File No. 33-69904
As filed on ^ November 27, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
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Post-Effective Amendment No. ^ 4 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. ^ 5 X
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INVESCO MULTIPLE ASSET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after
this post-effective amendment becomes effective.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
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^ X on December 1, 1996, pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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^ on _________________, pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on _________________, pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
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previously filed post-effective amendment.
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Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended July 31, ^ 1996 will be
filed on or about September ^ 26, 1996.
Page 1 of 241
Exhibit index is located at page 120
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INVESCO MULTIPLE ASSET FUNDS, INC.
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CROSS-REFERENCE SHEET
Form N-1A
Item Caption
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses; Essential
Information
3....................... Financial Highlights; Fund Price
and Performance
4....................... Investment Objective and Strategy;
Investment Policies and Risks; The
Fund and Its Management
5....................... The Fund and Its Management
5A...................... Not Applicable
6....................... Fund Services; Taxes, Dividends,
and Capital Gain Distributions;
Additional Information
7....................... How to Buy Shares; Fund Price and
Performance; Fund Services; The
Fund and Its Management
8....................... Fund Services; How to Sell Shares
9....................... Not Applicable
Part B Statement of Additional Information
10....................... Cover Page
11....................... Table of Contents
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Form N-1A
Item Caption
12....................... The Fund and Its Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Fund and Its Management
15....................... The Fund and Its Management;
Additional Information
16....................... The Fund and Its Management;
Additional Information
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Fund; Tax-Deferred
Retirement Plans; How to Redeem
Shares
20....................... Dividends, Capital Gain
Distributions, and Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
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PROSPECTUS
^ December 1, 1996
INVESCO Balanced Fund (the "Fund") seeks to achieve a high total return on
investment through capital appreciation and current income. The Fund invests in
a combination of common stocks (normally 50% to 70% of total assets) and
fixed-income securities (normally 25% or more).
This prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated ^ December 1, 1996, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this prospectus. To
obtain a free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; ^ call 1-800-525-8085; or on the World Wide Web:
http://www.invesco.com.
TABLE OF CONTENTS Page
ESSENTIAL INFORMATION...................................................... 6
ANNUAL FUND EXPENSES....................................................... 7
FINANCIAL HIGHLIGHTS....................................................... 9
INVESTMENT OBJECTIVE AND STRATEGY.......................................... 10
INVESTMENT POLICIES AND RISKS.............................................. 11
THE FUND AND ITS MANAGEMENT................................................ 15
FUND PRICE AND PERFORMANCE................................................. 17
HOW TO BUY SHARES.......................................................... 18
FUND SERVICES.............................................................. 22
HOW TO SELL SHARES......................................................... 23
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS........................... 26
ADDITIONAL INFORMATION..................................................... 27
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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ESSENTIAL INFORMATION
Investment ^ Goal And Strategy. Balanced Fund seeks to achieve
its objective -- a high total return on investment through capital
appreciation and current income -- by investing in a mixture of
common stocks and fixed-income securities, primarily debt
obligations issued by the U.S. government and its agencies or
instrumentalities or investment grade corporate bonds. There is no
guarantee that the Fund will meet its objective. See "Investment
Objective And Strategy."
^ Designed For: Investors seeking a combination of current income and
capital growth. While not intended as a complete investment program, the Fund
may be a valuable element of your investment portfolio. You also may wish to
consider the Fund as part of a Uniform Gift/Transfer To Minors Account or
systematic investing strategy. The Fund may be a suitable investment for many
types of retirement programs, including IRA, SEP-IRA, SARSEP, 401(k), Profit
Sharing, Money Purchase Pension^ and 403(b) plans.
Time Horizon. Because the value of its holdings varies, the Fund's price
per share will fluctuate. Investors should consider this a medium- to long-term
investment.
Risks. The Fund's investments in fixed-income securities are subject to
credit risk and market risk. Its returns on foreign investments may be
influenced by currency fluctuations and other risks of investing overseas. The
Fund may experience rapid portfolio turnover, which may result in higher
brokerage commissions and the acceleration of taxable capital gains. See
"Investment Objective And Strategy" and "Investment Policies ^ And Risks."
Organization and Management. The Fund is a series of INVESCO Multiple Asset
Funds, Inc. (the ^"Company"), a diversified, managed, no-load mutual fund. The
Fund is owned by its shareholders. It employs INVESCO Funds Group, Inc. (IFG),
founded in 1932, to serve as investment adviser, administrator, distributor^ and
transfer agent. INVESCO Trust Company ^("INVESCO Trust"), founded in 1969,
serves as sub-adviser.
The ^ Fund's investments are selected by three experienced INVESCO
portfolio managers: INVESCO senior vice presidents Charles Mayer, who has 26
years of investment experience, and Donovan J. (Jerry) Paul, with 20 years of
experience; and INVESCO vice president Albert M. Grossi, who has 22 years of
experience. A Chartered Financial Analyst, Mr. Mayer earned his MBA from St.
John's University and a BA from St. Peter's College. Mr. Paul holds an MBA from
the University of Northern Iowa and a BBA from the University of Iowa; he is
both a Chartered Financial Analyst and a Certified Public Accountant. Mr. Grossi
received both his MBA in Finance and his BA from Rutgers University. See "The
Fund And Its Management."
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IFG and INVESCO Trust are part of a global firm that managed approximately
^ $90 billion as of June 30, ^ 1996. The parent company, INVESCO PLC, is based
in London, with money managers located in Europe, North America and the Far
East.
This Fund ^ offers all of the ^ following services at no charge:
Telephone purchases
Telephone exchanges
Telephone redemptions
Automatic reinvestment of distributions
Regular investment plans, such as EasiVest (the Fund's
automatic monthly investment program), Direct Payroll
Purchase^ and Automatic Monthly Exchange
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for
regular investment plans, including EasiVest and Direct Payroll
Purchase, and certain retirement plans.
Minimum Subsequent Investment: $50 (Minimums are lower for
certain retirement plans.)
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange
or redeem shares. The Fund is authorized to pay a Rule 12b-1
distribution fee of one quarter of one percent of the Fund's
average net assets each year. (See "How To Buy Shares
- --Distribution Expenses.")
Like any company, the Fund has operating expenses^ such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts^ and other expenses. These expenses are paid from the Fund's assets.
Lower expenses therefore benefit investors by increasing the Fund's total
return.
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets.^ To keep expenses competitive, IFG and INVESCO Trust
voluntarily reimburse The Fund for amounts in excess of 1.25% of average net
assets.
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Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees 0.25%
Other Expenses ^ 0.44%
Total Fund Operating Expenses^(1)(2) 1.29%
^(1) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees and pricing
expenses were reduced under an expense offset arrangement. However, as a result
of an SEC requirement, for mutual funds to state their total operating expenses
without crediting any such expense offset arrangement, the figures shown above
do not reflect these reductions. In comparing expenses for different years,
please note that the ratios of Expenses to Average Net Assets shown under
"Financial Highlights" do reflect reductions for periods prior to the fiscal
year ended July 31, ^ 1996. See "The Funds and Their Management."
(2) In the absence of the voluntary expense limitation, the Fund's
"Other Expenses" and "Total Fund Operating Expenses" would have
been ^ 0.44% and ^ 1.29%, respectively, based on the Fund's actual
expenses for the fiscal year ended July 31, ^ 1996. See "The Fund
And Its Management."
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption at
the end of each time period. (Of course, actual operating expenses are paid from
the Fund's assets ^ and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)
1 Year 3 Years 5 Years 10 Years
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$13 ^ $41 $71 $156
The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR EXPENSES,
AND ACTUAL ANNUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For more information on the Fund's expenses, see "The Fund ^ And Its Management"
and "How ^ To Buy Shares -- Distribution Expenses."
^ Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
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FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report thereon
appearing in the Fund's ^ 1996 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information^. Both
are available without charge by contacting INVESCO Funds Group, Inc. at the
address or telephone number on the cover of this ^ prospectus. The Annual Report
also contains more information about the Fund's performance.
Period
Ended
Year Ended July 31 July 31
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1996 1995 1994^
PER SHARE DATA
Net Asset Value -
Beginning of Period $12.08 $10.30 $10.00
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INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.37 0.29 0.12
Net Gains on Securities
(Both Realized and
Unrealized) 2.12 2.03 0.30
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Total from Investment
Operations 2.49 2.32 0.42
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LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.37 0.29 0.12
Distributions from
Capital Gains 0.84 0.25 0.00
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Total Distributions 1.21 0.54 0.12
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Net Asset Value -
End of Period $13.36 $12.08 $10.30
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TOTAL RETURN 20.93% 23.18%** 4.16%*
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RATIOS
Net Assets - End of Period
($000 Omitted) $115,066 $37,224 $4,252
Ratio of Expenses to
Average Net Assets# 1.29%@ 1.25% 1.25%~
Ratio of Net Investment Income
to Average Net Assets# 3.03% 3.12% 2.87%~
Portfolio Turnover Rate 259% 255% 61%*
^ From December 1, 1993, commencement of operations, to July 31, 1994.
** Restated.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and ITC for the
^ years ended July 31, 1996 and 1995 and the period ended July 31, 1994. If such
expenses had not been voluntarily absorbed, ^ ratio of expenses to average net
assets would have been 1.29%, 1.59% and 4.37% (annualized), respectively, and ^
ratio of net investment income to average net assets would have been 3.03%,
2.77% and (0.25%) (annualized), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
INVESTMENT OBJECTIVE AND STRATEGY
INVESCO Balanced Fund is a diversified mutual fund that seeks to achieve a
high total return on investment through capital appreciation and current income.
This investment objective is fundamental and may not be changed without the
approval of the Fund's shareholders. The Fund pursues this objective by normally
investing 50% to 70% of its total assets in common stocks^ and the remainder in
fixed-income securities, including cash reserves. At least 25% of the Fund's
assets normally will be invested in fixed-income securities issued by the U.S.
government, its agencies and instrumentalities, or in investment grade corporate
bonds. This approach is designed to cushion a shareholder's investment from the
volatility typically associated with mutual funds that invest primarily in
common stocks. There is no guarantee that the Fund will meet its objective.
For the equity holdings, we look for companies with better- than-average
earnings growth potential, as well as companies within industries we've
identified as well-positioned for the current and expected economic climate.
Because current income is a component of total return, we also consider dividend
payout records. Most of these holdings are traded on national stock exchanges or
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in the over-the-counter (OTC) market; we may also take positions in securities
traded on regional or foreign exchanges. In addition to common stocks, the Fund
also may hold preferred stocks and securities convertible into common stock.
For the fixed-income portion of the holdings, we select only obligations
of the U.S. government, its agencies and instrumentalities, or investment grade
corporate bonds. These securities tend to offer lower income than bonds of lower
quality ^ but are more shielded from credit risk. Obligations issued by U.S.
government agencies or instrumentalities may include some supported only by the
credit of the issuer rather than backed by the full faith and credit of the U.S.
government. The Fund may hold securities of any maturity (from less than one
year up to 30 years), with the average maturity varying depending upon economic
and market conditions. The Fund also may hold cash and cash equivalent
securities as cash reserves.
The amount invested in stocks, bonds and cash securities may ^ vary from
time to time depending upon Fund Management's assessment of business, economic
and market conditions. When we believe conditions are unfavorable, the Fund may
assume a defensive position by temporarily investing up to 100% of its assets in
U.S. government and agency securities, investment grade corporate bonds^ or cash
securities, such as domestic certificates of deposit and bankers' acceptances,
commercial paper and repurchase agreements, in an attempt to protect principal
value until conditions stabilize.
INVESTMENT POLICIES AND RISKS
Investors generally should expect to see their price per share and income
levels vary with movements in the stock and fixed-income markets, changes in
economic conditions and other factors. The Fund invests in many different
companies in a variety of securities and industries; this diversification may
help reduce the Fund's overall exposure to investment and market risks^ but
cannot eliminate these risks.
Debt Securities. When we assess an issuer's ability to meet its interest
rate obligations and repay its debt when due, we are referring to "credit risk."
Debt obligations are rated based on their estimated credit risk by independent
services such as Standard & Poor's ^("S&P") or Moody's Investors Service, Inc. ^
("Moody's"). "Market risk" for debt securities principally refers to sensitivity
to changes in interest rates: for instance, when interest rates go up, the
market value of a ^ previously issued bond generally declines; on the other
hand, when interest rates go down, bonds generally see their prices increase.
The lower a bond's quality, the more it is subject to credit risk and
market risk and the more speculative it becomes; this is also true of most
unrated debt securities. The Fund seeks to reduce these risks by investing only
in investment grade debt securities (those rated AAA, AA, A or BBB by S&P or
<PAGE>
Aaa, Aa, A or Baa by Moody's or, if unrated, are judged by Fund Management to
be of equivalent quality). These bonds enjoy strong to adequate capacity to
pay principal and interest. Securities rated BBB or Baa are considered to be of
medium grade and may have speculative characteristics. While Fund Management
continuously monitors all of the debt securities in the Fund's portfolio for the
issuer's ability to make required principal and interest payments and other
quality factors, it may retain a bond whose rating is changed to one below the
minimum rating required for purchase of the security.
The Fund's investments in debt securities may include investments in zero
coupon bonds, step-up bonds, mortgage-backed securities and asset-backed
securities. Zero coupon bonds ^ ("zeros") make no periodic interest payments.
Instead, they are sold at a discount from their face value. The buyer of the
zero receives the rate of return by the gradual appreciation in the price of the
security, which is redeemed at face value at maturity. Step-up bonds initially
make no (or low) cash interest payments^ but begin paying interest (or a higher
rate of interest) at a fixed time after issuance of the bond. Being extremely
responsive to changes in interest rates, the market prices of both zeros and
step-up bonds may be more volatile than other bonds. The Fund may be required to
distribute income recognized on these bonds, even though no cash interest
payments may be received, which could reduce the amount of cash available for
investment by the Fund.
Mortgage-backed securities represent interests in pools of mortgages.
Asset-backed securities generally represent interests in pools of consumer
loans. Both usually are structured as pass-through securities. Interest and
principal payments ultimately depend on payment of the underlying loans,
although the securities may be supported, at least in part, by letters of credit
or other credit enhancements or, in the case of mortgage-backed securities,
guarantees by the U.S. government, its agencies or instrumentalities. The
underlying loans are subject to prepayments that may shorten the securities'
weighted average lives and may lower their returns.
Foreign Securities. Up to 25% of the Fund's total assets, measured at the
time of purchase, may be invested directly in foreign equity or corporate debt
securities. Securities of Canadian issuers and American Depository Receipts
("ADRs") are not subject to this 25% limitation. ADRs are receipts representing
shares of a foreign corporation held by a U.S. bank that entitle the holder to
all dividends and capital gains. ADRs are denominated in U.S.
dollars and trade in the U.S. securities markets.
For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments
themselves^ but also by currency fluctuations. That is, when the
U.S. dollar generally rises against foreign currencies, returns on
foreign securities for a U.S. investor may decrease. By contrast,
<PAGE>
in a period when the U.S. dollar generally declines, those returns may
increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally
available about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
ADRs are subject to some of the same risks as direct investments in
foreign securities, including the risk that material information about the
issuer may not be disclosed in the United States and the risk that currency
fluctuations may adversely affect the value of the ADR.
Repurchase Agreements. The Fund may invest money, for as short a time as
overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
the instrument if the prior owner defaults on its repurchase obligation. To
reduce that risk, the securities that are the subject of the repurchase
agreement will be maintained with the Fund's custodian in an amount at least
equal to the repurchase price under the agreement (including accrued interest).
These agreements are entered into only with member banks of the Federal Reserve
System, registered broker-dealers^ and registered U.S. government securities
dealers that are deemed creditworthy under standards established by the Fund's
board of directors.
Futures, Options and Other Derivative Instruments. In order to
hedge its portfolio, the Fund may purchase and write options on
securities (including index options and options on foreign
securities)^ and may invest in futures contracts for the purchase
<PAGE>
or sale of foreign currencies, fixed-income securities and instruments based on
financial indices (collectively, "futures contracts"), options on futures
contracts and forward contracts. These practices and their risks are discussed
under "Investment Policies and Restrictions" in the Statement of Additional
Information.
Other Securities. The Fund may invest in illiquid securities, including
securities that are subject to restrictions on resale and securities that are
not readily marketable, and in restricted securities that may be resold to
institutional investors, known as "Rule 144A Securities." The Fund also may
purchase and sell securities on a when-issued or delayed-delivery basis -- that
is, with settlement taking place in the future. In addition, the Fund may seek
to earn additional income by lending securities to qualified brokers, dealers,
banks^ or other financial institutions on a fully-collateralized basis. For more
information concerning these securities and investment techniques, see
"Investment Policies and Restrictions" in the Statement of Additional
Information.
Portfolio Turnover. There are no limitations regarding portfolio turnover
for either the equity or fixed-income portions of the Fund's portfolio. Although
the Fund does not trade for short-term profits, securities may be sold without
regard to the time they have been held when, in the opinion of Fund Management,
investment considerations warrant such action. The Fund's portfolio turnover
rate therefore may be higher than other mutual funds with similar objectives.
Increased portfolio turnover may result in greater brokerage commissions and
acceleration of capital gains which are taxable when distributed to
shareholders. The Statement of Additional Information includes an expanded
discussion of the Fund's portfolio turnover rate, its brokerage practices and
certain federal income tax matters.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies and Restrictions" and "Investment Practices" in
the Statement of Additional Information.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
the Fund's shareholders. For example, with respect to 75% of its total assets,
the Fund limits to 5% the portion of its total assets that may be invested in
any one issuer (other than cash items and U.S. government securities). In
addition, the Fund limits to 25% the portion of its total assets that may be
invested in any one industry (other than U.S. government securities). Other
fundamental restrictions prohibit the Fund from lending more than 33-1/3% of its
total assets to other parties and from borrowing money, except that the Fund may
borrow amounts up to 33-1/3% of its total assets for temporary or emergency
purposes. Except where indicated to the contrary, the investment policies
described in this prospectus are not considered fundamental and may be changed
without a vote of the Fund's shareholders.
<PAGE>
THE FUND AND ITS MANAGEMENT
On November 4, 1996, an Agreement and Plan of Merger among INVESCO PLC,
INVESCO Group Services, Inc. ("Services") and AIM Management Group, Inc. ("AIM")
was signed under which AIM will be merged with Services. When this merger takes
effect, which is expected to occur in the first part of 1997, the Fund's
Investment Advisory, Sub-Advisory, Distribution, Administrative Services,
Transfer Agency and Rule 12b-1 Agreements (the "Agreements") will automatically
terminate. Consummation of this merger is conditioned, among other things, on
new Agreements, essentially identical to the existing Agreements, including the
provisions governing fees, being presented to, and approved by, The Fund's Board
of Directors and, where necessary, the Fund's shareholders prior to this merger
taking effect. The meetings of the Fund's shareholders to consider approving the
necessary new Agreements is expected to occur in early 1997. Fund Management
anticipates that the key personnel responsible for providing services to the
Fund will remain unchanged.
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified, management investment company.
It was incorporated on August 19, 1993, under the laws of Maryland.
The Company's board of directors has responsibility for overall
supervision of the Fund^ and reviews the services provided by the adviser and
sub-adviser. Under an agreement with the Fund, INVESCO Funds Group, Inc.
^("IFG"), 7800 E. Union Avenue, Denver, Colorado 80237, serves as the Fund's
investment manager; it is primarily responsible for providing the Fund with
various administrative services. IFG's wholly-owned subsidiary, INVESCO Trust
Company ^("INVESCO Trust"), is the Fund's sub-adviser and is primarily
responsible for managing the Fund's investments. Together, IFG and INVESCO Trust
constitute "Fund Management."
^ Charles P. Mayer has served as co-portfolio manager ^ of the Fund since ^
1996 and is primarily responsible for the day-to-day management of the Fund's
equity holdings. ^ He is also co- portfolio VIF-High Yield Portfolio ^ as
manager of ^ INVESCO Industrial Income Fund and INVESCO VIF-Industrial Income
Portfolio. Mr. Mayer began his investment career in 1969 and is a senior vice
president of INVESCO Trust; from 1993 to 1994, he was a vice president of
INVESCO Trust. From 1984 to 1993, he was a portfolio manager with Westinghouse
Pension. B.A., St. Peter's College; M.B.A., St. John's University; Chartered
Financial Analyst.
Donovan J. (Jerry) Paul has served as co-portfolio manager ^ of the Fund
since 1994, focusing on fixed-income investments. ^ He also is the portfolio
manager of INVESCO Select Income Fund, INVESCO High Yield Fund, and INVESCO
<PAGE>
VIF-High Yield Portfolio ^ as well as co-portfolio manager of INVESCO
Industrial Income Fund , INVESCO Short-Term Bond Fund and INVESCO VIF-Industrial
Income Portfolio^. A senior vice president ^ of INVESCO Trust since 1994, he
entered the investment management industry in 1976. Mr. Paul's recent career
includes these highlights: From 1989 to 1992, he served as senior vice president
and director of fixed-income research^, and from 1987 to 1992, as portfolio
manager^, with Stein, Roe & Farnham Inc^. From 1993 to 1994, he was president^
of Quixote Investment Management, Inc. B.B.A., University of Iowa; M.B.A.,
University of Northern Iowa^; Chartered Financial Analyst ^; Certified Public
Accountant.
Albert M. Grossi has served as co-portfolio manager of the Fund since 1996.
He also is the portfolio manager of INVESCO Worldwide Capital Goods Fund. A vice
president of INVESCO Trust, Mr. Grossi began his career as a securities analyst
in 1974. Most recently, he managed an equity portfolio for Westinghouse Pension
Investments Corporation for seven years prior to joining INVESCO. B.A., M.B.A.,
Rutgers University.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
The Fund pays IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily. The management fee
is computed at the annual rate of 0.60% on the first $350 million of the Fund's
average net assets; 0.55% on the next $350 million of the Fund's average net
assets; and 0.50% on the Fund's average net assets over $700 million. For the
fiscal year ended July 31, ^ 1996, investment advisory fees paid by the Fund
amounted to 0.60% of the Fund's average net assets. Out of this fee, IFG paid an
amount equal to ^ 0.30% of the Fund's average net assets to INVESCO Trust as a
sub-advisory fee. No fee is paid by the Fund to INVESCO Trust.
Under a Transfer Agency Agreement, IFG acts as registrar, transfer agent^
and dividend disbursing agent for the Fund. The Fund pays an annual fee of ^
$20.00 per shareholder account or omnibus account participant for these
services. Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of IFG, may provide
equivalent services to the Fund. In these cases, IFG may pay, out of the fee it
receives from the Fund, an annual sub-transfer agency or record-keeping fee to
the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, record-keeping^ and internal sub-accounting services
for the Fund. For the fiscal year ended July 31, ^ 1996, the Fund paid IFG a fee
for these services equal to ^ a base fee of $10,000 plus 0.015% of the Fund's
average net assets.
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended July 31, ^ 1996, including investment management fees (but excluding
<PAGE>
brokerage commissions, which are a cost of acquiring securities), amounted
to ^ 1.29% of the Fund's average net assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
at the best available prices. As discussed under "How ^ To Buy Shares --
Distribution Expenses," the Fund may market its shares through intermediary
brokers or dealers that have entered into Dealer Agreements with IFG^ as the
Fund's Distributor. The Fund may place orders for portfolio transactions with
qualified ^ broker-dealers that recommend the Fund^ or sell shares of the Fund^
to clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of the execution of the transaction and
level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices -- Placement
of Portfolio Brokerage" in the Statement of Additional Information.
The parent company for IFG and INVESCO Trust is INVESCO PLC, a publicly
traded holding company whose subsidiaries provide investment services around the
world. IFG was established in 1932 and, as of July 31, ^ 1996, managed 14 mutual
funds, consisting of ^ 39 separate portfolios, with combined assets of
approximately ^ $12.2 billion on behalf of over ^ 821,000 shareholders. INVESCO
Trust (founded in 1969) served as adviser or sub-adviser to ^ 46 investment
portfolios as of July 31, ^ 1996, including 27 portfolios in the INVESCO group.
These ^ 46 portfolios had aggregate assets of approximately ^ $11.4 billion as
of July 31, ^ 1996. In addition, INVESCO Trust provides investment management
services to private clients, including employee benefit plans that may be
invested in a collective trust sponsored by INVESCO Trust.
FUND PRICE AND PERFORMANCE
Determining Price. The value of your investment in the Fund will vary
daily. The price per share is also known as the Net Asset Value ^("NAV"). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading (normally, 4:00 p.m., New York time). NAV is calculated
by adding together the current market value of all of the Fund's assets,
including accrued interest and dividends; then subtracting liabilities,
including accrued expenses; and finally dividing that dollar amount by the total
number of shares outstanding.
Performance Data. To keep shareholders and potential investors informed, we
will occasionally advertise the Fund's total return for one-, five-^ and
ten-year periods (or since inception). Total return figures show the rate of
return on an investment in the Fund, assuming reinvestment of all dividends and
capital gain distributions for the periods cited. Cumulative total return shows
the actual rate of return on an investment; average annual total return
<PAGE>
represents the average annual percentage change in the value of an
investment. Both cumulative and average annual total returns tend to "smooth
out" fluctuations in the Fund's investment results, not showing the interim
variations in performance over the periods cited. More information about the
Fund's recent and historical performance is contained in the Fund's Annual
Report to ^ Shareholders. You can get a free copy by calling or writing to IFG
using the phone number or address on the cover of this prospectus.
When we quote mutual fund rankings published by Lipper Analytical
Services, Inc., we may compare the Fund to others in its category of Balanced
Funds, as well as the broad-based Lipper general fund groupings. These rankings
allow you to compare the Fund to its peers. Other independent financial media
also produce performance- or service-related comparisons, which you may see in
our promotional materials. For more information, see "Fund Performance" in the
Statement of Additional Information.
Performance figures are based on historical investment results and are not
intended to suggest future performance.
HOW TO BUY SHARES
The ^ chart on page 19 shows several convenient ways to invest in the
Fund. Your new Fund shares will be priced at the NAV next determined after your
order is received in proper form. There is no charge to invest, exchange^ or
redeem shares when you make transactions directly through IFG. However, if you
invest in the Fund through a securities broker, you may be charged a commission
or transaction fee. For all new accounts, please send a completed application
form. Please specify which Fund you wish to purchase.
Fund Management reserves the right to increase, reduce or waive the
minimum investment requirements in its sole discretion, where it determines this
action is in the best interests of the Fund. Further, Fund Management reserves
the right in its sole discretion to reject any order for the purchase of Fund
shares (including purchases by exchange) when, in its judgment, such rejection
is in the Fund's best interests.
<PAGE>
How To Buy Shares
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check $1,000 for regular If your check does
Mail to: account; not clear, you will
INVESCO Funds $250 for an be responsible for
Group, Inc., Individual any related loss
P.O. Box 173706, Retirement Account; the Fund or IFG
Denver, CO 80217- $50 minimum for incurs. If you are
3706. each subsequent already a
Or you may send investment. shareholder in the
your check by INVESCO funds, the
overnight courier Fund may seek
to: 7800 E. Union reimbursement from
Ave., your existing
Denver, CO 80237. account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or $1,000. Payment must be
Wire received within 3
Call 1-800-525-8085 business days, or
to request your the transaction may
purchase. Then send be cancelled. If a
your check by telephone purchase
overnight courier is cancelled due to
to our street nonpayment, you
address: will be responsible
7800 E. Union Ave., for any related
Denver, CO 80237. loss the Fund or
Or you may transmit IFG incurs. If you
your payment by are already a
bank wire (call IFG shareholder in the
for instructions). INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or $50 per month for Like all regular
Direct Payroll EasiVest; $50 per investment plans,
Purchase pay period for neither EasiVest
You may enroll on Direct Payroll nor Direct Payroll
the fund Purchase. You may Purchase ensures a
application, or start or stop your profit or protects
call us for the regular investment against loss in a
correct form and plan at any time, falling market.
more details. with two weeks' Because you'll
Investing the same notice to IFG. invest continually,
amount on a monthly regardless of
basis allows you to varying price
buy more shares levels, consider
when prices are low your financial
and fewer shares ability to keep
when prices are buying through low
high. This "dollar- price levels. And
cost averaging" may remember that you
help offset market will lose money if
fluctuations. Over you redeem your
a period of time, shares when the
your average cost market value of all
per share may be your shares is less
less than the than their cost.
actual average
price per share.
- --------------------------------------------------------------------------------
By PAL $1,000. Be sure to write
Your "Personal down the
Account Line" is confirmation number
available for provided by PAL.
subsequent Payment must be
purchases and received within 3
exchanges 24-hours business days, or
a day. Simply call the transaction may
1-800-424-8085. be cancelled. If a
telephone purchase is
cancelled due to
nonpayment, you will be
responsible for any
related loss the Fund or
IFG incurs. If you are
already a shareholder in
the INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege^," below.
another of the for written
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
Automatic Monthly purchases requested
Exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
================================================================================
Exchange Privilege. You may exchange your shares in this Fund for those in
another INVESCO fund^ on the basis of their respective net asset values at the
time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider their differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make four exchanges out of each fund during each
calendar year.
3) An exchange is the redemption of shares from one fund followed by the
purchase of shares in another. Therefore, any gain or loss realized on the
exchange is recognizable for federal income tax purposes (unless, of course,
your account is tax-deferred).
4) The Fund reserves the right to reject any exchange request, or to
modify or terminate exchange privileges, in the best interests of the Fund and
its shareholders. Notice of all such modifications or ^ terminations will be
given at least 60 days prior to the effective date of the change in privilege^
except for unusual instances (such as when redemptions of the exchanged shares
are suspended under Section 22(e) of the Investment Company Act of 1940^ or when
sales of the fund into which you are exchanging are temporarily stopped).
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of shares. These expenditures may include compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
<PAGE>
financial institutions and organizations, which may include IFG-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers^ and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions.
In addition, other reimbursable expenditures include advertising,
preparation and distribution of sales literature, printing and distribution of
prospectuses to prospective investors, public relations efforts, marketing
programs and other services and promotional activities agreed upon from time to
time by the Fund and its board of directors. These services and activities may
be conducted by the staff of IFG or its affiliates or by third parties.
IFG is not entitled to reimbursement for overhead expenses under the Plan^
but may be reimbursed for all or a portion of the compensation paid for salaries
and other employee benefits for IFG personnel whose primary responsibilities
involve marketing shares of the INVESCO funds, including the Fund. Also, any
payments made by the Fund may not be used to finance the distribution of shares
of any other mutual fund advised by IFG. Payments made by the Fund under the
Plan for compensation of marketing personnel, as noted above, are based on an
allocation formula designed to ensure that all such payments are appropriate.
Under the Plan, the Fund's reimbursement to IFG is limited to an amount
computed at a maximum annual rate of 0.25 ^% of the Fund's average net assets.
Payments by the Fund under the Plan, for any month, may only be made to
reimburse expenditures incurred during the rolling 12-month period in which that
month falls, although this period is expanded to 24 months for expenses incurred
during the first 24 months of the Fund's operations. Therefore, any reimbursable
expenses incurred by IFG in excess of the limitations described above are not
reimbursable and will be borne by IFG. In addition, IFG may from time to time
make additional payments from its revenues to securities dealers and other
financial institutions that provide distribution-related and/or administrative
services for the Fund. No further payments will be made by the Fund under the
Plan in the event of its termination.
FUND SERVICES
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges^ and redemptions. If you choose certain
<PAGE>
EasiVest), your transactions will be confirmed on your quarterly Investment
Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends and capital gain distributions
are automatically invested in additional fund shares at the NAV on the
ex-dividend date, unless you choose to have dividends and/or capital gain
distributions automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application^ or a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if the Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans And IRAs. Fund shares may be purchased for Individual
Retirement Accounts (IRAs) and many types of tax-deferred retirement plans. IFG
can supply you with information and forms to establish or transfer your existing
plan or account.
HOW TO SELL SHARES
The ^ chart on page 24 shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at their current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
Please ^ specify from which fund you wish to redeem shares. Shareholders
have a separate account for each fund in which they invest.
<PAGE>
How To Sell Shares
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone $250 (or, if less, This option is not
Call us toll-free full liquidation of available for
at 1-800-525-8085. the account) for a shares held in
redemption check; Individual
$1,000 for a wire Retirement Accounts
to bank of record. (IRAs).
The maximum amount
which may be
redeemed by
telephone is
generally $25,000.
These telephone
redemption
privileges may be
modified or
terminated in the
future at the
discretion of IFG.
- --------------------------------------------------------------------------------
In Writing Any amount. The If the shares to be
Mail your request redemption request redeemed are
to INVESCO Funds must be signed by represented by
Group, Inc., P.O. all registered stock certificates,
Box 173706, shareholders(s). the certificates
Denver, CO 80217- Payment will be must be sent to
3706. You may also mailed to your IFG.
send your request address of record,
by overnight or to a pre-
courier to 7800 E. designated bank.
Union Ave., Denver,
CO 80237.
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege," ^ page
another of the for written 21.
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
automatic monthly exchanges requested
exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal $100 per payment, You must have at
Plan on a monthly or least $10,000 total
You may call us to quarterly basis. invested with the
request the The redemption INVESCO funds, with
appropriate form check may be made at least $5,000 of
and more payable to any that total invested
information at 1- party you in the fund from
800-525-8085. designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third Any amount. All registered
Party owners of the
Mail your request account must sign
to INVESCO Funds the request, with a
Group, Inc., P.O. signature guarantee
Box 173706, from an eligible
Denver, CO 80217- guarantor financial
3706. institution, such
as a commercial
bank or recognized
national or
regional securities
firm.
================================================================================
While the Fund will attempt to process telephone redemptions promptly,
there may be times -- particularly in periods of severe economic or market
disruption -- when you may experience delays in redeeming shares by phone.
Payments of redemption proceeds will be mailed within seven days following
receipt of the redemption request in proper form. However, payment may be
postponed under unusual circumstances -- for instance, if normal trading is not
taking place on the New York Stock Exchange or during an emergency as defined by
the Securities and Exchange Commission. If your shares were purchased by a check
which has not yet cleared, payment will be made promptly upon clearance of the
purchase check (which may take up to 15 days).
If you participate in ^ EasiVest, the Fund's automatic monthly investment
program, and redeem all of the shares in your account, we will terminate any
further ^ EasiVest purchases unless you instruct us otherwise.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to involuntarily redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state^
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically ^ reinvested in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to withholding of foreign taxes on dividends or
interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund meets the qualifications to
enable it to pass these taxes through to shareholders for use by them as a
foreign tax credit or deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless you are subject to
backup withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax identification
number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders on a quarterly basis, at the discretion of the Fund's
board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of distribution regardless of how long the shares have
been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying the full purchase price, a portion of
which is then returned in the form of a taxable distribution.
<PAGE>
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending upon how long
the Fund held the security which gave rise to the gains. The capital gains
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as taxable dividends.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Capital Gain Distributions and Taxes" in
the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company have equal voting rights based on
one vote for each share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all the funds of the Company voting together. In other cases, such as voting
upon an investment advisory contract, voting is on a fund-by-fund basis. To the
extent permitted by law, when not all funds are affected by a matter to be voted
upon, only shareholders of the fund or funds affected by the matter will be
entitled to vote thereon. The Company is not generally required and does not
expect to hold regular annual meetings of shareholders. However, when requested
to do so in writing by the holders of 10% or more of the outstanding shares of
the Company or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority of
the outstanding shares of the Company. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
Master/Feeder Option. As a matter of fundamental policy, the Company may,
in the future, seek to achieve the Fund's investment objective by investing all
of the Fund's assets in another investment company having substantially the same
fundamental investment objective, policies and limitations. It is expected that
any such investment company would be managed by IFG in substantially the same
manner as the Fund. If permitted by applicable law, any such investment may be
made in the sole discretion of the Company's board of directors without a vote
of the Fund's shareholders. However, shareholders will be given at least 30 days
prior notice of any such investment. Such an investment would be made only if
the board of directors determines it to be in the best interests of the Fund and
<PAGE>
its shareholders based on potential cost savings, operational efficiencies
or other factors. No assurance can be given that costs would be materially
reduced if this option were implemented.
<PAGE>
INVESCO BALANCED FUND
A no-load mutual fund seeking capital appreciation
and current income.
PROSPECTUS
^ December 1, 1996
To receive general information and prospectuses on any of the INVESCO
funds or retirement plans, or to obtain current account or price information or
responses to other questions, call toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line^, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
^ Post Office Box 173706
Denver, Colorado 80217-3706
You can find us on The World Wide Web:
http://www.invesco.com
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue, Lobby Level
<PAGE>
PROSPECTUS
^ December 1, 1996
INVESCO Multi-Asset Allocation Fund (the "Fund") seeks to achieve a high
total return on investment through capital appreciation and current income. The
Fund invests in six asset classes: stocks of large-capitalization companies,
stocks of small- capitalization companies, equity real estate securities,
international equity securities, fixed-income securities^ and cash securities.
Allocating assets among these different classes allows the Fund to take
advantage of attractive investment opportunities in various sectors of the
capital markets^ while providing diversification to reduce risk.
This prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated ^ December 1, 1996, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this prospectus. To
obtain a free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; ^ call 1-800-525-8085; or on the World Wide Web:
http://www.invesco.com.
TABLE OF CONTENTS Page
ESSENTIAL INFORMATION...................................................... 32
ANNUAL FUND EXPENSES....................................................... 33
FINANCIAL HIGHLIGHTS....................................................... 35
INVESTMENT OBJECTIVE AND STRATEGY.......................................... 36
INVESTMENT POLICIES AND RISKS.............................................. 40
THE FUND AND ITS MANAGEMENT................................................ 44
FUND PRICE AND PERFORMANCE................................................. 46
HOW TO BUY SHARES.......................................................... 47
FUND SERVICES.............................................................. 51
HOW TO SELL SHARES......................................................... 52
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS........................... 55
ADDITIONAL INFORMATION..................................................... 56
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
ESSENTIAL INFORMATION
Investment ^ Goal And Strategy. Multi-Asset Allocation Fund pursues its
objective -- a high total return on investment through capital appreciation and
current income -- by investing in a strategic mixture of common stocks (both
large- and small-cap), foreign equities, equity real estate securities
(primarily real estate investment trusts), fixed-income securities^ and cash.
Allocations are based upon the projected investment returns for each class.
There is no guarantee that the Fund will meet its objective. See "Investment
Objective And Strategy."
^ Designed For: Investors who want to diversify their portfolios among
various types of investments in a single fund. While not intended as a complete
investment program, the Fund may be a valuable element of your investment
portfolio. You also may wish to consider the Fund as part of a Uniform
Gift/Transfer To Minors Account or systematic investing strategy. The Fund may
be a suitable investment for many types of retirement programs, including IRA,
SEP-IRA, SARSEP, 401(k), Profit Sharing, Money Purchase Pension^ and 403(b)
plans.
Time Horizon. Because the value of its holdings varies, the Fund's price
per share will fluctuate. Investors should consider this a medium- to long-term
investment.
Risks. The Fund's investments in fixed-income securities are subject to
credit risk and market risk. Its returns on foreign investments may be
influenced by currency fluctuations and other risks of investing overseas. The
market prices of the small-cap stocks in which the Fund invests may be more
volatile than those of large-cap stocks. The Fund's investments in real estate
securities have many of the same risks as the direct ownership of real estate.
See "Investment Objective ^ And Strategy" and "Investment Policies ^ And Risks."
Organization and Management. The Fund is a series of INVESCO Multiple Asset
Funds, Inc. (the ^"Company"), a diversified, managed, no-load mutual fund. The
Fund is owned by its shareholders. It employs INVESCO Funds Group, Inc.
^("IFG"), founded in 1932, to serve as investment adviser, administrator,
distributor^ and transfer agent. INVESCO Management & Research, Inc. ^("IMR")
serves as sub-adviser.
The Fund is team-managed; Bob Slotpole leads this group and makes the final
determination of asset allocations. Mr. Slotpole has 20 years of investment
experience^ and holds degrees from Stanford University and the State University
of New York at Buffalo. See "The Fund And Its Management."
IFG and IMR are part of a global firm that managed approximately ^ $90
billion as of June 30, ^ 1996. The parent company, INVESCO PLC, is based in
London, with money managers located in Europe, North America and the Far East.
<PAGE>
This Fund ^ offers all of the ^ following services at no charge:
Telephone purchases
Telephone exchanges
Telephone redemptions
Automatic reinvestment of distributions
Regular investment plans, such as EasiVest (the Fund's
automatic monthly investment program), Direct Payroll
Purchase^ and Automatic Monthly Exchange
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll
Purchase, and certain retirement plans.
Minimum Subsequent Investment: $50 (Minimums are lower for certain
retirement plans.)
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange
or redeem shares. The Fund is authorized to pay a Rule 12b-1
distribution fee of one quarter of one percent of the Fund's
average net assets each year. (See "How To Buy Shares
- --Distribution Expenses.")
Like any company, the Fund has operating expenses^ such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts^ and other expenses. These expenses are paid from the Fund's assets.
Lower expenses therefore benefit investors by increasing the Fund's total
return.
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, IFG and IMR voluntarily
reimburse the Fund for amounts in excess of 1.50% of average net assets.
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees 0.25%
Other Expenses ^ 0.62%
Total Fund Operating Expenses^(1)(2) 1.62%
<PAGE>
^(1) It should be noted that the Fund's actual total operating expenses were
lower than the figures shown because the Fund's custodian fees and pricing
expenses were reduced under an expense offset arrangement. However, as a result
of an SEC requirement, for mutual funds to state their total operating expenses
without crediting any such expense offset arrangement, the figures shown above
do not reflect these reductions. In comparing expenses for different years,
please note that the ratios of Expenses to Average Net Assets shown under
"Financial Highlights" do reflect reductions for periods prior to the fiscal
year ended July 31, ^ 1996. See "The Funds and Their Management."
(2) In the absence of the voluntary expense limitation, the Fund's "Other
Expenses" and "Total Fund Operating Expenses" would have been ^ 1.24% and ^
2.24%, respectively, based on the Fund's actual expenses for the fiscal year
ended July 31, ^ 1996. See "The Fund And Its Management."
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption at
the end of each time period. (Of course, actual operating expenses are paid from
the Fund's assets ^ and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
^ $17 $51 $89 $193
The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR EXPENSES,
AND ACTUAL ANNUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For more information on the Fund's expenses, see "The Fund ^ And Its Management"
and "How ^ To Buy Shares -- Distribution Expenses."
^ Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report thereon
appearing in the Fund's ^ 1996 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information^. Both
are available without charge by contacting INVESCO Funds Group, Inc. at the
address or telephone number on the cover of this ^ prospectus. The Annual Report
also contains more information about the Fund's performance.
Period
Ended
Year Ended July 31 July 31
-------------------- --------
1996 1995 1994^
PER SHARE DATA
Net Asset Value -
Beginning of Period ^ $10.84 $9.68 $10.00
--------------------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.28 0.28 0.06
Net Gains or (Losses)
on Securities (Both Realized
and Unrealized) 0.89 1.16 (0.32)
--------------------- -------
Total from Investment Operations 1.17 1.44 (0.26)
---------------------- -------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.28 0.28 0.06
Distributions from Capital Gains 0.18 0.00 0.00
---------------------- ------
Total Distributions 0.46 0.28 0.06
----------------------- ------
Net Asset Value - End of Period $11.55 $10.84 $9.68
====================== =======
TOTAL RETURN 10.96% 15.11%** (2.60%)*
<PAGE>
RATIOS
Net Assets - End of Period
($000 Omitted) $9,574 $7,778 $4,958
Ratio of Expenses to
Average Net Assets# 1.62%@ 1.50% 1.50%~
Ratio of Net Investment Income
to Average Net Assets# 2.43% 2.99% 2.23%~
Portfolio Turnover Rate 92% 79% 42%*
^ From December 1, 1993, commencement of operations, to July 31, 1994.
** Restated.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and IMR for the
years ended July 31, 1996 and 1995 and the period ended July 31, 1994. If such
expenses had not been voluntarily absorbed, ^ ratio of expenses to average net
assets would have been 2.24%, 2.47% and 5.14% (annualized), respectively, and ^
ratio of net investment income to average net assets would have been 1.81%,
2.02% and (1.41%) (annualized), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
INVESTMENT OBJECTIVE AND STRATEGY
INVESCO Multi-Asset Allocation Fund is a diversified mutual fund that
seeks a high total return on investment through capital appreciation and current
income. This investment objective is fundamental and may not be changed without
the approval of the Fund's shareholders. The Fund pursues this objective by
allocating its assets among six asset classes: stocks of large- capitalization
companies (large-cap stocks); stocks of small- capitalization companies
(small-cap stocks); equity real estate securities, primarily real estate
investment trusts; international equity securities; fixed-income securities; and
cash securities. There is no guarantee that the Fund will meet its objective.
The Fund may allocate its assets among these six classes within specified
ranges. Current allocations are based on Fund Management's projections of
investment returns for each class. The Fund's "benchmark mix" of assets
represents the expected allocation when the projected returns for all six
classes are normal relative to the others based on historical investment
returns. If we believe the return for a particular class will be higher than
<PAGE>
normal relative to the others, the Fund invests ^ in that class more
heavily than the benchmark suggests. Conversely, if we estimate
lower-than-normal returns for a particular class relative to the others, it is
underweighted relative to the benchmark mix. The historical performance of each
class is measured by using a comparative index of securities for the class. The
Fund's six asset classes, investment ranges, benchmark mix and comparative
indices are set forth below:
Percentage Bench-
Asset of Fund's mark
Class Total Assets Mix Comparative Index
- ----------------------------------------------------------
Large-cap stocks 0-70% 35% S&P 500
Small-cap stocks 0-30% 10% Russell 2000
Real estate equity
securities 0-30% 10% NAREIT Equity
REIT Index
International
stocks 0-30% 10% MSCI-EAFE
Fixed-income 0-50% 25% Lehman Brothers
Aggregate Bond
Cash ^ securities 0-30% 10% 90-day T-bills
Fund Management regularly reviews the Fund's investment allocations^ and
will vary the amount invested in each class within the ranges set forth above
depending upon its assessment of business, economic and market conditions.
However, we do not attempt to "time" the various markets or make sudden, major
shifts in weightings. Any allocation adjustments are made gradually and in
accordance with the Fund's objective of seeking a high total return. While the
percentage of the Fund's assets invested in each class will vary from time to
time, the Fund does not anticipate altering the benchmark mix. However, Fund
Management reserves the right to add or delete asset classes^ and to adjust the
percentage of each class in the benchmark mix accordingly. The Fund will not add
or delete asset classes without giving shareholders such notice as may be
required under the circumstances.
When we believe conditions are unfavorable, the Fund may assume a
defensive position by temporarily investing up to 100% of its assets in cash and
fixed-income securities^ in an attempt to protect principal value until
conditions stabilize. Under normal market conditions, the Fund does not expect
to have a substantial portion of its assets invested in cash securities.
<PAGE>
Equity Holdings
In managing the equity portions of the Fund's portfolio (large-cap stocks,
small-cap stocks, equity real estate securities and international stocks), Fund
Management applies a combination of quantitative strategies and traditional
stock selection methods to a broad universe of stocks in order to uncover
attractive values. Typically, common stocks and, to a lesser degree, preferred
stocks and securities convertible into common stocks, will be examined
quantitatively for their exposure to certain factors that we believe are helpful
in selecting equities that can be expected to show superior future performance.
These factors include earnings- to-price ratio, book value-to-price ratio,
earnings estimate revision momentum, relative market strength compared to
competitors, inventory/sales trend^ and financial leverage. A stock's expected
return is estimated based on these factors and estimated trading costs. Next a
computer optimization process suggests a portfolio that seeks to maximize
expected return at a controlled level of risk. Traditional fundamental analysis
is then employed to make the final selection of holdings.
Large-cap stocks. These holdings are selected from the 1,000 largest
publicly-traded U.S. companies. Size is determined by measuring a firm's market
capitalization -- the market value of all of a company's equity securities.
These securities are traded principally on U.S. national stock exchanges^ but
also may be traded on regional stock exchanges or in the over-the-counter (OTC)
market. Large-cap stocks may offer higher dividends than the stocks of
smaller-cap firms.
The index used to measure the historical performance of large- cap stocks
is the Standard & Poor's 500, which is composed of 500 widely held common stocks
listed on the New York or American Stock Exchange^ or on the NASDAQ
over-the-counter market.
Small-cap stocks. The Fund seeks its small-cap holdings from companies
having market capitalizations smaller than the 1,000 largest publicly-traded
U.S. companies. These small-cap stocks typically pay no or only minimal
dividends^ and may involve greater risks than securities of larger, more
established companies. However, because of their long-term prospects, they may
offer the potential for greater price appreciation.
The index used to measure the historical performance of small-cap stocks
is the Russell 2000, which is composed of the 2,000 publicly traded U.S.
companies that are next in size after the 1,000 largest publicly traded U.S.
companies, measured by market capitalization.
Real estate equity securities. The Fund focuses its real estate
investments on equity real estate investment trusts (REITs)^ but may also invest
in real estate development and real estate operating companies, as well as other
real estate-related businesses. Equity REITs are trusts that sell shares to
investors and invest the proceeds in real estate. The index used is the NAREIT
<PAGE>
Equity REIT, which is composed of all tax-qualified REITs listed on the New
York and American Stock Exchanges, plus those listed on the NASDAQ National
Market System.
International stocks. The Fund may invest in international equity
securities directly or through American Depository Receipts ^("ADRs"). Up to 25%
of the Fund's total assets, measured at the time of purchase, may be invested
directly in foreign securities. Investments in Canadian securities and ADRs are
not included in this limitation. ADRs are receipts representing shares of a
foreign corporation held by a U.S. bank that entitle the holder to all dividends
and capital gains. ADRs are denominated in U.S. dollars and trade in the U.S.
securities markets. The index used is the Morgan Stanley Capital Index-Europe,
Australia^ and Far East (MSCI-EAFE), which is composed of companies listed on
exchanges in countries of those specific regions.
Fixed Income and Cash Holdings
Fixed-income. For the fixed-income portion of the holdings, we select only
obligations of the U.S. government, its agencies and instrumentalities, or
investment grade corporate bonds. These securities tend to offer lower income
than bonds of lower quality^ but are more shielded from credit risk. Obligations
issued by government agencies or instrumentalities may include some supported
only by the credit of the issuer rather than backed by the full faith and credit
of the U.S. government. The Fund also may invest up to 25% of its total assets
in fixed-income securities issued by foreign companies. The Fund may hold
securities of any maturity (from less than one year up to 30 years), with the
average maturity varying depending upon economic and market conditions.
The index used to measure the historical performance of fixed-income
securities is the Lehman Brothers Aggregate Bond, which is composed of
fixed-rate, investment grade domestic corporate bond issues, plus U.S.
government treasury and agency securities, Yankee bonds (U.S. traded debt issued
or guaranteed by foreign governments)^ and mortgage-backed securities.
Cash securities. The Fund's cash securities may include domestic
certificates of deposit and ^ bankers' acceptances, repurchase agreements,
commercial paper and U.S. government and agency securities and investment grade
corporate bonds with remaining maturities of one year or less.
<PAGE>
INVESTMENT POLICIES AND RISKS
Investors generally should expect to see their price per share and income
levels vary with movements in the stock and fixed-income markets, changes in
economic conditions and other factors. The Fund invests in many different
companies in a variety of securities and industries; this diversification may
help reduce the Fund's overall exposure to investment and market risks^ but
cannot eliminate these risks.
Small-Cap Stocks. Small-cap companies frequently have limited operating
histories, product lines^ and financial and managerial resources. They may
experience intense competitive pressures from larger, more established firms in
the same industry. The market prices of small-cap stocks may be more volatile
than those of large-cap stocks both because they typically trade in lower
volumes and because small-cap firms may be more vulnerable to changes in their
earnings or prospects. As a result, small-cap companies may experience
substantial losses as well as significant growth.
Real Estate Securities. Real estate securities have many of the same risks
as the direct ownership of real estate, including the risk that the property
will decline in value, and risks related to general and local economic
conditions, overbuilding, property tax and operating expense increases^ and
fluctuating rental income. REITs have the additional factors of management
skill, potentially inadequate diversification, and favorable financing to
consider. REITs are also subject to the possibility of failing to qualify for
tax-free pass-through of income under the Internal Revenue Code of 1986 and
failing to maintain exemption from the Investment Company Act of 1940.
Foreign Securities. For U.S. investors, the returns on foreign
securities are influenced not only by the returns on the foreign
investments themselves^ but also by currency fluctuations. That is,
when the U.S. dollar generally rises against foreign currencies,
returns on foreign securities for a U.S. investor may decrease. By
contrast, in a period when the U.S. dollar generally declines,
those returns may increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally available about U.S.
issuers;
-differences in accounting, auditing and financial reporting standards;
-generally higher commission rates on foreign portfolio transactions and
longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility; and
<PAGE>
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
ADRs are subject to some of the same risks as direct investments in
foreign securities, including the risk that material information about the
issuer may not be disclosed in the United States and the risk that currency
fluctuations may adversely affect the value of the ADR.
Debt Securities. When we assess an issuer's ability to meet its interest
rate obligations and repay its debt when due, we are referring to "credit risk."
Debt obligations are rated based on their estimated credit risk by independent
services such as Standard & Poor's ^("S&P") or Moody's Investors Service, Inc. ^
("Moody's"). "Market risk" for debt securities principally refers to sensitivity
to changes in interest rates: for instance, when interest rates go up, the
market value of a ^ previously issued bond generally declines; on the other
hand, when interest rates go down, bonds generally see their prices increase.
The lower a bond's quality, the more it is subject to credit risk and
market risk and the more speculative it becomes; this is also true of most
unrated debt securities. The Fund seeks to reduce these risks by investing only
in investment grade debt securities (those rated AAA, AA, A or BBB by S&P or
Aaa, Aa, A or Baa by Moody's or, if unrated, are judged by Fund Management to be
of equivalent quality). These bonds enjoy strong to adequate capacity to pay
principal and interest. Securities rated BBB or Baa are considered to be of
medium grade and may have speculative characteristics. While Fund Management
continuously monitors all of the debt securities in the Fund's portfolio for the
issuer's ability to make required principal and interest payments and other
quality factors, it may retain a bond whose rating is changed to one below the
minimum rating required for purchase of the security.
The Fund's investments in debt securities may include investments in zero
coupon bonds, step-up bonds, mortgage-backed securities and asset-backed
securities. Zero coupon bonds ^ ("zeros") make no periodic interest payments.
Instead, they are sold at a discount from their face value. The buyer of the
zero receives the rate of return by the gradual appreciation in the price of the
security, which is redeemed at face value at maturity. Step-up bonds initially
make no (or low) cash interest payments^ but begin paying interest (or a higher
rate of interest) at a fixed time after issuance of the bond. Being extremely
responsive to changes in interest rates, the market prices of both zeros and
<PAGE>
step-up bonds may be more volatile than other bonds. The Fund may be
required to distribute income recognized on these bonds, even though no cash
interest payments may be received, which could reduce the amount of cash
available for investment by the Fund.
Mortgage-backed securities represent interests in pools of mortgages.
Asset-backed securities generally represent interests in pools of consumer
loans. Both usually are structured as pass-through securities. Interest and
principal payments ultimately depend on payment of the underlying loans,
although the securities may be supported, at least in part, by letters of credit
or other credit enhancements or, in the case of mortgage-backed securities,
guarantees by the U.S. government, its agencies or instrumentalities. The
underlying loans are subject to prepayments that may shorten the securities'
weighted average lives and may lower their returns.
The Fund also may invest in stripped mortgage- or asset-backed securities,
in which the principal and interest payments on the underlying pool of loans are
separated or "stripped" to create two classes of securities. In general, the
interest-only, or IO, class receives all of the interest payments and the
principal-only, or PO, class receives all of the principal payments. The market
prices of these securities generally are more sensitive to changes in interest
and prepayment rates than traditional mortgage and asset-backed securities^ and
may be extremely volatile.
When-Issued Securities. Up to 10% of the value of the Fund's total assets
may be committed to purchase or sell securities on a when-issued or
delayed-delivery basis -- that is, with settlement taking place in the future.
The payment obligation and the interest rate received on the securities
generally are fixed at the time the Fund enters into the commitment. Between the
date of purchase and the settlement date, the market value of the securities may
vary, and no interest is payable to the Fund prior to settlement.
Futures, Options and Other Derivative Instruments. In order to hedge its
portfolio, the Fund may purchase and write options on securities (including
index options and options on foreign securities)^ and may invest in futures
contracts for the purchase or sale of foreign currencies, fixed-income
securities and instruments based on financial indices (collectively, "futures
contracts"), options on futures contracts and forward contracts. These practices
and their risks are discussed under "Investment Policies and Restrictions" in
the Statement of Additional Information.
Repurchase Agreements. The Fund may invest money, for as short a time as
overnight, using repurchase agreements ^("repos") . With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
the instrument if the prior owner defaults on its repurchase obligation. To
reduce that risk, the securities that are the subject of the repurchase
<PAGE>
agreement will be maintained with the Fund's custodian in an amount at
least equal to the repurchase price under the agreement (including accrued
interest). These agreements are entered into only with member banks of the
Federal Reserve System, registered broker-dealers^ and registered U.S.
government securities dealers that are deemed creditworthy under standards
established by the Fund's board of directors.
Other Securities. The Fund may invest in illiquid securities, including
securities that are subject to restrictions on resale and securities that are
not readily marketable, and in restricted securities that may be resold to
institutional investors, known as "Rule 144A Securities." In addition, the Fund
may seek to earn additional income by lending securities to qualified brokers,
dealers, banks^ or other financial institutions on a fully- collateralized
basis. For more information concerning these securities and investment
techniques, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
Portfolio Turnover. There are no limitations regarding portfolio turnover
for either the equity or fixed-income portions of the Fund's portfolio. Although
the Fund does not trade for short-term profits, securities may be sold without
regard to the time they have been held when, in the opinion of Fund Management,
investment considerations warrant such action. Increased portfolio turnover may
result in greater brokerage commissions and acceleration of capital gains which
are taxable when distributed to shareholders. The Statement of Additional
Information includes an expanded discussion of the Fund's portfolio turnover
rate, its brokerage practices and certain federal income tax matters.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies and Restrictions" and "Investment Practices" in
the Statement of Additional Information.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
the Fund's shareholders. For example, with respect to 75% of its total assets,
the Fund limits to 5% the portion of its total assets that may be invested in
any one issuer (other than cash items and U.S. government securities). In
addition, the Fund limits to 25% the portion of its total assets that may be
invested in any one industry (other than U.S. government securities). Other
fundamental restrictions prohibit the Fund from lending more than 33-1/3% of its
total assets to other parties and from borrowing money, except that the Fund may
borrow amounts up to 33-1/3% of its total assets for temporary or emergency
purposes. Except where indicated to the contrary, the investment policies
described in this prospectus are not considered fundamental and may be changed
without a vote of the Fund's shareholders.
<PAGE>
THE FUND AND ITS MANAGEMENT
On November 4, 1996, an Agreement and Plan of Merger among INVESCO PLC,
INVESCO Group Services, Inc. ("Services") and AIM Management Group, Inc. ("AIM")
was signed under which AIM will be merged with Services. When this merger takes
effect, which is expected to occur in the first part of 1997, the Fund's
Investment Advisory, Sub-Advisory, Distribution, Administrative Services,
Transfer Agency and Rule 12b-1 Agreements (the "Agreements") will automatically
terminate. Consummation of this merger is conditioned, among other things, on
new Agreements, essentially identical to the existing Agreements, including the
provisions governing fees, being presented to, and approved by, The Fund's Board
of Directors and, where necessary, the Fund's shareholders prior to this merger
taking effect. The meetings of the Fund's shareholders to consider approving the
necessary new Agreements is expected to occur in early 1997. Fund Management
anticipates that the key personnel responsible for providing services to the
Fund will remain unchanged.
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end, management investment company.
It was incorporated on August 19, 1993, under the laws of Maryland.
The Company's board of directors has responsibility for overall
supervision of the Fund^ and reviews the services provided by the adviser and
sub-adviser. Under an agreement with the Fund, INVESCO Funds Group, Inc.
^("IFG"), 7800 E. Union Avenue, Denver, Colorado 80237, serves as the Fund's
investment manager; it is primarily responsible for providing the Fund with
various administrative services. An affiliate of IFG, INVESCO Management &
Research, Inc. ^("IMR"), 101 Federal Street, Boston, Massachusetts, is the
Fund's sub-adviser and is primarily responsible for managing the Fund's
investments. Together, IFG and IMR constitute "Fund Management."
The Fund is managed by a team of specialists with expertise in the various
asset classes in which the Fund invests. Bob Slotpole, portfolio manager since
1993 for INVESCO Management & Research, Inc., has served as lead portfolio
manager ^ of the Fund since 1994^ and is primarily responsible for the overall
allocation of the Fund's investments among the six asset classes. He is also the
portfolio manager of INVESCO Small Company Fund. His recent career includes
these highlights: ^ He developed the program trading department at First Boston
(1985 to 1992) and served with the proprietary options department at Lehman
Brothers (1983 to 1984). B.S., State University of New York at Buffalo; M.B.A.,
Stanford University.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
<PAGE>
their personal investment activities in a manner that Fund Management
believes is not detrimental to the Fund or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
The Fund pays IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily. The management fee
is computed at the annual rate of 0.75% on the first $500 million of the Fund's
average net assets; 0.65% on the next $500 million of the Fund's average net
assets; and 0.50% on the Fund's average net assets over $1 billion. While the
portion of the management fee that is equal to 0.75% of the Fund's average net
assets is higher than the management fees incurred by most other mutual funds,
it is not higher than the management fees paid by most other asset allocation
funds on comparable levels of assets. For the fiscal year ended July 31, ^ 1996,
investment advisory fees paid by the Fund amounted to 0.75% of the Fund's
average net assets. Out of this fee, IFG paid an amount equal to ^ 0.38% of the
Fund's average net assets to IMR as a sub-advisory fee. No fee is paid by the
Fund to IMR.
Under a Transfer Agency Agreement, IFG acts as registrar, transfer agent^
and dividend disbursing agent for the Fund. The Fund pays an annual fee of ^
$20.00 per shareholder account or omnibus account participant for these
services. Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of IFG, may provide
equivalent services to the Fund. In these cases, IFG may pay, out of the fee it
receives from the Fund, an annual sub-transfer agency or record-keeping fee to
the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, record-keeping^ and internal sub-accounting services
for the Fund. For the fiscal year ended July 31, ^ 1996, the Fund paid IFG a fee
for these services equal to ^ a base fee of $10,000 plus 0.015% of the Fund's
average net assets.
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended July 31, ^ 1996, including investment management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to ^
1.62% of the Fund's average net assets. Certain Fund expenses are absorbed
voluntarily by IFG and IMR in order to ensure that the Fund's total operating
expenses do not exceed 1.50% of the Fund's average net assets. In the absence of
this voluntary expense limitation, the Fund's total operating expenses for the
year ended July 31, ^ 1996, would have been ^ 2.24% of the Fund's average net
assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
<PAGE>
at the best available prices. As discussed under "How ^ To Buy Shares --
Distribution Expenses," the Fund may market its shares through intermediary
brokers or dealers that have entered into Dealer Agreements with IFG^ as the
Fund's Distributor. The Fund may place orders for portfolio transactions with
qualified ^ broker-dealers that recommend the Fund^ or sell shares of the Fund^
to clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of the execution of the transaction and
level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices -- Placement
of Portfolio Brokerage" in the Statement of Additional Information.
The parent company for IFG and IMR is INVESCO PLC, a publicly traded
holding company whose subsidiaries provide investment services around the world.
IFG was established in 1932 and, as of July 31, ^ 1996, managed 14 mutual funds,
consisting of ^ 39 separate portfolios, with combined assets of approximately ^
$12.2 billion on behalf of over ^ 821,000 shareholders. IMR also acts as
sub-adviser to the INVESCO Small Company Fund and offers investment services to
U.S. institutions and wealthy individuals.
FUND PRICE AND PERFORMANCE
Determining Price. The value of your investment in the Fund will vary
daily. The price per share is also known as the Net Asset Value ^("NAV"). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading (normally, 4:00 p.m., New York time). NAV is calculated
by adding together the current market value of all of the Fund's assets,
including accrued interest and dividends; then subtracting liabilities,
including accrued expenses; and finally dividing that dollar amount by the total
number of shares outstanding.
Performance Data. To keep shareholders and potential investors informed,
we will occasionally advertise the Fund's total return for one-, five-^ and
ten-year periods (or since inception). Total return figures show the rate of
return on an investment in the Fund, assuming reinvestment of all dividends and
capital gain distributions for the periods cited. Cumulative total return shows
the actual rate of return on an investment; average annual total return
represents the average annual percentage change in the value of an investment.
Both cumulative and average annual total returns tend to "smooth out"
fluctuations in the Fund's investment results, not showing the interim
variations in performance over the periods cited. More information about the
Fund's recent and historical performance is contained in the Fund's Annual
Report to ^ Shareholders. You can get a free copy by calling or writing to IFG
using the phone number or address on the cover of this prospectus.
When we quote mutual fund rankings published by Lipper Analytical
Services, Inc., we may compare the Fund to others in its category of Flexible
Portfolio Funds, as well as the broad-based Lipper general fund groupings. These
<PAGE>
rankings allow you to compare the Fund to its peers. Other independent
financial media also produce performance- or service-related comparisons, which
you may see in our promotional materials. For more information, see "Fund
Performance" in the Statement of Additional Information.
Performance figures are based on historical investment results and are not
intended to suggest future performance.
HOW TO BUY SHARES
The following chart shows several convenient ways to invest in the Fund.
Your new Fund shares will be priced at the NAV next determined after your order
is received in proper form. There is no charge to invest, exchange^ or redeem
shares when you make transactions directly through IFG. However, if you invest
in the Fund through a securities broker, you may be charged a commission or
transaction fee. For all new accounts, please send a completed application form.
Please specify which Fund you wish to purchase.
Fund Management reserves the right to increase, reduce or waive the
minimum investment requirements in its sole discretion, where it determines this
action is in the best interests of the Fund. Further, Fund Management reserves
the right in its sole discretion to reject any order for the purchase of Fund
shares (including purchases by exchange) when, in its judgment, such rejection
is in the Fund's best interests.
<PAGE>
How To Buy Shares
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check $1,000 for regular If your check does
Mail to: account; not clear, you will
INVESCO Funds $250 for an be responsible for
Group, Inc., Individual any related loss
P.O. Box 173706, Retirement Account; the Fund or IFG
Denver, CO 80217- $50 minimum for incurs. If you are
3706. each subsequent already a
Or you may send investment. shareholder in the
your check by INVESCO funds, the
overnight courier Fund may seek
to: 7800 E. Union reimbursement from
Ave., your existing
Denver, CO 80237. account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or $1,000. Payment must be
Wire received within 3
Call 1-800-525-8085 business days, or
to request your the transaction may
purchase. Then send be cancelled. If a
your check by telephone purchase
overnight courier is cancelled due to
to our street nonpayment, you
address: will be responsible
7800 E. Union Ave., for any related
Denver, CO 80237. loss the Fund or
Or you may transmit IFG incurs. If you
your payment by are already a
bank wire (call IFG shareholder in the
for instructions). INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or $50 per month for Like all regular
Direct Payroll EasiVest; $50 per investment plans,
Purchase pay period for neither EasiVest
You may enroll on Direct Payroll nor Direct Payroll
the fund Purchase. You may Purchase ensures a
application, or start or stop your profit or protects
call us for the regular investment against loss in a
correct form and plan at any time, falling market.
more details. with two weeks' Because you'll
Investing the same notice to IFG. invest continually,
amount on a monthly regardless of
basis allows you to varying price
buy more shares levels, consider
when prices are low your financial
and fewer shares ability to keep
when prices are buying through low
high. This "dollar- price levels. And
cost averaging" may remember that you
help offset market will lose money if
fluctuations. Over you redeem your
a period of time, shares when the
your average cost market value of all
per share may be your shares is less
less than the than their cost.
actual average
price per share.
- --------------------------------------------------------------------------------
By PAL $1,000. Be sure to write
Your "Personal down the
Account Line" is confirmation number
available for provided by PAL.
subsequent Payment must be
purchases and received within 3
exchanges 24-hours business days, or
a day. Simply call the transaction may
1-800-424-8085. be cancelled. If a
telephone purchase is
cancelled due to
nonpayment, you will be
responsible for any
related loss the Fund or
IFG incurs. If you are
already a shareholder in
the INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege" below.
another of the for written
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
Automatic Monthly purchases requested
Exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
================================================================================
Exchange Privilege. You may exchange your shares in this Fund for those in
another INVESCO fund^ on the basis of their respective net asset values at the
time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider their differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make four exchanges out of each fund during each
calendar year.
3) An exchange is the redemption of shares from one fund followed by the
purchase of shares in another. Therefore, any gain or loss realized on the
exchange is recognizable for federal income tax purposes (unless, of course,
your account is tax-deferred).
4) The Fund reserves the right to reject any exchange request, or to
modify or terminate exchange privileges, in the best interests of the Fund and
its shareholders. Notice of all such modifications or termination will be given
at least 60 days prior to the effective date of the change in privilege^ except
for unusual instances (such as when redemptions of the exchanged shares are
suspended under Section 22(e) of the Investment Company Act of 1940^ or when
sales of the fund into which you are exchanging are temporarily stopped).
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of shares. These expenditures may include compensation (including
incentive compensation and/or continuing compensation based on the amount of
<PAGE>
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IFG-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers^ and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions.
In addition, other reimbursable expenditures include advertising,
preparation and distribution of sales literature, printing and distribution of
prospectuses to prospective investors, public relations efforts, marketing
programs and other services and promotional activities agreed upon from time to
time by the Fund and its board of directors. These services and activities may
be conducted by the staff of IFG or its affiliates or by third parties.
IFG is not entitled to reimbursement for overhead expenses under the Plan^
but may be reimbursed for all or a portion of the compensation paid for salaries
and other employee benefits for IFG personnel whose primary responsibilities
involve marketing shares of the INVESCO funds, including the Fund. Also, any
payments made by the Fund may not be used to finance the distribution of shares
of any other mutual fund advised by IFG. Payments made by the Fund under the
Plan for compensation of marketing personnel, as noted above, are based on an
allocation formula designed to ensure that all such payments are appropriate.
Under the Plan, the Fund's reimbursement to IFG is limited to an amount
computed at a maximum annual rate of 0.25 ^% of the Fund's average net assets.
Payments by the Fund under the Plan, for any month, may only be made to
reimburse expenditures incurred during the rolling 12-month period in which that
month falls, although this period is expanded to 24 months for expenses incurred
during the first 24 months of the Fund's operations. Therefore, any reimbursable
expenses incurred by IFG in excess of the limitations described above are not
reimbursable and will be borne by IFG. In addition, IFG may from time to time
make additional payments from its revenues to securities dealers and other
financial institutions that provide distribution-related and/or administrative
services for the Fund. No further payments will be made by the Fund under the
Plan in the event of its termination.
FUND SERVICES
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges^ and redemptions. If you choose certain
<PAGE>
recurring transaction plans (for instance, EasiVest), your transactions
will be confirmed on your quarterly Investment Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends and capital gain distributions
are automatically invested in additional fund shares at the NAV on the
ex-dividend date, unless you choose to have dividends and/or capital gain
distributions automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application^ or a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if the Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans And IRAs. Fund shares may be purchased for Individual
Retirement Accounts (IRAs) and many types of tax-deferred retirement plans. IFG
can supply you with information and forms to establish or transfer your existing
plan or account.
HOW TO SELL SHARES
The ^ chart on page 19 shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at their current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
Please ^ specify from which fund you wish to redeem shares. Shareholders
have a separate account for each fund in which they invest.
<PAGE>
How To Sell Shares
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone $250 (or, if less, This option is not
Call us toll-free full liquidation of available for
at 1-800-525-8085. the account) for a shares held in
redemption check; Individual
$1,000 for a wire Retirement Accounts
to bank of record. (IRAs).
The maximum amount
which may be
redeemed by
telephone is
generally $25,000.
These telephone
redemption
privileges may be
modified or
terminated in the
future at the
discretion of IFG.
- --------------------------------------------------------------------------------
In Writing Any amount. The If the shares to be
Mail your request redemption request redeemed are
to INVESCO Funds must be signed by represented by
Group, Inc., P.O. all registered stock certificates,
Box 173706, shareholders(s). the certificates
Denver, CO 80217- Payment will be must be sent to
3706. You may also mailed to your IFG.
send your request address of record,
by overnight or to a pre-
courier to 7800 E. designated bank.
Union Ave., Denver,
CO 80237.
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege," ^ page
another of the for written 50.
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
automatic monthly exchanges requested
exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal $100 per payment, You must have at
Plan on a monthly or least $10,000 total
You may call us to quarterly basis. invested with the
request the The redemption INVESCO funds, with
appropriate form check may be made at least $5,000 of
and more payable to any that total invested
information at 1- party you in the fund from
800-525-8085. designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third Any amount. All registered
Party owners of the
Mail your request account must sign
to INVESCO Funds the request, with a
Group, Inc., P.O. signature guarantee
Box 173706, from an eligible
Denver, CO 80217- guarantor financial
3706. institution, such
as a commercial
bank or recognized
national or
regional securities
firm.
================================================================================
While the Fund will attempt to process telephone redemptions promptly,
there may be times -- particularly in periods of severe economic or market
disruption -- when you may experience delays in redeeming shares by phone.
Payments of redemption proceeds will be mailed within seven days following
receipt of the redemption request in proper form. However, payment may be
postponed under unusual circumstances -- for instance, if normal trading is not
taking place on the New York Stock Exchange or during an emergency as defined by
the Securities and Exchange Commission. If your shares were purchased by a check
which has not yet cleared, payment will be made promptly upon clearance of the
purchase check (which may take up to 15 days).
