<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant[x]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(3)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section
240.14a-12
__________________________________________________
INVESCO SPECIALTY FUNDS, INC.
__________________________________________________
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:
2) Aggregate number of securities to which transaction applies:
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 filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
\\DCBDC\DOCS_FILES-144676.01
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3) Filing Party:
4) Date Filed:
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DRAFT
Preliminary Copy -- To Be Filed With the Securities
and Exchange Commission
INVESCO SPECIALTY FUNDS, INC.
December 26, 1996
--------------------------------------------------------------------------
Dear INVESCO Specialty Funds Shareholder:
Enclosed is a Proxy Statement for the January 31, 1997 special
meeting of shareholders of INVESCO Asian Growth Fund, INVESCO European
Small Company Fund, INVESCO Latin American Growth Fund, INVESCO Worldwide
Capital Goods Fund and INVESCO Worldwide Communications Fund, the five
series of INVESCO Specialty Funds, Inc. (the "Company").
As you may have heard, INVESCO PLC ("INVESCO") has entered into
an agreement to merge with A I M Management Group Inc. ("AIM"), under
which AIM will become part of INVESCO. INVESCO is the ultimate parent
company of INVESCO Funds Group, Inc., the investment adviser to the
Company; INVESCO Asia Limited, the sub-adviser to INVESCO Asian Growth
Fund; INVESCO Asset Management Limited, the sub-adviser to INVESCO
European Small Company Fund and INVESCO Latin American Growth Fund; and
INVESCO Trust Company, the sub-adviser to INVESCO Worldwide Capital Goods
Fund and INVESCO Worldwide Communications Fund.
As explained more fully in the attached Proxy Statement, at the
time the INVESCO/AIM merger takes effect, the Company's present investment
advisory and sub-advisory contracts will terminate automatically, as a
matter of law. Although Company shareholders are not being asked to
approve the merger, they must vote on the necessary new investment
advisory and sub-advisory contracts. Accordingly, to provide continuity
of investment advisory services to the Company, the Board of Directors is
asking shareholders to approve the following proposals:
. All shareholders of the Company will be asked to approve
a new investment advisory agreement for the Company, with
the same parties and on terms substantially identical to
the existing investment advisory agreement.
. Shareholders of INVESCO Asian Growth Fund will be asked
to approve a new investment sub-advisory agreement for
that Fund, with the same parties and on terms
substantially identical to the existing investment sub-
advisory agreement.
. Shareholders of INVESCO European Small Company Fund and
INVESCO Latin American Growth Fund will be asked to
approve a new investment sub-advisory agreement for those
Funds, with the same parties and on terms substantially
identical to the existing investment sub-advisory
agreement.
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. Shareholders of INVESCO Worldwide Capital Goods Fund and
INVESCO Worldwide Communications Fund will be asked to
approve a new investment sub-advisory agreement for those
Funds, with the same parties and on terms substantially
identical to the existing investment sub-advisory
agreement.
In addition, all shareholders are being asked to elect directors
of the Company and to ratify the selection of Price Waterhouse LLP as the
Company's independent accountants. The accompanying Proxy Statement
provides additional detailed information on these proposals, the
INVESCO/AIM merger and the Company.
WE ARE REQUIRED BY LAW TO INFORM YOU AS TO CERTAIN DETAILS OF THE
TRANSACTION, EVEN THOUGH YOU ARE NOT VOTING TO APPROVE THE MERGER. WHAT
IS MOST IMPORTANT FOR YOU AS A SHAREHOLDER OF THE FUNDS IS THAT APPROVAL
OF THE PROPOSALS LISTED ABOVE WILL IN NO WAY INCREASE THE ADVISORY FEES,
SUB-ADVISORY FEES OR EXPENSES OF THE COMPANY OR THE FUNDS OR CHANGE THE
LEVEL, NATURE OR QUALITY OF SERVICES YOU RECEIVE. EACH OF THESE PROPOSALS
HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF THE COMPANY, WHICH
RECOMMENDS THAT SHAREHOLDERS APPROVE THEM AS WELL.
The Board of Directors believes that these proposals are in the
best interests of the shareholders. Therefore, we ask that you read the
enclosed materials and vote promptly. Should you have any questions,
please feel free to call our client services representatives at
1-800-525-8085. They will be happy to answer any questions that you might
have.
YOUR VOTE IS IMPORTANT. THE MATTERS WE ARE SUBMITTING FOR YOUR
CONSIDERATION ARE SIGNIFICANT TO THE COMPANY, THE FUNDS AND TO YOU AS A
SHAREHOLDER. IF WE DO NOT RECEIVE SUFFICIENT VOTES TO APPROVE THESE
PROPOSALS, WE MAY HAVE TO SEND ADDITIONAL MAILINGS OR CONDUCT TELEPHONE
CANVASSING. THEREFORE, PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT
AND CAST YOUR VOTE ON THE ENCLOSED PROXY CARD, AND RETURN IT IN THE
ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.
Sincerely,
Dan J. Hesser
President
INVESCO Specialty Funds, Inc. --
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
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Preliminary Copy -- To Be Filed With the Securities
and Exchange Commission
INVESCO SPECIALTY FUNDS, INC.
7800 East Union Avenue
Denver, Colorado 80237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON January 31, 1997
==========================================================================
Notice is hereby given that a special meeting of shareholders
(the "Meeting") of INVESCO Asian Growth Fund (the "Asian Growth Fund"),
INVESCO European Small Company Fund (the "European Small Company Fund"),
INVESCO Latin American Growth Fund (the "Latin American Growth Fund"),
INVESCO Worldwide Capital Goods Fund (the "Worldwide Capital Goods Fund")
and INVESCO Worldwide Communications Fund (the "Worldwide Communications
Fund"; collectively, the "Funds") of INVESCO Specialty Funds, Inc. (the
"Company") will be held at the Denver Marriott Southeast, 6363 East
Hampden Avenue, Denver, Colorado 80222 on Friday, January 31, 1997, at
10:00 a.m., Mountain Standard Time, for the following purposes.
1.A. To approve or disapprove a new investment advisory
agreement between the Company and INVESCO Funds Group,
Inc. ("IFG"), such agreement to take effect only if the
proposed merger of A I M Management Group Inc. into a
wholly-owned U.S. subsidiary of INVESCO PLC is
consummated (the "Merger"). INVESCO PLC is the ultimate
parent of IFG.
1.B For shareholders of the Asian Growth Fund only: To
approve or disapprove a new sub-advisory agreement
between IFG and INVESCO Asia Limited, with respect to the
Asian Growth Fund, to take effect only if the Merger is
consummated.
1.C. For shareholders of the European Small Company Fund and
the Latin American Growth Fund only: To approve or
disapprove a new sub-advisory agreement between IFG and
INVESCO Asset Management Limited, with respect to the
European Small Company Fund and the Latin American Growth
Fund, to take effect only if the Merger is consummated.
1.D. For shareholders of the Worldwide Capital Goods Fund and
the Worldwide Communications Fund only: To approve or
disapprove a new sub-advisory agreement between IFG and
INVESCO Trust Company, with respect to the Worldwide
Capital Goods Fund and the Worldwide Communications Fund,
to take effect only if the Merger is consummated.
2. To elect eleven directors of the Company.
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3. To ratify or reject the selection of Price Waterhouse LLP
as independent accountants for the Company for the fiscal
year ending July 31, 1997.
4. To transact such other business as may properly come
before the Meeting or any adjournment(s) thereof.
None of these proposals is expected to result in any change in
the way the Funds are managed, in the advisory or sub-advisory fees or in
the services you receive as a shareholder.
The board of directors of the Company has fixed the close of
business on December 9, 1996, as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting or any
adjournment(s) thereof.
A complete list of shareholders of the Funds entitled to vote at
the Meeting will be available and open to the examination of any
shareholder of the Funds for any purpose germane to the Meeting during
ordinary business hours after December 15, 1996, at the offices of the
Company, 7800 East Union Avenue, Denver, Colorado 80237.
You are cordially invited to attend the Meeting. Shareholders
who do not expect to attend the Meeting in person are requested to
complete, date and sign the enclosed form of proxy and return it promptly
in the enclosed envelope that requires no postage if mailed in the United
States. The enclosed proxy is being solicited on behalf of the board of
directors of the Company.
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IMPORTANT
Please mark, sign, date and return the enclosed proxy in the
accompanying envelope as soon as possible in order to ensure a full
representation at the Meeting.
The Meeting will have to be adjourned without conducting any
business if less than one-third of the eligible shares is represented, and
the Company will have to continue to solicit votes until a quorum is
obtained. The Meeting also may be adjourned, if necessary, to continue to
solicit votes if less than the required shareholder vote has been obtained
to elect the specified number of directors and to approve Proposals 1.A.,
1.B., 1.C., 1.D. and 3.
Your vote, then, could be critical in allowing the Company to
hold the Meeting as scheduled. By marking, signing, and promptly
returning the enclosed proxy, you may eliminate the need for additional
solicitation. Your cooperation is appreciated.
By Order of the Board of Directors,
Glen A. Payne
Secretary
Denver, Colorado
Dated: December 26, 1996
<PAGE>
Preliminary Copy -- To Be Filed With the Securities and Exchange
Commission
INVESCO SPECIALTY FUNDS, INC.
December 26, 1996
__________________________________________________________________________
INVESCO SPECIALTY FUNDS, INC.
7800 East Union Avenue
Denver, Colorado 80237
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD January 31, 1997
INTRODUCTION
The enclosed proxy is being solicited by the board of directors
(the "Board" or the "Directors") of INVESCO Specialty Funds, Inc. (the
"Company") on behalf of INVESCO Asian Growth Fund (the "Asian Growth
Fund"), INVESCO European Small Company Fund (the "European Small Company
Fund"), INVESCO Latin American Growth Fund (the "Latin American Growth
Fund"), INVESCO Worldwide Capital Goods Fund (the "Worldwide Capital Goods
Fund") and INVESCO Worldwide Communications Fund (the "Worldwide
Communications Fund"; collectively, the "Funds"), the five series of the
Company, for use in connection with the special meeting of shareholders of
the Company (the "Meeting") to be held at 10:00 a.m., Mountain Standard
Time, on Friday, January 31, 1997, at the Denver Marriott Southeast, 6363
East Hampden Avenue, Denver, Colorado 80222, and at any adjournment(s)
thereof for the purposes set forth in the foregoing notice. THE COMPANY'S
ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS OF THE COMPANY FOR THE
FISCAL YEAR ENDED JULY 31, 1996, IS AVAILABLE WITHOUT CHARGE UPON REQUEST
FROM GLEN A. PAYNE, SECRETARY OF THE COMPANY, AT P.O. BOX 173706, DENVER,
COLORADO 80217-3706 (TELEPHONE NUMBER 1-800-525-8085). The approximate
mailing date of proxies and this Proxy Statement is December 26, 1996.
The primary purpose of the Meeting is to allow shareholders to
consider new investment advisory and sub-advisory agreements for the
Funds. As explained in more detail below, the existing advisory and sub-
advisory agreements for the Funds will terminate automatically, by
operation of law, upon the consummation of the proposed merger (the
"Merger") of A I M Management Group Inc. ("AIM") and a direct, wholly-
owned subsidiary of INVESCO PLC ("INVESCO"). Shareholders are not being
asked to approve the Merger; rather, they are being asked to continue the
existing investment advisory relationships for the Funds under new
contracts which would take effect at the time of the Merger. Consummation
of the Merger is conditioned on, among other things, shareholder approval
of the new investment advisory and sub-advisory contracts. The
transactions contemplated by the Merger and the terms of the new
investment advisory and sub-advisory agreements are discussed below.
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OTHER THAN THEIR COMMENCEMENT AND EXPIRATION DATES, THE PROPOSED
NEW ADVISORY AND SUB-ADVISORY AGREEMENTS ARE IDENTICAL IN FORM AND TERMS
TO THE PRESENT AGREEMENTS.
Therefore:
(1) Shareholders of all five Funds are being asked to approve a new
investment advisory agreement (the "Proposed Advisory Agreement") between
the Company and its investment adviser, INVESCO Funds Group, Inc. (the
"Adviser" or "IFG"), to replace the existing agreement between the Company
and the Adviser (the "Current Advisory Agreement");
(2) Shareholders of the Asian Growth Fund are being asked to approve
a new investment sub-advisory agreement (the "Proposed IAL Agreement")
between IFG and that Fund's sub-adviser, INVESCO Asia Limited ("IAL"), to
replace the existing sub-advisory agreement between IFG and IAL (the
"Current IAL Agreement");
(3) Shareholders of the European Small Company Fund and the Latin
American Growth Fund (together, the "IAM Sub-Advised Funds") are being
asked to approve a new investment sub-advisory agreement (the "Proposed
IAM Agreement") between IFG and those Funds' sub-adviser, INVESCO Asset
Management Limited ("IAM"), to replace the existing sub-advisory agreement
between IFG and IAM (the "Current IAM Agreement"); and
(4) Shareholders of the Worldwide Capital Goods Fund and the
Worldwide Communications Fund (together, the "ITC Sub-Advised Funds") are
being asked to approve a new investment sub-advisory agreement (the
"Proposed ITC Agreement") between IFG and those Funds' sub-adviser,
INVESCO Trust Company ("ITC"), to replace the existing sub-advisory
agreement between IFG and ITC (the "Current ITC Agreement").
Elsewhere in this Proxy Statement, the Current IAL Agreement, the
Current IAM Agreement and the Current ITC Agreement are collectively
referred to as the "Current Sub-Advisory Agreements," and, together with
the Current Advisory Agreement, are collectively referred to as the
"Current Agreements." Similarly, the Proposed IAL Agreement, the Proposed
IAM Agreement and the Proposed ITC Agreement are collectively referred to
as the "Proposed Sub-Advisory Agreements," and, together with the Proposed
Advisory Agreement, are collectively referred to as the "Proposed
Agreements." Each of IAL, IAM and ITC is referred to as a "Sub-Adviser"
and, collectively, as the "Sub-Advisers."
The following factors should be considered by shareholders in
determining whether to approve the Proposed Agreements:
. The Proposed Advisory Agreement and each of the Proposed
Sub-Advisory Agreements were approved by the Directors,
including the Independent Directors (as defined below).
. There will be no change in the investment objectives or
policies of the Funds.
2
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. There will be no increase in the fees payable to the
Adviser or to the Sub-Advisers as a result of the
approval and implementation of the Proposed Agreements.
. No significant changes are contemplated in the personnel
of the Adviser who are responsible for the overall
supervision of the Company or of each of the Sub-Advisers
who are responsible for managing the investments of the
Funds.
