to shareholders of INVESCO
Emerging Markets Fund ("Emerging Markets Fund"), INVESCO European Fund
("European Fund"), INVESCO Pacific Basin Fund ("Pacific Basin Fund"), and
INVESCO International Blue Chip Fund ("International Blue Chip Fund") (each a
"Fund" and, collectively, the "Funds"), each a series of INVESCO International
Funds, Inc. ("International Funds"), in connection with the solicitation of
proxies from shareholders of the Funds by the board of directors (the "Board")
of International Funds, for use at a special meeting of shareholders to be held
on May 20, 1999 (the "Meeting"), and at any adjournment of the Meeting. This
Proxy Statement will first be mailed to shareholders on or about March 23, 1999.
For each Fund, one-third of the Fund's shares outstanding on March 12,
1999 (the "Record Date") represented in person or by proxy, shall constitute a
quorum and must be present for the transaction of business at the Meeting. If a
quorum is not present at the Meeting or a quorum is present but sufficient votes
to approve one or more of the proposals set forth in this Proxy Statement are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of a majority of those shares represented at
the Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST that
proposal against such adjournment. A shareholder vote may be taken on one or
more of the proposals in this Proxy Statement prior to any such adjournment if a
quorum is present with respect to each proposal, sufficient votes have been
received and it is otherwise appropriate.
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Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present or outstanding. Abstentions and broker non-votes will not be counted,
however, as votes cast for purposes of determining whether sufficient votes have
been received to approve a proposal.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on the proxy card, if it is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you date, sign, and return the proxy card, but give no
voting instructions, your shares will be voted in favor of approval of each of
the proposals and the duly appointed proxies may, in their discretion, vote upon
such other matters as may come before the Meeting. The proxy card may be revoked
by giving another proxy or by letter or telegram revoking the initial proxy. To
be effective, revocation must be received by International Funds prior to the
Meeting and must indicate your name and account number. If you attend the
Meeting in person you may, if you wish, vote by ballot at the Meeting, thereby
canceling any proxy previously given.
In order to reduce costs, the notices to a shareholder having more than
one account in a Fund listed under the same social security number at a single
address have been combined. The proxy cards have been coded so that a
shareholder's votes will be counted for each such account.
As of the Record Date, each Fund had the following shares of common stock
outstanding: _______ (Emerging Markets Fund); _______ (European Fund); ________
(Pacific Basin Fund); and ________ (International Blue Chip Fund). The
solicitation of proxies, the cost of which will be borne half by INVESCO Funds
Group, Inc. ("INVESCO"), the investment adviser and transfer agent of the Funds,
and half by the Funds, will be made primarily by mail but also may be made by
telephone or oral communications by representatives of INVESCO and INVESCO
Distributors, Inc. ("IDI"), the distributor of the INVESCO group of investment
companies ("INVESCO Funds"), none of which will receive any compensation for
these activities from the Funds, or by Shareholder Communications Corporation,
professional proxy solicitors, which will be paid fees and expenses of up to
approximately $102,000 for soliciting services. If votes are recorded by
telephone, Shareholder Communications Corporation will use procedures designed
to authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that a shareholder's instructions have been properly recorded. You may also vote
by mail, by facsimile or through a secure Internet site. Proxies voted by
telephone, facsimile or Internet may be revoked at any time before they are
voted at the meeting in the same manner that proxies voted by mail may be
revoked.
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COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS MAY REQUEST COPIES OF THESE REPORTS, WITHOUT CHARGE, BY WRITING TO
INVESCO DISTRIBUTORS, INC., P.O. BOX 173706, DENVER, COLORADO 80217-3706, OR BY
CALLING TOLL-FREE 1-800-646-8372.
Except as set forth in Appendix A, INVESCO does not know of any person who
owns 5% or more of the shares of any Fund. Directors and officers of
International Funds own in the aggregate less than 1% of the shares of each
Fund.
VOTE REQUIRED. Approval of Proposal 1, to liquidate Emerging Markets Fund,
requires the affirmative vote of the lesser of: (1) 67% of Emerging Markets Fund
shares present at a meeting of Emerging Markets Fund shareholders if the holders
of more than 50% of Emerging Markets Fund's outstanding shares are present in
person or by proxy; or (2) more than 50% of Emerging Markets Fund's outstanding
shares. Approval of Proposal 2 with respect to a Fund requires the affirmative
vote of a "majority of the outstanding voting securities" of that Fund, as
defined in the Investment Company Act of 1940 ("1940 Act"). This means that for
a Fund, Proposal 2 must be approved by the lesser of: (1) 67% of that Fund's
shares present at a meeting of shareholders if the owners of more than 50% of
that Fund's shares then outstanding are present in person or by proxy; or (2)
more than 50% of that Fund's outstanding shares. A plurality of the votes of
International Funds cast at the Meeting is sufficient to approve Proposal 3.
Approval of Proposal 4 with respect to a Fund requires the affirmative vote of a
majority of that Fund's votes present at the Meeting, provided a quorum is
present with respect to that Fund. Each outstanding full share of each Fund is
entitled to one vote, and each outstanding fractional share thereof is entitled
to a proportionate fractional share of one vote. If any Proposal is not approved
by the requisite vote of shareholders of a Fund or the Funds, the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies.
PROPOSAL 1. TO APPROVE A PLAN OF LIQUIDATION AND TERMINATION
("LIQUIDATION PLAN") FOR EMERGING MARKETS FUND ("FUND") (FOR
EMERGING MARKETS FUND SHAREHOLDERS ONLY)
THE PROPOSED LIQUIDATION AND TERMINATION
The Board believes that liquidating Emerging Markets Fund's assets and
terminating its existence would be in its shareholders' best interests.
Accordingly, the Board, including all of its directors who are not "interested
persons," as that term is defined in the 1940 Act, of International Funds
("Independent Directors"), adopted the proposed Liquidation Plan, which provides
for liquidating Emerging Markets Fund's assets, distributing the proceeds
thereof to its shareholders PRO RATA, and terminating Emerging Markets Fund's
existence. A copy of the Liquidation Plan is attached to this proxy statement as
Appendix B.
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Emerging Markets Fund commenced operations on March 19, 1998. Throughout
the period since then, various Fund expenses have been voluntarily absorbed by
its investment adviser, INVESCO. Notwithstanding the expense reduction measures
taken by INVESCO, Emerging Markets Fund has experienced limited asset growth. In
addition, Emerging Markets Fund has experienced uneven returns over the last
several years and net asset reductions over the past fiscal year. INVESCO and
Emerging Markets Fund's distributor, IDI, have come to believe that it is
unlikely that Emerging Markets Fund will experience material growth in assets in
the foreseeable future. In light of the inefficiencies and higher costs of
managing Emerging Markets Fund's small asset base, INVESCO and IDI submitted to
the Board a proposal to liquidate and terminate Emerging Markets Fund.
At a meeting held on February 3, 1999, the Board considered and
unanimously approved the Liquidation Plan, subject to shareholder approval.
Under International Funds' Articles of Incorporation, the liquidation of
Emerging Markets Fund may be effected only on the affirmative vote of the lesser
of (1) 67% of Emerging Markets Fund's shares present at a meeting of its
shareholders if the holders of more than 50% of its outstanding shares are
present in person or by proxy or (2) more than 50% of Emerging Markets Fund's
outstanding shares.
CONSIDERATION BY THE BOARD
In evaluating the proposed liquidation and termination of Emerging Markets
Fund, the Board considered a number of factors, including the amount of Emerging
Markets Fund's total assets, its expense ratio (absent the absorption of
expenses mentioned above), and the likelihood that additional sales of Fund
shares could enable it to attain an asset level that would sustain an acceptable
expense ratio. The Board also considered INVESCO's representation that it is not
prepared to continue to waive its advisory fee and absorb the expenses
associated with managing Emerging Markets Fund at its current low level of
assets indefinitely, but will do so pending Emerging Markets Fund's liquidation
and termination. Based on consideration of the foregoing, and other factors they
deemed relevant, the Board (including all of its Independent Directors) approved
the liquidation and termination of Emerging Markets Fund, subject to shareholder
approval.
If the Liquidation Plan is not approved by the shareholders, Emerging
Markets Fund will continue to operate as a series of International Funds (but
without INVESCO's advisory fee waiver and absorption of expenses). The Board
thus is asking Emerging Markets Fund's shareholders to approve certain changes
to Emerging Markets Fund's fundamental investment restrictions, to elect
directors of International Funds, and to ratify the selection of
PricewaterhouseCoopers LLP as independent accountants of Emerging Markets Fund,
as set forth in Proposals 2, 3, and 4, respectively.
DESCRIPTION OF THE LIQUIDATION PLAN
Under the Liquidation Plan each shareholder's interest in Emerging Markets
Fund's assets will be fixed on the date on which the shareholders approve the
Liquidation Plan. On that date, the books of Emerging Markets Fund will be
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closed. Thereafter, all assets of Emerging Markets Fund not already held in cash
or cash equivalents will be liquidated. The Liquidation Plan provides that, as
soon as reasonably practicable after that date, the distribution of Emerging
Markets Fund's assets will be made in one or two liquidating distributions. The
first such distribution is expected to consist of cash representing
substantially all of Emerging Markets Fund's assets less the amount reserved to
pay its liabilities and expenses. A second liquidating distribution, if
necessary, is anticipated to be made within 90 days after the first liquidating
distribution and will consist of cash from any assets remaining after payment of
those liabilities and expenses, the proceeds of any sale of Emerging Markets
Fund assets not sold prior to the first liquidating distribution, and any other
miscellaneous Emerging Markets Fund income.