If you participate in ^ EasiVest, the Fund's automatic monthly investment
program, and redeem all of the shares in your account, we will terminate any
further ^ EasiVest purchases unless you instruct us otherwise.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to involuntarily redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state^
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically ^ reinvested in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to withholding of foreign taxes on dividends or
interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund meets the qualifications to
enable it to pass these taxes through to shareholders for use by them as a
foreign tax credit or deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless you are subject to
backup withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax identification
number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders on a quarterly basis, at the discretion of the Fund's
board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, are distributed
to shareholders at least annually, usually in December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of distribution regardless of how long the shares have
been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying the full purchase price, a portion of
which is then returned in the form of a taxable distribution.
<PAGE>
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending upon how long
the Fund held the security which gave rise to the gains. The capital gains
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as taxable dividends.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Capital Gain Distributions and Taxes" in
the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company have equal voting rights based on
one vote for each share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all the funds of the Company voting together. In other cases, such as voting
upon an investment advisory contract, voting is on a fund-by-fund basis. To the
extent permitted by law, when not all funds are affected by a matter to be voted
upon, only shareholders of the fund or funds affected by the matter will be
entitled to vote thereon. The Company is not generally required and does not
expect to hold regular annual meetings of shareholders. However, when requested
to do so in writing by the holders of 10% or more of the outstanding shares of
the Company or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority of
the outstanding shares of the Company. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
Master/Feeder Option. As a matter of fundamental policy, the Company may,
in the future, seek to achieve the Fund's investment objective by investing all
of the Fund's assets in another investment company having substantially the same
fundamental investment objective, policies and limitations. It is expected that
any such investment company would be managed by IFG in substantially the same
manner as the Fund. If permitted by applicable law, any such investment may be
made in the sole discretion of the Company's board of directors without a vote
of the Fund's shareholders. However, shareholders will be given at least 30 days
prior notice of any such investment. Such an investment would be made only if
the board of directors determines it to be in the best interests of the Fund and
<PAGE>
its shareholders based on potential cost savings, operational efficiencies
or other factors. No assurance can be given that costs would be materially
reduced if this option were implemented.
<PAGE>
INVESCO MULTI-ASSET ALLOCATION FUND A no-load
mutual fund seeking capital appreciation and
current income.
PROSPECTUS
^ December 1, 1996
To receive general information and prospectuses on any of the INVESCO
funds or retirement plans, or to obtain current account or price information or
responses to other questions, call toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line^, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
^ Post Office Box 173706
Denver, Colorado 80217-3706
You can find us on The World Wide Web:
http://www.invesco.com
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue, Lobby Level
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
^ December 1, 1996
INVESCO MULTIPLE ASSET FUNDS, INC.
Two no-load portfolios seeking
capital appreciation and current income
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
- --------------------------------------------------------------------------------
INVESCO MULTIPLE ASSET FUNDS, INC., (the "Company") is a diversified,
managed, no-load mutual fund consisting of two separate portfolios of
investments, INVESCO Multi-Asset Allocation Fund (the "Multi-Asset Allocation
Fund") and INVESCO Balanced Fund (the "Balanced Fund") (collectively, the
"Funds" and individually, a "Fund"). The investment objective of each Fund is to
provide investors with a high total return on investments through capital
appreciation and current income. Each Fund pursues its objective by investing in
a combination of equity securities and fixed-income securities. Investors may
purchase shares of either or both Funds.
Additional funds may be added in the future.
Separate Prospectuses for each of the Funds, dated ^ December 1, 1996,
which provide the basic information you should know before investing in a Fund,
may be obtained without charge from INVESCO Funds Group, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706. This Statement of Additional Information is not a ^
prospectus but contains information in addition to and more detailed than that
set forth in each ^ prospectus. It is intended to provide you with additional
information regarding the activities and operations of the Fund and should be
read in conjunction with the Prospectus.
Investment Adviser and Distributor: INVESCO FUNDS GROUP, INC.
<PAGE>
TABLE OF CONTENTS Page
INVESTMENT POLICIES AND RESTRICTIONS 61
THE FUND AND ITS MANAGEMENT 74
HOW SHARES CAN BE PURCHASED 87
HOW SHARES ARE VALUED 90
FUND PERFORMANCE 92
SERVICES PROVIDED BY THE FUND 93
TAX-DEFERRED RETIREMENT PLANS 94
HOW TO REDEEM SHARES 95
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES 95
INVESTMENT PRACTICES 98
ADDITIONAL INFORMATION 101
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
As discussed in their respective Prospectuses in the sections
entitled "Investment Objective ^ And Strategy" and "Investment
Policies ^ And Risks," the Funds may invest in a variety of
securities, and employ a broad range of investment techniques, in
seeking to achieve their respective investment objectives. Such
securities and techniques include the following:
Types of Equity Securities
As described in the Prospectuses, equity securities which may be purchased
by the Funds consist of common, preferred and convertible preferred stocks, and
securities having equity characteristics such as rights, warrants and
convertible debt securities. Common stocks and preferred stocks represent equity
ownership interests in a corporation and participate in the corporation's
earnings through dividends which may be declared by the corporation. Unlike
common stocks, preferred stocks are entitled to stated dividends payable from
the corporation's earnings, which in some cases may be "cumulative" if prior
stated dividends have not been paid. Dividends payable on preferred stock have
priority over distributions to holders of common stock, and preferred stocks
generally have preferences on the distribution of assets in the event of the
corporation's liquidation. Preferred stocks may be "participating," which means
that they may be entitled to dividends in excess of the stated dividend in
certain cases. The rights of common and preferred stocks are generally
subordinate to rights associated with a corporation's debt securities. Rights
and warrants are securities which entitle the holder to purchase the securities
of a company (generally, its common stock) at a specified price during a
specified time period. Because of this feature, the values of rights and
warrants are affected by factors similar to those which determine the prices of
common stocks and exhibit similar behavior. Rights and warrants may be purchased
directly or acquired in connection with a corporate reorganization or exchange
offer.
Convertible securities which may be purchased by the Funds include
convertible debt obligations and convertible preferred stock. A convertible
security entitles the holder to exchange it for a fixed number of shares of
common stock (or other equity security), usually at a fixed price within a
specified period of time. Until conversion, the holder receives the interest
paid on a convertible bond or the dividend preference of a preferred stock.
Convertible securities have an "investment value" which is the theoretical
value determined by the yield it provides in comparison with similar securities
without the conversion feature. Investment value changes are based upon
prevailing interest rates and other factors. They also have a "conversion value"
which is the worth in market value if the security were exchanged for the
underlying equity security. Conversion value fluctuates directly with the price
of the underlying security. If conversion value is
<PAGE>
substantially below investment value, the price of the convertible security is
governed principally by its investment value. If the conversion value is near or
above investment value, the price of the convertible security generally will
rise above investment value and may represent a premium over conversion value
due to the combination of the convertible security's right to interest (or
dividend preference) and the possibility of capital appreciation from the
conversion feature. A convertible security's price, when price is influenced
primarily by its conversion value, generally will yield less than a senior
non-convertible security of comparable investment value. Convertible securities
may be purchased at varying price levels above their investment values or
conversion values. However, there is no assurance that any premium above
investment value or conversion value will be recovered because prices change
and, as a result, the ability to achieve capital appreciation through conversion
may be eliminated.
Illiquid and 144A Securities. Each Fund may invest in securities that are
illiquid because they are subject to restrictions on their resale ("restricted
securities") or because, based upon their nature or the market for such
securities, they are not readily marketable. However, a Fund will not purchase
any such security if the purchase would cause the Fund to invest more than 15%
of its net assets, measured at the time of purchase, in illiquid securities.
Repurchase agreements maturing in more than seven days will be considered as
illiquid for purposes of this restriction. Investments in illiquid securities
involve certain risks to the extent that a Fund may be unable to dispose of such
a security at the time desired or at a reasonable price. In addition, in order
to resell a restricted security, a Fund might have to bear the expense and incur
the delays associated with effecting registration.
Each Fund also may invest in restricted securities that can be resold to
institutional investors pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "1933 Act") (hereinafter referred to as "Rule 144A Securities").
These securities may be purchased without regard to the foregoing 15% limitation
if a liquid institutional trading market exists. The Fund's board of directors
has delegated to Fund ^ Management the authority to determine the liquidity of
Rule 144A Securities pursuant to guidelines approved by the board. In recent
years, a large institutional market has developed for Rule 144A Securities.
Institutional investors generally will not seek to sell these instruments to the
general public^ but instead will often depend on an efficient institutional
market in which Rule 144A Securities can readily be resold or on an issuer's
ability to honor a demand for repayment. Therefore, the fact that there are
contractual or legal restrictions on resale to the general public or certain
institutions is not dispositive of the liquidity of such investments.
Institutional markets for Rule 144A Securities may provide both readily
ascertainable values for Rule 144A Securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
<PAGE>
of qualified institutional buyers interested in purchasing a Rule 144A
Security held by the Fund, however, could adversely affect the marketability of
such security, and the Fund might be unable to dispose of such security promptly
or at reasonable prices.^
American Depository Receipts
As discussed in the Prospectuses, the Funds may invest in American
Depository Receipts ("ADRs"). ADRs are receipts representing shares of a foreign
corporation held by a U.S. bank that entitle the holder to all dividends and
capital gains. ADRs are denominated in U.S. dollars and trade in the U.S.
securities markets. ADRs may be issued in sponsored or unsponsored programs. In
sponsored programs, the issuer makes arrangements to have its securities traded
in the form of ADRs; in unsponsored programs, the issuer may not be directly
involved in the creation of the program. Although the regulatory requirements
with respect to sponsored and unsponsored programs are generally similar, the
issuers of unsponsored ADRs are not obligated to disclose material information
in the United States and, therefore, such information may not be reflected in
the market value of the ADRs.
Obligations of Domestic Banks
These obligations consist of certificates of deposit ("CDs") and ^
bankers' acceptances issued by domestic banks (including their foreign branches)
having total assets in excess of $5 billion, which meet the Funds' minimum
rating requirements. CDs are issued against deposits in a commercial bank for a
specified period and rate and are normally negotiable. Eurodollar CDs are
certificates issued by a foreign branch (usually London) of a U.S. domestic
bank, and, as such, the credit is deemed to be that of the domestic bank.
Bankers' acceptances are short-term credit instruments evidencing the
promise of the bank (by virtue of the bank's "acceptance") to pay at maturity a
draft which has been drawn on it by a customer (the "drawer"). These instruments
are used to finance the import, export, transfer^ or storage of goods and
reflect the obligation of both the bank and the drawer to pay the face amount.
Commercial Paper
The Funds may invest in these obligations, which are short-term promissory
notes issued by domestic corporations to meet current working capital
requirements. Such paper may be unsecured or backed by a letter of credit.
Commercial paper issued with a letter of credit is, in effect, "two-party
paper," with the issuer directly responsible for payment, plus a bank's
guarantee that if the note is not paid at maturity by the issuer, the bank will
pay the principal and interest to the buyer. Commercial paper is sold either as
interest-bearing or on a discounted basis, with maturities not exceeding 270
<PAGE>
days. The Funds will only invest in commercial paper which at the date of
purchase is rated A-2 or higher by Standard & Poor's ^ or Prime-2 or higher by
Moody's Investors Service, Inc. or, if unrated, commercial paper that is judged
by Fund Management to be equivalent in quality to commercial paper having such
ratings. A commercial paper rating of A-2 or Prime-2 indicates a strong capacity
for repayment of short-term promissory obligations.
Mortgage-Backed Securities
The Funds may invest in mortgage-backed securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities, or institutions such as
banks, insurance companies^ and savings and loans. Some of these securities,
such as GNMA certificates, are backed by the full faith and credit of the U.S.
Treasury while others, such as Freddie Mac certificates, are not.
Mortgage-backed securities represent interests in a pool of mortgages.
Principal and interest payments made on the mortgages in the underlying mortgage
pool are passed through to the Funds. Unscheduled prepayments of principal
shorten the securities' weighted average life and may lower their total return.
The value of these securities also may change because of changes in the market's
perception of the creditworthiness of the federal agency or private institution
that issued them. In addition, the mortgage securities market in general may be
adversely affected by changes in governmental regulation or tax policies.
Asset-Backed Securities
Asset-backed securities represent interests in pools of consumer loans
(generally unrelated to mortgage loans) and most often are structured as
pass-through securities. Interest and principal payments ultimately depend on
payment of the underlying loans by individuals, although the securities may be
supported by letters of credit or other credit enhancements. The underlying
assets (e.g., loans) are subject to prepayments which shorten the securities'
weighted average life and may lower their returns. If the credit support or
enhancement is exhausted, losses or delays in payment may result if the required
payments of principal and interest are not made. The value of these securities
also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool^ or the financial institution providing the credit support or enhancement.
Zero Coupon Bonds
The Funds may invest in zero coupon bonds or "strips." Zero coupon bonds
do not make regular interest payments; rather, they are sold at a discount from
face value. Principal and accreted discount (representing interest accrued but
not paid) are paid at maturity. "Strips" are debt securities that are stripped
<PAGE>
of their interest after the securities are issued^ but otherwise are
comparable to zero coupon bonds. The market value of "strips" and zero coupon
bonds generally fluctuates in response to changes in interest rates to a greater
degree than interest-paying securities of comparable term and quality. In order
for a Fund to maintain its qualification as a regulated investment company, it
may be required to distribute income recognized on zero coupon bonds even though
no cash may be paid to the Fund until the maturity or call date of the bond, and
such distribution could reduce the amount of cash available for investment by
the Fund.
When-Issued Securities
Each Fund may make commitments in an amount of up to 10% of the value of
its total assets at the time any commitment is made to purchase or sell
securities on a when-issued or delayed delivery basis (i.e., securities may be
purchased or sold by the Fund with settlement taking place in the future, often
a month or more later). The payment obligation and, in the case of debt
securities, the interest rate that will be received on the securities are
generally fixed at the time the Fund enters into the commitment. During the
period between purchase and settlement, no payment is made by the Fund and no
interest accrues to the Fund. At the time of settlement, the market value of the
security may be more or less than the purchase price, and the Fund bears the
risk of such market value fluctuations. The Fund maintains cash, U.S. government
securities^ or other high-grade debt obligations readily convertible into cash
having an aggregate value equal to the amount of such purchase commitments in a
segregated account with its custodian until payment is made.
Securities Lending
Each Fund also may lend its securities to qualified brokers, dealers,
banks^ or other financial institutions. This practice permits the Fund to earn
income^ which, in turn, can be invested in additional securities to pursue the
Fund's investment objective. Loans of securities by the Fund will be
collateralized by cash, letters of credit^ or securities issued or guaranteed by
the U.S. government or its agencies equal to at least 100% of the current market
value of the loaned securities, determined on a daily basis. Lending securities
involves certain risks, the most significant of which is the risk that a
borrower may fail to return a portfolio security. The Fund monitors the
creditworthiness of borrowers in order to minimize such risks. The Fund will not
lend any security if, as a result of the loan, the aggregate value of securities
then on loan would exceed 33-1/3% of the Fund's total assets (taken at market
value).
Futures and Options on Futures and Securities
As described in the Funds' Prospectuses, the Funds may enter into futures
<PAGE>
contracts, and purchase and sell ("write") options to buy or sell futures
contracts and other securities. The Funds will comply with and adhere to
all limitations in the manner and extent to which they effect transactions in
futures and options on such futures currently imposed by the rules and policy
guidelines of the Commodity Futures Trading Commission (the "CFTC") as
conditions for exemption of a mutual fund, or investment advisers thereto, from
registration as a commodity pool operator. Under those restrictions, a Fund will
not, as to any positions, whether long, short or a combination thereof, enter
into futures and options thereon for which the aggregate initial margins and
premiums exceed 5% of the fair market value of the Fund's total assets after
taking into account unrealized profits and losses on options it has entered
into. In the case of an option that is "in-the-money," as defined in the
Commodity Exchange Act (the "CEA"), the in-the-money amount may be excluded in
computing such 5%. (In general, a call option on a future is "in-the-money" if
the value of the future exceeds the exercise ("strike") price of the call; a put
option on a future is "in-the-money" if the value of the future which is the
subject of the put is exceeded by the strike price of the put.) The Funds may
use futures and options thereon solely for bona fide hedging or for other
non-speculative purposes within the meaning and intent of the applicable
provisions of the CEA and the regulations thereunder. As to long positions which
are used as part of the Funds' portfolio strategies and are incidental to their
activities in the underlying cash market, the "underlying commodity value" of
the Funds' futures and options thereon must not exceed the sum of (i) cash set
aside in an identifiable manner, or short-term U.S. debt obligations or other
dollar-denominated high-quality, short-term money instruments so set aside, plus
sums deposited on margin; (ii) cash proceeds from existing investments due in 30
days; and (iii) accrued profits held at the futures commission merchant. The
"underlying commodity value" of a future is computed by multiplying the size of
the future by the daily settlement price of the future. For an option on a
future, that value is the underlying commodity value of the future underlying
the option.
Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Instead, the
Fund will be required to deposit in a segregated asset account with the broker
an amount of cash or qualifying securities (currently U.S. Treasury bills),
currently in a minimum amount of $15,000. This is called "initial margin." Such
initial margin is in the nature of a performance bond or good faith deposit on
the contract. However, ^ because losses on open contracts are required to be
reflected in cash in the form of variation margin payments, the Fund may be
required to make additional payments during the term of the contracts to its
broker. Such payments would be required, for example, where, during the term of
an interest rate futures contract purchased by a Fund, there was a general
increase in interest rates, thereby making the Fund's portfolio securities less
valuable. In all instances involving the purchase of financial futures contracts
by a Fund, an amount of cash together with such other securities as permitted by
<PAGE>
applicable regulatory authorities to be utilized for such purpose, at least
equal to the market value of the futures contracts, will be deposited in a
segregated account with the Fund's custodian to collateralize the position. At
any time prior to the expiration of a futures contract, the Fund may elect to
close its position by taking an opposite position which will operate to
terminate the Fund's position in the futures contract. For a more complete
discussion of the risks involved in futures and options on futures and other
securities, refer to Appendix A ("Description of Futures and Options
Contracts").
Where futures are purchased to hedge against a possible increase in the
price of a security before a Fund is able in an orderly fashion to invest in the
security, it is possible that the market may decline instead. If the Fund, as a
result, concluded not to make the planned investment at that time because of
concern as to possible further market decline or for other reasons, the Fund
would realize a loss on the futures contract that is not offset by a reduction
in the price of securities purchased.
In addition to the possibility that there may be an imperfect correlation
or no correlation at all between movements in the futures contract and the
portion of the portfolio being hedged, the price of futures may not correlate
perfectly with movements in the prices due to certain market distortions. All
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between the underlying securities and the
value of the futures contract. Moreover, the deposit requirements in the futures
market are less onerous than margin requirements in the securities market and
may therefore cause increased participation by speculators in the futures
market. Such increased participation may also cause temporary price distortions.
Due to the possibility of price distortion in the futures market and because of
the imperfect correlation between movements in the value of the underlying
securities and movements in the prices of futures contracts, the value of
futures contracts as a hedging device may be reduced.
In addition, if the Fund has insufficient available cash, it may at times
have to sell securities to meet variation margin requirements. Such sales may
have to be effected at a time when it may be disadvantageous to do so.
Options on Futures Contracts
The Funds may buy and write options on futures contracts for hedging
purposes. The purchase of a call option on a futures contract is similar in some
respects to the purchase of a call option on an individual security. Depending
on the pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the underlying instrument,
ownership of the option may or may not be less risky than ownership of the
<PAGE>
futures contract or the underlying instrument. As with the purchase of
futures contracts, when a Fund is not fully invested, it may buy a call option
on a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the option is below the exercise price, a
Fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in the Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at expiration of the option is higher than the exercise price,
the Fund will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which the Fund is
considering buying. If a call or put option the Fund has written is exercised,
the Fund will incur a loss which will be reduced by the amount of the premium it
received. Depending on the degree of correlation between change in the value of
its portfolio securities and changes in the value of the futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, a Fund may buy a put option on a futures contract to hedge the Fund's
portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.
Forward Foreign Currency Contracts
The Funds may enter into forward currency contracts to purchase or sell
foreign currencies (i.e., non-U.S. currencies) as a hedge against possible
variations in foreign exchange rates. A forward foreign currency exchange
contract is an agreement between the contracting parties to exchange an amount
of currency at some future time at an agreed upon rate. The rate can be higher
or lower than the spot rate between the currencies that are the subject of the
contract. A forward contract generally has no deposit requirement, and such
transactions do not involve commissions. By entering into a forward contract for
the purchase or sale of the amount of foreign currency invested in a foreign
<PAGE>
security transaction, a Fund can hedge against possible variations in the
value of the dollar versus the subject currency either between the date the
foreign security is purchased or sold and the date on which payment is made or
received or during the time the Fund holds the foreign security. Hedging against
a decline in the value of a currency in the foregoing manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
preclude the opportunity for gain if the value of the hedged currency should
rise. The Funds will not speculate in forward currency contracts. Although the
Funds have not adopted any limitations on their ability to use forward contracts
as a hedge against fluctuations in foreign exchange rates, the Funds do not
attempt to hedge all of their non-U.S. portfolio positions and will enter into
such transactions only to the extent, if any, deemed appropriate by their
investment adviser or sub-adviser. The Funds will not enter into forward
contracts for a term of more than one year.
Swaps and Swap-Related Products
Interest rate swaps involve the exchange by a Fund with another party of
their respective commitments to pay or receive interest, e.g., an exchange of
floating rate payments for fixed rate payments. The exchange commitments can
involve payments to be made in the same currency or in different currencies. The
purchase of an interest rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to receive payments of
interest on a contractually-based principal amount from the party selling the
interest rate cap. The purchase of an interest rate floor entitles the
purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a contractually-based
principal amount from the party selling the interest rate floor.
Although the Funds currently do not intend to use interest rate swaps,
caps and floors, they are permitted to enter into such transactions on either an
asset-based or liability-based basis, depending upon whether they are hedging
their assets or their liabilities. Interest rate swaps usually are entered into
on a net basis, i.e., the two payment streams are netted out, with a Fund
receiving or paying, as the case may be, only the net amount of the two
payments. The net amount of the excess, if any, of a Fund's obligations over its
entitlement with respect to each interest rate swap will be calculated on a
daily basis, and an amount of cash or high-grade liquid assets having an
aggregate net asset value at least equal to the accrued excess will be
maintained in a segregated account by the Funds' custodian. If a Fund enters
into an interest rate swap on other than a net basis, the Fund would maintain a
segregated account in the full amount accrued on a daily basis of the Fund's
obligations with respect to the swap. The Funds will not enter into any interest
rate swap, cap or floor transaction unless the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in one of the three
<PAGE>
highest rating categories of at least one nationally recognized statistical
rating organization at the time of entering into such transaction. The Funds'
adviser or sub-adviser will monitor the creditworthiness of all counterparties
on an ongoing basis. If there is a default by the other party to such a
transaction, a Fund would have contractual remedies pursuant to the agreements
related to the transaction.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. Caps and floors are more
recent innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps. To the extent a
Fund sells (i.e., writes) caps and floors, it will maintain in a segregated
account cash or high-grade liquid assets having an aggregate net asset value at
least equal to the full amount, accrued on a daily basis, of the Fund's
obligations with respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions that
may be entered into by a Fund. These transactions may in some instances involve
the delivery of securities or other underlying assets by a Fund or its
counterparty to collateralize obligations under the swap. The documentation
currently used in those markets attempts to limit the risk of loss with respect
to interest rate swaps to the net amount of the payments that a party is
contractually obligated to make. If the other party to an interest rate swap
that is not collateralized defaults, the Fund would anticipate losing the net
amount of the payments that the Fund contractually is entitled to receive over
the payments that the Fund is contractually obligated to make. The Funds may buy
and sell (i.e., write) caps and floors without limitation, subject to the
segregated account requirement described above as well as the Funds' other
investment restrictions set forth below.
<PAGE>
Investment Restrictions
As described in the section of each Fund's Prospectus entitled "Investment
Objective ^ And Policies," the Funds operate under certain investment
restrictions which are fundamental and may not be changed with respect to a
particular Fund without the prior approval of the holders of a majority, as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"), of
the outstanding voting securities of that Fund. For purposes of the following
limitations, all percentage limitations apply immediately after a purchase or
initial investment. Any subsequent change in a particular percentage resulting
from fluctuations in value does not require elimination of any security from a
Fund.
Each Fund may not:
1. With respect to seventy-five percent (75%) of its 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;
2. Borrow money, 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 net
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.
3. Invest more than 25% of the value of its total assets in
any particular industry (other than Government
securities).
4. 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.
5. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this
<PAGE>
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).
6. Lend any security or make any other 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 purchases of commercial paper, debt
securities or to repurchase agreements.)
7. 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.
As a fundamental policy in addition to the above, each 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.
Furthermore, the board of directors has adopted additional investment
restrictions for each Fund. These restrictions are operating policies of each
Fund and may be changed by the board of directors without shareholder approval.
The additional investment restrictions adopted by the board of directors to date
include the following:
(a) The Fund's investments in warrants, valued at the lower
of cost or market, may not exceed 5% of the value of its
net assets. Included within that amount, but not to
exceed 2% of the value of the Fund's net assets, may be
warrants that are not listed on the New York or American
Stock Exchanges. Warrants acquired by the Fund in units
or attached to securities shall be deemed to be without
value.
(b) The Fund will not (i) enter into any futures contracts or
options on futures contracts if immediately thereafter
the aggregate margin deposits on all outstanding futures
contracts positions held by the Fund and premiums paid on
outstanding options on futures contracts, after taking
into account unrealized profits and losses, would exceed
5% of the market value of the total assets of the Fund,
or (ii) enter into any futures contracts if the aggregate
net amount of the Fund's commitments under outstanding
futures contracts positions of the Fund would exceed the
market value of the total assets of the Fund.
(c) The Fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and
<PAGE>
amount to the securities sold short without the payment of any
additional consideration therefor, and provided that
transactions in options, swaps and forward futures contracts are
not deemed to constitute selling securities short.
(d) The Fund does not currently intend to purchase securities on margin,
except that the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that
margin payments and other deposits in connection with transactions
in options, futures, swaps and forward contracts shall not be deemed
to constitute purchasing securities on margin.
(e) The Fund does not currently intend to (i) purchase
securities of closed end investment companies, except in
the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain
securities issued by other open-end investment companies.
Limitations (i) and (ii) do not apply to money market
funds or to securities received as dividends, through
offers of exchange, or as a result of a reorganization,
consolidation^ or merger. If the Fund invests in a money
market fund, the Fund's investment adviser will waive its
advisory fee on the assets of the Fund which are invested
in the money market fund during the time that those
assets are so invested.
(f) The Fund may not mortgage or pledge any securities owned
or held by the Fund in amounts that exceed, in the
aggregate, 15% of the Fund's net asset value, provided
that this limitation does not apply to reverse repurchase
agreements or in the case of assets deposited to margin
or guarantee positions in futures, options, swaps or
forward contracts or placed in a segregated account in
connection with such contracts.
(g) The Fund does not currently intend to purchase securities
of any issuer (other than U.S. Government agencies and
instrumentalities or instruments guaranteed by an entity
with a record of more than three years' continuous
operation, including that of predecessors) with a record
of less than three years' continuous operation (including
that of predecessors) if such purchase would cause the
Fund's investments in all such issuers to exceed 5% of
the Fund's total assets taken at market value at the time
of such purchase.
(h) The Fund does not currently intend to invest directly in oil, gas^
or other mineral development or exploration programs or leases;
however, the Fund may own debt or equity securities of companies
engaged in those businesses.
<PAGE>
(i) The Fund does not currently intend to purchase any security or enter
into a repurchase agreement if, as a result, more than 15% of its
net assets would be invested in repurchase agreements not entitling
the holder to payment of principal and interest within seven days
and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily
available market. The board of directors, or the Fund's investment
adviser acting pursuant to authority delegated by the board of
directors, may determine that a readily available market exists for
securities eligible for resale pursuant to Rule 144A under the 1933
Act, or any successor to such rule, and therefore that such
securities are not subject to the foregoing limitation.
(j) The Fund may not invest in companies for the purpose of exercising
control or management, except to the extent that exercise by the
Fund of its rights under agreements related to portfolio securities
would be deemed to constitute such control.
In applying the industry concentration investment restriction ^(no. 3,
above), the Funds use an industry classification system based on the O'Neil
Database published by William O'Neil & Co., Inc.
With respect to investment restriction (i) above, the board of directors
has delegated to the Funds' investment adviser the authority to determine that a
liquid market exists for securities eligible for resale pursuant to Rule 144A
under the 1933 Act, or any successor to such rule, and that such securities are
not subject to restriction (i) above. Under guidelines established by the board
of directors, the adviser will consider the following factors, among others, in
making this determination: (1) the unregistered nature of a Rule 144A security^;
(2) the frequency of trades and quotes for the security; (3) the number of
dealers willing to purchase or sell the security and the number of other
potential purchasers; (4) dealer undertakings to make a market in the security;
and (5) the nature of the security and the nature of marketplace trades (e.g.,
the time needed to dispose of the security, the method of soliciting offers and
the mechanics of transfer).
The Company has ^ voluntarily undertaken to comply with the Guidelines for
Registration of Master Fund/Feeder Funds adopted by the membership of the North
American Securities Administrators Association, Inc. in the event that, in the
future, either or both of the Funds is converted into a feeder fund in a master
fund/feeder fund structure. ^
THE FUND AND ITS MANAGEMENT
The Company. The Company was incorporated on August 19, 1993,
under the laws of Maryland.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("INVESCO"), is employed as the Company's investment adviser. INVESCO was
<PAGE>
established in 1932 and also serves as an investment adviser to INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO
Money Market Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value Trust, and
INVESCO Variable Investment Funds, Inc.
The Sub-Advisers. INVESCO, as investment adviser, has contracted with
INVESCO Management & Research, Inc. ("INVESCO Management") for investment
advisory and research services on behalf of INVESCO Multi-Asset Allocation Fund^
and with INVESCO Trust Company ("INVESCO Trust") to provide such services on
behalf of INVESCO Balanced Fund. INVESCO Management and INVESCO Trust have the
primary responsibility for providing portfolio investment management services to
the respective Funds. INVESCO Management, formerly Gardner and Preston Moss,
Inc. is a wholly-owned subsidiary of INVESCO North American Holdings, Inc.
("INAH"), which is also the parent company of INVESCO. INVESCO Trust, a trust
company founded in 1969, is a wholly-owned subsidiary of INVESCO.
INVESCO is an indirect, wholly-owned subsidiary of INVESCO PLC, a
publicly-traded holding company organized in 1935. Through subsidiaries located
in London, Denver, Atlanta, Boston, Louisville, Dallas, Tokyo, Hong Kong^ and
the Channel Islands, INVESCO PLC provides investment services around the world.
INVESCO was acquired by INVESCO PLC in 1982 and as of July 31, ^ 1996, managed
14 mutual funds, consisting of ^ 39 separate portfolios, on behalf of over ^
821,000 shareholders. INVESCO PLC's other North American subsidiaries include
the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia, manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker-dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. of Boston, Massachusetts, primarily
manages pension and endowment accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for INVESCO PLC's clients
worldwide. Clients include corporate plans^ and public pension funds as well as
endowment and foundation accounts.
<PAGE>
The corporate headquarters of INVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Prospectuses, INVESCO, INVESCO Management and INVESCO
Trust permit investment and other personnel to purchase and sell securities for
their own accounts in accordance with a compliance policy governing personal
investing by directors, officers and employees of INVESCO and its North American
affiliates. The policy requires officers, inside directors, investment and other
personnel of INVESCO and its North American affiliates to pre-clear all
transactions in securities not otherwise exempt under the policy. Requests for
trading authority will be denied when, among other reasons, the proposed
personal transaction would be contrary to the provisions of the policy or would
be deemed to adversely affect any transaction then known to be under
consideration for or to have been effected on behalf of any client account,
including the Funds.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of INVESCO
and its North American affiliates to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The provisions of the policy are administered by and subject to
exceptions authorized by INVESCO, INVESCO Management or INVESCO Trust.
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement (the "Agreement") with the Company
which was approved on October 20, 1993, by a vote cast in person by a majority
of the directors of the Company, including a majority of the directors who are
not "interested persons" of the Company or INVESCO at a meeting called for such
purpose. The Agreement was approved by INVESCO Funds Group, Inc. on November 19,
1993, as the then sole shareholder of the Fund. The Agreement is for an initial
term expiring April 30, 1995. The Agreement has been continued by action of the
board of directors through April 30, ^ 1997. Thereafter, the Agreement may be
continued from year to year as to each Fund as long as each such continuance is
specifically approved at least annually by the board of directors of the
Company, or by a vote of the holders of a majority, as defined in the 1940 Act,
of the outstanding shares of the Fund. Any such continuance also must be
approved by a majority of the Company's directors who are not parties to the
Agreement or interested persons (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
continuance. The Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of an assignment to the extent required by the 1940 Act and the
rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolios
of the Funds in conformity with the Funds' investment policies (either directly
<PAGE>
or by delegation to a sub-adviser, which may be a party affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial
and all other services necessary or incidental to the administration of the
affairs of the Funds excluding, however, those services that are the subject of
separate agreement between the Company and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency^ and registrar services, and services
furnished under an Administrative Services Agreement with INVESCO discussed
below. Services provided under the Agreement include^ but are not limited to:
supplying the Company with officers, clerical staff and other employees, if any,
who are necessary in connection with the Funds' operations; furnishing office
space, facilities, equipment^ and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Funds' operations; preparation and review of
required documents, reports and filings by INVESCO's in-house legal and
accounting staff (including the prospectus, statement of additional information,
proxy statements, shareholder reports, tax returns, reports to the SEC^ and
other corporate documents of the Funds), except insofar as the assistance of
independent accountants or attorneys is necessary or desirable; supplying basic
telephone service and other utilities; and preparing and maintaining certain of
the books and records required to be prepared and maintained by the Funds under
the 1940 Act. Expenses not assumed by INVESCO are borne by the Funds.
As full compensation for its advisory services to the Company, INVESCO
receives a monthly fee. The fee is based upon a percentage of each Fund's
average net assets, determined daily. With respect to the Multi-Asset Allocation
Fund, the fee is calculated at the annual rate of: 0.75% of the first $500
million of the Fund's average net assets; 0.65% of the next $500 million of the
Fund's average net assets; and 0.50% of the Fund's average net assets over $1
billion. While the portion of the advisory fee which is equal to 0.75% of the
Fund's average net assets is higher than the advisory fees incurred by most
other mutual funds, this fee is not higher than the advisory fees paid by most
other asset allocation funds on comparable levels of assets. With respect to the
Balanced Fund, the fee is calculated at the annual rate of: 0.60% of the first
$350 million of the Fund's average net assets; 0.55% of the next $350 million of
the Fund's average net assets; and 0.50% of the Fund's average net assets over
$700 million.
For the fiscal ^ years ended July 31, 1996 and 1995 and the period ended
July 31, 1994, prior to the voluntary absorption of certain Fund expenses by
INVESCO and the applicable sub-adviser, the Multi-Asset Allocation Fund paid
INVESCO advisory fees of $69,539, $47,678 and $10,021, respectively, and the
Balanced Fund paid INVESCO advisory fees of $561,473, $109,635 and $9,081,
respectively.
<PAGE>
Certain states in which the shares of the Funds are qualified for sale
currently impose limitations on the expenses of each of the Funds. At the date
of this Statement of Additional Information, the most restrictive state-imposed
annual expense limitation requires that INVESCO absorb the amount necessary to
prevent any Fund's aggregate ordinary operating expenses (excluding interest,
taxes, Rule 12b-1 fees, brokerage fees and commissions, and extraordinary
charges such as litigation costs) from exceeding in any fiscal year 2.5% of that
Fund's first $30 million of average net assets, 2.0% of the next $70 million of
average net assets and 1.5% of the remaining average net assets. No payment of
the investment advisory fee will be made to INVESCO which would result in a
Fund's expenses exceeding on a cumulative annualized basis this state
limitation.
Sub-Advisory Agreements. INVESCO Management serves as sub- adviser to the
Multi-Asset Allocation Fund and INVESCO Trust serves as sub-adviser to the
Balanced Fund pursuant to separate sub-advisory agreements (the
"Sub-Agreements") with INVESCO which were approved on October 20, 1993, by a
vote cast in person by a majority of the directors of the Company, including a
majority of the directors who are not "interested persons" of the Company,
INVESCO, INVESCO Trust or INVESCO Management at a meeting called for such
purpose. The Sub-Agreements were approved on November 19, 1993, by INVESCO as
the then sole shareholder of the Funds for an initial term expiring April 30,
1995, and has been continued by action of the board of directors until April 30,
^ 1997. Thereafter, the Sub-Agreements may be continued from year to year as
long as each such continuance is specifically approved by the board of directors
of the Company, or by a vote of the holders of a majority, as defined in the
1940 Act, of the outstanding shares of the Fund to which the Sub-Agreement
relates. Each such continuance also must be approved by a majority of the
directors who are not parties to the Sub-Agreements or interested persons (as
defined in the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such continuance. The Sub-Agreements may be
terminated at any time without penalty by either party or the Company upon sixty
(60) days' written notice^ and terminates automatically in the event of an
assignment to the extent required by the ^ 1940 Act and the rules thereunder.
