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SCHEDULE 14a INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
INVESCO Combination Stock & Bond Funds, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE> 2
INVESCO LOGO
INVESCO BALANCED FUND
(A SERIES OF INVESCO COMBINATION
STOCK & BOND FUNDS, INC.)
MARCH 23, 1999
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Dear Shareholder:
The attached proxy materials seek your approval to make certain changes to
the fundamental investment restrictions of INVESCO Balanced Fund ("Balanced
Fund"), a series of INVESCO Combination Stock & Bond Funds, Inc. (formerly,
INVESCO Flexible Funds, Inc., formerly INVESCO Multiple Asset Funds, Inc.)
("Combination Stock & Bond Funds"), to elect directors, and to ratify the
appointment of PricewaterhouseCoopers LLP as independent accountants of Balanced
Fund.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL
PROPOSALS. The changes to the fundamental investment restrictions of Balanced
Fund have been approved by the board of directors in order to simplify and
modernize Balanced Fund's fundamental investment restrictions and make them more
uniform with those of the other INVESCO Funds. The attached proxy materials
provide more information about the proposed changes in fundamental investment
restrictions and the other matters you are being asked to vote upon.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit Combination Stock & Bond Funds to avoid costly
follow-up mail and telephone solicitation. After reviewing the attached
materials, please complete, date and sign your proxy card and mail it in the
enclosed return envelope promptly. As an alternative to using the paper proxy
card to vote, you may vote by telephone, by facsimile, through the Internet, or
in person.
Very truly yours,
/s/ Mark H. Williamson
Mark H. Williamson
President
INVESCO Combination Stock & Bond
Funds, Inc.
9952
<PAGE> 3
INVESCO BALANCED FUND
(A SERIES OF INVESCO COMBINATION
STOCK & BOND FUNDS, INC.)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
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To The Shareholders:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of INVESCO
Balanced Fund ("Balanced Fund"), a series of INVESCO Combination Stock & Bond
Funds, Inc. (formerly, INVESCO Flexible Funds, Inc., formerly, INVESCO Multiple
Asset Funds, Inc.) ("Combination Stock & Bond Funds"), will be held on May 20,
1999, at 10:00 a.m., Mountain Time, at the office of INVESCO Funds Group, Inc.,
7800 East Union Avenue, Denver, Colorado, for the following purposes:
(1) To approve certain changes to the fundamental investment
restrictions of Balanced Fund;
(2) To elect directors of Combination Stock & Bond Funds;
(3) To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of Balanced Fund; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
You are entitled to vote at the meeting and any adjournment thereof if you
owned shares of Balanced Fund at the close of business on March 12, 1999. IF YOU
ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By order of the Board of Directors,
/s/ Glen A. Payne
Glen A. Payne
Secretary
March 23, 1999
Denver, Colorado
<PAGE> 4
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, sign
and date the card, and return it in the envelope provided. IF YOU SIGN, DATE AND
RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED
"FOR" THE PROPOSALS DESCRIBED ABOVE. In order to avoid the additional expense of
further solicitation, we ask your cooperation in mailing your proxy card
promptly. As an alternative to using the paper proxy card to vote, you may vote
by telephone, through the Internet, by facsimile machine or in person. To vote
by telephone, please call 1-800-690-6903. Shares that are registered in your
name, as well as shares held in "street name" through a broker, may be voted via
the Internet or by telephone. To vote in this manner, you will need the 12-digit
"control" number that appears on your proxy card. To vote via the Internet,
please access http://www.proxyvote.com on the World Wide Web. In addition,
shares that are registered in your name may be voted by faxing your completed
proxy card to 1-800-733-1885. If we do not receive your completed proxy card
after several weeks, you may be contacted by our proxy solicitor, Shareholder
Communications Corporation. Our proxy solicitor will remind you to vote your
shares or will record your vote over the phone if you choose to vote in that
manner.
Unless proxy cards submitted by corporations and partnerships are signed by the
appropriate persons as indicated in the voting instructions on the proxy card,
they will not be voted.
<PAGE> 5
INVESCO BALANCED FUND
(A SERIES OF INVESCO COMBINATION STOCK & BOND FUNDS, INC.)
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7800 EAST UNION AVENUE
DENVER, COLORADO 80237
(TOLL FREE) 1-800-646-8372
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
VOTING INFORMATION
This Proxy Statement is being furnished to shareholders of INVESCO Balanced
Fund ("Balanced Fund"), a series of INVESCO Combination Stock & Bond Funds, Inc.
(formerly INVESCO Flexible Funds, Inc., formerly INVESCO Multiple Asset Funds,
Inc.) ("Combination Stock & Bond Funds"), in connection with the solicitation of
proxies from shareholders of Balanced Fund by the board of directors of
Combination Stock & Bond Funds ("Board") for use at a special meeting of
shareholders to be held on May 20, 1999 ("Meeting"), and at any adjournment of
the Meeting. This Proxy Statement will first be mailed to shareholders on or
about March 23, 1999.
One-third of Balanced Fund's shares outstanding on March 12, 1999 (the
"Record Date"), represented in person or by proxy, shall constitute a quorum and
must be present for the transaction of business at the Meeting. If a quorum is
not present at the Meeting or a quorum is present but sufficient votes to
approve one or more of the proposals set forth in this Proxy Statement are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares represented at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST a proposal
against such adjournment. A shareholder vote may be taken on one or more of the
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present or outstanding. Abstentions and broker non-votes will not be counted,
however, as votes cast for purposes of determining whether sufficient votes have
been received to approve a proposal.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on the proxy card, if it is
received properly executed by you or by your duly appointed agent or
<PAGE> 6
attorney-in-fact. If you date, sign and return the proxy card, but give no
voting instructions, your shares will be voted in favor of approval of each of
the proposals and the duly appointed proxies may, in their discretion, vote upon
such other matters as may come before the Meeting. The proxy card may be revoked
by giving another proxy or by letter or telegram revoking the initial proxy. To
be effective, revocation must be received by Combination Stock & Bond Funds
prior to the Meeting and must indicate your name and account number. If you
attend the Meeting in person you may, if you wish, vote by ballot at the
Meeting, thereby canceling any proxy previously given.
In order to reduce costs, notices to a shareholder having more than one
account in Balanced Fund listed under the same Social Security number at a
single address have been combined. The proxy cards have been coded so that a
shareholder's votes will be counted for each such account.
