File No. 33-69904
As filed on November ^ 24, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
Post-Effective Amendment No. ^ 5 X
-------- ---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. ^ 6 X
------------ ---
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)
-------------------
Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
-------------------
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)
X on December 1, ^ 1997 pursuant to paragraph (b)
- ----
- ---- 60 days after filing pursuant to paragraph (a)(1)
- ---- on --------------, pursuant to paragraph (a)(1)
- ---- 75 days after filing pursuant to paragraph (a)(2)
- ---- on-----------, pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
- ---- this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
--------------------
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended July 31, ^ 1997 was
filed on or about September 26, ^ 1997.
Page 1 of 236
-----
Exhibit index is located at page 124
-----
<PAGE>
INVESCO MULTIPLE ASSET FUNDS, INC.
---------------------------
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 ^ Other 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
-i-
<PAGE>
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 ^ 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, ^ Other 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.
-ii-
<PAGE>
PROSPECTUS
December 1, ^ 1997
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 of total assets).^
^ The Fund is a series of INVESCO Multiple Asset Funds, Inc. (the
"Company"), a diversified, managed no-load mutual fund, consisting of two
separate portfolios of investments. A separate prospectus is available upon
request from INVESCO Distributors, Inc. for the Company's other fund, INVESCO
Multi-Asset Allocation Fund. Investors may purchase shares of either or both of
the Funds. Additional funds may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated December 1, ^ 1997, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this ^ Prospectus. To
obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; call 1-800-525-8085; or ^ visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
TABLE OF CONTENTS
Page
----
ESSENTIAL INFORMATION........................................................6
ANNUAL FUND EXPENSES.........................................................7
FINANCIAL HIGHLIGHTS.........................................................9
INVESTMENT OBJECTIVE AND STRATEGY...........................................11
INVESTMENT POLICIES AND RISKS...............................................12
THE FUND AND ITS MANAGEMENT.................................................17
FUND PRICE AND PERFORMANCE..................................................20
HOW TO BUY SHARES...........................................................20
FUND SERVICES...............................................................25
HOW TO SELL SHARES..........................................................26
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS..................................28
ADDITIONAL INFORMATION......................................................30
<PAGE>
ESSENTIAL INFORMATION
Investment Goal And Strategy^: The 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 ^, its
agencies or instrumentalities ^ and investment grade corporate bonds. There is
no guarantee that the Fund will meet its objective. See ^"Investment Objective
And Strategy^" and "Investment Policies And Risks."
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 ^ Gifts/Transfers To Minors Act Account
or systematic investing strategy. The Fund may be a suitable investment for many
types of retirement programs, including ^ Individual Retirement Account ("IRA"),
SEP-IRA, SIMPLE 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 owned by its shareholders. It
employs INVESCO Funds Group, Inc. ^("IFG"), founded in 1932, to serve as
investment adviser, administrator^ and transfer agent. INVESCO Trust Company
^("INVESCO Trust"), founded in 1969, serves as sub-adviser. Together IFG and
INVESCO Trust constitute "Fund Management." Prior to September 30, 1997, IFG
served as the Fund's distributor. Effective September 30, 1997, INVESCO
Distributors, Inc. ("IDI"), founded in 1997 as a wholly-owned subsidiary of IFG,
became the Fund's distributor.
The Fund's investments are selected by ^ its portfolio manager or managers:
INVESCO senior vice presidents Charles Mayer, who has ^ 27 years of investment
experience, and Donovan J. (Jerry) Paul, with ^ 21 years of experience; and
INVESCO vice president Albert M. Grossi, who has ^ 23 years of experience. A
Chartered Financial Analyst, Mr. Mayer earned his ^ M.B.A. from St. John's
University and a ^ B.A. from St. Peter's College. Mr. Paul holds an ^ M.B.A.
from the University of Northern Iowa and a ^ B.B.A. from the University of Iowa;
<PAGE>
he is both a Chartered Financial Analyst and a Certified Public Accountant.
Mr. Grossi received both his ^ M.B.A. in Finance and his ^ B.A. from Rutgers
University. See ^"The Fund And Its Management.^"
^ IFG, INVESCO Trust and IDI are subsidiaries of AMVESCAP PLC, an
international investment management company that manages approximately $177.5
billion in assets. AMVESCAP 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, however, 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% (excluding excess
amounts that have been offset by the expense offset arrangement described below)
of average net assets.
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees 0.25%
Other Expenses(1)(2) 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 ^ and transfer
agency fees were reduced under ^ expense offset ^ arrangements. However, as a
result of an SEC requirement for mutual funds to state their total operating
expenses without crediting any such expense offset ^ arrangements, 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.
(2) ^ Certain expenses of the Fund are being absorbed voluntarily by IFG and
INVESCO Trust. In the absence of such absorbed expenses, the Fund's "Other
Expenses" and "Total Fund Operating Expenses^" would have been ^ 0.49% and ^
1.34%, respectively, based on the ^ Fund's actual expenses for the fiscal year
ended July 31, ^ 1997.
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
------ ------- ------- --------
^ $14 $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.
<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 ^ Company's 1997 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting ^ IDI at the address or telephone number
^ shown below. The Annual Report also contains more information about the Fund's
performance.
Period
Ended
Year Ended July 31 July 31
----------------------------------- ---------
1997 1996 1995 1994^
Balanced Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $13.36 $12.08 $10.30 $10.00
----------------------------------- ---------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.34 0.37 0.29 0.12
Net Gains on Securities
(Both Realized and
Unrealized) 3.37 2.12 2.03 0.30
----------------------------------- ---------
Total from Investment
<PAGE>
Operations 3.71 2.49 2.32 0.42
----------------------------------- ---------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.34 0.37 0.29 0.12
Distributions from
Capital Gains 0.87 0.84 0.25 0.00
----------------------------------- ---------
Total Distributions 1.21 1.21 0.54 0.12
----------------------------------- ---------
Net Asset Value -
End of Period $15.86 $13.36 $12.08 $10.30
=================================== =========
TOTAL RETURN 29.27% 20.93% 23.18% ^ 4.16%*
RATIOS
Net Assets - End of
Period^
($000 Omitted) $161,921 $115,066 ^ $ 37,224 $4,252
Ratio of Expenses to
Average Net Assets# 1.29%@ 1.29%@ 1.25% 1.25%~
Ratio of Net Investment
Income ^ to Average
Net Assets# 2.46% 3.03% 3.12% 2.87%~
Portfolio Turnover Rate 155% 259% 255% 61%*
Average Commission Rate
Paid^^ $0.1304 - - -
^ From December 1, 1993, commencement of investment operations, to July 31,
1994.
^
* 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 ^ INVESCO
Trust for the years ended July 31, 1997, 1996 and 1995 and for the period ended
July 31, 1994. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.34%, 1.29%, 1.59% and 4.37%
(annualized), respectively, and ratio of net investment income to average net
assets would have been 2.41%, 3.03%, 2.77% and (0.25%) (annualized),
respectively.
<PAGE>
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold, which is required to be disclosed
for fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Company's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706
or by calling 1-800- 525-8085.
<PAGE>
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
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 ^ 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 Fund's investment portfolio is actively traded. 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.
<PAGE>
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 and industries, and in a variety of securities ^; 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^, a division of The McGraw-Hill
Companies, Inc. ("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, prices of bonds generally ^ 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
<PAGE>
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. ^ Because they are
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 a foreign ^
currency, returns ^ for a U.S. investor on foreign securities denominated in
that foreign currency 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.
Illiquid and Rule 144A Securities. The Fund may invest in illiquid
securities, including securities that are subject to restrictions on resale and
securities that are not readily marketable. The Fund may also invest in
restricted securities that may be resold to institutional investors, known as
"Rule 144A Securities." For more information concerning illiquid and Rule 144A
Securities, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
Delayed Delivery or When-Issued Securities. Up to 10% of the value of the
Fund's total assets may be committed to the purchase or sale of 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. No interest is payable to the Fund prior to settlement.
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 ^
Company's board of directors.
Securities Lending. 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.
<PAGE>
For further information on this policy, see "Investment Policies and
Restrictions" in the Statement of Additional Information.
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.
^
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 ^ for temporary or emergency purposes and enter into reverse repurchase
agreements in an aggregate amount not exceeding 33 1/3% of its total assets.
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
^
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, ^ 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 ^, 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, who is the head of INVESCO's Equity Income Team,
Donovan J. (Jerry) Paul, who is the head of INVESCO's Fixed Income Team, and
Albert M. Grossi, who is a member of INVESCO's Equity Income Team, are primarily
responsible for the day-to-day management of the ^ Fund's portfolio holdings.
^ Charles P. Mayer has been a co-portfolio manager of ^ the Fund since
1996. Mr. Mayer also co-manages INVESCO Industrial Fund and INVESCO VIF
Industrial Income Fund and is a senior vice president of INVESCO Trust ^
Company. Mr. Mayer is also the Director of Investments of INVESCO Trust Company
and INVESCO Funds Group, Inc. Mr. Mayer was previously a portfolio manager with
Westinghouse Pension^ Investments Corporation from 1984 to 1993. Mr. Mayer
received a M.B.A. from St. John's University and a B.A. from St. Peter's
College.
Donovan J. (Jerry) Paul ^, a Chartered Financial Analyst and Certified
Public Accountant, has been a co-portfolio manager of the Fund since 1994^. Mr.
Paul also manages INVESCO Select Income Fund, INVESCO High Yield Fund^ and
INVESCO VIF-High Yield ^ Fund and co-manages INVESCO Industrial Income Fund,
INVESCO Short-Term Bond Fund and INVESCO VIF-Industrial Income ^ Fund. Mr. Paul
is also a senior vice president of INVESCO Trust ^ Company. Mr. Paul was
previously senior vice president and director of fixed-income research^ (1989 to
1992) and portfolio manager^ (1987 to 1992) with Stein, Roe & Farnham Inc. ^ and
president of Quixote Investment Management, Inc. ^(1993 to 1994). Mr. Paul
received a M.B.A. from the University of Northern Iowa ^ and a B.B.A. from the
University of Iowa.
Albert M. Grossi has ^ been a co-portfolio manager of the Fund since 1996.
^ Mr. Grossi also manages INVESCO Worldwide Capital Goods Fund^ and is an
assistant portfolio manager of INVESCO Industrial Fund and INVESCO
VIF-Industrial Income Fund. Mr. Grossi is also a vice president of INVESCO
<PAGE>
Trust^ Company. Mr. Grossi was previously portfolio manager/senior analyst
with Westinghouse Pension Investments ^ Corp. (1988 to 1995), retail equity
marketing coordinator with E.F. Hutton (1981 to 1988), a securities analyst with
Shearson American Express (1975 to 1981) and a securities analyst with Mutual
Benefit Life Insurance (1974 to 1975). Mr. Grossi received a M.B.A. in Finance
and a B.A. in Political Science/Economics from 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, ^ 1997, 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 Distribution Agreement effective September 20, 1997, IDI became
the Fund's distributor. IDI, established in 1997, is a registered broker-dealer
that acts as distributor for all retail funds advised by IFG. Prior to September
30, 1997, IFG served as the Fund's distributor.
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, where applicable, per participant in an
omnibus account ^. 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, ^ recordkeeping and internal sub-accounting services
for the Fund. For such services, IFG was paid, for the fiscal year ended July
31, ^ 1997, a fee equal to $10,000 plus an additional amount computed at an
annual rate of 0.015% of the Fund's average net assets.
<PAGE>
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of theFund (prior to any
expense offset arrangement) for the fiscal year ended July 31, ^ 1997, including
investment management fees (but excluding brokerage commissions, which are a
cost of acquiring securities), amounted to 1.29% of the Fund's average net
assets. Certain Fund expenses were absorbed voluntarily by IFG and INVESCO Trust
pursuant to a commitment of the Fund to ensure that the Fund's total operating
expenses (after expense offset arrangements) did not exceed 1.25% of the Fund's
average net assets. This commitment may be changed following consultation with
the Company's board of directors.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of ^
such broker-dealers' 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 or IDI 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.
^ IFG, INVESCO Trust and IDI are indirect wholly-owned subsidiaries of
AMVESCAP PLC. AMVESCAP-PLC is a publicly traded holding company ^ that through
its subsidiaries engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
INVESCO Trust continued to operate under their existing names. AMVESCAP PLC has
approximately $177.5 billion in assets under management. IFG was established in
1932 and, as of July 31, ^ 1997, managed 14 mutual funds, consisting of ^ 45
separate portfolios, with combined assets of approximately ^ $16.4 billion on
behalf of over ^ 858,051 shareholders. INVESCO Trust (founded in 1969) served as
adviser or sub-adviser to ^ 60 investment portfolios as of July 31, ^ 1997,
including ^ 33 portfolios in the INVESCO group. These ^ 60 portfolios had
aggregate assets of approximately ^ $15.0 billion as of July 31, ^ 1997. 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.
<PAGE>
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 AssetValue ^("NAV"). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading ^(generally, 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. Total return figures
show the average annual rate of return on a $1,000 investment in the Fund,
assuming reinvestment of all dividends and capital gain distributions for one-,
five- and ten-year periods (or since inception). ^ Cumulative total return ^
shows the actual rate of return on an investment ^ over stated periods; 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, because they do
not ^ show the interim variations in performance over the periods cited. More
information about the Fund's recent and historical performance is contained in
the ^ Company's Annual Report to Shareholders. You can get a free copy by
calling or writing to ^ IDI 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 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's shares 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
<PAGE>
the right in its sole discretion to reject any order for the purchase of
Fund shares 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.
^ HOW TO BUY SHARES
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check
Mail to: $1,000 for regular ^ If your check
INVESCO Funds account; does not clear, you
Group, Inc., $250 for an ^ IRA; will be responsible
P.O. Box 173706, $50 minimum for for any related
Denver, CO 80217- each subsequent loss the Fund or
3706. investment. IFG incurs. If you
Or you may send are already a
your check by shareholder in the
overnight courier INVESCO funds, the
to: 7800 E. Union Fund may seek
Ave., reimbursement from
Denver, CO 80237. your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or
Wire
Call 1-800-525-8085 $1,000. Payment must be
to request your received within 3
purchase. Then send business days, or
your check by the transaction may
overnight courier be ^ canceled. If a
to our street ^ purchase is ^
address: canceled due to
7800 E. Union Ave., nonpayment, you
Denver, CO 80237. will be responsible
Or you may transmit for any related
your payment by loss the Fund or
bank wire (call IFG IFG incurs. If you
for instructions). are already a
shareholder in the
INVESCO funds, the
Fund may seek
reimbursement from
your existing account(s)
for any loss incurred.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or
Direct Payroll
Purchase
You may enroll on $50 per month for Like all regular
the fund EasiVest; $50 per investment plans,
application, or pay period for neither EasiVest
call us for the Direct Payroll nor Direct Payroll
correct form and Purchase. You may Purchase ensures a
more details. start or stop your profit or protects
Investing the same regular investment against loss in a
amount on a monthly plan at any time, falling market.
basis allows you to with two weeks' Because you'll
buy more shares notice to IFG. invest continually,
when prices are low regardless of
and fewer shares varying price
when prices are levels, consider
high. This "dollar- your financial
cost averaging" may ability to keep
help offset market buying through low
fluctuations. Over price levels. And
a period of time, remember that you
your average cost will lose money if
per share may be you redeem your
less than the shares when the
actual average market value of all
price per share. your shares is less
than their cost.
By PAL
Your "Personal $1,000. Be sure to write
Account Line" is down the
available for confirmation number
subsequent provided by PAL.
purchases and Payment must be
exchanges 24-hours received within 3
a day. Simply call business days, or
1-800-424-8085. the transaction may
be ^ canceled. If a
telephone purchase is ^
canceled 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
Between this and $1,000 to open a See ^"Exchange
another of the new account; $50 Policy," below.
INVESCO funds. Call for written
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
Automatic Monthly minimum is $250 for
Exchange service purchases requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
================================================================================
Exchange ^ Policy. 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 the exchange ^ policy, when it is 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).
<PAGE>
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 ^ its shares to investors. Under the Plan, monthly payments
maybe made by the Fund to IDI to permit IDI, at its discretion, to engage in
certain activities and provide certain services approved by the board of
directors in connection with the distribution of the Fund's shares to investors.
These activities and services may include the payment of compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include ^ IDI-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 with the Fund.
In addition, other ^ permissible activities and services include
advertising, preparation, printing and distribution of sales literature,
printing and distribution of prospectuses to prospective investors^ and such
other services and promotional activities ^ for the Fund as may from time to
time be agreed upon by the ^ Company and its board of directors, including
public relations efforts and marketing programs to communicate with investors
and prospective investors. These services and activities may be conducted by the
staff of ^ IDI or its affiliates or by third parties.
^ Under the Plan, the Company's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's average
net assets. IDI is not entitled to payment for overhead expenses under the Plan,
but may be ^ paid for all or a portion of the compensation paid for salaries and
other employee benefits for ^ the personnel of IFG or IDI whose primary
responsibilities involve marketing shares of the INVESCO ^ Mutual Funds,
including the Fund. ^ Payment amounts by the Fund under the Plan, for any month,
may be made to compensate IDI for permissible activities engaged in and services
provided by IDI during the rolling 12-month period in which that month falls.
Therefore, any obligations incurred by IDI in excess of the limitations
described above will not be paid by the Fund under the Plan, and will be borne
by IDI. In addition, IDI and its affiliates may from time to time make
additional payments from its revenues to securities dealers, financial advisers
and financial institutions that provide distribution-related and/or
administrative services for the Fund. No further payments will be made by the
Fund under the Plan in the event of the Plan's termination. Payments made by the
Fund may not be used to finance directly the distribution of shares of any other
^ Fund of the Company or other mutual funds advised by IFG. However, payments
received by IDI which are not used to finance the distribution of shares of the
Fund become part of IDI's revenues and may be used by IDI for any permissible
activities for all of the mutual funds advised by IFG subject to review by the
Fund's directors. Payments made by the Fund under the Plan for compensation of
marketing personnel, as noted above, are based on an allocation formula designed
<PAGE>
to ensure that all such payments are appropriate. IDI will bear any
distribution- and service-related expenses in excess of the amounts which are
compensated pursuant to the Plan. The Plan also authorizes any financing of
distribution which may result from IDI's use of its own resources, including
profits from investment advisory fees received from the Fund, provided that such
fees are legitimate and not excessive. For more information see "How Shares Can
Be Purchased -- Distribution Plan" in the Statement of Additional information. ^
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 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 ^ other distributions are
automatically ^ reinvested in additional ^ Fund shares at the NAV on the
ex-dividend or ex-distribution date, unless you choose to have dividends and/or
^ other 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.
<PAGE>
HOW TO SELL SHARES
The following chart ^ 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.
^ HOW TO SELL SHARES
================================================================================
Method Minimum Redemption Please Remember
- --------------------------------------------------------------------------------
By Telephone
Call us toll-free $250 (or, if less, This option is not
at 1-800-525-8085. full liquidation of available for
the account) for a shares held in ^
redemption check; IRAs.
$1,000 for a wire
to bank of record.
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
- --------------------------------------------------------------------------------
Mail your request Any amount. The If the shares to be
to INVESCO Funds redemption request redeemed are
Group, Inc., P.O. must be signed by represented by
Box 173706, all registered ^ stock certificates,
Denver, CO 80217- owners of the the certificates
3706. You may also account. Payment must be sent to
<PAGE>
send your request will be mailed to IFG.
by overnight your address of
courier to 7800 E. record, or to a
Union Ave., Denver, pre-designated
CO 80237. bank.
By Exchange
- --------------------------------------------------------------------------------
Between this and $1,000 to open a See ^"Exchange
another of the new account; $50 Policy," page ^23.
INVESCO funds. Call for written
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
automatic monthly minimum is $250 for
exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
Periodic Withdrawal
Plan
- --------------------------------------------------------------------------------
You may call us to $100 per payment, You must have at
request the on a monthly or least $10,000 total
appropriate form quarterly basis. invested with the
and more The redemption INVESCO funds, with
information at 1- check may be made at least $5,000 of
800-525-8085. payable to any that total invested
party you in the fund from
designate. which withdrawals
will be made.