The following table indicates the Funds being solicited with
respect to the proposals being presented at the Meeting:
PROPOSAL FUND
-------- ----
1.A. Approval of new Advisory All five Funds
Agreement between the
Company and IFG
1.B. Approval of new Sub- Asian Growth Fund
Advisory Agreement between
IFG and IAL
1.C. Approval of new Sub- European Small Company
Advisory Agreement between Fund and Latin American
IFG and IAM Growth Fund
1.D. Approval of new Sub- Worldwide Capital Goods
Advisory Agreement between Fund and Worldwide
IFG and ITC Communications Fund
2. Election of Directors All five Funds
3. Ratification or Rejection All five Funds
of Independent Accountants
If the enclosed form of proxy is duly executed and returned in
time to be voted at the Meeting, and not subsequently revoked, all shares
represented by the proxy will be voted in accordance with the instructions
marked thereon. If no instructions are given, such shares will be voted
FOR the nominees for director hereinafter listed and FOR Proposals 1.A.,
1.B., 1.C., 1.D. and 3. One third of the outstanding shares of the
Company entitled to vote, represented in person or by proxy, will
constitute a quorum at the Meeting.
Shares held by shareholders present in person or
represented by proxy at the Meeting will be counted both for the purpose
of determining the presence of a quorum and for calculating the votes cast
on the issues before the Meeting. An abstention by a shareholder, either
by proxy or by vote in person at the Meeting, has the same effect as a
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negative vote. Shares held by a broker or other fiduciary as record owner
for the account of the beneficial owner are counted toward the required
quorum if the beneficial owner has executed and timely delivered the
necessary instructions from the broker to vote the shares or, if the
broker has exercised discretionary voting power. Where the broker or
fiduciary does not receive instruction from the beneficial owner and does
not have discretionary voting power as to one or more issues before the
Meeting, but grants a proxy for or votes such shares, they will be counted
toward the required quorum but will have the effect of a negative vote on
any proposals on which it does not vote.
Because certain of the proposals being submitted for a vote of
the shareholders of each Fund are identical, the Board determined to
combine the proxy materials for the Funds in order to reduce the cost of
preparing, printing and mailing the proxy materials. The proxy cards have
been coded so that each shareholder's votes will be counted for the
appropriate Fund, or for each Fund if a shareholder owns shares in more
than one Fund.
In order to further reduce costs, the notices to shareholders
having more than one account in a Fund listed under the same social
security number at a single address have been combined. The proxy cards
have been coded so that each shareholder's votes will be counted for all
such accounts.
Execution of the enclosed proxy will not affect a shareholder's
right to attend the Meeting and vote in person, and a shareholder giving a
proxy has the power to revoke it (by written notice to the Company at P.O.
Box 173706, Denver, Colorado 80217-3706, execution of a subsequent proxy,
or oral revocation at the Meeting) at any time before it is exercised.
Shareholders of the Funds of record at the close of business on
December 9, 1996 (the "Record Date"), are entitled to vote at the Meeting,
including any adjournment(s) thereof, and are entitled to one vote for
each share, and corresponding fractional votes for fractional shares, on
each matter to be acted upon at the Meeting. On the Record Date,
[____________] shares of the Company's common stock, $.01 par value per
share were outstanding, including [____________] shares of the Asian
Growth Fund, [____________] shares of the European Small Company Fund,
[_______________] shares of the Latin American Growth Fund,
[________________] shares of the Worldwide Capital Goods Fund and
[_______________] shares of the Worldwide Communications Fund.
The following table sets forth, as of the Record Date, the
beneficial ownership of each Fund's issued and outstanding common stock by
each 5% or greater shareholder. [Please confirm: The directors and
executive officers of the Company did not own [any] [1% or more of the
outstanding] Fund shares as of the Record Date.]
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Name and Address Amount & Nature of Percent of
of Beneficial Owner Beneficial Ownership1 Common Stock
------------------- --------------------- ------------
Asian Growth Fund
European Small
Company Fund
Latin American
Growth Fund
Worldwide Capital
Goods Fund
Worldwide
Communications
Fund
1 Each beneficial owner named above shares investment power
with respect to the shares listed next to its respective
row, but its customers retain sole voting power.
In addition to the solicitations of proxies by use of the mail,
proxies may be solicited by officers of the Company, and by officers and
employees of IFG, personally or by telephone or telegraph, without special
compensation. In addition, Shareholder Communications Corporation ("SCC")
will be retained to assist in the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes
the Company has not yet received may receive telephone calls from
representatives of SCC requesting that they authorize, by telephonic or
electronically transmitted instructions, SCC to execute proxy cards on
their behalf. Telephone authorizations will be recorded in accordance
with the procedures set forth below. The Adviser believes that these
procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately determined.
SCC has received an opinion of Maryland counsel that addresses
the validity, under the applicable laws of the State of Maryland, of
authorization given orally to execute a proxy. The opinion given by
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Maryland counsel concludes that a Maryland court would find that there is
no Maryland law or public policy against the acceptance of proxies signed
by an orally-authorized agent, provided it adheres to the procedures set
forth below.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask the shareholder for such shareholder's
full name, address, social security or employer identification number,
title (if the person giving the proxy is authorized to act on behalf of an
entity, such as a corporation), and the number of shares owned, and to
confirm that the shareholder has received the Proxy Statement in the mail.
If the information solicited agrees with the information provided to SCC
by the Company, the SCC representative has the responsibility to explain
the process, read the proposals listed on the proxy card, and ask for the
shareholder's instructions on each proposal. Although he or she is
permitted to answer questions about the process, the SCC representative is
not permitted to recommend to the shareholder how to vote, other than to
read any recommendation set forth in the proxy statement. SCC will record
the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram confirming the shareholder's
vote and asking the shareholder to call SCC immediately if the
shareholder's instructions are not correctly reflected in the
confirmation.
If a shareholder wishes to participate in the Meeting, but does
not wish to give a proxy by telephone, such shareholder may still submit
the proxy card originally sent with the Proxy Statement or attend in
person. Any proxy given by a shareholder, whether in writing or by
telephone, is revocable. A shareholder may revoke the accompanying proxy
or a proxy given telephonically at any time prior to its use by filing
with the Company a written revocation or duly executed proxy bearing a
later date. In addition, any shareholder who attends the Meeting in
person may vote by ballot at the Meeting, thereby canceling any proxy
previously given.
All costs of printing and mailing proxy materials and the costs
and expenses of holding the Meeting and soliciting proxies, including any
amount paid to SCC, will be paid by INVESCO and not by the Company, the
Funds or their shareholders.
The Board may seek one or more adjournments of the Meeting to
solicit additional shareholders, if necessary, to obtain a quorum for the
Meeting, or to obtain the required shareholder vote to elect the number of
specified directors and approve Proposals 1.A., 1.B., 1.C., 1.D. and 3.
An adjournment would require the affirmative vote of the holders of a
majority of the shares present at the Meeting (or an adjournment thereof)
in person or by proxy and entitled to vote. If adjournment is proposed in
order to obtain the required shareholder vote on a particular proposal,
the persons named as proxies will vote in favor of adjournment those
shares which they are entitled to vote in favor of such proposal and will
vote against adjournment those shares which they are required to vote
against such proposal. A shareholder vote may be taken on one or more of
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the proposals discussed herein prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
PROPOSAL 1: A. Approval of the Proposed Advisory Agreement
between the Company and INVESCO Funds Group, Inc.
B. With Respect to the Asian Growth Fund, approval
of the Proposed Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and INVESCO Asia
Limited
C. With respect to the European Small Company Fund
and the Latin American Growth Fund, approval of
the Proposed Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and INVESCO Asset
Management Limited
D. With respect to the Worldwide Capital Goods Fund
and the Worldwide Communications Fund, approval
of the Proposed Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and INVESCO Trust
Company
Background
IFG serves as investment adviser to the Company pursuant to the
Current Advisory Agreement. The Current Advisory Agreement provides that
the Adviser, upon receipt of written approval of the Company, is
authorized to retain companies to provide investment advisory services to
the Company. Accordingly, IFG has entered into a sub-advisory agreement
with IAL, pursuant to which IAL serves as sub-adviser to, and is primarily
responsible for, managing the investments of the Company's Asian Growth
Fund. IFG also has entered into a sub-advisory agreement with IAM,
pursuant to which IAM serves as sub-adviser to, and is primarily
responsible for, managing the investments of the Company's IAM Sub-Advised
Funds. In addition, IFG has entered into a sub-advisory agreement with
ITC, pursuant to which ITC serves as sub-adviser to, and is primarily
responsible for, managing the investments of the Company's ITC Sub-Advised
Funds. ITC is a wholly-owned subsidiary of the Adviser. All of the
Adviser and the Sub-Advisers are indirect, wholly-owned subsidiaries of
INVESCO. INVESCO is a publicly traded holding company organized under the
laws of England in 1935. The ordinary shares of INVESCO, 25 pence nominal
value per share (the "Ordinary Shares"), are traded on the London Stock
Exchange. INVESCO's subsidiaries provide investment advisory services
throughout the world. As of September 30, 1996, the total assets advised
by INVESCO and its subsidiaries were approximately $91.1 billion.
AIM is a holding company that has been engaged in the financial
services business since 1976 and, together with its affiliates, advises or
manages 38 investment company portfolios consisting of the A I M Family of
Funds[REGISTERED TRADEMARK]. As of October 31, 1996, the total assets of
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the investment company portfolios advised or managed by AIM and its
affiliates were approximately $57 billion.
On November 4, 1996, INVESCO and INVESCO Group Services, Inc.
("IGS") entered into an agreement of merger (the "Merger Agreement") with
AIM pursuant to which IGS or another wholly-owned U.S. subsidiary of
INVESCO ("INVESCO Sub") will acquire all the issued and outstanding shares
of AIM capital stock for consideration valued on November 4, 1996 at
approximately $1.6 billion, plus the amount of AIM net income from
September 1, 1996 through the date on which the Merger is consummated (the
"Closing Date"), minus dividends paid during such period and subject to
adjustments for certain balance sheet items and transaction expenses. The
consideration will include 290 million new Ordinary Shares (including
Ordinary Shares issuable in respect of vested and unvested AIM options) of
INVESCO valued on November 4, 1996 at approximately $1.1 billion. The
balance of the consideration will be paid in cash. Upon consummation of
the Merger, the AIM shareholders will own approximately 45% of INVESCO's
total outstanding capital stock on a fully-diluted basis. Thereafter,
INVESCO will change its name to "AMVESCO PLC" (the names of the Adviser
and the Sub-Advisers will not change).
The Closing Date is presently expected to occur on or about
February 28, 1997, subject to the satisfaction of conditions to closing
that include, among other things: (a) INVESCO having consummated one or
more financings and having received net proceeds of not less than $500
million; (b) the respective aggregate annualized asset management fees of
INVESCO and AIM (based on assets under management, excluding the effects
of market movements), in respect of which consents to the Merger have been
obtained being equal to or greater than 87.5% of all such fees; (c)
INVESCO and AIM having received certain consents from regulators, lenders
and/or other third parties; (d) AIM not having received from the holder or
holders of more than 2% of the outstanding AIM shares notices that they
intend to exercise dissenters' rights; (e) a Voting Agreement, Standstill
Agreement, Transfer Restriction Agreements, Transfer Administration
Agreement, Registration Rights Agreement, Indemnification Agreement and
employment agreements with approximately thirty AIM employees having been
executed and delivered; (f) AIM having received an opinion from its U.S.
counsel that the Merger will be treated as a tax-free reorganization; and
(g) shareholder resolutions to appoint to INVESCO's board of directors
(the "INVESCO Board") six AIM designees and a resolution of the INVESCO
Board to appoint the seventh AIM designee having been passed and not
revoked.
The Merger Agreement may be terminated at any time prior to the
Closing Date by written notice by AIM or INVESCO to the other after June
1, 1997 or under other circumstances set forth in the Merger Agreement.
In certain circumstances occurring on or before September 30, 1997, a
termination fee will be payable by the party in respect of which such
circumstances have occurred.
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In connection with the Merger, the following agreements, each to
be effective upon the closing of the Merger, have been or will be
executed:
Voting Agreement. Certain AIM shareholders and
their spouses, the current directors of INVESCO and
proposed directors of INVESCO have agreed to vote as
directors and as shareholders to ensure that: (a) the
INVESCO Board will have fifteen members, consisting of
four executive directors and three non-executive
directors designated by INVESCO's current senior
management, four executive directors and three non-
executive directors designated by AIM's current senior
management and a Chairman; (b) the initial Chairman will
be Charles W. Brady (INVESCO's current Chairman) and the
initial Vice Chairman will be Charles T. Bauer (AIM's
current Chairman); and (c) the parties will vote at any
INVESCO shareholder meetings on resolutions (other than
those in respect of the election of directors) supported
by two-thirds of the INVESCO Board in the same proportion
as votes are cast by unaffiliated shareholders. The
Voting Agreement will terminate on the earlier of the
fourth anniversary of the Closing Date or the date on
which a resolution proposed by an INVESCO-designated
board member is approved by the INVESCO Board despite
being voted against by each AIM-designated board member
present at such INVESCO Board meeting.
Standstill Agreement and Transfer Restriction
Agreements. Certain AIM shareholders and their spouses
and certain significant shareholders of INVESCO have
agreed, under certain circumstances for a maximum period
of five years, not to engage in a number of specified
activities that might result in a change of the ownership
or control positions of INVESCO existing as of the
Closing Date. AIM shareholders and INVESCO's current
chairman will be restricted in their ability to transfer
their shares of INVESCO for a period of up to five years.
If the conditions to the Merger are not met or waived, or if the
Merger Agreement is terminated, the Merger will not be consummated and the
Current Agreements will remain in effect. If the Proposed Agreements are
approved and the Merger is thereafter consummated, the Proposed Agreements
will be executed and become effective on the Closing Date. In the event
that any of the Proposed Agreements are not approved and the Merger is
consummated, the Board will determine what action to take, which
ultimately will be subject to the approval of shareholders of the Company.
Under the Merger Agreement, INVESCO and INVESCO Sub have agreed
that it will comply, and use all reasonable efforts to cause compliance on
behalf of its affiliates, with the provisions of Section 15(f) of the
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Investment Company Act of 1940, as amended (the "1940 Act"). Section
15(f) provides, in pertinent part, that an investment adviser of an
investment company and its affiliates may receive any amount or benefit in
connection with a sale of securities of, or a sale of any other interest
in, such investment adviser that results in an "assignment" of an
investment advisory contract as long as two conditions are met. First, no
"unfair burden" may be imposed on the investment company as a result of
the Merger. The term "unfair burden," as defined in the 1940 Act,
includes any arrangement during the two-year period after the transaction
whereby the investment adviser (or predecessor or successor investment
adviser) or any interested person of any such adviser receives or is
entitled to receive any compensation directly or indirectly from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection
with the purchase or sale of securities or other property to, from, or on
behalf of the investment company (other than fees for bona fide principal
underwriting services). No such compensation arrangements are
contemplated in connection with the Merger.
The second condition is that, for a period of three years after
the transaction occurs, at least 75% of the members of the board of
directors of the investment company advised by such adviser are not
"interested persons" (as defined in the 1940 Act) of the new or the old
investment adviser. The Board you are being asked to elect in Proposal
No. 2 below does not meet this 75% requirement. Nevertheless, as more
fully described below under Proposal No. 2, the composition of the Board,
on or prior to the date the Merger is effected, will comply with the 75%
requirement.
