UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary proxy statement
o		Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to § 240.14a-12

INVESCO PLC

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)

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þ		No fee required.
o		Fee computed below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Title of each class of securities to which transaction applies:

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(2)

Form, Schedule or Registration Statement No.:

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Date Filed:

THIS DOCUMENT IS IMPORTANT AND REQUIRES

YOUR IMMEDIATE ATTENTION

 

Proposed Scheme of Arrangement

to establish

INVESCO PLC

as a subsidiary of

Invesco Ltd.

 

Circular to INVESCO PLC Shareholders, the INVESCO PLC SV Shareholder,

INVESCO Inc. Exchangeable Shareholders and INVESCO PLC ADS holders

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately about the Proposal from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser who, if you are taking advice in the United Kingdom, is authorised under the Financial Services and Markets Act 2000 or, if you are in a territory outside the United Kingdom, is an appropriately authorised independent financial advisor. Capitalised terms used throughout this document have the meanings set forth in Part VIII of this document.

 

If you are an INVESCO PLC Shareholder and/or an INVESCO PLC ADS holder and have sold or otherwise transferred all of your INVESCO PLC Shares and/or INVESCO PLC ADSs, please send this document and the accompanying documents at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you have sold or otherwise transferred some of your INVESCO PLC Shares and/or INVESCO PLC ADSs, you should immediately consult the stockbroker, bank or other agent through whom the sale or transfer was effected.

 

The Invesco Ltd. Shares are intended to be quoted on the NYSE. The application is expected to become effective and trading in the Invesco Ltd. Shares on the NYSE is expected to commence at 9:30 a.m. (New York time) and 2:30 p.m. (London time) on the Effective Date which, subject to the approval of the Court, is expected to be 4 December 2007.

 

Dealings in INVESCO PLC Shares on the London Stock Exchange’s main market for listed securities will be suspended with effect from start of trading on the Effective Date, currently expected to be 4 December 2007. The existing listing of INVESCO PLC Shares on the Official List and their admission to trading on the London Stock Exchange’s main market for listed securities and the quotation of INVESCO PLC ADSs on the NYSE will be cancelled immediately prior to the commencement of dealings of Invesco Ltd. Shares on the NYSE.

 

Following implementation of the Proposal, the Takeover Code will not apply to acquisitions of shares in, or offers for shares of, Invesco Ltd.

 

INVESCO PLC

Proposed scheme of arrangement

(under section 425 of the Companies Act 1985)

to establish

INVESCO PLC

as a

subsidiary of

Invesco Ltd.

 

 

The distribution of this document and any of the accompanying documents in jurisdictions other than the United Kingdom or the United States may be restricted by law and therefore persons into whose possession this document or any of the accompanying documents comes should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction.

 

Notices of the Court Meeting and the Extraordinary General Meeting, each of which will be held on 14 November 2007, are set out on pages 64 to 68 of this document.

 

Your attention is drawn to the letter from the Chairman of INVESCO PLC on pages 14 to 15 of this document, recommending that INVESCO PLC Shareholders, holders of INVESCO PLC ADS and the INVESCO PLC SV Shareholder vote in favour of the scheme of arrangement (under section 425 of the Companies Act 1985) which is being proposed to enable INVESCO PLC Shareholders to exchange their INVESCO PLC Shares for ordinary shares in Invesco Ltd. which has its registered office in Hamilton, Bermuda, and which will be the new holding company of INVESCO.

 

INVESCO PLC Shareholders are asked to complete and return the relevant enclosed forms of proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received by the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, not later than 48 hours before the relevant meeting. If the form of proxy for the Court Meeting is not lodged by then, it may be handed to the chairman of the Court Meeting before the start of the Court Meeting.

 

INVESCO PLC ADS holders are asked to sign and return the ADS Voting Instruction Card in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received by the Depository, at the address indicated on the ADS Voting Instruction Card, not later than 5:00 p.m. on 6 November 2007.

 

The action to be taken by INVESCO PLC Shareholders is detailed on page 29 of this document. The action to be taken by the INVESCO PLC ADS holders is also detailed on page 29 of this document. These materials are being sent to shareholders on or about 22 October 2007.

 

Apart from the responsibilities and liabilities, if any, which may be imposed on UBS Limited or JPMorgan Cazenove Limited by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, neither UBS Limited nor JPMorgan Cazenove Limited accepts any responsibility whatsoever for the contents of this document or for any statement made or purported to be made by either of them, or on their behalf, in connection with INVESCO PLC, Invesco Ltd., the INVESCO PLC Shares, the INVESCO PLC ADSs, the Invesco Ltd. Shares or the Proposal. Each of UBS Limited and JPMorgan Cazenove Limited accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which either of them might otherwise have in respect of this document or any such statement.

 

This document does not constitute an offer or an invitation to any person to subscribe for or to purchase any securities in Invesco Ltd.

 

UBS Limited is acting as financial adviser to INVESCO PLC and Invesco Ltd. in connection with the Proposal and for no one other than INVESCO PLC or Invesco Ltd. and will not be responsible to anyone other than INVESCO PLC or Invesco Ltd. for providing the protections afforded to clients of UBS Limited or for providing advice in relation to the Proposal or the contents of this document.

 

JPMorgan Cazenove Limited is acting as financial adviser to INVESCO PLC and Invesco Ltd. in connection with the Proposal and for no one other than INVESCO PLC or Invesco Ltd. and will not be responsible to anyone other than INVESCO PLC or Invesco Ltd. for providing the protections afforded to clients of JPMorgan Cazenove Limited or for providing advice in relation to the Proposal or the contents of this document.

 

TABLE OF CONTENTS

 

 

EXPECTED TIMETABLE

 

 

 

Notes:

 

 

ENCLOSURES

 

All INVESCO PLC Shareholders will find enclosed with this document:

 

 

The INVESCO PLC SV Shareholder will find enclosed with this document:

 

 

All INVESCO PLC ADS holders will find enclosed with this document:

 

 

HELPLINES

 

Capita Registrars are providing a telephone helpline to answer questions which INVESCO PLC Shareholders may have prior to deciding what action to take. The number for callers dialling from within the UK is 0800 030 4452 and for callers dialling from outside the UK the number is +44 208 639 3314.

 

The Bank of New York Mellon is providing a telephone helpline to answer questions which INVESCO PLC ADS holders may have prior to deciding what action to take. The number for callers dialling from within the US is 877 277 9899 and for callers dialling from outside the US the number is +1 201 680 6686.

 

Helpline operators cannot provide financial or legal advice and will only be able to answer questions on the effect of the Proposal.

 

Helplines are open Monday to Friday during normal business hours.