The Sub-Agreements provide that INVESCO Management as sub- adviser to the
Multi-Asset Allocation Fund and INVESCO Trust as sub-adviser to the Balanced
Fund, subject to the supervision of INVESCO, shall manage the investment
portfolios of the applicable Funds in conformity with each Fund's investment
policies. These management services would include: (a) managing the investment
and reinvestment of all the assets, now or hereafter acquired, of the Funds^ and
executing all purchases and sales of portfolio securities; (b) maintaining a
continuous investment program for the Funds, consistent with (i) each Fund's
investment policies as set forth in the Company's Articles of Incorporation,
Bylaws^ and Registration Statement, as from time to time amended, under the 1940
<PAGE>
Act, as amended, and in any prospectus and/or statement of additional
information of the Company, as from time to time amended and in use under the
1933 Act, as amended, and (ii) the Company's status as a regulated investment
company under the Internal Revenue Code of 1986, as amended; (c) determining
what securities are to be purchased or sold for each of the Funds, unless
otherwise directed by the directors of the Company or INVESCO, and executing
transactions accordingly; (d) providing the Funds the benefit of all of the
investment analysis and research, the reviews of current economic conditions and
trends, and the consideration of long-range investment policy now or hereafter
generally available to investment advisory customers of the Sub-Adviser; (e)
determining what portion of each of the Funds should be invested in the various
types of securities authorized for purchase by each Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Company action and any other rights pertaining to the portfolio securities of
each Fund shall be exercised.
The Sub-Agreements provide that as compensation for their services,
INVESCO Management and INVESCO Trust shall receive from INVESCO, at the end of
each month, a fee based upon the average daily value of the applicable Fund's
net assets. With respect to the INVESCO Multi-Asset Allocation Fund, the fee is
calculated at the annual rate of: 0.375% of the first $500 million of the Fund's
average net assets; 0.325% of the next $500 million of the Fund's average net
assets; and 0.25% of the Fund's average net assets over $1 billion. With respect
to the INVESCO Balanced Fund, the fee is calculated at the annual rate of: 0.30%
of the first $350 million of the Fund's average net assets; 0.275% of the next
$350 million of the Fund's average net assets; and 0.25% of the Fund's average
net assets over $700 million. The Sub-Advisory fees are paid by INVESCO, NOT the
Funds.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, provides certain administrative, sub-accounting^ and
recordkeeping services to the Funds pursuant to an Administrative Services
Agreement dated October 20, 1993 (the "Administrative Agreement"). The
Administrative Agreement was approved on October 20, 1993, by a vote cast in
person by all of the directors of the Company, including all of the directors
who are not "interested persons" of the Company or INVESCO at a meeting called
for such purpose. The Administrative Agreement was for an initial term expiring
April 30, 1994, and has been continued by action of the board of directors until
April 30, ^ 1997. The Administrative Agreement may be continued from year to
year thereafter as long as each such continuance is specifically approved by the
board of directors of the Company, including a majority of the directors who are
not parties to the Administrative Agreement or interested persons (as defined in
the 1940 Act) of any such party, cast in person at a meeting called for the
purpose of voting on such continuance. The Administrative Agreement may be
terminated at any time without penalty by INVESCO on sixty (60) days' written
notice, or by the Company upon thirty (30) days' written notice, and terminates
<PAGE>
automatically in the event of an assignment unless the Company's board of
directors approves such assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Funds: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Funds; and (B) such sub-accounting, recordkeeping, and administrative services
and functions, which may be provided by affiliates of INVESCO, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants in
such plans. As full compensation for services provided under the Administrative
Agreement, each Fund pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% per year of the average net assets of the
Fund. During the fiscal ^ years ended July 31, 1996 and 1995 and the period
ended July 31, 1994, prior to the voluntary absorption of certain Fund expenses
by INVESCO and the applicable sub-adviser, the Multi-Asset Allocation Fund paid
INVESCO administrative services fees in the amount of $11,391, $10,954 and
$6,867, respectively, and the Balanced Fund paid INVESCO administrative services
fees in the amount of $24,037, $12,806 and $6,894, respectively.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent^ and registrar services for the Funds pursuant to a Transfer
Agency Agreement which was approved by the board of directors of the Company,
including a majority of the Company's directors who are not parties to the
Transfer Agency Agreement or "interested persons" of any such party, on October
20, 1993, for an initial term expiring April 30, 1994. The Transfer Agency
Agreement has been continued by action of the board of directors until April 30,
^ 1997, and thereafter may be continued from year to year as to each Fund as
long as such continuance is specifically approved at least annually by the board
of directors of the Company, or by a vote of the holders of a majority of the
outstanding shares of the Fund. Any such continuance also must be approved by a
majority of the Company's directors who are not parties to the Transfer Agency
Agreement or interested persons (as defined by the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
continuance. The Transfer Agency Agreement may be terminated at any time without
penalty by either party upon sixty (60) days' written notice and terminates
automatically in the event of assignment.
The Transfer Agency Agreement provides that the Funds will pay to INVESCO
a fee of ^ $20.00 per shareholder account or omnibus account participant per
year. This fee is paid monthly at 1/12 of the annual fee and is based upon the
number of shareholder accounts or omnibus account participants in existence at
any time during each month. For the fiscal ^ years ended July 31, 1996 and 1995
and the period ended July 31, 1994, prior to the voluntary absorption of certain
<PAGE>
Fund expenses by INVESCO and the applicable sub-adviser, the Multi-Asset
Allocation Fund paid INVESCO transfer agency fees of $25,922, $18,599 and
$3,810, respectively, and the Balanced Fund paid INVESCO transfer agency fees of
$203,967, $56,538 and $3,241, respectively.
Officers and Directors of the Company. The overall direction and
supervision of the Company is the responsibility of the board of directors,
which has the primary duty of seeing that the general investment policies and
programs of each of the Funds are carried out and that the Funds are properly
administered. The officers of the Company, all of whom are officers and
employees of, and paid by, INVESCO, are responsible for the day-to-day
administration of the Company and each of the Funds. The investment adviser for
each Fund has the primary responsibility for making investment decisions on
behalf of that Fund. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of the Company hold comparable positions
with INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc.^, INVESCO Income
Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds,
Inc., INVESCO Money Market Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO
Variable Investment Funds, Inc. All of the directors of the Company also serve
as trustees of INVESCO Value Trust. In addition, all of the directors of the
Company also are ^ directors of INVESCO Advisor Funds, Inc. (formerly known as
"The EBI Funds, Inc.") and with the exception of Mr. Hesser, trustees of INVESCO
Treasurer's Series Trust. All of the officers of the Company also hold
comparable positions with INVESCO Value Trust. Set forth below is information
with respect to each of the Company's officers and directors. Unless otherwise
indicated, the address of the directors and officers is Post Office Box 173706,
Denver, Colorado 80217-3706. Their affiliations represent their principal
occupations during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of INVESCO PLC, London, England, and of various subsidiaries thereof;
Chairman of the Board of ^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's
Series Trust, and The Global ^ Health Sciences Fund. Address: 1315 Peachtree
Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Advisor Funds, Inc. and INVESCO Treasurer's Series Trust. Trustee of The Global
Health Sciences Fund. Formerly, Chairman of the Executive Committee and Chairman
of the Board of Security Life of Denver Insurance Company, Denver, Colorado;
Director of ^ ING America Life Insurance Co., Urbaine Life Insurance Company and
Midwestern United Life Insurance Company. Address: Security Life Center, 1290
Broadway, Denver, Colorado. Born: January 12, 1928.
<PAGE>
DAN J. HESSER,+* President and Director. Chairman of the Board, President
and Chief Executive Officer of INVESCO Funds Group, Inc. ^; Director of INVESCO
Trust Company. Trustee of The Global Health Sciences Fund.
Born: December 27, 1939.
VICTOR L. ANDREWS,** Director. ^ Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance at Georgia State
University, Atlanta, Georgia^; President, Andrews Financial Associates, Inc.
(consulting firm); formerly, member of the faculties of the Harvard Business
School and the Sloan School of Management of MIT. Dr. Andrews is ^ a Director of
The Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds, Inc.
Address: ^ 4625 Jettridge Drive, Atlanta, Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
^
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: 15
Sterling Road, Armonk, New York. Born: August 1, 1923.
A. D. FRAZIER, JR.,*^,** Director. Executive Vice President of INVESCO PLC
(since November 1996). Formerly, Senior Executive Vice President and Chief
Operating Officer of the Atlanta Committee for the Olympic Games. From 1982 to
1991, Mr. Frazier was employed in various capacities by First Chicago ^ Bank.
Trustee of The Global Health Sciences Fund. Director of Magellan Health
Services, Inc. and of Charter Medical Corp. Address: 250 Williams Street, Suite
6000, Atlanta, Georgia 30301. Born: June ^ 23, 1944.
HUBERT L. HARRIS, JR.,* Director, Chairman (since May 1996) and President
(January 1990 to April 1996) of INVESCO Services, Inc. Director of INVESCO PLC
and Chief Executive Officer of INVESCO Individual Services Group. Member of the
Executive Committee of the Alumni Board of Trustees of Georgia Institute of
Technology. Address: 1315 Peachtree Street, N.E., Atlanta, Georgia. Born: July
15, 1943.
<PAGE>
KENNETH T. KING,** Director. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# Director. Retired. Formerly, Vice Chairman of the Board
of Directors of the Citizens and Southern Corporation and Chairman of the Board
and Chief Executive Officer of the Citizens and Southern Georgia Corporation and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential Trust.
Address: Seven Piedmont Center, Suite 100, Atlanta, Georgia 30305. Born:
September 14, 1930.
^
GLEN A. PAYNE, Secretary. Senior Vice President, General Counsel and
Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company; formerly,
employee of a U.S. regulatory agency, Washington, D.C., (June 1973 through May
1989). Born: September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company since January 1988.
Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company^. Formerly,
Vice President of 440 Financial Group from June 1990 to August 1992; Assistant
Vice President of Putnam Companies from November 1986 to June 1990. Born: August
21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Company.
+Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions
are subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Company as defined in the
1940 Act.
**Member of the management liaison committee of the Company.
<PAGE>
As of ^ November 11, 1996, officers and directors of the Company, as a
group, beneficially owned less than 1% of the Company's outstanding shares and
less than 1% of each Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended July 31, ^ 1996:
the compensation paid by the Company to its eight independent directors for
services rendered in their capacities as directors of the Company; the benefits
accrued as Company expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these directors upon retirement as a result of their service to the
Company. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Funds Group, Inc. (including the
Company), ^ INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and
The Global Health Sciences Fund (collectively, the "INVESCO Complex") to these
directors for services rendered in their capacities as directors or trustees
during the year ended December 31, ^ 1995. As of December 31, ^ 1995, there were
^ 48 funds in the INVESCO Complex.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Company Upon Paid To
Company1 Expenses2 Retirement3 Directors1
Fred A.Deering, ^ $2,212 $120 $100 $87,350
Vice Chairman of
the Board
Victor L. Andrews ^ 2,180 106 110 68,000
Bob R. Baker ^ 2,189 109 147 73,000
Lawrence H. Budner ^ 2,165 113 110 68,350
Daniel D. Chabris ^ 2,190 129 78 73,350
A. D. Frazier, ^ Jr.4,5 2,144 0 0 ^ 63,500
<PAGE>
Kenneth T. King ^ 2,179 124 90 70,000
John W. McIntyre4 ^ 2,158 0 0 ^ 67,850
Total ^ $17,417 $701 $635 $571,400
% of Net Assets ^ 0.0140%6 0.0006%6 0.0043%7
(1)The vice chairman of the board, the chairmen of the audit,
management liaison and compensation committees, and the members of the
executive and valuation committees each receive compensation for serving in
such capacities in addition to the compensation paid to all independent
directors.
(2)Represents benefits accrued with respect to the Defined Benefit
Deferred Compensation Plan discussed below, and not compensation deferred
at the election of the directors.
(3)These amounts represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding the Global Health Sciences
Fund which does not participate in any retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex^ and for other reasons during the period in which
retirement benefits are accrued on behalf of the respective directors. This
results in lower estimated benefits for directors who are closer to retirement
and higher estimated benefits for directors who are further from retirement.
With the exception of Messrs. Frazier and McIntyre, each of these directors has
served as a director/trustee of one or more of the funds in the INVESCO Complex
for the minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan.
(4)Messrs. Frazier and McIntyre began serving as directors of the
Company on April 19, 1995.
(5)Effective November 1, 1996, Mr. Frazier was employed by INVESCO PLC, a
company affiliated with INVESCO. Because it was possible that Mr. Frazier would
be employed with INVESCO PLC effective May 1, 1996, he was deemed at that time
to be an "interested person" of the Company and of the other funds in the
INVESCO Complex. Effective November 1, 1996, Mr. Frazier will no longer receive
any director's fees or other compensation from the Company or other funds in the
INVESCO Complex for his service as a director.
(6)Total ^ as a percentage of the Company's net assets as of July
31, ^ 1996.
^ (7)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1995.
<PAGE>
^ Messrs. Brady, Harris, Hesser and, effective November 1, 1996, Frazier,
as "interested persons" of the Company and of the other funds in the INVESCO
Complex, receive compensation as officers or employees of INVESCO or its
affiliated companies^ and do not receive any director's fees or other
compensation from the Company or other funds in the INVESCO Complex for their
services as directors.
The boards of directors/trustees of the mutual funds managed by INVESCO, ^
INVESCO Advisor Funds, Inc. and INVESCO Treasurer's Series Trust have adopted a
Defined Benefit Deferred Compensation Plan for the non-interested directors and
trustees of the funds. Under this plan, each director or trustee who is not an
interested person of the funds (as defined in the 1940 Act) and who has served
for at least five years (a "qualified director") is entitled to receive, upon
retiring from the boards at the retirement age of 72 (or the retirement age of
73 to 74, if the retirement date is extended by the boards for one or two years,
but less than three years) continuation of payment for one year (the "first year
retirement benefit") of the annual basic retainer payable by the funds to the
qualified director at the time of his retirement (the "basic retainer").
Commencing with any such director's second year of retirement, and commencing
with the first year of retirement of a director whose retirement has been
extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to 25% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or to his beneficiary or estate. If a
qualified director becomes disabled or dies either prior to age 72 or during
his/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
retainer payments will be made to his beneficiary or estate. The plan is
administered by a committee of three directors who are also participants in the
plan and one director who is not a plan participant. The cost of the plan will
be allocated among the INVESCO, ^ INVESCO Advisor and Treasurer's Series funds
in a manner determined to be fair and equitable by the committee. The Company is
not making any payments to directors under the plan as of the date of this
Statement of Additional Information. The Company has no stock options or other
pension or retirement plans for management or other personnel and pays no salary
or compensation to any of its officers.
The Company has an audit committee comprised of four of the directors who
are not interested persons of the Company. The committee meets periodically with
the Company's independent accountants and officers to review accounting
principles used by the Company, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
<PAGE>
The Company also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Company, and (b) to review
legal and operational matters which have been assigned to the committee by the
board of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
Shares of each Fund are sold on a continuous basis at the respective net
asset value per share of the Fund next calculated after receipt of a purchase
order in good form. The net asset value per share is computed separately for
each Fund and is determined once each day that the New York Stock Exchange is
open as of the close of regular trading on that Exchange^ but may also be
computed at other times. See "How Shares Are Valued." INVESCO acts as the Funds'
Distributor under a distribution agreement with the Company under which it
receives no compensation and bears all expenses, including the costs of printing
and distributing prospectuses, incident to marketing of the Funds' shares,
except for such distribution expenses which are paid out of Fund assets under
the Company's Plan of Distribution which has been adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.
Distribution Plan. As discussed under "How ^ To Buy Shares - -Distribution
Expenses" in the Prospectus, the Company has adopted a Plan and Agreement of
Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan
provides that each of the Funds may make monthly payments to INVESCO of amounts
computed at an annual rate no greater than 0.25% of the Fund's average net
assets to reimburse it for expenses incurred by it in connection with the
distribution of each Fund's shares to investors. Payment amounts by a Fund under
the Plan, for any month, may only be made to reimburse or pay expenditures
incurred during the rolling 12-month period in which that month falls, although
this period is expanded to 24 months for expenses incurred during the first 24
months of the Fund's operations. During the fiscal period ended July 31, ^ 1996,
the Multi-Asset Allocation Fund and Balanced Fund incurred ^ $22,632 and ^
$216,431 in distribution expenses, respectively, prior to the voluntary
absorption of certain Fund expenses by INVESCO and the applicable sub-adviser.
In addition, as of July 31, ^ 1996, $2,156 and ^ $25,250 of additional
distribution expenses had been incurred for Multi-Asset Allocation Fund and
Balanced Fund, respectively, subject to payment upon approval by the Company's
directors, which payments were approved on October ^ 30, 1996. As noted in the
Prospectuses, one type of reimbursable expenditure is the payment of
compensation to securities companies and other financial institutions and
organizations, which may include INVESCO-affiliated companies, in order to
obtain various distribution-related and/or administrative services for the
Funds.
<PAGE>
Each Fund is authorized by the Plan to use its assets to finance the payments
made to obtain those services. Payments will be made by INVESCO to
broker-dealers who sell shares of the Funds and may be made to banks, savings
and loan associations and other depository institutions. Although the
Glass-Steagall Act limits the ability of certain banks to act as underwriters of
mutual fund shares, the Company does not believe that these limitations would
affect the ability of such banks to enter into arrangements with INVESCO^ but
can give no assurance in this regard. However, to the extent it is determined
otherwise in the future, arrangements with banks might have to be modified or
terminated, and, in that case, the size of one or more of the Funds possibly
could decrease to the extent that the banks would no longer invest customer
assets in a particular Fund. Neither the Company nor its investment adviser will
give any preference to banks or other depository institutions which enter into
such arrangements when selecting investments to be made by each Fund.
For the fiscal year ended July 31, ^ 1996, allocation of 12b-1 amounts
paid by the Multi-Asset Allocation Fund for the following categories of expenses
were: advertising -- ^ $1,331; sales literature, printing and postage -- ^
$7,857; direct mail -- ^ $1,254; public relations/promotion -- ^ $1,538;
compensation to securities dealers and other organizations -- ^ $3,774;
marketing personnel --^ $6,878. For the fiscal year ended July 31, ^ 1996,
allocation of 12b-1 amounts paid by the Balanced Fund for the following
categories of expenses were: advertising -- ^ $106,461; sales literature,
printing and postage -- ^ $47,185; direct mail -- ^ $14,538; public
relations/promotion -- ^ $5,899; compensation to securities dealers and other
organizations -- ^ $19,647; marketing personnel -- ^ $22,701.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Company's Transfer Agent computer-processable tapes of each Fund's
transactions by customers, serving as the primary source of information to
customers in answering questions concerning each Fund^ and assisting in other
customer transactions with each Fund.
The Plan was approved on October 20, 1993, at a meeting called for such
purpose by a majority of the then-directors of the Company, including a majority
of the directors who neither ^ were "interested persons" of the Company nor ^
had any financial interest in the operation of the Plan ("12b-1 directors"). The
Plan was approved by INVESCO on November 19, 1993, as the then sole shareholder
of the Funds for an initial term expiring April 30, 1994, and has been continued
by action of the board of directors until April 30, ^ 1997.
The Plan provides that it shall continue in effect with respect to each
Fund for so long as such continuance is approved at least annually by the vote
of the board of directors of the Company cast in person at a meeting called for
the purpose of voting on such continuance. The Plan also can be terminated at
any time with respect to any Fund, without penalty, if a majority of the 12b-1
<PAGE>
directors, or shareholders of such Fund, vote to terminate the Plan. The
Company may, in its absolute discretion, suspend, discontinue or limit the
offering of the shares of any Fund at any time. In determining whether any such
action should be taken, the board of directors intends to consider all relevant
factors including, without limitation, the size of the Funds, the investment
climate for any particular Fund, general market conditions^ and the volume of
sales and redemptions of Fund shares. The Plan may continue in effect and
payments may be made under the Plan following any such temporary suspension or
limitation of the offering of a Fund's shares; however, the Company is not
contractually obligated to continue the Plan for any particular period of time.
Suspension of the offering of a Fund's shares would not, of course, affect a
shareholder's ability to redeem his shares. So long as the Plan is in effect,
the selection and nomination of persons to serve as independent directors of the
Company shall be committed to the independent directors then in office at the
time of such selection or nomination. The Plan may not be amended to increase
materially the amount of any Fund's payments thereunder without approval of the
shareholders of that Fund, and all material amendments to the Plan must be
approved by the board of directors of the Company, including a majority of the
12b-1 directors. Under the agreement implementing the Plan, INVESCO or the
Funds, the latter by vote of a majority of the 12b-1 directors or of the holders
of a majority of any Fund's outstanding voting securities, may terminate such
agreement without penalty upon 30 days' written notice to the other party. No
further payments will be made by any Fund under the Plan in the event of its
termination as to that Fund.
To the extent that the Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of each Fund's assets in the amounts and for the
purposes set forth therein, notwithstanding the occurrence of an assignment, as
defined by the 1940 Act^ and rules thereunder. To the extent it constitutes an
agreement pursuant to a plan, each Fund's obligation to make payments to INVESCO
shall terminate automatically^ in the event of such "assignment," in which event
the Funds may continue to make payments, pursuant to the Plan, to INVESCO or
another organization only upon the approval of new arrangements, which may or
may not be with INVESCO, regarding the use of the amounts authorized to be paid
by it under the Plan, by the directors, including a majority of the 12b-1
directors, by a vote cast in person at a meeting called for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by each Fund are provided to^ and reviewed by^ the directors on a
quarterly basis. In the quarterly review, the directors determine whether^ and
to what extent^ INVESCO will be reimbursed for expenditures which it has made
that
<PAGE>
are reimbursable under the Company's Rule 12b-1 Plan. On an annual basis,
the directors consider the continued appropriateness of the Plan at the level of
compensation provided therein.
The only directors or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Company who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the Company listed under "The Fund and Its Management - Officers and
Directors of the Company" who are also officers either of INVESCO or companies
affiliated with INVESCO. The benefits which the Company believes will be
reasonably likely to flow to the Funds and their shareholders under the Plan
include the following:
(1) Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Funds;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of securities of the Funds in
amounts and at times that are disadvantageous for investment
purposes;
(3) The positive effect which increased Fund assets will have on its
revenues could allow INVESCO:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of each Fund's
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from INVESCO (and support them in their infancy)^
and thereby expand the investment choices available to all
shareholders, and
(c) To acquire and retain talented employees who desire
to be associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g., exceeding
established breakpoints in the advisory fee schedule and allocating
fixed expenses over a larger asset base), thereby partially
offsetting the costs of the Plan.
HOW SHARES ARE VALUED
As described in the section of each Fund's Prospectus entitled "Fund Price
^ And Performance," the net asset value of shares of each Fund of the Company is
computed once each day that the New York Stock Exchange is open as of the close
<PAGE>
of regular trading on that Exchange (generally 4:00 p.m., New York time)
and applies to purchase and redemption orders received prior to that time. Net
asset value per share is also computed on any other day on which there is a
sufficient degree of trading in the securities held by a Fund that the current
net asset value per share of such Fund might be materially affected by changes
in the value of the securities held, but only if on such day the Fund receives a
request to purchase or redeem shares. Net asset value per share is not
calculated on days the New York Stock Exchange is closed, such as federal
holidays, including New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving^ and Christmas.
The net asset value per share of each Fund is calculated by dividing the
value of all securities held by the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of the Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap Market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over-the-counter market for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities will be valued at their fair values as determined in good
faith by the board of directors or pursuant to procedures adopted by the board
of directors. The above procedures may include the use of valuations furnished
by a pricing service which employs a matrix to determine valuations for normal
institutional-size trading units of debt securities. Prior to utilizing a
pricing service, the Company's board of directors reviews the methods used by
such service to assure itself that securities will be valued at their fair
values. The Company's board of directors also periodically monitors the methods
used by such pricing services. Debt securities with remaining maturities of 60
days or less at the time of purchase are normally valued at amortized cost.
The values of securities held by the Funds, and other assets used in
computing net asset value, generally are determined as of the time regular
trading in such securities or assets is completed each day. ^ Because regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Funds' net asset value. However, in the event that the closing price of a
foreign security is not available in time to calculate a Fund's net asset value
on a particular day, the Company's board of directors has authorized the use of
the market price for the security obtained from an approved pricing service at
<PAGE>
an established time during the day which may be prior to the close of
regular trading in the security. The value of all assets and liabilities
initially expressed in foreign currencies will be converted into U.S. dollars at
the spot rate of such currencies against U.S. dollars provided by an approved
pricing service.
FUND PERFORMANCE
As discussed in the section of each Fund's Prospectus entitled "Fund Price
^ And Performance," the Funds advertise their total return performance. The
total return performance for each Fund for the indicated periods ended July 31,
^ 1996 was as follows:
Fund 1 Year Life of Fund*
---- ------ ------------
Multi-Asset Allocation Fund ^ 10.96% 8.53%
Balanced Fund ^ 20.93% 17.91%
^*32 months ^(2.67 years)
Average annual total return performance is computed by finding the average
annual compounded rates of return that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1 + T)n = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
In conjunction with performance reports, comparative data between the
Fund's performance for a given period and other types of investment vehicles,
including certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder
service for the Funds, comparative data between a Fund's performance for a given
period and recognized indices of investment results for the same period, and/or
assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex,
all of which are unmanaged market indicators. In addition, rankings, ratings^
<PAGE>
and comparisons of investment performance and/or assessments of the quality
of shareholder service made by independent sources may be used in
advertisements, sales literature or shareholder reports, including reprints of,
or selections from, editorials or articles about the Funds. These sources
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services. The Lipper Analytical
Services, Inc. mutual fund rankings and comparisons which may be used by the
Multi-Asset Allocation Fund and the Balanced Fund in performance reports will be
drawn from the Flexible Portfolio Funds and Balanced Funds mutual fund
groupings, respectively, in addition to the broad-based Lipper general fund
groupings. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of each
Fund's Prospectus entitled "How ^ To Sell Shares," each Fund offers
<PAGE>
a Periodic Withdrawal Plan. ^ Dividends and distributions on shares owned
by shareholders participating in this Plan are reinvested in additional shares.
^ Because withdrawal payments represent the proceeds from sales of shares, the
amount of shareholders' investments in a Fund will be reduced to the extent that
withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such Plan do not represent income or a return
on investment.
A Periodic Withdrawal Plan may be terminated at any time by sending a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of each Fund's Prospectus
entitled "How ^ To Buy Shares -- Exchange Privilege," the Funds offer
shareholders the privilege of exchanging shares of the Funds for shares of
another fund or for shares of certain other no-load mutual funds advised by
INVESCO. Exchange requests may be made either by telephone or by written request
to INVESCO Funds Group, Inc., using the telephone number or address on the cover
of this Statement of Additional Information. Exchanges made by telephone must be
in an amount of at least $250^ if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that have established a new
account must meet the fund's applicable minimum initial investment requirements.
Written exchange requests into an existing account have no minimum requirements
other than the fund's applicable minimum subsequent investment requirements. Any
gain or loss realized on such an exchange is recognized for federal income tax
purposes. This privilege is not an option or right to purchase securities^ but
is a revocable privilege permitted under the present policies of each of the
funds and is not available in any state or other jurisdiction where the shares
of the mutual fund into which transfer is to be made are not qualified for sale^
or when the net asset value of the shares presented for exchange is less than
the minimum dollar purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of each Fund's Prospectus entitled "Fund
Services," shares of a Fund may be purchased as the investment medium for
various tax-deferred retirement plans. Persons who request information regarding
these plans from INVESCO will be provided with prototype documents and other
supporting information regarding the type of plan requested. Each of these plans
involves a long-term commitment of assets and is subject to possible regulatory
<PAGE>
penalties for excess contributions, premature distributions or for
insufficient distributions after age 70-1/2. The legal and tax implications may
vary according to the circumstances of the individual investor. Therefore, the
investor is urged to consult with an attorney or tax adviser prior to the
establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven days
following receipt of the required documents as described in the section of each
Fund's Prospectus entitled "How ^ To Redeem Shares." The right of redemption may
be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
a Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets; or (d) the Securities and Exchange Commission (the "SEC") by order so
permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Company's investment adviser, make it undesirable for a Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Company is obligated under the 1940 Act to redeem for cash
all shares of a Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
Each Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. Each Fund so qualified in the fiscal year
ended July 31, ^ 1996, and intends to continue to qualify during its current
fiscal year. As a result, it is anticipated that the Funds will pay no federal
income or excise taxes and will be accorded conduit or "pass through" treatment
for federal income tax purposes.
Dividends paid by the Funds from net investment income^ as well as
distributions of net realized short-term capital gains and net realized gains
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
<PAGE>
each Fund sends shareholders information regarding the amount and character
of dividends paid in the year, including the dividends eligible for the
dividends-received deduction for corporations. Such amounts will be limited to
the aggregate amount of qualifying dividends which the Fund derives from its
portfolio investments.
Distributions by the Funds of net capital gain (the excess of net
long-term capital gain over net short-term capital loss) are, for federal income
tax purposes, taxable to the shareholder as long-term capital gains regardless
of how long a shareholder has held shares of a Fund. Such distributions are
identified as such and are not eligible for the dividends-received deduction.
All dividends and distributions are regarded as taxable to the investor,
whether or not such dividends and distributions are reinvested in additional
shares. If the net asset value of the shares of the Funds should be reduced
below a shareholder's cost as a result of a distribution, such distribution
would be taxable to the shareholder although a portion would be, in effect, a
return of invested capital. The net asset value of shares of the Funds reflects
accrued net investment income and undistributed realized capital and foreign
currency gains; therefore, when a distribution is made, the net asset value is
reduced by the amount of the distribution. If shares are purchased shortly
before a distribution, the full price for the shares will be paid and some
portion of the price may then be returned to the shareholder as a taxable
dividend or capital gain. However, the net asset value per share will be reduced
by the amount of the distribution, which would reduce any gain (or increase any
loss) for tax purposes on any subsequent redemption of shares.
INVESCO may provide Fund shareholders with information concerning the
average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders^ and will
not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the
use of several methods to determine the cost basis of mutual fund shares. The
cost basis information provided by INVESCO will be computed using the
single-category average cost method, although neither INVESCO nor the Fund
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for a Fund in past years, the shareholder must continue to use the method
previously used, unless the shareholder applies to the IRS for permission to
change methods.
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as a long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
A Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
<PAGE>
Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of a
Fund's total assets at the close of any taxable year consists of securities of
foreign corporations, the Fund will be eligible to, and may, file an election
with the IRS that will enable its shareholders, in effect, to receive the
benefit of the foreign tax credit with respect to any foreign and U.S.
possessions income taxes paid by it. The Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's income
from sources within, and taxes paid to, foreign countries and U.S. possessions
if it makes this election.
Each Fund may invest in the stock of "passive foreign investment
companies" ^("PFICs"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) at least 75% of its gross income is passive,
or (2) an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, a Fund will be
subject to federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on disposition of the stock (collectively
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC income
will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time a
Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of the Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gains
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
for income tax purposes does not entail government supervision of management or
investment policies.
<PAGE>
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding the portfolio
turnover of the Funds. The rate of portfolio turnover can fluctuate under
constantly changing economic conditions and market circumstances. Securities
initially satisfying the basic policies and objectives of a Fund may be disposed
of when they are no longer suitable. Brokerage costs to these Funds are
commensurate with the rate of portfolio activity. For the fiscal ^ years ended
July 31, 1996 and 1995 and the period ended July 31, 1994, the Multi-Asset
Allocation Fund's portfolio turnover rates were 92%, 79% and 42% (unannualized),
respectively. For the fiscal ^ years ended July 31, 1996 and 1995 and the period
ended July 31, 1994, the Balanced Fund's portfolio turnover rates were 259%,
255% and 61% (unannualized), respectively. The higher portfolio turnover rates
for the Funds during the fiscal ^ years ended July 31, 1996 and 1995^ were
primarily due to the increase in the size of the Funds ^. Additionally, the
fiscal 1996 and 1995 figures reflect a full year of operations. In computing
portfolio turnover rates, all investments with maturities or expiration dates at
the time of acquisition of one year or less are excluded. Subject to this
exclusion, the turnover rate is calculated by dividing (A) the lesser of
purchases or sales of portfolio securities for the fiscal year by (B) the
monthly average of the value of portfolio securities owned by the Fund during
the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO, as the Company's
investment adviser, or INVESCO Trust or INVESCO Management, as the Company's
sub-advisers, places orders for the purchase and sale of securities with brokers
and dealers based upon INVESCO's or the sub-advisers' evaluation of their
financial responsibility, subject to their ability to effect transactions at the
best available prices. INVESCO or the applicable sub-adviser evaluates the
overall reasonableness of brokerage commissions or underwriting discounts (the
difference between the full acquisition price to acquire the new offering and
the discount offered to members of the underwriting syndicate) paid by reviewing
the quality of executions obtained on portfolio transactions of each Fund,
viewed in terms of the size of transactions, prevailing market conditions in the
security purchased or sold, and general economic and market conditions. In
seeking to ensure that the commissions or discounts charged the Funds are
consistent with prevailing and reasonable commissions or discounts, INVESCO or
the sub-advisers also endeavor to monitor brokerage industry practices with
regard to the commissions or discounts charged by brokers and dealers on
transactions effected for other comparable institutional investors. While
INVESCO or the sub-advisers seek reasonably competitive rates, the Funds do not
necessarily pay the lowest commission, spread or discount available.
<PAGE>
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, INVESCO or the sub-advisers may select brokers that
provide research services to effect such transactions. Research services consist
of statistical and analytical reports relating to issuers, industries,
securities and economic factors and trends, which may be of assistance or value
to INVESCO or the sub-advisers in making informed investment decisions. Research
services prepared and furnished by brokers through which the Funds effect
securities transactions may be used by INVESCO or the sub-advisers in servicing
all of their respective accounts and not all such services may be used by
INVESCO or the sub-advisers in connection with the Funds.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, INVESCO or the sub-advisers, consistent
with the standard of seeking to obtain the best execution on portfolio
transactions, may place orders with such brokers for the execution of
transactions for the Funds on which the commissions or discounts are in excess
of those which other brokers might have charged for effecting the same
transactions.
Portfolio transactions may be effected through qualified ^ broker-dealers
that recommend the Funds to their clients^ or who act as agent in the purchase
of any of the Fund's shares for their clients. When a number of brokers and
dealers can provide comparable best price and execution on a particular
transaction, the Company's adviser may consider the sale of Fund shares by a
broker or dealer in selecting among qualified ^ broker-dealers.
Certain brokers are paid a fee (the "Broker's Fee") for recordkeeping,
shareholder communications and other services provided by the brokers to
investors purchasing shares of the Funds through no transaction fee programs
("NTF Programs") offered by the brokers. The Broker's Fee is based on the
average daily value of the investments in each Fund made by a broker and held in
omnibus accounts maintained on behalf of investors participating in the NTF
Program. With respect to certain NTF Programs, the directors of the Company have
authorized the Funds to apply dollars generated from the Company's Plan and
Agreement of Distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan")
to pay the entire Broker's Fee, subject to the maximum Rule 12b-1 fee permitted
by the Plan. With respect to other NTF Programs, the Company's directors have
authorized each Fund to pay transfer agency fees to INVESCO based on the number
of investors who have beneficial interests in the broker's omnibus accounts in
that Fund. INVESCO, in turn, pays these transfer agency fees to the broker as a
sub-transfer agency or recordkeeping fee in payment of all or a portion of the
Broker's Fee. In the event that the sub-transfer agency or recordkeeping fee is
insufficient to pay all of the Broker's Fee with respect to these NTF Programs,
the directors of the Company have authorized the Funds to apply dollars
generated from the Plan to pay the remainder of the Broker's Fee, subject to the
maximum Rule 12b-1 fee permitted by the Plan. INVESCO itself pays the portion of
<PAGE>
a Fund's Broker's Fee, if any, that exceeds the sum of the sub- transfer
agency or recordkeeping fee and Rule 12b-1 fee. The Company's directors have
further authorized INVESCO to place a portion of each Fund's brokerage
transactions with certain brokers that sponsor NTF Programs, if INVESCO
reasonably believes that, in effecting the Fund's transactions in portfolio
securities, the broker is able to provide the best execution of orders at the
most favorable prices. A portion of the commissions earned by such a broker from
executing portfolio transactions on behalf of a specific Fund may be credited by
the broker first against the sub- transfer agency or recordkeeping fee payable
with respect to that Fund, and second against any Rule 12b-1 fees used to pay a
portion of the Broker's Fee, on a basis which has resulted from negotiations
between INVESCO and the broker.* Thus, the Fund pays sub-transfer agency or
recordkeeping fees to the broker in payment of the Broker's Fee only to the
extent that such fees are not offset by the Fund's credits. In the event that
the transfer agency fee paid by a Fund to INVESCO with respect to investors who
have beneficial interests in a particular broker's omnibus accounts in that Fund
exceeds the Broker's Fee applicable to that Fund, INVESCO may carry forward the
excess and apply it to future Broker's Fees payable to that broker with respect
to the Fund. The amount of excess transfer agency fees carried forward will be
reviewed for possible adjustment by INVESCO prior to each fiscal year-end of the
Company. The Company's board of directors has also authorized the Company to pay
an amount equal to any credits received by the Funds against their respective
Rule 12b-1 fees as a result of these arrangements to INVESCO in reimbursement of
other expenses incurred by INVESCO in engaging in the activities and providing
the services on behalf of the respective Funds contemplated by the Plan, subject
to the maximum Rule 12b-1 fee permitted by the Plan.