As of the Record Date, Balanced Fund had 17,433,350.809 shares of common
stock outstanding. The solicitation of proxies, the cost of which will be borne
half by INVESCO Funds Group, Inc. ("INVESCO"), the investment adviser and
transfer agent of Balanced Fund, and half by Balanced Fund, will be made
primarily by mail but also may be made by telephone or oral communications by
representatives of INVESCO and INVESCO Distributors, Inc. ("IDI"), the
distributor of the INVESCO group of investment companies (the "INVESCO Funds"),
who will not receive any compensation for these activities from Balanced Fund,
or by Shareholder Communications Corporation, professional proxy solicitors,
which will be paid fees and expenses of up to approximately $32,000 for
soliciting services. If votes are recorded by telephone, Shareholder
Communications Corporation will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of their
shares in accordance with their instructions, and to confirm that a
shareholder's instructions have been properly recorded. You may also vote by
mail, by facsimile or through a secure Internet site. Proxies voted by
telephone, facsimile or Internet may be revoked at any time before they are
voted at the meeting in the same manner that proxies voted by mail may be
revoked.
COPIES OF BALANCED FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS,
INCLUDING FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS MAY REQUEST COPIES OF THESE REPORTS, WITHOUT CHARGE, BY WRITING TO
INVESCO DISTRIBUTORS, INC., P.O. BOX 173706, DENVER, COLORADO 80217-3706, OR BY
CALLING TOLL-FREE 1-800-646-8372.
Except as set forth in Appendix A, INVESCO does not know of any person who
owns beneficially 5% or more of the shares of Balanced Fund. Directors and
officers of Combination Stock & Bond Funds own in the aggregate less than 1% of
the shares of Balanced Fund.
VOTE REQUIRED. Approval of Proposal 1 requires the affirmative vote of a
"majority of the outstanding voting securities" of Balanced Fund, as defined in
the Investment Company Act of 1940, as amended ("1940 Act"). This means that
Proposal 1 must be approved by the lesser of (1) 67% of Balanced Fund's shares
present at a meeting of shareholders if the owners of more than 50% of Balanced
Fund's shares then outstanding are present in person or by proxy or (2) more
than 50% of Balanced Fund's outstanding shares. A plurality of the votes cast at
the Meeting and at a concurrent meeting of the other series of Combination Stock
& Bond Funds, taken in the aggregate, is sufficient to approve Proposal 2.
Approval of Proposal 3 requires the affirmative vote of a majority of the votes
present at the Meeting, provided a quorum is present. Each outstanding full
share of Balanced Fund is entitled to one vote, and each outstanding fractional
share thereof is entitled to a proportionate fractional share of one vote. If
any Proposal is not approved by the requisite vote of
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shareholders, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies.
PROPOSAL 1: TO APPROVE AMENDMENTS TO THE FUNDAMENTAL
INVESTMENT RESTRICTIONS OF BALANCED FUND
As required by the 1940 Act, Balanced Fund has adopted certain fundamental
investment restrictions ("fundamental restrictions"), which are set forth in its
Statement of Additional Information. These fundamental restrictions may be
changed only with shareholder approval. Restrictions and policies that Balanced
Fund has not specifically designated as fundamental are considered to be
"non-fundamental" and may be changed by the Board without shareholder approval.
Some of Balanced Fund's fundamental restrictions reflect past regulatory,
business or industry conditions, practices or requirements that are no longer in
effect. Also, as other INVESCO Funds have been created over the years, these
Funds have adopted substantially similar fundamental restrictions that often
have been phrased in slightly different ways, resulting in minor but unintended
differences in effect or potentially giving rise to unintended differences in
interpretation. Accordingly, the Board has approved revisions to Balanced Fund's
fundamental restrictions in order to simplify, modernize and make Balanced
Fund's fundamental restrictions more uniform with those of the other INVESCO
Funds.
The Board believes that eliminating the disparities among the INVESCO
Funds' fundamental restrictions will enhance management's ability to manage
Balanced Fund's assets efficiently and effectively in changing regulatory and
investment environments and permit directors to review and monitor investment
policies more easily. In addition, standardizing the fundamental investment
restrictions of the INVESCO Funds will assist the INVESCO Funds in making
required regulatory filings in a more efficient and cost-effective way. Although
the proposed changes in fundamental restrictions will allow Balanced Fund
greater investment flexibility to respond to future investment opportunities,
the Board does not anticipate that the changes, individually or in the
aggregate, will result at this time in a material change in the level of
investment risk associated with an investment in Balanced Fund.
The text and a summary description of each proposed change to Balanced
Fund's fundamental restrictions are set forth below, together with the text of
each current corresponding fundamental restriction. The text below also
describes any non-fundamental restrictions that would be adopted by the Board in
conjunction with the revision of certain fundamental restrictions. Any
non-fundamental restriction may be modified or eliminated by the Board at any
future date without further shareholder approval.
If approved by Balanced Fund's shareholders at the Meeting, the proposed
changes to Balanced Fund's fundamental restrictions will be adopted by Balanced
Fund. Balanced Fund's Statement of Additional Information will be revised to
reflect those changes as soon as practicable following the Meeting.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUER DIVERSIFICATION
Balanced Fund's current fundamental restriction on issuer diversification
is as follows:
The Fund may not, 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
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1940 Act), if the purchase would cause the Fund to have more than 5% of the
value of its total assets invested in the securities of such issuer or to
own more than 10% of the outstanding voting securities of such issuer.
The Board recommends that this restriction be replaced with the following
fundamental restriction:
The Fund may not, with respect to 75% of the Fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or securities of other investment companies) if, as
a result, (i) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (ii) the Fund would hold
more than 10% of the outstanding voting securities of that issuer.