 

LEGAL NOTICES

 

Nothing contained in this document shall constitute an offer to sell or issue, or a solicitation of any offer to purchase or subscribe for, any shares in INVESCO PLC or Invesco Ltd., nor shall it form the basis of, or be relied upon in connection with, any contract for such purchase or subscription.

 

The Invesco Ltd. Shares to be issued pursuant to the Scheme will not be registered under the Securities Act, and will be issued in reliance upon the exemption from the registration requirements of the Securities Act provided by section 3(a)(10) thereof.

 

FORWARD-LOOKING STATEMENTS

 

This document may include statements that constitute “forward-looking statements” within the meaning of United States securities laws. These statements are based on the beliefs and assumptions of Invesco’s management and on information available to Invesco’s management at the time such statements were made. Forward-looking statements include information concerning possible or assumed future results of our operations, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, assets under management, acquisition activities and the effect of completed acquisitions, debt levels and our ability to obtain additional financing or make payments on our debt, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, when used in this document, words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates” and future or conditional verbs such as “will”, “may”, “could”, “should” and “would” and any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

 

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from Invesco’s expectations. Invesco cautions investors not to rely unduly on any forward-looking statements.

 

The following important factors, and other factors described in Invesco’s Annual Report on Form 20-F, among others, could cause Invesco’s results to differ materially from any results that Invesco may describe in any such forward-looking statements: (1) variations in demand for Invesco’s investment products or services, including termination or non-renewal of Invesco’s investment advisory agreements; (2) significant changes in net cash flows into or out of the accounts Invesco manages or declines in market value of the assets in, or redemptions or other withdrawals from, those accounts; (3) significant fluctuations in the performance of debt and equity markets worldwide; (4) the effect of political or social instability in the countries in which Invesco invests or does business; (5) the effect of terrorist attacks in the countries in which Invesco invests or does business and the escalation of hostilities that could result therefrom; (6) enactment of adverse state, federal or foreign legislation or changes in government policy or regulation (including accounting standards) affecting Invesco’s operations or the way in which Invesco’s profits are taxed; (7) war and other hostilities in or involving countries in which Invesco invests or does business; (8) adverse results in litigation, including private civil litigation related to market timing, mutual fund fees and mutual fund sales practices, and any similar potential regulatory or other proceedings; (9) exchange rate fluctuations, especially as against the US dollar; (10) the effect of economic conditions and interest rates in the US, UK or globally; (11) Invesco’s ability to compete in the investment management business; (12) the effect of consolidation in the investment management business; (13) limitations or restrictions on access to distribution channels for our products; (14) Invesco’s ability to attract and retain key personnel, including investment management professionals; (15) the investment performance of Invesco’s investment products and Invesco’s ability to retain Invesco’s accounts; (16) Invesco’s ability to acquire and integrate other companies into Invesco’s operations successfully and the extent to which we can realise anticipated cost savings and synergies from such acquisitions; (17) changes in regulatory capital requirements; (18) Invesco’s substantial debt and the limitations imposed by our credit facility; (19) the effect of failures or delays in support systems or customer service functions, and other interruptions of our operations; (20) the occurrence of breaches and errors in the conduct of Invesco’s business; and (21) the execution risk inherent in Invesco’s current company-wide transformational initiatives. Other factors and assumptions not identified above were also involved in the derivation of these forward-looking statements, and the failure of such other assumptions to be realised, as well as other factors, may also cause actual results to differ materially from those projected.

 

QUESTIONS AND ANSWERS ABOUT THE PROPOSAL

 

The following is designed to assist your understanding of the Proposal. However, it should not be solely relied upon for a full and proper understanding of the Proposal and you are advised to read the whole of this document.

 

Holders of INVESCO Inc. Exchangeable Shares please refer to question no. 5.

 

Holders of INVESCO PLC ADSs should also read paragraph 9 of Part II of this document, which contains more particular information about the Proposal as it affects holders of INVESCO PLC ADSs.

 

 

Invesco Ltd. is a new company incorporated in Bermuda under the Bermuda Companies Act. INVESCO PLC is proposing to reorganise itself pursuant to a Court approved scheme of arrangement under the laws of England and Wales so that INVESCO PLC becomes a wholly-owned subsidiary of Invesco Ltd. and the former INVESCO PLC Shareholders and INVESCO PLC ADS holders become shareholders of Invesco Ltd.

 

Invesco is applying to list the Invesco Ltd. common shares to be issued under the Scheme on the NYSE. The application is expected to become effective and trading in Invesco Ltd. Shares is expected to commence shortly after the scheme of arrangement becomes effective. Simultaneously, the INVESCO PLC Shares will be delisted from the London Stock Exchange and the INVESCO PLC ADS programme will be terminated, with the Invesco Ltd. Shares underlying the INVESCO PLC ADSs being distributed to the holders of the INVESCO PLC ADSs upon surrender of the INVESCO PLC ADSs to the Depositary.

 

As part of the Proposal, Invesco Ltd. intends to implement a reverse stock split on a two-for-one basis in respect of the Invesco Ltd. Shares issued under the Scheme. This is being proposed to help ensure that initially the Invesco Ltd. Shares trade at a value comparable to the trading value of the INVESCO PLC ADSs. The effect of the reverse stock split (described in this document as the Share Capital Consolidation) is that INVESCO PLC Shareholders will ultimately receive one Invesco Ltd. Share for every two INVESCO PLC Shares held before the Scheme becomes effective.

 

For the purposes of this document, references to the “Proposal” should be read as including all of the above-mentioned actions.

 

Finally, INVESCO PLC Shareholders are being asked to pass the resolutions necessary to enable a proposed intragroup reorganisation to take place after the scheme of arrangement becomes effective.

 

 

If fully implemented, the Proposal will result in all the INVESCO PLC Shares being replaced by Invesco Ltd. Shares, on the following basis:

 

One Invesco Ltd. Share for every two INVESCO PLC Shares currently held.

 

You will not have to pay anything for the Invesco Ltd. Shares.

 

 

INVESCO PLC Shares are listed on the NYSE in the form of INVESCO PLC ADSs. Each INVESCO PLC ADS represents the right to receive two INVESCO PLC Shares.

 

 

If fully implemented, the Proposal will result in all INVESCO PLC ADSs being replaced by Invesco Ltd. Shares on the following basis:

 

One Invesco Ltd. Share for each INVESCO PLC ADS currently held.

 

You will not have to pay anything for the Invesco Ltd. Shares.

 

The ADS programme for INVESCO PLC ADSs will be terminated after the Proposal has been implemented.

 

 

INVESCO Inc. Exchangeable Shares are shares in INVESCO Inc., a corporation incorporated in Canada and an indirect subsidiary of INVESCO PLC. INVESCO Inc. Exchangeable Shares are generally exchangeable for

INVESCO PLC Shares on a one-for-one basis at any time at the request of the relevant INVESCO Inc. Exchangeable Shareholder.