Payment To Third
Party
- --------------------------------------------------------------------------------
Mail your request Any amount. ^ All registered
to INVESCO Funds owners of the
Group, Inc., P.O. account must sign
Box 173706, the request, with a
Denver, CO 80217- signature guarantee
3706. from an eligible
guarantor financial
institution, such as a
commercial bank or
recognized national or
regional securities firm.
================================================================================
<PAGE>
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 ^ will 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 ^
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 involuntarily 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.
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders ^ 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 ^ other 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.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by individuals by
applying different capital gains rates depending on the taxpayer's holding
period and marginal rate of federal income tax. Long-term gains realized on the
sale of securities held for more than one year but not for more than 18 months
are taxable at a rate of 28%. This category of long-term gains is often referred
to as "mid-term" gains but is technically termed "28% rate gains". Long-term
<PAGE>
gains realized on the sale of securities held for more than 18 months are
taxable at a rate of 20%. At the end of each year, information regarding the tax
status of dividends and other distributions is provided to shareholders.
Shareholders should consult their tax advisers as to the effect of the Tax Act
on distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
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 ^.
^ Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other 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.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other ^ Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. ^
Dividends paid by the Fund will be based solely on the income earned by it. 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. Dividends are automatically reinvested in shares of
the Fund at the net asset value on the payable date unless otherwise requested.
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, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in shares of the Fund at the net asset value on the
payable date unless otherwise requested.
Dividends and other ^ distributions are paid to ^ holders of shares on the
record date of distribution regardless of how long the Fund shares have been
held by the shareholder. The ^ Fund's share price will then drop by the amount
of the distribution on the ^ ex-dividend or ex-distribution ^ date. 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>
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company have equal voting rights based on
one vote for each share owned^ and a corresponding fractional vote for each
fractional share owned. 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 ^ Company 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
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 ^ MULTIPLE ASSET FUNDS, INC.
INVESCO Balanced Fund
A no-load mutual fund seeking capital appreciation
and current income.
PROSPECTUS
December 1, ^ 1997
^ INVESCO FUNDS
^ INVESCO Distributors, Inc.
^ Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085 ^
http://www.invesco.com
^ In Denver, ^ visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street;
Denver Tech Center
7800 East Union Avenue
^ Lobby Level
In addition, all documents
filed by the Company with the
Securities and Exchange Commission
can be located on a Web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
December 1, ^ 1997
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.
The Fund is a series of INVESCO Multiple Asset Funds, Inc. (the
"Company"), a diversified, managed no-load mutual fund, consisting of two
separate portfolios of investments. A separate prospectus is available upon
request from INVESCO Distributors, Inc. for the Company's other Fund, INVESCO
Balanced Fund. Investors may purchase shares of either or both of the Funds.
Additional funds may be offered in the future.
This Prospectus ^ provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated December 1, ^ 1997, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this ^ Prospectus. To
obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; call 1-800-525-8085; or ^ visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
TABLE OF CONTENTS
Page
ESSENTIAL INFORMATION.......................................................34
ANNUAL FUND EXPENSES........................................................35
FINANCIAL HIGHLIGHTS........................................................37
INVESTMENT OBJECTIVE AND STRATEGY...........................................39
INVESTMENT POLICIES AND RISKS...............................................42
THE FUND AND ITS MANAGEMENT.................................................46
FUND PRICE AND PERFORMANCE..................................................48
HOW TO BUY SHARES...........................................................49
FUND SERVICES...............................................................54
HOW TO SELL SHARES..........................................................55
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS..................................58
ADDITIONAL INFORMATION......................................................59
<PAGE>
ESSENTIAL INFORMATION
Investment Goal And Strategy^: The 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^" and "Investment Policies And Risks."
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 ^
Gifts/Transfers To Minors Act Account or systematic investing strategy. The Fund
may be a suitable investment for many types of retirement programs, including ^
Individual Retirement Account ("IRA"), SEP-IRA, SIMPLE 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 owned by its shareholders. It
employs INVESCO Funds Group, Inc. ^("IFG"), founded in 1932, to serve as
investment adviser, administrator^ and transfer agent. INVESCO Management &
Research, Inc. ^("IMR") serves as sub-adviser. Together, IFG and IMR constitute
"Fund Management." Prior to September 30, 1997, IFG served as the Fund's
distributor. Effective September 30, 1997, INVESCO Distributors, Inc. ("IDI"),
founded in 1997 as a wholly-owned subsidiary of IFG, became the Fund's
distributor.
The Fund is team-managed; Bob Slotpole leads ^ the 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.^"
<PAGE>
^ IFG, IMR and IDI are subsidiaries of AMVESCAP PLC, an international
investment management company that manages approximately $177.5 billion in
assets. AMVESCAP 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, however, 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% (excluding excess amounts that
have been offset by the expense offset arrangement described below) of average
net assets.
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees 0.25%
Other Expenses ^(1)(2) 0.55%
Total Fund Operating Expenses(1)(2) ^ 1.55%
(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 ^ 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.
(2) ^ Certain expenses of the Fund are being absorbed voluntarily by IFG and
IMR. In the absence of such absorbed expenses, the Fund's "Other Expenses" and
"Total Fund Operating Expenses^" would have been ^ 0.97% and ^ 1.97%,
respectively, based on the ^ Fund's actual expenses for the fiscal year ended
July 31, ^ 1997.
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
------ ------- ------- --------
^ $16 $49 $85 $186
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 ^ Company's 1997 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting ^ IDI at the address or telephone number
^ shown below. The Annual Report also contains more information about the Fund's
performance.
Period
Ended
Year Ended July31 July 31
------------------------------------ ---------
1997 1996 1995 1994^
Multi-Asset Allocation Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $11.55 $10.84 $9.68 $10.00
------------------------------------ ---------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.25 0.28 0.28 0.06
Net Gains or (Losses)
on Securities (Both
Realized ^ and Unrealized) 3.18 0.89 1.16 (0.32)
------------------------------------ ---------
Total from Investment
Operations 3.43 1.17 1.44 (0.26)
------------------------------------ ---------
LESS DISTRIBUTIONS
Dividends from Net
<PAGE>
Investment Income 0.25 0.28 0.28 0.06
Distributions from
Capital Gains 0.98 0.18 0.00 0.00
------------------------------------
Total Distributions 1.23 0.46 0.28 0.06
------------------------------------
Net Asset Value -
End of Period $13.75 $11.55 $10.84 $9.68
==================================== =========
TOTAL RETURN 31.41% 10.96% 15.11% ^(2.60%)*
RATIOS
Net Assets - End of
Period ^
($000 Omitted) $17,117 $9,574 $7,778 $4,958
Ratio of Expenses to
Average Net Assets# 1.55%@ 1.62%@ 1.50% 1.50%~
Ratio of Net Investment
Income ^ to Average
Net Assets# 2.19% 2.43% 2.99% 2.23%~
Portfolio Turnover Rate 98% 92% 79% 42%*
Average Commission Rate
Paid^^ $0.0555 - - -
^ From December 1, 1993, commencement of investment operations, to July 31,
1994.
^
* 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, 1997, 1996 and 1995 and for the period ended July 31, 1994.
If such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.97%, 2.24%, 2.47% and 5.14% (annualized),
respectively, and ratio of net investment income to average net assets would
have been 1.77%, 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
<PAGE>
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Company's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706
or by calling 1-800- 525-8085.
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
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
<PAGE>
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.
The Fund's investment portfolio is actively traded. 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.
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
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.
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,
<PAGE>
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 ^ OTC 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
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.
<PAGE>
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.
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 and industries, and in a variety of securities ^; 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
<PAGE>
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.
^ 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, a division of The McGraw-Hill Companies,
Inc. ("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, the
prices of bonds generally 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. Because they are
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,
<PAGE>
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.
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 a foreign ^
currency, returns ^ for a U.S. investor on foreign securities denominated in
that foreign currency 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
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
<PAGE>
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
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.
^ Illiquid and Rule 144A Securities. The Fund may invest in illiquid
securities, including securities that are subject to restrictions on resale and
securities that are not readily marketable. The Fund may also invest in
restricted securities that may be resold to institutional investors, known as
"Rule 144A Securities." For more information concerning illiquid and Rule 144A
Securities, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
^ Delayed Delivery or When-Issued Securities. Up to 10% of the value of
the Fund's total assets may be committed to the purchase or ^ sale of 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^. No interest is payable to the Fund prior to
settlement.
^ Securities Lending. 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 further information on this
policy, see "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
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.
<PAGE>
^ 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.
^
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 ^, and enter into reverse repurchase agreements in an amount not
exceeding 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.
THE FUND AND ITS MANAGEMENT
^
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, ^ 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, ^ IMR, 101 Federal Street, Boston, Massachusetts, is the
Fund's sub-adviser and is primarily responsible for managing the Fund's
investments.^
<PAGE>
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
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. ^ For the
fiscal year ended July 31, ^ 1997, 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 ^ 0.37% 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 Distribution Agreement effective September 20, 1997, IDI became
the Fund's distributor. IDI, established in 1997, is a registered broker-dealer
that acts as distributor for all retail funds advised by IFG. Prior to September
30, 1997, IFG served as the Fund's distributor.
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, where applicable, per participant in an
omnibus account ^. 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, ^ recordkeeping and internal sub-accounting services
for the Fund. For such services, IFG was paid, for the fiscal year ended July
31, ^ 1997, a fee equal to $10,000 plus an additional amount computed at an
annual rate of 0.015% of the Fund's average net assets.
<PAGE>
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund (prior to any
expense offset arrangement) for the fiscal year ended July 31, ^ 1997, including
investment management fees (but excluding brokerage commissions, which are a
cost of acquiring securities), amounted to ^ 1.55% 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 (after expense
offset arrangements) 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, ^ 1997, would have been ^ 1.97% 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 ^
such broker-dealers' 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 or IDI 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.
^ IFG, IMR and IDI are indirect, wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly traded holding company ^ that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
IMR continued to operate under their existing names. AMVESCAP PLC has
approximately $177.5 billion in assets under management. IFG was established in
1932 and, as of July 31, ^ 1997, managed 14 mutual funds, consisting of ^ 45
separate portfolios, with combined assets of approximately ^ $16.4 billion on
behalf of over ^ 858,051 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
<PAGE>
^(generally, 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 ^. Total return figures
show the average annual rate of return on a $1,000 investment in the Fund,
assuming reinvestment of all dividends and capital gain distributions for the
one-, five-and ten-year periods (or since inception). ^ Cumulative total return
^ shows the actual rate of return on an investment ^ over stated periods;
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, because
they do not ^ show 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
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's shares 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
Mail to: $1,000 for regular ^ If your check
INVESCO Funds account; does not clear, you
Group, Inc., $250 for an ^ IRA; will be responsible
P.O. Box 173706, $50 minimum for for any related
Denver, CO 80217- each subsequent loss the Fund or
3706. investment. IFG incurs. If you
Or you may send are already a
your check by shareholder in the
overnight courier INVESCO funds, the
to: 7800 E. Union Fund may seek
Ave., reimbursement from
Denver, CO 80237. your existing
account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or
Wire
Call 1-800-525-8085 $1,000. Payment must be
to request your received within 3
purchase. Then send business days, or
your check by the transaction may
overnight courier be ^ canceled. If a
to our street ^ purchase is ^
address: canceled due to
7800 E. Union Ave., nonpayment, you
Denver, CO 80237. will be responsible
Or you may transmit for any related
your payment by loss the Fund or
bank wire (call IFG IFG incurs. If you
for instructions). are already a
shareholder in the
INVESCO funds, the Fund
may seek reimbursement
from your existing
account(s) for any loss
incurred.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
With EasiVest or
Direct Payroll
Purchase
You may enroll on $50 per month for Like all regular
the fund EasiVest; $50 per investment plans,
application, or pay period for neither EasiVest
call us for the Direct Payroll nor Direct Payroll
correct form and Purchase. You may Purchase ensures a
more details. start or stop your profit or protects
Investing the same regular investment against loss in a
amount on a monthly plan at any time, falling market.
basis allows you to with two weeks' Because you'll
buy more shares notice to IFG. invest continually,
when prices are low regardless of
and fewer shares varying price
when prices are levels, consider
high. This "dollar- your financial
cost averaging" may ability to keep
help offset market buying through low
fluctuations. Over price levels. And
a period of time, remember that you
your average cost will lose money if
per share may be you redeem your
less than the shares when the
actual average market value of all
price per share. your shares is less
than their cost.
By PAL
Your "Personal $1,000. Be sure to write
Account Line" is down the
available for confirmation number
subsequent provided by PAL.
purchases and Payment must be
exchanges 24-hours received within 3
a day. Simply call business days, or
1-800-424-8085. the transaction may
be ^ canceled. If a
telephone purchase is ^
canceled 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
Between this and $1,000 to open a See ^"Exchange
another of the new account; $50 Policy" below.
INVESCO funds. Call for written
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
establish an (The exchange
Automatic Monthly minimum is $250 for
Exchange service purchases requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
================================================================================
Exchange ^ Policy. 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 ^ its shares to investors. Under the Plan, monthly payments may
be made by the Fund to IDI to permit IDI, at its discretion, to engage in
<PAGE>
certain activities and provide certain services approved by the board of
directors in connection with the distribution of the Fund's shares to investors.
These activities and services may include the payment of compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include ^ IDI-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 with the Fund.
In addition, other ^ permissible activities and services include
advertising, preparation, printing and distribution of sales literature,
printing and distribution of prospectuses to prospective investors^ and such
other services and promotional activities ^ for the Fund as may from time to
time be agreed upon by the ^ Company and its board of directors, including
public relations efforts and marketing programs to communicate with investors
and prospective investors. These services and activities may be conducted by the
staff of ^ IDI or its affiliates or by third parties.
^ Under the Plan, the Company's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's average
net assets. IDI is not entitled to payment for overhead expenses under the Plan,
but may be ^ paid for all or a portion of the compensation paid for salaries and
other employee benefits for ^ the personnel of IFG or IDI whose primary
responsibilities involve marketing shares of the INVESCO ^ Mutual Funds,
including the Fund. ^ Payment amounts by the Fund under the Plan, for any month,
may be made to compensate IDI for permissible activities engaged in and services
provided by IDI during the rolling 12-month period in which that month falls.
Therefore, any obligations incurred by IDI in excess of the limitations
described above will not be paid by the Fund under the Plan, and will be borne
by IDI. In addition, IDI and its affiliates may from time to time make
additional payments from its revenues to securities dealers, financial advisers
and financial institutions that provide distribution-related and/or
administrative services for the Fund. No further payments will be made by the
Fund under the Plan in the event of the Plan's termination. Payments made by the
Fund may not be used to finance directly the distribution of shares of any other
^ Fund of the Company or other mutual funds advised by IFG. However, payments
received by IDI which are not used to finance the distribution of shares of the
Fund become part of IDI's revenues and may be used by IDI for any permissible
activities for all of the mutual funds advised by IFG subject to review by the
Fund's directors. Payments made by the Fund under the Plan for compensation of
marketing personnel, as noted above, are based on an allocation formula designed
<PAGE>
to ensure that all such payments are appropriate. IDI will bear any
distribution-and service-related expenses in excess of the amounts which are
compensated pursuant to the Plan. The Plan also authorizes any financing of
distribution which may result from IDI's use of its own resources, including
profits from investment advisory fees received from the Fund, provided that such
fees are legitimate and not excessive. For more information see "How Shares Can
Be Purchased -- Distribution Plan" in the Statement of Additional information. ^
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 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 other distributions are
automatically invested in additional fund shares at the NAV on the ex-dividend
or ex-distribution 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.
<PAGE>
HOW TO SELL SHARES
The following chart ^ 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
Call us toll-free $250 (or, if less, This option is not
at 1-800-525-8085. full liquidation of available for
the account) for a shares held in ^
redemption check; IRAs.
$1,000 for a wire
to bank of record.
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
Mail your request Any amount. The If the shares to be
to INVESCO Funds redemption request redeemed are
Group, Inc., P.O. must be signed by represented by
Box 173706, all registered ^ stock certificates,
Denver, CO 80217- owners of the the certificates
3706. You may also account. Payment must be sent to
send your request will be mailed to IFG.
by overnight your address of
courier to 7800 E. record, or to a
Union Ave., Denver, pre-designated
CO 80237. bank.
- --------------------------------------------------------------------------------
By Exchange
Between this and $1,000 to open a See ^"Exchange
another of the new account; $50 Policy," page ^52.
INVESCO funds. Call for written
1-800-525-8085 for requests to
prospectuses of purchase additional
other INVESCO shares for an
funds. You may also existing account.
<PAGE>
establish an (The exchange
automatic monthly minimum is $250 for
exchange service exchanges requested
between two INVESCO by telephone.)
funds; call IFG for
further details and
the correct form.
- --------------------------------------------------------------------------------
Periodic Withdrawal
Plan
You may call us to $100 per payment, You must have at
request the on a monthly or least $10,000 total
appropriate form quarterly basis. invested with the
and more The redemption INVESCO funds, with
information at 1- check may be made at least $5,000 of
800-525-8085. payable to any that total invested
party you in the fund from
designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third
Party
Mail your request Any amount. ^ All registered
to INVESCO Funds owners of the
Group, Inc., P.O. account must sign
Box 173706, the request, with a
Denver, CO 80217- signature guarantee
3706. from an eligible
guarantor financial
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 ^ will take up to 15 days).
<PAGE>
If you participate in EasiVest, the Fund's automatic monthly investment
program, and redeem all of the shares in your account, we will terminate ^
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 involuntarily 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.
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders ^ 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 ^ other 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.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains for individuals by
applying different capital gains rates depending on the taxpayer's holding
period and marginal rate of federal income tax. Long-term gains realized on the
sale of securities held for more than one year but not for more than 18 months
are taxable at a rate of 28%. This category of long-term gains is often referred
to as "mid-term" gains but is technically termed "28% rate gains". Long-term
gains realized on the sale of securities held for more than 18 months are
taxable at a rate of 20%. At the end of each year, information regarding the tax
status of dividends and other distributions is provided to shareholders.
Shareholders should consult their tax advisers as to the effect of the Tax Act
on distributions by the Fund of net capital gains.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gains, in which
event it will be subject to federal income tax at the rates indicated above.
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 ^.
<PAGE>
^ Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other 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.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other ^ Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. ^
Dividends paid by the Fund will be based solely on the income earned by it. 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. Dividends are automatically reinvested in shares of
the Fund at the net asset value on the payable date unless otherwise requested.
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, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in shares of the Fund at the net asset value on the
payable date unless otherwise requested.
Dividends and other ^ distributions are paid to ^ holders of shares on the
record date of distribution regardless ^ how long the Fund shares have been held
by the shareholder. The ^ Fund's share price will then drop by the amount of the
distribution on the ^ ex- dividend or ex-distribution ^ date. 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.
^
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company have equal voting rights based on
one vote for each share owned^ and a corresponding fractional vote for each
fractional share owned. 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
<PAGE>
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 ^ Company 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
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 ^ MULTIPLE ASSET FUNDS, INC.
INVESCO Multi-Asset Allocation Fund
A no-load mutual fund seeking capital appreciation
and current income.
PROSPECTUS
December 1, ^ 1997
^ INVESCO FUNDS
^ INVESCO Distributors, Inc.
^ Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085 ^
http://www.invesco.com
^ In Denver, ^ visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street;
Denver Tech Center
7800 East Union Avenue
^ Lobby Level
In addition, all documents
filed by the Company with the
Securities and exchange Commission
can be located on a Web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
December 1, ^ 1997
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, ^ 1997,
which provide the basic information you should know before investing in a Fund,
may be obtained without charge from INVESCO ^ Distributors, 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 ^: INVESCO FUNDS GROUP, INC.
Distributor: INVESCO DISTRIBUTORS, INC.
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT POLICIES AND RESTRICTIONS 64
THE FUND AND ITS MANAGEMENT 77
HOW SHARES CAN BE PURCHASED 90
HOW SHARES ARE VALUED 93
FUND PERFORMANCE 95
SERVICES PROVIDED BY THE FUND 97
TAX-DEFERRED RETIREMENT PLANS 98
HOW TO REDEEM SHARES 98
DIVIDENDS, ^ OTHER DISTRIBUTIONS AND TAXES 98
INVESTMENT PRACTICES 101
ADDITIONAL INFORMATION 105
<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:
^ 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 substantially below
investment value, the price of the convertible security is governed principally
<PAGE>
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.