INVESCO has advised the Company that the Merger is not expected
to have a material effect on the operations of the Company, on the Funds
or on their shareholders. No material change in investment philosophy,
policies or strategies is currently envisioned. The Adviser and the Sub-
Advisers will, following the Merger, continue to be indirect wholly-owned
subsidiaries of INVESCO. The Merger Agreement does not, by its terms,
contemplate any changes, other than changes in the ordinary course of
business, in the management or operation of the Adviser or the Sub-
Advisers relating to the Company and its Funds, the personnel managing the
Funds, or other services provided to or other business activities of the
Company. The Merger also is not expected to result in material changes in
the business, corporate structure or composition of the senior management
or personnel of the Adviser or the Sub-Advisers. Based on the foregoing,
the Adviser does not anticipate that the Merger will cause a reduction in
the quality of services now being provided to the Company, or have any
adverse effect on the Adviser's or the Sub-Advisers' abilities to fulfill
their respective obligations under the Proposed Agreements or to operate
their businesses in a manner consistent with their current practices.
Each of the Current Agreements, as required by Section 15 of the
1940 Act, provides for its automatic termination in the event of its
assignment. Any change of control of the Adviser and/or the Sub-Advisers
is deemed to be an assignment. Because INVESCO Ordinary Shares
10
<PAGE>
constituting more than 25% of the outstanding voting securities of INVESCO
will be issued to the shareholders of AIM, as a result of the Merger,
there may be deemed to be a change in control of INVESCO. Such a change
in control would cause an automatic termination of the Current Advisory
Agreement, the Current IAL Agreement, the Current IAM Agreement and the
Current ITC Agreement under the 1940 Act.
Accordingly, in anticipation of the consummation of the Merger
and in order to ensure continuity of investment advisory services to the
Company by the Adviser, and to the Asian Growth Fund, the IAM Sub-Advised
Funds and the ITC Sub-Advised Funds by IAL, IAM and ITC, respectively, a
new investment advisory agreement between the Company and IFG is proposed
to be approved by shareholders of each of the Funds. In addition, it is
proposed that: shareholders of the Asian Growth Fund approve a new sub-
advisory agreement between IFG and IAL, shareholders of the IAM Sub-
Advised Funds approve a new sub-advisory agreement between IFG and IAM and
shareholders of the ITC Sub-Advised Funds approve a new sub-advisory
agreement between IFG and ITC.
The Board, including a majority of those Directors who are not
"interested persons" of the Company as such term is defined under the 1940
Act (the "Independent Directors"), has approved the Proposed Advisory
Agreement and the Proposed Sub-Advisory Agreements.
Evaluation of the Board of Directors
At regular or special meetings of the Independent Directors and
of the Board held on October 14, 15, 28 and 30 and on November 6, 1996, at
each of which a majority of the Independent Directors were in attendance,
the Directors present evaluated the Proposed Advisory Agreement and each
of the Proposed Sub-Advisory Agreements. The Independent Directors had
available to them the assistance of outside counsel throughout the process
of determining whether to approve the Proposed Agreements. Prior to and
during the meetings the Independent Directors requested and received all
information they deemed necessary to enable them to determine whether each
of the Proposed Agreements is in the best interests of the Company, the
Funds and their shareholders. At the meetings, the Independent Directors
reviewed materials furnished by Fund management and met with
representatives of INVESCO and with representatives of AIM. They noted
that senior members of the management team of the Adviser will continue to
be responsible for managing the day-to-day affairs of the Adviser and
senior management members of each of the Sub-Advisers will continue to be
responsible for managing the affairs of those companies. In evaluating
the effect of the Merger, the Independent Directors viewed as significant
the fact that the Adviser and the Sub-Advisers are expected to continue to
provide to the Company, the Funds and their shareholders, after the
Merger, investment advisory services of the same nature and quality as
before the Merger. Also, the Independent Directors considered the
possible effects of the Merger on the Company and its Funds.
The Board considered the nature, quality and extent of services
provided and expected to be provided by the Adviser to the Company, by IAL
11
<PAGE>
to the Asian Growth Fund, by IAM to the IAM Sub-Advised Funds and by ITC
to the ITC Sub-Advised Funds, as well as the benefits derived by the
Adviser, IAL, IAM and ITC. In addition, the Board discussed and reviewed
the terms and provisions of the Proposed Advisory Agreement and the
Proposed Sub-Advisory Agreements. The Board specifically noted that,
other than the dates of execution, effectiveness and termination, the
terms of each of the Proposed Agreements are the same, in all material
respects, as the terms of the corresponding Current Agreements.
Specifically, the Board noted that the fees and expenses payable under
each of the Proposed Agreements are identical to the fees presently in
effect under the corresponding Current Agreements.
The Board also took note of the terms of the Merger Agreement and
the effect of the addition of the substantial resources of AIM and its
affiliated companies to the INVESCO group, including the reputation,
experience, personnel, resources, financial condition and performance of
A I M Advisors, Inc. The Board considered the statements made by
representatives of INVESCO and AIM that the capabilities of the Adviser
and the Sub-Advisers would not be adversely affected by the Merger and
could be enhanced by the resources of AIM, although there was no assurance
of the Adviser or Sub-Advisers obtaining any particular benefits.
Based upon the Directors' review and the evaluations of the
materials they received, and in consideration of all factors deemed
relevant to them, the Directors determined that each of the Proposed
Agreements is fair, reasonable and in the best interests of the Company,
the Funds and their shareholders. ACCORDINGLY, THE BOARD, INCLUDING ALL
OF THE INDEPENDENT DIRECTORS PRESENT AT THE APPLICABLE MEETING, APPROVED
EACH OF THE PROPOSED AGREEMENTS AND VOTED TO RECOMMEND THAT ALL OF THE
COMPANY'S SHAREHOLDERS VOTE TO APPROVE THE PROPOSED ADVISORY AGREEMENT,
THAT SHAREHOLDERS OF THE ASIAN GROWTH FUND VOTE TO APPROVE THE PROPOSED
IAL AGREEMENT, THAT SHAREHOLDERS OF THE IAM SUB-ADVISED FUNDS VOTE TO
APPROVE THE PROPOSED IAM AGREEMENT AND THAT SHAREHOLDERS OF THE ITC SUB-
ADVISED FUNDS VOTE TO APPROVE THE PROPOSED ITC AGREEMENT.
The Proposed Advisory and Sub-Advisory Agreements
If (i) shareholders of each of the Funds approve the Proposed
Advisory Agreement; (ii) shareholders of the Asian Growth Fund approve the
Proposed IAL Agreement; (iii) shareholders of each of the IAM Sub-Advised
Funds approve the Proposed IAM Agreement; and (iv) shareholders of each of
the ITC Sub-Advised Funds approve the Proposed ITC Agreement, the Proposed
Agreements will become effective immediately after the closing of the
Merger. This summary of the Proposed Agreements is qualified in its
entirety by reference to the form of such agreements attached to this
Proxy Statement as Exhibits A.1., A.2., A.3. and A.4., respectively.
Each of the Proposed Agreements will remain in effect, unless
earlier terminated, for an initial term expiring two years from the
Closing Date. As previously discussed, the sole purpose of entering into
the Proposed Advisory Agreement and each of the Proposed Sub-Advisory
Agreements is to enable IFG to continue to serve as the investment adviser
12
<PAGE>
to the Company and to enable IAL, IAM and ITC to continue to serve as sub-
advisers to the Asian Growth Fund, the IAM Sub-Advised Funds and the ITC
Sub-Advised Funds, respectively, after termination of each of the Current
Agreements by virtue of the "assignment" of such agreements that could
result from the Merger. THE MATERIAL TERMS AND PROVISIONS OF EACH OF THE
PROPOSED AGREEMENTS, OTHER THAN THEIR RESPECTIVE EFFECTIVE AND TERMINATION
DATES, ARE THE SAME, IN ALL SUBSTANTIVE RESPECTS, AS THOSE OF THE
CORRESPONDING CURRENT AGREEMENTS, EACH OF WHICH IS SUMMARIZED BELOW.
The Current Advisory Agreement
The Current Advisory Agreement, dated May 2, 1994, was
unanimously approved on April 20, 1994, by a vote cast in person by a
majority of the Company's Directors, including a majority of the
Independent Directors. On July 12, 1994, such agreement was approved by
IFG, as the then sole shareholder of the Company, for an initial term
expiring on April 30, 1996. On _______________, 1995, the Board,
including a majority of the Independent Directors approved an amendment to
the agreement reflecting the addition of the investment portfolio
designated as the Asian Growth Fund to the Company. On September 12,
1995, IFG, the then sole shareholder of the Asian Growth Fund approved the
Current Advisory Agreement. The continuation of the Current Advisory
Agreement until April 30, 1997, was approved by the Directors, including a
majority of the Independent Directors, at a meeting of the Directors held
on April 30, 1996, called for the purpose of approving the Current
Advisory Agreement.
The Current Advisory Agreement may be continued from year to year
as to each Fund as long as each such continuance is approved at least
annually by the Board, or by a vote of the holders of a majority of the
then-outstanding voting securities (as defined below under "Vote
Required") of the Funds. Any such continuance also must be approved by a
majority of the Independent Directors of the Company at a meeting called
for the purpose of voting on such continuance. Upon sixty (60) days'
written notice, the Current Advisory Agreement may be terminated at any
time without penalty by the Board or by a majority of the then-outstanding
voting securities of the Company or, with respect to a particular Fund, by
a majority of the then-outstanding voting securities of that Fund, or by
IFG. As discussed earlier, the Current Advisory Agreement terminates
automatically in the event of its "assignment" under the 1940 Act.
The Current Advisory Agreement provides that the Adviser shall
(either directly or by delegation to a sub-adviser) maintain a continuous
investment program for the Company and each of the Funds that is
consistent with the Company's and the Funds' respective investment
objectives and policies as set forth in the Company's registration
statement (the "Registration Statement") and prospectuses and Statements
of Additional Information of each of the Funds (the "Prospectus" and the
"SAI") as in effect from time to time under the 1940 Act and the
Securities Act of 1933, as amended. In the performance of such duties,
the Adviser shall, among other things: (i) manage the investment and
reinvestment of the assets of the Company and the Funds; (ii) determine
13
<PAGE>
what securities are to be purchased or sold for the Company and the Funds
and place, or arrange for the placement of, all orders for such
transactions; (iii) furnish the Company and the Funds with investment
analysis and research, reviews of current economic conditions and trends
and considerations respecting long-range investment policies; (iv) make
recommendations as to the manner in which rights pertaining to the Funds'
portfolio securities should be exercised; (v) calculate the net asset
value of each Fund as required by the 1940 Act; (vi) furnish requisite
office space, equipment and facilities as may reasonably be requested by
the Company from time to time; and (vii) maintain the Company's accounts
and records and prepare all requisite corporate documents such as tax
returns and reports to the Securities and Exchange Commission. Except to
the extent assumed by IFG under the Current Advisory Agreement or required
by law, expenses incurred in connection with the operations and
organization of the Funds 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 each of the
Asian Growth Fund, the European Small Company Fund and the Latin American
Growth 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 0.55% of the Fund's
average net assets over $1 billion. With respect to each of the Worldwide
Capital Goods Fund and the Worldwide Communications Fund, the fee is
calculated at the annual rate of: 0.65% of the first $500 million of the
Fund's average net assets; 0.55% of the next $500 million of the Fund's
average net assets; and 0.45% of the Fund's average net assets over $1
billion.
For the fiscal year ended July 31, 1996, the European Small
Company Fund, the Latin American Growth Fund, the Worldwide Capital Goods
Fund and the Worldwide Communications Fund paid to IFG total advisory fees
of $271,008, $130,913, $52,495 and $255,873, respectively. The net
assets, at July 31, 1996, for such Funds were $94,261,007, $32,063,900,
$7,730,965 and $50,516,386, respectively.
For the period from March 1, 1996 (the Asian Growth Fund's
inception) until July 31, 1996, the Asian Growth Fund paid to IFG total
advisory fees of $26,564. The Asian Growth Fund's net assets at July 31,
1996 were $14,314,704.
The Current Advisory Agreement provides that IFG shall not be
liable for any error of judgment, mistake of law, any loss arising out of
any investment, any other act or omission in the performance of its
obligations under the Current Advisory Agreement not involving wilful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations under such Agreement.
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<PAGE>
The Current Sub-Advisory Agreements
The Current IAL Agreement, dated June 20, 1995, was unanimously
approved on __________, 1995 by a majority of the Directors, including a
majority of the Independent Directors. On September 12, 1995, IFG, the
then sole shareholder of the Asian Growth Fund, approved the Current IAL
Agreement for an initial term expiring on April 30, 1996.
The Current IAM Agreement, dated November 10, 1995, was
unanimously approved on __________, 1995 by a majority of the Directors,
including a majority of the Independent Directors, reflecting an
assignment to IAM of the obligations of sub-adviser to the IAM Sub-Advised
Funds from another indirect wholly-owned subsidiary of INVESCO with no
actual change in management or control. The Current IAM Agreement is
substantially identical, in all material respects, to the prior sub-
advisory agreement, which was approved on February 8, 1995, by IFG, as the
then sole shareholder of the IAM Sub-Advised Funds, for an initial term
expiring on April 30, 1996.
The Current ITC Agreement, dated May 2, 1994, was unanimously
approved on April 20, 1994 by a majority of the Directors, including a
majority of the Independent Directors. On July 12, 1994, IFG, as the then
sole shareholder of the ITC Sub-Advised Funds, approved the Current ITC
Agreement for an initial term expiring on April 30, 1996.
The continuation of the Current Sub-Advisory Agreements until
April 30, 1997, was approved by the Directors, including a majority of the
Independent Directors at a meeting of the Directors held on April 30,
1996, called for the purpose of approving the Current Sub-Advisory
Agreements. Each of the Current Sub-Advisory Agreements may be terminated
at any time without penalty by IFG, the Board, a vote of a majority of the
then-outstanding voting securities of the respective Fund or by the
applicable Sub-Adviser. Termination by IFG or the Sub-Adviser requires
sixty (60) days' written notice to the other party and to the Company.
Each of the Current Sub-Advisory Agreements provides, as
applicable, that IAL, as sub-adviser to the Asian Growth Fund, IAM, as
sub-adviser to the IAM Sub-Advised Funds, and ITC, as sub-adviser to the
ITC Sub-Advised Funds, subject to the supervision of IFG and the Board,
shall maintain a continuous investment program for the Asian Growth Fund,
the IAM Sub-Advised Funds and the ITC Sub-Advised Funds, respectively,
that is consistent with each Fund's respective investment objectives and
policies as set forth in the Company's Registration Statement and in the
Fund's Prospectus and SAI. In the performance of such duties, each Sub-
Adviser is obligated to provide the Fund it sub-advises with the same
services as those set forth above in clauses (i) through (iv) with respect
to the services provided to the Company and the Funds by the Adviser.