* With respect to INVESCO Multiple Asset Funds, Inc., the Company's directors
have not authorized INVESCO to place any portion of the INVESCO Multi-Asset
Allocation Fund's brokerage transactions with brokers that sponsor NTF Programs
in order to obtain such credits.
The aggregate dollar amounts of brokerage commissions paid by the
Multi-Asset Allocation Fund for the ^ years ended July 31, 1996 and 1995 and the
period ended July 31, 1994, were $16,522, $11,217 and $5,556, respectively. The
aggregate dollar amounts of brokerage commissions paid by the Balanced Fund for
the ^ years ended July 31, 1996 and 1995 and the period ended July 31, 1994,
were $1,262,695, $302,143 and $9,805, respectively. The higher levels of
brokerage commissions paid by the Funds for the ^ years ended July 31, 1996 and
1995 were primarily due to the increased size of the Funds, increased portfolio
turnover and the fact that the fiscal 1996 and 1995 figures reflect a full year
of operations. For the fiscal year ended July 31, ^ 1996, brokers providing
research services received ^ $463,460 in commissions on portfolio transactions
effected for the Funds. The aggregate dollar amount of such portfolio
transactions was ^ $179,722,050. On a Fund-by-Fund basis, this figure breaks
down as follows: Multi-Asset Allocation, ^ $1,926,669 and Balanced, ^
$177,795,381 . As a result of sellingshares of the Funds, brokers received ^
$377 in commissions on portfolio transactions effected for the Funds during the
fiscal year ended July 31, ^ 1996.
<PAGE>
At July 31, ^ 1996, each of the Funds held securities of its regular
brokers or dealers, or their parents, as follows:
Value of Securities
Fund Broker or Dealer at ^ 7/31/96
- ---- ---------------- ------------------
Multi-Asset State Street Bank & Tr. Co. ^ $190,000.00
^ Allocation Fund Associates Corp. of North
^ America 52,762.30
Balanced Fund State Street Bank & Tr. Co. ^ $8,174,000.00
Neither INVESCO, INVESCO Trust not INVESCO Management receives any
brokerage commissions on portfolio transactions effected on behalf of the Funds,
and there is no affiliation between INVESCO, INVESCO Trust, INVESCO Management^
or any person affiliated with INVESCO, INVESCO Trust, INVESCO Management^ or the
Funds and any broker or dealer that executes transactions for the Funds.
ADDITIONAL INFORMATION
Common Stock. The Company has 500,000,000 authorized shares of common
stock with a par value of $0.01 per share. Of the Company's authorized shares,
100,000,000 shares have been allocated to each of two classes, representing the
Company's two Funds. As of July 31, ^ 1996, 828,624 shares of the INVESCO
Multi-Asset Allocation Fund and ^ 8,610,364 shares of the INVESCO Balanced Fund
were outstanding. The board of directors has the authority to designate
additional classes of common stock without seeking the approval of shareholders^
and may classify and reclassify any authorized but unissued shares.
Shares of each class represent the interests of the shareholders of such
class in a particular portfolio of investments of the Company. Each class of the
Company's shares is preferred over all other classes in respect of the assets
specifically allocated to that class, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that class. The assets of each class are segregated on
the books of account and are charged with the liabilities of that class and with
a share of the Company's general liabilities. The board of directors determines
those assets and liabilities deemed to be general assets or liabilities of the
Company, and these items are allocated among classes in a manner deemed by the
board of directors to be fair and equitable. Generally, such allocation will be
made based upon the relative total net assets of each class. In the unlikely
event that a liability allocable to one class exceeds the assets belonging to
the class, all or a portion of such liability may have to be borne by the
holders of shares of the Company's other classes.
<PAGE>
All shares, regardless of class, have equal voting rights. Voting with
respect to certain matters, such as ratification of independent accountants or
election of directors, will be by all classes of the Company. When not all
classes are affected by a matter to be voted upon, such as approval of an
investment advisory contract or changes in a Fund's investment policies, only
shareholders of the class affected by the matter may be entitled to vote.
Company shares have noncumulative voting rights, which means that the holders of
a majority of the shares voting for the election of directors can elect 100% of
the directors if they choose to do so. In such event, the holders of the
remaining shares voting for the election of directors will not be able to elect
any person or persons to the board of directors. After they have been elected by
shareholders, the directors will continue to serve until their successors are
elected and have qualified or they are removed from office, in either case by a
shareholder vote, or until death, resignation^ or retirement. They may appoint
their own successors, provided that always at least a majority of the directors
have been elected by the Company's shareholders. It is the intention of the
Company not to hold annual meetings of shareholders. The directors will call
annual or special meetings of shareholders for action by shareholder vote as may
be required by the Investment Company Act of 1940 or the Company's Articles of
Incorporation, or at their discretion.
Principal Shareholders. As of ^ November 1, 1996, the following persons
held more than 5% of the Funds' outstanding equity securities.
<PAGE>
Shares Held and
Name and Address Nature of Ownership Percent of Class
- ---------------- ------------------- ----------------
Multi-Asset
Allocation Fund
- ---------------
Charles Schwab & Co., Inc. 262,886.639 25.349%
Special Custody Acct. For The Record
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Koehler Manufacturing ^ 102,475.953 9.881%
Retirement Income Plan Record &
123 Felton St. Beneficial
Marlborough, MA 01752
^ Stein Family Trust 52,286.156 5.042%
^ P.O. Box 8650
^ Rancho Santa Fe, CA 92067
Balanced Fund
- -------------
Charles Schwab & Co., Inc. ^ 1,942,050.082 21.292%
^Special Custody Acct. For The Record
^Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the
Company. The independent accountants are responsible for auditing the financial
statements of the Company.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Company. The bank is also responsible for, among other things,
receipt and delivery of the investment securities of the Company's Funds in
accordance with procedures and conditions specified in the custody agreement.
Transfer Agent. The Company is provided with transfer agent, registrar^
and dividend disbursing agent services by INVESCO Funds Group, Inc., 7800 E.
<PAGE>
Union Avenue, Denver, Colorado 80237, pursuant to the Transfer Agency Agreement
described herein. Such services include the issuance, cancellation and transfer
of shares of the Funds^ and the maintenance of records regarding the ownership
of such shares.
Reports to Shareholders. The Company's fiscal year ends on July 31. The
Company distributes reports at least semiannually to its shareholders. Financial
statements regarding the Company, audited by the independent accountants, are
sent to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart, Washington, D.C., is
legal counsel for the Company. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Company.
Financial Statements. The Funds' audited financial statements and the
notes thereto for the fiscal year ended July 31, ^ 1996, and the report of Price
Waterhouse LLP with respect to such financial statements, are incorporated
herein by reference from the Funds' Annual Report to Shareholders for the fiscal
year ended July 31, ^ 1996.
Prospectuses. The Company will furnish, without charge, a copy of the
applicable Prospectus for each of its Funds upon request. There is a separate
Prospectus available for each Fund. Such requests should be made to the Company
at the mailing address or telephone number set forth on the first page of this
Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the
Prospectuses do not contain all of the information set forth in the Registration
Statement the Company has filed with the SEC. The complete Registration
Statement may be obtained from the SEC upon payment of the fee prescribed by the
rules and regulations of the SEC.
<PAGE>
APPENDIX A
DESCRIPTION OF FUTURES AND OPTIONS CONTRACTS
Options on Securities
An option on a security provides the purchaser, or "holder," with the
right, but not the obligation, to purchase, in the case of a "call" option, or
sell, in the case of a "put" option, the security or securities underlying the
option, for a fixed exercise price up to a stated expiration date. The holder
pays a non-refundable purchase price for the option, known as the "premium." The
maximum amount of risk the purchaser of the option assumes is equal to the
premium plus related transaction costs, although the entire amount may be lost.
The risk of the seller, or "writer," however, is potentially unlimited, unless
the option is "covered," which is generally accomplished through the writer's
ownership of the underlying security, in the case of a call option, or the
writer's segregation of an amount of cash or securities equal to the exercise
price, in the case of a put option. If the writer's obligation is not so
covered, it is subject to the risk of the full change in value of the underlying
security from the time the option is written until exercise.
Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security, in the case of a call option, or to deliver
the security in return for the purchase price, in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
Options on securities are traded on national securities exchanges, such as
the Chicago Board of Options Exchange and the New York Stock Exchange, which are
regulated by the Securities and Exchange Commission. The Options Clearing
Corporation guarantees the performance of each party to an exchange-traded
option^ by in effect taking the opposite side of each such option. A holder or
writer may engage in transactions in exchange-traded options on securities and
options on indices of securities only through a registered ^ broker-dealer which
is a member of the exchange on which the option is traded.
An option position in an exchange-traded option may be closed out only on
an exchange which provides a secondary market for an option of the same series.
Although the Funds will generally purchase or write only those options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option at
any particular time. In such event it might not be possible to effect closing
transactions in a particular option with the result that the Funds would have to
exercise the option in order to realize any profit.
<PAGE>
This would result in the Funds incurring brokerage commissions upon the
disposition of underlying securities acquired through the exercise of a call
option or upon the purchase of underlying securities upon the exercise of a put
option. If these Funds, as covered call option writers, are unable to effect a
closing purchase transaction in a secondary market, they will not be able to
sell the underlying security until the option expires unless the Funds are
required to deliver the securities pursuant to the assignment of an exercise
notice^.
Reasons for the potential absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient trading interest
in certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities: (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or a clearing corporation may not at all times be adequate to
handle current trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or particular class or series of options) in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange which had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at a particular time, render certain of the facilities of any of the
clearing corporations inadequate and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders. However, the Options Clearing Corporation, based on forecasts
provided by the U.S. exchanges, believes that its facilities are adequate to
handle the volume of reasonably anticipated options transactions, and such
exchanges have advised such clearing corporation that they believe their
facilities will also be adequate to handle reasonably anticipated volume.
In addition, options on securities may be traded over-the-counter through
financial institutions dealing in such options as well as the underlying
instruments. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with the Funds.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between the Funds and the transacting dealer, without the
intermediation of a third party such as the OCC. If the transacting dealer fails
to make or take delivery of the securities underlying an option it has written,
in accordance with the terms of that option as written, the Funds would lose the
premium paid for the option as well as any anticipated benefit of the
transaction. The Fund will engage in OTC option transactions only with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York.
<PAGE>
Futures Contracts
A Futures Contract is a bilateral agreement providing for the purchase and
sale of a specified type and amount of a financial instrument or foreign
currency, or for the making and acceptance of a cash settlement, at a stated
time in the future, for a fixed price. By its terms, a Futures Contract provides
for a specified settlement date on which, in the case of the majority of
interest rate and foreign currency futures contracts, the fixed income
securities or currency underlying the contract are delivered by the seller and
paid for by the purchaser, or on which, in the case of stock index futures
contracts and certain interest rate and foreign currency futures contracts, the
difference between the price at which the contract was entered into and the
contract's closing value is settled between the purchaser and seller in cash.
Futures Contracts differ from options in that they are bilateral agreements,
with both the purchaser and the seller equally obligated to complete the
transaction. In addition, Futures Contracts call for settlement only on the
expiration date^ and cannot be "exercised" at any other time during their term.
The purchase or sale of a Futures Contract also differs from the purchase
or sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalent, which varies
but may be as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin." Subsequent payments to and from the broker,
referred to as "variation margin," are made on a daily basis as the value of the
index or instrument underlying the Futures Contract fluctuates, making positions
in the Futures Contract more or less valuable, a process known as "marking to
market."
A Futures Contract may be purchased or sold only on an exchange, known as
a "contract market," designated by the Commodity Futures Trading Commission for
the trading of such contract, and only through a registered futures commission
merchant which is a member of such contract market. A commission must be paid on
each completed purchase and sale transaction. The contract market clearing house
guarantees the performance of each party to a Futures Contract^ by in effect
taking the opposite side of such Contract. At any time prior to the expiration
of a Futures Contract, a trader may elect to close out its position by taking an
opposite position on the contract market on which the position was entered into,
subject to the availability of a secondary market, which will operate to
terminate the initial position. At that time, a final determination of variation
margin is made and any loss experienced by the trader is required to be paid to
the contract market clearing house while any profit due to the trader must be
delivered to it.
<PAGE>
Interest rate futures contracts currently are traded on a variety of
fixed-income securities, including long-term U.S. Treasury Bonds, Treasury
Notes, Government National Mortgage Association modified pass-through
mortgage-backed securities, U.S. Treasury Bills, bank certificates of deposit
and commercial paper. In addition, interest rate futures contracts include
contracts on indices of municipal securities. Foreign currency futures contracts
currently are traded on the British pound, Canadian dollar, Japanese yen, Swiss
franc, West German mark and on Eurodollar deposits.
Options on Futures Contracts
An Option on a Futures Contract provides the holder with the right to
enter into a "long" position in the underlying Futures Contract, in the case of
a call option, or a "short" position in the underlying Futures Contract, in the
case of a put option, at a fixed exercise price to a stated expiration date.
Upon exercise of the option by the holder, the contract market clearing house
establishes a corresponding short position for the writer of the option, in the
case of a call option, or a corresponding long position, in the case of a put
option. In the event that an option is exercised, the parties will be subject to
all the risks associated with the trading of Futures Contracts, such as payment
of variation margin deposits. In addition, the writer of an Option on a Futures
contract, unlike the holder, is subject to initial and variation margin
requirements on the option position.
A position in an Option on a Futures Contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.
An option, whether based on a Futures Contract, a stock index or a
security, becomes worthless to the holder when it expires. Upon exercise of an
option, the exchange or contract market clearing house assigns exercise notices
on a random basis to those of its members which have written options of the same
series and with the same expiration date. A brokerage firm receiving such
notices then assigns them on a random basis to those of its customers which have
written options of the same series and expiration date.
<PAGE>
A writer therefore has no control over whether an option will be exercised
against it, nor over the time of such exercise.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
(1) Financial statements and schedules ----------
included in Prospectus (Part A):
Financial Highlights for the Period 9
December ^ 1, 1993 (Inception) through 35
July 31, 1994 and the^ years ended July
31, ^ 1996.
Page in
Statement
of Addi-
tional In-
formation
----------
(2) The following audited financial
statements of the INVESCO Multi-Asset
Allocation Fund and the INVESCO Balanced
Fund and the notes thereto for the
fiscal year ended July 31, ^ 1996, and
the report of Price Waterhouse LLP with
respect to such financial statements,
are incorporated in the Statement of
Additional Information by reference from
the Company's Annual Report to
Shareholders for the fiscal year ended
July 31, ^ 1996: Statement of
Investment Securities as of July 31, ^
1996; Statement of Assets and
Liabilities as of July 31, ^ 1996;
Statement of Operations for the year
ended July 31, ^ 1996; Statement of
Changes in Net Assets for ^ each of the
two years in the period ended July 31, ^
1996; Financial Highlights for ^ each of
the two years in the period ended July
31, ^ 1996 and the period from
commencement of the Funds' operations
(December ^ 1, 1993) through July 31,
1994.
(3) Financial statements and schedules
included in Part C:
<PAGE>
None: Schedules have been omitted as all
information has been presented in the
financial statements.
(b) Exhibits:
(1) Articles of Incorporation ^(Charter).
(2) ^ Bylaws.
(3) Not applicable.
(4) ^ Not required to be filed on EDGAR.
(5) (a) Investment Advisory Agreement
Between Registrant and INVESCO Funds
Group, Inc. dated October 20, ^ 1993.
(b) Sub-Advisory Agreement Between
INVESCO Funds Group, Inc. and INVESCO
Management & Research, Inc. dated
October 20, ^ 1993.
(c) Sub-Advisory Agreement Between
INVESCO Funds Group and INVESCO Trust
Company dated October 20, ^ 1993.
(6) General Distribution Agreement Between
Registrant and INVESCO Funds Group, Inc.
dated October 20, ^ 1993.
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and ^
Trustees.
(8) Custody Agreement Between Registrant and
State Street Bank and Trust Company
dated October 20, ^ 1993.
(a) Amendment to Custody Agreement dated
October 25, 1995.
(9) (a) Transfer Agency Agreement Between
Registrant and INVESCO Funds Group, Inc.
dated October 20, ^ 1993.
(i) Amended Fee Schedule to
Transfer Agency Agreement dated
^ May 1, ^ 1996.
<PAGE>
(b) Administrative Services Agreement
between Registrant and INVESCO Funds
Group, Inc. dated October 20, ^ 1993.
(10) Opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will, when sold, be
legally issued, fully paid and nonassessable
dated September 30, ^1993.2
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the establishment
of retirement plans as follows: Non-standardized
Profit Sharing Plan; Non-standardized Money Purchase
Pension Plan; Standardized Profit Sharing Plan Adoption
Agreement; Standardized Money Purchase Pension Plan;
Non-standardized 401(k) Plan Adoption Agreement;
Standardized 401(k) Paired Profit Sharing Plan;
Standardized Simplified Profit Sharing Plan;
Standardized Simplified Money Purchase Plan; Defined
Contribution Master Plan & Trust Agreement; and
Financial 403(b) Retirement Plan, all filed with
Registration Statement No. 33-63498 of INVESCO
International Funds, Inc. filed May 27, 1993, and
herein incorporated by reference.
(15) Plan and Agreement of Distribution dated
October 20, 1993 adopted pursuant to
Rule 12b-1 under the Investment Company Act of ^ 1940.
(i) Amendment of Plan and Agreement
of Distribution dated July 19, ^
1995.1
(16) Schedule for computation of performance
^ data.4
(17) (a) Financial Data Schedule for the
period ended July 31, ^1996, for
INVESCO Balanced Fund.
(b) Financial Data Schedule for the
period ended July 31, ^1996, for
INVESCO Multi-Asset Allocation Fund.
(18) Not applicable.
<PAGE>
- -------------------------
(1)Previously filed on EDGAR with the Registrant's Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form N-1A on September 21, 1995,
and incorporated herein by reference.
(2)Previously filed with the Registrant's original Registration Statement on
Form N-1A on October 4, 1993, and incorporated herein by reference.
^(3)Previously filed with Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement on November 24, 1993, and incorporated herein by
reference.
^(4)Previously filed with Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on June 3, 1994, and incorporated herein by reference.
Item 25. Persons Controlled by or Under Common Control
With Registrant
No person is presently controlled by or under common control with
the Registrant.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class ^ October 31, ^ 1996
-------------- --------------------
INVESCO Multi-Asset
Allocation Fund ^ 1,086
INVESCO Balanced Fund ^ 14,392
Item 27. Indemnification
Indemnification provisions for officers and directors of Registrant
are set forth in Article VII, Section 2 of the Articles of Incorporation^ and
are hereby incorporated by reference. See Item 24(b)(1) above. Under these
Articles, officers and directors will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
Fund directors and officers cannot be protected against liability to the Company
or its shareholders to which they would be subject because of willful
<PAGE>
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
their office. The Company also maintains liability insurance policies covering
its directors and officers.
Item 28. Business and Other Connections of Investment
Adviser
See "The Fund ^ And Its Management" in the Funds' respective
Prospectuses and in the Statement of Additional Information for information
regarding the business of the investment adviser. For information as to the
business, profession, vocation or employment of a substantial nature of each of
the officers and directors of INVESCO Funds Group, Inc., reference is made to
the Schedule Ds to the Form ADV filed under the Investment Advisers Act of 1940
by INVESCO Funds Group, Inc., which schedules are herein incorporated by
reference.
Item 29. Principal Underwriters
(a) INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ -------------- --------------
^
Frank M. Bishop Director ^
1315 Peachtree Street NE
Atlanta, GA 30309
Charles W. Brady Chairman of
1315 Peachtree Street NE the Board
Atlanta, GA 30309
^
M. Anthony Cox Senior Vice
1315 Peachtree St. NE President
Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell ^ Regional Vice ^
7800 E. Union Avenue President ^
^ Denver, CO 80237
Samuel T. DeKinder Director
1315 Peachtree Street NE
Atlanta, GA 30309
Douglas P. Dhom Regional Vice
1355 Peachtree Street, N.E. President
Atlanta, GA 30309
William J. Galvin, Jr. Senior Vice Asst.
7800 E. Union Avenue President Secretary
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President Chief Fin'l
Denver, CO 80237 & Treasurer Officer, and
Chief Acctg.
Officer
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
^ Hubert L. Harris ^, Jr. Director Director
1315 Peachtree Street, N.E. ^
Atlanta, GA 30309
Dan J. Hesser Chairman of the Board, President
7800 E. Union Avenue President, CEO & Director
Denver, CO 80237 & Director
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
^
Michael D. Legoski Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
^ James F. Lummanick Vice President;
7800 E. Union Avenue ^ Asst. General
^ Denver, CO 80237 Counsel
Brian N. Minturn Executive Vice
7800 E. Union Avenue President
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
Robert J. O'Connor Director
1315 Peachtree Street N.E.
Atlanta, GA 30309
Donald R. Paddack Asst. Vice
7800 E. Union Avenue President
Denver, CO 80237
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President, Secretary
Denver, CO 80237 & General Counsel
^ Pamela J. Piro Asst. Vice
7800 E. Union Avenue President
Denver, CO 80237
^ Gary J. Ruhl Vice President
7800 E. Union Avenue
Denver, CO 80237
^ R. Dalton Sim Director
^ 7800 E. Union Avenue
^ Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street N.E. President
Atlanta, GA 30309
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
^ Tane T. Tyler Asst. Vice
^ 7800 E. Union Avenue President
^ Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- --------------
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80237
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant shall furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
(b) The Registrant hereby undertakes that the board of
directors will call a special shareholders meeting
for the purpose of voting on the question of
removal of a director or directors of the Company
if requested to do so in writing by the holders of
at least 10% of the outstanding shares of the
Company, and to assist the shareholders in
communicating with other shareholders as required
by the Investment Company Act of 1940.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this ^
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the ^27 day of ^ November, 1996.
Attest: INVESCO Multiple Asset
Funds, Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------------ ------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this ^
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this ^27 day of ^
November, 1996.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------
Dan J. Hesser, President & ------------------------------------
Director (Chief Executive Officer) Lawrence H. Budner, Director
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------
Ronald L. Grooms, Treasurer ------------------------------------
(Chief Financial and Daniel D. Chabris, Director
Accounting Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------
------------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ------------------------------------
------------------------------------
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ Hubert L. Harris, Jr. /s/ Kenneth T. King
------------------------------------
------------------------------------
Hubert L. Harris, Jr., Director Kenneth T. King, Director
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------------------
------------------------------------
Charles W. Brady, Director John W. McIntyre, Director
By*
---------------------------------
Edward F. O'Keefe By*/s/ Glen A. Payne
Attorney in Fact ---------------------------------
Glen A. Payne
Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
October 4, 1993, November 24, 1993 and September 20, 1995.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
^ 1 121
2 131
5(a) 151
5(b) 160
5(c) 165
6 171
7 181
8 185
8(a) 217
9(a) 218
9(a)(i) 232
9(b) 233
11 238
15 239
17(a) 240
17(b)
EX-99.POA HARRIS 241
ARTICLES OF INCORPORATION
OF
INVESCO MULTIPLE ASSET FUNDS, INC.
THIS IS TO CERTIFY to the Maryland State Department of Assessments that the
undersigned, Dan J. Hesser, whose post office address is 7800 E. Union Avenue,
Suite 800, Denver, Colorado 80237, and being at least 18 years of age, does
hereby declare that he is an incorporator intending to form a corporation under
and by virtue of the general laws of the State of Maryland authorizing the
formation of corporations.
ARTICLE I
NAME AND TERM
The name of the corporation is INVESCO Multiple Asset Funds, Inc. The
corporation shall have perpetual existence.
ARTICLE II
POWERS AND PURPOSES
The nature of the business and the objects and purposes to be transacted,
promoted and carried on by the corporation are as follows:
1. To engage in the business of an incorporated investment company of
open-end management type and to engage in all legally permissible
activities and operations usual, customary, or necessary in
connection therewith.
2. In general, to engage in any other business permitted to
corporations by the laws of the State of Maryland and to
have and exercise all powers conferred upon or permitted
to corporations by the Maryland General Corporation Law
and any other laws of the State of Maryland; provided,
however, that the corporation shall be restricted from
engaging in any activities or taking any actions which
would preclude its compliance with applicable provisions
of the Investment Company Act of 1940, as amended,
applicable to open-end management type investment
companies or applicable rules promulgated thereunder.
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares the corporation shall have the
authority to issue is five hundred million (500,000,000) shares of Common Stock,
having a par value of one cent ($0.01) per share. The aggregate par value of
all shares which the corporation shall have the authority to issue is five
million dollars ($5,000,000). Such stock may be issued as full shares or as
fractional shares.
<PAGE>
In the exercise of the powers granted to the board of directors pursuant
to Section 3 of this Article III, the board of directors initially designates
two classes of shares of Common Stock of the corporation, to be designated as
the INVESCO Multi-Asset Allocation Fund and the INVESCO Balanced Fund,
respectively. Initially, one hundred million (100,000,000) shares of the
corporation's Common Stock are classified as and are allocated to each such
designated class.
Unless otherwise prohibited by law, so long as the corporation is
registered as an open-end investment company under the Investment Company Act of
1940, as amended, the total number of shares which the corporation is authorized
to issue may be increased or decreased by the board of directors in accordance
with the applicable provisions of the Maryland General Corporation Law.
Section 2. No holder of stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any shares of the capital stock of
the corporation which it may issue or sell, whether out of the number of shares
authorized by these articles of incorporation, or out of any shares of the
capital stock of the corporation acquired by it after the issue thereof.
Section 3. The corporation is authorized to issue its stock in one or more
series or one or more classes of shares, and, subject to the requirements of the
Investment Company Act of 1940, as amended, particularly Section 18(f) thereof
and Rule 18f-2 thereunder, the different series and classes, if any, shall be
established and designated, and the variations in the relative preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as between the
different series or classes shall be fixed and determined and may be classified
and reclassified by the board of directors; provided that the board of directors
shall not classify or reclassify any of such shares into any class or series of
stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the general assets of, the corporation, except
that there may be variations so fixed and determined between different series or
classes as to investment objective, purchase price, right of redemption, special
rights as to dividends and on liquidation with respect to assets and income
belonging to a particular series or class, voting powers and conversion rights.
All references to shares in these articles of incorporation shall be deemed to
be shares of any or all series and classes of shares of the corporation's
capital stock as the context may require.
(a) The number of authorized shares allocated to each series
or class and the number of shares of each series or of each class
that may be issued shall be in such number as may be determined by
the board of directors. The directors may classify or reclassify any
unissued shares or any shares previously issued and reacquired of
any series or class into one or more series or one or more classes
that may be established and designated by the board of directors
<PAGE>
from time to time. The directors may hold as treasury shares (of the
same or some other series or class), reissue for such consideration
and on such terms as they may determine, or cancel any shares of any
series or any class reacquired by the corporation at their
discretion from time to time.
(b) All consideration received by the corporation for the
issue or sale of shares of a particular series or class,
together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall
irrevocably belong to that series or class for all
purposes, subject only to the rights of creditors of that
series or class, and shall be so recorded upon the books
of account of the corporation. In the event that there
are any assets, income, earnings, profits and proceeds
thereof, funds, or payments which are not readily
identifiable as belonging to any particular series or
class, the directors shall allocate them among any one or
more of the series or classes established and designated
from time to time in such manner and on such basis as
they, in their sole discretion, deem fair and equitable.
Each such allocation by the corporation shall be
conclusive and binding upon the stockholders of all
series or classes for all purposes. The directors shall
have full discretion, to the extent not inconsistent with
the Investment Company Act of 1940, as amended, and the
Maryland General Corporation Law to determine which items
shall be treated as income and which items shall be
treated as capital; and each such determination and
allocation shall be conclusive and binding upon the
stockholders.
(c) The assets belonging to each particular class or series
shall be charged with the liabilities of the corporation
in respect to that class or series and all expenses,
costs, charges and reserves attributable to that class or
series, and any general liabilities, expenses, costs,
charges or reserves of the corporation which are not
readily identifiable as belonging to any particular class
or series shall be allocated and charged by the directors
to and among any one or more of the classes or series
established and designated from time to time in such
<PAGE>
manner and on such basis as the directors in their sole discretion
deem fair and equitable. Each allocation of liabilities, expenses,
costs, charges and reserves by the directors shall be conclusive and
binding upon the stockholders of all series and classes for all
purposes.
(d) Dividends and distributions on shares of a particular
series or class may be paid with such frequency as the
directors may determine, which may be daily or otherwise,
pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the board of
directors may determine, to the holders of shares of that
series or class, from such of the income and capital
gains, accrued or realized, from the assets belonging to
that series or class, as the directors may determine,
after providing for actual and accrued liabilities
belonging to that series or class. All dividends and
distributions on shares of a particular series or class
shall be distributed pro rata to the holders of that
series or class in proportion to the number of shares of
that series or class held by such holders at the date and
time of record established for the payment of such
dividends or distributions except that in connection with
any dividend or distribution program or procedure, the
board of directors may determine that no dividend or
distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment have not been
received by the time or times established by the board of
directors under such program or procedure.
The corporation intends to have each series that may be established
to represent interests of a separate investment portfolio qualify as
a "regulated investment company" under the Internal Revenue Code of
1986, or any successor comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income
and gains for federal income tax purposes may vary from the
computation thereof on the books of the corporation, the board of
directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends
designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the board of directors, to
enable the respective series to qualify as regulated investment
companies and to avoid liability of such series for federal income
tax in respect of that year. However, nothing in the foregoing shall
limit the authority of the board of directors to make distributions
greater than or less than the amount necessary to qualify the series
as regulated investment companies and to avoid liability of such
series for such tax.
(e) Dividends and distributions may be made in cash, property
or additional shares of the same or another class or
<PAGE>
series, or a combination thereof, as determined by the board of
directors or pursuant to any program that the board of directors may
have in effect at the time for the election by each stockholder of
the mode of the making of such dividend or distribution to that
stockholder. Any such dividend or distribution paid in shares will
be paid at the net asset value thereof as defined in section (4)
below.
(f) In the event of the liquidation or dissolution of the
corporation or of a particular class or series, the
stockholders of each class or series that has been
established and designated and is being liquidated shall
be entitled to receive, as a class or series, when and as
declared by the board of directors, the excess of the
assets belonging to that class or series over the
liabilities belonging to that class or series. The
holders of shares of any particular class or series shall
not be entitled thereby to any distribution upon
liquidation of any other class or series. The assets so
distributable to the stockholders of any particular class
or series shall be distributed among such stockholders in
proportion to the number of shares of that class or
series held by them and recorded on the books of the
corporation. The liquidation of any particular class or
series in which there are shares then outstanding may be
authorized by vote of a majority of the board of
directors then in office, subject to the approval of a
majority of the outstanding securities of that class or
series, as defined in the Investment Company Act of 1940,
as amended, and without the vote of the holders of any
other class or series. The liquidation or dissolution of
a particular class or series may be accomplished, in
whole or in part, by the transfer of assets of such class
or series to another class or series or by the exchange
of shares of such class or series for the shares of
another class or series.
(g) On each matter submitted to a vote of the stockholders,
each holder of a share shall be entitled to one vote for
each share standing in his name on the books of the
corporation, irrespective of the class or series thereof,
and all shares of all classes or series shall vote as a
single class or series ("single class voting"); provided,
however that (i) as to any matter with respect to which
a separate vote of any class or series is required by the
Investment Company Act of 1940, as amended, or by the
Maryland General Corporation Law, such requirement as to
a separate vote by that class or series shall apply in
lieu of single class voting as described above; (ii) in
the event that the separate vote requirements referred to
in (i) above apply with respect to one or more but not
all classes or series, then, subject to (iii) below, the
shares of all other classes or series shall vote as a
<PAGE>
single class or series; and (iii) as to any matter which does not
affect the interest of a particular class or series, only the
holders of shares of the one or more affected classes shall be
entitled to vote. Holders of shares of the stock of the corporation
shall not be entitled to exercise cumulative voting in the election
of directors or on any other matter.
(h) The establishment and designation of any series or class
of shares, in addition to the initial class of shares
which has been established in section (1) above, shall be
effective upon the adoption by a majority of the then
directors of a resolution setting forth such
establishment and designation and the relative rights and
preferences of such series or class, or as otherwise
provided in such instrument and the filing with the
proper authority of the State of Maryland of Articles
Supplementary setting forth such establishment and
designation and relative rights and preferences.
Section 4. The corporation shall, upon due presentation of a share or
shares of stock for redemption, redeem such share or shares of stock at a
redemption price prescribed by the board of directors in accordance with
applicable laws and regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such class or series as
determined in accordance with the provisions of this section (4), less such
redemption or other charge as is determined by the board of directors. Subject
to applicable law, the corporation may redeem shares, not offered by a
stockholder for redemption, held by any stockholder whose shares of a class or
series had a value less than such minimum amount as may be fixed by the board of
directors from time to time or prescribed by applicable law, other than as a
result of a decline in value of such shares because of market action; provided
that before the corporation redeems such shares it must notify the shareholder
by first-class mail that the value of his shares is less than the required
minimum value and allow him 60 days to make an additional investment in an
amount which will increase the value of his account to the required minimum
value. Unless otherwise required by applicable law, the price to be paid for
shares redeemed pursuant to the preceding sentence shall be the aggregate net
asset value of the shares at the close of business on the date of redemption,
and the shareholder shall have no right to object to the redemption of his
shares. The corporation shall pay redemption prices in cash, except that the
corporation may at its sole option pay redemption prices in kind in such manner
as is consistent with and not in contravention of Section 18(f) of the
Investment Company Act of 1940, as amended, and any Rules or Regulations
thereunder. Redemption prices shall be paid exclusively out of the assets of the
class or series whose shares are being redeemed.
Notwithstanding the foregoing, the corporation may postpone
payment of redemption proceeds and may suspend the right of the
<PAGE>
holders of shares of any class or series to require the corporation to redeem
shares of that class or series during any period or at any time when and to the
extent permissible under the Investment Company Act of 1940, as amended, or any
rule or order thereunder.
The net asset value of a share of any class or series of common stock of
the corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the board of directors.
Section 5. The corporation may issue, sell, redeem, repurchase and
otherwise deal in and with shares of its stock in fractional denominations and
such fractional denominations shall, for all purposes, be shares having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the corporation; provided that the issue of shares in fractional
denominations shall be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the bylaws.
Section 6. The corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the bylaws or by the board of directors.
ARTICLE IV
PREEMPTIVE RIGHTS
No stockholder of the corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any share of any class or series of stock, or
shares convertible into, exchangeable for or evidencing the right to purchase
stock of any class or series whatsoever, whether or not the stock in question be
of the same class or series as may be held by such stockholder, and whether now
or hereafter authorized and whether issued for cash, property, services or
otherwise, other than such, if any, as the board of directors in its discretion
may from time to time fix.
ARTICLE V
PRINCIPAL OFFICE AND REGISTERED AGENT
The post office address of the principal office of the corporation in the
State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident
agent of the corporation is The Corporation Trust Incorporated, whose post
office address is 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a corporation of the State of Maryland.
<PAGE>
ARTICLE VI
DIRECTORS
Section 1. The initial board of directors shall consist of three members
who need not be residents of the State of Maryland or stockholders of the
corporation.
Section 2. The names of the persons who shall act as directors until the
first meeting of stockholders or until their successors shall have been elected
and qualified are as follows:
Charles W. Brady 1315 Peachtree Street, N.E., Atlanta, Georgia
John M. Butler 7800 E. Union Avenue, Denver, Colorado
Dan J. Hesser 7800 E. Union Avenue, Denver, Colorado
Section 3. The number of directors may be increased or decreased in
accordance with the bylaws, provided that the number shall not be reduced to
less than three.
Section 4. A majority of the directors shall constitute a quorum for the
transaction of business, unless the bylaws shall provide that a different number
shall constitute a quorum; provided, however, that in no case shall a quorum be
less than one-third (1/3) of the total number of directors or less than two (2)
directors.
Section 5. Except for the initial board of directors designated in Section
2 of this Article VI, no person shall serve as a director unless elected by the
stockholders at an annual meeting or a special meeting called for such purpose;
provided, however, that vacancies occurring between such meetings may be filled
by the directors in accordance with the bylaws, and subject to such limitations
as may be set forth by applicable laws and regulations.
Section 6. The board of directors of the corporation is hereby empowered
to authorize the issuance from time to time of shares of stock, whether of a
class or series now or hereafter authorized, for such consideration as it deems
advisable, subject to such limitations as may be set forth herein, in the
bylaws, in the Maryland General Corporation Law, and in the Investment Company
Act of 1940, as amended.
Section 7. The board of directors of the corporation may make, alter or
repeal from time to time any of the bylaws of the corporation except any
particular bylaw which is specified as not subject to alternation or repeal by
the board of directors.