The primary purpose of the modification is to revise Balanced Fund's
fundamental restriction on issuer diversification to conform to a restriction
that is expected to become standard for all INVESCO Funds. In addition, the
proposal would provide Balanced Fund's managers with greater investment
flexibility because it would allow Balanced Fund to invest in other investment
companies, to the extent permitted by the 1940 Act. The ability of mutual funds
to invest in other investment companies currently is generally restricted by
rules under the 1940 Act, including a rule limiting all such investments to 10%
of the mutual fund's total assets and investment in any one investment company
to an aggregate of 5% of the value of the investing fund's total assets and 3%
of the total outstanding voting stock of the acquired investment company.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON BORROWING AND ADOPTION OF
NON-FUNDAMENTAL RESTRICTION ON BORROWING
Balanced Fund's current fundamental restriction on borrowing is as follows:
The Fund may not borrow money, except that the Fund may borrow money
for temporary or emergency purposes (not for leveraging or investment)
and may enter into reverse repurchase agreements in an aggregate
amount not exceeding 33 1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed 33 1/3% of the value
of the Fund's total assets by reason of a decline in net assets will
be reduced within three business days to the extent necessary to
comply with the 33 1/3% limitation. This restriction shall not
prohibit deposits of assets to margin or guarantee positions in
futures, options, swaps or forward contracts, or the segregation of
assets in connection with such contracts.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not borrow money, except that the Fund may borrow money
in an amount not exceeding 33 1/3% of its total assets (including the
amount borrowed) less liabilities (other than borrowings).
The primary purpose of the proposal is to standardize Balanced Fund's
fundamental borrowing limitation to conform to other INVESCO Funds and to the
1940 Act requirements for borrowing. Currently, Balanced Fund's fundamental
restriction is significantly more limiting than the restrictions imposed by the
1940 Act. The proposal eliminates the fundamental nature of the restriction on
the purposes for which Balanced Fund
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may borrow money and also eliminates the explicit requirement that any
borrowings that come to exceed 33 1/3% of Balanced Fund's assets by reason of a
decline in net assets be reduced within three business days.
If the proposal is approved, the Board will adopt a non-fundamental
restriction as follows:
The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency
purposes (not for leveraging or investing) or by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
will be treated as borrowings for purposes of fundamental limitation
( )).
The non-fundamental restriction reflects Balanced Fund's current policy
that borrowing may only be done for temporary or emergency purposes. In addition
to borrowing from banks, as permitted by Balanced Fund's current restriction,
the non-fundamental restriction permits Balanced Fund to borrow from open-end
funds managed by INVESCO or an affiliate or successor thereof. Balanced Fund
would not be able to do so, however, unless it obtains permission for such
borrowings from the Securities and Exchange Commission (the "SEC"). The
non-fundamental restriction also clarifies that reverse repurchase agreements
will be treated as borrowings. The Board believes that this approach, making
Balanced Fund's fundamental restriction on borrowing no more limiting than is
required under the 1940 Act, while incorporating more strict limits on borrowing
in Balanced Fund's non-fundamental restriction, will maximize Balanced Fund's
flexibility for future contingencies.
C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INDUSTRY CONCENTRATION AND
ADOPTION OF NON-FUNDAMENTAL RESTRICTION IN INDUSTRY CONCENTRATION
Balanced Fund's current fundamental restriction on industry concentration
is as follows:
The Fund may not invest more than 25% of the value of its total assets
in any particular industry (other than Government securities).
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities or municipal securities) if, as a
result, more than 25% of the Fund's total assets would be invested in
the securities of companies whose principal business activities are in
the same industry.
If the proposed revision is approved, the Board would also adopt the
following non-fundamental policy:
With respect to fundamental limitation ( ), domestic and foreign
banking will be considered to be different industries.
The primary purpose of the modification is to eliminate minor differences
in the wording of the INVESCO Funds' current restrictions on concentration for
greater uniformity and to avoid unintended limitations. The proposed changes to
Balanced Fund's fundamental concentration policy clarify that the concentration
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies
5
<PAGE> 10
or instrumentalities, or to municipal securities. The exclusion from the current
concentration limitation refers simply to "Government securities." A failure to
exclude all such securities from the concentration policy could hinder Balanced
Fund's ability to purchase such securities in conjunction with taking temporary
defensive positions.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
Balanced Fund's current fundamental restriction on real estate investments
is as follows:
The Fund may not invest directly in real estate or interests in real
estate; however, the Fund may own debt or equity securities issued by
companies engaged in those businesses.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
In addition to conforming Balanced Fund's fundamental restriction to that
of the other INVESCO Funds, the proposed amendment more completely describes the
types of real estate-related securities investments that are permissible for
Balanced Fund and permits Balanced Fund to purchase or sell real estate acquired
as a result of ownership of securities or other instruments (e.g., through
foreclosure on a mortgage in which Balanced Fund directly or indirectly holds an
interest). The Board believes that this clarification will make it easier for
decisions to be made concerning Balanced Fund's investments in real
estate-related securities without materially altering the general restriction on
direct investments in real estate or interests in real estate.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES
Balanced Fund's current fundamental restriction on the purchase of
commodities is as follows:
The Fund may not purchase or sell physical commodities other than
foreign currencies unless acquired as a result of ownership of
securities (but this shall not prevent the Fund from purchasing or
selling options, futures, swaps and forward contracts or from
investing in securities or other instruments backed by physical
commodities).
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund will not purchase or sell physical commodities; however, this
policy shall not prevent the Fund from purchasing and selling foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.
The proposed changes are intended to conform the restriction to those of
the other INVESCO Funds and ensure that Balanced Fund will have the maximum
flexibility to enter into hedging or other transactions utilizing financial
instruments and derivative products when doing so is permitted by operating
policies
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established for Balanced Fund by the Board. Due to the rapid and continuing
development of derivative products and the possibility of changes in the
definition of "commodities," particularly in the context of the jurisdiction of
the Commodities Futures Trading Commission, it is important for Balanced Fund's
policy to be flexible enough to allow it to enter into hedging and other
transactions using these products when doing so is deemed appropriate by INVESCO
and is within the investment parameters established by the Board. To maximize
that flexibility, the Board recommends that Balanced Fund's fundamental
restriction on commodities investments be clear in permitting the use of
derivative products, even if the current non-fundamental restriction of Balanced
Fund would not permit investment in one or more of the permitted transactions.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON LOANS
Balanced Fund's current fundamental restriction on loans is as follows:
The Fund may not 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.)
The Board recommends that the shareholders of Balanced Fund vote to replace
this restriction with the following fundamental restriction:
The Fund may not lend any security or make any loan if, as a result,
more than 33 1/3% of its total assets would be lent to other parties,
but this limitation does not apply to the purchase of debt securities
or to repurchase agreements.
The primary purpose of this proposal is to conform the restriction to the
wording of the other INVESCO Funds' current restrictions on loans to achieve
greater uniformity. The proposed change to this fundamental restriction would
have no substantial effect on the lending activities or other investments of
Balanced Fund.