15
<PAGE>
The Current IAL Agreement provides that as compensation for its
services, IAL shall receive from IFG, at the end of each month, a fee
based upon the Asian Growth Fund's average net assets, determined daily.
Specifically, the fee is calculated at the annual rate of: 0.375% of the
first $500 million of the Fund's average net assets; 0.325% of the next
$500 million of the Fund's average net assets; and 0.275% of the Fund's
average net assets over $1 billion.
The Current IAM Agreement provides that as compensation for its
services, IAM shall receive from IFG, at the end of each month, a fee
based upon each IAM Sub-Advised Fund's average net asset, determined
daily. Specifically, the fee is calculated at the annual rate of: 0.375%
of the first $500 million of the Fund's average net assets; 0.325% of the
next $500 million of the Fund's average net assets; and 0.275% of the
Fund's average net assets over $1 billion.
The Current ITC Agreement provides that as compensation for its
services, ITC shall receive from IFG, at the end of each month, a fee
based upon each ITC Sub-Advised Fund's average net assets, determined
daily. Specifically, the fee is calculated at the annual rate of: 0.325%
of the first $500 million of the Fund's average net assets, 0.275% of the
next $500 million of the Fund's average net assets and 0.225% of the
Fund's average net assets over $1 billion.
With respect to each of the Current Sub-Advisory Agreements the
sub-advisory fees are paid by IFG, and not by the Funds or their
shareholders.
Under the Current Sub-Advisory Agreements, none of the Sub-
Advisers shall be liable for any error of judgment, mistake of law or for
any loss arising out of sub-advisory services rendered pursuant to such
agreements, except losses arising from wilful misfeasance, bad faith and
gross negligence (and, in the case of the Current ITC Agreement, reckless
disregard) of the Sub-Advisers' respective duties under these agreements.
Information Concerning Adviser and Affiliated Companies
IFG, a Delaware corporation, serves as the Company's investment
adviser. IFG 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 INVESCO.1 The
corporate headquarters of INVESCO are located at 11 Devonshire Square,
London EC2M 4YR, England. IFG's offices are located at 7800 East Union
Avenue, Denver, Colorado 80237. IFG currently serves as investment
adviser of 14 open-end investment companies having aggregate net assets of
$13.7 billion. Exhibit B to this Proxy Statement includes a list of
1 The intermediary companies between INAH and INVESCO are as
follows: INVESCO, Inc., INVESCO Group Services, Inc. and INVESCO North
American Group, Ltd., each of which is wholly-owned by its immediate
parent.
16
<PAGE>
investment companies, including the Company, for which the Adviser or the
Sub-Advisers provide advisory services and which have similar investment
objectives to those of the Funds, and sets forth the net assets of and
advisory fees payable by such companies.
The principal executive officer and directors of IFG and their
principal occupations are:
Dan J. Hesser, Chairman of the Board, President and Chief
Executive Officer; Brian N. Minturn, Executive Vice President and
Director; Frank M. Bishop, Director, also, President and Chief Operating
Officer of INVESCO, Inc.; Samuel T. DeKinder, Director, also,
Institutional Marketing Manager of INVESCO North America; Hubert L.
Harris, Jr., Director, also, President of INVESCO Services, Inc., Director
of INVESCO and Chief Executive Officer of INVESCO Individual Services
Group; Robert J. O'Connor, Director, also, Chief Executive Officer and
President of INVESCO Retirement Plan Services, a division of IFG; and R.
Dalton Sim, Director, also, President and Director of INVESCO Trust
Company.
The address of each of the foregoing officers and directors is
7800 East Union Avenue, Denver, Colorado 80237, with the exception of the
address of Messrs. Bishop, DeKinder and Harris, which is 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309 and Mr. O'Connor, whose address is
1355 Peachtree Street, N.E., Atlanta, Georgia 30309.
IFG also acts as the Company's Distributor. Pursuant to an
Administrative Services Agreement between the Company and IFG, IFG also
provides administrative services to the Company, including sub-accounting
and recordkeeping services and functions. During the fiscal year ended
July 31, 1996, the Company paid IFG total compensation of $58,185 in
payment of such services ($3,031, $15,420, $12,618, $11,211 and $15,905 of
such compensation was paid IFG by the Asian Growth Fund (for the period
from March 1, 1996), the European Small Company Fund, the Latin American
Growth Fund, the Worldwide Capital Goods Fund and the Worldwide
Communications Fund, respectively).
During the fiscal year ended July 31, 1996, the Company paid IFG,
which also serves as the Company's registrar, transfer agent and dividend
disbursing agent, total compensation of $317,397 for such services
($16,399, $66,181, $47,581, $35,801 and $151,435 of such compensation was
paid IFG by the Asian Growth Fund (for the period from March 1, 1996), the
European Small Company Fund, the Latin American Growth Fund, the Worldwide
Capital Goods Fund and the Worldwide Communications Fund, respectively).
Pursuant to each of the Funds' Plan and Agreement of Distribution
pursuant to Rule 12b-1 under the 1940 Act, the Funds paid IFG during the
fiscal year ended July 31, 1996, total reimbursements of $261,460
($8,854, $90,336, $43,638, $20,191 and $98,441 of such reimbursements were
paid by the Asian Growth Fund (for the period from March 1, 1996), the
European Small Company Fund, the Latin American Growth Fund, the Worldwide
Capital Goods Fund and the Worldwide Communications Fund, respectively).
17
<PAGE>
Once the Merger is consummated and the Proposed Agreements are
approved, IFG fully intends to continue to provide the same level, quality
and nature of the foregoing services to the Company and its Funds as are
currently being provided.
Information Concerning Sub-Advisers
INVESCO Asia Limited
INVESCO Asia Limited ("IAL"), Suite 2106, Two Pacific Place, 88
Queensway, Hong Kong, is a wholly-owned subsidiary of INVESCO Pacific
Holdings, Ltd., Cedar House, 41 Cedar Avenue, Hamilton, HM12, Bermuda
("IPHL"). IPHL is an indirect wholly-owned subsidiary of INVESCO.2
IFG, as investment adviser, has contracted with IAL for investment
advisory and research services on behalf of the Asian Growth Fund. IAL
has the primary responsibility for providing portfolio investment
management services to that Fund. IAL also served as adviser or sub-
adviser to [_________] investment portfolios as of July 31, 1996. These
[________] portfolios had aggregate assets of approximately [____________]
as of July 31, 1996.
The principal executive officer and directors of IAL, their
addresses and their principal occupations are:
Andrew Lo Tak Shing, Managing Director; the Honorable Michael
Benson, Chairman of the Board; Patrick Nigel Hale, Director; James Ian
Wedderburn Cleland Robertson, Director; Anna Tong Seen Ming, Director;
William A. Barron, Director; Hyung Jin Song, Director; and Sammy Lau
Chung Hing, Director.
The address of each of the foregoing officers and directors is
Suite 2106, Two Pacific Place, 88 Queensway, Hong Kong.
INVESCO Asset Management Limited
--------------------------------
INVESCO Asset Management Limited ("IAM"), 11 Devonshire Square,
London, England EC2M, is a wholly-owned subsidiary of INVESCO Europe
Limited ("IEL"). IEL is a direct wholly-owned subsidiary of INVESCO.
IFG, as investment adviser, has contracted with IAM for investment
advisory research services on behalf of the European Small Company Fund
and the Latin American Growth Fund. IAM has the primary responsibility
for providing portfolio investment management services to the Funds. IAM
also served as adviser or sub-adviser to [_______] investment portfolios
as of July 31, 1996. These [_____] portfolios had aggregate assets of
approximately [____________] as of July 31, 1996.
2 The intermediary companies between IPHL and INVESCO are as
follows: INVESCO Global Asset Management, Ltd., INVESCO International,
Ltd. and INVESCO International Holdings, Ltd.
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The principal executive officer and directors of IAM and their
principal occupations are as follows:
Jeffrey C. Attfield, Deputy Chief Executive, Director and Fund
Manager; Norman M. M. Riddell, Chairman of the Board and Investment
Manager; Sarah C. Bates, Director and Managing Director, Investment Trust
Division; Francesco Bertoni, Director and Investment Manager; Roy N.
Bracher, Director and Investment Director; Anthony Broccardo, Director and
Fund Manager; Ian A. Carstairs, Director and Investment Manager; Adam D.
Cooke, Director and Marketing Manager of Investment Services; Andrew J.
Crossley, Director and Fund Manager; Olivier de Faramond, Director and
Fund Manager; David C. Gillan, Director and Investment Director; Peter J.
Glynne-Percy, Director and Investment Manager; Tristan P. A. Hillgarth,
Director and Investment Manager; David C. Hypher, Director and Investment
Director; Martin R. Kraus, Director and Investment Manager; Jeremy C.
Lambourne, Director and Finance Director; Rory S. Powe, Director and
Investment Manager; Jennifer M. Prince-Cooper, Director; Ricardo
Ricciardi, Director; and Robert J. A. Cackett, Director and Secretary.
The address of each of the foregoing officers and directors is 11
Devonshire Square, London, England EC2M.
INVESCO Trust Company
---------------------
INVESCO Trust Company ("ITC"), 7800 East Union Avenue, Denver,
Colorado 80237, a Colorado trust company incorporated in 1969, is a
wholly-owned subsidiary of IFG. IFG, as investment adviser, has
contracted with ITC for investment advisory and research services on
behalf of the Worldwide Capital Goods Fund and the Worldwide
Communications Fund. ITC has the primary responsibility for providing
portfolio investment management services to these Funds. ITC also served
as adviser or sub-adviser to 47 investment portfolios as of October 31,
1996, including 27 portfolios in the INVESCO group. These 47 portfolios
had aggregate assets of approximately $12.5 billion as of October 31,
1996. In addition, ITC provides investment management services to private
clients, including employee benefit plans that may be invested in a
collective trust sponsored by ITC.
The principal executive officer and directors of ITC and their
principal occupations are:
R. Dalton Sim, President, Chief Executive Officer and Director;
Frank M. Bishop, Director, also, President and Chief Operating Officer of
INVESCO, Inc.; Samuel T. DeKinder, Director, also, Institutional Marketing
Manager of INVESCO North America; and Dan J. Hesser, Director, also,
President, Chief Executive Officer and Director of IFG.
The address of each of the foregoing officers and directors is
set forth above.
19
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Vote Required
As provided under the 1940 Act, approval of the Proposed Advisory
Agreement will require the affirmative vote of a majority of the
outstanding shares of each Fund voting separately as a class and approval
of each of the respective Proposed Sub-Advisory Agreements will require
the affirmative vote of a majority of the outstanding shares of each Fund,
voting separately as a class. Such a majority is defined in the 1940 Act
as the lesser of: (a) 67% or more of the shares present at such meeting,
if the holders of more than 50% of the outstanding shares of each Fund are
present or represented by proxy, or (b) more than 50% of the total
outstanding shares of each Fund.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS,
RECOMMEND THAT ALL OF THE COMPANY'S SHAREHOLDERS VOTE TO APPROVE THE
PROPOSED ADVISORY AGREEMENT BETWEEN THE COMPANY AND IFG, THAT SHAREHOLDERS
OF THE ASIAN GROWTH FUND VOTE TO APPROVE THE PROPOSED SUB-ADVISORY
AGREEMENT BETWEEN IFG AND IAL, THAT SHAREHOLDERS OF THE IAM SUB-ADVISED
FUNDS VOTE TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT BETWEEN IFG AND
IAM AND THAT SHAREHOLDERS OF THE ITC SUB-ADVISED FUNDS VOTE TO APPROVE THE
PROPOSED SUB-ADVISORY AGREEMENT BETWEEN IFG AND ITC.
PROPOSAL 2: Election of Directors of the Company
The Company currently has eleven 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 enable the requirement to be met in
the future without the necessity of calling additional shareholder
meetings, at this Meeting, shareholders are being asked to elect the
current eleven Directors to hold office until the next meeting of
shareholders or until their successors are elected and qualified. Under
the provisions of the Company's by-laws, as permitted by Maryland law, the
Company does not anticipate holding annual shareholder meetings. Thus,
the Directors will be elected for indefinite terms.
Seven of the current Directors are "Independent Directors," i.e.,
Directors who are not "interested persons" of the Company, as that term is
defined in the 1940 Act. The nominees for election as Directors have been
proposed by the Directors now serving or, in the case of nominees for
positions as Independent Directors, by the Independent Directors now
serving.
The persons named as attorneys-in-fact in the enclosed proxy have
advised the Company 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. All of the nominees have consented to being named
in this Proxy Statement and to serve, if elected, and no circumstances now
20
<PAGE>
known will prevent any of the nominees from serving. If any nominee
should be unable or unwilling to serve, the proxy will be voted for a
substitute nominee proposed by the present Directors or, in the case of an
Independent Director nominee, by the Independent Directors.
Set forth below is information concerning the nominees for
Directors to be elected at this Meeting:
<TABLE>
<CAPTION>
Number of Company
Director or Shares
Position, if Any, with the Company, Executive Beneficially
Principal Officer of Owned Directly or
Occupation and Business Experience (during the Company Indirectly on
Name and Age past five years) Since Dec. 9, 1996(1)
------------ ----------------------------------- ----------- -----------------
<S> <C> <C> <C>
Charles W. Brady* 3, 5, 6 Chairman of the Board of the Company. Chief 1993
Age 61 Executive Officer and Director of INVESCO
and of various subsidiaries thereof;
Chairman of the Board of INVESCO Advisor
Funds, Inc. ("Advisor Funds"), INVESCO
Treasurer's Series Trust ("Treasurer's
Series Trust") and The Global Health
Sciences Fund ("GHSF").
Dan J. Hesser* 3, 5 President, Chief Executive Officer and 1993
Age 56 Director of the Company. Chairman of the
Board, President and Chief Executive Officer
of IFG; Director of ITC; Trustee of GHSF;
Chairman and Director of Britannia North
America Holdings, Inc.
Fred A. Deering 2, 3, 5 Vice Chairman of the Board of the Company. 1993
Age 68 Vice Chairman of Advisor Funds and
Treasurer's Series Trust; Trustee of GHSF;
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.
21
<PAGE>
Number of Company
Director or Shares
Position, if Any, with the Company, Executive Beneficially
Principal Officer of Owned Directly or
Occupation and Business Experience (during the Company Indirectly on
Name and Age past five years) Since Dec. 9, 1996(1)
------------ ----------------------------------- ----------- -----------------
Dr. Victor L. Andrews 4, 6 Director of the Company. Professor 1993
Age 66 Emeritus, Chairman Emeritus and Chairman of
the CFO Roundtable of the Department of
Finance of Georgia State University,
Atlanta, Georgia; President, Andrews
Financial Associates, Inc. (consulting
firm); formerly, member of the faculties of
the Harvard Business School and the Sloan
School of Management of MIT. Dr. Andrews is
also a Director of The Southeastern Thrift
and Bank Fund, Inc., Sheffield Total Return
Fund and Sheffield Intermediate-Term Bond
Fund.