The date or dates on which Emerging Markets Fund will pay the liquidating
distributions and on which Emerging Markets Fund will be liquidated have not
been determined, but it is anticipated that, if Emerging Markets Fund's
shareholders adopt the Liquidation Plan, the liquidating distributions would
occur as soon as reasonably practical after the date on which the shareholders
approve the Liquidation Plan. Shareholders will receive their respective
portions of the liquidating distribution(s) without any further action on their
part.
The Liquidation Plan will not affect a shareholder's right to redeem his,
her, or its Emerging Markets Fund shares. Therefore, a shareholder may redeem in
accordance with the redemption procedure set forth in Emerging Markets Fund's
current prospectus without waiting for Emerging Markets Fund to take any action
respecting its liquidation. The Liquidation Plan also authorizes the Board to
make variations from or amendments to the provisions thereof that it deems
necessary or appropriate to carry out its purposes. No shareholder will be
entitled to exercise any dissenter's rights or appraisal rights with respect to
Emerging Markets Fund's liquidation and termination under either the Liquidation
Plan or relevant provisions of Maryland law.
Under the Liquidation Plan, Emerging Markets Fund will be responsible for
one-half of the expenses incurred in connection with carrying out the
Liquidation Plan, including the cost of soliciting proxies, liquidating its
assets, and terminating its existence, and INVESCO will be responsible for the
balance of those expenses.
FEDERAL INCOME TAX CONSEQUENCES
The following summary provides general information regarding the federal
income tax consequences to Emerging Markets Fund resulting from its liquidation
and termination and to its shareholders on their receipt of liquidating
distributions from Emerging Markets Fund. Emerging Markets Fund has not sought a
ruling from the Internal Revenue Service with respect to these matters. This
summary generally applies to shareholders who are individual U.S. citizens
(other than dealers in securities) and does not address the particular federal
income tax consequences that may apply to shareholders that are, for example,
corporations, trusts, estates, tax-exempt organizations, or non-resident aliens;
nor does this summary address state or local tax consequences. The tax
consequences discussed herein may affect shareholders differently, depending on
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their particular tax situations unrelated to the receipt of liquidating
distributions, and accordingly this summary is not a substitute for careful tax
planning. Shareholders may wish to consult their personal tax advisers
concerning their particular tax situations and the impact thereon of receiving
liquidating distributions from Emerging Markets Fund.
As discussed above, if the Liquidation Plan is approved by its
shareholders, Emerging Markets Fund will sell its assets and distribute the
proceeds to them. Emerging Markets Fund anticipates that it will retain its
qualification for treatment as a regulated investment company under the Internal
Revenue Code of 1986, as amended, during the liquidation period and thus will
not be taxed on any of its net gain realized from the sale of its assets.
A shareholder who receives a liquidating distribution in cancellation and
redemption of his, her, or its Fund shares will be treated as having sold those
shares for the amount of the liquidating distribution. The shareholder will
recognize gain or loss on that sale measured by the difference between his, her,
or its adjusted tax basis for the shares and the liquidating distribution. If
the shares are held as capital assets, the gain or loss will be characterized as
capital gain or loss. Capital gain or loss attributable to shares held for more
than one year will constitute long-term capital gain or loss, while capital gain
or loss attributable to shares held for one year or less will be short-term.
Shareholders also should be aware that Emerging Markets Fund is required to
withhold 31% of liquidating distributions payable to any individual and certain
other non-corporate shareholders who do not provide Emerging Markets Fund with a
correct taxpayer identification number.
The receipt of a liquidating distribution by an individual retirement
account ("IRA") that holds Fund shares generally will not be treated as a
taxable event to the IRA beneficiary. However, some IRAs that hold Fund shares
may have been established with custodians that may not reinvest the liquidation
distribution proceeds, but instead must immediately distribute those proceeds to
the IRA beneficiary. Those distributions could have adverse tax consequences for
the beneficiaries of such IRAs, who are urged to consult with their own tax
advisers regarding the tax consequences of those distributions.
REQUIRED VOTE. Approval of the Liquidation Plan requires the affirmative
vote of the lesser of: (1) 67% of Emerging Markets Fund shares present at a
meeting of Emerging Markets Fund shareholders if the holders of more than 50% of
Emerging Markets Fund's outstanding shares are present in person or by proxy; or
(2) more than 50% of Emerging Markets Fund's outstanding shares.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 1.
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PROPOSAL 2: TO APPROVE AMENDMENTS TO THE FUNDAMENTAL INVESTMENT
RESTRICTIONS OF EMERGING MARKETS FUND (IF THE LIQUIDATION IS NOT
APPROVED), EUROPEAN FUND, AND PACIFIC BASIN FUND
As required by the 1940 Act, Emerging Markets Fund, European Fund and
Pacific Basin Fund (each a "Fund" and, collectively, the "Funds") have each
adopted certain fundamental investment restrictions ("fundamental
restrictions"), which are set forth in the Funds' Statement of Additional
Information (the "SAI"). These fundamental restrictions may be changed only with
shareholder approval. Restrictions that a Fund has not specifically designated
as fundamental are considered to be "non-fundamental" and may be changed by the
Board without shareholder approval.
Some of the Funds' fundamental restrictions reflect past regulatory,
business or industry conditions, practices or requirements that are no longer in
effect. Also, as other INVESCO Funds have been created over the years, these
funds have adopted substantially similar fundamental restrictions that often
have been phrased in slightly different ways, resulting in minor but unintended
differences in effect or potentially giving rise to unintended differences in
interpretation. Accordingly, the Board has approved revisions to the Funds'
fundamental restrictions in order to simplify and modernize them, and make the
fundamental restrictions more uniform with those of the other INVESCO Funds.
The Board believes that eliminating the disparities among the INVESCO
Funds' fundamental restrictions will enhance management's ability to manage the
Funds' assets efficiently and effectively in changing regulatory and investment
environments and permit directors to review and monitor policies more easily. In
addition, standardizing the fundamental restrictions of the INVESCO Funds will
assist the INVESCO Funds in making required regulatory filings in a more
efficient and cost-effective way. Although the proposed changes in fundamental
restrictions will allow each Fund greater investment flexibility to respond to
future investment opportunities, the Board does not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
in the level of investment risk associated with an investment in that Fund.
The text and a summary description of each proposed change to each Fund's
fundamental restrictions are set forth below, together with the text of each
current corresponding fundamental restriction. The text below also describes any
non-fundamental restrictions that would be adopted by the Board in conjunction
with the revision of certain fundamental restrictions. Any non-fundamental
restriction may be modified or eliminated by the Board at any future date
without further shareholder approval.
If approved by the shareholders of a Fund at the Meeting, the proposed
changes to a Fund's fundamental restrictions will be adopted by that Fund. The
Fund's Statement of Additional Information will be revised to reflect those
changes as soon as practicable following the meeting.
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A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON THE ISSUANCE OF SENIOR
SECURITIES
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on issuance of senior securities as follows:
The Company may not 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)
Emerging Markets Fund currently has the following fundamental restriction
on the issuance of senior securities:
The Fund may not borrow money or issue senior securities (as defined
in the 1940 Act), except that the Fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) and may
enter into reverse repurchase agreements in an aggregate amount not
exceeding 33-1/3% of the value of its total assets (including the
amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed 33-1/3% of the value of the Fund's
total assets by reason of a decline in total assets will be reduced
within three business days to the extent necessary to comply with the
33-1/3% limitation. This restriction shall not prohibit deposits of
assets to margin or guarantee positions in futures, options, swaps,
or forward contracts, or the segregation of assets in connection with
such contracts.
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not issue senior securities, except as permitted under
the Investment Company Act of 1940.
The primary purposes of the Proposal are to eliminate differences in the
wording of the INVESCO Funds' current fundamental restrictions on the issuance
of senior securities for greater uniformity, to eliminate any unnecessary
limitations, and to conform them to 1940 Act requirements regarding the issuance
of senior securities. With respect to Emerging Markets Fund, the proposed
revision would also separate the Fund's fundamental restriction on borrowing and
issuing senior securities into two fundamental restrictions, a revision that is
expected to be standard for all of the INVESCO Funds. (See modification of
fundamental restriction on borrowing, below).
The Board believes that the adoption of the proposed fundamental
restriction, which does not specify the manner in which senior securities may be
issued and is no more limiting than is required under the 1940 Act, will
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maximize each Fund's borrowing flexibility for future contingencies and will
conform to the fundamental restrictions of the other INVESCO Funds on the
issuance of senior securities.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON BORROWING AND ADOPTION OF NON-
FUNDAMENTAL RESTRICTION ON BORROWING
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on borrowing as follows:
The Fund may not 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 assets. A Fund will not purchase
additional securities while any borrowings on behalf of that Fund
exist.
Emerging Markets Fund currently has the following fundamental restriction
on borrowing:
The Fund may not borrow money or issue senior securities (as defined
in the 1940 Act), except that the Fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) and may
enter into reverse repurchase agreements in an aggregate amount not
exceeding 33-1/3% of the value of its total assets (including the
amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed 33-1/3% of the value of the Fund's
total assets by reason of a decline in total assets will be reduced
within three business days to the extent necessary to comply with the
33-1/3% limitation. This restriction shall not prohibit deposits of
assets to margin or guarantee positions in futures, options, swaps,
or forward contracts, or the segregation of assets in connection with
such contracts.
The Board recommends that shareholders vote to replace these restrictions
with the following fundamental restriction:
The Fund will not borrow money, except that the Fund may borrow money
in an amount not exceeding 33-1/3% of its total assets (including the
amount borrowed) less liabilities (other than borrowings).
Currently, the Funds' fundamental restrictions are significantly more
limiting than the restrictions imposed by the 1940 Act in limiting the purposes
for which the Funds may borrow money. The proposal eliminates the fundamental
nature of the restrictions on the purposes for which a Fund may borrow money.