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.
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"), if a liquid institutional trading market exists. The ^ Company's
board of directors has delegated to Fund Management the authority to determine
the liquidity of Rule 144A Securities pursuant to guidelines approved by the
<PAGE>
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.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securitis to
qualified institutional buyers. 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 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.
^ 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. These ^ obligations^ 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 days.
^ 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
<PAGE>
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, interest rates or tax
policies.
Asset-Backed Securities. The Funds may invest in 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 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 and Delayed Delivery Securities. As discussed in the section
of the Funds' Prospectuses entitled "Investment Policies and Risks," 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 ^ and sell securities on a
<PAGE>
when-issued or delayed delivery basis^. When-issued or delayed delivery
transactions arise when securities (normally, debt obligations of issuers
eligible for investment by the Funds) are purchased or sold by the ^ Funds with
^ payment and delivery taking place in the future^ in order to secure what is
considered to be an advantageous price and yield. However, the yield on a
comparable security available when delivery takes place may vary from the yield
on the security at the time that the when-issued or delayed delivery transaction
was entered into. When the Funds engage in when-issued and delayed delivery
transactions, they rely on the seller or buyer, as the case may be, to
consummate the sale. Failure to do so may result in the Funds missing the
opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions may generally be expected to
settle within one month from the date a transaction is entered into, but in no
event later than 90 days after the transaction date. No payment or delivery is
made by the Funds until they receive delivery or payment from the other party to
the transaction. However, when a Fund purchases a security on a when- issued or
delayed delivery basis, it assumes the risk that the market price of the
security may ^ fluctuate between the date of purchase and the date of delivery.
To the extent that a Fund remains substantially fully invested at the same
time that it has purchased when-issued securities, as it would normally expect
to do, there may be greater fluctuations in its net assets than if the Fund sets
aside cash to satisfy its purchase commitments.
When a Fund purchases securities on a when-issued basis, it will maintain
in a segregated account cash or liquid securities having an aggregate value
equal to the amount of such purchase commitments ^, until payment is made. If
necessary, additional assets will be placed in the account daily so that the
value of the account will equal or exceed the amount of the Fund's purchase
commitments. ^
^ Securities Lending. The Funds also may lend their securities to
qualified brokers, dealers, banks or other financial institutions. This practice
permits ^ a Fund to earn income which, in turn, can be invested in additional
securities to pursue the Fund's investment objective. Loans of securities by ^ a
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, plus accrued interest and
dividends, 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. ^ Fund Management monitors the creditworthiness of
borrowers in order to minimize such risks. ^ A 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).
<PAGE>
Futures and Options on Futures and Securities. As described in the Funds'
Prospectuses, the Funds may enter into futures contracts, and purchase and sell
^("write") options to buy or sell futures contracts and other securities which
are included in the types of instruments sometimes referred to as "derivatives,"
because their value depends upon or derives from the value of an underlying
asset. 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. ^ 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. ^
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 ^ an amount of
cash or qualifying securities (currently U.S. Treasury bills)^. 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 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
<PAGE>
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; options are also included in the types
of instruments sometimes known as derivatives. 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 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.
<PAGE>
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 ("forward 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 forward contract. A forward
contract generally has no deposit requirement, and such transactions do not
involve commissions. By entering into a forward contract for the purchase or
sale of the amount of foreign currency invested in a foreign security
transaction, a Fund can hedge against possible variations in the value of the
dollar versus the subject currency either between the date the foreign security
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
<PAGE>
opportunity for gain if the value of the hedged currency should rise. The
Funds will not speculate in forward ^ 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
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.
<PAGE>
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.
Investment Restrictions
As described in the section of each Fund's Prospectus entitled
^"Investment Policies^ And Risks," the Funds operate under certain investment
restrictions ^. The following restrictions 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, unless otherwise indicated, 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
<PAGE>
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 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.
In applying the industry concentration investment restriction (number 3,
above), the Funds use a modified S&P industry code classification schema which
uses various sources to classify.
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.
<PAGE>
The additional investment restrictions adopted by the board of directors to
date, with respect to each Fund, 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
amount to the securities sold short without the payment of any
additional consideration therefor, and provided that transactions in
futures, options, swaps and forward ^ 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.
<PAGE>
(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.
(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.
^
With respect to investment restriction (i) above, ^ under the guidelines
established by the board of directors, the adviser will consider the following
factors, among others, in making this determination: (1) the unregistered nature
<PAGE>
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 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
^("IFG"), is employed as the Company's investment adviser. ^ IFG was established
in 1932 and also serves as an investment adviser to INVESCO ^ Capital
Appreciation Funds, Inc., formerly, INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, 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. ^ IFG, as investment adviser, has contracted with
INVESCO Management & Research, Inc. ^("IMR") to provide 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. ^ IMR and INVESCO Trust have the primary responsibility
for providing portfolio investment management services to the respective Funds.
^ IMR is a wholly-owned subsidiary of INVESCO North American Holdings, Inc.
^("INAH"), which is also the parent company of ^ IFG. INVESCO Trust, a trust
company founded in 1969, is a wholly-owned subsidiary of ^ IFG.
^ The Distributor. Effective September 30, 1997, INVESCO Distributors, Inc.
("IDI") became the Funds' distributor. IDI, established in 1997, is a registered
broker-dealer that acts as distributor for all retail mutual funds advised by
IFG. Prior to September 30, 1997, IFG served as the Funds' distributor.
IFG, IMR, INVESCO Trust and IDI are indirect wholly-owned subsidiaries of
AMVESCAP PLC, a publicly traded holding company ^ that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group, Inc. that created one of
the largest investment management businesses in the world with approximately
$177.5 billion in assets under management. IFG was established in 1932, and, as
of August 31, 1997, managed 14 mutual funds, consisting of ^ 45 separate
<PAGE>
portfolios, on behalf of over ^ 858,051 shareholders. ^ AMVESCAP 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.
^
--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.
--A I M Advisors, Inc. of Houston, Texas provides investment advisory and
administrative services for retail and institutional mutual funds.
--A I M Capital Management, Inc. of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-adviser to certain retail
and institutional mutual funds, one Canadian mutual fund and one portfolio of an
open-end registered investment company that is offered to separate accounts of
variable insurance companies.
--A I M Distributors, Inc. and Fund Management company of Houston, Texas
are registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of ^ AMVESCAP PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Funds' Prospectuses, ^ IFG, IMR 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 IFG, IMR, INVESCO Trust and ^ their
North American affiliates. The policy requires officers, inside directors,
investment and other personnel of IFG, IMR, INVESCO Trust and ^ their 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
<PAGE>
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 IFG, IMR,
INVESCO Trust and ^ their 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 ^ IFG.
Investment Advisory Agreement. ^ IFG serves as investment adviser to the
Funds pursuant to an investment advisory agreement ^ dated February 28, 1997
(the "Agreement") with the Company, which was approved ^ by the board of
directors on November 6, 1996, by a vote cast in person by a majority of the
directors of the Company, including a majority of the directors who are not
^"interested persons^" of the Company or ^ IFG at a meeting called for such
purpose. The Agreement was approved by ^ the Funds' shareholders on January 31,
1997,for an initial term expiring ^ February 28, 1999. Thereafter, the Agreement
may be continued from year to year as to each Fund as long as each such
continuance is specifically approved at least annually by the board of directors
of the Company, or by a vote of the holders of a majority, as defined in the
1940 Act, of the outstanding shares of ^ each 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, or by a Fund with respect to that Fund, 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 ^ IFG shall manage the investment portfolios
of the Funds in conformity with the Funds' investment policies (either directly
or by delegation to a sub-adviser, which may be a party affiliated with ^ IFG).
Further, ^ IFG 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 any
separate agreement between the Company and ^ IFG 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 ^ IFG 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
<PAGE>
compliance reviews of the Funds' operations; preparation and review of required
documents, reports and filings by ^ IFG'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 ^ IFG are borne by the Funds.
As full compensation for its advisory services to the Company, ^ IFG
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.^ 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, 1997, 1996 and 1995 ^, prior to the
voluntary absorption of certain Fund expenses by ^ IFG and the applicable
sub-adviser, the Multi-Asset Allocation Fund paid ^ IFG advisory fees of
$100,445, $69,539^ and $47,678 ^, respectively, and the Balanced Fund paid IFG
advisory fees of $797,409, $561,473 and $109,635, respectively. ^
Sub-Advisory Agreements. ^ IMR 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 ^ IFG
which were approved ^ by the board of directors on November 6, 1996 by a vote
cast in person by a majority of the directors of the Company, including a
majority of the directors who are not ^"interested persons^" of the Company, ^
IFG, INVESCO Trust or ^ IMR at a meeting called for such purpose. ^ Shareholders
of the Funds approved the Sub-Agreements on January 31, 1997, for an initial
term expiring ^ February 28, 1999. 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. ^ Any 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
<PAGE>
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 ^ IMR as sub-adviser to the Multi-Asset
Allocation Fund and INVESCO Trust as sub-adviser to the Balanced Fund, subject
to the supervision of ^ IFG, 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 Act, as
amended, and in any prospectus and/or statement of additional information of the
Company, as from time to time amended and in use under the 1933 Act, ^ and (ii)
the Company's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended; (c) determining what securities are to be
purchased or sold for each of the Funds, unless otherwise directed by the
directors of the Company or ^ IFG, 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, ^ IMR
and INVESCO Trust shall receive from ^ IFG, 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% ^ on the first $500 million of the Fund's average
net assets; 0.325% ^ on the next $500 million of the Fund's average net assets;
and 0.25% ^ on 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. ^ IFG, either directly or through
affiliated companies, provides certain administrative, sub-accounting and
recordkeeping services to the Funds pursuant to an Administrative Services
Agreement dated ^ February 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved ^ by the board of directors on November 6,
<PAGE>
1996, by a vote cast in person by all of the directors of the Company,
including all of the directors who are not ^"interested persons^" of the Company
or ^ IFG at a meeting called for such purpose. The Administrative Agreement ^ is
for an initial term expiring ^ February 28, 1998, and has been continued by
action of the board of directors until ^ May 15, 1998. 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 ^ IFG upon sixty (60) days' written notice, or by the Company upon
thirty (30) days' written notice, and terminates automatically in the event of
an assignment unless the Company's board of directors approves such assignment.
The Administrative Agreement provides that ^ IFG 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 ^ IFG, 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 ^ IFG 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, 1997, 1996 and 1995 ^, prior to the
voluntary absorption of certain Fund expenses by ^ IFG and the applicable
sub-adviser, the Multi-Asset Allocation Fund paid ^ IFG administrative services
fees in the amount of $12,009, $11,391^ and $10,954 ^, respectively, and the
Balanced Fund paid INVESCO administrative services fees in the amount of
$29,935, $24,037^ and $12,806 ^, respectively.
Transfer Agency Agreement. ^ IFG also performs transfer agent, dividend
disbursing agent and registrar services for the Funds pursuant to a Transfer
Agency Agreement dated February 28, 1997, which was approved by the board of
directors of the Company, including a majority of the Company's directors who
are not parties to the Transfer Agency Agreement or ^"interested persons^" of
any such party, on ^ November 6, 1997, for an initial term expiring ^ February
28, 1998 and has been continued by action of the board of directors until ^ May
15, 1998. Thereafter, the Transfer Agency Agreement may be continued from year
to year as to each Fund as long as such continuance is specifically approved at
least annually by the board of directors of the Company, or by a vote of the
<PAGE>
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 ^ IFG an
annual fee of $20.00 per shareholder account or ^ where applicable, per
participant ^ in an omnibus account. This fee is paid monthly at a rate of 1/12
of the annual fee and is based upon the number of shareholder accounts ^ and
omnibus account participants in existence at any time during each month.
For the fiscal years ended July 31, 1997, 1996 and 1995 ^, prior to the
voluntary absorption of certain Fund expenses by ^ IFG and the applicable
sub-adviser, the Multi-Asset Allocation Fund paid ^ IFG transfer agency fees of
$44,706, $25,922^ and $18,599 ^, respectively, and the Balanced Fund paid ^ IFG
transfer agency fees of $397,860, $203,967^ and $56,538 ^, 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' portfolios
are properly administered. The officers of the Company, all of whom are officers
and employees of, and paid by, ^ IFG, are responsible for the day-to-day
administration of the Company and each of the Funds. The investment sub-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 ^ IFG.
All of the officers and directors of the Company hold comparable positions
with INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund,
Inc.), INVESCO Diversified Funds, 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 ^ with the exception of
Mr. Hesser, also serve as 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
<PAGE>
and officers is Post Office Box 173706, Denver, Colorado 80217-3706. Their
affiliations represent their principal occupations during the past five years
unless otherwise indicated.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of ^ AMVESCAP PLC, London, England, and of various subsidiaries
thereof^. Chairman of the Board of INVESCO ^ Treasurer's Series Trust^. Address:
1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Treasurer's Series Trust. Trustee of ^ INVESCO 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 ^ Company, Urbaine Life Insurance Company and Midwestern
United Life Insurance Company. Address: Security Life Center, 1290 Broadway,
Denver, Colorado. Born: January 12, 1928.
DAN J. HESSER,+* President, CEO and Director. Chairman of the Board,
President, and Chief Executive Officer of INVESCO Funds Group, Inc. ^ and
INVESCO Distributors, Inc; President and Director of INVESCO Trust Company^;
President and Chief Operating Officer of INVESCO 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); since October 1984, Director of the Center for the Study of
Regulated Industry at Georgia State University; formerly, member of the
faculties of the Harvard Business School and the Sloan School of Management of
MIT. Dr. Andrews is also a Director of ^ the Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19
Kingsbridge Way, Madison, Connecticut. Born: August 1, 1923.
<PAGE>
^ WENDY L. GRAMM, Ph.D.,** Director. Self-employed (since 1993); Professor
of Economics and Public Administration, University of Texas at Arlington.
Formerly, Chairman, Commodity Futures Trading Commission from 1988 to 1993,
administrator for Information and Regulatory Affairs at the Office of Management
and Budget from 1985 to 1988, Executive Director of the Presidential Task Force
on Regulatory Relief and Director of the Federal Trade Commission's Bureau of
Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange,
Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life
Insurance Company, Kinetic Concepts, Inc., Independant Women's Forum,
International Republic Institute, and the Republican Women's Federal Forum. Dr.
Gramm is also a member of the Board of Visitors, College of Business
Administration, University of Iowa, and a member of the Board of Visitors,
Center for Study of Public Choice, George Mason University. Address: 4201 Yuma
Street, N.W., Washington, D.C. Born: January 10, 1945.
HUBERT L. HARRIS, JR.,* Director^. Chairman (since ^ 1996) and President
(January 1990 to ^ May 1996) of INVESCO Services, Inc. ^; 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, ^ NE, Atlanta, Georgia. Born: July 15, 1943.
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 ^ INVESCO Global Health Sciences Fund and Gables Residential Trust.
Address: ^ 7 Piedmont Center, Suite 100, Atlanta, Georgia ^. Born: September 14,
1930.
LARRY SOLL, Ph.D.,** Director. Formerly, Chairman of the Board (1987 to
1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President
(1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in
1982. Director of ISD Pharmaceuticals, Inc., Trustee of INVESCO Global Health
Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26,
1942.
<PAGE>
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company
(since 1989) and INVESCO Distributors, Inc.(since 1997); Vice President (May
1989 to April 1995), Secretary and General Counsel of INVESCO Funds Group, Inc.;
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 1988). Senior Vice President
and Treasurer of INVESCO Distributors, Inc. (since 1997). Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. (since 1995) and of INVESCO Distributors, Inc. (since
1997) and Trust Officer of INVESCO Trust Company (since July 1995) and formerly
(August 1992 to July 1995), Vice President of INVESCO Funds Group, Inc. and
Trust Officer of INVESCO Trust Company. Formerly, Vice President of 440
Financial Group from June 1990 to August 1992; Assistant Vice President of
Putnam Companies from November 1986 to June 1990. Born: August 21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. (since 1984) and Trust Officer of INVESCO Trust Company. Born: September
14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) 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.
As of November ^7, 1997, 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 ^ any portfolio's outstanding shares.
<PAGE>
Director Compensation
The following table sets forth, for the fiscal year ended July 31, ^ 1997:
the compensation paid by the Company to its ^ 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 ^ IDI (including the ^ Funds), INVESCO Advisor Funds, Inc.,
INVESCO Treasurer's Series Trust and ^ INVESCO Global Health Sciences Fund
(collectively, the ^"INVESCO Complex") to these directors for services rendered
in their capacities as directors or trustees during the year ended December 31,
^ 1996. As of December 31, ^ 1996, there were ^ 49 funds in the INVESCO Complex.
Dr. Soll became an independent director of the Company effective May 15, 1997.
Mr. Frazier resigned as an independent director of the Company on February 28,
1997. Dr. Gramm became an independent director of the Company effective July 29,
1997 and is not included in this chart.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Company Upon Paid To
Company(1) Expenses(2) Retirement(3) Directors(1)
Fred A.Deering, ^ $2,410 $260 $254 $98,850
Vice Chairman of
the Board
Victor L. Andrews ^ 2,388 246 294 84,350
Bob R. Baker ^ 2,413 220 393 84,850
Lawrence H. Budner ^ 2,366 246 294 80,350
Daniel D. Chabris ^ 2,391 281 209 84,850
A. D. Frazier, Jr.(4),(5) ^ 1,132 0 0 81,500
Kenneth T. King 2,278 270 230 71,350
<PAGE>
John W. McIntyre(4) 2,352 0 0 90,350
Larry Soll 544 0 0 17,500
------ ---- ---- -------
Total $18,274 $1,523 $1,674 $693,950
% of Net Assets 0.0102%5 0.0009%5 0.0045%6
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees, and the members of specially appointed task forces of the
board of directors each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
(3)These ^ figures represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ INVESCO 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, and Drs. Gramm
and Soll, each of these directors has served as a director/trustee of one or
more of the funds in the INVESCO Complex for the minimum five-year period
required to be eligible to participate in the Defined Benefit Deferred
Compensation Plan.
^ (4)Effective February 28, 1997, Mr. Frazier resigned as a director of the
Company. Mr. Frazier was employed by INVESCO PLC, the predecessor of AMVESCAP
PLC, a company affiliated with ^ IFG. Effective November 1, 1996, Mr. Frazier ^
no longer ^ received any director's fees or other compensation from the Company
or other funds in the INVESCO Complex for his service as a director.
^ (5)Total as a percentage of the Company's net assets as of July 31, ^
1997.
^ (6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
<PAGE>
Messrs. Brady, Harris^ and Hesser, as "interested persons" of the Company
and of the other funds in the INVESCO Complex, receive compensation as officers
or employees of ^ IFG 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 ^ IFG,
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 or her retirement (the ^"basic
retainer"). Commencing with any such director's second year of retirement, and
commencing with the first year of retirement of a director whose retirement has
been extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to ^ 40% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the ^"reduced retainer ^ payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or her or to his or her beneficiary or
estate. If a qualified director becomes disabled or dies either prior to age 72
or during his/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 or her beneficiary or estate. The
plan is administered by a committee of three directors who are also participants
in the plan and one director who is not a plan participant. The cost of the plan
will be allocated among the INVESCO^ and Treasurer's Series Trust 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 that is comprised of ^ five 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.
The Company also has a management liaison committee which meets quarterly
with various management personnel of ^ IFG 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.
<PAGE>
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.^" IDI 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
initial 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
board of directors, on February 4, 1997, approved amending the Plan to a
compensation type 12b-1 plan. This amendment of the Plan did not result in
increasing the amount of the Company's payments thereunder. The Plan was
continued by action of the board of directors until May 15, 1998. Pursuant to
authorization granted by the Company's board of directors on September 2, 1997,
a new Plan became effective on September 30, 1997, under which IDI assumed all
obligations related to distribution which were previously performed by IFG.