Bob R. Baker 3, 4, 5 Director of the Company. President and 1993
Age 60 Chief Executive Officer of AMC Cancer
Research Center, Denver, Colorado, since
January 1989.
Lawrence H. Budner 2, 6 Director of the Company. Trust Consultant. 1993
Age 66
Daniel D. Chabris 2, 3, 5 Director of the Company. Financial 1993
Age 73 Consultant.
A. D. Frazier, Jr.* 4 Director of the Company. Executive Vice 1995
Age 52 President of INVESCO; from 1991 to 1996,
Senior Executive Vice President and Chief
Operating Officer of the Atlanta Committee
for the Olympic Games; Trustee of GHSF;
Director of Charter Medical Corp.
Hubert L. Harris, Jr.* Director of the Company. Chief Executive 1996
Age 53 Officer of INVESCO Individual Services
Group; Chairman of the Board and Chief
Executive Officer of INVESCO Services, Inc.
and the Advisor Funds; President and Trustee
of GHSF; Director of INVESCO.
Kenneth T. King 3, 4, 5, 6 Director of the Company. 1993
Age 71
22
<PAGE>
Number of Company
Director or Shares
Position, if Any, with the Company, Executive Beneficially
Principal Officer of Owned Directly or
Occupation and Business Experience (during the Company Indirectly on
Name and Age past five years) Since Dec. 9, 1996(1)
------------ ----------------------------------- ----------- -----------------
John W. McIntyre 2 Director of the Company. Retired; formerly, 1995
Age 66 Vice Chairman of the Board of Directors of
The Citizens and Southern Corporation and
Chairman of the Board and Chief Executive
Officer of The Citizens and Southern Georgia
Corp. and Citizens and Southern National
Bank; Director of Golden Poultry Co., Inc.;
Trustee of GHSF and of Gables Residential
Trust.
</TABLE>
1 As interpreted by the Securities and Exchange Commission, a security
is beneficially owned by a person if that person has or shares voting
power or investment power with respect to the security. The persons
listed have some or complete voting and investment power with respect
to their respective fund shares.
2 Member of Audit Committee.
3 Member of Executive Committee.
4 Member of Management Liaison Committee.
5 Member of Valuation Committee.
6 Member of Compensation Committee.
* Because of his affiliation with INVESCO, with the Company's
investment advisers or with companies affiliated with INVESCO,
this individual is deemed to be an "interested person" of the
Company as that term is defined in the 1940 Act.
As discussed above under Proposal No.1, the terms of the Merger
Agreement require that immediately after the Merger is effected, 75% of
the members of the Board not be "interested persons" of the Company, as
that term is defined in the 1940 Act. As noted above, seven of the
current Directors (63%) are Independent Directors. Thus, the composition
of the Board you are being asked to elect would not meet the 75%
requirement. Therefore, prior to the closing of the Merger, it is the
current intention that a sufficient number of "interested" Directors would
resign from the Board so that the Board would be in compliance with the
75% requirement at the time the Merger is effected. However, it would
also be possible to comply with Section 15(f) if the Independent Directors
23
<PAGE>
then serving were to determine to increase the number of "disinterested"
Directors by nominating and electing a sufficient number of additional
Independent Directors, either before or after the closing of the Merger.
If that were to happen, fewer, if any, "interested" Directors would be
required to resign, or any that had resigned could be re-elected by the
Directors then serving so long as the 75% requirement continued to be met.
The committees of the Board are the compensation committee,
executive committee, audit committee, management liaison committee and
valuation committee. The Company does not have a nominating committee.
During the intervals between the meetings of the Board, and except for
certain powers which, under applicable law and/or the Company's by-laws,
may only be exercised by the full Board, the executive committee may
exercise all powers and authority of the Board in the management of
Company business. All decisions are subsequently submitted for
ratification by the full Board. The audit committee, consisting of four
Independent Directors, meets periodically with the Company's independent
accountants and the executive officers of the Company. This committee
reviews the accounting principles being applied by the Company 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 past fiscal year, the Board met three
times, the audit committee met four times, the management liaison
committee met three times and the compensation committee met once. During
the Company's last fiscal year, each director nominee attended seventy-
five percent or more of the aggregate of the Board meetings and meetings
of the committees of the Board on which he served [,WITH THE EXCEPTION OF
MESSRS. BRADY AND FRAZIER WHO ATTENDED [___]%, OF THE AGGREGATE OF SUCH
MEETINGS AND MR. KING WHO, BECAUSE OF NON-RECURRING HEALTH DIFFICULTIES,
ATTENDED 73% OF THE AGGREGATE OF SUCH MEETINGS.]
The Company pays its Independent Directors the director's fees
and board vice chairman and committee chairmen fees described below and
reimburses Directors for travel expenses incurred in attending meetings.
Messrs. Brady, Harris, Hesser and, as of November 1, 1996, Frazier, as
"interested persons" of the Company and of other funds in the INVESCO Fund
Complex,3 receive compensation and are reimbursed for travel expenses
incurred in attending meetings as officers or employees of IFG or of its
affiliated companies, but do not receive any directors' fees or other
compensation from the Company or from other companies in the INVESCO Fund
Complex for their services as Directors.
The following table sets forth, for the fiscal year ended
July 31, 1996: the compensation paid by the Company to its seven current
Independent Directors (and to Mr. Frazier, for the period before he became
an "interested person" of the Company on November 1, 1996) for services
3 As used herein, the term "INVESCO Fund Complex" refers to all
funds distributed by IFG (including the Company), the Advisor Funds, GHSF
and Treasurer's Series Trust.
24
<PAGE>
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 in the INVESCO Fund Complex to these
Directors for services rendered in their capacities as directors or
trustees during the year ended December 31, 1995. As of December 31,
1995, there were 48 funds in the INVESCO Fund Complex.
<TABLE>
<CAPTION>
Pension /
Retirement Total Compensation
Aggregate Benefits Accrued Estimated Annual from INVESCO Fund
Compensation from as Part of Company Benefits Upon Complex Paid
Name and Position the Company1 Expenses 2 Retirement 3 to Directors 1
----------------- ----------------- ------------------ ---------------- -----------------
<S> <C> <C> <C> <C>
Fred A. Deering, Vice 2,388 71 59 87,350
Chairman of the Board
Victor L. Andrews, 2,363 62 65 68,000
Director
Bob R. Baker, Director 2,370 64 87 73,000
Lawrence H. Budner, 2,353 67 65 68,350
Director
Daniel D. Chabris, 2,371 76 46 73,350
Director
A. D. Frazier, Jr., 2,342 0 0 63,500
Director 4
Kenneth T. King, 2,364 73 53 70,000
Director
John W. McIntyre, 2,350 0 0 67,850
Director 4 ------- ------- ------- -------
TOTAL 18,901 413 375 571,400
======= ======= ======= =======
% OF NET ASSETS 0.0095%5 0.0002%5 0.0043%(6)
</TABLE>
1 The vice chairman of the Board, the chairmen of the audit, management
liaison and compensation committees, and the members of the audit,
25
<PAGE>
management liaison, executive and valuation committees receive
compensation for serving in such capacities in addition to the
compensation paid to all Independent Directors.
2 Represents benefits accrued with respect to the Defined Benefit
Deferred Compensation Plan discussed below, and not compensation
deferred at the election of the Directors.
3 These amounts represent the Company's share of the estimated annual
benefits payable by the INVESCO Fund Complex (excluding GHSF, 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 Fund 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 Fund
Complex, and for other reasons during the period in which retirement
benefits are accrued on behalf of the respective Directors. This
results in lower estimated benefits for Directors who are closer to
retirement and higher estimated benefits for directors who are further
from retirement. With the exception of Messrs. Frazier and McIntyre,
each of these Directors has served as a director/trustee of one or
more of the funds in the INVESCO Fund Complex for the minimum five-
year period required to be eligible to participate in the Defined
Benefit Deferred Compensation Plan.
4 Messrs. Frazier and McIntyre began serving as Directors of the Company
on April 19, 1995.
5 Total as a percentage of the Company's net assets as of July 31, 1996.
6 Total as a percentage of the net assets of the INVESCO Fund Complex as
of December 31, 1995.
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 of each of the Funds. The investment
adviser for each Fund has the primary responsibility for making investment
decisions on behalf of that Fund. These investment decisions are reviewed
by the IFG investment committee.
All of the officers and Directors of the Company hold comparable
positions with the following investment companies which comprise the
INVESCO Fund Complex: 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 Strategic Portfolios, Inc.,
INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment
Funds, Inc. All of the officers and Directors of the Company hold
comparable positions with INVESCO Value Trust. In addition, all of the
Directors of the Company are also Directors of INVESCO Advisor Funds, Inc.
26
<PAGE>
(formerly known as The EBI Funds, Inc.); and, with the exception of Mr.
Hesser, Trustees of INVESCO Treasurer's Series Trust.
Vote Required
The Directors will be elected by a plurality of the votes present
at the Meeting in person or by proxy and entitled to vote, provided a
quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS
VOTE TO ELECT ALL OF THE NOMINEES LISTED ABOVE.
PROPOSAL 3: Ratification or Rejection of Selection
of Independent Accountants
The Directors of the Company, including a majority of its
Independent Directors, have selected Price Waterhouse LLP to continue to
serve as independent accountants of the Company for the fiscal year ending
July 31, 1997, subject to ratification by the Company's shareholders.
This firm has no direct financial interest or material indirect financial
interest in the Company. Representatives of this firm 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 following summarizes Price Waterhouse LLP's audit services
for the fiscal year ended July 31, 1996: audit of annual financial
statements; preparation of the Company's federal and state income tax
returns; preparation of the Company's federal excise tax return;
consultation with the Company's audit committee; and routine consultation
on financial accounting and reporting matters.
The Board authorized all services performed by Price Waterhouse
LLP on behalf of the Company. In addition, the Board annually reviews the
scope of services to be provided by Price Waterhouse LLP and considers the
effect, if any, that performance of any non-audit services might have on
audit independence.
An audit committee, consisting of four Independent Directors,
meets periodically with the Company's independent accountants to review
accounting and reporting requirements.
Vote Required
The ratification of the selection of the independent accountants
must be approved by a majority of the shares present at the Meeting in
person or by proxy and entitled to vote, provided a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS
VOTE IN FAVOR OF PROPOSAL 3.
27
<PAGE>
OTHER BUSINESS
The management of the Company has no business to bring before the
Meeting other than the matters described above. Should any other business
be presented at the Meeting, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
The Company 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 the Company, 7800 East
Union Avenue, Denver, Colorado 80237. The Company has not received any
shareholder proposals to be presented at this Meeting.
By Order of the Board of Directors,
Glen A. Payne
Secretary
December 26, 1996
28
<PAGE>
EXHIBIT A.1
-----------
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, Denver,
Colorado, by and between INVESCO Funds Group, Inc. (the "Adviser"), a
Delaware corporation, and INVESCO Specialty Funds, Inc., a Maryland
Corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company is a corporation organized under the laws of
the State of Maryland; and
WHEREAS, the Company is registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), as a diversified,
open end management investment company and has one class of shares (the
"Shares"), which is divided into five series, each representing an
interest in a separate portfolio of investments (such series initially
being the INVESCO Worldwide Capital Goods Fund, ^ INVESCO Worldwide
Communications Fund, INVESCO European Small Company Fund, INVESCO Latin
American Growth Fund, and INVESCO Asian Growth Fund (individually, the
"Fund" and collectively, the "Funds")); and
WHEREAS, the Company 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 Company and
its Funds, subject to the terms of this Agreement and to
the supervision of the Company's directors (the
"Directors"). The Adviser agrees to perform, or arrange
for the performance of, the following specific services
for the Company:
(a) to manage the investment and reinvestment of all
the assets, now or hereafter acquired, of the
Company and the Funds of the Company;
(b) to maintain a continuous investment program for
the Company and each Fund of the Company,
consistent with (i) the Company's and each 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
<PAGE>
information of the Company or any Fund of the
Company, 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 Company and its Funds, unless
otherwise directed by the Directors of the
Company, and to execute transactions accordingly;
(d) to provide to the Company and the Funds of the
Company the benefit of all of the investment
analyses and research, the reviews of current
economic conditions and trends, and the
consideration of long range investment policy now
or hereafter generally available to investment
advisory customers of the Adviser;
(e) to determine what portion of the Company and each
Fund of the Company should be invested in common
stocks, preferred stocks, Government obligations,
commercial paper, certificates of deposit,
bankers' acceptances, variable amount notes,
corporate debt obligations, and any other
authorized securities;
(f) to make recommendations as to the manner in which
voting rights, rights to consent to Company
and/or Fund action and any other rights
pertaining to the Company's portfolio securities
shall be exercised; and
(g) to calculate the net asset value of the Company
and each Fund, as applicable, as required by the
1940 Act, subject to such procedures as may be
established from time to time by the Company's
Directors, based upon the information provided to
the Adviser by the Company or by the custodian,
co custodian or sub custodian of the Company's or
any of the Funds' assets (the "Custodian") or
such other source as designated by the Directors
from time to time.
With respect to execution of transactions for the Company
and for the Funds, 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
Company and the Funds the most favorable execution and
price; after fulfilling this primary requirement of
<PAGE>
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 Company 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 Company monthly for any salaries paid by
the Company to officers, Directors, and full time
employees of the Company 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 Company under the Administrative Services
Agreement between the Company and the Adviser dated
May 2, 1994, which was approved on April 20, 1994, by the
Company's board of directors, including all of the
independent directors, at the Company's request the
Adviser shall also furnish to the Company, 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 Company. These services will include, among other
things, the maintenance (but not preparation) of the
Company'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 Company
shareholders. The Adviser also will furnish, at the
Adviser's expense, such office space, equipment and
facilities as may be reasonably requested by the Company
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 Company shall pay all costs and
expenses in connection with the operations and
organization of the Company. Without limiting the
generality of the foregoing, such costs and expenses
payable by the Company include the following:
<PAGE>
(a) all brokers' commissions, issue and transfer
taxes, and other costs chargeable to the Company
and any Fund in connection with securities
transactions to which the Company or any Fund is
a party or in connection with securities owned by
the Company or any Fund;
(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
Company or for any Fund;
(c) the interest on indebtedness, if any, incurred by
the Company or any Fund;
(d) the taxes, including franchise, income, issue,
transfer, business license, and other corporate
fees payable by the Company or any Fund to
federal, state, county, city, or other
governmental agents;
(e) the fees and expenses involved in maintaining the
registration and qualification of the Company and
of its shares under laws administered by the
Securities and Exchange Commission or under other
applicable regulatory requirements, including the
preparation and printing of prospectuses and
statements of additional information;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports,
notices of shareholders' meetings, proxy
statements, dividend notices, prospectuses,
statements of additional information and other
communications to the Company'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 Company'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 Company's operations by any other federal or
state authority;
<PAGE>
(i) the expenses of repurchasing and redeeming shares
of the Company;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing
certificates representing shares of common stock
of the Company;
(l) extraordinary expenses, including fees and
disbursements of Company counsel, in connection
with litigation by or against the Company or any
Fund;
(m) premiums for the fidelity bond maintained by the
Company 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 Company paid by the Company 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 Company, 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 Company 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 Fund of the Company, as
determined by valuations made in accordance with the
Company's procedure for calculating the Funds' net asset
value as described in the Company's Prospectus and/or
Statement of Additional Information. The advisory fee to
<PAGE>
the Adviser with respect to the INVESCO Worldwide Capital
Goods Fund and INVESCO Worldwide Communications Fund
shall be computed at the following annual rate: 0.65% of
the first $500 million of each Fund's average net assets,
0.55% of the Fund's average net assets in excess of $500
million but not more than $1 billion, and 0.45% of the
Fund's average net assets in excess of $1 billion. The
advisory fee to the Adviser with respect to the INVESCO
European Small Company Fund, INVESCO Latin American
Growth Fund and INVESCO Asian Growth Fund shall be
computed at the following annual rate: 0.75% of the
first $500 million of each Fund s average net assets,
0.65% of the next $500 million of each Fund s average net
assets and 0.55% of each Fund s average net assets over
$1 billion.