G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING
Balanced Fund's current fundamental restriction on underwriting is as
follows:
The Fund may not act as an underwriter of securities issued by others,
except to the extent that it may be deemed an underwriter in
connection with the disposition of portfolio securities of the Fund.
The Board recommends that shareholders vote to replace this restriction
with the following fundamental restriction:
The Fund may not underwrite securities of other issuers, except
insofar as it may be deemed to be an underwriter under the Securities
Act of 1933, as amended, in connection with the disposition of the
Fund's portfolio securities.
The purpose of this proposal is to eliminate minor differences in the
wording of the Balanced Fund's current fundamental restriction on underwriting
for greater uniformity with the fundamental restriction of other INVESCO Funds
and to avoid unintended limitations.
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<PAGE> 12
H. MODIFICATION OF FUNDAMENTAL POLICY ON INVESTING IN ANOTHER INVESTMENT
COMPANY AND ADOPTION OF NON-FUNDAMENTAL POLICY REGARDING INVESTING IN
SECURITIES ISSUED BY OTHER INVESTMENT COMPANIES
Balanced Fund's current fundamental policy regarding investment in another
investment company is as follows:
The 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.
The Board recommends that shareholders vote to replace this fundamental
restriction with the following fundamental restriction:
The Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by INVESCO Funds Group,
Inc. or an affiliate or successor thereof, with substantially the same
fundamental investment objective, policies and limitations as the
Fund.
The proposed revision to Balanced Fund's current fundamental restriction
will ensure that the INVESCO Funds have uniform policies permitting each Fund to
adopt a "master/feeder" structure whereby one or more Funds invest all of their
assets in another Fund. The master/feeder structure has the potential, under
certain circumstances, to minimize administration costs and maximize the
possibility of gaining a broader investor base. Currently, none of the INVESCO
Funds intend to establish a master/feeder structure; however, the Board
recommends that the shareholders adopt a policy that would permit this structure
in the event that the Board determines to recommend the adoption of a
master/feeder structure by Balanced Fund. The proposed revision would require
that any fund in which Balanced Fund may invest under a master/feeder structure
be advised by INVESCO or an affiliate.
If the proposed revision is approved, the Board will adopt a
non-fundamental restriction as follows:
The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.
The primary purpose of this non-fundamental restriction is to conform to
the other INVESCO Funds and to the 1940 Act requirements for investing in other
investment companies. Currently, Balanced Fund's fundamental restriction is much
more limiting than the restrictions imposed by the 1940 Act. Adoption of this
non-fundamental restriction will enable Balanced Fund to purchase the securities
of other investment companies to the extent permitted under the 1940 Act or an
exemption granted by the SEC. If a Fund did purchase the securities of another
investment company, shareholders might incur additional expenses because the
Fund would have to pay its ratable share of the expenses of the other investment
company.
I. ADOPTION OF FUNDAMENTAL RESTRICTION ON THE ISSUANCE OF SENIOR SECURITIES
Balanced Fund has no current fundamental restriction on the issuance of
senior securities.
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<PAGE> 13
The Board recommends that shareholders vote to adopt the following
fundamental restriction:
The Fund may not issue senior securities, except as permitted under
the Investment Company Act of 1940.
The Board believes that the adoption of the proposed fundamental
restriction, which does not specify the manner in which senior securities may be
issued and is no more limiting than is required under the 1940 Act, will
maximize Balanced Fund's borrowing flexibility for future contingencies and will
conform to the fundamental restrictions of the other INVESCO Funds on the
issuance of senior securities.
REQUIRED VOTE
Approval of Proposal 1 requires the affirmative vote of a "majority of the
outstanding voting securities" of Balanced Fund, which for this purpose means
the affirmative vote of the lesser of (1) 67% or more of the shares of Balanced
Fund present at the Meeting or represented by proxy if more than 50% of the
outstanding shares of Balanced Fund are so present or represented, or (2) more
than 50% of the outstanding shares of Balanced Fund. SHAREHOLDERS WHO VOTE "FOR"
PROPOSAL 1 WILL VOTE "FOR" EACH PROPOSED CHANGE DESCRIBED ABOVE. THOSE
SHAREHOLDERS WHO WISH TO VOTE AGAINST ANY OF THE SPECIFIC PROPOSED CHANGES
DESCRIBED ABOVE MAY DO SO ON THE PROXY PROVIDED.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 1.
PROPOSAL 2: TO ELECT THE DIRECTORS OF
COMBINATION STOCK & BOND FUNDS
The Board has nominated the individuals identified below for election to
the Board at the Meeting. Combination Stock & Bond Funds currently has ten
directors. Vacancies on the Board are generally filled by appointment by the
remaining directors. However, the 1940 Act provides that vacancies may not be
filled by directors unless thereafter at least two-thirds of the directors shall
have been elected by shareholders. To ensure continued compliance with this rule
without incurring the expense of calling additional shareholder meetings,
shareholders are being asked at this meeting to elect the current ten directors.
Consistent with the provisions of Combination Stock & Bond Funds' by-laws, and
as permitted by Maryland law, Combination Stock & Bond Funds does not anticipate
holding annual shareholder meetings. Thus, the directors will be elected for
indefinite terms, subject to termination or resignation. Each nominee has
indicated a willingness to serve if elected. If any of the nominees should not
be available for election, the persons named as proxies (or their substitutes)
may vote for other persons in their discretion. Management has no reason to
believe that any nominee will be unavailable for election.
All of the Independent Directors now being proposed for election were
nominated and selected by Independent Directors. Eight of the ten current
directors are Independent Directors.
The persons named as attorneys-in-fact in the enclosed proxy have advised
Combination Stock & Bond Funds that unless a proxy instructs them to withhold
authority to vote for all listed nominees or for any individual nominee, they
will vote all validly executed proxies for the election of the nominees named
below.
9
<PAGE> 14
The nominees for director, their ages, a description of their principal
occupations, the number of Combination Stock & Bond Funds shares owned by each,
and their respective memberships on Board committees are listed in the table
below.