The Plan provides that each of the Funds may make monthly payments to ^
IDI of amounts computed at an annual rate no greater than 0.25% of ^ each Fund's
average net assets to ^ permit IDI, at its discretion, to engage in certain
activities and provide services in connection with the distribution of each
Fund's shares to investors. Payment amounts by a Fund under the Plan, for any
month, may ^ be made to compensate IDI for permissible activities engaged in and
services provided by IDI during the rolling 12-month period in which that month
falls^. For the fiscal year ended July 31, 1997, the Multi-Asset Allocation Fund
and Balanced Fund ^ made payments to IFG (the predecessor of IDI as distributor
of shares of the Funds) under the 12b-1 Plan in the amount of $31,979 and
$323,776, respectively, prior to the voluntary absorption of certain Fund
expenses by ^ IFG and ^ applicable sub-adviser. In addition, as of July 31, ^
1997 $3,659 and ^ $33,727 of additional distribution ^ accruals had been
incurred under the Plan for the Multi-Asset Allocation Fund and Balanced Fund,
respectively, ^ and will be paid during the fiscal year ending July 31, 1998. As
noted in the Prospectuses, one type of ^ expenditure permitted by the Plan is
the payment of compensation to securities companies and other financial
institutions and organizations, which may include ^ IFG-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 ^ IDI 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 ^ IDI 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, ^ 1997, allocation of 12b-1 amounts
paid by the Multi-Asset Allocation Fund for the following categories of expenses
were: advertising -- ^ $2,454; sales literature, printing and postage -- ^
$10,717; direct mail -- ^ $1,897; public relations/promotion -- ^ $1,213;
compensation to securities dealers and other organizations -- ^ $6,924;
marketing personnel --^ $8,773. For the fiscal year ended July 31, ^ 1997,
allocation of 12b-1 amounts paid by the Balanced Fund for the following
categories of expenses were: advertising -- ^ $98,498; sales literature,
printing and postage -- ^ $77,970; direct mail -- ^ $19,811; public
relations/promotion -- ^ $4,970; compensation to securities dealers and other
organizations -- ^ $78,336; marketing personnel -- ^ $44,191.
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 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 can also ^ be terminated at
any time with respect to any Fund, without penalty, if a majority of the 12b-1
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
<PAGE>
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, ^ IDI 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 ^ IDI
shall terminate automatically in the event of such ^"assignment," in which ^
case the Funds may continue to make payments, pursuant to the Plan, to ^ IDI or
another organization only upon the approval of new arrangements, which may or
may not be with ^ IDI, 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.^ 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 ^ herein under the section entitled "The Fund And Its
Management Officers ^ And Directors of the Company^" who are also officers
<PAGE>
either of ^ IDI or companies affiliated with ^ IDI. 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 ^ IFG and its affiliated companies:
(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 ^ IFG and its affiliated companies (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 ^"How To
Buy Shares," 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
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 ^ that Fund receives a
request to purchase or redeem shares. Net asset value per share is not
<PAGE>
calculated on days the New York Stock Exchange is closed, such as federal
holidays, including New Year's Day, Martin Luther King,Jr. 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 ^ value of securities held by ^ each Fund, and other assets used in
computing net asset value, generally ^ is 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 ^
a Fund's net asset value on a particular day. However, in the event that the
closing price of a foreign security is not available in time to calculate a
Fund's net asset value on a particular day, the Company's board of directors has
authorized the use of the market price for the security obtained from an
approved pricing service at an established time during the day which may be
prior to the close of regular trading in the security. The value of all assets
and liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the spot rate of such currencies against U.S. dollars provided
by an approved pricing service.
<PAGE>
FUND PERFORMANCE
As discussed in the section of each Fund's Prospectus entitled "Fund Price
And Performance," the ^ Company advertises the total return performance of the
Funds. The total return performance for each Fund for the indicated periods
ended July 31, ^ 1997 was as follows:
Fund 1 Year Life of Fund*
---- ------ -------------
Multi-Asset Allocation Fund ^ 31.41% 14.35%
^ Balanced Fund 29.27% 20.90%
^*Commencement of Operations December 1, 1993.
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)expondent 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 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
<PAGE>
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
<PAGE>
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 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.
^ Participation in the Periodic Withdrawal Plan may be terminated at any
time by sending a written request to ^ IFG. Upon termination, all future
dividends and capital gain distributions will be reinvested in additional shares
unless a shareholder requests otherwise.
Exchange ^ Policy. As discussed in the section of each Fund's Prospectus
entitled "How To Buy Shares -- Exchange ^ Policy," each Fund offers shareholders
the ^ ability to exchange shares of the Funds for shares of another fund or for
shares of certain other no-load mutual funds advised by ^ IFG. Exchange requests
may be made either by telephone or by written request to ^ IFG, 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 ^ policy
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.
<PAGE>
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 ^ IFG will be provided with prototype documents and other
supporting information regarding the type of plan requested. Each of these plans
involves a long-term commitment of assets and is subject to possible regulatory
penalties for excess contributions, premature distributions or 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, ^ OTHER 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 (the "Code"). Each Fund so qualified ^ for the
<PAGE>
^ taxable year ended July 31, ^ 1997, and intends to continue to qualify
during its current ^ taxable year. As a result, because the Funds intend to
distribute all of their income and recognized gains, it is anticipated that the
^ Fund will pay no federal income or excise taxes and will be accorded conduit
or ^"pass through^" treatment for federal income tax purposes.
Dividends paid by ^ each Fund from net investment income as well as
distributions of net realized short^-term capital gains and net realized gains
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
each Fund sends shareholders information regarding the amount and character of
dividends paid in the year^.
^ Distributions by each Fund 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 ^ how long a shareholder has held shares of ^ the Fund. The Taxpayer
Relief Act of 1997 (the "Tax Act"), enacted in August 1997, changed the taxation
of long-term capital gains for individuals by applying different capital gains
rates depending on the taxpayer's holding period and marginal rate of federal
income tax. Long-term gains realized on the sale of securities held for more
than one year but not for more than 18 months are taxable at a rate of 28%. This
category of long-term gains is often referred to as "mid-term" gains but is
technically termed "28% rate gains". Long-term gains realized on the sale of
securities held for more than 18 months are taxable at a rate of 20%. At the end
of each year, information regarding the tax status of dividends and other
distributions is provided to shareholders. Shareholders should consult their tax
advisers as to the effect of the Tax Act on distributions by a Fund of net
capital gain.
All dividends and other distributions are regarded as taxable to the
investor, regardless whether ^ such dividends and distributions are reinvested
in ^ shares of one of the Funds or another fund in the INVESCO group. The net
asset value of Fund shares ^ reflects accrued net investment income and
undistributed realized capital and foreign currency gains; therefore, when a
distribution is made, the net asset value is reduced by the amount of the
distribution. If ^ the net asset value of Fund shares were 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. 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 by the shareholder.
IFG^ may provide ^ shareholders of the Funds 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
<PAGE>
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 ^ IFG will be computed using the
single-category average cost method, although neither ^ IFG nor ^ a 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 ^ with respect to shares a Fund in past years, the shareholder must
continue to use the cost basis method previously used^ unless the shareholder
applies to the IRS for permission to change ^ the method.
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.
^ Each Fund will be subject to a ^ non-deductible 4% excise tax to the
extent it fails to distribute by the end of any calendar year substantially all
of ^ it ordinary income for that year and net capital ^ gains for the one-year
period ending on October 31 of that year, plus certain other amounts.
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. ^ Foreign taxes withheld will be
treated as an expense of the Fund.
Each Fund may invest in the stock of ^"passive foreign investment
companies^" ("PFICs"). A PFIC is a foreign corporation (other than a controlled
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, ^ the 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 ^ a 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 ^ a Fund to the extent that income is distributed to its shareholders.
Each Fund may elect to "mark-to-market" its stock in any PFIC.
Marking-to-market, in this context, means including in ordinary income for each
taxable year the excess, if any, of the fair market value of the PFIC stock over
a Fund's adjusted tax basis therein as of the end of that year. Once the
election has been made, a Fund also will be allowed to deduct from ordinary
income the excess, if any, of its adjusted basis in PFIC stock over the fair
<PAGE>
market value thereof as of the end of the year, but only to the extent of
any net mark-to-market gains with respect to that PFIC stock included by a Fund
for prior taxable years. A Fund's adjusted tax basis in each PFIC's stock with
respect to which it makes this election will be adjusted to reflect the amounts
of income included and deductions taken under the election.
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 ^ each Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of ^ a Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and ^ other
distributions ^ generally will be subject to applicable state and local taxes.
Qualification as a regulated investment company under the ^ Code for federal
income tax purposes does not entail government supervision of management or
investment policies.
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. ^ Portfolio turnover rates for
the fiscal years ended July 31, 1997, 1996 and 1995 ^ for the Multi-Asset
Allocation ^ Fund were 98%, 92% and 79%, respectively, and for the Balanced Fund
were 155%, 259% and 255%, respectively. 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 ^ IFG, as the Company's
investment adviser, or INVESCO Trust or ^ IMR, as the Company's sub-advisers,
places orders for the purchase and sale of securities with brokers and dealers
based upon ^ IFG's or the sub- advisers' evaluation of ^ such broker-dealers'
<PAGE>
financial responsibility, subject to their ability to effect transactions
at the best available prices. ^ IFG 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 each Fund's portfolio transactions ^,
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, ^ IFG or the
sub-advisers also ^ endeavors to monitor brokerage industry practices with
regard to the commissions or discounts charged by ^ broker-dealers on
transactions effected for other comparable institutional investors. While ^ IFG
or the sub-advisers seek reasonably competitive rates, the Funds do not
necessarily pay the lowest commission, spread or discount available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, ^ IFG 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 ^ IFG 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 ^ IFG or the sub-advisers in servicing
all of their respective accounts and not all such services may be used by ^ IFG
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, ^ IFG 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 ^ financial institutions (including brokers who may sell shares of
the Funds, or affiliates of such brokers) are paid a fee (the ^"Services Fee")
for recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the Funds through no transaction fee
<PAGE>
programs ("NTF Programs") offered by the ^ financial institution or its
affiliate broker (an "NTF Program Sponsor"). The Services Fee is based on the
average daily value of the investments in each Fund made ^ in the name of such
NTF Program Sponsor 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 ^ Services 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 ^ the Funds to pay
transfer agency fees to ^ IFG based on the number of investors who have
beneficial interests in the ^ NTF Program Sponsor's omnibus accounts in ^ the
Funds. IFG, in turn, pays these transfer agency fees to the ^ NTF Program
Sponsor as a sub-transfer agency or recordkeeping fee in payment of all or a
portion of the ^ Services Fee. In the event that the sub- transfer agency or
recordkeeping fee is insufficient to pay all of the ^ Services Fee with respect
to these NTF Programs, the directors of the Company have authorized the ^
Company to apply dollars generated from the Plan to pay the remainder of the ^
Services Fee, subject to the maximum Rule 12b-1 fee permitted by the Plan. ^ IFG
itself pays the portion of ^ each Fund's ^ Services 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 ^ IFG to place a portion of each
Fund's brokerage transactions with certain ^ NTF Program Sponsors or their
affiliated brokers, if IFG 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 ^ the
Funds may be credited by the ^ NTF Program Sponsor against its Services Fee.
Such credit shall be applied first against any sub- transfer agency or
recordkeeping fee payable with respect to ^ the Funds, and second against any
Rule 12b-1 fees used to pay a portion of the ^ Services Fee, on a basis which
has resulted from negotiations between ^ IFG or IDI and the ^ NTF Program
Sponsor. Thus, the ^ Funds pay sub-transfer agency or recordkeeping fees to the
^ NTF Program Sponsor in payment of the ^ Services Fee only to the extent that
such fees are not offset by ^ a Fund's credits. In the event that the transfer
agency fee paid by ^ the Funds to ^ IFG with respect to investors who have
beneficial interests in a particular ^ NTF Program Sponsor's omnibus accounts in
^ a Fund exceeds the ^ Services Fee applicable to ^ the Fund, after application
of credits, IFG may carry forward the excess and apply it to future ^ Services
Fees payable to that ^ NTF Program Sponsor with respect to ^ a Fund. The amount
of excess transfer agency fees carried forward will be reviewed for possible
adjustment by ^ IFG prior to each fiscal year-end of the ^ Funds. The Company's
board of directors has also authorized the ^ Funds to pay to IDI the full Rule
12b-1 fees contemplated by the Plan to compensate IDI for expenses incurred by ^
IDI in engaging in the activities and providing the services on behalf of the ^
Funds contemplated by the Plan, subject to the maximum Rule 12b-1 fee permitted
<PAGE>
by the Plan, notwithstanding that credits have been applied to reduce the
portion of the 12b-1 fee that would have been used to compensate IDI for
payments to such NTF Program Sponsor absent such credits.
* With respect to INVESCO Multiple Asset Funds, Inc., the Company's directors
have not authorized ^ IFG 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, ^ 1997, 1996 and 1995,
were $28,745, $16,522 and $11,217, respectively. The aggregate dollar amounts of
brokerage commissions paid by the Balanced Fund for the years ended July 31,
1997, 1996 and 1995 ^, were $1,382,425, $1,262,695^ and $302,143 ^,
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, ^ 1997, brokers providing research services received ^ $259,882 in
commissions on portfolio transactions effected for the Funds. The aggregate
dollar amount of such portfolio transactions was ^ $146,157,668. On a
Fund-by-Fund basis, this figure breaks down as follows: Multi-Asset Allocation,
^ $0 and Balanced, ^ $146,157,668. As a result of selling shares of the Funds,
brokers received ^ $300 in commissions on portfolio transactions effected for
the Funds during the fiscal year ended July 31, ^ 1997.
At July 31, ^ 1997, each of the Funds held securities of its regular
brokers or dealers, or their ^ parent companies, as follows:
<PAGE>
Value of Securities
Fund Broker or Dealer at ^ 7/31/97
- ---- ---------------- -------------------
Multi-Asset State Street Bank & Tr. Co. ^ $1,750,000.00
^ Allocation Fund Bear Stearns Companies, Inc. $106,112.50
^ Morgan Stanley Dean Witter
Discover Co. $77,684.06
Balanced Fund State Street Bank & Tr. Co. ^ $13,335,000.00
^ Morgan Stanley Dean Witter
Discover Co. $1,569,375.00
Neither IFG, INVESCO Trust nor IMR receives any brokerage commissions on
portfolio transactions effected on behalf of the Funds, and there is no
affiliation between ^ IFG, INVESCO Trust, ^ IMR or any person affiliated with ^
IFG, INVESCO Trust, ^ IMR 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 ^ series, representing the
Company's two Funds. As of July 31, ^ 1997, 1,245,329 shares of the INVESCO
Multi-Asset Allocation Fund and ^ 10,211,984 shares of the INVESCO Balanced Fund
were outstanding. The board of directors has the authority to designate
additional ^ series of common stock without seeking the approval of shareholders
and may classify and reclassify any authorized but unissued shares.
Shares of each ^ series represent the interests of the shareholders of
such ^ series in a particular portfolio of investments of the Company. Each ^
series of the Company's shares is preferred over all other ^ series in respect
of the assets specifically allocated to that ^ series, and all income, earnings,
profits and proceeds from such assets, subject only to the rights of creditors,
are allocated to shares of that ^ series. The assets of each ^ series 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 ^ series 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 ^
series. In the unlikely event that a liability allocable to one ^ series exceeds
the assets belonging to the ^ series, all or a portion of such liability may
have to be borne by the holders of shares of the Company's other ^ series.
<PAGE>
All shares, regardless of ^ series, have equal voting rights. Voting with
respect to certain matters, such as ratification ofindependent accountants or
election of directors, will be by all ^ series of the Company. When not all ^
series 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 ^ series 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, ^ 1997, the following persons
held more than 5% of the Funds' outstanding equity securities.
Shares Held and
Name and Address Nature of Ownership Percent of Class
- ---------------- ------------------- ----------------
Multi-Asset
Allocation Fund
- ---------------
Charles Schwab & Co., Inc. ^ 267,570.253 23.521%
Special Custody Acct. For ^ Record
The Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
^
<PAGE>
Balanced Fund
- -------------
Charles Schwab & Co., Inc. ^ 2,212,629.916 20.882%
Special Custody Acct. For ^ Record
The 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.
Under its contract with the Company, the custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories.
Transfer Agent. The Company is provided with transfer agent, registrar and
dividend disbursing agent services by INVESCO Funds Group, Inc., 7800 E. Union
Avenue, Denver, Colorado 80237, pursuant to the Transfer Agency Agreement
described herein. Such services include the issuance, cancellation and transfer
of shares of 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 LLP, Washington, D.C.,
is legal counsel for the Company. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Company.
Financial Statements. The ^ Company's audited financial statements and the
notes thereto for the fiscal year ended July 31, ^ 1997, 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, ^ 1997.
<PAGE>
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
<PAGE>
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. 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
<PAGE>
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.
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. 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 INVESCO 9
Balanced Fund for the Period
December 1, 1993 ^(commencement
of investment operations)
through July 31, 1994 and the years
ended July 31, ^ 1995,
1996 and 1997.
Financial Highlights for the 37
INVESCO Multi-Asset Allocation
Fund for the period
December 1, 1993 (commencement of
operations) through July 31, 1994
and the years ended July 31,
1995, 1996 and 1997.
Page in
Statement
of Addi-
tional In-
formation
-----------
(2) The following audited financial
statements of ^ INVESCO
Multiple Asset Funds, Inc.
and the notes thereto for the
fiscal year ended July 31, ^ 1997,
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
<PAGE>
the fiscal year ended July 31, ^ 1997:
Statement of Investment Securities
as of July 31, ^ 1997; Statement
of Assets and Liabilities as of
July 31, ^ 1997; Statement of
Operations for the year ended
July 31, ^ 1997; Statement of
Changes in Net Assets for each
of the two years in the period
ended July 31, ^ 1997; Financial
Highlights for each of the ^ three
years in the period ended
July 31, ^ 1997 and the
period from commencement of the
Funds' investment operations
(December 1, 1993) through
July 31, 1994.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as all
information has been presented in the
financial statements.
(b) Exhibits:
(1) Articles of Incorporation ^(Charter).(2)
^(2) Bylaws.(2)
(3) Not applicable.
(4) Not required to be filed on EDGAR.
(5) (a) Investment Advisory Agreement
Between Registrant and INVESCO Funds
Group, Inc. dated ^ February 28, 1997.
(b) Sub-Advisory Agreement Between
INVESCO Funds Group, Inc. and INVESCO
Management & Research, Inc. dated ^
February 28, 1997.
(c) Sub-Advisory Agreement Between
INVESCO Funds Group and
INVESCO Trust Company
dated ^ February 28, 1997.
<PAGE>
(6) (a) General Distribution Agreement
Between Registrant and INVESCO Funds
Group, Inc. dated ^ February 28, 1997.
(b) General Distribution Agreement
between Registrant and INVESCO
Distributors, Inc. dated September 30,
1997.
(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.(2)
(a) Amendment to Custody Agreement dated
October 25, ^ 1995.(2)
(b) Data Access Services Addendum dated
May 19, 1997.
(9) (a) Transfer Agency Agreement Between
Registrant and INVESCO Funds Group, Inc.
dated February 28, 1997. ^
(b) Administrative Services Agreement
between Registrant and INVESCO Funds
Group, Inc. dated ^ February 28, 1997.
(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.
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
<PAGE>
(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^.
^(15) (a) Plan and Agreement of
Distribution ^ pursuant to Rule
12b-1 under the Investment Company
Act of 1940 dated October 20,
1993.(2)
(b)^ Amendment of Plan and
Agreement of Distribution ^
pursuant to 12b-1 under the
Investment Company Act of 1940
dated July 19, 1995.
^(c) Amended Plan and Agreement
of Distribution adopted
pursuant to Rule 12b-1 under the
Investment Company Act of
1940 dated January 1, 1997.
<PAGE>
(d) Amended Plan and Agreement
of Distribution adopted
pursuant to Rule 12b-1 under the
Investment Company Act of
1940 dated September 30, 1997.
(16) (a) Schedule for computation of
performance ^ data for INVESCO Balanced
Fund.
(b) Schedule for computation of
performance data for INVESCO Multi-Asset
Allocation Fund.
(17) (a) Financial Data Schedule for the
period ended July 31, ^ 1997, for
INVESCO Balanced Fund.