During any period when the determination of the Funds'
net asset value is suspended by the Directors of the
Company, the net asset value of a share of the Funds as
of the last business day prior to such suspension shall,
for the purpose of this 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 Company or any Fund 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 Fund's expenses
exceeds the most restrictive state imposed annual expense
limitation, the Adviser will be required to reimburse the
Fund 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 Company or such Fund 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 Company or any Fund,
neither the Adviser nor its officers or employees will
act as a principal or agent for any party other than the
Company or any Fund 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
<PAGE>
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 Funds of the
Company, and unless sooner terminated as hereinafter
provided, shall remain in force for an initial term of
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
Funds of the Company or by the Directors of the Company,
and (ii) by a majority of the Directors of the Company
who are not interested persons of the Adviser or the
Company by votes cast in person at a meeting called for
the purpose of voting on such approval. In the event of
the disapproval of this Agreement, or of the continuation
hereof, by the shareholders of a particular Fund (or by
the Directors of the Company as to a particular Fund),
the parties intend that such disapproval shall be
effective only as to such Fund, and that such disapproval
shall not affect the validity or effectiveness of the
approval of this Agreement, or of the continuation
hereof, by the shareholders of any other Fund (or by the
Directors, including a majority of the disinterested
Directors) as to such other Fund; in such case, this
Agreement shall be deemed to have been validly approved
or continued, as the case may be, as to such other Fund.
This Agreement may, on 60 days' prior written notice, be
terminated without the payment of any penalty, by a
majority of the Directors of the Company, or by the vote
of a majority of the outstanding voting securities of the
Company or, with respect to a particular Fund, by a
majority of the outstanding voting securities of that
Fund, as the case may be, or by the Adviser. This
Agreement shall immediately terminate in the event of its
assignment, unless an order is issued by the Securities
and Exchange Commission conditionally or unconditionally
exempting such assignment from the provisions of Section
15(a) of the 1940 Act, in which event this Agreement
shall remain in full force and effect subject to the
terms and provisions of said order. In interpreting the
provisions of this paragraph 6, the definitions contained
in Section 2(a) of the 1940 Act and the applicable rules
under the 1940 Act (particularly the definitions of
"interested person," "assignment" and "vote of a majority
of the outstanding voting securities") shall be applied.
The Adviser agrees to furnish to the Directors of the
Company such information on an annual basis as may
reasonably be necessary to evaluate the terms of this
Agreement.
<PAGE>
Termination of this Agreement shall not affect the right
of the Adviser to receive payments on any unpaid balance
of the compensation described in paragraph 4 earned prior
to such termination.
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 Company or any Fund of the
Company. 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 Company or any Fund 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 Company or any Fund and the Adviser's other
customers.
8. LIABILITY. The Adviser shall have no liability to the
Company or any Fund or to the Company'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 Company or any Fund 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 Company
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 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 any Fund of the
Company affected by such amendment; provided, however,
that this paragraph shall not prevent any immaterial
amendment(s) to this Agreement, which amendment(s) may be
<PAGE>
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 Company who are not
interested persons of the Adviser or the Company. In the
event of the disapproval of an amendment of this
Agreement by the shareholders of a particular Fund (or by
the Directors of the Company as to a particular Fund),
the parties intend that such disapproval shall be
effective only as to such Fund, and that such disapproval
shall not affect the validity or effectiveness of the
approval of the amendment by the shareholders of any
other Fund (or by the Directors, including a majority of
the disinterested Directors) as to such other Fund; in
such case, this Agreement shall be deemed to have been
validly amended as to such other Fund.
SEVERABILITY. Each provision of this Agreement is
intended to be severable. If any provision of this
Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such
illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
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 Company 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 SPECIALTY FUNDS, INC.
ATTEST:
By:
--------------------------------
Dan J. Hesser
------------------------------ President
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:
-------------------------------
Ronald L. Grooms, Senior Vice
President
------------------------------
Glen A. Payne
Seretary
<PAGE>
EXHIBIT A.2
-----------
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between
INVESCO Fund Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO
Asia Limited, a Hong Kong corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO SPECIALTY FUND, 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 Asian Growth 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, the Sub-Adviser is a member of the Securities and
Futures Commission (SFC) in Hong Kong and as such is regulated by SFC in
the conduct of its business; further the Sub-Adviser shall provide
services to INVESCO as a "Business Investor" as defined under the Rules of
SFC and as such certain rules designed for the protection of private
customers shall not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory
Agreement with the Company (the "INVESCO Investment Advisory Agreement"),
pursuant to which INVESCO is required to provide investment advisory
services to the Company, and, upon receipt of written approval of the
Company, is authorized to retain companies which are affiliated with
INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment
advisory services to the Company on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, INVESCO and the Sub-Adviser hereby agree
as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment
adviser to the Company and to furnish the investment advisory services
described below, subject to the broad supervision of INVESCO and Board of
<PAGE>
Directors of the Company, for the period and on the terms and conditions
set forth in this Agreement. The Sub-Adviser hereby accepts such
assignment and agrees during such period, at its own expense, to render
such services and to assume the obligations herein set forth for the
compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act
for or represent the Company in any way or otherwise be deemed an agent of
the Company.
The Sub-Adviser hereby agrees to manage the investment operations
of the Fund, subject to the supervision of the Company's directors (the
"Directors") and INVESCO. Specifically, the Sub-Adviser agrees to perform
the following services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund, and to execute
all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund,
consistent with (i) the Fund's investment policies as set forth
in the Company's 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, 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
<PAGE>
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. 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.
The Sub-Adviser may recommend transactions in which it has
directly or indirectly a material interest, in unregulated collective
investment schemes including any operated or advised by the Sub-Adviser or
in margined transactions. Advice on investments may extend to investments
not traded or exchanges recognized or designated by the Securities and
Investments Board.
Both parties acknowledge that the advice given under this
Agreement may involve liabilities in one currency matched by assets in
another currency and that accordingly movements in rates of exchange may
have a separate effect, unfavorable as well as favorable on the gain or
loss experienced on an investment.
In carrying out its duties hereunder, the Sub-Adviser shall
comply with all instructions of INVESCO in connection therewith such
instructions may be given by letter, telex, telephone or facsimile by any
Director or Officer of INVESCO or by any other person authorized by
INVESCO.
Any instructions which appear to conflict with the terms of this
Agreement may be confirmed by the Sub-Adviser with INVESCO prior to
execution.
<PAGE>
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
Fund's daily net assets up to $500 million; 0.325% of the Fund's daily net
assets in excess of $500 million but not more than $1 billion; and 0.275%
of the Fund's daily net assets in excess of $1 billion. During any period
when the determination of the Fund's net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the Fund as of
the last business day prior to such suspension shall, for the purpose of
this Article III, be deemed to be the net asset value at the close of each
succeeding business day until it is again determined. However, no such
fee shall be paid to the Sub-Adviser with respect to any assets of the
Fund which may be invested in any other investment company for which the
Sub-Adviser serves as investment adviser or sub-adviser. The fee provided
for hereunder shall be prorated in any month in which this Agreement is
not in effect for the entire month. The Sub-Adviser shall be entitled to
receive fees hereunder only for such periods as the INVESCO Investment
Advisory Agreement remains in effect.
ARTICLE IV
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 IV
referred to as "affiliates") being free to render services to others. It
is understood that directors, officers, employees and shareholders of the
Fund 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,
<PAGE>
INVESCO and their affiliates are or may become interested in the Fund as
directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the
investment 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; the Rules and Regulations of the SFC; and all rules and
regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is
approved by a majority of the outstanding voting securities of the Fund of
the Company, unless sooner terminated, as hereinafter provided.
Thereafter, this Agreement shall remain in force for an initial term of
two years from the date of execution, and from year to year thereafter
until its termination in accordance with this Article VI, but only so long
as such continuance is specifically approved at least annually by (i) the
Directors of the Company, or by the vote of a majority of the outstanding
voting securities of the Fund, and (ii) a majority of those Directors who
are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment
of any penalty, by INVESCO, the Fund by vote of the Directors of the
Company, or by vote of a majority of the outstanding voting securities of
the Fund, or by the Sub-Adviser. A termination by INVESCO or the Sub-
Adviser shall require sixty days' written notice to the other party and to
the Company, and a termination by the Company shall require such notice to
each of the parties. This Agreement shall automatically terminate in the
event of its assignment to the extent required by the Investment Company
Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company
such information on an annual basis as may reasonably be necessary to
evaluate the terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
<PAGE>
ARTICLE VII
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and
due care in carrying out its duties under this Agreement provided however
that the Sub-Adviser shall not be liable to INVESCO for any loss suffered
by INVESCO or the Fund advised in connection with the subject matter of
this Agreement unless such loss arises from the willful misfeasance, bad
faith or negligence in the performance of the Sub-Adviser's duties and
subject and without prejudice to the foregoing. INVESCO hereby undertakes
to indemnify and to keep indemnified the Sub-Adviser from and against any
and all liabilities, obligations, losses, damages, suits and expenses
which may be incurred by or asserted against the Sub-Adviser for which it
is responsible pursuant to Article I hereof provided always that the Sub-
Adviser shall send to INVESCO as soon as possible all claims, letters,
summonses, writs or documents which it receives from third parties and
provide whatever information and assistance INVESCO may require and no
liability of any sort shall be admitted and no undertaking shall be given
nor shall any offer, promise or payment be made or legal expenses
incurred by the Sub-Adviser without written consent of INVESCO who shall
be entitled if it so desires to take over and conduct in the name of the
Sub-Adviser the defense of any action or to prosecute any claim for
indemnity or damages or otherwise against any third party.
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.
<PAGE>
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the State of Colorado and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of
Colorado, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
ADVICE. Any recommendation or advice given by the Sub-Adviser to
INVESCO hereunder shall be given in writing or by mail, telex,
telefacsimile or by telephone, such telephone advice to be confirmed by
mail, telex, telefacsimile or in writing to such place as INVESCO shall
from time to time require; further the Sub-Adviser shall be free to
telephone INVESCO as it sees fit in the performance of its duties.
COMPLAINTS. The Sub-Adviser has in operation a written procedure
for the proper handling of complaints from clients; if the matter of
complaint cannot be resolved to INVESCO's satisfaction, INVESCO has the
right of recourse to the SFC.
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:
----------------------
Dan J. Hesser
President
------------------------------
Glen A. Payne
Secretary INVESCO ASIA LIMITED
By:
-----------------------
ATTEST: Andrew Lo
Managing Director
------------------------------
Fanny Lee
Secretary
<PAGE>
EXHIBIT A.3
-----------
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between
INVESCO Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO
Asset Management Limited, a United Kingdom corporation ("the
Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO SPECIALTY 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 two
such series being designated the INVESCO European Small Company Fund and
INVESCO Latin American Growth Fund, (collectively, the "Funds"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering
investment advisory services and are registered as investment advisers
under the Investment Advisers Act of 1940; and
WHEREAS, the Sub-Adviser is a member of the Investment Management
Regulatory Organization Limited ( IMRO ) in the United Kingdom and as such
is regulated by IMRO in the conduct of its business; further the
Sub-Adviser shall provide services to INVESCO as a "Business Investor" as
defined under the Rules of IMRO and as such certain rules designed for the
protection of private customers shall not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory
Agreement with the Company (the "INVESCO Investment Advisory Agreement"),
pursuant to which INVESCO is required to provide investment advisory
services to the Company, and, upon receipt of written approval of the
Company, is authorized to retain companies which are affiliated with
INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment
advisory services to the Company on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, INVESCO and the Sub-Adviser hereby agree
as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment
adviser to the Company and to furnish the investment advisory services
<PAGE>
described below, subject to the broad supervision of INVESCO and Board of
Directors of the Company, for the period and on the terms and conditions
set forth in this Agreement. The Sub-Adviser hereby accepts such
assignment and agrees during such period, at its own expense, to render
such services and to assume the obligations herein set forth for the
compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act
for or represent the Company in any way or otherwise be deemed an agent of
the Company.
The Sub-Adviser hereby agrees to manage the investment operations
of the Fund, subject to the supervision of the Company's directors (the
"Directors") and INVESCO. Specifically, the Sub-Adviser agrees to perform
the following services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Funds, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the
Funds, consistent with (i) the Funds investment policies
as set forth in the Company's Articles of Incorporation,
Bylaws, and Registration Statement, as from time to time
amended, under the Investment Company Act of 1940, as
amended (the "1940 Act"), and in any prospectus and/or
statement of additional information of the Funds, as from
time to time amended and in use under the Securities Act
of 1933, as amended, and (ii) the Company's status as a
regulated investment company under the Internal Revenue
Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold
for the Funds, unless otherwise directed by the Directors
of the Company or INVESCO, and to execute transactions
accordingly;
(d) to provide to the Funds the benefit of all of the
investment analysis and research, the reviews of current
economic conditions and trends, and the consideration of
long-range investment policy now or hereafter generally
available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Funds should be invested
in the various types of securities authorized for
purchase by the Funds; and
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Funds action and any other
rights pertaining to the Fund's portfolio securities
shall be exercised.
<PAGE>
With respect to execution of transactions for the Funds, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the 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 Funds, including but not limited to
research and analytical capabilities, reliability of performance, and
financial soundness and responsibility. Research services prepared and
furnished by brokers through which the Sub-Adviser effects securities
transactions on behalf of the Funds may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by
the Sub-Adviser in connection with the Funds. In the selection of a broker
or dealer for execution of any negotiated transaction, the Sub-Adviser
shall have no duty or obligation to seek advance competitive bidding for
the most favorable negotiated commission rate for such transaction, or to
select any broker solely on the basis of its purported or "posted"
commission rate for such transaction, provided, however, that the
Sub-Adviser shall consider such "posted" commission rates, if any,
together with any other information available at the time as to the level
of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Funds of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge
or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services,
reliability and other relevant factors in addition to the cost of
execution, the Sub-Adviser shall have the burden of demonstrating that
such expenditures were bona fide and for the benefit of the Funds.