<TABLE>
<CAPTION>
NUMBER OF
COMPANY
DIRECTOR OR SHARES BENEFICIALLY
PRINCIPAL OCCUPATION AND EXECUTIVE OWNED DIRECTLY OR
NAME, POSITION WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY ON MEMBER OF
COMPANY, AND AGE (DURING THE PAST FIVE YEARS) COMPANY SINCE DEC. 31, 1998(1) COMMITTEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHARLES W. BRADY, Chief Executive Officer and 1993 0 (3),(5),(6)
Chairman of the Board, Director of AMVESCAP PLC,
Age 63* London, England, and of
various subsidiaries thereof
Chairman of the Board of
INVESCO Global Health
Sciences Fund.
FRED A. DEERING, Trustee of INVESCO Global 1993 16.084 (2),(3),(5)
Vice Chairman of the Health Sciences Fund.
Board, Age 71 Formerly, Chairman of the
Executive Committee and
Chairman of the Board of
Security Life of Denver
Insurance Company, Denver,
Colorado; Director of ING
American Holdings Company,
and First ING Life Insurance
Company of New York.
MARK H. WILLIAMSON, President, Chief Executive 1998 0 (3),(5)
President, Chief Executive Officer, and Director,
Officer, and Director, Age INVESCO Distributors, Inc.;
47* President, Chief Executive
Officer, and Director,
INVESCO; President, Chief
Operating Officer, and
Trustee, INVESCO Global
Health Sciences Fund.
Formerly, Chairman of the
Board and Chief Executive
Officer, NationsBanc
Advisors, Inc. (1995-1997);
Chairman of the Board,
NationsBanc Investments,
Inc. (1997-1998).
</TABLE>
10
<PAGE> 15
<TABLE>
<CAPTION>
NUMBER OF
COMPANY
DIRECTOR OR SHARES BENEFICIALLY
PRINCIPAL OCCUPATION AND EXECUTIVE OWNED DIRECTLY OR
NAME, POSITION WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY ON MEMBER OF
COMPANY, AND AGE (DURING THE PAST FIVE YEARS) COMPANY SINCE DEC. 31, 1998(1) COMMITTEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. VICTOR L. ANDREWS, Professor Emeritus, Chairman 1993 16.084 (4),(6),(8)
Director, Age 68 Emeritus and Chairman of the
CFO Roundtable of the
Department of Finance of
Georgia State University,
Atlanta, Georgia and
President, Andrews Financial
Associates, Inc. (consulting
firm). Formerly, member of
the faculties of the Harvard
Business School and the
Sloan School of Management
of MIT. Dr. Andrews is also
a director of the Sheffield
Funds, Inc.
BOB R. BAKER, President and Chief 1993 16.084 (3),(4),(5)
Director, Age 62 Executive Officer of AMC
Cancer Research Center,
Denver, Colorado, since
January 1989; until December
1988, Vice Chairman of the
Board, First Columbia
Financial Corporation,
Englewood, Colorado.
Formerly, Chairman of the
Board and Chief Executive
Officer of First Columbia
Financial Corporation.
LAWRENCE H. BUDNER, Trust Consultant. Prior to 1993 16.084 (2),(6),(7)
Director, Age 68 June 1987, Senior Vice
President and Senior Trust
Officer, InterFirst Bank,
Dallas, Texas.
</TABLE>
11
<PAGE> 16
<TABLE>
<CAPTION>
NUMBER OF
COMPANY
DIRECTOR OR SHARES BENEFICIALLY
PRINCIPAL OCCUPATION AND EXECUTIVE OWNED DIRECTLY OR
NAME, POSITION WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY ON MEMBER OF
COMPANY, AND AGE (DURING THE PAST FIVE YEARS) COMPANY SINCE DEC. 31, 1998(1) COMMITTEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. WENDY LEE GRAMM, Self-employed (since 1993). 1997 16.084 (4),(8)
Director, Age 54 Professor of Economics and
Public Administration,
University of Texas at
Arlington. Formerly,
Chairman, Commodities
Futures Trading Commission
(1988-1993); Administrator
for Information and
Regulatory Affairs, Office
of Management and Budget
(1985-1988); Executive
Director, Presidential Task
Force on Regulatory Relief;
Director, Federal Trade
Commission's Bureau of
Economics. Director of the
Chicago Mercantile Exchange;
Enron Corporation; IBP,
Inc.; State Farm Insurance
Company; Independent Women's
Forum; International
Republic Institute; and the
Republican Women's Federal
Forum.
KENNETH T. KING, Presently retired. Formerly, 1993 16.084 (2),(3),
Director, Age 73 Chairman of the Board, The (5),(6),(7)
Capitol Life Insurance '
Company, Providence
Washington Insurance
Company, and Director of
numerous U.S. subsidiaries
thereof. Formerly, Chairman
of the Board, The Providence
Capitol Companies in the
United Kingdom and Guernsey.
Until 1987, Chairman of the
Board, Symbion Corporation.
</TABLE>
12
<PAGE> 17
<TABLE>
<CAPTION>
NUMBER OF
COMPANY
DIRECTOR OR SHARES BENEFICIALLY
PRINCIPAL OCCUPATION AND EXECUTIVE OWNED DIRECTLY OR
NAME, POSITION WITH BUSINESS EXPERIENCE OFFICER OF INDIRECTLY ON MEMBER OF
COMPANY, AND AGE (DURING THE PAST FIVE YEARS) COMPANY SINCE DEC. 31, 1998(1) COMMITTEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JOHN W. MCINTYRE, Presently retired. Formerly, 1995 16.084 (2),(3),
Director, Age 68 Vice Chairman of the Board, (5),(7)
The Citizens and Southern
Corporation; Chairman of the
Board and Chief Executive
Officer, The Citizens and
Southern Georgia
Corporation; Chairman of the
Board and Chief Executive
Officer, The Citizens and
Southern National Bank.
Trustee of INVESCO Global
Health Sciences Fund and
Gables Residential Trust,
Employee's Retirement System
of Georgia, Emory
University, and J. M. Tull
Charitable Foundation;
Director of Kaiser
Foundation Health Plans of
Georgia, Inc.
DR. LARRY SOLL, Presently retired. Formerly, 1997 16.084 (4),(8)
Director, Age 56 Chairman of the Board (1987-
1994), Chief Executive
Officer (1982-1989 and
1993-1994) and President
(1982-1989) of Synergen Inc.
Director of Synergen Inc.
since incorporation in 1982.
Director of Isis
Pharmaceuticals, Inc.
Trustee of INVESCO Global
Health Sciences Fund.