 

The INVESCO PLC SV Share is a share in INVESCO PLC which was issued in connection with the INVESCO Inc. Exchangeable Shares. It carries voting rights in INVESCO PLC and its holder exercises those voting rights in accordance with the instructions of the INVESCO Inc. Exchangeable Shareholders.

 

As announced on 22 October 2007, the Board of Directors of INVESCO Inc. has resolved that, if the Scheme is sanctioned at the First Court Hearing, the INVESCO Inc. Exchangeable Shares will be redeemed in accordance with their terms and each holder of INVESCO Inc. Exchangeable Shares will receive one INVESCO PLC Share for each INVESCO Inc. Exchangeable Share held on that date.

 

The INVESCO PLC Shares issued in respect of the INVESCO Inc. Exchangeable Shares will be subject to the Proposal and are therefore expected to be replaced with Invesco Ltd. Shares on the same basis as set out in paragraph 2 above.

 

Therefore, after implementation of the Proposal, the former holders of INVESCO Inc. Exchangeable Shares will be holders of Invesco Ltd. Shares and will enjoy the same rights and privileges as the former INVESCO PLC Shareholders. The INVESCO PLC SV Share will also be redeemed after the Scheme becomes effective.

 

Separate guidance to holders of INVESCO Inc. Exchangeable Shares has been sent with this document to holders of INVESCO Inc. Exchangeable Shares, and includes details on how to instruct the INVESCO PLC SV Shareholder to vote at the Extraordinary General Meeting.

 

If you hold INVESCO PLC Shares and/or INVESCO PLC ADSs only, you do not need to concern yourself with the description of the particular mechanics of the Proposal as it applies to the INVESCO PLC SV Share or the INVESCO Inc. Exchangeable Shares.

 

 

As part of the Proposal, Invesco Ltd. intends to implement a reverse stock split on a two-for-one basis in respect of the Invesco Ltd. Shares issued under the Scheme. This is being proposed to help ensure that initially the Invesco Ltd. Shares trade at a value comparable to the trading value of the INVESCO PLC ADSs. The reverse stock split (described in this document as the Share Capital Consolidation) will be effected by Invesco Ltd. Shareholders receiving one Invesco Ltd. Share for every two INVESCO PLC Shares held before the scheme of arrangement becomes effective.

 

Subject to fractional interests, discussed in the next question, INVESCO PLC Shareholders and holders of INVESCO PLC ADSs will own the same relative proportion of Invesco Ltd. following the Share Capital Consolidation as they did of INVESCO PLC immediately prior to the Scheme becoming effective.

 

 

You will not receive a fractional interest in Invesco Ltd. Shares in connection with the Share Capital Consolidation. Since the Share Capital Consolidation is proposed to take place on a two-for-one basis, the fractional interest, if any, which an Invesco Ltd. Shareholder would be entitled to will be equivalent to one half of an Invesco Ltd. Share. To the extent that you are entitled to a fractional interest in Invesco Ltd. Shares such fractional interest will be aggregated with other fractional interests and sold in the market and the cash despatched to you.

 

 

As a result of INVESCO PLC losing its foreign private issuer status in the United States in July 2007, INVESCO PLC immediately became subject to the full requirements of two primary securities regulators, the SEC in the United States and the FSA in the United Kingdom and to two differing accounting standards, US GAAP and IFRS. Without any action, the differing regulatory and accounting standards may produce conflicts which may impede full compliance with either primary regulator and create potential confusion for the shareholders. The Board of Directors of INVESCO PLC believes having a US primary listed entity is the most practical way to return to supervision by a single primary regulator and minimise the possible disruption and cost associated with dual regulatory and accounting standards.

 

A US primary listing on the NYSE will better align Invesco Ltd. with the current shareholder base since US shareholders now constitute a majority of shareholders. Invesco Ltd. is expected to benefit from being situated amongst a more appropriate public company peer group which will provide improved visibility and direct

comparability with this peer group of large, global asset managers. Consistent with Invesco’s Anglo-American heritage and culture, Invesco Ltd. intends to continue to encourage UK share ownership and investment with a secondary listing on the London Stock Exchange, which it intends to establish early in 2008.

 

A change of domicile of INVESCO PLC to the United States would have caused adverse tax consequences. Bermuda is a well established jurisdiction for companies traded on US stock exchanges and will minimise the impact on shareholders by allowing Invesco to maintain legal, regulatory capital and financial positions consistent with those of INVESCO PLC today.

 

 

The Scheme, if approved, is binding on all INVESCO PLC Shareholders when it becomes effective, thereby providing certainty and equality of treatment for INVESCO PLC Shareholders. However, the implementation of the Scheme must satisfy certain legal requirements for the protection of INVESCO PLC Shareholders and creditors and therefore requires the approval of the Court and certain regulatory approvals (including the approval of the FSA).

 

 

The key steps are as follows:

 

 

The above actions if fully implemented will result in INVESCO PLC Shareholders receiving one Invesco Ltd. Share for every two INVESCO PLC Shares held previously.

 

 

Holdings of INVESCO PLC Shares recorded in the share register at the Scheme Record Time (which is expected to be on 3 December 2007) will determine the entitlements to Invesco Ltd. Shares. Assuming the necessary Court and INVESCO PLC Shareholder approvals are obtained, it is expected that the Invesco Ltd. Shares will be listed on the NYSE on 4 December 2007. The expected timetable of principal events to give effect to the Proposal is set out on page 5 of this document.

 

 

 

If you are a Certificated Holder, your entitlement to Invesco Ltd. Shares will be issued directly to you in book entry form under the direct registration system which exists in the United States. Written notification of the relevant holding in book entry form will be sent to the Certificated Holders after the Effective Date.

 

INVESCO PLC currently operates a share dealing facility for its UK resident INVESCO PLC Shareholders. Details of this share dealing facility can be found at http://www.invesco.com/invest/csds.html. Invesco Ltd. expects to put in place a similar dealing facility operated by The Bank of New York Mellon as Invesco Ltd.’s US transfer agent. Details of this facility will be made available at www.invesco.com after the Scheme has become effective.

 

 

To facilitate holding and trading of Invesco Ltd. Shares in uncertificated form for those INVESCO PLC Shareholders who hold INVESCO PLC Shares in a stock account in CREST at the Scheme Record Time, it is intended that the Invesco Ltd. Shares to which they will be entitled will be delivered, held and settled in CREST by means of the CREST International Settlement Links Service, and in particular Euroclear UK’s established link with DTCC, the US settlement and clearance system. This link operates via the services of CREST International Nominees, which is a participant in DTCC. Under the CREST International Settlement Links Service, CREST Depository Limited, a subsidiary of Euroclear UK, issues dematerialised depository interests representing entitlements to non-UK securities such as Invesco Ltd. Shares, called CDIs. CDIs are independent securities constituted under English law, which may be held and transferred through CREST.