The Sub-Adviser may recommend transactions in which it has
directly or indirectly a material interest, in unregulated collective
investment schemes including any operated or advised by the Sub-Adviser or
in margined transactions. Advice on investments may extend to investments
not traded or exchanges recognized or designated by the Securities and
Investments Board.
Both parties acknowledge that the advice given under this
Agreement may involve liabilities in one currency matched by assets in
another currency and that accordingly movements in rates of exchange may
have a separate effect, unfavorable as well as favorable on the gain or
loss experienced on an investment.
In carrying out its duties hereunder, the Sub-Adviser shall
comply with all instructions of INVESCO in connection therewith such
instructions may be given by letter, telex, telephone or facsimile by any
Director or Officer of INVESCO or by any other person authorized by
INVESCO.
Any instructions which appear to conflict with the terms of this
Agreement may be confirmed by the Sub-Adviser with INVESCO prior to
execution.
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff
and personnel necessary to perform its obligations under this Agreement,
and shall, at its own expense, provide the office space, equipment and
facilities necessary to perform its obligations under this Agreement.
Except to the extent expressly assumed by the Sub-Adviser herein and
except to the extent required by law to be paid by the Sub-Adviser,
INVESCO and/or the Company shall pay all costs and expenses in connection
with the operations of the Funds.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses
assumed by the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee,
computed daily and paid as of the last day of each month, using for each
daily calculation the most recently determined net asset value of the
Funds, as determined by a valuation made in accordance with the Fund's
procedures for calculating its net asset value as described in the Fund's
Prospectus and/or Statement of Additional Information. The advisory fee to
the Sub-Adviser shall be computed at the annual rate of 0.375% of the
Fund's daily net assets up to $500 million; 0.325% of the Fund's daily net
assets in excess of $500 million but not more than $1 billion; and 0.275%
of the Fund's daily net assets in excess of $1 billion. During any period
when the determination of the Funds' net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the Funds as of
the last business day prior to such suspension shall, for the purpose of
this Article III, be deemed to be the net asset value at the close of each
succeeding business day until it is again determined. However, no such fee
shall be paid to the Sub-Adviser with respect to any assets of the Funds
which may be invested in any other investment company for which the
Sub-Adviser serves as investment adviser or sub-adviser. The fee provided
for hereunder shall be prorated in any month in which this Agreement is
not in effect for the entire month. The Sub-Adviser shall be entitled to
receive fees hereunder only for such periods as the INVESCO Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Funds are not to be deemed
to be exclusive, the Sub-Adviser and any person controlled by or under
common control with the Sub-Adviser (for purposes of this Article IV
referred to as "affiliates") being free to render services to others. It
is understood that directors, officers, employees and shareholders of the
Funds are or may become interested in the Sub-Adviser and its affiliates,
as directors, officers, employees and shareholders or otherwise and that
directors, officers, employees and shareholders of the Sub-Adviser,
<PAGE>
INVESCO and their affiliates are or may become interested in the Funds as
directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the
investment portfolios of the Funds, neither the Sub-Adviser nor any of its
directors, officers or employees will act as a principal or agent for any
party other than the Funds or receive any commissions. The Sub-Adviser
will comply with all applicable laws in acting hereunder including,
without limitation, the 1940 Act; the Investment Advisers Act of 1940, as
amended; the Rules and Regulations of IMRO; and all rules and regulations
duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is
approved by a majority of the outstanding voting securities of the Fund of
the Company, unless sooner terminated, as hereinafter provided.
Thereafter, this Agreement shall remain in force for an initial term of
two years from the date of execution, and from year to year thereafter
until its termination in accordance with this Article VI, but only so long
as such continuance is specifically approved at least annually by (i) the
Directors of the Company, or by the vote of a majority of the outstanding
voting securities of the Funds, and (ii) a majority of those Directors who
are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment
of any penalty, by INVESCO, the Funds by vote of the Directors of the
Company, or by vote of a majority of the outstanding voting securities of
the Funds, or by the Sub-Adviser. A termination by INVESCO or the
Sub-Adviser shall require sixty days' written notice to the other party
and to the Company, and a termination by the Company shall require such
notice to each of the parties. This Agreement shall automatically
terminate in the event of its assignment to the extent required by the
Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company
such information on an annual basis as may reasonably be necessary to
evaluate the terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
<PAGE>
ARTICLE VII
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and
due care in carrying out its duties under this Agreement provided however
that the Sub-Adviser shall not be liable to INVESCO for any loss suffered
by INVESCO or the funds advised in connection with the subject matter of
this Agreement unless such loss arises from the willful misfeasance, bad
faith or negligence in the performance of the Sub-Adviser's duties and
subject and without prejudice to the foregoing. INVESCO hereby undertakes
to indemnify and to keep indemnified the Sub-Adviser from and against any
and all liabilities, obligations, losses, damages, suits and expenses
which may be incurred by or asserted against the Sub-Adviser for which it
is responsible pursuant to Article I hereof provided always that the
Sub-Adviser shall send to INVESCO as soon as possible all claims, letters,
summonses, writs or documents which it receives from third parties and
provide whatever information and assistance INVESCO may require and no
liability of any sort shall be admitted and no undertaking shall be given
nor shall any offer, promise or payment be made or legal expenses incurred
by the Sub-Adviser without written consent of INVESCO who shall be
entitled if it so desires to take over and conduct in the name of the
Sub-Adviser the defense of any action or to prosecute any claim for
indemnity or damages or otherwise against any third party.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or
discharged, but may only be modified by an instrument in writing signed by
the Sub-Adviser and INVESCO. In addition, no amendment to this Agreement
shall be effective unless approved by (1) the vote of a majority of the
Directors of the Company, including a majority of the Directors who are
not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such amendment
and (2) the vote of a majority of the outstanding voting securities of the
Funds (other than an amendment which can be effective without shareholder
approval under applicable law).
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote
of a majority of the outstanding voting securities," "assignments,"
"affiliated person" and "interested person," when used in this Agreement,
shall have the respective meanings specified in the Investment Company Act
and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
<PAGE>
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the State of Colorado and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of
Colorado, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
ADVICE. Any recommendation or advice given by the Sub-Adviser to
INVESCO hereunder shall be given in writing or by mail, telex,
telefacsimile or by telephone, such telephone advice to be confirmed by
mail, telex, telefacsimile or in writing to such place as INVESCO shall
from time to time require; further the Sub-Adviser shall be free to
telephone INVESCO as it sees fit in the performance of its duties.
COMPLAINTS. The Sub-Adviser has in operation a written procedure
for the proper handling of complaints from clients; if the matter of
complaint cannot be resolved to INVESCO's satisfaction, INVESCO has the
right of recourse to IMRO.
NOTICE. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at
such address as such other party may designate for the receipt of such
notice.
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:
-----------------------
Dan J. Hesser
President
-------------------------
Glen A. Payne
Secretary INVESCO ASSET MANAGEMENT LIMITED
By:
-----------------------------
ATTEST: Norman Riddell
Chairman
-------------------------
Graeme J. Proudfoot
<PAGE>
EXHIBIT A.4
-----------
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 SPECIALTY 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, two such
series being designated the INVESCO Worldwide Capital Goods Fund and
INVESCO Worldwide Communications Fund (individually, a "Fund" and
collectively, the "Funds"); and
WHEREAS, INVESCO and the Sub Adviser are engaged in rendering
investment advisory services and are registered as investment advisers
under the Investment Advisers Act of 1940; and
WHEREAS, 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
<PAGE>
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
Funds, subject to the supervision of the Company's directors (the
"Directors") and INVESCO. Specifically, the Sub Adviser agrees to perform
the following services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Funds, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the
Funds, consistent with (i) each 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 Funds, as from time to time
amended and in use under the Securities Act of 1933, as
amended, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of
1986, as amended;
(c) to determine what securities are to be purchased or sold
for the Funds, unless otherwise directed by the Directors
of the Company or INVESCO, and to execute transactions
accordingly;
(d) to provide to the Funds the benefit of all of the
investment analysis and research, the reviews of current
economic conditions and trends, and the consideration of
long range investment policy now or hereafter generally
available to investment advisory customers of the Sub
Adviser;
(e) to determine what portion of each 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 each Fund's portfolio securities
shall be exercised.
With respect to execution of transactions for the Funds, the Sub Adviser
is authorized to employ such brokers or dealers as may, in the Sub
Adviser's best judgment, implement the policy of the Funds to obtain
prompt and reliable execution at the most favorable price obtainable. In
assigning an execution or negotiating the commission to be paid therefor,
the Sub Adviser is authorized to consider the full range and quality of a
<PAGE>
broker's services which benefit the Funds, including but not limited to
research and analytical capabilities, reliability of performance, and
financial soundness and responsibility. Research services prepared and
furnished by brokers through which the Sub Adviser effects securities
transactions on behalf of the Funds may be used by the Sub Adviser in
servicing all of its accounts, and not all such services may be used by
the Sub Adviser in connection with the Funds. The Sub-Adviser may follow a
policy of considering sales of shares of the Funds 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 Funds of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge
or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services,
reliability and other relevant factors in addition to the cost of
execution, the Sub Adviser shall have the burden of demonstrating that
such expenditures were bona fide and for the benefit of the Funds.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub Adviser assumes and shall pay for maintaining the staff
and personnel necessary to perform its obligations under this Agreement,
and shall, at its own expense, provide the office space, equipment and
facilities necessary to perform its obligations under this Agreement.
Except to the extent expressly assumed by the Sub Adviser herein and
except to the extent required by law to be paid by the Sub Adviser,
INVESCO and/or the Company shall pay all costs and expenses in connection
with the operations of the Funds.
ARTICLE III
COMPENSATION OF THE SUB ADVISER
For the services rendered, facilities furnished, and expenses
assumed by the Sub Adviser, INVESCO shall pay to the Sub Adviser 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
each Fund, as determined by a valuation made in accordance with the Funds'
procedures for calculating their net asset value as described in the
Funds' Prospectus and/or Statement of Additional Information. The advisory
fee to the Sub Adviser shall be computed at the annual rate of 0.325% of
<PAGE>
the first $500 million of each Fund's average net assets, 0.275% of each
Fund's average net assets in excess of $500 million but not more than $1
billion, and 0.225% of each Fund's average net assets in excess of $1
billion. During any period when the determination of a Fund's net asset
value is suspended by the Directors of the Company, the net asset value of
a share of the respective 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 a Fund which may be invested in any other
investment company for which the Sub Adviser serves as investment adviser
or sub adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month. The
Sub Adviser shall be entitled to receive fees hereunder only for such
periods as the INVESCO Investment Advisory Agreement remains in effect.
ARTICLE IV
LIMITATION OF LIABILITY OF SUB-ADVISER
The Sub-Adviser shall not be liable for any error of judgment,
mistake of law or for any loss arising out of any investment or for any
act or omission in the performance of sub-advisory services rendered with
respect to the Company or the Funds, 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 Funds are not to be deemed
to be exclusive, the Sub Adviser and any person controlled by or under
common control with the Sub Adviser (for purposes of this Article 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 portfolios of the Funds, neither the Sub Adviser nor any of its
directors, officers or employees will act as a principal or agent for any
party other than the Funds or receive any commissions. The Sub Adviser
<PAGE>
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 Funds,
and shall remain in force for an initial term of two years from the date
of execution, and from year to year thereafter until its termination in
accordance with this Article 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 Funds, and (ii) a majority of those Directors who are not parties
to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval. In the
event of the disapproval of this Agreement, or of the continuation hereof,
by the shareholders of a particular Fund (or by the Directors of the
Company as to a particular Fund), the parties intend that such disapproval
shall be effective only as to such Fund, and that such disapproval shall
not affect the validity of effectiveness of the approval of this
Agreement, or of the continuation hereof, by the shareholders of any other
Fund (or by the Directors, including a majority of the disinterested
Directors) as to such other Fund; in such case, this Agreement shall be
deemed to have been validly approved or continued, as the case may be, as
to such other Fund.
This Agreement may be terminated at any time, without the payment
of any penalty, by INVESCO; the Funds by vote of a majority of the
Directors of the Company; by vote of a majority of the outstanding voting
securities of the Funds; or, with respect to a particular Fund, by a
majority of the outstanding voting securities of that Fund, as the case
may be; 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.
<PAGE>
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or
discharged, but may only be modified by an instrument in writing signed by
the Sub Adviser and INVESCO. In addition, no amendment to this Agreement
shall be effective unless approved by (1) the vote of a majority of the
Directors of the Company, including a majority of the Directors who are
not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such amendment
and (2) the vote of a majority of the outstanding voting securities of the
Funds (other than an amendment which can be effective without shareholder
approval under applicable law). In the event of the disapproval of an
amendment of this Agreement by the shareholders of a particular Fund (or
by the Directors of the Company as to a particular Fund), the parties
intend that such disapproval shall be effective only as to such Fund, and
that such disapproval shall not affect the validity or effectiveness of
the approval of the amendment by the shareholders of any other Fund (or by
the Directors, including a majority of the disinterested Directors) as to
such other Fund; in such case, this Agreement shall be deemed to have been
validly amended as to such other Fund.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote
of a majority of the outstanding voting securities," "assignments,"
"affiliated person" and "interested person," when used in this Agreement,
shall have the respective meanings specified in the Investment Company Act
and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the State of Colorado and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of
Colorado, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
NOTICE. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at
such address as such other party may designate for the receipt of such
notice.
<PAGE>
SEVERABILITY. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or
made invalid by a court decision, statute, rule or otherwise, such
illegality or invalidity shall not affect the validity or enforceability
of the remainder of this Agreement.