European Fund and Pacific Basin Fund's fundamental restriction is also unduly
restrictive in limiting all borrowings to 10% of each Fund's assets. With
respect to these Funds, the proposal increases each Fund's fundamental borrowing
authority from 10% to 33-1/3% of its total assets, and eliminates the
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restriction against mortgaging, pledging or hypothecating securities. The
proposed revision also eliminates European Fund and Pacific Basin Fund's
fundamental restriction limiting borrowings to banks and prohibiting the
purchase of securities when borrowings are outstanding. For Emerging Markets
Fund, the proposal would delete the explicit requirement, which tracks that
already contained in the 1940 Act, that any borrowings that come to exceed
33-1/3% of the Fund's total assets by reason of a decline in total assets be
reduced within three business days. The proposed revision would also separate
Emerging Markets Fund's fundamental restriction on borrowing and issuing senior
securities into two fundamental restrictions, a revision that is expected to be
standard for all of the INVESCO Funds. (See modification of fundamental
investment restriction on issuing senior securities, above).
If the proposal is approved, the Board will adopt a non-fundamental
restriction as follows:
The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency
purposes (not for leveraging or investing) or by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
will be treated as borrowings for purposes of fundamental limitation
(2)).
The non-fundamental restriction reflects European Fund and Pacific Basin
Fund's current fundamental restriction that borrowing by the Funds may only be
done for temporary or emergency purposes. In addition to borrowings from banks,
as permitted by European Fund and Pacific Basin Fund's current fundamental
restriction, the non-fundamental restriction permits the Funds to borrow from
open-end funds managed by INVESCO or an affiliate or successor thereof. The
Funds would not be able to do so, however, unless they obtain permission for
such borrowings from the SEC. The non-fundamental restriction also clarifies
that reverse repurchase agreements will be treated as borrowings. The Board
believes that this approach, making the Funds' fundamental restriction on
borrowing no more limiting than is required under the 1940 Act, while
incorporating more strict limits on borrowing in the Funds' non-fundamental
restriction, will maximize each Fund's flexibility for future contingencies.
C. MODIFICATION OF FUNDAMENTAL POLICY ON INVESTING IN COMMODITIES
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on the purchase of commodities as follows:
The Fund may not 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).
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Emerging Markets Fund currently has the following fundamental restriction
on the purchase of commodities:
The Fund may not purchase or sell physical commodities other than
foreign currencies unless acquired as a result of ownership of
securities (but this shall not prevent the Fund from purchasing or
selling options, futures, swaps and forward contracts or from
investing in securities or other instruments backed by physical
commodities).
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not purchase or sell physical commodities; however, this
policy shall not prevent the Fund from purchasing and selling foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.
The proposed changes to these fundamental restrictions are intended to
conform the restrictions to those of the other INVESCO Funds and to ensure that
each Fund will have maximum flexibility to enter into hedging or other
transactions utilizing financial contracts and derivative products when doing so
is permitted by operating policies established for the Funds by the Board. Due
to the rapid and continuing development of derivative products and the
possibility of changes in the definition of "commodities," particularly in the
context of the jurisdiction of the Commodities Futures Trading Commission, it is
important for each Fund's restriction to be flexible enough to allow it to enter
into hedging and other transactions using these products when doing so is deemed
appropriate by INVESCO and is within the investment parameters established by
the Board. To maximize that flexibility, the Board recommends that each Fund's
fundamental restriction on commodities investments be clear in permitting the
use of derivative products, even if the current non-fundamental investment
restrictions of that Fund would not permit investment in one or more of the
permitted transactions.
The proposal also eliminates European Fund and Pacific Basin Fund's
fundamental restriction on investments in oil, gas or other mineral interests or
exploration programs. Investment in oil, gas or other mineral leases or programs
is not prohibited by federal law for mutual funds, but was prohibited in the
past by some state regulations that are no longer applicable. Although European
Fund and Pacific Basin Fund have no current intention to invest in oil, gas or
other mineral leases, the Board recommends that shareholders eliminate the
fundamental restriction for greater flexibility and uniformity with other
INVESCO Funds.
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D. ELIMINATION OF FUNDAMENTAL RESTRICTION OF INVESTING IN ILLIQUID SECURITIES
AND ADOPTION OF NON-FUNDAMENTAL RESTRICTION ON INVESTING IN ILLIQUID
SECURITIES (EUROPEAN FUND AND PACIFIC BASIN FUND ONLY)
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction regarding investing in illiquid securities as follows:
The Fund may not 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.
The Board recommends that shareholders vote to eliminate this restriction.
If the proposal is approved, the Board will adopt the following non-fundamental
restriction for European Fund and Pacific Basin Funds:
The Fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
The primary purpose of the proposal is to conform to the federal
securities law requirements regarding investment in illiquid securities and to
conform the fundamental restrictions of European Fund and Pacific Basin Fund to
those of the other INVESCO Funds. The Funds are currently limited in their
ability to invest in illiquid securities. The Board believes that the proposed
elimination of the fundamental restriction and subsequent adoption of the
non-fundamental restriction will make the restriction more accurately reflect
market conditions and will maximize the Funds' flexibility for future
contingencies. The Board may delegate to INVESCO, the Funds' investment adviser,
the authority to determine whether a security is liquid for the purposes of this
fundamental restriction.
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E. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SHORT SALES AND MARGIN
TRANSACTIONS AND ADOPTION OF NON-FUNDAMENTAL RESTRICTION ON SHORT SALES
AND MARGIN TRANSACTIONS (EUROPEAN FUND AND PACIFIC BASIN FUND ONLY)
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction regarding short sales and margin transactions as follows:
The Fund may not sell short or buy on margin.
The Board recommends that shareholders vote to eliminate this fundamental
restriction. If the proposal is approved by shareholders, the Board will adopt
the following non-fundamental restriction for European Fund and Pacific Basin
Fund:
The Fund may not sell securities short (unless it owns or has the
right to obtain securities equivalent in kind and amount to the
securities sold short) or purchase securities on margin, except that:
(i) this policy does not prevent the Fund from entering into short
positions in foreign currency, futures contracts, options, forward
contracts, swaps, caps, floors, collars and other financial
instruments; (ii) the Fund may obtain such short-term credits as are
necessary for the clearance of transactions; and (iii) the Fund may
make margin payments in connection with futures contracts, options,
forward contracts, swaps, caps, floors, collars and other financial
instruments.
The proposed change clarifies the wording of the restriction and expand
the exceptions to the restriction, which generally prohibits European Fund and
Pacific Basin Fund from selling securities short or buying securities on margin.
The proposed non-fundamental restriction also permits short sales against the
box, in which an investor sells securities short while owning the same
securities in the same amount or having the right to obtain equivalent
securities. It also permits European Fund and Pacific Basin Fund to borrow a
security on a short-term basis and to enter into short positions and make margin
payments in connection with a variety of financial instruments. The Board
believes that elimination of the fundamental restriction and adoption of the
non-fundamental restriction will provide European Fund and Pacific Basin Fund
with greater investment flexibility.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on real estate investments as follows:
The Fund may not 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).
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<PAGE>
Emerging Markets Fund currently has the following fundamental restriction
on real estate investments:
The Fund may not invest directly in real estate or interests in real
estate; however, the Fund may own debt or equity securities issued by
companies engaged in those businesses.
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments (but this
shall not prevent the Fund from investing in securities or other
instruments backed by real estate or securities of companies engaged
in the real estate business).
In addition to conforming each Fund's fundamental restriction on real
estate, the proposal would more completely describe the types of real
estate-related securities investments that are permissible for the Funds and
would permit the Funds to purchase or sell real estate acquired as a result of
ownership of securities or other instruments (E.G., through foreclosure on a
mortgage in which the Funds directly or indirectly hold an interest). The Board
believes that this clarification will make it easier for decisions to be made
concerning the Funds' investments in real estate-related securities without
materially altering the general restriction on direct investments in real estate
or interests in real estate. The proposed change would also give the Funds the
ability to invest in assets secured by real estate.
G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN ANOTHER INVESTMENT
COMPANY
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction regarding investments in other investment companies as follows:
The Fund may not 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 or 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.
Emerging Markets Fund currently has the following fundamental restriction
regarding investments in other investment companies:
The Emerging Markets Fund may, notwithstanding any other investment
policy or limitation (whether or not fundamental), invest all of its
assets in the securities of a single open-end management investment
company with substantially the same fundamental investment
objectives, policies and limitations as the Fund.
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<PAGE>
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by INVESCO Funds
Group, Inc. or an affiliate or a successor thereof, with
substantially the same fundamental investment objectives, policies
and limitations as the Fund.
The proposed revision to each Fund's fundamental restriction would ensure
that the INVESCO Funds have uniform policies permitting each Fund to adopt a
"master/feeder" structure whereby one or more Funds invest all of their assets
in another fund. The master/feeder structure has the potential, under certain
circumstances, to minimize administration costs and maximize the possibility of
gaining a broader investor base. Currently, none of the INVESCO Funds intend to
establish a master/feeder structure; however, the Board recommends that
shareholders approve the proposal, ensuring that this structure will be
available in the event that the Board determines to recommend the adoption of a
master/feeder structure by the Funds. The proposed revision, unlike the current
fundamental restriction, would require that any fund in which the Funds may
invest under a master/feeder structure be advised by INVESCO or an affiliate
thereof.
H. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN COMPANIES FOR THE
PURPOSE OF EXERCISING CONTROL OR MANAGEMENT (EUROPEAN FUND AND PACIFIC
BASIN FUND ONLY)
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction regarding investments in companies for the purpose of exercising
control or management as follows:
The Fund may not invest in any company for the purpose of exercising
control or management.