(b) Financial Data Schedule for
the period ended July 31, ^
1997, for INVESCO Multi-Asset Allocation Fund.
(18) Not applicable.
- -------------------------
(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 on EDGAR with Post ^-Effective Amendment No. 4 dated
November 27, 1996 and incorporated by reference herein. ^
Item 25. Persons Controlled by or Under Common Control
With Registrant
No person is presently controlled by or under common control with
the INVESCO Multi-Asset Allocation of the INVESCO Balanced Funds of the
Registrant.
<PAGE>
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class October 31, ^ 1997
-------------- ------------------
INVESCO Multi-Asset
Allocation Fund ^ 1,488
INVESCO Balanced Fund ^ 15,385
<PAGE>
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
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 Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, 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
- ------------------ ------------- --------------
^ William J. Galvin, Jr. Senior Vice Assistant
7800 E. Union Avenue President Secretary
Denver, CO 80237
^ Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President & Chief Fin'l
Denver, CO 80237 Treasurer Officer, and
Chief Acctg.
Off.
Dan J. Hesser Chairman of President, ^
7800 E. Union Avenue ^ the Board, CEO & Dir.
Denver, CO 80237 President ,
Chief Executive
Officer, &
Director
Gregory E. Hyde ^ Vice President
7800 E. Union Avenue
Denver, CO 80237
^ Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
^ 7800 E. Union Avenue President ^,
^ Denver, CO 80237 Secretary &
^ General Counsel
Judy P. Wiese Vice President Asst. Treas.
^ 7800 E. Union Avenue
Denver, CO 80237
<PAGE>
(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 ^24th day of November, ^ 1997.
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 ^24th day of
November, ^ 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ ------------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ ------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and
Accounting Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ ------------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ ^ Larry Soll
- ------------------------------------ ------------------------------------
Bob R. Baker, Director ^ Larry Soll, 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
/s/ Wendy L. Gramm
- ------------------------------------
Wendy L. Gramm, Director
By*--------------------------------- By* /s/ Glen A. Payne
--------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
<PAGE>
* 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 (with the exception of Drs. Soll and Gramm) have been filed
with the Securities and Exchange Commission on October 4, 1993, November 24,
1993 ^, September 20, 1995 and November 27, 1996.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
^
5(a) 125
5(b) 133
5(c) 140
6(a) 147
6(b) 158
7 169
8(b) 175
9(a) 194
9(b) 210
10 214
11 216
14 217
15(a) 220
15(b) 225
15(c) 231
15(d) 232
16(a) 233
16(b) 234
17(a)
17(b)
EX99. POA. GRAMM 235
EX99. POA. SOLL 236
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Denver,
Colorado, by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO 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 which is divided into two series
(the "Shares"), each representing an interest in a separate portfolio of
investments (such series initially being the INVESCO Balanced Fund and the
INVESCO Multi-Asset Allocation Fund (the "Portfolios")); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and the Adviser desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby agrees to manage the
investment operations of the Fund's three Portfolios, subject to the terms of
this Agreement and to the supervision of the Fund's directors (the "Directors").
The Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's three Portfolios;
(b) to maintain a continuous investment program for the Fund's three
Portfolios, consistent with (i) the Portfolios' investment policies as set
forth in the Fund's Articles of Incorporation, Bylaws, and Registration
Statement, as from time to time amended, under the Investment Company Act
of 1940, as amended (the "1940 Act"), and in any prospectus and/or statement
of additional information of the Fund or any Portfolio of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as
amended, and (ii) the Fund's status as a regulated investment company under
the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund's
three Portfolios, unless otherwise directed by the Directors of the Fund,
and to execute transactions accordingly;
(d) to provide to the Fund's three Portfolios the benefit of all of the
investment analyses and research, the reviews of current economic
conditions and trends, and the consideration of long range investment
policy now or hereafter generally available to investment advisory
customers of the Adviser;
<PAGE>
(e) to determine what portion of the Fund's three Portfolios should be
invested in the various types of securities authorized for purchase by the
Fund;
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund and/or Portfolio action and any other rights pertaining
to the Portfolios' securities shall be exercised; and
(g) to calculate the net asset value of the Fund and each Portfolio, as
applicable, as required by the 1940 Act, subject to such procedures as may
be established from time to time by the Fund's Directors, based upon the
information provided to the Adviser by the Fund or by the custodian, co-
custodian or sub-custodian of the Fund's or any of the Portfolios' assets
(the "Custodian") or such other source as designated by the Directors from
time to time.
With respect to execution of transactions for the Fund's three Portfolios,
the Adviser shall place, or arrange for the placement of, all orders for the
purchase or sale of portfolio securities with brokers or dealers selected by the
Adviser. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed at all times to obtain for the
Fund's three Portfolios the most favorable execution and price; after fulfilling
this primary requirement of obtaining the most favorable execution and price,
the Adviser is hereby expressly authorized to consider as a secondary factor in
selecting brokers or dealers with which such orders may be placed whether such
firms furnish statistical, research and other information or services to the
Adviser. Receipt by the Adviser of any such statistical or other information and
services should not be deemed to give rise to any requirement for adjustment of
the advisory fee payable pursuant to paragraph 4 hereof. The Adviser may follow
a policy of considering sales of shares of the Fund as a factor in the selection
of broker/dealers to execute portfolio transactions, subject to the requirements
of best execution discussed above.
The Adviser shall for all purposes herein provided be deemed to be an
independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall reimburse the Fund
monthly for any salaries paid by the Fund to officers, Directors, and full time
employees of the Fund who also are officers, general partners or employees of
the Adviser or its affiliates. Except for such subaccounting, recordkeeping, and
administrative services which are to be provided by the Adviser to the Fund
under the Administrative Services Agreement between the Fund and the Adviser
dated April 30, 1993, which was approved on April 21, 1993, by the Fund's board
of directors, including all of the independent directors, at the Fund's request
the Adviser shall also furnish to the Fund, at the expense of the Adviser, such
competent executive, statistical, administrative, internal accounting and
clerical services as may be required in the judgment of the Directors of the
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
<PAGE>
office space, equipment and facilities as may be reasonably requested by the
Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and except to
the extent required by law to be paid by the Adviser, the Fund shall pay all
costs and expenses in connection with the operations and organization of the
Fund. Without limiting the generality of the foregoing, such costs and expenses
payable by the Fund include the following:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Fund and any Portfolio in connection with
securities transactions to which the Fund or any Portfolio is a party or in
connection with securities owned by the Fund's three Portfolios;
(b) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent, dividend
reinvestment agent, transfer agent, registrar, independent pricing
services and legal counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by the Fund or any
of the Fund's three Portfolios;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Fund or any Portfolio
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration and
qualification of the Fund and of its shares under laws administered by
the Securities and Exchange Commission or under other applicable
regulatory requirements;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices, prospectuses,
statements of additional information and other communications to the Fund's
shareholders, as well as all expenses of shareholders' meetings and
Directors' meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Fund's Articles of Incorporation, including
its initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial registration
and qualification of its securities under the laws of any state and the
approval of the Fund's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Fund;
(j) insurance premiums;
<PAGE>
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interest of the Fund's three Portfolios;
(l) extraordinary expenses, including fees and disbursements of Fund
counsel, in connection with litigation by or against the Fund or any
Portfolio;
(m) premiums for the fidelity bond maintained by the Fund pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder (except for
such premiums as may be allocated to the Adviser as an insured thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid by the
Fund pursuant to a Plan and Agreement of Distribution adopted under Rule
12b 1 of the Investment Company Act of 1940.
3. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the
Adviser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of written
approval of the Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this Agreement
and that all costs and expenses associated with the providing of services by any
such companies or employees and required by this Agreement to be borne by the
Adviser shall be borne by the Adviser or its affiliated companies.
4. Compensation of the Adviser. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund shall pay
to the Adviser an advisory fee which will be computed on a daily basis and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of each of the three Portfolios of the Fund,
as determined by valuations made in accordance with the Fund's procedure for
calculating its net asset value as described in the Fund's Prospectus and/or
Statement of Additional Information. The advisory fee to the Adviser with
respect to each of the Portfolios designated as INVESCO European Fund and
INVESCO Pacific Basin Fund shall be computed at the following annual rates:
0.75% of such Portfolio's average net assets up to $350 million; 0.65% of such
Portfolio's average net assets in excess of $350 million but not more than $700
million; and 0.55% of such Portfolio's average net assets in excess of $700
million. The advisory fee to the Adviser with respect to the Portfolio
designated as INVESCO International Growth Fund shall be computed at the
following annual rates: 1.00% of such Portfolio's average net assets up to $500
million; 0.75% of such Portfolio's average net assets in excess of $500 million
but not more than $1 billion; and 0.65% of such Portfolio's average net assets
in excess of $1 billion.
<PAGE>
During any period when the determination of the Fund's net asset value is
suspended by the Directors of the Fund, the net asset value of a share of the
Fund as of the last business day prior to such suspension shall, for the purpose
of this Paragraph 4, be deemed to be the net asset value at the close of each
succeeding business day until it is again determined. However, no such fee shall
be paid to the Adviser with respect to any assets of the Fund or any Portfolio
thereof which may be invested in any other investment company for which the
Adviser serves as investment adviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect for the entire
month.
If, in any given year, the sum of a Portfolio's expenses exceeds the most
restrictive state imposed annual expense limitation, the Adviser will be
required to reimburse that Portfolio for such excess expenses promptly.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for purposes of this paragraph and shall be borne by the Fund or
Portfolio in any event. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and shall not be deemed
to be expenses for purposes of this paragraph.
5. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolio of
the Fund's three Portfolios, neither the Adviser nor its officers or employees,
will act as a principal or agent for any party other than the Fund's three
Portfolios or receive any commissions. The Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
6. Duration and Termination. This Agreement shall become effective as of
the date it is approved by a majority of the outstanding voting securities of
the portfolios of the Fund designated the INVESCO Pacific Basin Fund, INVESCO
European Fund and INVESCO International Growth Fund, respectively. Thereafter,
and unless sooner terminated as hereinafter provided, this Agreement shall
remain in force for an initial term ending two years from the date of execution,
and from year to year thereafter, but only as long as such continuance is
specifically approved at least annually (i) by a vote of a majority of the
outstanding voting securities of the three Portfolios of the Fund or by the
Directors of the Fund, and (ii) by a majority of the Directors of the Fund who
are not interested persons of the Adviser or the Fund by votes cast in person at
a meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund's three Portfolios, as
the case may be, or by the Adviser. This Agreement shall immediately terminate
in the event of its assignment, unless an order is issued by the Securities and
Exchange Commission conditionally or unconditionally exempting such assignment
from the provisions of Section 15(a) of the 1940 Act, in which event this
Agreement shall remain in full force and effect subject to the terms and
<PAGE>
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 3 earned prior to such termination.
7. Non Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to others,
including, without limitation, other investment companies with similar
objectives to those of the Fund's three Portfolios. The Adviser may, when it
deems such to be advisable, aggregate orders for its other customers together
with any securities of the same type to be sold or purchased for the Fund's
three Portfolios in order to obtain best execution and lower brokerage
commissions. In such event, the Adviser shall allocate the shares so purchased
or sold, as well as the expenses incurred in the transaction, in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund's three Portfolios and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Fund or any
Portfolio or to the Fund's shareholders or creditors, for any error of judgment,
mistake of law, or for any loss arising out of any investment, nor for any other
act or omission, in the performance of its obligations to the Fund or any
Portfolio not involving willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties hereunder.
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Amendments Hereof. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Fund and the Adviser, and no material amendment of this Agreement shall be
effective unless approved by (1) the vote of a majority of the Directors of the
Fund, including a majority of the Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote of a
majority of the outstanding voting securities of any of the Fund's three
Portfolios as to which such amendment is applicable; provided, however, that
this paragraph shall not prevent any immaterial amendment(s) to this Agreement,
which amendment(s) may be made without shareholder approval, if such
amendment(s) are made with the approval of (1) the Directors and (2) a majority
of the Directors of the Fund who are not interested persons of the Adviser or
the Fund.
<PAGE>
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
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.
<PAGE>
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, the day and year first above written.
INVESCO INTERNATIONAL FUNDS, INC.
ATTEST:
By: /s/ Dan J. Hesser
-----------------------------
Dan J. Hesser
President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-------------------------------
Ronald L. Grooms
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO 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:
<PAGE>
(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
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
<PAGE>
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 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.
<PAGE>
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.
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.
<PAGE>
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
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE>
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.
<PAGE>
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. Keeler
-------------------------------
Frank J. Keeler
/s/ Kathy A. Greenberg President
- -----------------------
Kathy Greenberg
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO 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.
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:
<PAGE>
(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
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
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.
<PAGE>
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.
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.
<PAGE>
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
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE>
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.
<PAGE>
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/ Ronald L. Grooms
------------------------------
Senior Vice President
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne
Secretary
INVESCO TRUST COMPANY
ATTEST:
By: /s/ Dan J. Hessier
-----------------------------
President
/s/ Glen A. Payne
- -----------------------------
Glen A. Payne
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 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 has 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
<PAGE>
the right to reject any subscription in whole or in
part for any reason.
2. The Underwriter hereby agrees to serve as agent for the
distribution of the Shares and agrees that it will use its best
efforts with reasonable promptness to sell such part of the
authorized Shares remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933, as amended
(the "1933 Act"), at such prices and on such terms as hereinafter
set forth, 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 thedistribution
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")
<PAGE>
and Statement of Additional Information ("SAI") of the Fund as the
Underwriter may determine from time to time; provided that no
broker-dealer or other person shall be appointed or authorized to
act as agent of the Fund without the prior consent of the directors
(the "Directors") of the Fund. The Underwriter will require each
broker-dealer to conform to the provisions hereof and of the
Registration Statement (and related Prospectus and SAI) at the time
in effect under the 1933 Act with respect to the public offering
price of the Shares of any Series. The Fund will have no
obligation to pay any commissions or other remuneration to such
broker-dealers.
5. The Shares of each Series offered for sale or sold by the
Underwriter shall be offered or sold at the net asset value per
share determined in accordance with the then current Prospectus
and/or SAI relating to the sale of the Shares of the appropriate
Series except as departure from such prices shall be permitted by
the then current Prospectus and/or SAI of the Fund, in accordance
with applicable rules and regulations of the Securities and Exchange
Commission. The price the Fund shall receive for the Shares of each
Series purchased from the Fund shall be the net asset value per
share of such Share, determined in accordance with the Prospectus
and/or SAI applicable to the sale of the Shares of such Series.
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
<PAGE>
consent to comply with any requirement which in the
opinion of the Directors of the Fund is unduly burdensome).
The Underwriter, at its own expense, will effect all
qualifications of itself as broker or dealer, or otherwise,
under all applicable state or Federal laws required in order that
the Shares may be sold in such states or jurisdictions as the Fund
may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter from
time to time the most recent form of the Prospectus and/or SAI of
the Fund and/or of each Series of the Fund. The Fund authorizes the
Underwriter to use the Prospectus and/or SAI, in the forms furnished
to the Underwriter from time to time, in connection with the sale of
the Shares of the Fund and/or of each Series of the Fund. The Fund
will furnish to the Underwriter from time to time such information
with respect to the Fund, each Series, and the Shares as the
Underwriter may reasonably request for use in connection with the
sale of the Shares. The Underwriter agrees that it will not use or
distribute or authorize the use, distribution or dissemination by
broker-dealers or others in connection with the sale of the Shares
any statements, other than those contained in a current Prospectus
and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under
Federal and state securities laws and regulations, and that it will
promptly furnish the Fund with copies of all such material.
9. The Underwriter will not make, or authorize any
broker-dealers or others to make any short sales of the Shares of
the Fund or otherwise make any sales of the Shares unless such sales
are made in accordance with a then current Prospectus and/or SAI
relating to the sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the
Fund, may cause the redemption or repurchase of the Shares at such
prices and upon such terms and conditions as shall be specified in a
then current Prospectus and/or SAI. In selling, redeeming or
repurchasing the Shares for the account of the Fund, the Underwriter
will in all respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., relating to such sale,
<PAGE>
redemption or repurchase, 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.
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
<PAGE>
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 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
<PAGE>
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 as the
Fund's agent that has not been expressly authorized by the
Fund in writing.
<PAGE>
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
<PAGE>
not to assume the defense of any such suit, or should
the Fund not approve of counsel chosen by the
Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Fund or them. In
addition, the Fund shall have the right to employ counsel to
represent it, its Directors and any such controlling person
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Fund against
the Underwriter hereunder if in the reasonable judgment of the
Fund it is advisable for the Fund, its Directors or such
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
<PAGE>
are not "interested persons" (as defined in the Investment Company
Act) of the Fund, and shall continue in effect for an initial term
expiring February 28, 1998, and from year to year thereafter, but
only so long as such continuance is specifically approved at least
annually (a)(i) by a vote of the Directors of the Fund or (ii) by a
vote of a majority of the outstanding voting securities of the Fund,
and (b) by a vote of a majority of the Directors of the Fund who are
not "interested persons," as defined in the Investment Company Act,
of the Fund cast in person at a meeting for the purpose of voting on
this Agreement.
Either party hereto may terminate this Agreement on any
date, without the payment of a penalty, by giving the other party at
least 60 days' prior written notice of such termination specifying
the date fixed therefor. In particular, this Agreement may be
terminated at any time, without payment of any penalty, by vote of a
majority of the members of the Directors of the Fund or by a vote of
a majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided
for in this Agreement or otherwise, the Fund may terminate
this Agreement at any time immediately upon the Underwriter's
failure to fulfill any of the obligations of the Underwriter
hereunder.
14. The Underwriter expressly agrees that, notwithstanding
anything to the contrary herein, or in any applicable law, it will
look solely to the assets of the Fund for any obligations of the
Fund hereunder 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.
<PAGE>
17. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the Fund and the Underwriter and, if applicable,
approved in the manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If
any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such
illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation
hereof shall be governed exclusively by the laws of the
State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO 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
/s/ Glen A. Payne Senior Vice President
- -----------------------------
Glen A. Payne
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of September, 1997 between INVESCO
MULTIPLE ASSET FUNDS, INC., a Maryland corporation (the "Fund"), and INVESCO
DISTRIBUTORS, 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 to life insurance companies that have entered into
participation agreements with the Fund and the Underwriter ("Participating
Insurance Companies") and separate accounts of Participating Insurance
Companies; 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 eligible 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, provided
that such shareholders are eligible to purchase shares.
Notwithstanding any other provision hereof, the Fund
<PAGE>
may terminate, suspend or withdraw the offering of Shares whenever,
in its sole discretion, it deems such action to be desirable. The
Fund reserves the right to reject any subscription in whole or in
part for any reason.
2. The Underwriter hereby agrees to serve as agent for the
distribution of the Shares and agrees that it will use its best
efforts with reasonable promptness to sell such part of the
authorized Shares remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933, as amended
(the "1933 Act"), at such prices and on such terms as hereinafter
set forth, 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, 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
Participating Insurance Companies, or separate accounts of
Participating Insurance Companies, 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.
<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
<PAGE>
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
others in connection with the sale of the Shares any statements,
other than those contained in a current Prospectus and/or SAI of the
Fund or applicable Series, except such supplemental literature or
advertising as shall be lawful under Federal and state securities
laws and regulations, and that it will promptly furnish the Fund
with copies of all such material, including any such material
provided to the Underwriter by Participating Insurance Companies
that mentions the Fund by name.
9. The Underwriter will not make, or authorize 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
<PAGE>
meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities
and any attorney fees incurred in connection therewith) which
the Underwriter, its officers and directors or any such
controlling person, may incur under the federal securities
laws, the common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained
in the Registration Statement or any related Prospectus and/or
SAI or arising out of or based upon any alleged omission
to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, this indemnity
agreement, to the extent that it might require
indemnity of the Underwriter or any person who is an officer,
director or controlling person of the Underwriter, shall not
inure to the benefit of the Underwriter or officer, director
or controlling person thereof unless a court of competent
jurisdiction shall determine, or it shall have been determined
by controlling precedent, that such result would not be
against public policy as expressed in the federal securities
laws and in no event shall anything contained herein be so
construed as to protect the Underwriter against any liability
to the Fund, the Directors or the Fund's shareholders to which
the Underwriter would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
This indemnity agreement is expressly conditioned
upon the Fund's being notified of any action brought
against the Underwriter, its officers or directors or
any such controlling person, which notification shall be given
by letter or by telegram addressed to the Fund at its
principal address in Denver, Colorado and sent to the Fund by
the person against whom such action is brought within ten (10)
days after the summons or other first legal process shall have
been served upon the Underwriter, its officers or directors or
any such controlling person. The failure to notify
<PAGE>
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 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.