 

Accordingly, the Invesco Ltd. Shares to which INVESCO PLC Shareholders will be entitled will be delivered to CREST International Nominees’ account at DTCC, and CREST Depository Limited will then issue Invesco Ltd. CDIs through CREST to the appropriate stock account in CREST of the INVESCO PLC Shareholder concerned. The stock account concerned will be an account under the same participant ID as the relevant INVESCO PLC Shareholder currently has. Following distribution of the Invesco Ltd. CDIs, such holders will be entitled to arrange for the transfer of their Invesco Ltd. CDIs to other CREST holders, or the underlying Invesco Ltd. Shares to another participant in DTCC, if they so wish.

 

As from the Effective Date, INVESCO PLC Shares held within CREST will be cancelled.

 

The crediting of Invesco Ltd. CDIs through CREST will take place as soon as reasonably practicable after the Effective Date and in any event after the Share Capital Consolidation. Statements of entitlement detailing the holding of Invesco Ltd. CDIs will be despatched no later than 14 days after the Effective Date.

 

INVESCO PLC Shareholders should note that they will have no rights in respect of Invesco Ltd. Shares or Invesco Ltd. CDIs held through CREST against Euroclear UK or its subsidiaries. Normal CREST procedures (including timings) apply in relation to any INVESCO PLC Shares that are, or are to be, converted from uncertificated to certificated form, or from certificated to uncertificated form prior to the Effective Date.

 

A nominal custody fee, as determined by Euroclear UK from time to time, will be charged to users for the use of Invesco Ltd. CDIs.

 

Following issue of the Invesco Ltd. CDIs, holders of the Invesco Ltd. CDIs will, at their option, be able to effect the cancellation of their Invesco Ltd. CDIs in CREST in order to hold their underlying Invesco Ltd. Shares directly by sending an instruction to CREST to that effect and will be entitled to arrange for the transfer of their Invesco Ltd. Shares (as represented by their holding of Invesco Ltd. CDIs) either into the direct registration service in the United States or into a shareholding account with a depositary financial institution which is a participant in DTCC. Certain transfer fees will be payable by a holder of Invesco Ltd. CDIs who makes such a transfer.

 

 

In respect of holders of INVESCO PLC ADSs, the Invesco Ltd. Shares will be issued to them in book entry form either (i) under the direct registration system which exists in the United States or (ii) if appropriate account details are provided to The Bank of New York Mellon by 26 November 2007, to a participant in DTCC. The relevant accounts will be credited as more fully set out on page 23.

 

 

Only INVESCO PLC Shareholders registered in the register of members of INVESCO PLC at 6:00 p.m. on 12 November 2007 are entitled to attend and vote at the INVESCO PLC Meetings.

 

The INVESCO PLC SV Shareholder is entitled to vote only at the Extraordinary General Meeting.

 

INVESCO PLC ADS holders should refer to questions 17, 18 and 25 below and to paragraph 9 of Part II of this document for details of how they can vote or have their votes represented at the INVESCO PLC Meetings.

 

 

The two meetings are for different purposes. The Court Meeting has been convened by order of the Court so that the Court will have the authority to sanction the Scheme if approved by INVESCO PLC Shareholders. The Extraordinary General Meeting is being held for INVESCO PLC Shareholders and the INVESCO PLC SV Shareholder to authorise the implementation of the Proposal.

 

The meetings are to be held at the offices of UBS Limited at 1 Finsbury Avenue, London EC2M 2PP from 11:30 a.m. on 14 November 2007. The formal notices are set out on pages 64 to 68 of this document. INVESCO PLC Shareholders who are unable to attend the INVESCO PLC Meetings are encouraged to vote by completing and returning the enclosed forms of proxy in accordance with the instructions thereon.

 

 

If you are an INVESCO PLC Shareholder, forms of proxy for your use in connection with the INVESCO PLC Meetings are enclosed with this document. Whether or not you propose to attend the INVESCO PLC Meetings, you should complete and sign the attached forms of proxy in accordance with the instructions on them. Completed forms

of proxy should be returned to INVESCO PLC’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.

 

INVESCO PLC Shareholders are requested to lodge BLUE forms of proxy, for use at the Court Meeting, at least 48 hours before the time appointed for the Court Meeting. BLUE forms of proxy not lodged by such time may be handed to the chairman of the Court Meeting immediately prior to the start of the meeting.

 

WHITE forms of proxy, for use at the Extraordinary General Meeting, must be lodged at least 48 hours before the time appointed for the Extraordinary General Meeting. WHITE forms of proxy not lodged by such time will be invalid.

 

 

If you are not the registered holder of your INVESCO PLC Shares, the registered holder may be entitled to vote your INVESCO PLC Shares if you provide that holder with instructions on how to vote. You should instruct your broker to vote your INVESCO PLC Shares, following the directions provided to you by your broker.

 

If your broker has not received instructions from you and does not vote your INVESCO PLC Shares, your shares will not be counted towards the number of shares considered present at the meetings and will not have an effect on the outcome of the vote.

 

 

If you are an INVESCO PLC ADS holder, you should use your ADS Voting Instruction Card to direct the manner in which the Depositary should vote your underlying INVESCO PLC Shares at the INVESCO PLC Meetings. Completed ADS Voting Instruction Cards should be returned to The Bank of New York Mellon, as Depositary, in the return envelope provided as soon as possible and in any event to be received not later than 5:00 p.m. (New York time) on 6 November 2007.

 

 

If you hold INVESCO PLC ADSs through a broker in the United States, you must rely on the procedures of the bank, broker or financial institution through which you hold your INVESCO PLC ADSs.

 

 

Your vote is important. In particular, the Court needs to be satisfied that there is a fair representation of the opinion of INVESCO PLC Shareholders at the Court Meeting.

 

INVESCO PLC Shareholders are therefore urged to complete, sign and return BOTH forms of proxy as soon as possible. This will not preclude INVESCO PLC Shareholders from attending the INVESCO PLC Meetings in person. The BLUE form of proxy is for the Court Meeting and the WHITE form of proxy is for the Extraordinary General Meeting.

 

INVESCO PLC ADS holders are also urged to complete, sign and return their ADS Voting Instruction Cards before 5:00 p.m. (New York time) on 6 November 2007.

 

 

On the Effective Date (which is expected to be 4 December 2007) your INVESCO PLC Share certificate will cease to be valid. Once written notifications relating to the holdings of Invesco Ltd. Shares in book entry form have been issued, certificates for the INVESCO PLC Shares should be destroyed. It is expected that written notifications of the holdings of Invesco Ltd. Shares in book entry form will be sent out by 18 December 2007.