</TABLE>
- ---------------
* Because of his affiliation with INVESCO, with the Fund's investment adviser,
or with companies affiliated with INVESCO, this individual is deemed to be
an "interested person" of Combination Stock & Bond Funds as that term is
defined in the 1940 Act.
(1) As interpreted by the SEC, a security is beneficially owned by a person if
that person has or shares voting power or investment power with respect to
that security. The persons listed have partial or complete voting and
investment power with respect to their respective Fund shares.
13
<PAGE> 18
(2) Member of the Audit Committee
(3) Member of the Executive Committee
(4) Member of the Management Liaison Committee
(5) Member of the Valuation Committee
(6) Member of the Compensation Committee
(7) Member of the Soft Dollar Brokerage Committee
(8) Member of the Derivatives Committee
The Board has audit, management liaison, soft dollar brokerage and
derivatives committees consisting of Independent Directors, and compensation,
executive and valuation committees consisting of Independent Directors and
non-independent directors. The Board does not have a nominating committee. The
audit committee, consisting of four Independent Directors, meets quarterly with
the independent accountants and executive officers of Combination Stock & Bond
Funds. This committee reviews the accounting principles being applied by
Combination Stock & Bond Funds in financial reporting, the scope and adequacy of
internal controls, the responsibilities and fees of the independent accountants,
and other matters. All of the recommendations of the audit committee are
reported to the full Board. During the intervals between the meetings of the
Board, the executive committee may exercise all powers and authority of the
Board in the management of Combination Stock & Bond Funds' business, except for
certain powers which, under applicable law and/or Combination Stock & Bond
Funds' by-laws, may only be exercised by the full Board. All decisions are
subsequently submitted for ratification by the Board. The management liaison
committee meets quarterly with various management personnel of INVESCO in order
to facilitate better understanding of the management and operations of
Combination Stock & Bond Funds, and to review legal and operational matters that
have been assigned to the committee by the Board, in furtherance of the Board's
overall duty of supervision. The soft dollar brokerage committee meets
periodically to review soft dollar transactions by Balanced Fund, and to review
policies and procedures of Balanced Fund's adviser with respect to soft dollar
brokerage transactions. The committee then reports on these matters to the
Board. The derivatives committee meets periodically to review derivatives
investments made by Balanced Fund. The committee monitors derivatives usage by
Balanced Fund and the procedures utilized by Balanced Fund's adviser to ensure
that the use of such instruments follows the policies on such instruments
adopted by the Board. The committee then reports on these matters to the Board.
Each Independent Director receives an annual retainer of $56,000 for their
service to the INVESCO Funds. Additionally, each Independent Director receives
$3,000 for in-person attendance at each board meeting and $1,000 for in-person
attendance at each committee meeting. The chairmen of the audit and management
liaison committees receive an annual fee of $4,000 for serving in such capacity.
During the past year, the Board met four times, the audit committee met
three times, the compensation committee met once, the management liaison
committee met three times, the soft dollar brokerage committee met once, and the
derivatives committee met twice. The executive committee did not meet. During
Combination Stock & Bond Funds' last fiscal year, each director attended 75% or
more of the Board meetings and meetings of the committees of the Board on which
he or she served.
14
<PAGE> 19
The Independent Directors nominate individuals to serve as Independent
Directors, without any specific nominating committee. The Board ordinarily will
not consider unsolicited director nominations recommended by shareholders. The
Board, including its Independent Directors, unanimously approved the nomination
of the foregoing persons to serve as directors and directed that the election of
these nominees be submitted to shareholders.
The following table sets forth information relating to the compensation
paid to directors during the last fiscal year:
COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY COMBINATION STOCK & BOND FUNDS TO DIRECTORS
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT BENEFITS TOTAL COMPENSATION FROM
AGGREGATE ACCRUED AS PART OF COMBINATION STOCK & BOND
COMPENSATION FROM COMBINATION ESTIMATED ANNUAL FUNDS AND THE
COMBINATION STOCK STOCK & BOND BENEFITS UPON OTHER 14 INVESCO FUNDS
NAME OF PERSON, POSITION & BOND FUNDS(1) FUNDS' EXPENSES(2) RETIREMENT(3) PAID TO DIRECTORS(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred A Deering $ 2,458 $ 439 $ 281 $103,700
Vice Chairman of the
Board and Director
Dr. Victor L. Andrews $ 2,434 $ 414 $ 326 $ 80,350
Director
Bob R. Baker $ 2,475 $ 370 $ 437 $ 84,000
Director
Lawrence H. Budner $ 2,409 $ 414 $ 326 $ 79,350
Director
Daniel D. Chabris(4) $ 2,437 $ 448 $ 243 $ 70,000
Director
Dr. Wendy L. Gramm $ 2,363 $ 0 $ 0 $ 79,000
Director
Kenneth T. King $ 2,374 $ 455 $ 255 $ 77,050
Director
John W. McIntyre $ 2,384 $ 0 $ 0 $ 98,500
Director
Dr. Larry Soll $ 2,384 $ 0 $ 0 $ 96,000
Director
------- ------ ------ --------
TOTAL $21,718 $2,540 $1,868 $767,950
======= ====== ====== ========
AS A PERCENTAGE OF NET 0.0091%(5) 0.0011%(5) 0.0035%(6)
ASSETS
</TABLE>
15
<PAGE> 20
- ---------------
(1) The Vice Chairman of the Board, the chairmen of the audit, management
liaison, derivatives, soft dollar brokerage and compensation committees, and
the Independent Director members of the committees of each Fund receive
compensation for serving in such capacities in addition to the compensation
paid to all Independent Directors.
(2) Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the
election of the directors.
(3) These figures represent the Funds' share of the estimated annual benefits
payable by the INVESCO Complex (excluding INVESCO Global Health Sciences
Fund which does not participate in this retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the INVESCO Funds. These estimated benefits assume
retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex, and for other reasons during the period in
which retirement benefits are accrued on behalf of the respective directors.
This results in lower estimated benefits for directors who are closer to
retirement and higher estimated benefits for directors who are farther from
retirement. With the exception of Drs. Soll and Gramm, each of these
directors has served as director of one or more of the INVESCO Funds for the
minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan. Although Mr. McIntyre became
eligible to participate in the Defined Benefit Deferred Compensation Plan as
of November 1, 1998, he will not be included in the calculation of
retirement benefits until November 1, 1999.