<PAGE>
(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 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.
<PAGE>
This indemnity agreement is expressly conditioned
upon the Underwriter's being notified of any action brought
against the Fund, its Directors or any such controlling
person, which notification shall be given by letter or
telegram addressed to the Underwriter at its principal office
in Denver, Colorado, and sent to the Underwriter by the person
against whom such action is brought, within ten (10) days
after the summons or other first legal process shall have been
served upon the Fund, its Directors or any such controlling
person. The failure to notify the Underwriter of any such
action shall not relieve the Underwriter from any liability
which it may have to the person against whom such action is
brought by reason of any such alleged untrue statement or
omission otherwise than on account of the indemnity agreement
contained in this paragraph. The Underwriter shall be entitled
to assume the defense of any suit brought to enforce such
claim, demand, or liability, but in such case the defense
shall be conducted by counsel chosen by the Underwriter and
approved by the Fund, which approval shall not be unreasonably
withheld. If the Underwriter elects to assume the defense of
any such suit and retain counsel approved by the Fund, the
defendant or defendants in such suit shall bear the fees and
expenses of an additional counsel obtained by any of them.
Should the Underwriter elect not to assume the defense of any
such suit, or should the Fund not approve of counsel chosen by
the Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Fund or them. In
addition, the Fund shall have the right to employ counsel to
represent it, its Directors and any such controlling person
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Fund against
the Underwriter hereunder if in the reasonable judgment of the
Fund it is advisable for the Fund, its Directors or such
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
<PAGE>
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 September 30, 1998,
and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually (a)(i) by a
vote of the Directors of the Fund or (ii) by a vote of a majority of
the outstanding voting securities of the Fund, and (b) by a vote of
a majority of the Directors of the Fund who are not "interested
persons," as defined in the Investment Company Act, of the Fund cast
in person at a meeting for the purpose of voting on this Agreement.
Either party hereto may terminate this Agreement on any
date, without the payment of a penalty, by giving the other party at
least 60 days' prior written notice of such termination specifying
the date fixed therefor. In particular, this Agreement may be
terminated at any time, without payment of any penalty, by vote of a
majority of the members of the Directors of the Fund or by a vote of
a majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
<PAGE>
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
/s/ Glen A. Payne President
- ----------------------
Glen A. Payne
Secretary
INVESCO DISTRIBUTORS, INC.
ATTEST:
By: /s/ Ronald L. Grooms
-------------------------------------
Ronald L. Grooms
/s/ Glen A. Payne Senior Vice President
- ----------------------
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
a. Service Termination. Service Termination means termination of service
(other than by disability or death) of an Independent Director which results
from the Director's having reached his Service Termination Date.
b. Service Termination Date. An Independent Director's Service Termination
Date is normally the last day of the calendar quarter in which such Director's
seventy-second birthday occurs. A majority of the Board of a Fund may annually
extend a Director's Service Termination Date for a maximum period of three
years, through the date not later than the last day of the calendar quarter in
which such Director's seventy-fifth birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean an Independent Director's normal Service Termination Date, or the
Director's extended Service Termination Date, whichever may be applicable to the
Independent Director.
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not later than the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director will receive
four quarterly payments during the first twelve months subsequent to his Service
Termination Date (the "First Year Retirement Payments"), with each payment to be
equal to 25 percent of the annual basic retainer payable by each Fund to the
Independent Director on his Service Termination Date (excluding any fees
relating to attending meetings or chairing committees).
<PAGE>
b. Benefit. Commencing with the first anniversary of the Service
Termination Date of any Independent Director who has received the First Year
Retirement Payments, and commencing as of the Service Termination Date of an
Independent Director whose Service Termination Date is subsequent to the date of
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurred, the Independent Director will receive, for the remainder of
his life, a benefit (the "Benefit"), payable quarterly, with each quarterly
payment to be equal to 10 percent of the annual basic retainer payable by each
Fund to the Independent Director on his Service Termination Date (excluding any
fees relating to attending meetings or chairing committees).
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for a period of ten years, with quarterly payments to
be made to the designated beneficiary.
If an Independent Director's service as a Director is terminated because of
his death prior to the last day of the calendar quarter in which such Director's
seventy-second birthday occurs or subsequent to the last day of the calendar
quarter in which such Director's seventy-fourth birthday occurred, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his disability subsequent to the last day of
the calendar quarter in which such Director's seventy-second birthday occurred
and prior to the last day of the calendar quarter in which such Director's
seventy-fourth birthday occurs, the Independent Director shall receive the First
Year Retirement Payments and shall, commencing with the quarter following the
quarter in which the last First Year Retirement Payment is made, receive the
Benefit for the remainder of his life, with quarterly payments to be made to the
disabled Independent Director. If the disabled Independent Director should die
before the First Year Retirement Payments are completed and before forty
quarterly Benefit payments are made, such payments will continue to be made to
the Independent Director's designated beneficiary until the aggregate of the
First Year Retirement Payments and forty quarterly Benefit payments have been
made to the disabled Independent Director and the Director's designated
beneficiary.
If an Independent Director's service as a Director is terminated because of
his disability prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
Independent Director shall receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
<PAGE>
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If the Independent
Director and his designated beneficiary should die before the First Year
Retirement Payments and/or a total of forty quarterly Benefit payments are made,
the remaining value of the Independent Director's First Year Retirement Payments
and/or Benefit shall be determined as of the date of the death of the
Independent Director's designated beneficiary and shall be paid to the estate of
the designated beneficiary in one lump sum or in periodic payments, with the
determinations with respect to the value of the First Year Retirement Payments
and/or Benefit and the method and frequency of payment to be made by the
Committee (as defined in paragraph 8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
First Year Retirement Payments and/or Benefit shall be determined as of the date
of the death of the Independent Director by the Committee and shall be paid as
promptly as possible in one lump sum to the Independent Director's estate.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will be
paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit: Allocation of
Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or Benefit applicable to the Fund, as well as its
proportionate share of all expenses of administration of the Plan, including
without limitation all accounting and legal fees and expenses and fees and
expenses of any Actuary. The obligations of each Fund to pay such First Year
Retirement Payments and/or Benefit and expenses will not be secured or funded in
any manner, and such obligations will not have any preference over the lawful
<PAGE>
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or Benefit is paid by more than one Fund, such
costs and expenses will be allocated among such Funds in a manner that is
determined by the Committee to be fair and equitable under the circumstances. To
the extent that one or more of such Funds consist of one or more separate
portfolios, such costs and expenses allocated to any such Fund will thereafter
be allocated among such portfolios by the Board of the Fund in a manner that is
determined by such Board to be fair and equitable under the circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. Except as
otherwise provided herein, the Committee will make all interpretations and
determinations necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive. Committee
members will be elected annually.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board of any Fund to nominate any Independent Director for
reelection.
<PAGE>
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993. Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
The INVESCO Advisor Funds, Inc.
INVESCO Treasurer's Series Trust
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between each Fund listed on Appendix A, (individually a
"Customer" and collectively, the "Customers") and State Street Bank and Trust
Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
each Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Customers;
WHEREAS, State Street has developed and utilizes proprietary accounting and
other systems, including State Street's proprietary Multicurrency HORIZONR
Accounting System, in its role as custodian of each Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Customer with access to State Street's
Multicurrency HORIZONR Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Customer and
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Customer to originate
electronic instructions to State Street on behalf of each Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
<PAGE>
c. Additional Services. State Street may from time to time agree to make
available to a Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, a Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Customer acknowledge that in connection with the Data
Access Services provided under this Agreement, each Customer will have access,
through the Data Access Services, to Customer Data and to functions of State
Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of a Customer or the Investment Advisor or
Independent Auditor located in Denver, Colorado ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Customer agree
that each will engage or retain the services of trained personnel to enable both
State Street and the Customer to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. Each Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
<PAGE>
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Customer's access to services performed by the System or
to Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, a
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
<PAGE>
g. Security Procedures. Each Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. Each Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of the
System and the Data Access Services by the Customer and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Customer and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Customer's or the Investment Advisor's business.
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to each Customer shall be
deemed
<PAGE>
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Customer agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. Each Customer further acknowledges that State Street
shall not be required to provide the Investment Advisor or the Investment
Auditor with access to the System unless it has first received from the
Investment Advisor of the Investment Auditor an undertaking with respect to
State Street's Proprietary Information in the form of Attachment C and/or
Attachment C-1 to this Agreement. Each Customer shall use all commercially
reasonable efforts to assist State Street in identifying and preventing any
unauthorized use, copying or disclosure of the Proprietary Information or any
portions thereof or any of the logic, formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and each Customer will, at its expense,
cooperate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief. Each Customer acknowledges that the disclosure of any
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
<PAGE>
d. Survival. The provisions of this Section 4 shall survive the termination
of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. Each Customer agrees
any liability of State Street to the Customer or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for he preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
<PAGE>
e. Force Majeure. Neither State Street or a Customer shall be liable for
any costs or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including without
limitation, cessation of services hereunder or any damages resulting therefrom
to the other party, or the Customer as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
Each Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor or the Independent Auditor of the Customer and (ii) any loss
resulting from incorrect Client Originated Electronic Financial Instructions.
State Street shall be entitled to rely on the validity and authenticity of
Client Originated Electronic Financial Instructions without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Agreement, including, without
<PAGE>
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by each Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated State
Street training facility or at the Designated Location, to he Customer's
personnel in connection with the use of the System on the Designated
Configuration. Each Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that attach
to the Designated Configuration in order to use the Data Access
Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this Agreement.
<PAGE>
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date of
its execution by State Street and shall remain in full force and effect u til
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i) for
any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of the Agreement by giving the other
party written notice of termination. In the event the Customer shall cease doing
business, shall become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Agreement and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Customer.
Termination of this Agreement with respect to any given Customer shall in no way
affect the continued validity of this Agreement with respect to any other
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Agreement for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Agreement for any
reason, the Customer shall return to State Street all copies of documentation
<PAGE>
and other Proprietary Information in its possession; provided, however,
that in the event that either State Street or the Customer terminates this
Agreement or the Custodian Agreement for any reason other than the Customer's
breach, State Street shall provide the Data Access Services for a period of time
and at a price to be agreed upon by State Street and the Customer.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations of
each Customer and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a success r of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Agreement is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
or any right hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned Funds severally has
caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
-----------------------------------
Title: Exeuctive Vice President
Date: -----------------------------
EACH FUND LISTED ON APPENDIX A
By: /s/ Glen A. Payne
------------------------------
Title: Secretary
Date: May 19, 1997
------------------------------
<PAGE>
APPENDIX A
INVESCO FUNDS
INVESCO Diversified Funds, Inc.
INVESCO Small Company Value Fund
INVESCO Dynamics Fund, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Small Company Growth Fund
INVESCO Worldwide Emerging Markets Fund
INVESCO Growth Fund, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO High Yield Fund
INVESCO Select Income Fund
INVESCO Short-Term Bond Fund
INVESCO U.S. Government Bond Fund
INVESCO Industrial Income Fund, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO European Fund
INVESCO International Growth Fund
INVESCO Pacific Basin Fund
INVESCO Money Market Funds, Inc.
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
INVESCO U.S. Government Money Fund
INVESCO Multiple Asset Funds, Inc.
INVESCO Balanced Fund
INVESCO Multi-Asset Allocation Fund
<PAGE>
INVESCO Specialty Funds, Inc.
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Realty Fund
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
INVESCO Strategic Portfolios, Inc.
Energy Portfolio
Environmental Services Portfolio
Financial Services Portfolio
Gold Portfolio
Health Sciences Portfolio
Leisure Portfolio
Technology Portfolio
Utilities Portfolio
INVESCO Tax-Free Income Funds, Inc.
INVESCO Tax-Free Intermediate Bond Fund
INVESCO Tax-Free Long-Term Bond Fund
INVESCO Treasurer's Series Trust
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Prime Reserve Fund
INVESCO Treasurer's Special Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
INVESCO Value Trust
INVESCO Intermediate Government Bond Fund
INVESCO Total Return Fund
INVESCO Value Equity Fund
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Dynamics Portfolio
INVESCO VIF-Health Sciences Portfolio
INVESCO VIF-High Yield Portfolio
INVESCO VIF-Industrial Income Portfolio
<PAGE>
INVESCO VIF-Small Company Growth Portfolio
INVESCO VIF-Technology Portfolio
INVESCO VIF-Total Return Portfolio
INVESCO VIF-Utilities Portfolio
INVESCO VIF-Growth Portfolio*
*Effective May 1, 1997.
<PAGE>
ATTACHMENT A
Multicurrency HORIZONR Accounting System
System Product Description
I. The Multicurrency HORIZONR Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuestR GlobalQuestR is designed to provide customer access to the
following information maintained on The Multicurrency HORIZONR Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund receivables; 5) daily priced positions; 6) open
trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.
III. HORIZONR Gateway. HORIZONR Gateway provides customers with the ability
to (i) generate reports using information maintained on the Multicurrency
HORIZONR Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency HORIZONR
Accounting System; and (iii) access previous day and historical data. The
following information which may be accessed for these purposes: 1) holdings; 2)
holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger
and 7) cash.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to each of the Funds (individually a, "Customer" ,
collectively, the "Customers") it will have access to State Street Bank and
Trust Company's ("State Street") Multicurrency HORIZON Accounting System and
other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
By: /s/ Glen A. Payne
----------------------------
Title: Secretary
Date: May 19, 1997
-----------------------
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's HORIZONR Help Desk and Customer Assistance Center between the hours of
8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of
obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to assist
the Customer in using the System and the Data Access Services. The total amount
of technical support provided by State Street shall not exceed 10 resource days
per year. State Street shall provide such additional technical support as is
expressly set forth in the fee schedule in effect from time to time between the
parties (the "Fee Schedule"). Technical support, including during installation
and testing, is subject to the fees and other terms set forth in the Fee
Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
<PAGE>
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to support
the Customer's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, 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 East Union
Avenue, Denver, Colorado 80237 (hereinafter referred to as the "Transfer
Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth, the
Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, Treasurer, or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the
Fund as indicated in a certification as may be received
by the Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent, which is actually
received by the Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in
the 1940 Act;
(d) "Custodian" refers to the custodian of all of the
securities and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions actually
received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person;
(f) "Prospectus" shall mean the currently effective
prospectus relating to the Fund's Shares
registered under the Securities Act of 1933;
<PAGE>
(g) "Shares" refers to the shares of common stock,
$.01 par value, of the Fund;
(h) "Shareholder" means a record owner of Shares;
(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.
<PAGE>
(c) Any compensation agreed to hereunder may be adjusted from
time to time by attaching to this Agreement a revised Fee
Schedule, dated and signed by an authorized officer of each
party hereto, and a certified copy of the resolution of the
board of directors of the Fund authorizing such revised Fee
Schedule.
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
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
<PAGE>
(h) An opinion of counsel for the Fund with respect to
the validity of the Shares.
6. Further Documentation. The Fund will also furnish from
time to time the following documents:
(a) Each resolution of the board of directors
authorizing the original issue of Shares;
(b) Each Registration Statement filed with the
Commission, and amendments and orders with respect
thereto, in effect with respect to the sale of
Shares of the Fund;
(c) A certified copy of each amendment to the Articles
of Incorporation and the Bylaws of the Fund;
(d) Certified copies of each resolution of the board
of directors designating Authorized Persons to
give instructions to the Transfer Agent;
(e) Certificates as to any change in any officer,
director, or Authorized Person of the Fund;
(f) Specimens of all new certificates for Shares
accompanied by the Fund's resolutions of the board
of directors approving such forms; and
(g) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for the Transfer Agent in
the proper performance of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent
shall maintain an adequate supply of blank share
certificates to meet the Transfer Agent's
requirements therefor. Such share certificates
shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund
whose signature appears on such certificates, the
Transfer Agent may continue to countersign
certificates which bear such signatures until
otherwise directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and mail
certificates as requested by the Shareholders for Shares of
the Fund in accordance with the instructions of the Fund and
to confirm such issuance to the Shareholder and the Fund or
its designee.
<PAGE>
(c) The Fund hereby authorizes the Transfer Agent to
issue replacement share certificates in lieu of
certificates which have been lost, stolen or
destroyed, without any further action by the board
of directors or any officer of the Fund, upon
receipt by the Transfer Agent of properly executed
affidavits or lost certificate bonds, in form
satisfactory to the Transfer Agent, with the Fund
and the Transfer Agent as obligees under any such
bond.
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall
sell or cause to be sold any Shares, the Fund or
its authorized agent shall provide or cause to be
provided to the Transfer Agent information
including: (i) the number of Shares sold, trade
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.
<PAGE>
(c) Upon receipt of the notification required under paragraph
(a) hereof and the notification from the Custodian that such
money has been received by it, the Transfer Agent shall issue
to the purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue
any Shares of the Fund where it has received
Written Instructions from the Fund or written
notification from any appropriate federal or state
authority that the sale of the Shares of the Fund
has been suspended or discontinued, and the
Transfer Agent shall be entitled to rely upon such
Written Instructions or written notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other
order for the payment of money is returned unpaid for
any reason, the Transfer Agent will: (i) give prompt
notice of such return to the Fund or its designee; (ii)
place a stop transfer order against all Shares issued
or held on deposit as a result of such check or order;
(iii) in the case of any Shareholder who has obtained
redemption checks, place a stop payment order on the
checking account on which such checks are issued; and
(iv) take such other steps as the Transfer Agent may,
in its discretion, deem appropriate or as the Fund or
its designee may instruct.
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the
Fund will be redeemed upon receipt by the Transfer
<PAGE>
Agent of: (i) a written request for redemption, signed by each
registered owner exactly as the Shares are registered; (ii)
certificates properly endorsed for any Shares for which
certificates have been issued; (iii) signature guarantees to
the extent required by the Transfer Agent as described in the
Prospectus for the Fund; and (iv) any additional documents
required by the Transfer Agent for redemption by corporations,
executors, administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer
Agent will, consistent with procedures which may
be established by the Fund from time to time for
redemption by wire or telephone, upon receipt of
such a wire order or telephone redemption request,
redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as
directed. All wire or telephone redemptions will
be subject to such additional requirements as may
be described in the Prospectus for the Fund. Both
the Fund and the Transfer Agent reserve the right
to modify or terminate the procedures for wire
order or telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all
necessary information and documentation relating
to a redemption, the Transfer Agent will issue to
the Custodian an advice setting forth the number
of Shares of the Fund received by the Transfer
Agent for redemption and that such shares are
valid and in good form for redemption. The
Transfer Agent shall, upon receipt of the moneys
paid to it by the Custodian for the redemption of
Shares, pay such moneys to the Shareholder, his
authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is
authorized to review and process transfers of Shares of
the Fund and to the extent, if any, permitted in the
Prospectus for the Fund, exchanges between the Fund and
other mutual funds advised by INVESCO Funds Group,
Inc., on the records of the Fund maintained by the
Transfer Agent. If Shares to be transferred are
represented by outstanding certificates, the Transfer
Agent will, upon surrender to it of the certificates in
proper form for transfer, and upon cancellation
thereof, countersign and issue new certificates for a
like number of Shares and deliver the same. If the
Shares to be transferred are not represented by
outstanding certificates, the Transfer Agent will, upon
an order therefor by or on behalf of the registered
holder thereof in proper form, credit the same to the
<PAGE>
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 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
<PAGE>
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.
(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
<PAGE>
paid and date and price of all transactions on a Shareholder's
account; (iv) any stop or restraining order placed against a
Shareholder's account; (v) information with respect to
withholdings in the case of a foreign account; (vi) any
capital gain or dividend reinvestment order, plan application,
dividend address and correspondence relating to the current
maintenance of a Shareholder's account; (vii) certificate
numbers and denominations for any Shareholders holding
certificates; and (viii) any information required in order for
the Transfer Agent to perform the calculations contemplated or
required by this Agreement.