The Board recommends that shareholders vote to eliminate this fundamental
restriction. There is no legal requirement that a fund have an affirmative
policy on investment for the purpose of management or control if it does NOT
intend to make investments for that purpose. European Fund and Pacific Basin
Fund each have no intention of investing in any company for the purpose of
exercising control or management. By eliminating this restriction, the Board
may, however, be able to authorize a strategy in the future if it concludes that
doing so would be in the best interests of the Funds and their shareholders.
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I. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on underwriting securities as follows:
The Fund may not engage in the underwriting of any securities, except
insofar as the Fund may be deemed an "underwriter" under the 1933 Act
in disposing of a portfolio security.
Emerging Markets Fund currently has the following fundamental restriction
on underwriting securities:
The Fund may not act as an underwriter of securities issued by
others, except to the extent that it may be deemed an underwriter in
connection with the disposition of portfolio securities of the Fund.
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not underwrite securities of other issuers, except
insofar as it may be deemed to be an underwriter under the Securities
Act of 1933, as amended, in connection with the disposition of the
Fund's portfolio securities.
The purpose of the proposal is to eliminate minor differences in the
wording of the Funds' current fundamental restriction on underwriting for
greater uniformity with the fundamental restrictions of the other INVESCO Funds
and to avoid unintended limitations.
J. MODIFICATION OF FUNDAMENTAL RESTRICTION ON LOANS
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on loans as follows:
The Fund may not 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 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 assets (taken at
current value). No more than 10% of a Fund's total assets may be
invested in repurchase agreements maturing in more than seven days.
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Emerging Markets Fund currently has the following fundamental restriction
on loans:
The Fund may not lend any security or make any other loan if, as a
result, more than 10% of its total assets would be lent to other
parties (but this limitation does not apply to purchases of
commercial paper, debt securities or to repurchase agreements.)
The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not lend any security or make any loan if, as a result,
more than 33-1/3% of its total assets would be lent to other parties,
but this limitation does not apply to the purchase of debt securities
or to repurchase agreements.
The primary purposes of the proposal are to eliminate minor differences in
the wording of the INVESCO Funds' current fundamental restrictions on loans to
achieve greater uniformity and to conform the fundamental restrictions to the
requirements of the 1940 Act. For European Fund and Pacific Basin Fund, the
revision would eliminate the restriction on investing in repurchase agreements
maturing in more than seven days. European Fund and Pacific Basin Fund's
investments in such repurchase agreements will be subject to the non-fundamental
restriction on illiquid securities (see proposal 1.d, above). The proposed
changes to European Fund and Pacific Basin Fund's fundamental restriction are
relatively minor and would have no substantive effect on either Fund's lending
activities or other investments.
Emerging Markets Fund's fundamental restriction on loans is significantly
more limiting than is required by the 1940 Act in limiting loans to 10% of the
Fund's assets. The proposal increases Emerging Markets Fund's lending authority
from 10% to 33-1/3% of its total assets. The Board believes that the proposed
change, making the Fund's fundamental restriction on loans no more limiting than
is required by the 1940 Act, will give the Fund greater flexibility to respond
to future contingencies.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON FUND OWNERSHIP OF SECURITIES
ALSO OWNED BY DIRECTORS AND OFFICERS OF EACH FUND OR ITS INVESTMENT
ADVISER (EUROPEAN FUND AND PACIFIC BASIN FUND ONLY)
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction concerning Fund ownership of securities also owned by officers and
directors of each Fund or its investment adviser as follows:
The Fund may not 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.
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<PAGE>
The Board recommends that shareholders vote to eliminate this restriction.
Funds are not legally required to have a fundamental restriction limiting or
prohibiting the purchase of securities of companies that are also owned by
affiliated parties of the fund. This restriction was derived from state laws
that are no longer applicable. The concerns that this restriction was designed
to address are sufficiently safeguarded against by provisions of the 1940 Act
applicable to European Fund and Pacific Basin Fund, as well as by the Funds'
other fundamental restrictions. Specifically, to the extent that this seeks to
limit possible conflicts of interest arising out of transactions with affiliated
parties, the restriction is unnecessary and unduly burdensome because the Funds
are subject to the extensive affiliated transaction provisions of the 1940 Act.
Because this restriction provides no additional protections to shareholders and
may hinder the Board in pursuing investment strategies that may be advantageous
to the Funds, the Board recommends that this investment restriction be
eliminated.
L. MODIFICATION OF FUNDAMENTAL POLICY ON ISSUER DIVERSIFICATION
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on issuer diversification as follows:
The Fund may not 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.
Emerging Markets Fund currently has the following fundamental restriction
on issuer diversification:
The Fund may not, with respect to seventy-five percent (75%) of the
Fund's total assets, purchase the securities of any one issuer
(except cash items and "government securities" as defined under the
1940 Act), if the purchase would cause the Fund to have more than 5%
of the value of its total assets invested in the securities of such
issuer or to own more than 10% of the outstanding voting securities
of such issuer.
The Board recommends that these fundamental restrictions be replaced with
the following fundamental restriction:
The Fund may not, with respect to 75% of the Fund's total assets,
purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies) if,
as a result, (i) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (ii) the Fund would
hold more than 10% of the outstanding voting securities of that
issuer.
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The proposed fundamental restriction concerning diversification is the
limitation imposed by the 1940 Act for diversified investment companies. The
amended fundamental restriction would now allow European Fund and Pacific Basin
Fund, and would continue to allow Emerging Markets Fund, with respect to 25% of
their respective total assets, to invest more than 5% of those assets in the
securities of one or more issuers and to hold more than 10% of the voting
securities of an issuer. European Fund and Pacific Basin Fund would now be
required to invest 75%, instead of 100%, of their respective total assets so
that no more than 5% of total assets are invested in any one issuer, and so that
each Fund will not own more than 10% of the voting securities of an issuer. This
requirement would continue to apply to Emerging Markets Fund.
The amended fundamental restriction would give the European Fund and
Pacific Basin Fund greater investment flexibility by permitting each of them to
acquire larger positions in the securities of a particular issuer, consistent
with its investment objectives and strategies. This increased flexibility could
provide opportunities to enhance each Fund's performance. Investing a large
percentage of a Fund's assets in a single issuer's securities, however,
increases that Fund's exposure to credit and other risks associated with that
issuer's financial condition and operations, including the risk of default on
debt securities.
The amended fundamental restriction also would permit each of the Funds to
invest without limit in the securities of other investment companies. The Funds
have no current intention of doing so, and the 1940 Act imposes restrictions on
the extent to which a fund may invest in the securities of other investment
companies. The revision would, however, give the Funds flexibility to invest in
other investment companies in the event legal and other regulatory requirements
change.
M. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INDUSTRY CONCENTRATION AND
ADOPTION OF NON-FUNDAMENTAL INTERPRETATION ON CLASSIFICATION OF FOREIGN
GOVERNMENTS FOR CONCENTRATION PURPOSES
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction on industry concentration as follows:
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 in the securities of issuers in any one
industry.
Emerging Markets Fund currently has the following fundamental restriction
on industry concentration:
The Fund may not invest more than 25% of the value of its total
assets in any particular industry (other than government securities).
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The Board recommends that shareholders vote to replace these fundamental
restrictions with the following fundamental restriction:
The Fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities or municipal securities) if, as a
result, more than 25% of the Fund's total assets would be invested in
securities of companies whose principal business activities are in
the same industry.
If the proposal is approved, the Board will adopt the following
non-fundamental interpretation:
With respect to fundamental restriction ((12) for European Fund and
Pacific Basin Fund and (7) for Emerging Markets Fund), 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.
The primary purpose of the modification is to eliminate minor differences
in the wording of the INVESCO Funds' current fundamental restrictions on
industry concentration for greater uniformity and to avoid unintended
limitations without materially altering the restriction. The proposed
fundamental restriction on concentration excludes municipal securities and
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities from the concentration limitation. The current fundamental
restriction on concentration for European Fund and Pacific Basin Fund contains
no such exclusion, and the Emerging Markets Fund's current fundamental
restriction on concentration excludes only "government securities." A failure to
exclude securities issued of U.S. government agencies and instrumentalities and
municipal securities from the fundamental restriction on concentration could
hinder each Fund's ability to purchase such securities in conjunction with
taking temporary defensive positions.
N. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN NEWLY FORMED
ISSUERS (EUROPEAN FUND AND PACIFIC BASIN FUND ONLY)
Each of European Fund and Pacific Basin Fund currently has a fundamental
restriction against investing in newly formed issuers as follows:
The Fund may not invest more than 5% of its total assets in an issuer
having a record, together with predecessors, of less than three
years' continuous operation.
The Board recommends the elimination of this fundamental restriction. This
restriction is derived from a state "blue sky" requirement that has been
pre-empted by recent amendments of the federal securities laws. Companies with
less than three years of continuous operation are typically referred to as newly
formed issuers or "unseasoned issuers." Because newly formed companies have no
proven track record in business, their prospects may be uncertain. Their
securities may fluctuate in price more unduly than securities of established
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companies. The Board believes that elimination of this fundamental restriction
will provide European Fund and Pacific Basin Fund with greater investment
flexibility. If this proposal is approved, Funds will be able to invest in the
securities of newly formed issuers, in accordance with their investment
objectives, policies and restrictions.
REQUIRED VOTE. Approval of Proposal 2 with respect to a Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, which for this purpose means the affirmative vote of the lesser of: (1)
67% or more of the shares of that Fund present at the Meeting or represented by
proxy if more than 50% of the outstanding shares of that Fund are so present or
represented; or (2) more than 50% of the outstanding shares of that Fund.