(4) Mr. Chabris retired as a director effective September 30, 1998.
(5) Total as a percentage of the Fund's net assets as of July 31, 1998.
(6) Total as a percentage of the net assets of the 15 INVESCO Funds in the
INVESCO Complex as of December 31, 1998.
Combination Stock & Bond Funds pays its Independent Directors, Board vice
chairman, and committee chairmen and committee members the fees described above.
Combination Stock & Bond Funds also reimburses its Independent Directors for
travel expenses incurred in attending meetings. Charles W. Brady, Chairman of
the Board, and Mark H. Williamson, President, Chief Executive Officer, and
Director, as "interested persons" of Combination Stock & Bond Funds and of other
INVESCO Funds, receive compensation and are reimbursed for travel expenses
incurred in attending meetings as officers or employees of INVESCO or its
affiliated companies, but do not receive any director's fees or other
compensation from Combination Stock & Bond Funds or other INVESCO Funds for
their services as directors.
The overall direction and supervision of Balanced Fund is the
responsibility of the Board, which has the primary duty of ensuring that
Balanced Fund's general investment policies and programs are adhered to and that
Balanced Fund is properly administered. The officers of Balanced Fund, all of
whom are officers and employees of and paid by INVESCO, are responsible for the
day-to-day administration of Balanced Fund. The investment adviser for Balanced
Fund has the primary responsibility for making investment decisions on behalf of
Balanced Fund. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of Combination Stock & Bond Funds hold
comparable positions with the following INVESCO Funds: INVESCO Bond Funds, Inc.
(formerly, INVESCO Income Funds, Inc.), INVESCO Diversified Funds, Inc., INVESCO
Emerging Opportunity Funds, Inc., INVESCO Growth Funds, Inc. (formerly, INVESCO
Growth Fund, Inc.), INVESCO Industrial Income Fund, Inc., INVESCO International
Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Sector Funds, Inc.
(formerly, INVESCO Strategic Portfolios, Inc.), INVESCO Specialty Funds, Inc.,
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc. and INVESCO
Capital Appreciation Funds, Inc.), INVESCO Tax-Free Income Funds, Inc., and
INVESCO Variable Investment Funds, Inc. All of the directors of
16
<PAGE> 21
Combination Stock & Bond Funds also serve as trustees of INVESCO Value Trust,
and INVESCO Treasurer's Series Trust (the "INVESCO Funds").
The Boards of the funds managed by INVESCO have adopted a Defined Benefit
Deferred Compensation Plan (the "Plan") for the non-interested directors and
trustees of the Funds. Under the Plan, each director or trustee who is not an
interested person of the Funds (as defined in Section 2(a)(19) of the 1940 Act)
and who has served for at least five years (a "Qualified Director") is entitled
to receive, upon termination of service as director (normally at retirement age
72 or the retirement age of 73 or 74, if the retirement date is extended by the
Boards for one or two years, but less than three years) continuation of payment
for one year (the "First Year Retirement Benefit") of the annual basic retainer
and annualized board meeting fees payable by the funds to the Qualified Director
at the time of his or her retirement (the "Basic Benefit"). Commencing with any
such director's second year of retirement, and commencing with the first year of
retirement of any director whose retirement has been extended by the Board for
three years, a Qualified Director shall receive quarterly payments at an annual
rate equal to 50% of the Basic Benefit. These payments will continue for the
remainder of the Qualified Director's life or ten years, whichever is longer
(the "Reduced Benefit Payments"). If a Qualified Director dies or becomes
disabled after age 72 and before age 74 while still a director of the funds, the
First Year Retirement Benefit and Reduced Benefit Payments will be made to him
or her or to his or her beneficiary or estate. If a Qualified Director becomes
disabled or dies either prior to age 72 or during his or her 74th year while
still a director of the funds, the director will not be entitled to receive the
First Year Retirement Benefit; however, the Reduced Benefit Payments will be
made to his or her beneficiary or estate. The Plan is administered by a
committee of three directors who are also participants in the Plan and one
director who is not a Plan participant. The cost of the Plan will be allocated
among the INVESCO Funds in a manner determined to be fair and equitable by the
committee. The funds began making payments to Mr. Chabris as of October 1, 1998
under the Plan. Combination Stock & Bond Funds has no stock options or other
pension or retirement plans for management or other personnel and pays no salary
or compensation to any of its officers.
The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of certain of the INVESCO
Funds. The deferred amounts have been invested in shares of certain INVESCO
Funds. Each Independent Director may, therefore, be deemed to have an indirect
interest in shares of each such INVESCO Fund, in addition to any Balanced Fund
shares that they may own directly or beneficially.
REQUIRED VOTE
Election of each nominee as a director of Combination Stock & Bond Funds
requires, in the aggregate, a plurality of the votes of Balanced Fund cast at
the Meeting in person or by proxy, and of the votes of the other series of
Combination Stock & Bond Funds cast at a concurrent meeting of the shareholders
of that series.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE
NOMINEES IN PROPOSAL 2.
17
<PAGE> 22
PROPOSAL 3: RATIFICATION OR REJECTION OF INDEPENDENT ACCOUNTANTS
The Board, including all of its Independent Directors, has selected
PricewaterhouseCoopers LLP to continue to serve as independent accountants of
Balanced Fund, subject to ratification by Balanced Fund's shareholders.
PricewaterhouseCoopers LLP has no direct financial interest or material indirect
financial interest in Balanced Fund. Representatives of PricewaterhouseCoopers
LLP are not expected to attend the Meeting, but have been given the opportunity
to make a statement if they so desire, and will be available should any matter
arise requiring their presence.
The independent accountants examine annual financial statements for
Balanced Fund and provide other audit and tax-related services. In recommending
the selection of PricewaterhouseCoopers LLP, the Board reviewed the nature and
scope of the services to be provided (including non-audit services) and whether
the performance of such services would affect the accountants' independence.
REQUIRED VOTE
Ratification of the selection of PricewaterhouseCoopers LLP as independent
accountants require the vote of a majority of the votes present at the meeting
provided a quorum is present.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 3.