(b) Any records required to be maintained by Rule
31a-1 under the 1940 Act will be preserved for the
periods prescribed in Rule 31a-2 under the 1940
Act. Such records may be inspected by the Fund at
reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the
Fund's demand, turn over to the Fund and cease to
retain in the Transfer Agent's files, records and
documents created and maintained by the Transfer
Agent in performance of its services or for its
protection. At the end of the six-year retention
period, such records and documents will either be
turned over to the Fund, or destroyed in
accordance with the Fund's authorization.
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.
<PAGE>
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any
paper or document believed by it to be genuine and to have
been signed by an Authorized Person and shall not be held to
have any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates which
it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any
Authorized Person of the Fund for Written
Instructions, and, at the expense of the Fund, may
seek advice from legal counsel for the Fund, with
respect to any matter arising in connection with
this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in
good faith in accordance with such Written
Instructions or with the opinion of such counsel.
In addition, the Transfer Agent, its officers,
agents or employees, shall accept instructions or
requests given to them by any person representing
or acting on behalf of the Fund only if said
representative is known by the Transfer Agent, its
officers, agents or employees, to be an Authorized
Person. The Transfer Agent shall have no duty or
obligation to inquire into, nor shall the Transfer
Agent be responsible for, the legality of any act
done by it upon the request or direction of
Authorized Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under
no duty or obligation to inquire into, and shall
not be liable for: (i) the legality of the issue
or sale of any Shares of the Fund, or the
sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares
of the Fund, or the propriety of the amount to be
paid therefor; (iii) the legality of the
declaration of any dividend by the Fund, or the
legality of the issue of any Shares of the Fund in
payment 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
<PAGE>
shall not be liable for any loss arising out of or in
connection with its actions under this Agreement so long as it
acts in good faith and with due diligence, and is not
negligent or guilty of any willful misconduct.
(b) The Fund hereby agrees to indemnify and hold
harmless the Transfer Agent from and against any
and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of
any and every nature which the Transfer Agent may
sustain or incur or which may be asserted against
the Transfer Agent by any person by reason of, or
as a result of: (i) any action taken or omitted to
be taken by the Transfer Agent in good faith in
reliance upon any Certificate, instrument, order
or stock certificate believed by it to be genuine
and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions
or Written Instructions of an Authorized Person of
the Fund or upon the opinion of legal counsel for
the Fund or its own counsel; or (ii) any action
taken or omitted to be taken by the Transfer Agent
in connection with its appointment in good faith
in reliance upon any law, act, regulation or
interpretation of the same even though the same
may thereafter have been altered, changed, amended
or repealed. However, indemnification hereunder
shall not apply to actions or omissions of the
Transfer Agent or its directors, officers,
employees or agents in cases of its own gross
negligence, willful misconduct, bad faith, or
reckless disregard of its or their own duties
hereunder.
20. Affiliation Between Fund and Transfer Agent. It is
understood that the directors, officers, employees,
agents and Shareholders of the Fund, and the officers,
directors, employees, agents and shareholders of the
Fund's investment adviser, INVESCO Funds Group, Inc.
(the "Adviser"), are or may be interested in the
Transfer Agent as directors, officers, employees,
agents, shareholders, or otherwise, and that the
directors, officers, employees, agents or shareholders
of the Transfer Agent may be interested in the Fund as
directors, officers, employees, agents, shareholders,
or otherwise, or in the Adviser as officers, directors,
employees, agents, shareholders or otherwise.
<PAGE>
21. Term.
(a) This Agreement shall become effective on February
28, 1997 after approval by vote of a majority (as defined in
the 1940 Act) of the Fund's board of directors, including a
majority of the directors who are not interested persons of
the Fund (as defined in the 1940 Act), and shall continue in
effect for an initial term expiring February 28, 1998 and from
year to year thereafter, so long as such continuance is
specifically approved at least annually both: (i) by either
the board of directors or the vote of a majority of the
outstanding voting securities of the Fund; and (ii) by a vote
of the majority of the directors who are not interested
persons of the Fund (as defined in the 1940 Act) cast in
person at a meeting called for the purpose of voting upon such
approval.
(b) Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in
writing specifying the date of such termination,
which shall not be less than 60 days after the
date of receipt of such notice. In the event such
notice is given by the Fund, it shall be
accompanied by a resolution of the board of
directors, certified by the Secretary, electing to
terminate this Agreement and designating a
successor transfer agent.
22. Amendment. This Agreement may not be amended or
modified in any manner except by a written agreement
executed by both parties with the formality of this
Agreement, and (i) authorized or approved by the
resolution of the board of directors, including a
majority of the directors of the Fund who are not
interested persons of the Fund as defined in the 1940
Act, or (ii) authorized and approved by such other
procedures as may be permitted or required by the 1940
Act.
23. Subcontracting. The Fund agrees that the Transfer Agent
may, in its discretion, subcontract for certain of the
services to be provided hereunder; provided, however,
that the transfer agent will be liable to the Fund for
any loss arising out of or in connection with the
actions of any subcontractor, if the subcontractor
fails to act in good faith and with due diligence or is
negligent or guilty of any willful misconduct.
24. Miscellaneous.
(a) Any notice and other instrument in writing,
authorized or required by this Agreement to be
<PAGE>
given to the Fund or the Transfer Agent, shall be sufficiently
given if addressed to that party and mailed or delivered to it
at its office set forth below or at such other place as it may
from time to time designate in writing.
To the Fund:
INVESCO Multiple Asset Funds, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Ronald L.Grooms, Senior Vice President
(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
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated February 28, 1997,
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 it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 28th day of February, 1997.
INVESCO 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,
ATTEST: Senior Vice President
/s/Glen A. Payne
- -----------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 28th day of February, 1997, in Denver, Colorado,
by and between INVESCO 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: (1) INVESCO
Multi-Asset Allocation Fund, and (2) INVESCO Balanced Fund (the "Portfolios");
and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting
and recordkeeping services to certain investment companies, including the Fund;
and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon receipt of written
approval of the Fund arrange for other companies, including affiliates of
INVESCO, to provide to the Portfolios: A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Portfolios. Such services shall include, but shall not be limited to,
preparation and maintenance of the following required books, records and other
documents: (1) journals containing daily itemized records of all purchases and
sales, and receipts and deliveries of securities and all receipts and
disbursements of cash and all other debits and credits, in the form required by
Rule 31a-1(b)(1) under the Act; (2) general and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, in the form
required by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities record
or ledger reflecting separately for each portfolio security as of trade date all
"long" and "short" positions carried by the Portfolios for the account of the
Portfolios, if any, and showing the location of all securities long and the
off-setting position to all securities short, in the form required by Rule
31a-1(b)(3) under the Act; (4) a record of all portfolio purchases or sales, in
the form required by Rule 31a-1(b)(6) under the Act; (5) a record of all puts,
calls, spreads, straddles and all other options, if any, in which the Portfolios
have any direct or indirect interest or which the Portfolios have granted or
guaranteed, in the form required by Rule 31a-1(b)(7) under the Act; (6) a record
<PAGE>
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 a
wholly-owned subsidiary of INVESCO, as are reasonably necessary for the
operation of Portfolio shareholder accounts maintained by certain retirement
plans and employee benefit plans for the benefit of participants in such plans.
Such services and functions shall include, but shall not be limited to: (1)
establishing new retirement plan participant accounts; (2) receipt and posting
of weekly, bi-weekly and monthly retirement plan contributions; (3) allocation
of contributions to each participant's individual Portfolio account; (4)
maintenance of separate account balances for each source of retirement plan
money (i.e., Company, Employee, Voluntary, Rollover) invested in the Portfolios;
(5) purchase, sale, exchange or transfer of monies in the retirement plan as
directed by the relevant party; (6) distribution of monies for participant
loans, hardships, terminations, death or disability payments; (7) distribution
of periodic payments for retired participants; (8) posting of distributions of
interest, dividends and long-term capital gains to participants by the
Portfolios; (9) production of monthly, quarterly and/or annual statements of all
Portfolio activity for the relevant parties; (10) processing of participant
maintenance information for investment election changes, address changes,
beneficiary changes and Qualified Domestic Relations Orders; (11) responding to
telephone and written inquiries concerning Portfolio investments, retirement
plan provisions and compliance issues; (12) performing discrimination testing
and counseling employers on cure options on failed tests; (13) preparation of
1099R and W2P participant IRS tax forms; (14) preparation of, or assisting in
the preparation of, 5500 Series tax forms, Summary Plan Descriptions and
Determination Letters; and (15) reviewing legislative and IRS changes to keep
the retirement plan in compliance with applicable law.
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, such staff and personnel shall be deemed to include officers of
INVESCO and persons employed or otherwise retained by INVESCO to provide or
assist in providing the Services to the Portfolios.
3. INVESCO shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer equipment,
communication lines and supplies) and such clerical help and other services as
shall be necessary to provide the Services to the Portfolios. In addition,
INVESCO may arrange on behalf of the Fund to obtain pricing information
regarding the Portfolios' investment securities from such company or companies
as are approved by a majority of the Fund's board of directors; and, if
necessary, the Fund shall be financially responsible to such company or
companies for the reasonable cost of providing such pricing information.
<PAGE>
4. The Fund will, from time to time, furnish or otherwise make available
to INVESCO such information relating to the business and affairs of the
Portfolios as INVESCO may reasonably require in order to discharge its duties
and obligations hereunder.
5. For the services rendered, facilities furnished, and expenses assumed
by INVESCO under this Agreement, the Fund shall pay to INVESCO a $10,000 per
year per Portfolio base fee, plus an additional fee, computed on a daily basis
and paid on a monthly basis. For purposes of each daily calculation of this
additional fee, the most recently determined net asset value of each Portfolio,
as determined by a valuation made in accordance with the Fund's procedure for
calculating each Portfolio's net asset value as described in the Portfolios'
Prospectus and/or Statement of Additional Information, shall be used. The
additional fee to INVESCO under this Agreement shall be computed at the
annual rate of 0.015% of each Portfolio's daily net assets as so determined.
During any period when the determination of a Portfolio's net asset value is
suspended by the directors of the Fund, the net asset value of a share of that
Portfolio as of the last business day prior to such suspension shall, for the
purpose of this Paragraph 5, be deemed to be the net asset value at the close of
each succeeding business day until it is again determined.
6. INVESCO will permit representatives of the Fund including the Fund's
independent auditors to have reasonable access to the personnel and records of
INVESCO in order to enable such representatives to monitor the quality of
services being provided and the level of fees due INVESCO pursuant to this
Agreement. In addition, INVESCO shall promptly deliver to the board of directors
of the Fund such information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination regarding
continuation of this Agreement and the payments contemplated to be made
hereunder.
7. This Agreement shall remain in effect until no later than February 28,
1998 and from year to year thereafter provided such continuance is approved at
least annually by the vote of a majority of the directors of the Fund who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; and further provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days written notice to INVESCO; (b) the Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Act and the Rules thereunder) unless the Board of Directors of the Fund approves
such assignment; and (c) INVESCO may terminate this Agreement without payment of
penalty on sixty days written notice to the Fund. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed postage
pre-paid, to the other party at the principal office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the extent the
applicable law of the State of Colorado or any of the provisions herein conflict
with the applicable provisions of the Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO MULTIPLE ASSET FUNDS, INC.
By: /s/ Dan J. Hesser
------------------------------
ATTEST: Dan J. Hesser
President
/s/ Glen A. Payne
- -----------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L.Grooms
-----------------------------
ATTEST: Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- ----------------------
Glen A. Payne
Secretary
MOYE, GILES, O'KEEFE, VERMEIRE & GORRELL
A LAW PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
29TH FLOOR
1225 SEVENTEENTH STREET
DENVER, COLORADO 80202-5529
TELEPHONE (303) 292-2900
TELECOPIER (303) 292-4510
EDWARD F. O'KEEFE, P.C.
September 30, 1993
INVESCO Multiple Asset Funds, Inc.
P.O. Box 2040
Denver, Colorado 80201
Gentlemen:
This is in response to your request for our opinion as to the legality of
the registration of an indefinite number of shares of capital stock ($0.01 par
value) of INVESCO Multiple Asset Funds, Inc., being registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 and
the Securities Act of 1933, as amended (Form N-1A). This share registration is
being requested pursuant to the provisions of Rule 24f-2 under Section 24(f) of
the Investment Company Act of 1940.
We have examined the articles of incorporation of INVESCO Multiple Asset
Funds, Inc., as filed for record with the State Department of Assessments and
Taxation of the State of Maryland, on August 19, 1993; the bylaws; the minute
book setting forth, among other things, the actions taken by the board of
directors authorizing the issue and sale of the corporation's capital stock and
related acts and procedures; the registration statement including all exhibits
thereto; and have made such other examination as deemed necessary in the
premises.
Based upon our examination, we are of the opinion that INVESCO Multiple
Asset Funds, Inc. is a corporation duly organized and existing under and by the
virtue of the laws of the State of Maryland, with full power to issue its shares
of capital stock. Said shares, up to the maximum amount hereinafter indicated,
when issued and sold in the manner and on the terms set forth in the
registration statement, will be legally and validly issued, fully paid and
non-assessable shares of the corporation of the par value of $0.01 per share.
The maximum number of shares which has been authorized by the Corporation, and
thus the maximum number which may legally and validly be issued, is five hundred
million shares of such capital stock.
<PAGE>
MOYE, GILES, O'KEEFE, VERMEIRE & GORRELL
INVESCO Multiple Asset Funds, Inc.
September 30, 1993
Page 2
We hereby consent to the use of this opinion in the registration statement
and further consent to the reference to our name therein.
Very truly yours,
MOYE, GILES, O'KEEFE,
VERMEIRE & GORRELL
By: Edward F. O'Keefe, P.C.
By: /s/ Edward F. O'Keefe
----------------------------
Edward F. O'Keefe,
President
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 5 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated September 2, 1997, relating to the financial
statements and financial highlights of INVESCO Balanced Fund and INVESCO Multi-
Asset Allocation Fund appearing in the July 31, 1997 Annual report to
Shareholders of 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 Prospectus and under
headings "Independent Accountants" and "Financial Statements" in the Statement
of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------------------
Denver, Colorado
November 21, 1997.
AMENDMENT OF PLAN AND AGREEMENT OF DISTRIBUTION
PURSUANT TO RULE 12B-1
This Amendment of Plan and Agreement of Distribution Pursuant to Rule 1
2b-1 (this "Amendment") is entered into as of the 19th day of July, 1995, by and
between INVESCO Multiple Asset Funds, Inc., a Maryland corporation (the
"Company"), and INVESCO Funds Group, Inc., a Delaware corporation ("INVESCO").
WHEREAS, the Company and INVESCO have entered into a Plan and Agreement of
Distribution Pursuant to Rule 12b-1, dated as of October 20, 1993 (the "Plan and
Agreement"); and
WHEREAS, the Plan and Agreement may be amended provided that all material
amendments to the Plan and Agreement are approved by the vote of the board of
directors of the Company, including a majority of the Disinterested Directors,
cast in person at a meeting called for the purpose of voting on such amendment
and, provided further, that the Plan may not be amended to increase the amount
to be spent by the Company thereunder without approval of a majority of the
outstanding voting securities of the Company; and
WHEREAS, the Company has determined to amend the Plan, and the Company and
INVESCO have mutually determined to amend the Agreement, in the manner set forth
in this Amendment, and such amendments were approved by the vote of the board of
directors of the Company, including a majority of the Disinterested Directors,
cast in person at a meeting held on July 19, 1995, called for the purpose of
voting on such amendments; and
WHEREAS, the Company has determined that the amendments to the Plan
contained in this Amendment will not increase the amount to be spent by any Fund
under the Plan, and therefore do not require the approval of a majority of the
outstanding voting securities of any Fund;
NOW, THEREFORE, the parties hereby agree as follows:
1. All capitalized terms used in this amendment, unless otherwise defined,
shall have the meanings assigned to them in the Plan and Agreement.
2. The Company hereby adopts the amendments to the Plan set forth below,
and the Company and INVESCO hereby agree to the amendments to the Agreement set
forth below.
3. Section 2 of the Plan and Agreement is hereby amended to read as
follows:
<PAGE>
Subject to the supervision of the board of directors, the Company hereby
retains INVESCO to promote the distribution of the Companys shares by
providing services and engaging in activities beyond those specifically
required by the Distribution Agreement between the Company and
INVESCO and to provide related services. The activities and
services to be provided by INVESCO hereunder shall include one or more
of the following: (a) the payment of compensation (including trail
commissions and incentive compensation) to securities dealers,
financial institutions and other organizations, which may include
INVESCO-affiliated companies, that render distribution and
administrative services in connection with the distribution of the
Company's shares; (b) the printing and distribution of reports and
prospectuses for the use of potential investors in the Company; (c) the
preparing and distributing of sales literature; (d) the providing of
advertising and engaging in other promotional activities, including direct
mail solicitation, and television, radio, newspaper and other media
advertisements; and (e) the providing of such other services and activities
as may from time to time be agreed upon by the Company. Such reports and
prospectuses, sales literature, advertising and promotional activities and
other services and activities may be prepared and/or conducted either by
INVESCO' own staff, the staff of INVESCO-affiliated companies, or third
parties.
4. Section 4 of the Plan and Agreement is hereby amended to read as
follows:
Each Fund is hereby authorized to expense, out of its assets, on a monthly
basis, and shall reimburse INVESCO to such extent, for INVESCO's actual
direct expenditures incurred over a rolling twelve-month period (or the
rolling twenty-four month period specified below) in engaging in the
activities and providing the services specified in paragraph (2) above, an
amount computed at an annual rate of .25 of 1% of the average daily net
assets of the Fund during the month. INVESCO shall not be entitled
hereunder to reimbursement for overhead expenses (overhead expenses defined
as customary overhead not including the costs of INVESCO's personnel whose
primary responsibilities involve marketing of the INVESCO Funds). Payments
by a Fund hereunder, for any month, may be made only with respect to: (a)
expenditures incurred by INVESCO during the rolling twelve-month period in
which that month falls, or (b) to the extent permitted by applicable law,
for any month during the first twenty-four months following a Fund's
commencement of operations, expenditures incurred by INVESCO during the
rolling twenty-four month period in which that months falls, and any
expenditures incurred in excess of the limitations described above are not
reimbursable. No Fund shall be authorized to expend, for any month, a
greater amount out of its assets to reimburse INVESCO for expenditures
incurred during the rolling twenty-four month period referred to above than
<PAGE>
it would otherwise be authorized to expend out of its assets to reimburse
INVESCO for expenditures incurred during the rolling twelve month period
referred to above. No payments will be made by the Company hereunder after
the date of termination of the Plan and Agreement.
5. Except to the extent modified by this Amendment, the Plan and Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment on 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
AMENDED PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of 1st day of January, 1997, by and between
INVESCO Multiple Asset Funds, Inc., a Maryland corporation (hereinafter called
the "Company"), and INVESCO FUNDS GROUP, Inc., a Delaware corporation
("INVESCO").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of the shares of
each of its two classes or series of common stock, each of which represents an
interest in a separate portfolio of investments, together with any additional
such classes or series that may hereafter be offered to the public
(individually, a "Fund" and collectively, the "Funds"), in accordance with this
Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Act (the
"Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Disinterested Directors") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and the
Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b-1 under the Act and
authorizes payments as described herein. The Agreement is defined
as those provisions of this document by which the Company retains
INVESCO to provide distribution services beyond those required by
the General Distribution Agreement between the parties, as are
described herein. The Company may retain the Plan notwithstanding
termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. Each Fund is hereby
authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's shares.