SHAREHOLDERS WHO VOTE "FOR" PROPOSAL 2 WILL VOTE "FOR" EACH PROPOSED CHANGE
DESCRIBED ABOVE. THOSE SHAREHOLDERS WHO WISH TO VOTE AGAINST ANY OF THE SPECIFIC
PROPOSED CHANGES DESCRIBED ABOVE MAY DO SO ON THE PROXY PROVIDED. ONLY THOSE
SPECIFIC PROPOSED CHANGES APPROVED BY THE REQUIRED VOTE WILL BECOME EFFECTIVE.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 2.
----------------
PROPOSAL 3: TO ELECT THE DIRECTORS OF INTERNATIONAL FUNDS
The Board has nominated the individuals identified below for election to
the Board at the Meeting. International Funds currently has ten directors.
Vacancies on the Board are generally filled by appointment by the remaining
directors. However, the 1940 Act provides that vacancies may not be filled by
directors unless thereafter at least two-thirds of the directors shall have been
elected by shareholders. To ensure continued compliance with this rule without
incurring the expense of calling additional shareholder meetings, shareholders
are being asked at this Meeting to elect the current ten directors to hold
office until the next meeting of shareholders. Consistent with the by-laws of
International Funds, and as permitted by Maryland law, International Funds does
not anticipate holding annual shareholder meetings. Thus, the directors will be
elected for indefinite terms, subject to termination or resignation. Each
nominee has indicated a willingness to serve if elected. If any of the nominees
should not be available for election, the persons named as proxies (or their
substitutes) may vote for other persons in their discretion. Management has no
reason to believe that any nominee will be unavailable for election.
All of the Independent Directors (I.E., directors who are not "interested
persons" of International Funds, as such term is defined in the 1940 Act) now
being proposed for election were nominated and selected by Independent
Directors. Eight of the ten current directors are Independent Directors.
The persons named as attorneys-in-fact in the enclosed proxy have advised
International Funds that unless a proxy instructs them to withhold authority to
21
<PAGE>
vote for all listed nominees or for any individual nominee, they will vote all
validly executed proxies for the election of the nominees named below.
The nominees for director, their ages, a description of their principal
occupations, the number of International Funds' shares owned by each, and their
respective memberships on Board committees are listed in the table below.
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL
FUNDS'
DIRECTOR OR SHARES OWNED
NAME, POSITION PRINCIPAL OCCUPATION AND EXECUTIVE DIRECTLY OR
WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY MEMBER
INTERNATIONAL (DURING THE PAST FIVE INTERNATIONAL ON DEC. 31, OF
FUNDS, AND AGE YEARS) FUNDS SINCE 1998 (1) COMMITTEES
- -------------- ------------------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
CHARLES W. Chief Executive Officer 1993 0 (3), (5), (6)
BRADY, CHAIRMAN and Director of AMVESCAP
OF THE BOARD, PLC, London, England, and
AGE 63* of various subsidiaries
thereof. Chairman of the
Board of INVESCO Global
Health Sciences Fund.
FRED A. Trustee of INVESCO Global 1993 65.865 (2), (3), (5)
DEERING, VICE Health Sciences Fund.
CHAIRMAN OF THE Formerly, Chairman of the
BOARD, AGE 70 Executive Committee and
Chairman of the Board of
Security Life of Denver
Insurance Company,
Denver, Colorado;
Director of ING American
Holdings Company and
First ING Life Insurance
Company of New York.
MARK H. President, Chief 1998 0 (3), (5)
WILLIAMSON, Executive Officer, and
PRESIDENT, Director, INVESCO
CHIEF EXECUTIVE Distributors Inc.;
OFFICER, AND President, Chief
DIRECTOR, AGE Executive Officer, and
47* Director, INVESCO;
President, Chief
Operating Officer, and
Trustee, INVESCO Global
Health Sciences Fund.
Formerly, Chairman of the
Board and Chief Executive
Officer, NationsBanc
Advisors, Inc.
(1995-1997); Chairman of
the Board, NationsBanc
Investments, Inc.
(1997-1998).
22
<PAGE>
NUMBER OF
INTERNATIONAL
FUNDS'
DIRECTOR OR SHARES OWNED
NAME, POSITION PRINCIPAL OCCUPATION AND EXECUTIVE DIRECTLY OR
WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY MEMBER
INTERNATIONAL (DURING THE PAST FIVE INTERNATIONAL ON DEC. 31, OF
FUNDS, AND AGE YEARS) FUNDS SINCE 1998 (1) COMMITTEES
- -------------- ------------------------ ------------- ----------- ----------
DR. VICTOR L. Professor Emeritus, 1993 65.865 (4), (6), (8)
ANDREWS, Chairman Emeritus and
DIRECTOR, AGE Chairman of the CFO
68 Roundtable of the
Department of Finance at
Georgia State University,
Atlanta, Georgia and
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 Sheffield
Funds, Inc.
BOB R. BAKER, President and Chief 1993 65.865 (3), (4), (5)
DIRECTOR, AGE Executive Officer of AMC
62 Cancer Research Center,
Denver, Colorado, since
January 1989; until
December 1988, Vice
Chairman of the Board,
First Columbia Financial
Corporation, Englewood,
Colorado. Formerly,
Chairman of the Board and
Chief Executive Officer
of First Columbia
Financial Corporation.
LAWRENCE H. Trust Consultant; Prior 1993 65.865 (2), (6), (7)
BUDNER, to June 1987, Senior Vice
DIRECTOR, AGE President and Senior
68 Trust Officer, InterFirst
Bank, Dallas, Texas.
23
<PAGE>
NUMBER OF
INTERNATIONAL
FUNDS'
DIRECTOR OR SHARES OWNED
NAME, POSITION PRINCIPAL OCCUPATION AND EXECUTIVE DIRECTLY OR
WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY MEMBER
INTERNATIONAL (DURING THE PAST FIVE INTERNATIONAL ON DEC. 31, OF
FUNDS, AND AGE YEARS) FUNDS SINCE 1998 (1) COMMITTEES
- -------------- ------------------------- ------------- ---------- ----------
DR. WENDY LEE Self-employed (since 1997 65.865 (4), (8)
GRAMM, 1993). Professor of
DIRECTOR, Economics and Public
Age 53 Administration,
University of Texas at
Arlington. Formerly,
Chairman, Commodities
Futures Trading
Commission (1988-1993);
Administrator for
Information and
Regulatory Affairs,
Office of Management and
Budget (1985-1988);
Executive Director,
Presidential Task Force
on Regulatory Relief;
Director, Federal Trade
Commission Bureau of
Economics. Director of
the Chicago Mercantile
Exchange, Enron
Corporation, IBP, Inc.,
State Farm Insurance
Company, Independent
Women's Forum,
International Republic
Institute, and the
Republican Women's
Federal Forum.
KENNETH T. Presently retired. 1993 65.865 (2), (3), (5), (6), (7)
KING, DIRECTOR, Formerly, Chairman of the
AGE 73 Board of The Capitol Life
Insurance Company,
Providence Washington
Insurance Company, and
Director of numerous U.S.
subsidiaries thereof.
Formerly, Chairman of the
Board of the Providence
Capitol Companies in the
United Kingdom and
Guernsey. Until 1987,
Chairman of the Board of
Symbion Corporation.
24
<PAGE>
NUMBER OF
INTERNATIONAL
FUNDS'
DIRECTOR OR SHARES OWNED
NAME, POSITION PRINCIPAL OCCUPATION AND EXECUTIVE DIRECTLY OR
WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY MEMBER
INTERNATIONAL (DURING THE PAST FIVE INTERNATIONAL ON DEC. 31, OF
FUNDS, AND AGE YEARS) FUNDS SINCE 1998 (1) COMMITTEES
- -------------- ------------------------- ------------- ----------- ----------
JOHN W. Presently retired. 1995 65.865 (2), (3), (5), (7)
MCINTYRE, Formerly, Vice Chairman
DIRECTOR, AGE of the Board of The
68 Citizens and Southern
Corporation; Chairman of
the Board and Chief
Executive Officer of The
Citizens and Southern
Georgia Corporation;
Chairman of the Board and
Chief Executive Officer
of The Citizens and
Southern National Bank.
Trustee of INVESCO Global
Health Sciences Fund,
Gables Residential Trust,
Employee's Retirement
System of Georgia, Emory
University, and the J.M.
Tull Charitable
Foundation. Director of
Kaiser Foundation Health
Plans of Georgia, Inc.
DR. LARRY SOLL, Presently retired. 1997 65.865 (4), (8)
DIRECTOR, AGE Formerly, Chairman of the
56 Board (1987-1994), Chief
Executive Officer
(1982-1989 and 1993-1994)
and President (1982-1989)
of Synergen, Inc.
Director of Synergen,
Inc. since incorporation
in 1982. Director of Isis
Pharmaceuticals, Inc.
Trustee of INVESCO Global
Health Sciences Fund.
</TABLE>
25
<PAGE>
*Because of his affiliation with INVESCO, with the Funds' investment adviser, or
with companies affiliated with INVESCO, this individual is deemed to be an
"interested person" of International Funds as that term is defined in the 1940
Act.
(1) = As interpreted by the SEC, a security is beneficially owned by a person if
that person has or shares voting power or investment power with respect to that
security. The persons listed have partial or complete voting and investment
power with respect to their respective Fund shares.