 

In addition, on the Effective Date, the INVESCO PLC ADSs will represent the right to receive the appropriate number of Invesco Ltd. Shares on the basis of one Invesco Ltd. Share for each INVESCO PLC ADS surrendered. After the Effective Date, the ADS programme for INVESCO PLC ADSs will be terminated and the Depositary will transfer INVESCO PLC ADS holders the relevant number of Invesco Ltd. Shares.

 

 

If you are resident outside the United Kingdom or the United States, or a national or citizen of jurisdictions outside the United Kingdom or the United States, you should read paragraph 12 of Part II of this document.

 

 

UK resident individual shareholders are currently entitled to a non-payable tax credit on dividends that they receive from INVESCO PLC. Such shareholders will not be entitled to a non-payable tax credit on dividends that they receive from Invesco Ltd. until the tax year 2008/2009 (when it is expected that they will be entitled to such a tax credit for the first £5,000 of non-UK dividends in each tax year). UK resident corporate shareholders (and shareholders who are taxed in the same manner as a UK corporate taxpayer) are in general currently exempt from tax on dividends that they receive from INVESCO PLC. Such shareholders will be taxed on dividends that they receive from Invesco Ltd. However, INVESCO PLC understands that the UK government is currently considering the tax treatment of portfolio dividends received by UK tax resident companies with a view to achieving parity of treatment between UK and foreign portfolio dividends. Please refer to paragraph 11 of Part II of this document for a more detailed description of the tax consequences for UK and US resident INVESCO PLC Shareholders and INVESCO PLC ADS holders. For all other jurisdictions, you should consult your professional adviser.

 

 

You will be written to separately. It is intended that options and awards in respect of INVESCO PLC Shares will continue as rights to acquire Invesco Ltd. Shares on the same terms. There will therefore be no changes to the operation of the INVESCO PLC Share Plans for existing options and awards.

 

Appropriate adjustments will be made to options and awards to take account of the Share Capital Consolidation. Where necessary, such adjustments will be approved by HM Revenue. Participants holding restricted shares will, as beneficial owners of such shares, take part in the Scheme and the Share Capital Consolidation.

 

 

Invesco Ltd. intends to adopt a dividend policy in line with the current policy of INVESCO PLC. If dividends are declared, Invesco Ltd. Shareholders will be paid dividends in US dollars. Invesco Ltd. is exploring the feasibility of permitting Invesco Ltd. Shareholders to elect to receive their dividends in pounds sterling. If implemented, details of this facility will be made available to Invesco Ltd. Shareholders in due course.

 

 

Yes, you will be able to trade your INVESCO PLC Shares or Invesco PLC ADSs during the time between the date of this document and the close of business on the date before the Effective Date. The last date for dealings in the INVESCO PLC Shares and the INVESCO PLC ADSs is therefore expected to be 3 December 2007.

 

Certificated Holders of INVESCO PLC Shares should note, however, that, if they intend to trade their INVESCO PLC Shares between the date of this document and the Effective Date, they must ensure that the relevant trade has completed (i.e. settled) by no later than the Scheme Record Time, which is expected to be 6:00 p.m. on 3 December 2007. If any trades in certificated INVESCO PLC Shares have not settled by this time, the relevant INVESCO PLC Shareholder will be required to make arrangements with his financial adviser and/or broker to ensure that the trade is satisfied by the transfer of Invesco Ltd. Shares.

 

If Certificated Holders of INVESCO PLC Shares are in any doubt as to what action they should take, they should seek advice from their financial adviser and/or broker.

 

As noted above, Invesco is applying to list the Invesco Ltd. Shares to be issued under the Scheme on the NYSE, and it is expected that you will be able to trade your Invesco Ltd. Shares on the New York Stock Exchange from the Effective Date onwards.

 

The Effective Date is expected to be on or about 4 December 2007.

 

 

Please call one of the helplines shown below. The helplines will not provide advice on the merits of the Proposal or give any financial or taxation advice. For financial or taxation advice, you will need to consult an independent financial adviser.

 

FOR FURTHER INFORMATION

 

Helplines are available during normal business hours, Monday to Friday:

 

For INVESCO PLC Shareholders:

 

For callers dialling from within the UK, the helpline number is 0800 030 4452.

 

For callers dialling outside the UK, the helpline number is +44 208 639 3314.

 

For INVESCO PLC ADS Holders:

 

For callers dialling from within the US, the helpline number is 877 277 9899.

 

For callers dialling from outside the US, the helpline number is +1 201 680 6686.

 

PART I
LETTER FROM THE CHAIRMAN OF INVESCO PLC

 

 

Registered Office

 

30 Finsbury Square

London

 

Dear INVESCO PLC Shareholders, INVESCO PLC ADS holders, the INVESCO PLC SV Shareholder and INVESCO Inc. Exchangeable Shareholders

 

Introduction

 

INVESCO PLC has continued to pursue its strategy of being a leading global independent retail and institutional asset manager by creating a business with a broad spectrum of products and a strong international presence in key markets. As a result of the successful execution of our strategy, the operations and client base of INVESCO PLC have undergone significant change over the past several years. Concurrently, strong demand for INVESCO PLC’s shares has resulted in a significant increase in share ownership in the US.

 

On 18 July 2007, INVESCO PLC announced that it had lost its foreign private issuer status in the United States chiefly as a result of US share ownership exceeding fifty percent of our issued share capital. As a result of this we immediately became subject to the full requirements of two primary securities regulators, the SEC in the United States and the FSA in the United Kingdom, and to two different accounting standards, US GAAP and IFRS. Different regulatory and accounting standards of these regulators place the company in an untenable position that may produce supervisory conflicts that may impede full compliance with the requirements of either primary regulatory scheme and create confusion for the shareholders.

 

The Proposal

 

INVESCO PLC announced on 25 September 2007 that, in response to these events, the Board of Directors of INVESCO PLC unanimously approved a series of inter-related proposals to be put before its shareholders, namely:

 

 

 

 

In addition, on 22 October 2007, it was announced that, conditional upon the Scheme of Arrangement being sanctioned by the Court, the INVESCO Inc. Exchangeable Shares would be redeemed in accordance with their terms and exchanged on a one-for-one basis for INVESCO PLC Shares. The INVESCO PLC Shares issued in respect of the INVESCO Inc. Exchangeable Shares will be subject to the Scheme of Arrangement and the Share Capital Consolidation on the same terms as all other INVESCO PLC Shares. Former holders of INVESCO Inc. Exchangeable Shares will therefore ultimately become holders of Invesco Ltd. Shares.