<PAGE>
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. Directors and officers of the corporation, including persons who
formerly have served in such capacities, shall have limitations on, and/or
immunity from, liability of such directors and officers to the fullest extent
permitted by the Maryland General Corporation Law, subject only to such
restrictions as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Such limitations and/or immunity will apply
to acts or omissions occurring at the time an individual serves as a director or
officer of the corporation, whether such person is a director or officer of the
corporation at the time of any proceeding in which liability is asserted against
the director or officer. No amendment to these Articles of Incorporation or
repeal of any of its provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
Section 2. The corporation shall indemnify and advance expenses to its
directors and officers, including persons who formerly have served in such
capacities, to the fullest extent permitted to directors by the Maryland General
Corporation Law and the bylaws of the corporation, as such Law and bylaws now or
in the future may be in effect, subject only to such limitations as may be
required by the Investment Company Act of 1940, as amended, and the rules
thereunder.
ARTICLE VIII
SPECIAL VOTING AND MEETING PROVISIONS
Section 1. Notwithstanding any provision of Maryland law requiring a
greater proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast to take or authorize any action, the corporation
may take or authorize any such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
Section 2. The presence in person or by proxy of the holders of one-third
of the shares of stock of the corporation entitled to vote without regard to
class shall constitute a quorum at any meeting of stockholders, except with
respect to any matter which by law requires the separate approval of one or more
classes of stock, in which case the presence in person or by proxy of the
holders of one-third of the shares of stock of each class entitled to vote on
the matter shall constitute a quorum for that class.
Section 3. So long as the corporation is registered pursuant to the
Investment Company Act of 1940, as amended, the corporation will not be required
to hold annual shareholder meetings in years in which the election of directors
is not required to be acted upon under the Investment Company Act of 1940, as
amended.
<PAGE>
ARTICLE IX
AMENDMENT
The corporation reserves the right from time to time to make any amendment
of its articles of incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in such
articles, of any outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes the terms or rights of any of its
outstanding shares shall be valid unless such amendment shall have been
authorized by not less than a majority of the aggregate number of votes entitled
to be cast thereon, by a vote at a meeting or in writing with or without a
meeting.
IN WITNESS WHEREOF, I have signed these articles of incorporation on this
17th day of August, 1993.
/s/ Dan J. Hesser
------------------------------------
Dan J. Hesser
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I hereby certify that on the 17th day of August, 1993, before me, the
subscriber, a Notary Public of the State of Colorado, in and for the City and
County of Denver, personally appeared Dan J. Hesser who acknowledged the
foregoing articles of incorporation to be his act.
WITNESS my hand and notarial seal, the day and year first above written.
/s/ Terri L. Smedra
------------------------------
Notary Public
My commission expires: March 2, 1996
-------------------
BYLAWS
OF
INVESCO MULTIPLE ASSET FUNDS, INC.
AS OF AUGUST 19, 1993
ARTICLE I.
SHAREHOLDERS
Section 1. Annual Meeting. Unless otherwise determined by the
board of directors or required by applicable law, no
annual meeting of shareholders shall be required to be
held in any year in which the election of directors is
not required under the Investment Company Act of 1940.
If the corporation is required to hold a meeting of
shareholders to elect directors, the meeting shall be
designated as the annual meeting of shareholders for
that year, and shall be held no later than 120 days
after occurrence of the event requiring the meeting at
a place within or without the State of Maryland.
Section 2. Special Meetings. Special meetings of the shareholders
entitled to vote shall be called upon the request in
writing of the president or, in his absence, a vice
president, or by a vote of a majority of the board of
directors, or upon the request in writing of share-
holders of the Company representing not less than ten
percent (10%) of the votes entitled to be cast at the
meeting.
Section 3. Place of Meetings. Each annual and any special meeting
of the shareholders shall be held at the principal
office of the corporation in Denver, Colorado, or at
such alternate site as may be determined by the board of
directors.
Section 4. Notices. Notices of every meeting, annual or special,
shall specify the place, day and hour of the meeting
and shall be mailed not less than ten (10) days nor
more than ninety (90) days before such meeting. Such
notice shall be given by the Secretary of the Corpora-
tion to each shareholder entitled to notice of and
entitled to vote at the meeting. In the event that a
special meeting is called by the shareholders entitled
to vote, the Secretary of the Corporation shall inform
the shareholders who make the request of the reasonably
estimated cost of preparing and mailing a notice of the
meeting, and upon payment of these costs to the Corpora-
tion, shall notify each shareholder entitled to notice
of the meeting. Notice of every special meeting shall
indicate briefly its purpose. Notice shall be deemed
delivered where it is personally delivered to the indi-
<PAGE>
vidual, left at the individual's usual place of busi-
ness, or mailed to the individual at the individual's
address as it appears on the records of the Corporation.
Section 5. Quorum. At every meeting of the shareholders, the pre-
sence in person or by proxy of the holders of one-third
of all of the shares of stock of the corporation issued
and outstanding and entitled to vote without regard to
class shall constitute a quorum, except with respect to
any matter which by law requires the separate approval
of one or more classes of stock, in which case the
presence in person or by proxy of the holders of one-
third of the shares of stock of each class entitled to
vote on the matter shall constitute a quorum for that
class; provided, however, that at every meeting of the
shareholders, the representation of a larger number of
shareholders shall constitute a quorum if required by
the Investment Company Act of 1940, as amended, other
applicable law, or by the Articles of Incorporation.
Section 6. Voting. At every meeting of the shareholders at which
a quorum is present, each shareholder entitled to vote
shall be entitled to vote in person, or by proxy
appointed by instrument in writing subscribed by such
shareholder, or his duly authorized attorney, and he
shall have one (1) vote for each share of stock standing
registered in his name on each matter submitted at the
meeting on which such share is entitled to vote and for
each director to be elected. Fractional shares shall be
entitled to proportionate fractional votes.Every proxy
shall be dated and no proxy shall be valid after eleven
(11) months from its date unless otherwise provided in
the proxy. There shall be no cumulative voting in the
election of directors. Except as otherwise provided by
law, by the charter of the corporation, or by these
bylaws, at each meeting of stockholders at which a
quorum is present, all matters shall be decided by a
majority of the votes cast by the stockholders present
in person or represented by proxy and entitled to vote
with respect to any such matter.
Section 7. Qualification of Voters. At every meeting of share-
holders, unless the voting is conducted by inspectors,
the proxies and ballots shall be received, and all
questions with respect to the qualification of voters
and the validity of proxies and the acceptance or
rejection of votes shall be decided by the chairman of
the meeting. If demanded by shareholders present in
person or by proxy entitled to cast twenty-five per
cent (25%) in number of votes, or if ordered by the
chairman of the meeting, the vote upon any election or
question shall be taken by ballot and, upon such demand
or order, the voting shall be conducted by two (2)
inspectors appointed by the chairman, in which event the
<PAGE>
proxies and ballots shall be received and all questions
with respect to the qualification of votes and the
validity of proxies and the acceptance or rejection of
votes shall be decided by such inspectors.Unless so
demanded or ordered, no vote need be by ballot and the
voting need not be conducted by inspectors.
Section 8. Waiver of Notice. A waiver of notice of any meeting of
shareholders signed by any shareholder entitled to such
notice filed with the records of the meeting, whether
before or after the holding thereof or actual attendance
at the meeting in person or by proxy, shall be deemed
equivalent to the giving of notice to such shareholder.
Section 9. Adjournment. A meeting of shareholders convened on
the date for which it was called may be adjourned from
time to time without further notice to a date not more
than 120 days after the original record date of the
meeting.
Section 10. Action by Shareholders Without Meeting. Except as
otherwise provided by law, the provisions of these
bylaws relating to notices and meetings to the contrary
notwithstanding, any action required or permitted to be
taken at any meeting of shareholders may be taken
without a meeting if a consent in writing setting forth
the action shall be signed by all the shareholders
entitled to vote upon the action and such consent shall
be filed with the records of the corporation.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Powers. The business and property of the corporation
shall be conducted and managed by its board of
directors, which may exercise all of the powers of the
corporation, except such as are by statute, by the
charter or by the bylaws, conferred upon or reserved to
the shareholders. The board of directors shall keep
full and complete records of its transactions.
Section 2. Number. By vote of a majority of the entire board of
directors, the number of directors may be increased or
decreased from time to time; provided that, in no
event, may the number be decreased to less than three.
Section 3. Election. The members of the board of directors shall
be elected by the shareholders by plurality vote at the
<PAGE>
annual meeting, or at any special meeting called for
such purpose. Each director shall hold office until his
successor shall have been duly chosen and qualified, or
until he shall have resigned or shall have been removed
in the manner provided by law. Any vacancy, including
one created by an increase in the number of directors
on the board (except where such vacancy is created by
removal by the shareholders), may be filled by the vote
of a majority of the remaining directors, although such
majority is less than a quorum; provided, however, that
immediately after filling any vacancy by such action of
the board of directors, at least two-thirds (2/3) of
the directors then holding office shall have been
elected by the shareholders at an annual or special
meeting.
Section 4. Regular Meetings. The board of directors shall
schedule an Annual Meeting at such place and time as
they may designate for the purpose of organization, the
election of officers, and the transaction of other
business. Other regular meetings may be held as
scheduled by a majority of the directors.
Section 5. Special Meetings. Special meetings of the board of
directors may be called at any time by the president or
by a majority of the directors or by a majority of the
executive committee.
Section 6. Notice of Meetings. Notice of the place, day and hour
of every special meeting shall be given to each director
at least two (2) days before the meeting, by written
announcement, telephone, telegraph and/or mail addressed
to him at his post office address, according to the
records of the corporation. Unless required by
resolution of the board of directors, no notice of any
meeting of the board of directors need state the
business to be transacted thereat. No notice of any
meeting of the board of directors need be given to any
director who attends, or to any director who, in writing
executed and filed with the records of the meeting
either before or after the holding thereof, waives such
notice. Any meeting of the board of directors may
adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any
such adjourned meeting other than by announcement.
Section 7. Quorum. At all meetings of the board of directors, one-
third of the total number of directors or not less than
two (2) directors shall constitute a quorum for the
transaction of business. In the absence of a quorum,
the directors present by a majority vote and without
notice other than by announcement may adjourn the meet-
ing from time to time until a quorum shall be present.
At any such adjourned meeting, any business may be
transacted which might have been transacted at the
meeting as originally notified.
<PAGE>
Section 8. Compensation of Directors. Directors shall be entitled
to receive such compensation from the corporation for
their services as may from time to time be voted by the
board of directors. All directors shall be reimbursed
for their reasonable expenses of attendance, if any, at
the board and committee meetings. Any director of the
corporation may also serve the corporation in any other
capacity and receive compensation therefor.
Section 9. Vacancies. Any vacancy occurring in the board of
directors may be filled by the affirmative vote of a
majority of the remaining directors though less than a
quorum of the board of directors. A director elected
to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to
be filled by reason of an increase in the number of
directors may be filled by election by the board of
directors for a term of office continuing only until the
next election of directors by the shareholders.
Section 10. Resignation and Removal of Directors. Any director or
member of any committee may resign at any time. Such
resignation shall be made in writing and shall take
effect at the time specified therein. If no time is
specified, it shall take effect from the time of its
receipt by the Secretary, who shall record such resigna-
tion, noting the day and hour of its reception. The
acceptance of a resignation shall not be necessary to
make it effective. Notwithstanding anything to the con-
trary in Article I, Section 2 hereof, a meeting for
removing a director shall be called in accordance with
the procedures specified in Section 16(c) of the Invest-
ment Company Act of 1940, and the shareholder comm-
unications provisions of said Section 16(c) shall be
following by the corporation. At any meeting of share-
holders, duly called and at which a quorum is present,
the shareholders may,by affirmative vote of the holders
of a majority of the votes entitled to be cast there-
on, remove any director or directors from office and
may elect a successor or successors to fill any
resulting vacancies to hold office until the next
annual meeting of shareholders or until a successor
or successors are elected and qualify.
Section 11. Telephone Meetings. Any member or members of the board
of directors or of any committee designated by the
board of directors, may participate in a meeting of the
board, or any such committee, as the case may be, by
means of a conference telephone or similar communi-
cations equipment if all persons participating in the
meeting can hear each other at the same time. Parti-
cipation in a meeting by these means constitutes
presence in person at the meeting. This Section 11
shall not be applicable to meetings held for the pur-
pose of voting in respect of approval of contracts or
agreements whereby a person undertakes to serve or
act as investment
<PAGE>
adviser of, or principal underwriter for, the corpora-
tion or in respect to other matters as to which the
Investment Company Act of 1940 or the rules thereunder
require that votes be cast in person.
Section 12. Action by Directors Without Meeting. The provisions of
these bylaws covering notices and meetings to the con-
trary notwithstanding, and except as required by law
(including Section 15 of the Investment Company Act of
1940), any action required or permitted to be taken at
any meeting of the board of directors may be taken with-
out a meeting if a consent in writing setting forth the
action shall be signed by all of the directors entitled
to vote upon the action and such written consent is
filed with the minutes of proceedings of the board of
directors.
ARTICLE III.
COMMITTEES
Section 1. Executive Committee. The board of directors, by reso-
lution adopted by a majority of the whole board of
directors, may provide for an executive committee of
three (3) or more directors. If provision be made for
an executive committee, the members thereof shall be
elected by the board of directors to serve during the
pleasure of the board of directors. Unless otherwise
provided by resolution of the board of directors, the
president shall be a member and the chairman of the
executive committee shall preside at all meetings
thereof. During the intervals between the meetings of
the board of directors, the executive committee shall
possess and may exercise all of the powers of the board
of directors in the management of the business and
affairs of the corporation conferred by the bylaws or
otherwise, to the extent authorized by the resolution
providing for such executive committee or by subsequent
resolution adopted by a majority of the whole board of
directors, in all cases in which specific directions
shall not have been given by the board of directors.
Notwithstanding the foregoing, the executive committee
shall not have the power to: (i) declare dividends
or distributions on stock; (ii) issue stock other than
as provided by the Maryland General Corporation Law;
(iii) recommend to the shareholders any action which
requires shareholder approval; (iv) amend these bylaws;
or (v) approve any merger or share exchange which does
not require shareholder approval. The executive com-
mittee shall maintain written records of its
transactions. All action by the executive committee
shall be reported to the board of directors at its
meeting next succeeding such action, and shall be
subject to ratification, with or without revision or
alteration, by such vote of the board of directors as
would have been required under Article II, Section 7,
<PAGE>
hereof, had such action been taken by the board of
directors. Vacancies in the executive committee shall be
filled by the board of directors.
Section 2. Meetings of the Executive Committee. The executive
committee shall fix its own rules of procedure and shall
meet as provided by such rules or by resolution of the
board of directors, and it shall also meet at the call
of the chairman or of any two (2) members of the com-
mittee. A majority of the executive committee shall
constitute a quorum. Except in cases in which it is
otherwise provided by resolution of the board of
directors, the vote of a majority of such quorum at a
duly constituted meeting shall be sufficient to elect
and to pass any measure, subject to ratification by the
board of directors as provided in Section 1 of this
Article III.
Section 3. Other Committees. The board of directors may by
resolution provide for such other standing or special
committees as it deems desirable, and discontinue the
same at its pleasure. Each such committee shall have
such powers and perform such duties as may be assigned
to it by the board of directors.
Section 4. Committee Action Without Meeting. The provisions of
these bylaws covering notices and meetings to the
contrary notwithstanding, and except as required by law,
any action required or permitted to be taken at any
meeting of any committee of the board of directors
appointed pursuant to these bylaws may be taken without
a meeting if a consent in writing setting forth the
action shall be signed by all members of the committee
entitled to vote upon the action, and such written
consent is filed with the records of the proceedings of
the committee.
ARTICLE IV.
OFFICERS
Section 1. Numbers; Qualifications; Term of Office; Vacancies. The
board of directors may select one of their number as
chairman of the board and may select one of their number
as vice chairman of the board (neither of which posi-
tions shall be considered to be the designation of a
position as an officer of the corporation), and shall
choose as officers a president from among the directors
and a treasurer and a secretary who need not be
directors. The board of directors may also choose one
or more vice presidents, one or more assistant secre-
taries and one or more assistant treasurers, none of
<PAGE>
whom need be a director. Any two or more of such
offices, except those of president and vice president,
may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more
than one capacity if such instrument is required by law
or by the certificate of incorporation or by these
bylaws or by resolution of the board of directors to
be executed, acknowledged or verified by any two or more
officers. Each such officer shall hold office until the
first meeting of the board of directors after the annual
meeting of the shareholders next following his election
or, if no such annual meeting of the shareholders is
held, until the annual meeting of the board of dir-
ectors in the year following his election, and, until
his successor is chosen and qualified or until he shall
have resigned or died, or until he shall have been
removed as hereinafter provided in Section 3 of this
Article IV. Any vacancy in any of the above offices may
be filled by the board of directors at any regular or
special meeting. All officers and agents of the
corporation, as between themselves and the corporation,
shall have such authority and perform such duties in the
management of the corporation as may be provided in or
pursuant to these bylaws, or, to the extent not so
provided, as may be prescribed by the board of
directors; provided, that no rights of any third party
shall be affected or impaired by any such bylaws or
resolution of the board unless the third party has
knowledge thereof.
Section 2. Subordinate Officers. The board of directors, or any
officer thereunto authorized by it, may appoint from
time to time such other officers and agents for such
terms of office and with such powers and duties as may
be prescribed by the board of directors or the officer
making such appointment.
Section 3. Removal. Any officer or agent may be removed by the
board of directors whenever, in its judgment, the best
interests of the corporation will be served thereby, but
such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
Section 4. Chairman of the Board. The chairman of the board, if one
shall be elected, shall preside at all meetings of the
board of directors, and shall appoint all committees
except such as are required by statute, these bylaws or
<PAGE>
a resolution of the board of directors or of the
executive committee to be otherwise appointed, and shall
have other such duties as may be assigned to him from
time to time by the board of directors. In recognition
of notable and distinguished services to the
corporation, the board of directors may designate one of
its members as honorary chairman, who shall have such
duties as the board may, from time to time, assign him
by appropriate resolution, excluding, however, any
authority or duty vested by law or these bylaws in any
other officer.
Section 5. Vice Chairman of the Board. The vice chairman of the
board, if one shall be elected, shall preside at all
meetings of the board of directors at which the chairman
of the board is not present, shall call at his discre-
tion and shall preside at meetings of those directors of
the corporation who are not affiliated with the
corporation's investment adviser, distributor, or
affiliates thereof, and shall perform such other duties
as may be assigned to the vice chairman from time to
time by the board of directors.
Section 6. President. The president shall preside at all meetings
of the shareholders and, in the absence of the chairman
and the vice chairman of the board or if a chairman and
vice chairman of the board are not elected, at all
meetings of the board of directors. Unless otherwise
provided by the board of directors, he shall have
direct control of and any authority over the business
and affairs and over the officers of the corporation,
and shall preside at all meetings of the executive
committee. The president shall also perform all such
other duties as are incident to his office and as may be
assigned to him from time to time by the board of
directors.
Section 7. Vice Presidents. The vice president or vice presidents,
at the request of the president or in his absence or
inability to act, shall perform the duties and exercise
the functions of the president in such manner as may be
directed by the president, the board of directors or the
executive committee. The vice president or vice
presidents shall have such other powers and perform all
such other duties as may be assigned to them by the
board of directors, the executive committee, or the
president.
<PAGE>
Section 8. Secretary. The secretary shall see that all notices are
duly given in accordance with these bylaws; he shall
keep the minutes of all meetings of the shareholders
and, if directed to do so by the chairman of the
meeting, of meetings of the board of directors and of
the executive committee at which he shall be present; he
shall have charge of the books and records and the
corporate seal or seals of the corporation; he shall see
that the corporate seal is affixed to all documents, the
execution of which under the seal of the corporation is
duly authorized and is necessary; and he shall make such
reports and perform all such other duties as are
incident to his office and as may be assigned to him
from time to time by the board of directors or by the
president.
Section 9. Treasurer. The treasurer shall be the chief financial
officer of the corporation, and as such shall have
supervision of the custody of all funds, securities and
valuable documents of the corporation, subject to such
arrangements as may be authorized or approved by the
board of directors with respect to the custody of assets
of the corporation; shall receive, or cause to be
received, and give, or cause to be given, receipts for
all funds, securities or valuable documents paid or
delivered to, or for the account of, the corporation,
and cause such funds, securities or valuable documents
to be deposited for the account of the corporation with
such banks or trust companies as shall be designated by
the board of directors; shall pay or cause to be paid
out of the funds of the corporation all just debts of
the corporation upon their maturity; shall maintain, or
cause to be maintained, accurate records of all
receipts, disbursements, assets, liabilities, and
transactions of the corporation; shall see that adequate
audits thereof are regularly made; shall, when required
by the board of directors, render accurate statements of
the condition of the corporation; and shall perform all
such other duties as are incident to his office and as
may be assigned to him by the board of directors or by
the president.
Section 10. Assistant Secretaries, Assistant Treasurers. The
assistant secretaries and assistant treasurers shall
have such duties as from time to time may be assigned to
them by the board of directors, or by the president.
<PAGE>
Section 11. Compensation. The board of directors shall have the
power to fix the compensation of all officers and agents
of the corporation, but may delegate to any officer or
committee the power of determining the amount of salary
to be paid to any officer or agent of the corporation
other than the chairman of the board, the president, the
vice presidents, the secretary and the treasurer.
Section 12. Contracts. Except as otherwise provided by law or by
the charter, no contract or transaction between the
corporation and any partnership or corporation, and no
act of the corporation, shall in any way be affected or
invalidated by the fact that any officer or director of
the corporation is pecuniarily or otherwise interested
therein or is a member, officer or director of such
other partnership or corporation if such interest shall
be known to the board of directors of the corporation.
Specifically, but without limitation of the foregoing,
the corporation may enter into one or more contracts
appointing INVESCO Funds Group, Inc. investment adviser
of the corporation, and may otherwise do business with
INVESCO Funds Group, Inc., notwithstanding the fact that
one or more of the directors of the corporation and some
or all of its officers are, have been or may become
directors, officers, members, employees, or shareholders
of INVESCO Funds Group, Inc. and may deal freely with
each other, and neither such contract appointing
INVESCO Funds Group, Inc. investment adviser to the
corporation nor any other contract or transaction
between the corporation and INVESCO Funds Group, Inc.
shall be invalidated or in any way affected thereby, nor
shall any director or officer of the corporation by
reason thereof be liable to the corporation or to any
shareholder or creditor of the corporation or to any
other person for any loss incurred under or by reason of
any such contract or transaction. For purposes of this
paragraph, any reference to "INVESCO Funds Group, Inc."
shall be deemed to include said company and any parent,
subsidiary or affiliate of said company and any
successor (by merger, consolidation or otherwise) to
said company or any such parent, subsidiary or
affiliate.
Section 13. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the board of
directors may deem it desirable, the board may delegate
the powers and duties of an officer to any other officer
or officers or to any director or directors.
<PAGE>
ARTICLE V.
CAPITAL STOCK
Section 1. Issuance of Stock. The corporation shall not issue its
shares of capital stock except as approved by the board
of directors. Upon the sale of each share of its common
stock, except as otherwise permitted by applicable laws
and regulations, the corporation shall receive in cash
or in securities valued as provided in Article VIII of
these bylaws, not less than the current net asset value
thereof, exclusive of any distributing commission or
discount, and in no event less than the par value
thereof.
Section 2. Certificates. Certificates for the Corporation's
classes of Common Stock shall be issued only upon the
specific request of a shareholder. If certificates are
requested, they shall be issued in such a form as may be
approved by the board of directors, they shall be
respectively numbered serially for each class of shares,
or series thereof, as they are issued, and shall be
signed by, or bear a facsimile of the signatures of, the
president or a vice president, and shall also be signed
by, or bear a facsimile of the signature of some other
person who is one of the following: the treasurer, an
assistant treasurer, the secretary, or an assistant
secretary; and shall be sealed with, or bear a facsimile
of, the seal of the corporation. In case any officer of
the corporation whose signature or facsimile signature
appears on such certificates shall cease to be such
officer, whether because of death, resignation or
otherwise, certificates may nevertheless be issued and
delivered as though such person had not ceased to be an
officer.
Section 3. Transfers. Subject to the Maryland General Corporation
Law, the board of directors shall have power and auth-
ority to make all such rules and regulations as it may
deem expedient concerning the issue, transfer and
registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of
transfer agent and registrar may be combined.
<PAGE>
Section 4. Stock Ledgers. Original or duplicate stock ledgers,
containing the names and addresses of the shareholders
of the corporation and the number of shares of each
class held by them respectively, shall be kept at an
office or agency of the corporation in such city or town
as may be designated by the board of directors.
Section 5. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a
determination of shareholders for any other purpose, the
board of directors of the Corporation may provide that
the share transfer books shall be closed for a stated
period but not to exceed, in any case, twenty days. If
the share transfer books shall be closed for the purpose
of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be
closed for at least ten days immediately preceding such
meeting. In lieu of closing the share transfer books,
the board of directors may fix in advance a date as the
record date for any such determination of shareholders,
such date in any case to be not more than ninety days
and, in case of a meeting of shareholders, not less than
ten days prior to the date on which the particular
action, requiring such determination of shareholders, is
to be taken. If the share transfer books are not closed
and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a
meeting of shareholders, the later of the close of
business on the date on which notice of the meeting is
mailed or the thirtieth day before the meeting shall be
the record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders. The
record date for determining shareholders entitled to
receive payment of a dividend or an allotment of any
rights shall be the close of business on the day on
which the resolution of the board of directors declaring
such dividend or allotment of rights is adopted. But
the payment or allotment may not be made more than 60
days after the date on which the resolution is adopted.
When a determination of shareholders entitled to vote
at any meeting of shareholders has been made as provided
in this section, such determination shall apply to any
adjournment thereof.
<PAGE>
Section 6. New Certificates. In case any certificate of stock is
lost, stolen, mutilated or destroyed, the board of
directors may authorize the issue of a new certificate
in place thereof upon such terms and conditions as it
may deem advisable; or the board of directors may
delegate such power to any officer or officers of the
corporation; but the board of directors or such officer
or officers, in their discretion, may refuse to issue
such new certificate, save upon the order of some court
having jurisdiction in the premises.
Section 7. Registered Owners of Stock. The corporation shall be
entitled to recognize the exclusive right of a person
registered on its books as the owner of shares of stock
to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person
registered on its books as the owner of shares of stock,
and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on
the part of any other person, whether or not it shall
have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
Section 8. Fractional Denominations. Subject to any applicable
provisions of law and the charter of the corporation,
the corporation may issue shares of its capital stock in
fractional denominations, provided that the transactions
in which and the terms and conditions upon which shares
in fractional denominations may be issued from time to
time be limited or determined by or under the authority
of the board of directors.
ARTICLE VI.
FINANCES
Section 1. Checks, drafts, etc. All instruments, documents, and
other papers shall be executed in the name and on behalf
of the corporation, and all drafts, checks, notes and
other obligations for the payment of money by the
corporation shall, unless otherwise provided by
resolution of the board of directors, be signed by the
president or vice president and countersigned by the
secretary or treasurer.
Section 2. Annual Reports. A statement of the affairs of the
corporation shall be submitted at the annual meeting of
the shareholders and, within twenty (20) days after the
<PAGE>
meeting, shall be placed on file at the corporation's
principal office. If the corporation is not required to
hold an annual meeting of shareholders, the cor-
poration's statement of affairs shall be placed on file
at the corporation's principal office within one hundred
and twenty (120) days after the end of its fiscal year.
Such statement shall be prepared by such executive
officer of the corporation as may be designated by
resolution of the board of directors. If no other
executive officer is so designated, it shall be the duty
of the president to prepare such statement.
Section 3. Fiscal Year. The fiscal year of the corporation shall
begin on the 1st day of April in each year and end on
the 31st day of March following.
Section 4. Dividends and Distributions. Subject to any applicable
provisions of law and the charter of the corporation,
dividends and distributions upon the common stock of the
corporation may be declared at such intervals as the
board of directors may determine, in cash, in securities
or other property, or in shares of stock of the
corporation, from any sources permitted by law, all as
the board of directors shall from time to time
determine.
Section 5. Location of Books and Records. The books and records
of the corporation may be kept outside the State of
Maryland at the principal office of the corporation or
at such place or places as the board of directors may
from time to time determine, except as otherwise
required by law.
ARTICLE VII.
REDEMPTION OF STOCK
The registered owner of the outstanding stock of the corporation shall have
the right to require the corporation to redeem his shares at the asset value
thereof, as hereinafter defined in Article VIII of these bylaws, upon delivery
to the corporation of any certificate, or certificates, properly endorsed, which
have been issued as evidence of ownership of such stock, and a written request
for redemption in a form satisfactory to the corporation.
Stock of the corporation shall be redeemed at the current net asset value
per share next determined after a request in proper form has been received from
the registered owner or owner's designee at the office of the corporation
designated to receive redemption requests. Any certificates delivered at the
<PAGE>
designated principal place of business of the corporation on a day which is
not a business day as herein defined, shall be deemed to have been received on
the business day next succeeding the day of such delivery. Subject to the
limitations of the Investment Company Act of 1940, the board of directors shall
have authority to fix a reasonable service charge for redemption of its stock,
including redemption pursuant to any periodic withdrawal or variable payment
plan or contract.
ARTICLE VIII.
DETERMINATION OF ASSET VALUE
Section 1. Net Asset Value. The net asset value of a share of
common stock of the corporation shall be determined in
accordance with applicable laws and regulations under
the supervision of such persons and at such time or
times, including the close of business on each business
day, as shall be prescribed by the board of directors.
Each such determination shall be made by subtracting
from the value of the assets of the corporation (as
determined pursuant to Section 2 of this Article of the
bylaws) the amount of its liabilities, dividing the
remainder by the number of shares of common stock issued
and outstanding, and adjusting the results to the
nearest full cent per share.
Section 2. Valuation of Portfolio Securities and Other Assets.
Except as otherwise required by any applicable law or
regulation of any regulatory agency having jurisdiction
over the activities of the corporation, the corporation
shall determine the value of its portfolio securities
and other assets as follows:
(a) securities for which market quotations are readily
available shall be valued at current market value
determined in such manner as the board of directors may
from time to time prescribe;
(b) all other securities and assets shall be valued at
amounts deemed best to reflect their fair value as
determined in good faith by or under the supervision of
such persons and at such time or times as shall from
time to time be prescribed by the board of directors;
All quotations, sale prices, bid and asked prices and other
information shall be obtained from such sources as the persons
making such determination believe to be reliable, and any
determination of net asset value based thereon shall be
conclusive.
<PAGE>
ARTICLE IX.
PERIOD OF EMERGENCY
During any period of emergency, the board of directors, at its option, may
suspend the computation of asset value for the purpose of issuing or redeeming
it stock, and may suspend any obligation to accept payments for the acquisition
of additional stock of the corporation and may suspend the obligation of the
corporation to redeem stock. A period of emergency is defined to be:
(a) A period during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, or during which trading
on the New York Stock Exchange is restricted;
(b) A period during which disposal by the corporation of securities
owned by it is not reasonably practicable, or during which it is not
reasonably practicable for the corporation to fairly to determine
the value of its net assets; or
(c) Such other periods as the Securities and Exchange Commission
pursuant to the provisions of the Investment Company Act of 1940 may
by order declare as an emergency period or periods.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 1. Seal. The board of directors shall provide a suitable
seal, bearing the name of the corporation, which shall
be in the charge of the secretary. The board of
directors may authorize one or more duplicate seals and
provide for the custody thereof.
Section 2. Bonds. The board of directors may require any
officer, agent or employee of the corporation to give a
bond to the corporation, conditioned upon the faithful
discharge of his duties, with one or more sureties and
in such amount as may be satisfactory to the board of
directors.
Section 3. Voting upon Stock in Other Corporations. Any stock in
other corporations or associations, which may from time
to time be held by the corporation, may be voted at any
meeting of the shareholders thereof by the president or
a vice president of the corporation or by proxy or
proxies appointed by the president or one of the vice
presidents of the corporation. The board of directors,
however, may by resolution appoint some other person or
<PAGE>
persons to vote such stock, in which case, such person
or persons shall be entitled to vote such stock upon the
production of a certified copy of such resolution.
Section 4. Bylaws. The board of directors shall have the power to
make, amend and repeal the bylaws of the corporation
which may contain any provision for regulation and
management of the affairs of the corporation not incon-
sistent with law or the certificate of incorporation;
provided that any and all provisions of the bylaws,
notwithstanding the power of the directors to act with
respect thereto, may be altered or repealed, and new
provisions may be adopted by the shareholders or at any
annual meeting or any special meeting called for that
purpose.
Section 5. Appointment and Duties of Custodian. The corporation
shall at all times employ a bank or trust company having
the qualifications specified by the Investment Company
Act of 1940, as amended, as custodian with authority as
its agent, but subject to such restrictions, limitations
and other requirements, if any, as may be contained in
these bylaws and the Investment Company Act of 1940, as
amended:
(1) to receive and hold the securities owned by the cor-
poration and deliver the same upon written order;
(2) to receive and receipt for any moneys due to the cor-
poration and deposit the same in its own banking
department or elsewhere as the board of directors may
direct;
(3) to disburse such funds upon orders or vouchers;
(4) and to provide such additional services as may be
requested by the corporation;
all upon such basis of compensation as may be agreed upon
between the board of directors and the custodian.
The board of directors may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the board of
directors.
<PAGE>
Section 6. Central Certification System. Subject to such rules,
regulations and orders as the U.S. Securities and
Exchange Commission may adopt, the board of directors
may direct the custodian to deposit all or any part of
the securities owned by the corporation in a system for
the central handling of securities established by a
national securities exchange or a national securities
association registered with the SEC under the Securities
Exchange Act of 1934, or such other person as may be
permitted by the SEC or its staff in accordance with the
Investment Company Act of 1940, as amended, and any rule
or staff interpretation thereof, pursuant to which
system all securities of any particular class or series
of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by book-
keeping entry without physical delivery of such
securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the
corporation.
Section 7. Compliance with Federal Regulations. The board of
directors is hereby empowered to take such action as it
may deem to be necessary, desirable or appropriate so
that the corporation is or shall be in compliance with
any federal or state statute, rule or regulation with
which compliance by the corporation is required.
Section 8. Waiver of Notice. Whenever any notice of the time,
place or purpose of any meeting of shareholders,
directors, or of any committee is required to be given
under the provisions of statute or under the provisions
of the charter of the corporation or these bylaws, a
waiver thereof in writing, signed by the person or
person entitled to such notice and filed with the
records of the meeting, whether before or after the
holding thereof, or actual attendance at the meeting of
directors or committee in person, shall be deemed
equivalent to the giving of such notice to such person.
Section 9. Offices. The principal office of the corporation in the
State of Maryland shall be in the City of Baltimore. In
addition to its principal office in the State of
Maryland, the corporation may have an office or offices
in the City of Denver, State of Colorado, and at such
other places as the board of directors may from time to
time designate or the business of the corporation may
require.
<PAGE>
Section 10. Definitions. For all purposes of the certificate of
incorporation and these bylaws, the terms:
(a) "business day" shall be defined as a day with respect to
which the New York Stock Exchange is open for business,
and with respect to which the actual time of closing of
such exchange is that time which shall have been
scheduled for such closing in advance of the opening of
such exchange;
(b) "the close of business" shall be defined as the time of
closing of the New York Stock Exchange.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 20th day of October 1993, Denver, Colorado, by
and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware corporation,
and INVESCO Multiple Asset Funds, Inc., a Maryland Corporation (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of
the State of Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and has one class of shares (the "Shares"), which is divided
into two series, each representing an interest in a separate portfolio of
investments (such series initially being the INVESCO Multi-Asset Allocation Fund
and INVESCO Balanced Fund (the "Portfolios")); and
WHEREAS, the Fund desires that the Adviser manage its investment
operations and the Adviser desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby
agrees to manage the investment operations of the Fund
and its Portfolios, subject to the terms of this
Agreement and to the supervision of the Fund's directors
(the "Directors"). The Adviser agrees to perform, or
arrange for the performance of, the following specific
services for the Fund:
(a) to manage the investment and reinvestment of all
the assets, now or hereafter acquired, of the Fund
and the Portfolios of the Fund;
(b) to maintain a continuous investment program for the
Fund and each Portfolio of the Fund, consistent
with (i) the Fund's and each Portfolio's investment
policies as set forth in the Fund's Registration
Statement, as from time to time amended, under the
Investment Company Act of 1940, as amended (the
"1940 Act"), and in any prospectus and/or statement
of additional information of the Fund or any
Portfolio of the Fund, as from time to time amended
and in use under the Securities Act of 1933, as
amended, and (ii) the Fund's status as a regulated
investment company under the Internal Revenue Code
of 1986, as amended;
<PAGE>
(c) to determine what securities are to be purchased or sold for
the Fund and its Portfolios, unless otherwise directed by the
Directors of the Fund, and to execute transactions
accordingly;
(d) to provide to the Fund and the Portfolios of the
Fund the benefit of all of the investment analyses
and research, the reviews of current economic
conditions and trends, and the consideration of
long-range investment policy now or hereafter
generally available to investment advisory
customers of the Adviser;
(e) to determine what portion of the Fund and each Portfolio of
the Fund should be invested in common stocks, preferred
stocks, Government obligations, commercial paper, certificates
of deposit, bankers' acceptances, variable amount notes,
corporate debt obligations, and any other authorized
securities;
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Fund and/or Portfolio action and
any other rights pertaining to the Fund's portfolio securities
shall be exercised; and
(g) to calculate the net asset value of the Fund and
each Portfolio, as applicable, as required by the
1940 Act, subject to such procedures as may be
established from time to time by the Fund's
Directors, based upon the information provided to
the Adviser by the Fund or by the custodian,
co-custodian or sub-custodian of the Fund's or any
of the Portfolios' assets (the "Custodian") or such
other source as designated by the Directors from
time to time.