(2) = Member of the Audit Committee
(3) = Member of the Executive Committee
(4) = Member of the Management Liaison Committee
(5) = Member of the Valuation Committee
(6) = Member of the Compensation Committee
(7) = Member of the Soft Dollar Brokerage Committee
(8) = Member of the Derivatives Committee
The Board has audit, management liaison, soft dollar brokerage, and
derivatives committees consisting of Independent Directors, and compensation,
executive, and valuation committees consisting of Independent Directors and
non-independent directors. The Board does not have a nominating committee. The
audit committee, consisting of four Independent Directors, meets quarterly with
the independent accountants and executive officers of International Funds. This
committee reviews the accounting principles being applied by International Funds
in financial reporting, the scope and adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters. All
of the recommendations of the audit committee are reported to the full Board.
During the intervals between the meetings of the Board, the executive committee
may exercise all powers and authority of the Board in the management of the
business of International Funds, except for certain powers which, under
applicable law and/or the by-laws of International Funds, may only be exercised
by the full Board. All decisions by the executive committee are subsequently
submitted for ratification by the Board. The management liaison committee meets
quarterly with various management personnel of INVESCO in order to facilitate
better understanding of management and operations of International Funds, and to
review legal and operational matters that have been assigned to the committee by
the Board, in furtherance of the Board's overall duty of supervision. The soft
dollar brokerage committee meets periodically to review soft dollar transactions
by International Funds, and to review policies and procedures of International
Funds' adviser with respect to soft dollar brokerage transactions. The committee
then reports on these matters to the Board. The derivatives committee meets
periodically to review derivatives investments made by International Funds. The
committee monitors derivatives usage by International Funds and the procedures
utilized by International Funds' adviser to ensure that the use of such
instruments follows the policies on such instruments adopted by the Board. The
committee then reports on these matters to the Board.
During the past fiscal year, the Board met four times, the audit committee
met four times, the compensation committee met once, the management liaison
committee met four times, the soft dollar brokerage committee met twice, and the
derivatives committee met once. The executive committee did not meet. During the
last fiscal year of International Funds, each Director attended 75% or more of
the Board meetings and meetings of the committees of the Board on which he or
she served.
26
<PAGE>
The Independent Directors nominate individuals to serve as Independent
Directors, without any specific nominating committee. The Board ordinarily will
not consider unsolicited director nominations recommended by the Funds'
shareholders. The Board, including its Independent Directors, unanimously
approved the nomination of the foregoing persons to serve as directors and
directed that the election of these nominees be submitted to International
Funds' shareholders.
The following table sets forth information relating to the compensation
paid to directors during the last fiscal year:
COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY INTERNATIONAL FUNDS TO DIRECTORS
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS FROM
AGGREGATE ACCRUED AS INTERNATIONAL
COMPENSATION PART OF ESTIMATED FUNDS AND
FROM INTERNATIONAL ANNUAL INVESCO FUNDS
NAME OF PERSON, INTERNATIONAL FUNDS BENEFITS UPON PAID TO
POSITION FUNDS EXPENSES(2) RETIREMENT(3) DIRECTORS(1)
- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FRED A. DEERING, $4,395 $1,355 $870 $103,700
VICE CHAIRMAN OF
THE BOARD AND
DIRECTOR
DR. VICTOR L. $4,306 $1,281 $1,107 $80,350
ANDREWS, DIRECTOR
BOB R. BAKER, $4,421 $1,143 $1,349 $84,000
DIRECTOR
LAWRENCE H. $4,240 $1,281 $1,007 $79,350
BUDNER, DIRECTOR
DANIEL D. $4,330 $1,384 $751 $70,000
CHABRIS4, DIRECTOR
DR. WENDY L. $4,163 $0 $0 $79,000
GRAMM, DIRECTOR
KENNETH T. KING, $4,151 $1,407 $789 $77,050
DIRECTOR
JOHN W. MCINTYRE, $4,198 $0 $0 $98,500
DIRECTOR
DR. LARRY SOLL, $4,198 $0 $0 $96,000
DIRECTOR
-----------------------------------------------------------------
TOTAL $38,402 $7,851 $5,773 $767,950
- -----
AS A PERCENTAGE 0.0050%(5) 0.0010%(5) 0.0035%(6)
- ----------------
OF NET ASSETS
</TABLE>
27
<PAGE>
(1) The Vice Chairman of the Board, the chairmen of the audit, management
liaison, derivatives, soft dollar brokerage, and compensation committees, and
the Independent Director members of the committees of International Funds
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 Funds' share of the estimated annual benefits
payable by the INVESCO Complex (excluding INVESCO Global Health Sciences Fund
which does not participate in this retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the INVESCO Funds. 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 farther from retirement. With the
exception of Mr. McIntyre and Drs. Soll and Gramm, each of these directors has
served as director of one or more of the INVESCO Funds for the minimum five-year
period required to be eligible to participate in the Defined Benefit Deferred
Compensation Plan.
(4) Mr. Chabris retired as a director effective September 30, 1998.
(5) Total as a percentage of the Funds' net assets as of December 31, 1998.
(6) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1998.
International Funds pays its Independent Directors, Board vice chairman,
committee chairmen and committee members the fees described above. International
Funds also reimburses its Independent Directors for travel expenses incurred in
attending meetings. Charles W. Brady, Chairman of the Board, and Mark H.
Williamson, President, Chief Executive Officer, and Director, as "interested
persons" of International Funds and of other INVESCO Funds, receive compensation
and are reimbursed for travel expenses incurred in attending meetings as
officers or employees of INVESCO or its affiliated companies, but do not receive
any director's fees or other compensation from International Funds or other
INVESCO Funds for their services as directors.
The overall direction and supervision of International Funds is the
responsibility of the Board, which has the primary duty of ensuring that
International Funds' general investment policies and programs are adhered to and
that International Funds is properly administered. The officers of International
Funds, all of whom are officers and employees of and paid by INVESCO, are
responsible for the day-to-day administration of International Funds. The
investment adviser for International Funds has the primary responsibility for
making investment decisions on behalf of International Funds. These investment
decisions are reviewed by the investment committee of INVESCO.
28
<PAGE>
All of the officers and directors of International Funds hold comparable
positions with the following INVESCO Funds: INVESCO Bond Funds, Inc. (formerly,
INVESCO Income Funds, Inc.), INVESCO Combination Stock & Bond Funds, Inc.
(formerly, INVESCO Flexible Funds, Inc. and INVESCO Multiple Asset Funds, Inc.),
INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc.,
INVESCO Growth Funds, Inc., (formerly INVESCO Growth Fund, Inc.), INVESCO
Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO Sector
Funds, Inc. (formerly, INVESCO Strategic Funds, Inc.), INVESCO Specialty Funds,
Inc., INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc. and
INVESCO Capital Appreciation Funds, Inc.), INVESCO Tax-Free Income Funds, Inc.,
INVESCO Variable Investment Funds, Inc., INVESCO Value Trust, and INVESCO
Treasurer's Series Trust.
The Boards of the Funds managed by INVESCO have adopted a Defined Benefit
Deferred Compensation Plan (the "Plan") for the non-interested directors and
trustees of the Funds. Under the Plan, each director or trustee who is not an
interested person of the Funds (as defined in Section 2(a)(19) of the 1940 Act)
and who has served for at least five years (a "Qualified Director") is entitled
to receive, upon termination of service as director (normally at retirement age
of 72 or the retirement age of 73 or 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 and annualized board meeting fees payable by the Funds to the Qualified
Directors at the time of his or her retirement (the "Basic Benefit"). Commencing
with any such director's second year of retirement, and commencing with the
first year of retirement of any 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 50% of the Basic Benefit. These payments will
continue for the remainder of the Qualified Director's life or ten years,
whichever is longer (the "Reduced Benefit 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 Reduced Benefit Payments
will be made to him or her or to his or her beneficiary or estate. If a
Qualified Director becomes disabled or dies either prior to age 72 or during his
or her 74th year while still a director of the Funds, the director will not be
entitled to receive the First Year Retirement Benefit; however, the Reduced
Benefit Payments will be made to his or her 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 Funds in a manner determined to be fair and
equitable by the committee. The Funds began making payments to Mr. Chabris as of
October 1, 1998 under the Plan. International Funds 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 Independent Directors have contributed to a deferred compensation
plan, pursuant to which they have deferred receipt of a portion of the
compensation which they would otherwise have been paid as directors of certain
of the INVESCO Funds. The deferred amounts have been invested in shares of
certain INVESCO Funds. Each Independent Director is, therefore, an indirect
owner of shares of each such INVESCO Fund, in addition to any Fund shares that
may be owned directly.
29
<PAGE>
REQUIRED VOTE. Election of each nominee as a director of International
Funds requires the vote of a plurality of the votes of International Funds cast
at the Meeting in person or by proxy.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE NOMINEES IN PROPOSAL 3.
----------------
PROPOSAL 4. RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of International Funds, including all of its Independent
Directors, has selected PricewaterhouseCoopers LLP to continue to serve as
independent accountants of each Fund, subject to ratification by each Fund's
shareholders. PricewaterhouseCoopers LLP has no direct financial interest or
material indirect financial interest in any of the Funds. Representatives of
PricewaterhouseCoopers LLP are not expected to attend the Meeting, but have been
given the opportunity to make a statement if they so desire, and will be
available should any matter arise requiring their presence.
The independent accountants examine annual financial statements for the
Funds and provide other audit and tax-related services. In recommending the
selection of PricewaterhouseCoopers LLP, the Board reviewed the nature and scope
of the services to be provided (including non-audit services) and whether the
performance of such services would affect the accountants' independence.
REQUIRED VOTE. Ratification of the selection of PriceWaterhouseCoopers LLP
as independent accountants with respect to a Fund requires the vote of a
majority of the votes of that Fund present at the Meeting, provided a quorum is
present with respect to that Fund.
THE BOARD UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 4.