2. Subject to the supervision of the board of directors, the Company
hereby retains INVESCO to promote the distribution of shares of each
of the Funds by providing services and engaging in activities beyond
<PAGE>
those specifically required by the Distribution Agreement between
the Company and INVESCO and to provide related services. The
activities and services to be provided by INVESCO hereunder shall
include one or more of the following: (a) the payment of
compensation (including trail commissions and incentive
compensation) to securities dealers, financial institutions and
other organizations, which may include INVESCO-affiliated
companies, that render distribution and administrative services in
connection with the distribution of the shares of each of the
Funds; (b) the printing and distribution of reports and
prospectuses for the use of potential investors in each Fund;
(c) the preparing and distributing of sales literature; (d) the
providing of advertising and engaging in other promotional
activities, including direct mail solicitation, and television,
radio, newspaper and other media advertisements; and (e) the
providing of such other services and activities as may from time to
time be agreed upon by the Company. Such reports and
prospectuses, sales literature, advertising and promotional
activities and other services and activities may be prepared and/or
conducted either by INVESCO's own staff, the staff of INVESCO-
affiliated companies, or third parties.
3. INVESCO hereby undertakes to use its best efforts to promote sales
of shares of each of the Funds to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and
as it from time to time believes will best further sales of such
shares.
4. Each Fund is hereby authorized to expend, out of its assets, on a
monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below) in
the activities and provide the services specified in paragraph (2)
above, an amount computed at an annual rate of .25 of 1% of the
average daily net assets of the Fund during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by a Fund hereunder,
for any month, may be used to compensate INVESCO for:
(a) activities engaged in and services provided by INVESCO
during the rolling twelve-month period in which that month falls,
or (b) to the extent permitted by applicable law, for any month
during the first twenty-four months following a Fund's
commencement of operations, activities engaged in and services
provided by INVESCO during the rolling twenty-four month period in
which that month falls, and any obligations incurred by INVESCO in
excess of the limitation described above shall not be paid for out
of Fund assets. No Fund shall be authorized to expend, for any
month, a greater percentage of its assets to pay INVESCO for
activities engaged in and services provided by INVESCO during
the rolling twenty-four month period referred to above than it
would otherwise be authorized to expend out of its assets
<PAGE>
to pay INVESCO for activitiesengaged in and services provided
by INVESCO during the rolling twelve-month period referred
to above, and no Fund shall be authorized to expend, for any month,
a greater percentage of its assets to pay INVESCO for activities
engaged in and services provided by INVESCO pursuant to the Plan
and Agreement than it would otherwise have been authorized to
expend out of its assets to reimburse INVESCO for expenditures
incurred by INVESCO pursuant to the Plan and Agreement as it
existed prior to February 5, 1997. No payments will be made by the
Company hereunder after the date of termination of the Plan and
Agreement.
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in
the sale of shares of a Fund, pursuant to this Plan and Agreement
or otherwise, may be deemed to constitute the indirect use of Fund
assets, such indirect use of Fund assets is hereby authorized in
addition to, and not in lieu of, any other payments authorized under
this Plan and Agreement.
6. The Treasurer of INVESCO shall provide to the board of directors of
the Company, at least quarterly, a written report of all moneys
spent by INVESCO on the activities and services specified in
paragraph (2) above pursuant to the Plan and Agreement. Each such
report shall itemize the activities engaged in and services
provided by INVESCO to a Fund as authorized by the penultimate
sentence of paragraph (4) above. Upon request, but no less
frequently than annually, INVESCO shall provide to the board of
directors of the Company such information as may reasonably be
required for it to review the continuing appropriateness of the
Plan and Agreement.
7. This Plan and Agreement shall each become effective immediately
upon approval by a vote of a majority of the outstanding voting
securities of the Company as defined in the Act, and shall continue
in effect until February 5, 1998 unless terminated as provided
below. Thereafter, the Plan and Agreement shall continue in effect
from year to year, provided that the continuance of each is
approved at least annually by a vote of the board of directors
of the Company, including a majority of the Disinterested
Directors, cast in person at a meeting called for the purpose of
voting on such continuance. The Plan may be terminated at any time
as to any Fund, without penalty, by the vote of a majority of the
Disinterested Directors or by the vote of a majority of the
outstanding voting securities of that Fund. INVESCO, or the
Company, by vote of a majority of the Disinterested Directors
or of the holders of a majority of the outstanding voting
securities of the Fund, may terminate the Agreement under this Plan
as to such Fund, without penalty, upon 30 days' written notice to
the other party. In the event that neither INVESCO nor any
affiliate of INVESCO serves the Company as investment adviser,
the agreement with INVESCO pursuant to this Plan shall terminate at
<PAGE>
such time. The board of directors may determine to approve a
continuance of the Plan, but not a continuance of the Agreement,
hereunder.
8. So long as the Plan remains in effect, the selection and nomination
of persons to serve as directors of the Company who are not
"interested persons" of the Company shall be committed to the
discretion of the directors then in office who are not "interested
persons" of the Company. However, nothing contained herein
shall prevent the participation of other persons in the
selection and nomination process, provided that a final
decision on any such selection or nomination is within the
discretion of, and approved by, a majority of the directors of the
Company then in office who are not "interested persons" of the
Company.
9. This Plan may not be amended to increase the amount to be spent
by a Fund hereunder without approval of a majority of the
outstanding voting securities of that Fund. All material amendments
to the Plan and to the Agreement must be approved by the vote of
the board of directors of the Company, including a majority of the
Disinterested Directors, cast in person at a meeting called for the
purpose of voting on such amendment.
10. To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall
remain in effect as such, so as to authorize the use by each Fund
of its assets in the amounts and for the purposes set forth
herein, notwithstanding the occurrence of an "assignment," as
defined by the Act and the rules thereunder. To the extent it
constitutes an agreement with INVESCO pursuant to a plan, it
shall terminate automatically in the event of such "assignment."
Upon a termination of the agreement with INVESCO, the Funds may
continue to make payments pursuant to the Plan only upon the
approval of a new agreement under this Plan and Agreement,
which may or may not be with INVESCO, or the adoption of other
arrangements regarding the use of the amounts authorized to
be paid by the Funds hereunder, by the Company's board of
directors in accordance with the procedures set forth in paragraph
7 above.
11. The Company shall preserve copies of this Plan and Agreement and
all reports made pursuant to paragraph 6 hereof, together with
minutes of all board of directors meetings at which the adoption,
amendment or continuance of the Plan were considered (describing
the factors considered and the basis for decision), for a period of
not less than six years from the date of this Plan and Agreement,
or any such reports or minutes, as the case may be, the first two
years in an easily accessible place.
12. This Plan and Agreement shall be construed in accordance with the
laws of the State of Colorado and applicable provisions of the Act.
To the extent the applicable laws of the State of Colorado, or any
provisions herein, conflict with the applicable provisions of the
Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the 5th day of February, 1997.
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
AMENDED PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of 30th day of September, 1997, by and between
INVESCO MULTIPLE ASSET FUNDS, INC., a Maryland corporation (hereinafter called
the "Company"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation
("INVESCO").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of its shares in
accordance with this Plan and Agreement of Distribution pursuant to Rule 12b-1
under the Act (the "Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as
defined in the Act, and who have no direct or indirect financial interest in the
operation of this Plan and Agreement (the "Disinterested Directors") cast in
person at a meeting called for the purpose of voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b- 1 under the Act and
authorizes payments as described herein. The Agreement is defined as
those provisions of this document by which the Company retains
INVESCO to provide distribution services beyond those required by
the General Distribution Agreement between the parties, as are
described herein. The Company may retain the Plan notwithstanding
termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. The Company is hereby
authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's shares.
2. Subject to the supervision of the board of directors,
the Company hereby retains INVESCO to promote the
<PAGE>
distribution of shares of the Company by providing services and
engaging in activities beyond those specifically required by the
Distribution Agreement between the Company and INVESCO and to
provide related services. The activities and services to be provided
by INVESCO hereunder shall include one or more of the following: (a)
the payment of compensation (including trail commissions and
incentive compensation) to securities dealers, financial
institutions and other organizations, which may include
INVESCO-affiliated companies, that render distribution and
administrative services in connection with the distribution of the
Company's shares; (b) the printing and distribution of reports and
prospectuses for the use of potential investors in the Company; (c)
the preparing and distributing of sales literature; (d) the
providing of advertising and engaging in other promotional
activities, including direct mail solicitation, and television,
radio, newspaper and other media advertisements; and (e) the
providing of such other services and activities as may from time to
time be agreed upon by the Company. Such reports and prospectuses,
sales literature, advertising and promotional activities and other
services and activities may be prepared and/or conducted either by
INVESCO's own staff, the staff of INVESCO-affiliated companies, or
third parties.
3. INVESCO hereby undertakes to use its best efforts to promote
sales of shares of the Company to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and
as it from time to time believes will best further sales of such
shares.
4. The Company is hereby authorized to expend, out of its assets, on
a monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below) in
the activities and provide the services specified in paragraph (2)
above, an amount computed at an annual rate of .25 of 1% of the
average daily net assets of the Company during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by the Company hereunder,
for any month, may be used to compensate INVESCO for: (a) activities
engaged in and services provided by INVESCO during the rolling
twelve-month period in which that month falls, or (b) to the extent
permitted by applicable law, for any month during the first
<PAGE>
twenty-four months following the Company's commencement of
operations, activities engaged in and services provided by INVESCO
during the rolling twenty-four month period in which that month
falls, and any obligations incurred by INVESCO in excess of the
limitation described above shall not be paid for out of Fund assets.
The Company shall not be authorized to expend, for any month, a
greater percentage of its assets to pay INVESCO for activities
engaged in and services provided by INVESCO during the rolling
twenty-four month period referred to above than it would otherwise
be authorized to expend out of its assets to pay INVESCO
for activities engaged in and services provided by INVESCO
during the rolling twelve-month period referred to
and the Company shall not be authorized to above, expend,
for any month, a greater percentage of its assets to pay
INVESCO for activities engaged in and services provided by INVESCO
pursuant to the Plan and Agreement than it would otherwise have been
authorized to expend out of its assets to reimburse INVESCO for
expenditures incurred by INVESCO pursuant to the Plan and Agreement
as it existed prior to February 5, 1997. No payments will be made by
the Company hereunder after the date of termination of the Plan and
Agreement.
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in
the sale of shares of the Company, pursuant to this Plan and
Agreement or otherwise, may be deemed to constitute the indirect use
of Company assets, such indirect use of Company assets is hereby
authorized in addition to, and not in lieu of, any other payments
authorized under this Plan and Agreement.
6. The Treasurer of INVESCO shall provide to the board of directors
of the Company, at least quarterly, a written report of all moneys
spent by INVESCO on the activities and services specified in
paragraph (2) above pursuant to the Plan and Agreement. Each such
report shall itemize the activities engaged in and services provided
by INVESCO to a Fund as authorized by the penultimate sentence of
paragraph (4) above. Upon request, but no less frequently than
annually, INVESCO shall provide to the board of directors of the
Company such information as may reasonably be required for it to
review the continuing appropriateness of the Plan and Agreement.
7. This Plan and Agreement shall each become effective
immediately since the predecessor Plan and Agreement
had already been approved by a vote of a majority of
<PAGE>
the outstanding voting securities of the Company as defined in the
Act, and shall continue in effect until September 30, 1998 unless
terminated as provided below. Thereafter, the Plan and
Agreement shall continue in effect from year to year,
provided that the continuance of each is approved at
least annually by a vote of the board of directors of the Company,
including a majority of the Disinterested Directors, cast in person
at a meeting called for the purpose of voting on such continuance.
The Plan may be terminated at any time, without penalty, by the vote
of a majority of the Disinterested Directors or by the vote of a
majority of the outstanding voting securities of the Company.
INVESCO, or the Company, by vote of a majority of the Disinterested
Directors or of the holders of a majority of the outstanding voting
securities of the Company, may terminate the Agreement under this
Plan, without penalty, upon 30 days' written notice to the other
party. In the event that neither INVESCO nor any affiliate of
INVESCO serves the Company as investment adviser, the agreement
with INVESCO pursuant to this Plan shall terminate at such time.
The board of directors may determine to approve a continuance
of the Plan, but not a continuance of the Agreement, hereunder.
8. So long as the Plan remains in effect, the selection and
nomination of persons to serve as directors of the Company who are
not "interested persons" of the Company shall be committed to the
discretion of the directors then in office who are not "interested
persons" of the Company. However, nothing contained herein shall
prevent the participation of other persons in the selection and
nomination process, provided that a final decision on any such
selection or nomination is within the discretion of, and approved
by, a majority of the directors of the Company then in office who
are not "interested persons" of the Company.
9. This Plan may not be amended to increase the amount to be spent
by the Company hereunder without approval of a majority of the
outstanding voting securities of the Company. All material
amendments to the Plan and to the Agreement must be approved by the
vote of the board of directors of the Company, including a majority
of the Disinterested Directors, cast in person at a meeting called
for the purpose of voting on such amendment.
10. To the extent that this Plan and Agreement constitutes
a Plan of Distribution adopted pursuant to Rule 12b-1
under the Act it shall remain in effect as such, so as
<PAGE>
to authorize the use by the Company of its assets in the amounts and
for the purposes set forth herein, notwithstanding the occurrence of
an "assignment," as defined by the Act and the rules thereunder. To
the extent it constitutes an agreement with INVESCO pursuant to a
plan, it shall terminate automatically in the event of such
"assignment." Upon a termination of the agreement with INVESCO, the
Company may continue to make payments pursuant to the Plan only upon
the approval of a new agreement under this Plan and Agreement, which
may or may not be with INVESCO, or the adoption of other
arrangements regarding the use of the amounts authorized to be paid
by the Funds hereunder, by the Company's board of directors in
accordance with the procedures set forth in paragraph 7 above.
11. The Company shall preserve copies of this Plan and Agreement and
all reports made pursuant to paragraph 6 hereof, together with
minutes of all board of directors meetings at which the adoption,
amendment or continuance of the Plan were considered (describing the
factors considered and the basis for decision), for a period of not
less than six years from the date of this Plan and Agreement, or any
such reports or minutes, as the case may be, the first two years in
an easily accessible place.
12. This Plan and Agreement shall be construed in accordance with
the laws of the State of Colorado and applicable provisions of the
Act. To the extent the applicable laws of the State of Colorado, or
any provisions herein, conflict with the applicable provisions of
the Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the 30th day of September, 1997.
INVESCO MULTIPLE ASSET FUNDS, INC.
By: /s/ Dan J. Hesser
----------------------------------
Dan J. Hesser, President
ATTEST: /s/ Glen A. Payne
---------------------
Glen A. Payne, Secretary
INVESCO DISTRIBUTORS, INC.
By: /s/ Ronald L. Grooms
---------------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: /s/ Glen A. Payne
----------------------
Glen A. Payne, Secretary
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
INVESCO Balanced Fund
TOTAL RETURN
Formula prescribed by Item 22 of Form N-1A:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1 + T) exponent n = ERV
for the period December 3, 1993 to April 30, 1994:
1000(1 + 1.92%) = 1,019
annualized percentage:
1000(1 + 4.67%)5/12 = 1,019
The formula given in Item 22 is written to solve for Ending Redeemable Value.
However, the quanity to be reported is T (Average Annual Total Return).
Because P, n and ERV are known values, we have solved for T as follows:
T = nth root of (ERV/P) - 1
for the period December 3, 1993 to April 30, 1994:
.0192 = (1,019/1000) - 1
annualized percentage:
.0467 = 5/12th root of (1,019/1000) - 1
and have reported those amounts as the total return.
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
INVESCO Multi-Asset Allocation Fund
TOTAL RETURN
Formula prescribed by Item 22 of Form N-1A:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1 + T) exponent n = ERV
for the period December 3, 1993 to April 30, 1994:
1000(1 - 3.20%) = 968
annualized percentage:
1000(1 - 7.51%)5/12 = 968
The formula given in Item 22 is written to solve for Ending Redeemable Value.
However, the quanity to be reported is T (Average Annual Total Return).
Because P, n and ERV are known values, we have solved for T as follows:
T = nth root of (ERV/P) - 1
for the period December 3, 1993 to April 30, 1994:
-.032 = (968/1000) - 1
annualized percentage:
-.0751 = 5/12th root of (968/1000) - 1
and have reported those amounts as the total return.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000913126
<NAME> INVESCO MULTIPLE ASSET FUNDS, INC.
<SERIES>
<NUMBER> 2
<NAME> INVESCO BALANCED FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 145370809
<INVESTMENTS-AT-VALUE> 165846717
<RECEIVABLES> 2301547
<ASSETS-OTHER> 36237
<OTHER-ITEMS-ASSETS> 1572754
<TOTAL-ASSETS> 169757255
<PAYABLE-FOR-SECURITIES> 7488920
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 347614
<TOTAL-LIABILITIES> 7836534
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 129832395
<SHARES-COMMON-STOCK> 10211984
<SHARES-COMMON-PRIOR> 8610364
<ACCUMULATED-NII-CURRENT> 148050
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11464650
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20475626
<NET-ASSETS> 161920721
<DIVIDEND-INCOME> 1385725
<INTEREST-INCOME> 3571802
<OTHER-INCOME> (24582)
<EXPENSES-NET> 1664043
<NET-INVESTMENT-INCOME> 3268902
<REALIZED-GAINS-CURRENT> 12406672
<APPREC-INCREASE-CURRENT> 19416347
<NET-CHANGE-FROM-OPS> 31823019
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3256031
<DISTRIBUTIONS-OF-GAINS> 7920456
<DISTRIBUTIONS-OTHER> 00958657
<NUMBER-OF-SHARES-SOLD> 10958657
<NUMBER-OF-SHARES-REDEEMED> 10136122
<SHARES-REINVESTED> 779085
<NET-CHANGE-IN-ASSETS> 46854870
<ACCUMULATED-NII-PRIOR> 10019
<ACCUMULATED-GAINS-PRIOR> 7105541
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 797409
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1786786
<AVERAGE-NET-ASSETS> 133377470
<PER-SHARE-NAV-BEGIN> 13.36
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 3.37
<PER-SHARE-DIVIDEND> 0.34
<PER-SHARE-DISTRIBUTIONS> 0.87
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.86
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000913126
<NAME> INVESCO MULTIPLE ASSET FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> INVESCO MULTI-ASSET FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 14815796
<INVESTMENTS-AT-VALUE> 17212913
<RECEIVABLES> 109894
<ASSETS-OTHER> 10942
<OTHER-ITEMS-ASSETS> 42766
<TOTAL-ASSETS> 17376515
<PAYABLE-FOR-SECURITIES> 221514
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37659
<TOTAL-LIABILITIES> 259173
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13360302
<SHARES-COMMON-STOCK> 1245329
<SHARES-COMMON-PRIOR> 828624
<ACCUMULATED-NII-CURRENT> 10855
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1249068
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2497117
<NET-ASSETS> 17117342
<DIVIDEND-INCOME> 228200
<INTEREST-INCOME> 271665
<OTHER-INCOME> (3697)
<EXPENSES-NET> 201949
<NET-INVESTMENT-INCOME> 294219
<REALIZED-GAINS-CURRENT> 1555676
<APPREC-INCREASE-CURRENT> 1745166
<NET-CHANGE-FROM-OPS> 3300842
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 292965
<DISTRIBUTIONS-OF-GAINS> 828800
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3446561
<NUMBER-OF-SHARES-REDEEMED> 3121290
<SHARES-REINVESTED> 91434
<NET-CHANGE-IN-ASSETS> 7543762
<ACCUMULATED-NII-PRIOR> 1204
<ACCUMULATED-GAINS-PRIOR> 531231
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100445
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 264129
<AVERAGE-NET-ASSETS> 13707717
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 3.18
<PER-SHARE-DIVIDEND> 0.25
<PER-SHARE-DISTRIBUTIONS> 0.98
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.75
<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 Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, 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 25th day of August, 1997.
/s/ Wendy L. Gramm
------------------------------------------
Wendy L. Gramm
STATE OF District of )
Columbia )
COUNTY OF )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Wendy L.
Gramm, as a director or trustee of each of the above-described entities, this
25th day of August, 1997.
/s/ Margaret Foster
------------------------------------------
Notary Public
My Commission Expires: Feb. 14, 2000
-------------
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 20th day of November, 1997.
/s/ Larry Soll
------------------------------------------
Larry Soll
STATE OF COLORADO )
)
COUNTY OF BOULDER )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Larry Soll, as a
director or trustee of each of the above-described entities, this 20th day of
November, 1997.
/s/ Rebecca R. Saunders
------------------------------------------
Notary Public
My Commission Expires: 02/26/2001