HEADINGS. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended to
describe, interpret, define or limit the size, extent or intent of this
Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST:
By:
------------------------
Dan J. Hesser
President
----------------------
Glen A. Payne
Secretary
INVESCO TRUST COMPANY
ATTEST:
By:
------------------------
R. Dalton Sim
President
---------------------------
Glen A. Payne
Secretary
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
Equity Income Funds
<TABLE>
<CAPTION>
Equity Income 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets (at
Funds Objective Rate (based on Fee Rate (based October 31,
average net on average net 1996)
assets) assets)
<S> <C> <C> <C> <C> <C> <C>
Industrial Income Current INVESCO INVESCO .60% of the .25% of the
Fund Income Funds Group, Trust first $350 first $200
Inc. Company million; .55% million; .20%
of the next over $200
$350 million; million
.50% over $700
million
Utilities Capital INVESCO INVESCO .75% of the .25% of the
Portfolio Appreciation Funds Group, Trust first $350 first $200
and Income Inc. Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
VIF-Industrial Current INVESCO INVESCO .75% of the .375% of the
Income Portfolio Income Funds Group, Trust first $500 first $500
Inc. Company million; .65% million; .325%
of the next of the next
$500 million; $500 million;
.55% over $1 .275% over $1
billion billion
VIF-Utilities Capital INVESCO INVESCO .60% of the .30% if the
Portfolio Appreciation Funds Group, Trust first $500 first $500
and Income Inc. Company million;.55% of million; .275%
the next $500 of the next
million; .45% $500 million;
over $1 billion .225% over $1
billion
* Indicates whether fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
Growth & Value Funds
<TABLE>
<CAPTION>
Growth & Value 1940 Act Adviser Sub-Adviser Advisory Fee Rate Sub-Advisory Fee Net Assets
Funds Objective (based on average Rate (based on (at October
net assets) average net 31, 1996)
assets)
<S> <C> <C> <C> <C> <C> <C>
Value Equity Capital INVESCO INVESCO .75% of the first .20% of the first
Appreciation Funds Group, Capital $500 million; .65% $500 million; .17%
and Income Inc. Management of the next $500 of the next $500
million; .50% over million; .13% over
$1 billion $1 billion
Growth Fund Long-Term INVESCO INVESCO .60% of the first .25% of the first
Capital Funds Group, Trust $350 million; .55% $200 million; .20%
Growth; Inc. Company of the next $350 over $200 million
Current million; .50% over
Income $700 million
Secondary
Dynamics Fund Capital INVESCO INVESCO .60% of the first .25% of the first
Appreciation Funds Group, Trust $350 million; .55% $200 million; .20%
Inc. Company of the next $350 over $200 million
million; .50% over
$700 million
Emerging Long-Term INVESCO INVESCO .75% of the first .25% of the first
Growth Fund* Capital Funds Group, Trust $350 million; .65% $200 million; .20%
Growth Inc. Company of the next $350 over $200 million
million; .55% over
$700 milllion
Small Company Long-Term INVESCO INVESCO .75% .375%
Fund* Capital Funds Group, Management
Growth Inc. & Research
Equity Capital INVESCO INVESCO .75% .20% 134,188,186
Portfolio Appreciation Services, Management
and Income Inc. & Research
* Indicates whether fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
Sector Funds
<TABLE>
<CAPTION>
Sector Funds 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Objective Rate (based on Fee Rate (at October
average net (based on 31, 1996)
assets) average net
assets)
<S> <C> <C> <C> <C> <C> <C>
Energy Portfolio Capital INVESCO Funds INVESCO .75% of the .25% of the
Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Environmental Capital INVESCO Funds INVESCO .75% of the .25% of the
Services Portfolio Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Financial Services Capital INVESCO Funds INVESCO .75% of the .25% of the
Portfolio Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Gold Portfolio Capital INVESCO Funds INVESCO .75% of the .25% of the
Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Health Sciences Capital INVESCO Funds INVESCO .75% of the .25% of the
Portfolio Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
Sector Funds
Sector Funds 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Objective Rate (based on Fee Rate (at October
average net (based on 31, 1996)
assets) average net
assets)
Leisure Portfolio Capital INVESCO Funds INVESCO .75% of the .25% of the
Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Technology Capital INVESCO Funds INVESCO .75% of the .25% of the
Portfolio Appreciation Group, Inc. Trust first $350 first $200
Company million; .65% million; .20%
of the next over $200
$350 million; million
.55% over $700
million
Worldwide Capital Capital INVESCO Funds INVESCO .65% of the .325% of the
Goods Fund* Appreciation Group, Inc. Trust first $500 first $500
Company million; .55% million; .275%
of the next of the next
$500 million; $500 million;
.45% over $1 .225% over $1
billion billion
Worldwide Capital INVESCO Funds INVESCO .65% of the .325% of the
Communications Fund Appreciation Group, Inc. Trust first $500 first $500
and Income Company million; .55% million; .275%
of the next of the next
$500 million; $500 million;
.45% over $1 .225% over $1
billion billion
Real Estate Capital INVESCO INVESCO .90% .35% of the 15,293,490
Portfolio Appreciation Services, Inc. Realty first $100
and Income Advisers, million; .25%
Inc. over $100
million
Global Health Capital INVESCO Trust None 1.0% N/A
Sciences Fund ** Appreciation Company, Inc.
*Indicates whether fee has been waived or absorbed during the Fund's past fiscal year.
** Closed-end Fund
**Closed-end Fund
</TABLE>
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
International Funds
<TABLE>
<CAPTION>
International 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Funds Objective Rate (based Fee Rate (at October
on average (based on 31, 1996)
net assets) average net
assets)
<S> <C> <C> <C> <C> <C> <C>
International Capital INVESCO Funds INVESCO 1.0% of the .25% of the
Growth Fund Appreciation and Group, Inc. Asset first $500 first $500
Income Management million; million;
.75% of the .1875% of the
next $500 next $500
million; million;
.65% over $1 .1625% over
billion $1 billion
European Fund Capital INVESCO Funds INVESCO .75% of the .45% of the
Appreciation Group, Inc. Asset first $350 first $350
Management million; million; .40%
.65% of the of the next
next $350 $350 million;
million; .35% over
.55% over $700 million
$700 million
Pacific Basin Fund Capital INVESCO Funds INVESCO .75% of the .45% of the
Appreciation Group, Inc. Asset first $350 first $350
Management million; million; .40%
.65% of the of the next
next $350 $350 million;
million; .35% over
.55% over $700 million
$700 million
European Small Capital INVESCO Funds INVESCO .75% of the .375% of the
Company Fund Appreciation Group, Inc. Asset first $500 first $500
Management million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
International Funds
International 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Funds Objective Rate (based Fee Rate (at October
on average (based on 31, 1996)
net assets) average net
assets)
Latin American Capital INVESCO Funds INVESCO .75% of the .375% of the
Growth Fund* Appreciation Group, Inc. Asset first $500 first $500
Management million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
Asian Growth Fund* Capital INVESCO Funds INVESCO .75% of the .375% of the
Appreciation Group, Inc. Asian first $500 first $500
Limited million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
International Capital INVESCO INVESCO 1.0% .35% of the 42, 820, 898
Value Portfolio Appreciation and Services, Capital first $50
Income Inc. Management million; .30%
of the next
$50 million;
.25% over
$100 million
* Indicates whether the fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
International Funds
<TABLE>
<CAPTION>
International 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Funds Objective Rate (based Fee Rate (at October
on average (based on 31, 1996)
net assets) average net
assets)
<S> <C> <C> <C> <C> <C> <C>
International Capital INVESCO Funds INVESCO 1.0% of the .25% of the
Growth Fund Appreciation and Group, Inc. Asset first $500 first $500
Income Management million; million;
.75% of the .1875% of the
next $500 next $500
million; million;
.65% over $1 .1625% over
billion $1 billion
European Fund Capital INVESCO Funds INVESCO .75% of the .45% of the
Appreciation Group, Inc. Asset first $350 first $350
Management million; million; .40%
.65% of the of the next
next $350 $350 million;
million; .35% over
.55% over $700 million
$700 million
Pacific Basin Fund Capital INVESCO Funds INVESCO .75% of the .45% of the
Appreciation Group, Inc. Asset first $350 first $350
Management million; million; .40%
.65% of the of the next
next $350 $350 million;
million; .35% over
.55% over $700 million
$700 million
European Small Capital INVESCO Funds INVESCO .75% of the .375% of the
Company Fund Appreciation Group, Inc. Asset first $500 first $500
Management million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investment
Objectives and Strategies to those of the Company;
International Funds
International 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets
Funds Objective Rate (based Fee Rate (at October
on average (based on 31, 1996)
net assets) average net
assets)
Latin American Capital INVESCO Funds INVESCO .75% of the .375% of the
Growth Fund* Appreciation Group, Inc. Asset first $500 first $500
Management million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
Asian Growth Fund* Capital INVESCO Funds INVESCO .75% of the .375% of the
Appreciation Group, Inc. Asian first $500 first $500
Limited million; million;
.65% of the .325% of the
next $500 next $500
million; million;
.55% over $1 .275% over
billion $1 billion
International Capital INVESCO INVESCO 1.0% .35% of the 42, 820, 898
Value Portfolio Appreciation and Services, Capital first $50
Income Inc. Management million; .30%
of the next
$50 million;
.25% over
$100 million
* Indicates whether the fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Advisers with Similar Investmen
Objectives and Strategies to those of the Company;
Balanced Funds
<TABLE>
<CAPTION>
Balanced 1940 Act Adviser Sub-Adviser Advisory Fee Rate Sub-Advisory Fee Net Assets
Funds Objective (based on average Rate (at October
Net Assets) 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Balanced Capital INVESCO INVESCO .60% of the first .30% of the first
Fund* Appreciation Funds Trust $350 million; .55% $350 million;
and Income Group, Inc. Company of the next $350 .275% of the next
million; .50% over $350 million; .25%
$700 million over $1 billion
Multi-Asset Capital INVESCO INVESCO .75% of the first .375% of the first
Allocation Appreciation Funds Management & $500 million; .65% $500 million;
Fund* and Income Group, Inc. Research of the next $500 .325% of the next
million; .50% over $500 million; .25%
$1 billion over $1 billion
Total Return Capital INVESCO INVESCO .75% of the first .20% of the first
Fund Appreciation Funds Capital $500 million; .65% $500 million; .17%
and Income Group, Inc. Management of the next $500 of the next $500
million; .50% over million; .13 over
$1 billion $1 billion
MultiFlex Capital INVESCO INVESCO 1.0% .35 of the first $243,766,866
Portfolio Appreciation Services, Management & $500 million; .25%
and Income Inc. Research over $500 million
Flex Capital INVESCO INVESCO .75% .20% $473,695,882
Portfolio Appreciation Services, Capital
and Income Inc. Management
VIF-Total Capital INVESCO INVESCO .75% of the first .375% of the first
Return Appreciation Funds Capital $500 million; .65% $500 million;
Portfolio* and Income Group, Inc. Management of the next $500 .325% of the next
million; .55% over $500 million;
$1 billion .275% over $1
billion
*Indicates whether fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Funds 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets (at
Objective Rate Fee Rate October 31,
1996)
<S> <C> <C> <C> <C> <C> <C>
Short-Term Bond Current INVESCO INVESCO Trust .50% of the .25% of the
Fund* Income; Funds Company first $300 first $300
Liquidity Group, million; .40% million; .20%
Inc. of the next of the next
$200 million; $200 million;
.30% over $500 .15% over $500
million million
Intermediate Capital INVESCO INVESCO .60% of the .16% of the
Government Bond Appreciatio Funds Capital first $500 first $500
Fund* n and Group, Management million; .50% million; .13%
Income Inc. of the next of the next
$500 million; $500 million;
.40% over $1 .11% over $1
billion billion
U.S. Government Current INVESCO INVESCO Trust .55% of the .25% of the
Securities Fund* Income Funds Company first $300 first $200
Group, million; .45% million; .20%
Inc. of the next over $200
$200 million; million
.35% over $500
million
Select Income Fund* Current INVESCO INVESCO Trust .55% of the .25% of the
Income Funds Company first $300 first $200
Group, million; .45% million; .20%
Inc. of the next over $200
$200 million; million
.35% over $500
million
High Yield Fund* Current INVESCO INVESCO Trust .50% of the .25% of the
Income Funds Company first $300 first $200
Group, million; .40% million; .20%
Inc. of the next over $200
$200 million; million
.30% over $500
million
VIF-High Yield Current INVESCO INVESCO Trust .60% of the .30% of the
Fund* Income Funds Company first $500 first $500;
Group, million; .55% .275% of the
Inc. of the next next $500
$500 million; million; .225%
.45% over $1 of over $1
billion billion
<PAGE>
EXHIBIT B
---------
Funds Advised by the Adviser or the Sub-Adviser with Similar Investment
Objectives and Strategies to those of the Company
Income Funds
Income Funds 1940 Act Adviser Sub-Adviser Advisory Fee Sub-Advisory Net Assets (at
Objective Rate Fee Rate October 31,
1996)
Income Portfolio Capital INVESCO INVESCO .65% * .10% 27,752,586
Appreciatio Services, Capital
n and Inc. Management
Income
* Indicates whether fee has been waived or absorbed during the Fund's past fiscal year.
</TABLE>
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN PROMPTLY.
INVESCO SPECIALTY FUNDS, INC.
INVESCO WORLDWIDE CAPITAL GOODS FUND
INVESCO WORLDWIDE COMMUNICATIONS FUND
INVESCO EUROPEAN SMALL COMPANY FUND
INVESCO LATIN AMERICAN GROWTH FUND
INVESCO ASIAN GROWTH FUND
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at
the Special Meeting of the Shareholders of the INVESCO Worldwide Capital
Goods Fund, the INVESCO Worldwide Communications Fund, the INVESCO
European Small Company Fund, the INVESCO Latin American Growth Fund and
the INVESCO Asian Growth Fund (the "Funds") of INVESCO Specialty Funds,
Inc. (the "Company"), to be held at the Denver Marriott Southeast, 6363
East Hampden Avenue, Denver, Colorado 80222, on Friday, January 31, 1997,
at 10:00 a.m. (Mountain Standard Time) and at any adjournment thereof,
upon the matters set forth below, all in accordance with and as more fully
described in the Notice of Special Meeting and Proxy Statement, dated
December 6, 1996, receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
"FOR:"
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
1.A. Proposal to approve a new investment advisory agreement between
the Company and INVESCO Funds Group, Inc. ( IFG ), such agreement
to take effect only if the proposed merger of AIM Management
Group, Inc. into INVESCO Group Services, Inc. or another
wholly-owned U.S. subsidiary of INVESCO is consummated.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
1.B. For shareholders of the Asian Growth Fund only: Proposal to
approve a new sub-advisory agreement between IFG and INVESCO Asia
Limited, with respect to the Asian Growth Fund, to take effect
only if the Merger is consummated.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
<PAGE>
1.C. For shareholders of the European Small Company Fund and the Latin
American Growth Fund only: Proposal to approve a new sub-advisory
agreement between IFG and INVESCO Asset Management Limited, with
respect to the European Small Company Fund and the Latin American
Growth Fund, to take effect only if the Merger is consummated.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
1.D. For shareholders of the Worldwide Capital Goods Fund and the
Worldwide Communications Fund only: Proposal to approve a new
sub-advisory agreement between IFG and INVESCO Trust Company,
with respect to the Worldwide Capital Goods Fund and the
Worldwide Communications Fund, to take effect only if the Merger
is consummated.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
2. Proposal to elect eleven directors of the Company.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
3. Proposal to ratify the selection of Price Waterhouse LLP as
independent accountants for the Company for the fiscal year
ending July 31, 1997.
Vote on Proposal
For [ ] Against [ ] Abstain [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1.A., 2, 3 and PROPOSAL 1.B., 1.C. or 1.D.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE
AS SOON AS POSSIBLE. THANK YOU.
------------------ ------------------- -----------------
Signature Signature Date
(Joint Owners)
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.
<PAGE>