----------------
INFORMATION CONCERNING ADVISER, SUB-ADVISER,
DISTRIBUTOR AND AFFILIATED COMPANIES
INVESCO, a Delaware corporation, serves as each Fund's investment adviser,
and provides other services to each Fund and to International Funds. IDI, a
Delaware corporation, serves as each Fund's distributor. INVESCO Asset
Management Limited ("IAML") serves as investment sub-adviser to European Fund
and Pacific Basin Fund. INVESCO Global Asset Management ("IGAM") serves as
investment sub-adviser to International Blue Chip Fund. INVESCO is a wholly
owned subsidiary of INVESCO North American Holdings, Inc. ("INAH"). INAH is an
indirect wholly owned subsidiary of AMVESCAP PLC.(1)
- --------
(1) The intermediary companies between INAH and AMVESCAP PLC are as follows:
INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North American Group,
Ltd., each of which is wholly owned by its immediate parent.
30
<PAGE>
The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England. INVESCO's and IDI's offices are located at
7800 East Union Avenue, Denver, Colorado 80237. IAML's offices are located at 11
Devonshire Square, London, EC2M 4YR, England. IGAM's offices are located at 1355
Peachtree Street, N.E., Atlanta, Georgia 30309. INAH's offices are located at
1315 Peachtree Street, N.E., Atlanta, Georgia 30309. INVESCO currently serves as
investment adviser of 14 open-end investment companies having approximate
aggregate net assets in excess of $21.1 billion, as of December 31, 1998.
The principal executive officers and directors of INVESCO and their
principal occupations are:
Mark H. Williamson, Chairman of the Board, President, Chief Executive
Officer and Director, also, President and Chief Executive Officer of IDI;
Charles Mayer, Senior Vice President and Director, also, Senior Vice President
and Director of IDI; Ronald L. Grooms, Senior Vice President and Treasurer, also
Senior Vice President and Treasurer of IDI; and Glen A. Payne, Senior Vice
President, Secretary and General Counsel, also Senior Vice President, Secretary
and General Counsel of IDI.
The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237.
INVESCO, as investment adviser, has contracted with IAML, as investment
sub-adviser, to provide portfolio investment advisory services to European Fund
and Pacific Basin Fund. IAML also acts as sub-adviser to INVESCO Emerging
Markets Fund, INVESCO European Small Company Fund, INVESCO International Growth
Fund, and INVESCO Latin American Growth Fund. The principal executive officers
and directors of IAML and their principal occupations are:
Tristan Hillgarth, Chief Executive Officer; Dennis Elliot, Director;
Jeremy Lambourne, Director; Dallas McGillivray, Director; Anthony Myers,
Director; Graeme Proudfoot, Director; Riccardo Ricciardi, Director; Martin
Trowell, Director; Hugh Ward, Director; Roger Yates, Director; Michael Perman,
Secretary; and Robert Cachett, Secretary.
The address of each of the foregoing officers and directors is 11
Devonshire Square, London, EC2M 4YR, England.
INVESCO, as investment adviser, has contracted with IGAM, as investment
sub-adviser, to provide portfolio investment advisory services to International
Blue Chip Fund. IGAM also acts as sub-adviser to I.R.T. International Equity
Fund, I.R.T. International Bond Fund, I.R.T. Lifestyle Aggressive Fund, I.R.T.
Lifestyle Moderate Fund, and I.R.T. Lifestyle Conservative Fund. The principal
executive officers and directors of IGAM and their principal occupations are:
31
<PAGE>
The Hon. Michael Benson, Chairman and Director; John D. Rogers, President,
Chief Executive Officer and Director; Wendell M. Starke, Director; Stephen A.
Dana, Director; Luis Aguilar, Vice President, Secretary, General Counsel and
Director; William L. Davidson, Vice President; Erik B. Granade, Vice President;
Kirk F. Holland, Vice President; and Deborah Lamb, Assistant Secretary.
The address of each of the foregoing officers and directors is 1355
Peachtree Street, N.E., Atlanta, Georgia 30309.
Pursuant to an Administrative Services Agreement between International
Funds and INVESCO, INVESCO provides administrative services to International
Funds, including sub-accounting and recordkeeping services and functions. During
the fiscal year ended October 31, 1998, International Funds paid INVESCO, which
also serves as International Funds' registrar, transfer agent and dividend
disbursing agent, total compensation of $2,087,461 for such services.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.
SHAREHOLDER PROPOSALS
International Funds does not hold annual meetings of shareholders.
Shareholders wishing to submit proposals for inclusion in a proxy statement and
form of proxy for a subsequent shareholders' meeting should send their written
proposals to the Secretary of International Funds, 7800 East Union Avenue,
Denver, Colorado 80237. International Funds has not received any shareholder
proposals to be presented at this Meeting.
By Order of the Board of Directors,
Glen A. Payne
Secretary
INVESCO International Funds, Inc.
March 23, 1999
32
<PAGE>
APPENDIX A
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of each Fund's
outstanding equity securities as of March 12, 1999 by each beneficial owner of
5% or more of a Fund's outstanding equity securities.
BENEFICIAL OWNERS OF 5% OR MORE OF EMERGING MARKETS FUND
Name and Address Amount of Ownership Percent
- ---------------- ------------------- -------
INVESCO Funds Group, Inc. [XXXXXXXX] [22.19%]
Attn: Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706
Charles Schwab & Co., Inc. [XXXXXXXX] [6.91%]
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
BENEFICIAL OWNERS OF 5% OR MORE OF EUROPEAN FUND
Name and Address Amount of Ownership Percent
- ---------------- ------------------- -------
Charles Schwab & Co., Inc. [XXXXXXXX] [32.99%]
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
National Financial Services Corp. [XXXXXXXX] [8.56%]
The Exclusive Benefit of Customers
Attn: Kate- Recon
One World Financial Center
200 Liberty Street, 5th Floor
New York, NY 10281-1003
A-1
<PAGE>
BENEFICIAL OWNERS OF 5% OR MORE OF PACIFIC BASIN FUND
Name and Address Amount of Ownership Percent
- ---------------- ------------------- -------
Charles Schwab & Co., Inc. [XXXXXXXX] [35.81%]
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA94104-4122
BENEFICIAL OWNERS OF 5% OR MORE OF INTERNATIONAL BLUE CHIP FUND
Name and Address Amount of Ownership Percent
- ---------------- ------------------- -------
Charles Schwab & Co., Inc. [XXXXXXXX] [42.80%]
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
A-2
<PAGE>
APPENDIX B
PLAN OF LIQUIDATION AND TERMINATION
INVESCO EMERGING MARKETS FUND
THIS PLAN OF LIQUIDATION AND TERMINATION ("Plan") is made by INVESCO
International Funds, Inc., a Maryland open-end investment company
("Corporation"), with respect to INVESCO Emerging Markets Fund, a segregated
portfolio of assets ("series") thereof ("Fund").
WHEREAS, the Corporation's board of directors ("Board") has determined
that liquidation and termination of the Fund is in the best interests of the
Corporation and the Fund and accordingly has adopted this Plan;
WHEREAS, Article III, Section 4, of the Corporation's Articles of
Incorporation provides that the Board may redeem shares of any series of stock
from its shareholders; and
WHEREAS, pursuant to Article III, Section 3(f), of the Corporation's
Articles of Incorporation, liquidation of the Fund as a series of the
Corporation requires the affirmative vote of the lesser of (1) 67% of the Fund's
shares present at a meeting of its shareholders if the holders of more than 50%
of its outstanding shares are present in person or by proxy or (2) more than 50%
of the Fund's outstanding shares ("Required Vote").
NOW THEREFORE, this Plan shall be effective upon receipt of the Required
Vote.
Article I. Actions to Be Taken Prior to Liquidation
----------------------------------------
(a) As directed by the Board, the Fund shall proceed with the business of
winding up its affairs.
(b) The Board shall authorize the appropriate parties to wind up the
Fund's affairs, and all the powers of the Corporation's directors under its
Articles of Incorporation and by-laws shall continue with respect to the Fund
until its affairs have been wound up, including the powers to (i) fulfill or
discharge the Fund's contracts, (ii) collect the Fund's assets, (iii) sell,
convey, assign, exchange, transfer, or otherwise dispose of all or any part of
the remaining property of the Fund to one or more persons at public or private
sale for consideration that may consist in whole or in part of cash, securities,
or other property of any kind, (iv) discharge or pay the Fund's liabilities, (v)
prosecute, settle, or compromise claims of the Fund or to which the Fund is
subject, (vi) file final state and federal tax returns for the Fund, (vii) mail
notice to all known creditors and employees, if any, of the Fund, at their
respective addresses shown on the Fund's records, and (viii) do all other acts
necessary or appropriate to wind up the Fund's business.
(c) As directed by the Board, the Corporation shall make one or two
liquidating distributions to the Fund's shareholders of record as of the date of
the Required Vote (individually a "Shareholder" and collectively "Shareholders")
in cancellation and redemption of their Fund shares. The amount of each
liquidating distribution to each Shareholder shall be in proportion to the
number of Fund shares held thereby.
<PAGE>
Article II. Filings with the State of Maryland
----------------------------------
(a) The Board shall authorize the appropriate parties to file for and
obtain (i) a tax clearance certificate from the Comptroller of the Treasury of
Maryland or the collector of taxes stating that all taxes payable by the Fund
have been paid or provided for and (ii) if the Fund has employees, a certificate
from the Secretary of Economic and Employment Development of Maryland stating
that all unemployment insurance contribution, reimbursement payments, and
interest have been paid or provided for.
(b) Upon cancellation of the Fund shares, the Board shall authorize the
appropriate parties to file Articles Supplementary with the Maryland Department
of Assessments and Taxation to eliminate the total number of shares of stock
allocated to the Fund and decrease, by an identical amount, the aggregate number
of shares of stock the Corporation has authority to issue.