With respect to execution of transactions for the Fund and for the
Portfolios, the Adviser shall place, or arrange for the placement of, all orders
for the purchase or sale of portfolio securities with brokers or dealers
selected by the Adviser. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed at all times to
obtain for the Fund and the Portfolios the most favorable execution and price;
after fulfilling this primary requirement of obtaining the most favorable
execution and price, the Adviser is hereby expressly authorized to consider as a
secondary factor in selecting brokers or dealers with which such orders may be
placed whether such firms furnish statistical, research and other information or
services to the Adviser. Receipt by the Adviser of any such statistical or other
information and services should not be deemed to give rise to any requirement
<PAGE>
for adjustment of the advisory fee payable pursuant to paragraph 4 hereof. The
Adviser may follow a policy of considering sales of shares of the Fund as a
factor in the selection of broker/dealers to execute portfolio transactions,
subject to the requirements of best execution discussed above.
The Adviser shall for all purposes herein provided be deemed to be
an independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall
reimburse the Fund monthly for any salaries paid by the
Fund to officers, Directors, and full-time employees of
the Fund who also are officers, general partners or
employees of the Adviser or its affiliates. Except for
such subaccounting, recordkeeping, and administrative
services which are to be provided by the Adviser to the
Fund under the Administrative Services Agreement between
the Fund and the Adviser dated October 20, 1993, which
was approved on October 20, 1993, by the Fund's board of
directors, including all of the independent directors, at
the Fund's request the Adviser shall also furnish to the
Fund, at the expense of the Adviser, such competent
executive, statistical, administrative, internal
accounting and clerical services as may be required in
the judgment of the Directors of the Fund. These
services will include, among other things, the
maintenance (but not preparation) of the Fund's accounts
and records, and the preparation (apart from legal and
accounting costs) of all requisite corporate documents
such as tax returns and reports to the Securities and
Exchange Commission and Fund shareholders. The Adviser
also will furnish, at the Adviser's expense, such office
space, equipment and facilities as may be reasonably
requested by the Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and
except to the extent required by law to be paid by the Adviser, the
Fund shall pay all costs and expenses in connection with the
operations and organization of the Fund. Without limiting the
generality of the foregoing, such costs and expenses payable by the
Fund include the following:
(a) all brokers' commissions, issue and transfer taxes,
and other costs chargeable to the Fund and any
Portfolio in connection with securities
transactions to which the Fund or any Portfolio is
a party or in connection with securities owned by
the Fund or any Portfolio;
(b) the fees, charges and expenses of any independent
public accountants, custodian, depository, dividend
disbursing agent, dividend reinvestment agent,
<PAGE>
transfer agent, registrar, independent pricing
services and legal counsel for the Fund or for any
Portfolio;
(c) the interest on indebtedness, if any, incurred by
the Fund or any Portfolio;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund
or any Portfolio to federal, state, county, city, or other
governmental agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Fund and of its shares under laws
administered by the Securities and Exchange Commission or
under other applicable regulatory requirements, including the
preparation and printing of prospectuses and statements of
additional information;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports,
notices of shareholders' meetings, proxy
statements, dividend notices, prospectuses,
statements of additional information and other
communications to the Fund's shareholders, as well
as all expenses of shareholders' meetings and
Directors' meetings;
(h) all costs, fees or other expenses arising in
connection with the organization and filing of the
Fund's Articles of Incorporation, including its
initial registration and qualification under the
1940 Act and under the Securities Act of 1933, as
amended, the initial determination of its tax
status and any rulings obtained for this purpose,
the initial registration and qualification of its
securities under the laws of any state and the
approval of the Fund's operations by any other
federal or state authority;
(i) the expenses of repurchasing and redeeming shares
of the Fund;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing
certificates representing shares of beneficial
interest of the Fund;
<PAGE>
(l) extraordinary expenses, including fees and
disbursements of Fund counsel, in connection with
litigation by or against the Fund or any Portfolio;
(m) premiums for the fidelity bond maintained by the Fund pursuant
to Section 17(g) of the 1940 Act and rules promulgated
thereunder (except for such premiums as may be allocated to
the Adviser as an insured thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid
by the Fund pursuant to a Plan and Agreement of Distribution
adopted under Rule 12b-1 of the Investment Company Act of
1940.
3. Use of Affiliated Companies. In connection with the
rendering of the services required to be provided by the
Adviser under this Agreement, the Adviser may, to the
extent it deems appropriate and subject to compliance
with the requirements of applicable laws and regulations,
and upon receipt of written approval of the Fund, make
use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain
fully responsible for all such services in accordance
with and to the extent provided by this Agreement and
that all costs and expenses associated with the providing
of services by any such companies or employees and
required by this Agreement to be borne by the Adviser
shall be borne by the Adviser or its affiliated
companies.
4. Compensation of the Adviser. For the services to be
rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Fund shall pay to the Adviser
an advisory fee which will be computed on a daily basis
and paid as of the last day of each month, using for each
daily calculation the most recently determined net asset
value of each Portfolio of the Fund, as determined by
valuations made in accordance with the Fund's procedure
for calculating the Portfolios' net asset value as
described in the Fund's Prospectus and/or Statement of
Additional Information. The advisory fee to the Adviser
with respect to the Portfolio designated as INVESCO
Multi-Asset Allocation Fund shall be computed at the
following annual rate: 0.75% of the first $500 million
of such Portfolio's average net assets, 0.65% of such
Portfolio's average net assets in excess of $500 million
but not more than $1 billion, and 0.50% of such
Portfolio's average net assets in excess of $1 billion.
The advisory fee to the Adviser with respect to the
Portfolio designated as INVESCO Balanced Fund shall be
computed at the following annual rate: 0.60% of the
<PAGE>
first $350 million of such Portfolio's average net assets, 0.55% of
such Portfolio's average net assets in excess of $350 million but
not more than $700 million, and 0.50% of such Portfolio's average
net assets in excess of $700 million.
During any period when the determination of the Portfolios' net
asset value is suspended by the Directors of the Fund, the net asset
value of a share of the Portfolios as of the last business day prior
to such suspension shall, for the purpose of this Paragraph 4, be
deemed to be the net asset value at the close of each succeeding
business day until it is again determined. However, no such fee
shall be paid to the Adviser with respect to any assets of the Fund
or any Portfolio thereof which may be invested in any other
investment company for which the Adviser serves as investment
adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month.
If, in any given year, the sum of a Portfolio's expenses exceeds the
most restrictive state imposed annual expense limitation, the
Adviser will be required to reimburse the Portfolio for such excess
expenses promptly. Interest, taxes and extraordinary items such as
litigation costs are not deemed expenses for purposes of this
paragraph and shall be borne by the Fund or such Portfolio in any
event. Expenditures, including costs incurred in connection with the
purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable
to investment companies, are accounted for as capital items and
shall not be deemed to be expenses for purposes of this paragraph.
5. Avoidance of Inconsistent Positions and Compliance with
Laws.
In connection with purchases or sales of securities for
the investment portfolio of the Fund or any Portfolio,
neither the Adviser nor its officers or employees will
act as a principal or agent for any party other than the
Fund or any Portfolio or receive any commissions. The
Adviser will comply with all applicable laws in acting
hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all
rules and regulations duly promulgated under the
foregoing.
6. Duration and Termination. This Agreement shall become
effective as of the date it is approved by a majority of
the outstanding voting securities of the Portfolios of
the Fund, and unless sooner terminated as hereinafter
provided, shall remain in force for an initial term
<PAGE>
expiring April 30, 1995, and from year to year thereafter, but only
as long as such continuance is specifically approved at least
annually (i) by a vote of a majority of the outstanding voting
securities of the Portfolios of the Fund or by the Directors of the
Fund, and (ii) by a majority of the Directors of the Fund who are
not interested persons of the Adviser or the Fund by votes cast in
person at a meeting called for the purpose of voting on such
approval. In the event of the disapproval of this Agreement, or of
the continuation hereof, by the shareholders of a particular
Portfolio (or by the Directors of the Fund as to a particular
Portfolio), the parties intend that such disapproval shall be
effective only as to such Portfolio, and that such disapproval shall
not affect the validity or effectiveness of the approval of this
Agreement, or of the continuation hereof, by the shareholders of any
other Portfolio (or by the Directors, including a majority of the
disinterested Directors) as to such other Portfolio; in such case,
this Agreement shall be deemed to have been validly approved or
continued, as the case may be, as to such other Portfolio.
This Agreement may, on 60 days' prior written notice, be terminated
without the payment of any penalty, by the Directors of the Fund, or
by the vote of a majority of the outstanding voting securities of
the Fund or, with respect to a particular Portfolio, by a majority
of the outstanding voting securities of that Portfolio, as the case
may be, or by the Adviser. This Agreement shall immediately
terminate in the event of its assignment, unless an order is issued
by the Securities and Exchange Commission conditionally or
unconditionally exempting such assignment from the provisions of
Section 15(a) of the 1940 Act, in which event this Agreement shall
remain in full force and effect subject to the terms and provisions
of said order. In interpreting the provisions of this paragraph 6,
the definitions contained in Section 2(a) of the 1940 Act and the
applicable rules under the 1940 Act (particularly the definitions of
"interested person," "assignment" and "vote of a majority of the
outstanding voting securities") shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to
evaluate the terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation described in paragraph 4 earned prior to such
termination.
<PAGE>
7. Non-Exclusive Services. The Adviser shall, during the
term of this Agreement, be entitled to render investment
advisory services to others, including, without
limitation, other investment companies with similar
objectives to those of the Fund or any Portfolio of the
Fund. The Adviser may, when it deems such to be
advisable, aggregate orders for its other customers
together with any securities of the same type to be sold
or purchased for the Fund or any Portfolio in order to
obtain best execution and lower brokerage commissions.
In such event, the Adviser shall allocate the shares so
purchased or sold, as well as the expenses incurred in
the transaction, in the manner it considers to be most
equitable and consistent with its fiduciary obligations
to the Fund or any Portfolio and the Adviser's other
customers.
8. Liability. The Adviser shall have no liability to the
Fund or any Portfolio or to the Fund's shareholders or
creditors, for any error of judgment, mistake of law, or
for any loss arising out of any investment, nor for any
other act or omission, in the performance of its
obligations to the Fund or any Portfolio not involving
willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties
hereunder.
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
Amendments Hereof. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument
in writing signed by the Fund and the Adviser, and no material
amendment of this Agreement shall be effective unless approved by
(1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote
of a majority of the outstanding voting securities of any Portfolio
of the Fund affected by such amendment; provided, however, that this
paragraph shall not prevent any immaterial amendment(s) to this
Agreement, which amendment(s) may be made without shareholder
approval, if such amendment(s) are made with the approval of (1) the
Directors and (2) a majority of the Directors of the Fund who are
not interested persons of the Adviser or the Fund. In the event of
the disapproval of an amendment of this Agreement by the
shareholders of a particular Portfolio
<PAGE>
(or by the Directors of the Fund as to a particular Portfolio), the
parties intend that such disapproval shall be effective only as to
such Portfolio, and that such disapproval shall not affect the
validity or effectiveness of the approval of the amendment by the
shareholders of any other Portfolio (or by the Directors, including
a majority of the disinterested Directors) as to such other
Portfolio; in such case, this Agreement shall be deemed to have been
validly amended as to such other Portfolio.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal
or made invalid by a court decision, statute, rule or otherwise,
such illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended to
describe, interpret, define or limit the size, extent or intent of
this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of
Colorado, or any of the provisions herein, conflict with applicable
provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, the day and year first above written.
INVESCO MULTIPLE ASSET FUNDS, INC.
ATTEST:
By: /s/ Dan J. Hesser
---------------------------------------
Dan J. Hesser
/s/ Glen A. Payne
- -------------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
---------------------------------------
Ronald L. Grooms, Senior Vice
/s/ Glen A. Payne President
- --------------------------------
Glen A. Payne
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 20th day of October, 1993, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Management &
Research, Inc., a Massachusetts corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO MULTIPLE ASSET FUNDS, INC. (the "Company") is engaged in
business as a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act") and has one class of shares (the "Shares"), which
is divided into series, each representing an interest in a separate portfolio of
investments, with one such series being designated the INVESCO Multi-Asset
Allocation Fund (the "Fund"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and to execute all purchases and
sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund, consistent
with (i) the Fund's investment policies as set forth in the
Company's Registration Statement, as from time to time amended,
under the Investment Company Act of 1940, as amended (the "1940
Act"), and in any prospectus and/or statement of additional
information of the Fund, as from time to time amended and in use
under the Securities Act of 1933, as amended, and (ii) the Company's
<PAGE>
status as a regulated investment company under the Internal Revenue
Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment analysis
and research, the reviews of current economic conditions and trends,
and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of
the Sub-Adviser;
(e) to determine what portion of the Fund should be invested in the
various types of securities authorized for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Fund. The Sub-Adviser may follow a policy of
considering sales of shares of the Fund as a factor in the selection of
broker/dealers to execute portfolio transactions, subject to the requirements of
best execution discussed above. In the selection of a broker or dealer for
execution of any negotiated transaction, the Sub-Adviser shall have no duty or
obligation to seek advance competitive bidding for the most favorable negotiated
commission rate for such transaction, or to select any broker solely on the
basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
particular transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the commission
rate reflects services, reliability and other relevant factors in addition to
the cost of execution, the Sub-Adviser shall have the burden of demonstrating
that such expenditures were bona fide and for the benefit of the Fund.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Fund.
<PAGE>
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.375% of the first $500 million of the Fund's average net assets,
0.325% of the Fund's average net assets in excess of $500 million but not more
than $1 billion, and 0.25% of the Fund's average net assets in excess of $1
billion. During any period when the determination of the Fund's net asset value
is suspended by the Directors of the Company, the net asset value of a share of
the Fund as of the last business day prior to such suspension shall, for the
purpose of this Article III, be deemed to be the net asset value at the close of
each succeeding business day until it is again determined. However, no such fee
shall be paid to the Sub-Adviser with respect to any assets of the Fund which
may be invested in any other investment company for which the Sub-Adviser serves
as investment adviser or sub-adviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect for the entire
month. The Sub-Adviser shall be entitled to receive fees hereunder only for such
periods as the INVESCO Investment Advisory Agreement remains in effect.
ARTICLE IV
LIMITATION OF LIABILITY OF SUB-ADVISER
The Sub-Adviser shall not be liable for any error of judgment, mistake of
law or for any loss arising out of any investment or for any act or omission in
the performance of sub-advisory services rendered with respect to the Company or
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Article IV, "Sub-Adviser" shall include
any affiliates of the Sub-Adviser performing services contemplated hereby and
directors, officers and employees of the Sub-Adviser and such affiliates.
ARTICLE V
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article V referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Company are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise, and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Company as directors, officers and employees.
ARTICLE VI
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Fund or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
<PAGE>
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund, and shall remain in
force for an initial term expiring April 30, 1995, and from year to year
thereafter until its termination in accordance with this Article VII, but only
so long as such continuance is specifically approved at least annually by (i)
the Directors of the Company, or by the vote of a majority of the outstanding
voting securities of the Fund, and (ii) a majority of those Directors who are
not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company shall require such notice to each of the parties. This Agreement
shall automatically terminate in the event of its assignment to the extent
required by the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the Fund (other than an amendment which can be
effective without shareholder approval under applicable law).
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
<PAGE>
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Dan J. Hesser
------------------------------------
Dan J. Hesser
/s/ Glen A. Payne President
- ---------------------------------
Glen A. Payne
Secretary
INVESCO MANAGEMENT & RESEARCH, INC.
ATTEST:
By: /s/ Frank J. Keller
------------------------------------
Frank J. Keeler
/s/ Kathy Greenberg President
- ----------------------------------
Kathy Greenberg
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 20th day of October, 1993, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Trust
Company, Inc., a Colorado corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO MULTIPLE ASSET FUNDS, INC. (the "Company") is engaged in
business as a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act") and has one class of shares (the "Shares"), which
is divided into series, each representing an interest in a separate portfolio of
investments, with one such series being designated the INVESCO Balanced Fund
(the "Fund"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
<PAGE>
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund,
consistent with (i) the Fund's investment policies as set
forth in the Company's Registration Statement, as from
time to time amended, under the Investment Company Act of
1940, as amended (the "1940 Act"), and in any prospectus
and/or statement of additional information of the Fund,
as from time to time amended and in use under the
Securities Act of 1933, as amended, and (ii) the
Company's status as a regulated investment company under
the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment analysis
and research, the reviews of current economic conditions and trends,
and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of
the Sub-Adviser;
(e) to determine what portion of the Fund should be invested
in the various types of securities authorized for
purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
<PAGE>
securities transactions on behalf of the Fund may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Fund. The Sub-Adviser may follow a policy of
considering sales of shares of the Fund as a factor in the selection of
broker/dealers to execute portfolio transactions, subject to the requirements of
best execution discussed above. In the selection of a broker or dealer for
execution of any negotiated transaction, the Sub-Adviser shall have no duty or
obligation to seek advance competitive bidding for the most favorable negotiated
commission rate for such transaction, or to select any broker solely on the
basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the circumstances of the
particular transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the commission
rate reflects services, reliability and other relevant factors in addition to
the cost of execution, the Sub-Adviser shall have the burden of demonstrating
that such expenditures were bona fide and for the benefit of the Fund.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Fund.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser an annual fee, computed
daily and paid as of the last day of each month, using for each daily
calculation the most recently determined net asset value of the Fund, as
determined by a valuation made in accordance with the Fund's procedures for
calculating its net asset value as described in the Fund's Prospectus and/or
Statement of Additional Information. The advisory fee to the Sub-Adviser shall
be computed at the annual rate of 0.30% of the first $350 million of the Fund's
average net assets, 0.275%of the Fund's average net assets in excess of $350
million but not more than $700 million, and 0.25% of the Fund's average net
<PAGE>
assets in excess of $700 million. During any period when the determination of
the Fund's net asset value is suspended by the Directors of the Company, the
net asset value of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this Article III, be deemed to be the net
asset value at the close of each succeeding business day until it is again
determined. However, no such fee shall be paid to the Sub-Adviser with respect
to any assets of the Fund which may be invested in any other investment company
for which the Sub-Adviser serves as investment adviser or sub-adviser. The fee
provided for hereunder shall be prorated in any month in which this Agreement is
not in effect for the entire month. The Sub-Adviser shall be entitled to receive
fees hereunder only for such periods as the INVESCO Investment Advisory
Agreement remains in effect.
ARTICLE IV
LIMITATION OF LIABILITY OF SUB-ADVISER
The Sub-Adviser shall not be liable for any error of judgment, mistake of
law or for any loss arising out of any investment or for any act or omission in
the performance of sub-advisory services rendered with respect to the Company or
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Article IV, "Sub-Adviser" shall include
any affiliates of the Sub-Adviser performing services contemplated hereby and
directors, officers and employees of the Sub-Adviser and such affiliates.
ARTICLE V
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article V referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Company are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Company as directors, officers and employees.
ARTICLE VI
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
<PAGE>
the Fund or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund, and shall remain in
force for an initial term expiring April 30, 1995, and from year to year
thereafter until its termination in accordance with this Article VII, but only
so long as suchcontinuance is specifically approved at least annually by (i) the
Directors of the Company, or by the vote of a majority of the outstanding voting
securities of the Fund, and (ii) a majority of those Directors who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company shall require such notice to each of the parties. This Agreement
shall automatically terminate in the event of its assignment to the extent
required by the Investment Company Act of 1940 and the Rules thereunder. The
Sub-Adviser agrees to furnish to the Directors of the Company such information
on an annual basis as may reasonably be necessary to evaluate the terms of this
Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the Fund (other than an amendment which can be
effective without shareholder approval under applicable law).
<PAGE>
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Dan J. Hesser
------------------------------------
/s/ Glen A. Payne Dan J. Hesser
- ---------------------------------- President
Glen A. Payne
Secretary
INVESCO TRUST COMPANY
ATTEST:
By: /s/ R. Dalton Sim
-----------------------------------
/s/ Glen A. Payne R. Dalton Sim
- ----------------------------------- President
Glen A. Payne
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 20th day of October, 1993 between INVESCO
MULTIPLE ASSET FUNDS, INC., a Maryland corporation (the "Fund"), and INVESCO
FUNDS GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently proposes to have one class of shares (the
"Shares") which is divided into two series, and which may be divided into
additional series (the "Series"), each representing an interest in a separate
portfolio of investments, and it is in the interest of the Fund to offer the
Shares for sale continuously; and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for
the distribution of Shares of each Series in
jurisdictions wherein such Shares legally may be offered
for sale; provided, however, that the Fund in its
absolute discretion may (a) issue or sell Shares of each
Series directly to purchasers, or (b) issue or sell
Shares of a particular Series to the shareholders of any
other Series or to the shareholders of any other
investment company, for which the Underwriter or any
affiliate thereof shall act as exclusive distributor, who
wish to exchange all or a portion of their investment in
Shares of such Series or in shares of such other
investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of Shares
whenever, in its sole discretion, it deems such action to
be desirable. The Fund reserves the right to reject any
subscription in whole or in part for any reason.
2. The Underwriter hereby agrees to serve as agent for the distribution
of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares
<PAGE>
remaining unissued as from time to time shall be effectively
registered under the Securities Act of 1933, as amended (the
"1933 Act"), at such prices and on such terms as hereinafter set
forth, all subject to applicable federal and state securities laws
and regulations. Nothing herein shall be construed to prohibit the
Underwriter from engaging in other related or unrelated businesses.
3. In addition to serving as the Fund's agent in the distribution of
the Shares, the Underwriter shall also provide to the holders of the
Shares certain maintenance, support or similar services
("Shareholder Services"). Such services shall include, without
limitation, answering routine shareholder inquiries regarding the
Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging
for bank wires, and providing such other services as the Fund may
reasonably request from time to time. It is expressly understood
that the Underwriter or the Fund may enter into one or more
agreements with third parties pursuant to which such third parties
may provide the Shareholder Services provided for in this paragraph.
Nothing herein shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any registrar,
transfer agent or custodian appointed by the Fund, the computation
of the asset value or offering price of Shares, the preparation and
distribution of notices of meetings, proxy soliciting material,
annual and periodic reports, dividends and dividend notices, or any
other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through
qualified broker-dealers or others, in such manner, not inconsistent
with the provisions hereof and the then effective Registration
Statement of the Fund under the 1933 Act (the "Registration
Statement") and related Prospectus (the "Prospectus") and Statement
of Additional Information ("SAI") of the Fund as the Underwriter
may determine from time to time; provided that no broker-dealer or
other person shall be appointed or authorized to act as agent of the
Fund without the prior consent of the directors (the "Directors") of
the Fund. The Underwriter will require each broker-dealer to
conform to the provisions hereof and of the Registration Statement
(and related Prospectus and SAI) at the time in effect under the
1933 Act with respect to the public offering price of the Shares of
any Series. The Fund will have no obligation to pay any commissions
or other remuneration to such broker-dealers.
<PAGE>
5. The Shares of each Series offered for sale or sold by the
Underwriter shall be offered or sold at the net asset
value per share determined in accordance with the then
current Prospectus and/or SAI relating to the sale of the
Shares of the appropriate Series except as departure from
such prices shall be permitted by the then current
Prospectus and/or SAI of the Fund, in accordance with
applicable rules and regulations of the Securities and
Exchange Commission. The price the Fund shall receive
for the Shares of each Series purchased from the Fund
shall be the net asset value per share of such Share,
determined in accordance with the Prospectus and/or SAI
applicable to the sale of the Shares of such Series.
6. Except as may be otherwise agreed to by the Fund, the
Underwriter shall be responsible for issuing and
delivering such confirmations of sales made by it
pursuant to this Agreement as may be required; provided,
however, that the Underwriter or the Fund may utilize the
services of other persons or entities believed by it to
be competent to perform such functions. Shares shall be
registered on the transfer books of the Fund in such
names and denominations as the Underwriter may specify.
7. The Fund will execute any and all documents and furnish
any and all information which may be reasonably necessary
in connection with the qualification of the Shares for
sale (including the qualification of the Fund as a
broker-dealer where necessary or advisable) in such
states as the Underwriter may reasonably request (it
being understood that the Fund shall not be required
without its consent to comply with any requirement which
in the opinion of the Directors of the Fund is unduly
burdensome). The Underwriter, at its own expense, will
effect all qualifications of itself as broker or dealer,
or otherwise, under all applicable state or Federal laws
required in order that the Shares may be sold in such
states or jurisdictions as the Fund may reasonably
request.
8. The Fund shall prepare and furnish to the Underwriter
from time to time the most recent form of the Prospectus
and/or SAI of the Fund and/or of each Series of the Fund.
The Fund authorizes the Underwriter to use the Prospectus
and/or SAI, in the forms furnished to the Underwriter
from time to time, in connection with the sale of the
Shares of the Fund and/or of each Series of the Fund.
The Fund will furnish to the Underwriter from time to
time such information with respect to the Fund, each
Series, and the Shares as the Underwriter may reasonably
request for use in connection with the sale of the
Shares. The Underwriter agrees that it will not use or
distribute or authorize the use, distribution or
dissemination by broker-dealers or others in connection
<PAGE>
with the sale of the Shares any statements, other than those
contained in a current Prospectus and/or SAI of the Fund or
applicable Series, except such supplemental literature or
advertising as shall be lawful under Federal and state securities
laws and regulations, and that it will promptly furnish the Fund
with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the
Fund, may cause the redemption of the Shares at such
prices and upon such terms and conditions as shall be
specified in a then current Prospectus and/or SAI. In
selling or redeeming the Shares for the account of the
Fund, the Underwriter will in all respects conform to the
requirements of all state and federal laws and the Rules
of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale or
redemption, as the case may be. The Underwriter will
observe and be bound by all the provisions of the
Articles of Incorporation or Bylaws of the Fund and of
any provisions in the Registration Statement, Prospectus
and SAI, as such may be amended or supplemented from time
to time, notice of which shall have been given to the
Underwriter, which at the time in any way require, limit,
restrict or prohibit or otherwise regulate any action on
the part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless
the Underwriter, its officers and directors and any
person who controls the Underwriter within the
meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses
(including the cost of investigating or defending
such claims, demands or liabilities and any
attorney fees incurred in connection therewith)
which the Underwriter, its officers and directors
or any such controlling person, may incur under the
federal securities laws, the common law or
otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in
the Registration Statement or any related
Prospectus and/or SAI or arising out of or based
upon any alleged omission to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading.
<PAGE>
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against
whom such action is brought within ten (10) days after the
summons or other first legal process shall have been served
upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any such
action shall not relieve the Fund from any liability which it
may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained
in this paragraph. The Fund shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Fund and approved by the Underwriter,
which approval shall not be unreasonably withheld. If the Fund
elects to assume the defense of any such suit and retain
counsel approved by the Underwriter, the defendant or
defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the Fund
elect not to assume the defense of any such suit, or should
the Underwriter not approve of counsel chosen by the Fund, the
Fund will reimburse the Underwriter, its officers and
directors or the controlling person or persons named as
<PAGE>
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Underwriter or
them. In addition, the Underwriter shall have the right to
employ counsel to represent it, its officers and directors
and any such controlling person who may be subject to
liability arising out of any claim in respect of which
indemnity may be sought by the Underwriter against the Fund
hereunder if in the reasonable judgment of the Underwriter it
is advisable for the Underwriter, its officers and directors
or such controlling person to be represented by separate
counsel, in which event the reasonable fees and expenses of
such separate counsel shall be borne by the Fund. This
indemnity agreement and the Fund's representations and
warranties in this Agreement shall remain operative and in
full force and effect and shall survive the delivery of any of
the Shares as provided in this Agreement. This indemnity
agreement shall inure exclusively to the benefit of the
Underwriter and its successors, the Underwriter's officers and
directors and their respective estates and any such
controlling person and their successors and estates. The Fund
shall promptly notify the Underwriter of the commencement of
any litigation or proceeding against it in connection with the
issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and
hold harmless the Fund, its Directors and any
person who controls the Fund within the meaning of
the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the
cost of investigating or defending such claims,
demands or liabilities and any attorney fees
incurred in connection therewith) which the Fund,
its Directors or any such controlling person may
incur under the Federal securities laws, the common
law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its
Directors or such controlling person resulting from
such claims or demands shall arise out of or be
based upon (a) any alleged untrue statement of a
material fact contained in information furnished in
writing by the Underwriter to the Fund specifically
for use in the Registration Statement or any
related Prospectus and/or SAI or shall arise out of
or be based upon any alleged omission to state a
material fact in connection with such information
required to be stated in the Registration Statement
or the related Prospectus and/or SAI or necessary
to make such information not misleading and (b) any
alleged act or omission on the Underwriter's part
<PAGE>
as the Fund's agent that has not been expressly
authorized by the Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to the extent that
it might require indemnity of the Fund or any Director or controlling person of
the Fund, shall not inure to the benefit of the Fund or Director or controlling
person thereof unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result would not
be against public policy as expressed in the federal securities laws and in no
event shall anything contained herein be so construed as to protect any Director
of the Fund against any liability to the Fund or the Fund's shareholders to
which the Director would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence or reckless disregard of the duties involved in
the conduct of his office.
This indemnity agreement is expressly conditioned upon the Underwriter's
being notified of any action brought against the Fund, its Directors or any such
controlling person, which notification shall be given by letter or telegram
addressed to the Underwriter at its principal office in Denver, Colorado, and
sent to the Underwriter by the person against whom such action is brought,
within ten (10) days after the summons or other first legal process shall have
been served upon the Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not relieve the
Underwriter from any liability which it may have to the person against whom such
action is brought by reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the defense of any suit
brought to enforce such claim, demand, or liability, but in such case the
defense shall be conducted by counsel chosen by the Underwriter and approved by
the Fund, which approval shall not be unreasonably withheld. If the Underwriter
elects to assume the defense of any such suit and retain counsel approved by the
Fund, the defendant or defendants in such suit shall bear the fees and expenses
of an additional counsel obtained by any of them. Should the Underwriter elect
not to assume the defense of any such suit, or should the Fund not approve of
counsel chosen by the Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as defendant or
<PAGE>
defendants in such suit, for the reasonable fees and expenses of any counsel
retained by the Fund or them. In addition, the Fund shall have the right to
employ counsel to represent it, its Directors and any such controlling person
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Fund against the Underwriter hereunder if in the
reasonable judgment of the Fund it is advisable for the Fund, its Directors or
such controlling person to be represented by separate counsel, in which event
the reasonable fees and expenses of such separate counsel shall be borne by the
Underwriter. This indemnity agreement and the Underwriter's representations and
warranties in this Agreement shall remain operative and in full force and effect
and shall survive the delivery of any of the Shares as provided in this
Agreement. This indemnity agreement shall inure exclusively to the benefit of
the Fund and its successors, the Fund's Directors and their respective estates
and any such controlling person and their successors and estates. The
Underwriter shall promptly notify the Fund of the commencement of any litigation
or proceeding against it in connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses
(including the fees and disbursements of its own counsel)
of any registration of the Shares under the 1933 Act, as
amended, (b) expenses incident to the issuance of the
Shares, and (c) expenses (including the fees and
disbursements of its own counsel) incurred in connection
with the preparation, printing and distribution of the
Fund's Prospectuses, SAIs, and periodic and other reports
sent to holders of the Shares in their capacity as such.
The Underwriter shall prepare and provide necessary
copies of all sales literature subject to the Fund's
approval thereof.
13. This Agreement shall become effective as of the date it
is approved by a majority vote of the Directors of the
Fund, as well as a majority vote of the Directors who are
not "interested persons" (as defined in the Investment
Company Act) of the Fund, and shall continue in effect
for an initial term expiring April 30, 1995, and from
year to year thereafter, but only so long as such
continuance is specifically approved at least annually
(a)(i) by a vote of the Directors of the Fund or (ii) by
a vote of a majority of the outstanding voting securities
of the Fund, and (b) by a vote of a majority of the
Directors of the Fund who are not "interested persons,"
as defined in the Investment Company Act, of the Fund
<PAGE>
cast in person at a meeting for the purpose of voting on
this Agreement.
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at least
60 days' prior written notice of such termination specifying the
date fixed therefor. In particular, this Agreement may be terminated
at any time, without payment of any penalty, by vote of a majority
of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for in
this Agreement or otherwise, the Fund may terminate this Agreement
at any time immediately upon the Underwriter's failure to fulfill
any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to
the contrary herein, or in any applicable law, it will look solely
to the assets of the Fund for any obligations of the Fund hereunder
and nothing herein shall be construed to create any personal
liability on the part of any Director or any shareholder of the
Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15, the
definition of "assignment" contained in the Investment Company Act
shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Fund and the Underwriter and, if applicable, approved in the
manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If any
provision of this Agreement shall be held illegal or made invalid by
a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the
remainder of this Agreement.
19. This Agreement and the application and interpretation
hereof shall be governed exclusively by the laws of the
State of Colorado.
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO MULTIPLE ASSET FUNDS, INC.
ATTEST:
By:/s/ Dan J. Hesser
----------------------------------
Dan J. Hesser
President
/s/ Glen A. Payne
- ----------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST: By:/s/ Ronald L. Grooms
----------------------------------
Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- ----------------------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
The Plan has been adopted as an alternative to providing an increase in
the present compensation payable to each Fund's Independent Directors for
serving in such capacity. The increase in present compensation was considered by
all directors of each Fund and was determined to be reasonable in relation to
the services which are currently being performed by the Independent Directors
and the responsibilities and obligations which are imposed upon the directors in
the performance of such services.
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
Service Termination includes termination of service (other than by
disability or death) of an Independent Director which results from the
Director's having reached his Service Termination Date, which is the date not
later than the last day of the calendar quarter in which such Director's
seventy-second birthday occurs.
3. Defined Benefit
Commencing as of his Service Termination Date, each Independent Director
will receive, for the remainder of his life, a benefit (the "Benefit"), payable
quarterly, at an annual rate equal to 25 percent of the annual basic retainer
payable by each Fund to the Independent Director on his Service Termination Date
(excluding any fees relating to attending meetings or chairing committees). If
an Independent Director should die after his Service Termination Date and before
forty quarterly payments are
<PAGE>
made, payments will continue to be made to the Independent Director's designated
beneficiary until the aggregate of forty quarterly payments has been made to the
Independent Director and the Director's beneficiary.
If an Independent Director's service as a Director is terminated because
of his death prior to the occurrence of his Service Termination Date, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary.
If an Independent Director's service as a Director is terminated because
of his disability prior to the occurrence of his Service Termination Date, the
Independent Director will receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director. If the
disabled Independent Director should die before forty quarterly payments are
made, payments will continue to be made to the Independent Director's designated
beneficiary until the aggregate of forty quarterly payments has been made to the
disabled Independent Director and the Director's beneficiary.
If the Independent Director and his designated beneficiary should die
before a total of forty quarterly payments are made, the remaining value of the
Independent Director's benefit shall be determined as of the date of the death
of the Independent Director's designated beneficiary and shall be paid to the
estate of the designated beneficiary in one lump sum or in periodic payments,
with the determinations with respect to the value of the benefit and the method
and frequency of payment to be made by the Committee (as defined in paragraph
8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
benefit shall be determined as of the date of the death of the Independent
Director and shall be paid as promptly a possible in one lump sum to the estate
of the designated beneficiary.
<PAGE>
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The Benefit for each year will be paid in quarterly installments that are
as nearly equal as possible.
7. Payment of Benefit; Allocation of Costs
Each Fund is responsible for the payment of the amount of the Benefit
applicable to the Fund, as well as its proportionate share of all expenses of
administration of the Plan, including without limitation all accounting and
legal fees and expenses and fees and expenses of any Actuary. The obligations of
each Fund to pay such Benefits and expenses will not be secured or funded in any
manner, and such obligations will not have any preference over the lawful claims
of each Fund's creditors and shareholders. To the extent that the Benefit is
paid by more than one Fund, such costs and expenses will be allocated among such
Funds in a manner that is determined by the Committee to be fair and equitable
under the circumstances. To the extent that one or more of such Funds consist of
one or more separate portfolios, such costs and expenses allocated to any such
Fund will thereafter be allocated among such portfolios by the Board of the Fund
in a manner that is determined by such Board to be fair and equitable under the
circumstances.