 

The actions set forth above are being proposed following due and careful consideration and deliberation. The Board of Directors believes that the proposals are in the best interests of INVESCO PLC and its shareholders for the reasons set forth below:

 

 

Detailed descriptions of each of the proposals set forth above are described in more detail in the various parts of this document. You are strongly urged to read this document in its entirety in order to gain a better understanding of the proposals set forth herein and not to rely solely upon the information set forth in this letter.

 

The Court Meeting and the Extraordinary General Meeting

 

In order to seek your approval of the matters set forth above and otherwise described in this document, INVESCO PLC will hold two meetings of shareholders – a Court Meeting and an Extraordinary General Meeting. The Court Meeting is being convened so that the appropriate UK court will have the authority to sanction the Scheme of Arrangement if approved by INVESCO PLC Shareholders. The Extraordinary General Meeting is being held to authorise the implementation of the proposals set forth herein. The meetings are to be held at the offices of UBS Limited at 1 Finsbury Avenue, London EC2M 2PP from 11:30 a.m. on 14 November 2007. Formal notices of the meetings are set out on pages 64 to 68 of this document. If you are unable to attend the meetings, you are strongly encouraged to vote by completing and returning the enclosed forms of proxy in accordance with the instructions contained in this document and in the proxy.

 

Recommendation

 

The Directors, who have received financial advice from UBS Limited and JPMorgan Cazenove Limited, consider the terms of the Proposal to be fair and reasonable. In providing their advice to the Directors, UBS Limited and JPMorgan Cazenove Limited have relied upon the Directors’ commercial assessment of the Proposal. The Directors consider that the Proposal is in the best interests of INVESCO PLC, INVESCO PLC Shareholders and holders of INVESCO PLC ADSs taken as a whole and unanimously recommend that you support the Scheme, by, if you are an INVESCO PLC Shareholder, voting, or, if you are an INVESCO PLC ADS holder, instructing the Depositary to vote, in favour of the resolutions to be proposed at the Court Meeting and the Extraordinary General Meeting.

 

Thank you for your consideration of the matters set forth herein. If you should have questions after reading this document, helplines have been established to address your questions. Information regarding the helplines are set forth in this document.

 

 

Sincerely,

 

Rex D. Adams

Chairman

INVESCO PLC

 

PART II
EXPLANATORY STATEMENT

(in compliance with section 426 of the Companies Act 1985)

 

 

22 October 2007

 

Dear INVESCO PLC Shareholders, INVESCO PLC ADS holders, the INVESCO PLC SV Shareholder and INVESCO Inc. Exchangeable Shareholders

 

 

On 25 September 2007, the board of directors of INVESCO PLC announced that it had approved a series of inter-related proposals to be put before INVESCO PLC Shareholders. Chief among the proposals is (i) to change the primary listing from the London Stock Exchange to the NYSE; (ii) to reorganise pursuant to a court approved scheme of arrangement so that INVESCO PLC becomes a wholly-owned subsidiary of Invesco Ltd., a new corporation incorporated in Bermuda; (iii) to implement a Share Capital Consolidation, also known as a reverse stock split, after the Scheme becomes effective; and (iv) to implement an intragroup reorganisation after the Scheme becomes effective.

 

Your attention is drawn to the letter from the Chairman of INVESCO PLC set out in Part I of this document, which forms part of this Explanatory Statement. The letter contains, among other matters, information on the reasons for the Proposal and the unanimous recommendation by the board of directors of INVESCO PLC to INVESCO PLC Shareholders and INVESCO PLC ADS holders to vote in favour of the resolutions to be proposed at the Court Meeting and the Extraordinary General Meeting.

 

The INVESCO PLC Directors intend to vote in favour of the resolutions to be proposed at the Court Meeting and the Extraordinary General Meeting in respect of their own beneficial holdings, which amount in aggregate to 7,147,093 INVESCO PLC Shares. This represents, as at 19 October 2007 (the last practicable day before publication of this document), approximately 0.86 percent of the votes capable of being cast at the Court Meeting and 0.84 percent of the votes capable of being cast at the Extraordinary General Meeting.

 

The INVESCO PLC Directors have retained UBS Limited and JPMorgan Cazenove Limited as financial advisers in connection with the Scheme. We have been authorised by the INVESCO PLC Directors to write to you to explain the Scheme and other components of the Proposal and to provide you with other relevant information.

 

The Scheme is set out in full in Part V of this document. Your attention is also drawn to the information regarding INVESCO PLC and Invesco Ltd. contained in Parts III and VII of this document.

 

You are strongly urged to read this document in its entirety in order to gain a better understanding of the proposals set forth herein.

 

 

 

Under the Scheme, INVESCO PLC is proposing to reorganise itself pursuant to a Court approved scheme of arrangement under section 425 of the Companies Act so that INVESCO PLC becomes a wholly and directly owned subsidiary of Invesco Ltd. and the INVESCO PLC Shareholders and INVESCO PLC ADS holders become shareholders of Invesco Ltd. Immediately following the Scheme becoming effective, INVESCO PLC Shareholders and INVESCO PLC ADS holders will hold 100 percent of the Invesco Ltd. Shares in issue and the directors of Invesco Ltd. will be identical to the current Directors of INVESCO PLC. The Scheme will be implemented by cancelling the issued ordinary share capital of INVESCO PLC, capitalising the reserve created by the cancellation and issuing new fully paid shares in INVESCO PLC to Invesco Ltd. In return for Invesco Ltd.’s receipt of INVESCO

PLC Shares, the former INVESCO PLC Shareholders will receive one Invesco Ltd. Share for each INVESCO PLC Share and the former INVESCO PLC ADS holders will receive two Invesco Ltd. Shares for each INVESCO PLC ADS previously held by them at the Scheme Record Time (which is currently expected to be 6:00 p.m. on 3 December 2007) and otherwise on the terms and conditions set out in this document. However, the combined effect of the Scheme along with the Share Capital Consolidation will result in the former INVESCO PLC Shareholders receiving one Invesco Ltd. Share for every two INVESCO PLC Shares held before the Scheme becomes effective and the Share Capital Consolidation is implemented and the former INVESCO PLC ADS holders receiving one Invesco Ltd. Share for each INVESCO PLC ADS held before the Scheme becomes effective and the Share Capital Consolidation is implemented. Your attention is drawn to paragraph 3 of this Part II where the Scheme is explained in greater detail.

 

 

When the Scheme becomes effective, the Invesco Ltd. Shares are intended to be listed on the NYSE. Simultaneously, the INVESCO PLC Shares will be delisted from the London Stock Exchange and the INVESCO PLC ADS programme will be terminated.