Article III. Liquidation Procedures
----------------------
(a) The Board shall authorize all actions to be taken such that the Fund
will apply its assets to the payment of all its existing debts and obligations,
including necessary expenses of redeeming and canceling the Fund shares.
(b) On the date of the Required Vote, the interest of each Shareholder
shall be fixed and the books of the Funds shall be closed.
(c) As soon as reasonably practicable after (1) the Required Vote, (2)
paying or adequately providing for the payment of all Fund liabilities, and (3)
receipt of such releases, indemnities, and refunding agreements as the Board
deems necessary for its protection, the Board shall cause the remaining assets
of the Fund to be distributed in one or two (if necessary) distributions of cash
payments, with each Shareholder receiving his, her, or its proportionate share
of each payment, in cancellation and redemption of his, her, or its Fund shares.
(d) If the Board is unable to make distributions to all the Shareholders
because of the inability to locate Shareholders to whom distributions in
cancellation and redemption of Fund shares are payable, the Board may create, in
the name and on behalf of the Fund, a trust with a financial institution and,
subject to applicable abandoned property laws, deposit any remaining assets of
the Fund in such trust for the benefit of the Shareholders that cannot be
located. The expenses of such trust shall be charged against the assets therein.
Article IV. Amendment of this Plan
----------------------
The Board may authorize variations from, or amendments of, the provisions
of this Plan (other than the terms of the liquidating distributions) that it
deems necessary or appropriate to effect the distributions in cancellation and
redemption of the Fund shares and the liquidation and termination of the Fund's
existence.
B-2
<PAGE>
Article V. Expenses
--------
The Fund shall bear 50% of all the expenses incurred in connection with
carrying out this Plan, including the cost of soliciting proxies, liquidating
its assets, and terminating its existence, and the remaining 50% will be borne
by INVESCO Funds Group, Inc.
B-3
<PAGE>
[Name and Address]
INVESCO EMERGING MARKETS FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO International Funds, Inc. ("International Funds") and relates to the
proposals with respect to International Funds and to INVESCO Emerging Markets
Fund ("Emerging Markets Fund"), a series of International Funds. The undersigned
hereby appoints as proxies [ ] and [ ], and each of them (with power of
substitution), to vote all shares of common stock of the undersigned in Emerging
Markets Fund at the Special Meeting of Shareholders to be held at 10:00 a.m.,
Mountain Standard Time, on May 20, 1999, at the offices of International Funds,
7800 E. Union Avenue, Denver, Colorado 80237, and any adjournment thereof
("Meeting"), with all the power the undersigned would have if personally
present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to International Funds and to Emerging Markets Fund
with discretionary power to vote upon such other business as may properly come
before the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[XXX] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO EMERGING MARKETS FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
<TABLE>
<CAPTION>
VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
<S> <C> <C> <C> <C> <C>
3. Election of International Funds' / / / / / / To withhold authority
Board of Directors: (1) Charles to vote for any
W. Brady; (2) Fred A. Deering; individual nominee(s),
(3) Mark H. Williamson; mark "For All Except"
(4) Dr. Victor L. Andrews; (5) and write the nominee's
Bob R. Baker; (6) Lawrence H. number on the line
Budner; (7) Dr. Wendy Lee below.
(8) Kenneth T. King; (9) John
McIntyre; and (10) Dr. Larry -----------------------
</TABLE>
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of a Plan of Liquidation and Termination; / / / / / /
2. Approval of changes to the fundamental investment / / / / / /
restrictions;
/ / To vote against the proposed changes to one or
more of the specific fundamental investment
restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT left and indicate the number(s)
(as set forth in the proxy statement) of the
investment restriction or restrictions you do not
want to change on the line below.
_________________________________________________
4. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as Emerging Market
Fund's Independent Public Accountants;
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person
- ----------------------------------------------- ------------------------------
Signature Date
- ----------------------------------------------- ------------------------------
Signature (Joint Owners) Date
<PAGE>
[Name and Address]
INVESCO EUROPEAN FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO International Funds, Inc. ("International Funds") and relates to the
proposals with respect to International Funds and to INVESCO European Fund
("European Fund"), a series of International Funds. The undersigned hereby
appoints as proxies [ ] and [ ], and each of them (with power of substitution),
to vote all shares of common stock of the undersigned in European Fund at the
Special Meeting of Shareholders to be held at 10:00 a.m., Mountain Standard
Time, on May 20, 1999, at the offices of International Funds, 7800 E. Union
Avenue, Denver, Colorado 80237, and any adjournment thereof ("Meeting"), with
all the power the undersigned would have if personally present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to International Funds and to European Fund with
discretionary power to vote upon such other business as may properly come before
the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[XXX] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO EUROPEAN FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
<TABLE>
<CAPTION>
FOR WITHHOLD FOR ALL
VOTE ON DIRECTORS ALL ALL EXCEPT
<S> <C> <C> <C> <C> <C>
2. Election of International Funds'
Board of Directors: (1) Charles / / / / / / To withhold authority
W. Brady; (2) Fred A. Deering; to vote for any
(3) Mark H. Williamson; (4) Dr. individual nominee(s),
Victor L. Andrews; (5) Bob R. mark "For All Except"
Baker; (6) Lawrence H. Budner; and write the nominee's
(7) Dr. Wendy Lee Gramm; (8) number on the line
Kenneth T. King; (9) John W. below.
McIntyre; and (10) Dr. Larry
Soll. -----------------------
</TABLE>
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of changes to the fundamental investment / / / / / /
restrictions;
/ / To vote against the proposed changes to one or
more of the specific fundamental investment
restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT left and indicate the number(s)
(as set forth in the proxy statement) of the
investment restriction or restrictions you do not
want to change on the line below.
_________________________________________________
3. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as European Fund's
Independent Public Accountants;
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person
- ----------------------------------------------- ------------------------------
Signature Date
- ----------------------------------------------- ------------------------------
Signature (Joint Owners) Date
<PAGE>
[Name and Address]
INVESCO PACIFIC BASIN FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO International Funds, Inc. ("International Funds") and relates to the
proposals with respect to International Funds and to INVESCO Pacific Basin Fund
("Pacific Basin Fund"), a series of International Funds. The undersigned hereby
appoints as proxies [ ] and [ ], and each of them (with power of substitution),
to vote all shares of common stock of the undersigned in Pacific Basin Fund at
the Special Meeting of Shareholders to be held at 10:00 a.m., Mountain Standard
Time, on May 20, 1999, at the offices of International Funds, 7800 E. Union
Avenue, Denver, Colorado 80237, and any adjournment thereof ("Meeting"), with
all the power the undersigned would have if personally present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to International Funds and to Pacific Basin Fund
with discretionary power to vote upon such other business as may properly come
before the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[XXX] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO PACIFIC BASIN FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
2. Election of International Funds' / / / / / / To withhold
Board of Directors: (1) Charles authority to vote
W. Brady; (2) Fred A. Deering; for any individual
(3) Mark H. Williamson; nominee(s), mark
(4) Dr. Victor L. Andrews; "For All Except"
(5) Bob R. Baker; (6) Lawrence and write the
H. Budner; (7) Dr. Wendy Lee nominee's number
Gramm; (8) Kenneth T. King; on the line
(9) John W. McIntyre; and below.
(10) Dr. Larry Soll. __________________
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
1. Approval of changes to the fundamental investment / / / / / /
restrictions;
/ / To vote against the proposed changes to one or
more of the specific fundamental investment
restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT left and indicate the number(s)
(as set forth in the proxy statement) of the
investment restriction or restrictions you do not
want to change on the line below.
_________________________________________________
3. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as Pacific Basin
Fund's Independent Public Accountants;
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person
- ----------------------------------------------- ------------------------------
Signature Date
- ----------------------------------------------- ------------------------------
Signature (Joint Owners) Date
<PAGE>
[Name and Address]
INVESCO INTERNATIONAL BLUE CHIP FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO International Funds, Inc. ("International Funds") and relates to the
proposals with respect to International Funds and to INVESCO International Blue
Chip Fund ("International Blue Chip Fund"), a series of International Funds. The
undersigned hereby appoints as proxies [ ] and [ ], and each of them (with power
of substitution), to vote all shares of common stock of the undersigned in
International Blue Chip Fund at the Special Meeting of Shareholders to be held
at 10:00 a.m., Mountain Standard Time, on May 20, 1999, at the offices of
International Funds, 7800 E. Union Avenue, Denver, Colorado 80237, and any
adjournment thereof ("Meeting"), with all the power the undersigned would have
if personally present.
The shares represented by this proxy will be voted as instructed. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to International Funds and to International Blue
Chip Fund with discretionary power to vote upon such other business as may
properly come before the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[XXX] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO INTERNATIONAL BLUE CHIP FUND
(a series of INVESCO INTERNATIONAL FUNDS, Inc.)
VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. Election of International Funds' / / / / / / To withhold
Board of Directors: (1) Charles authority to vote
W. Brady; (2) Fred A. Deering; for any individual
(3) Mark H. Williamson; nominee(s), mark
(4) Dr. Victor L. Andrews; "For All Except"
(5) Bob R. Baker; (6) Lawrence and write the
H. Budner; (7) Dr. Wendy Lee nominee's number
Gramm; (8) Kenneth T. King; on the line
(9) John W. McIntyre; and below.
(10) Dr. Larry Soll. __________________
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
2. Ratification of the selection of / / / / / /
PricewaterhouseCoopers LLP as International Blue
Chips Fund's Independent Public Accountants;
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-525-8085 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-516-254-7564.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person
- ----------------------------------------------- ------------------------------
Signature Date
- ----------------------------------------------- ------------------------------
Signature (Joint Owners) Date