INFORMATION CONCERNING ADVISER,
DISTRIBUTOR AND AFFILIATED COMPANIES
INVESCO, a Delaware corporation, serves as Balanced Fund's investment
adviser, and provides other services to Balanced Fund and Combination Stock &
Bond Funds. IDI, a Delaware corporation that serves as Balanced Fund's
distributor, is a wholly owned subsidiary of INVESCO. INVESCO is a wholly owned
subsidiary of INVESCO North American Holdings, Inc. ("INAH"), 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309. INAH is an indirect wholly owned
subsidiary of AMVESCAP PLC.(1) The corporate headquarters of AMVESCAP PLC are
located at 11 Devonshire Square, London, EC2M 4YR, England. INVESCO's and IDI's
offices are located at 7800 East Union Avenue, Denver, Colorado 80237. INVESCO
currently serves as investment adviser of 14 open-end investment companies
having aggregate net assets of $21.1 billion as of December 31, 1998.
The principal executive officers and directors of INVESCO and their
principal occupations are:
Mark H. Williamson, Chairman of the Board, President, Chief Executive
Officer and Director, also, President and Chief Executive Officer of IDI;
Charles P. Mayer, Director and Senior Vice President, also, Director and Senior
Vice President of IDI; Ronald L. Grooms, Director and Senior Vice-President and
Treasurer, also, Director and Senior Vice-President and Treasurer of IDI;
Richard W. Healey, Director and Senior Vice President, also, Director and Senior
Vice President of IDI; Timothy J. Miller, Director and Senior
- ---------------
(1) The intermediary companies between INAH and AMVESCAP PLC are as follows:
INVESCO, Inc., AMVESCAP Group Services, Inc., AVZ, Inc. and INVESCO North
American Group, Ltd., each of which is wholly owned by its immediate parent.
18
<PAGE> 23
Vice President, also, Director and Senior Vice President of IDI; and Glen A.
Payne, Senior Vice-President, Secretary and General Counsel, also Senior
Vice-President, Secretary and General Counsel of IDI.
The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237.
Pursuant to an Administrative Services Agreement between Combination Stock
& Bond Funds and INVESCO, INVESCO provides administrative services to
Combination Stock & Bond Funds, including sub-accounting and recordkeeping
services and functions. During the fiscal year ended July 31, 1998, Combination
Stock & Bond Funds paid INVESCO, which also serves as Combination Stock & Bond
Funds' registrar, transfer agent and dividend disbursing agent, total
compensation of $562,869 for such services.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.
SHAREHOLDER PROPOSALS
Combination Stock & Bond Funds does not hold annual meetings of
shareholders. Shareholders wishing to submit proposals for inclusion in a proxy
statement and form of proxy for a subsequent shareholders' meeting should send
their written proposals to the Secretary of Combination Stock & Bond Funds, 7800
East Union Avenue, Denver, Colorado 80237. Combination Stock & Bond Funds has
not received any shareholder proposals to be presented at this Meeting.
By order of the Board of Directors
/s/ Glen A. Payne
------------------------
Glen A. Payne
Secretary
March 23, 1999
19
<PAGE> 24
APPENDIX A
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of the Balanced
Fund's outstanding equity securities as of March 12, 1999 by each beneficial
owner of 5% or more of the Fund's outstanding equity securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OWNERSHIP PERCENTAGE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co., Inc. 5,341,995.2170 30.64%
Special Custody Account for
The Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
Saxon & Co. TR 1,209,970.5180 6.94%
91 Vested Interest Omnib Asset
A/C #20-01-302-9912426
P.O. Box 7780-1888
Philadelphia, PA 19182-0001
</TABLE>
A-1
<PAGE> 25
[Name and Address]
INVESCO BALANCED FUND
INVESCO COMBINATION STOCK & BOND FUNDS, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy is being solicited on behalf of the Board of Directors of
INVESCO Combination Stock & Bond Funds, Inc. ("Company") and relates to the
proposals with respect to the Company and to INVESCO Balanced Fund, a series of
the Company ("Fund"). The undersigned hereby appoints as proxies Fred A. Deering
and Mark H. Williamson, and each of them (with power of substitution), to vote
all shares of common stock of the undersigned in the Fund at the Special Meeting
of Shareholders to be held at 10:00 a.m., Mountain Standard Time, on May 20,
1999, at the offices of the Company, 7800 East Union Avenue, Denver, Colorado
80237, and any adjournment thereof ("Meeting"), with all the power the
undersigned would have if personally present.
The shares represented by this proxy will be voted as instructed.
Unless indicated to the contrary, this proxy shall be deemed to grant authority
to vote "FOR" all proposals relating to the Company and the Fund with
discretionary power to vote upon such other business as may properly come before
the Meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-800-733-1885.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
[X] KEEP THIS PORTION FOR YOUR RECORDS
<PAGE> 26
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INVESCO BALANCED FUND
INVESCO COMBINATION STOCK & BOND FUNDS, INC.
<TABLE>
<S> <C> <C> <C> <C>
VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
2. Election of the Company's Board of Directors: [ ] [ ] [ ] To withhold authority
(1) Charles W. Brady; (2) Fred A. Deering; (3) to vote, mark "For All
Mark H. Williamson; (4) Dr. Victor L. Andrews; Except" and write the
(5) Bob R. Baker; (6) Lawrence H. Budner; nominee's number on the
(7) Dr. Wendy Lee Gramm; (8) Kenneth T. King; line below.
(9) John W. McIntyre; and (10) Dr. Larry Soll;
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
ALL ALL ALL
1. Approval of changes to the fundamental investment restrictions; [ ] [ ] [ ]
[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT LEFT and indicate the letter(s) (as set forth in
the proxy statement) of the investment restriction or restrictions
you do not want to change on the line on the reverse side. IF YOU
CHOOSE TO VOTE DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL
IN YOUR PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND INTERNET VOTING
ARE AVAILABLE.
FOR AGAINST ABSTAIN
3. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's [ ] [ ] [ ]
Independent Public Accountants.
</TABLE>
YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-800-733-1885.
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
- ----------------------------------------------------- ------------------------
Signature Date
- ----------------------------------------------------- ------------------------
Signature (Joint Owners) Date
<PAGE> 27
[Back]
To vote against the proposed changes to one or more
of the specific fundamental investment restrictions,
indicate the letter(s) (as set forth in the proxy
statement) of the investment restriction or
restrictions you do not want to change on the line at
the right. IF YOU CHOOSE TO VOTE DIFFERENTLY ON
INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN YOUR
PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE
AND INTERNET VOTING ARE AVAILABLE.
1. ______________________________