 

 

As part of the Proposal, Invesco Ltd. intends to implement a reverse stock split, on a two-for-one basis, in respect of the Invesco Ltd. Shares issued under the Scheme. The Share Capital Consolidation will be implemented immediately after the Scheme. As stated above, the combined effect of the Scheme and the Share Capital Consolidation is that INVESCO PLC Shareholders will receive one Invesco Ltd. Share for every two INVESCO PLC Shares held before the Scheme becomes effective and the Share Capital Consolidation is implemented. Similarly, INVESCO PLC ADS holders will receive one Invesco Ltd. Share for each INVESCO PLC ADS held before the Scheme becomes effective and the Share Capital Consolidation is implemented. Your attention is drawn to paragraph 5 of this Part II where the Share Capital Consolidation is explained in greater detail.

 

 

Immediately after the Scheme becomes effective, it is intended that there will be an intra group reorganisation under which INVESCO UK Limited, as the holding company for certain companies in the group carrying on regulated business in the EU, will be distributed by INVESCO PLC to Invesco Ltd. In order to create the necessary distributable reserves to enable this distribution to be made, it is intended that part of INVESCO PLC’s reserves should be capitalised through an issue of shares to Invesco Ltd. and that those shares will then be cancelled. All of this will happen after the Scheme becomes effective and so will not directly affect INVESCO PLC Shareholders. However, in order to make sure that this reorganisation can take place as soon as practicable, the necessary resolutions to facilitate the distribution will be put to the EGM.

 

INVESCO PLC ADS holders should read paragraph 9 of this Part II, which contains important information to INVESCO PLC ADS holders regarding the Proposal which is relevant to them.

 

The INVESCO PLC SV Shareholder should read paragraph 10 of this Part II, which contains important information regarding the Proposal which is relevant to the INVESCO PLC SV Shareholder.

 

Participants in the INVESCO PLC Share Plans should read paragraph 13 of this Part II, which contains further important information which is relevant to them.

 

 

 

The Proposal is to be effected by way of a scheme of arrangement of INVESCO PLC under section 425 of the Companies Act, the provisions of which are set out in full in Part V of this document.

 

On the Scheme becoming effective, the entire issued ordinary share capital of INVESCO PLC as at the Effective Date will be cancelled and new shares will be issued by INVESCO PLC to Invesco Ltd. by a capitalisation of the reserves arising from such cancellation, so that INVESCO PLC becomes a wholly owned subsidiary of Invesco Ltd.

 

INVESCO PLC Shareholders will then receive Invesco Ltd. Shares on the basis set out in paragraph 2.1 of this Part II.

 

To become effective, the Scheme requires the approval of (i) a majority in number of those INVESCO PLC Shareholders present and voting, either in person or by proxy, at the Court Meeting; (ii) 75 percent or more in value

of all INVESCO PLC Shares held by such INVESCO PLC Shareholders and voted at that meeting. The Scheme also requires the sanction of the Court and the passing of a special resolution to implement the Scheme at the Extraordinary General Meeting, as well as satisfaction or waiver of the other conditions set out in Part IV of this document.

 

If the Scheme becomes effective, it will be binding on all INVESCO PLC Shareholders, including any shareholders who did not vote to approve the Scheme.

 

On the Effective Date, share certificates in respect of INVESCO PLC Shares will cease to be valid and should be destroyed. In addition, on the Effective Date, entitlements to INVESCO PLC Shares held within the CREST system will be cancelled.

 

 

The Scheme is subject to a number of conditions set out in full in Part IV of this document.

 

The Scheme will require approval by the INVESCO PLC Shareholders at the Court Meeting and the Extraordinary General Meeting. The INVESCO PLC Meetings and the nature of the approvals required to be given at each of them are described in more detail in paragraph 4 of this Part II.

 

The Scheme can only become effective if all conditions to the Scheme, including approvals at the INVESCO PLC Meetings and the sanction of the Court, have been satisfied or, where appropriate, waived. INVESCO PLC Shareholders are entitled to attend the INVESCO PLC Meetings in person or by proxy to support or oppose the Scheme. The Scheme will become effective upon the delivery for registration to the Registrar of Companies at Companies House of copies of the Court Orders and the registration of the Court Order confirming the Capital Reduction. Unless the Scheme becomes effective by not later than 30 June 2008, or such later date as INVESCO PLC and Invesco Ltd. may agree and the Court may allow, the Scheme will lapse and will not proceed.

 

Invesco Ltd. has agreed to consent to the Scheme and to undertake to be bound by the terms of the Scheme. The First Court Hearing is expected to be held on 3 December 2007.

 

If the Scheme is sanctioned by the Court and the conditions to the Scheme are satisfied or waived, it is expected that the Scheme will become effective on 4 December 2007, and that dealings in the Invesco Ltd. Shares issued pursuant to the Scheme will commence at 9:30 a.m. (New York time) and 2:30 p.m. (London time) on 4 December 2007.

 

 

It is proposed, as part of the first resolution to be proposed at the Extraordinary General Meeting, to amend INVESCO PLC’s Articles of Association to ensure that any INVESCO PLC Shares issued after the date of such amendment to the Articles but before the Reduction Record Time are issued subject to the terms of the Scheme. The amended Articles of Association will also provide that any INVESCO PLC Shares issued on or after the Effective Date, for example, upon the exercise of options under the INVESCO PLC Share Plans, will automatically be transferred to Invesco Ltd. in consideration of the issue to such holder by Invesco Ltd. of Invesco Ltd. Shares on the same terms as under the Scheme. This will avoid any person other than Invesco Ltd. or its nominee(s) holding INVESCO PLC Shares after the Scheme becomes effective.

 

Paragraph 1.2 of the first resolution set out in the notice of Extraordinary General Meeting at the end of this document seeks shareholder approval for such amendments.

 

 

INVESCO PLC has been advised that the Invesco Ltd. Shares may be issued to INVESCO PLC Shareholders under the Scheme without registration under the Securities Act pursuant to an exemption provided by section 3(a)(10) of the Securities Act. INVESCO PLC will advise the Court that its sanctioning of the Scheme will be relied upon by INVESCO PLC as a court approval of the Scheme for the purpose of qualifying for the exemption from the registration requirements of the Securities Act described above.

 

 

The Scheme will require the approval of INVESCO PLC Shareholders at the Court Meeting and the Extraordinary General Meeting. Both such meetings will be held on 14 November 2007.

 

Notices of the Court Meeting and the Extraordinary General Meeting are set out on pages 64 to 68 of this document. Entitlement to attend and vote at these meetings and the number of votes which may be cast thereat will be

determined by reference to the register of members of INVESCO PLC at 6:00 p.m. on 12 November 2007 which is two days before the date of the INVESCO PLC Meetings.