8. Administration
a. The Committee. Any questions involving entitlement to payments
under or the administration of the Plan will be referred to a committee (the
"Committee") of three Independent Directors designated by all of the Independent
Directors of the Funds. Except as otherwise provided herein, the Committee will
make all interpretations and determinations necessary or desirable for the
Plan's administration, and such interpretations and determinations will be final
and conclusive. Committee members will be elected annually by the Independent
Directors.
b. Powers of the Committee. The Committee will represent and act on
behalf of the Funds in respect of the Plan and, subject to the other provisions
of the Plan, the Committee may adopt, amend or repeal bylaws or other
regulations relating to the administration of the Plan, the conduct of the
Committee's affairs, its rights or powers, or the rights or powers of its
members. The Committee will report to the Independent Directors and to the
Boards of the Funds from time to time on its activities in respect
<PAGE>
of the Plan. The Committee or persons designated by it will cause
such records to be kept as may be necessary for the administration
of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is
specifically provided in paragraph 3, the right to receive any
payment under the Plan is not transferable or assignable, and
nothing in the Plan shall create any benefit, cause of action,
right of sale, transfer, assignment, pledge, encumbrance, or other
such right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board
of any Fund, may as to the specific Fund at any time amend or terminate the Plan
or waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will
create any obligation on the part of the Board of any Fund to
nominate any Independent Director for reelection.
d. Consulting. Subsequent to his Service Termination Date, an
Independent Director may render such services for any Fund, for such
compensation, as may be agreed upon from time to time by such Independent
Director and the Board of the Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent
Directors who have Service Termination Dates occurring on and after October 20,
1993. Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993.
CUSTODIAN CONTRACT
Between
INVESCO MULTIPLE ASSET FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By
It..................................................................l
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States..............2
2.1 Holding Securities............................................2
2.2 Delivery of Securities........................................2
2.3 Registration of Securities....................................5
2.4 Bank Accounts.................................................6
2.5 Availability of Federal Funds.................................6
2.6 Collection of Income..........................................6
2.7 Payment of Fund Monies........................................7
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased...............................8
2.9 Appointment of Agents.........................................9
2.10 Deposit of Fund Assets in Securities System...................9
2.10A Fund Assets Held in the Custodian's Direct Paper System......11
2.11 Segregated Account...........................................12
2.12 Ownership Certificates for Tax Purposes......................12
2.13 Proxies......................................................13
2.14 Communications Relating to Portfolio Securities..............13
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States.........................13
3.1 Appointment of Foreign Sub-Custodians........................13
3.2 Assets to be Held............................................14
3.3 Foreign Securities Depositories..............................14
3.4 Agreements with Foreign Banking Institutions.................14
3.5 Access of Independent Accountants of the Fund................15
3.6 Reports by Custodian.........................................15
3.7 Transactions in Foreign Custody Account......................15
3.8 Liability of Foreign Sub-Custodians..........................16
3.9 Liability of Custodian.......................................16
3.10 Reimbursement for Advances...................................16
3.11 Monitoring Responsibilities..................................17
3.12 Branches of U.S. Banks.......................................17
3.13 Tax Law......................................................17
4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund..............................................18
5. Proper Instructions................................................18
<PAGE>
6. Actions Permitted Without Express Authority........................19
7. Evidence of Authority..............................................19
8. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income......................20
9. Records............................................................20
10. Opinion of Fund's Independent Accountants..........................20
11. Reports to Fund by Independent Public Accountants..................21
12. Compensation of Custodian..........................................21
13. Responsibility of Custodian........................................21
14. Effective Period, Termination and Amendment........................22
15. Successor Custodian................................................23
16. Interpretive and Additional Provisions.............................24
17. Additional Funds...................................................25
18. Massachusetts Law to Apply.........................................25
19. Shareholder Communications.........................................25
<PAGE>
CUSTODIAN CONTRACT
This Contract between INVESCO Multiple Asset Funds, Inc., a corporation
organized and existing under the laws of Maryland, having its principal place of
business at 7800 East Union Avenue, Denver, Colorado, 80237, hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in two series, INVESCO
Balanced Fund and INVESCO Multi-Asset Allocation Fund (such series together with
all other series subsequently established by the Fund and made subject to this
Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund representing interests in the Portfolios, ("Shares") as may be issued
or sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
<PAGE>
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by it
in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Portfolio;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 hereof;
<PAGE>
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name
of any agent appointed pursuant to Section 2.9 or into the
name or nominee name of any sub-custodian appointed pursuant
to Article l; or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided
<PAGE>
that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in
the form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act') and a
member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
<PAGE>
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from the Fund
on behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth
the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities
shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as
the Portfolio, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Portfolio under the terms of this
Contract shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in "street
name", the Custodian shall utilize its best efforts only to timely collect
income due the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange offers.
<PAGE>
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian in such other banks
or trust companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company
shall be qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to
be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the Board
of Directors of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
<PAGE>
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of
the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian
(or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the case of
repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Custodian, or another bank,
or a broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
<PAGE>
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Portfolio or (e) for transfer to a time
deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest, taxes,
management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses
are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of
the Portfolio, a certified copy of a resolution of the Board
of Directors or of the Executive Committee of the Fund
signed by an officer of the Fund and certified by its
Secretary or an Assistant Secretary, specifying the amount
of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
<PAGE>
purpose, and naming the person or persons to whom such
payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to securities of
the Portfolio which are maintained in a Securities System
<PAGE>
shall identify by book-entry those securities belonging to
the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and
transfer for the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. Copies of all
advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify
the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund on behalf of
the Portfolio confirmation of each transfer to or from the
account of the Portfolio in the form of a written advice or
notice and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the
account of the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
<PAGE>
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Fund, it shall be entitled to
be subrogated to the rights of the Custodian with respect to
any claim against the Securities System or any other person
which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Portfolio has not been
made whole for any such loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned by a Portfolio
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
an account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to securities of
the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records
<PAGE>
of the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice or
notice, of Direct Paper on the next business day following
such transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund on behalf
of the Portfolio, the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Portfolio, (ii) for
purposes of segregating cash or government securities in connection with
options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii)
for the purposes of compliance by the Portfolio with the procedures
required by Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission relating
to the maintenance of segregated accounts by registered investment
<PAGE>
companies and (iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper Instructions
from the Fund on behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Directors or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.14 Communications Relating to Portfolio Securities.
Subject to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund for each Portfolio all written information (including,
without limitation, pendency of calls and maturities of domestic securities
and expirations of rights in connection therewith and notices of exercise
of call and put options written by the Fund on behalf of the Portfolio
and the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Portfolio
shall notify the Custodian at least three business days prior to the date
on which the Custodian is to take such action.
<PAGE>
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Directors, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(l) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be
reasonably necessary to effect the Portfolio's foreign securities
transactions. The Custodian shall identify on its books as belonging to
the Fund, the foreign securities of the Fund held by each foreign
sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Portfolios shall
be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the assets of each
<PAGE>
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement with
the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other
assets and advices or notifications of any transfers of securities to or
from each custodial account maintained by a foreign banking institution
for the Custodian on behalf of each applicable Portfolio indicating, as
to securities acquired for a Portfolio, the identity of the entity
having physical possession of such securities.
3.7 Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b)of this Section 3.7, the
provision of Sections 2.2 and 2.7 of this Contract shall apply, mutatis
mutandis to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
<PAGE>
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the account
of each applicable Portfolio may be effected in accordance with the
customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer. (c)
Securities maintained in the custody of a foreign sub-custodian may be
maintained in the name of such entity's nominee to the same extent as set
forth in Section 2.3 of this Contract, and the Fund agrees to hold any
such nominee harmless from any liability as a holder of record of such
securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and each Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.12 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
<PAGE>
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.9, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
other losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear incident or
other losses under circumstances where the Custodian and State Street
London Ltd. have exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of
this Contract, except such as may arise from its or its nominees own
negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the applicable Portfolio
shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of such Portfolios assets to the extent
necessary to obtain reimbursement.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or
<PAGE>
the equivalent thereof) or that its shareholders' equity has declined
below $200 million (in each case computed in accordance with generally
accepted U.S. accounting principles).
3.12 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions hereof
shall not apply where the custody of the Portfolios assets are maintained
in a foreign branch of a banking institution which is a "bank" as defined
by Section 2(a)(5) of the Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act. The appointment
of any such branch as a sub-custodian shall be governed by paragraph 1 of
this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund with
the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd.or both.
3.13 Tax Law. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the tax
law of jurisdictions other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting.
The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to
any claim for exemption or refund under the tax law of jurisdictions for
which the Fund has provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the
Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
<PAGE>
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.11. 6. Actions Permitted without Express Authority.
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
<PAGE>
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities
in definitive form;
3) endorse for collection, in the name of the Portfolio,
checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board of Directors of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, if directed in writing to do so
by the Fund on behalf of the Portfolio, shall itself keep such books of account
and/or compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Portfolio as described in the
Fund's currently effective prospectus related to such Portfolio and shall advise
the Fund and the Transfer Agent daily of the total amounts of such net income
and, if instructed in writing by an officer of the Fund to do so, shall advise
the Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share and
the daily income of each Portfolio shall be made at the time or times described
from time to time in the Fund's currently effective prospectus related to such
Portfolio.
<PAGE>
9. Records
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the Investment Company Act
of 1940, with particular attention Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by the
Fund and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Fund's Form N-lA, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other requirements of such
Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such state.
<PAGE>
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel who maybe counsel for the
Fund) on all matters, and shall be without liability for any action reasonably
taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody of any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian
<PAGE>
or its nominee assigned to the Fund or the Portfolio being liable for the
payment of money or incurring liability of some other form, the Fund on behalf
of the Portfolio, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) for the benefit of a Portfolio including the purchase or sale of
foreign exchange or of contracts for foreign exchange or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available cash
and to dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
14. Effective Period. Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities System by such Portfolio and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Directors has reviewed the use by such Portfolio of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not with respect to
a Portfolio act under Section 2.10A hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, that the
Fund shall not amend or terminate this Contract in contravention
<PAGE>
of any applicable federal or state regulations, or any provision of the
Articles of Incorporation, and further provided, that the Fund on behalf of
one or more of the Portfolios may at any time by action of its Board of
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver for
the Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Directors of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System. If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified copy of a vote of
the Board of Directors of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
<PAGE>
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or
of the Board of Directors to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Articles of Incorporation of the Fund.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to INVESCO Balanced Fund and INVESCO Multi-Asset Allocation Fund with
respect to which it desires to have the Custodian render services as custodian
under the terms hereof, it shall so notify the Custodian in writing, and if
the Custodian agrees in writing to provide such services, such series of
Shares shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
<PAGE>
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [X] The Custodian is not authorized to release the Fund's
name, address, and share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 20th day of October 1993.
ATTEST INVESCO MULTIPLE ASSET FUNDS, INC.
/s/Glen A. Payne By:/s/ Dan Hesser
- ------------------- -------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
By:
Assistant Secretary Executive Vice President
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of INVESCO Multiple
Asset Funds, Inc. for use as sub-custodians for the Fund's securities and other
assets:
(Insert banks and securities depositories)
Certified:
/s/ Dan Hesser
- --------------------------
Fund's Authorized Officer
Date: October 20, 1993
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and INVESCO Multiple Asset Funds, Inc. (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated October 20, 1993 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by bookentry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 25 day of October, 1995.
INVESCO MULTIPLE ASSET FUNDS, INC.
By:
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By:
Title:
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and INVESCO Multiple Asset Funds, Inc.
(the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated October 20, 1993 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by bookentry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 25th day of October, 1995.
INVESCO MULTIPLE ASSET FUNDS, INC.
By: /s/ Glen A. Payne
------------------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By: /s/ Charles R. Whittemore, Jr.
------------------------------
Title: Vice President
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 20th day of October, 1993, between INVESCO
Multiple Asset Funds, Inc., a Maryland corporation, having its principal office
and place of business at 7800 East Union Avenue, Denver, Colorado, 80237
(hereinafter referred to as the "Fund") and INVESCO Funds Group, Inc., a
Delaware corporation, having its principal place of business at 7800 E. Union
Avenue, Denver, CO 80237 (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth, the
Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, Treasurer, or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund as
indicated in a certification as may be received by the
Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent, which is actually
received by the Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in the 1940
Act;
(d) "Custodian" refers to the custodian of all of the securities
and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions actually
received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person;
(f) "Prospectus" shall mean the currently effective prospectus
relating to the Fund's Shares registered under the Securities
Act of 1933;
(g) "Shares" refers to the shares of common stock, $.01 par value,
of the Fund;
(h) "Shareholder" means a record owner of Shares;
<PAGE>
(i) "Written Instructions" shall mean a written communication
actually received by the Transfer Agent where the receiver is
able to verify with a reasonable degree of certainty the
authenticity of the sender of such communication; and
(j) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time.
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it has an effective
registration statement on SEC Form TA-1 and, accordingly, has duly
registered as a transfer agent as provided in Section 17A(c) of the
Securities Exchange Act of 1934.
3. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent for all of the
Shares of the Fund authorized as of the date hereof, and the
Transfer Agent accepts such appointment and agrees to perform the
duties herein set forth. If the board of directors of the Fund
hereafter reclassifies the Shares, by the creation of one or more
additional series or otherwise, the Transfer Agent agrees that it
will act as transfer agent for the Shares so reclassified on the
terms set forth herein.
4. Compensation.
(a) The Fund will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the
fees set forth in the Fee Schedule annexed hereto and
incorporated herein.
(b) The parties hereto will agree upon the compensation for acting
as transfer agent for any series of Shares hereafter
designated and established at the time that the Transfer Agent
commences serving as such for said series, and such agreement
shall be reflected in a Fee Schedule for that series, dated
and signed by an authorized officer of each party hereto, to
be attached to this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Fee Schedule,
dated and signed by an authorized officer of each party
hereto, and a certified copy of the resolution of the board of
directors of the Fund authorizing such revised Fee Schedule.
<PAGE>
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
5. Documents. In connection with the appointment of the Transfer
Agent, the Fund shall, on or before the date this Agreement goes
into effect, file with the Transfer Agent the following documents:
(a) A certified copy of the Articles of Incorporation
of the Fund, including all amendments thereto, as then in
effect;
(b) A certified copy of the Bylaws of the Fund, as then in effect;
(c) Certified copies of the resolutions of the board of directors
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the board of directors, with a certificate of
the Secretary of the Fund as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the Fund with the name,
address and tax identification number of each Shareholder, and
the number of Shares held by each, certificate numbers and
denominations (if any certificates have been issued), lists of
any accounts against which stops have been placed, together
with the reasons for said stops, and the number of Shares
redeemed by the Fund;
(g) Copies of all agreements then in effect between the Fund and
any agent with respect to the issuance, sale, or cancellation
of Shares; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares.
6. Further Documentation. The Fund will also furnish from time to time
the following documents:
(a) Each resolution of the board of directors authorizing the
original issue of Shares;
<PAGE>
(b) Each Registration Statement filed with the Commission, and
amendments and orders with respect thereto, in effect with
respect to the sale of Shares of the Fund;
(c) A certified copy of each amendment to the Articles of
Incorporation and the Bylaws of the Fund;
(d) Certified copies of each resolution of the board of directors
designating Authorized Persons to give instructions to the
Transfer Agent;
(e) Certificates as to any change in any officer, director, or
Authorized Person of the Fund;
(f) Specimens of all new certificates for Shares accompanied by
the Fund's resolutions of the board of directors approving
such forms; and
(g) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for theTransfer Agent in
the proper performance of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent shall maintain
an adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such share
certificates shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death, resignation, or
removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent may continue to counter-
sign certificates which bear such signatures until otherwise
directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and mail
certificates as requested by the Shareholders for Shares of
the Fund in accordance with the instructions of the Fund and
to confirm such issuance to the Shareholder and the Fund or
its designee.
(c) The Fund hereby authorizes the Transfer Agent to issue
replacement share certificates in lieu of certificates which
have been lost, stolen or destroyed, without any further
action by the board of directors or any officer of the Fund,
upon receipt by the Transfer Agent of properly executed
affidavits or lost certificate bonds, in form satisfactory to
the Transfer Agent, with the Fund and the Transfer Agent as
obligees under any such bond.
<PAGE>
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall sell or cause
to be sold any Shares, the Fund or its authorized agent shall
provide or cause to be provided to the Transfer Agent
information including: (i) the number of Shares sold, trade
date, and price; (ii) the amount of money to be delivered to
the Custodian for the sale of such Shares; (iii) in the case
of a new account, a new account application or sufficient
information to establish an account.
(b) The Transfer Agent will, upon receipt by it of a check or
other payment identified by it as an investment in Shares of
the Fund and drawn or endorsed to the Transfer Agent as agent
for, or identified as being for the account of, the Fund,
promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the
investment. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related
account adjustments.
(c) Upon receipt of the notification required under paragraph
(a) hereof and the notification from the Custodian that such
money has been received by it, the Transfer Agent shall issue
to the purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
<PAGE>
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue any Shares
of the Fund where it has received Written Instructions from
the Fund or written notification from any appropriate federal
or state authority that the sale of the Shares of the Fund
has been suspended or discontinued, and the Transfer Agent
shall be entitled to rely upon such Written Instructions or
written notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer
Agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares issued
or held on deposit as a result of such check or order; (iii) in the
case of any Shareholder who has obtained redemption checks, place a
stop payment order on the checking account on which such checks are
issued; and (iv) take such other steps as the Transfer Agent may, in
its discretion, deem appropriate or as the Fund or its designee may
instruct.
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the Fund will be
redeemed upon receipt by the Transfer Agent of: (i) a written
request for redemption, signed by each registered owner
exactly as the Shares are registered; (ii) certificates
properly endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the extent required
by the Transfer Agent as described in the Prospectus for the
Fund; and (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer Agent will,
consistent with procedures which may be established by the
Fund from time to time for redemption by wire or telephone,
upon receipt of such a wire order or telephone redemption
request, redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as directed. All wire
<PAGE>
or telephone redemptions will be subject to such additional
requirements as may be described in the Prospectus for the
Fund. Both the Fund and the Transfer Agent reserve the right
to modify or terminate the procedures for wire order or
telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all necessary
information and documentation relating to a redemption, the
Transfer Agent will issue to the Custodian an advice setting
forth the number of Shares of the Fund received by the
Transfer Agent for redemption and that such shares are valid
and in good form for redemption. The Transfer Agent shall,
upon receipt of the moneys paid to it by the Custodian for the
redemption of Shares, pay such moneys to the Shareholder, his
authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized to review
and process transfers of Shares of the Fund and to the extent, if
any, permitted in the Prospectus for the Fund, exchanges between
the Fund and other mutual funds advised by INVESCO Funds Group,
Inc., on the records of the Fund maintained by the Transfer
Agent. If Shares to be transferred are represented by outstanding
certificates, the Transfer Agent will, upon surrender to it of the
certificates in proper form for transfer, and upon cancellation
thereof, countersign and issue new certificates for a like number of
Shares and deliver the same. If the Shares to be transferred
are not represented by outstanding certificates, the Transfer
Agent will, upon an order therefor by or on behalf of the
registered holder thereof in proper form, credit the same
to the transferee on its books. If Shares are to be exchanged for
Shares of another mutual fund, the Transfer Agent will process such
exchange in the same manner as a redemption and sale of Shares,
except that it may in its discretion waive requirements for
information and documentation.
12. Right to Seek Assurances. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers
or redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
<PAGE>
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall
furnish to the Transfer Agent a resolution of the board of
directors of the Fund certified by the Secretary authorizing
the declaration of dividends and authorizing the Transfer
Agent to rely on Oral Instructions or a Certificate specifying
the date of the declaration of such dividend or distribution,
the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined, the
amount payable per share to Shareholders of record as of that
date, and the total amount payable to the Transfer Agent on
the payment date.
(b) The Transfer Agent will, on or before the payable date of any
dividend or distribution, notify the Custodian of the
estimated amount of cash required to pay said dividend or
distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall
instruct the Custodian to place in a dividend disbursing
account funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder instructions,
will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
(c) The Transfer Agent will replace lost checks upon receipt of
properly executed affidavits and maintain stop payment orders
against replaced checks.
(d) The Transfer Agent will maintain all records necessary to
reflect the crediting of dividends which are reinvested in
Shares of the Fund.
(e) The Transfer Agent shall not be liable for any improper
payments made in accordance with the resolution of the board
of directors of the Fund.
<PAGE>
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
14. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and
functions as are set forth in the Fee Schedules(s) hereto from time
to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
investor's account the following: (i) names, addresses, tax
identifying numbers and assigned account numbers; (ii) numbers
of Shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date
and price of all transactions on a Shareholder's account; (iv)
any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings in the
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a
Shareholder's account;(vii) certificate numbers and
denominations for any Shareholders holding certificates; and
(viii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by
this Agreement.
(b) Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act. Such records may be inspected by
the Fund at reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the
Transfer Agent's files, records and documents created and
maintained by the Transfer Agent in performance of its
services or for its protection. At the end of the six-year
<PAGE>
retention period, such records and documents will either
be turned over to the Fund, or destroyed in accordance
with the Fund's authorization.
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
(b) The Transfer Agent will address and mail all communications to
Shareholders or their nominees, including proxy material and
periodic reports to Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper
or document believed by it to be genuine and to have been
signed by an Authorized Person and shall not be held to have
any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates
which it reasonably believes to bear the proper manual or
facsimile signatures of the officers of the Fund and the
proper counter-signature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions, and, at the
expense of the Fund, may seek advice from legal counsel for
the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or with the opinion
of such counsel. In addition, the Transfer Agent, its
officers, agents or employees, shall accept instructions or
requests given to them by any person representing or acting
on behalf of the Fund only if said representative is known by
the Transfer Agent, its officers, agents or employees, to be
an Authorized Person. The Transfer Agent shall have no duty
<PAGE>
or obligation to inquire into, nor shall the Transfer Agent
be responsible for, the legality of any act done by it upon
the request or direction of Authorized Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for:
(i) the legality of the issue or sale of any Shares of the
Fund, or the sufficiency of the amount to be received
therefor; (ii) the legality of the redemption of any Shares
of the Fund, or the propriety of the amount to be paid
therefor; (iii) the legality of the declaration of any
dividend by the Fund, or the legality of the issue of any
Shares of the Fund in payment of any stock dividend; or (iv)
the legality of any recapitalization or readjustment of the
Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Transfer Agent
may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by the Transfer
Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized person of the Fund or upon the
opinion of legal counsel for the Fund or its own counsel; or
(ii) any action taken or omitted to be taken by the Transfer
Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of
the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnifi-
cation hereunder shall not apply to actions or omissions of
the Transfer Agent or its directors, officers, employees or
agents in cases of its own gross negligence, willful mis-
conduct, bad faith, or reckless disregard of its or their own
duties hereunder.
<PAGE>
20. Affiliation Between Fund and Transfer Agent. It is understood that
the directors, officers, employees, agents and Shareholders of the
Fund, and the officers, directors, employees, agents and share-
holders of the Fund's investment adviser, INVESCO Funds Group, Inc.
(the "Adviser"), are or may be interested in the Transfer Agent
as directors, officers, employees, agents, shareholders, or other-
wise, and that the directors, officers, employees, agents or
shareholders of the Transfer Agent may be interested in the Fund as
directors, officers, employees, agents, shareholders, or otherwise,
or in the Adviser as officers, directors, employees, agents, share-
holders or otherwise.
21. Term.
(a) This Agreement shall become effective on the date on which it
is approved by vote of a majority (as defined in the 1940 Act)
of the Fund's board of directors, including a majority of the
directors who are not interested persons of the Fund (as defined
in the 1940 Act), and shall continue in effect for an initial
term expiring April 30, 1994, and from year to year thereafter,
so long as such continuance is specifically approved at least
annually both: (i) by either the board of directors or the vote
of a majority of the outstanding voting securities of the Fund;
and (ii) by a vote of the majority of the directors who are not
interested persons of the Fund (as defined in the 1940 Act)
cast in person at a meeting called for the purpose of voting upon
such approval.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the
date of such termination, which shall not be less than 60 days
after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a
resolution of the board of directors, certified by the Secretary,
electing to terminate this Agreement and designating a successor
transfer agent.
22. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with
the formality of this Agreement, and (i) authorized or approved by
the resolution of the board of directors, including a majority of the
directors of the Fund who are not interested persons of the Fund as
defined in the 1940 Act, or (ii) authorized and approved by such other
procedures as may be permitted or required by the 1940 Act.
23. Subcontracting. The Fund agrees that the Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided
hereunder; provided, however that the transfer agent will be liable
to the Fund for any loss arising out of or in connection with the
actions of any subcontractor, if the subcontractor fails to act in
good faith and with due diligence or is negligent or guilty of any
willful misconduct.
<PAGE>
24. Miscellaneous.
(a) Any notice and other instrument in writing, authorized or
required by this Agreement to be given to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to
that party and mailed or delivered to it at its office set
forth below or at such other place as it may from time to time
designated in writing.
To the Fund:
INVESCO Multiple Asset Funds, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: John M. Butler, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
(b) This Agreement shall not be assignable and in the event of its
assignment (in the sense contemplated by the 1940 Act), it
shall automatically terminate.
(c) This Agreement shall be construed in accordance with the laws of
the State of Colorado.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
INVESCO MULTIPLE ASSET FUNDS, INC.
By:/s/ Dan J. Hesser
------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- --------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By:/s/ Ronald L. Grooms
------------------------------
Ronald L. Grooms, Senior Vice
President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
AMENDMENT NO. 3
to
FEE SCHEDULE
for
Services pursuant to a Transfer Agency Agreement, dated October 20, 1993
between INVESCO Multiple Asset Funds, Inc. (the "Fund") and INVESCO Funds Group,
Inc. as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that is opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of May, 1996.
INVESCO MULTIPLE ASSET FUNDS, INC.
By: /s/ Dan J. Hesser
-------------------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -----------------------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------------------------
Ronald L. Grooms, Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ---------------------------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 20th day of October, 1993, in Denver, Colorado,
by and between INVESCO Multiple Asset Funds, Inc., a Maryland corporation (the
"Fund"), and INVESCO Funds Group, Inc., a Delaware corporation (hereinafter
referred to as "INVESCO").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"), and is authorized to issue shares representing
interests in the following separate portfolios of investments: INVESCO
Multi-Asset Allocation Fund and INVESCO Balanced Fund, and which may be
authorized to issue shares representing interests in additional portfolios of
investments (collectively, the "Portfolios"); and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting,
and recordkeeping services to certain investment companies, including the
Portfolios; and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting, and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such
services on said terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon
receipt of written approval of the Fund arrange for other
companies, including affiliates of INVESCO, to provide to
the Portfolios: A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for
the operation of the Portfolios. Such services shall
include, but shall not be limited to, preparation and
maintenance of the following required books, records and
other documents: (1) journals containing daily itemized
records of all purchases and sales, and receipts and
deliveries of securities and all receipts and
disbursements of cash and all other debits and credits,
in the form required by Rule 31a-1(b)(1) under the Act;
(2) general and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
in the form required by Rules 31a-1(b)(2)(i) - (iii)
under the Act; (3) a securities record or ledger
reflecting separately for each portfolio security as of
trade date all "long" and "short" positions carried by
the Portfolios for the account of the Portfolios, if any,
<PAGE>
and showing the location of all securities long and the off-setting
position to all securities short, in the form required by Rule
31a-1(b)(3) under the Act; (4) a record of all portfolio purchases
or sales, in the form required by Rule 31a-1(b)(6) under the Act;
(5) a record of all puts, calls, spreads, straddles and all other
options, if any, in which the Portfolios have any direct or indirect
interest or which the Portfolios have granted or guaranteed, in the
form required by Rule 31a-1(b)(7) under the Act; (6) a record of the
proof of money balances in all ledger accounts maintained pursuant
to this Agreement, in the form required by Rule 31a-1(b)(8) under
the Act; and (7) price make-up sheets and such records as are
necessary to reflect the determination of the Portfolios' net asset
value. The foregoing books and records shall be maintained and
preserved by INVESCO in accordance with and for the time periods
specified by applicable rules and regulations, including Rule 31a-2
under the Act. All such books and records shall be the property of
the Fund and, upon request therefor, INVESCO shall surrender to the
Fund such of the books and records so requested; and B) such
sub-accounting, recordkeeping, and administrative services and
functions, which shall be furnished by INVESCO's affiliated
corporation, INVESCO Solutions, Inc., as are reasonably necessary
for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of
participants in such plans. Such services and functions shall
include, but shall not be limited to: (1) establishing new
retirement plan participant accounts; (2) receipt and posting of
weekly, bi-weekly and monthly retirement plan contributions; (3)
allocation of contributions to each participant's individual
Portfolio account; (4) maintenance of separate account balances for
each source of retirement plan money (i.e., Company, Employee,
Voluntary, Rollover) invested in the Portfolios; (5) purchase, sale,
exchange or transfer of monies in the retirement plan as directed by
the relevant party; (6) distribution of monies for participant
loans, hardships, terminations, death or disability payments; (7)
distribution of periodic payments for retired participants; (8)
posting of distributions of interest, dividends and long-term
capital gains to participants by the Portfolios; (9) production of
monthly, quarterly and/or annual statements of all Portfolio
activity for the relevant parties; (10) processing of participant
maintenance information for investment election changes, address
changes, beneficiary changes and Qualified Domestic Relations
Orders; (11) responding to telephone and written inquiries
concerning Portfolio investments, retirement plan provisions and
compliance issues; (12) performing discrimination testing and
counseling employers on cure options on failed tests; (13)
preparation of 1099R and W2P participant IRS tax forms;
(14) preparation of, or assisting in the preparation of, 5500 Series
tax forms, Summary Plan Descriptions and Determination Letters; and
(15) reviewing legislative and IRS changes to keep the retirement
plan in compliance with applicable law.
<PAGE>
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without
limiting the generality of the foregoing, such staff and personnel
shall be deemed to include officers of INVESCO and persons employed
or otherwise retained by INVESCO to provide or assist in providing
the Services to the Portfolios.
3. INVESCO shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer
equipment, communication lines and supplies) and such clerical help
and other services as shall be necessary to provide the Services to
the Portfolios. In addition, INVESCO may arrange on behalf of the
Portfolios to obtain pricing information regarding the Portfolios'
investment securities from such company or companies as are approved
by a majority of the Fund's board of directors; and, if necessary,
the Fund shall be financially responsible to such company or
companies for the reasonable cost of providing such pricing
information.
4. The Fund will, from time to time, furnish or otherwise make
available to INVESCO such information relating to the business and
affairs of the Portfolios as INVESCO may reasonably require in order
to discharge its duties and obligations hereunder.
5. For the services rendered, facilities furnished, and expenses
assumed by INVESCO under this Agreement, the Fund shall pay to
INVESCO a $10,000 per year per Portfolio base fee, plus an
additional fee, computed on a daily basis and paid on a monthly
basis. For purposes of each daily calculation of this additional
fee, the most recently determined net asset value of each Portfolio,
as determined by a valuation made in accordance with the Fund's
procedure for calculating each Portfolio's net asset value as
described in each Portfolio's Prospectus and/or Statement of
Additional Information, shall be used. The additional fee to
INVESCO under this Agreement shall be computed at the annual rate
of 0.015% of each Portfolio's daily net assets as so determined.
During any period when the determination of a Portfolio's net asset
value is suspended by the directors of the Fund, the net asset
<PAGE>
value of a share of that Portfolio as of the last business day prior
to such suspension shall, for the purpose of this Paragraph 5, be
deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
6. INVESCO will permit representatives of the Fund, including the
Fund's independent auditors, to have reasonable access to the
personnel and records of INVESCO in order to enable such
representatives to monitor the quality of services being provided
and the level of fees due INVESCO pursuant to this Agreement. In
addition, INVESCO shall promptly deliver to the board of directors
of the Fund such information as may reasonably be requested from
time to time to permit the board of directors to make an informed
determination regarding continuation of this Agreement and the
payments contemplated to be made hereunder.
7. This Agreement shall remain in effect until no later than April 30,
1994 and from year to year thereafter provided such continuance is
approved at least annually by the vote of a majority of the
directors of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party,
which vote must be cast in person at a meeting called for the
purpose of voting on such approval; and further provided, however,
that (a) the Fund may, at any time and without the payment of any
penalty, terminate this Agreement upon thirty days written notice
to INVESCO; (b) the Agreement shall immediately terminate in the
event of its assignment (within the meaning of the Act and the Rules
thereunder) unless the Board of Directors of the Fund approves such
assignment; and (c) INVESCO may terminate this Agreement without
payment of penalty on sixty days written notice to the Fund. Any
notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postage prepaid, to the other party
at the principal office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the
extent the applicable law of the State of Colorado or any of the
provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO MULTIPLE ASSET FUNDS, INC.
By:/s/ Dan J. Hesser
-----------------------------------
Dan J. Hesser
President
INVESCO FUNDS GROUP, INC.
By:/s/ Ronald L. Grooms
------------------------------------
Ronald L. Grooms
Senior Vice President
<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 4 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 30, 1996, relating to the financial
statements and financial highlights appearing in the July 31, 1996, Annual
report to Shareholders of Balanced Fund and Multi-Asset Allocation Fund
(constituting INVESCO Multiple Asset Funds, Inc.), which is also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the heading "Financial Highlights" in the Prospectuses and under the
headings "Independent Accountants" and "Financial Statements" in the Statement
of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------
Price Waterhouse LLP
Denver, Colorado
November 22, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> INVESCO BALANCED FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 108282225
<INVESTMENTS-AT-VALUE> 109338977
<RECEIVABLES> 2263496
<ASSETS-OTHER> 35359
<OTHER-ITEMS-ASSETS> 4130082
<TOTAL-ASSETS> 115767914
<PAYABLE-FOR-SECURITIES> 523670
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 178393
<TOTAL-LIABILITIES> 702063
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 106892959
<SHARES-COMMON-STOCK> 8610364
<SHARES-COMMON-PRIOR> 3080421
<ACCUMULATED-NII-CURRENT> 10019
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7105541
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1057332
<NET-ASSETS> 115065851
<DIVIDEND-INCOME> 1747428
<INTEREST-INCOME> 2274898
<OTHER-INCOME> (18627)
<EXPENSES-NET> 1168860
<NET-INVESTMENT-INCOME> 2834839
<REALIZED-GAINS-CURRENT> 11022562
<APPREC-INCREASE-CURRENT> (1554333)
<NET-CHANGE-FROM-OPS> 9468229
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2832865
<DISTRIBUTIONS-OF-GAINS> 5048134
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14985724
<NUMBER-OF-SHARES-REDEEMED> 10019968
<SHARES-REINVESTED> 564187
<NET-CHANGE-IN-ASSETS> 77842340
<ACCUMULATED-NII-PRIOR> 906
<ACCUMULATED-GAINS-PRIOR> 1138252
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 561473
<INTEREST-EXPENSE> 5566
<GROSS-EXPENSE> 1211381
<AVERAGE-NET-ASSETS> 92800499
<PER-SHARE-NAV-BEGIN> 12.08
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> 2.12
<PER-SHARE-DIVIDEND> 0.37
<PER-SHARE-DISTRIBUTIONS> 0.84
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.36
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> INVESCO MULTI-ASSET ALLOCATION FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 8818656
<INVESTMENTS-AT-VALUE> 9569965
<RECEIVABLES> 57853
<ASSETS-OTHER> 8528
<OTHER-ITEMS-ASSETS> 26798
<TOTAL-ASSETS> 9663144
<PAYABLE-FOR-SECURITIES> 70029
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19535
<TOTAL-LIABILITIES> 89564
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8289836
<SHARES-COMMON-STOCK> 828624
<SHARES-COMMON-PRIOR> 717499
<ACCUMULATED-NII-CURRENT> 1204
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 531231
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 751309
<NET-ASSETS> 9573580
<DIVIDEND-INCOME> 187849
<INTEREST-INCOME> 180310
<OTHER-INCOME> (4141)
<EXPENSES-NET> 139078
<NET-INVESTMENT-INCOME> 224940
<REALIZED-GAINS-CURRENT> 665235
<APPREC-INCREASE-CURRENT> 18014
<NET-CHANGE-FROM-OPS> 683249
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 225039
<DISTRIBUTIONS-OF-GAINS> 147924
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1194602
<NUMBER-OF-SHARES-REDEEMED> 1115680
<SHARES-REINVESTED> 32203
<NET-CHANGE-IN-ASSETS> 1795216
<ACCUMULATED-NII-PRIOR> 2129
<ACCUMULATED-GAINS-PRIOR> 13100
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 69539
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 207654
<AVERAGE-NET-ASSETS> 9324510
<PER-SHARE-NAV-BEGIN> 10.84
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 0.89
<PER-SHARE-DIVIDEND> 0.28
<PER-SHARE-DISTRIBUTIONS> 0.18
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.55
<EXPENSE-RATIO> 2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 23rd day of July, 1996.
/s/ Hubert L. Harris, Jr.
------------------------------------------
Hubert L. Harris, Jr.
STATE OF GEORGIA )
)
COUNTY OF DeKalb )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Hubert L. Harris, Jr.,
as a director or trustee of each of the above-described entities, this 23rd day
of July, 1996.
/s/ Cecilia Underwood
------------------------------------------
Notary Public
My Commission Expires: /s/Notary Public,DeKalb County, Georgia,
My Commission Expires Oct. 14, 1997