 

 

The Court Meeting has been convened for 11:30 a.m. on 14 November 2007 in accordance with the direction of the Court to enable the INVESCO PLC Shareholders to consider and, if thought fit, approve the Scheme. In relation to the Court Meeting, voting will be by way of poll and each relevant member present in person or by proxy will be entitled to one vote for every four INVESCO PLC Shares held.

 

 

The Extraordinary General Meeting has been convened for 11:45 a.m. on 14 November 2007 (or as soon thereafter as the Court Meeting shall have concluded or been adjourned) to enable INVESCO PLC Shareholders and the INVESCO PLC SV Shareholder to consider and, if thought fit, pass the following special resolutions (which require a vote in favour of not less than 75 percent of the votes cast):

 

 

 

 

 

The approval required at the Court Meeting is (i) a majority in number of those INVESCO PLC Shareholders present and voting, either in person or by proxy, at the Court Meeting; and (ii) 75 percent or more in value of all INVESCO PLC Shares held by such INVESCO PLC Shareholders and voted at that meeting.

 

All INVESCO PLC Shareholders are entitled to vote at the Court Meeting and the Extraordinary General Meeting. The INVESCO SV Shareholder is entitled to vote at the Extraordinary General Meeting, but is not entitled to vote at the Court Meeting. At the Extraordinary General Meeting, on a show of hands, each INVESCO PLC Shareholder and the INVESCO PLC SV Shareholder will have one vote. On a poll, each INVESCO PLC Shareholder will have one vote for every four INVESCO PLC Shares held and the INVESCO PLC SV Shareholder will have one vote for every four INVESCO Inc. Exchangeable Shares that are owned by INVESCO Inc. Exchangeable Shareholders and for which the INVESCO PLC SV Shareholder has voting instructions.

 

At the Court Meeting, voting will be by way of poll and therefore each INVESCO PLC Shareholder present in person or by proxy will be entitled to one vote for every four INVESCO PLC Shares held.

 

A BLUE form of proxy for use at the Court Meeting and a WHITE form of proxy for use at the Extraordinary General Meeting are enclosed. Any proxy given may be revoked at any time up to 48 hours before the start of the relevant meeting (or any adjournment thereof) by notifying Capita Registrars in writing of such revocation at the address set out on the proxy form. Alternatively, if the relevant INVESCO PLC Shareholder attends and votes in person at the meeting or any adjournment thereof, the proxy will be disregarded.

 

Under US state law, dissenters’ right of appraisal is generally a procedure by which shareholders may dissent from certain merger and sale of assets transactions submitted for shareholder vote, demand the payment of the fair value of their shares and have the fair value determined by judicial appraisal. There are no such rights of appraisal or similar rights of dissenters with respect to any of the matters to be acted upon at the meetings. However, objections to the Scheme may be raised at the First Court Hearing as explained in paragraph 3.2 of this Part II.

 

At the Court Meeting, INVESCO PLC Shares may be voted either “for” or “against” with respect to the Scheme and INVESCO PLC Shares that are not voted “for” or “against” will not be considered present at such meeting and will therefore not have an effect on the outcome of the vote.

 

At the Extraordinary General Meeting, INVESCO PLC Shares may be voted either “for”, “against” or “vote withheld” with respect to the resolutions that are put to vote. INVESCO PLC Shares that are not voted “for”, “against” or “vote withheld” in respect of such resolutions will not be considered present at such meeting and, as a result, such shares will not have an effect on the outcome of the vote. Shares voted “withheld” will not be a vote in law and will not count in the calculation of the proportion of the votes cast for and against the resolutions.

 

Duly executed forms of proxy will be voted in accordance with the instructions provided therein and to the extent no instructions are given the shares will not be voted at the meeting. At the Extraordinary General Meeting, if no alternative proxy is indicated, the chairman of the meeting will act as the proxy, which, in the absence of any instruction, will be voted in accordance with the recommendations of the board of directors as described in this proxy statement. Your attention is drawn to the new regime for the appointment of proxies, in particular the appointment of more than one proxy, set out in the “Multiple Proxy Voting Instructions” attached to the enclosed forms of proxy.

 

 

As part of the Proposal, it is intended to implement a reverse stock split on a two-for-one basis. This is being proposed to help ensure that initially the Invesco Ltd. Shares trade at a price comparable to the trading price of the INVESCO PLC ADSs. The reverse stock split will take place after the Scheme becomes effective and will be conditional upon the listing of the Invesco Ltd. Shares on the NYSE.

 

The reverse stock split will be implemented by consolidating Invesco Ltd. Shares issued under the Scheme so that Shareholders will receive one Invesco Ltd. Share for every two INVESCO PLC Shares they own (directly or indirectly) at 6:00 p.m. (London time), or 1:00 p.m. (New York City time), as the case may be, on 3 December 2007. This is referred to in this document as the Share Capital Consolidation.

 

The effect of this consolidation will be to reduce the number of Invesco Ltd. Shares in issue, but INVESCO PLC Shareholders and holders of INVESCO PLC ADSs will own the same proportion of Invesco Ltd. as they did of INVESCO PLC before the Scheme became effective, subject (in the case of INVESCO PLC Shareholders) to fractional entitlements.

 

A fractional entitlement will arise as a result of the Share Capital Consolidation unless a holding of Invesco Ltd. Shares is divisible by two. For example, an INVESCO PLC Shareholder holding seventy-five Invesco Ltd. Shares immediately after the Scheme becomes effective would, after the Share Capital Consolidation, be entitled to thirty-seven Invesco Ltd. Shares and a one-half fractional entitlement to a new Invesco Ltd. Share. Fractional entitlements will be aggregated, sold in the market and the proceeds will be returned to the former INVESCO PLC Shareholders by cheque to be despatched by 18 December 2007.

 

As each INVESCO PLC ADS currently represents two INVESCO PLC Shares, the Share Capital Consolidation will not result in any entitlement to fractional interests in Invesco Ltd. Shares for the holders of INVESCO PLC ADSs.

 

 

Details of the interests of the Directors of INVESCO PLC (including any interests under the INVESCO PLC Share Plans) are set out in paragraph 5 of Part VII of this document. INVESCO PLC Shares held by the Directors of INVESCO PLC will be subject to the Scheme.

 

There will be no change to the terms of the service contracts or letters of appointment of the Directors of INVESCO PLC (other than to substitute Invesco Ltd. for INVESCO PLC) in connection with the Scheme or the Proposal.

 

The effect of the Scheme on the interests of the Directors and executive officers of INVESCO PLC does not differ from its effect on the like interests of any other person.

 

 

 

As a public limited company registered in England and with its central place of management and control in the UK, INVESCO PLC is currently subject to the provisions of the Takeover Code. Following the Scheme becoming effective, INVESCO PLC Shareholders will become shareholders in Invesco Ltd., a company whose central place of management and control is not in the UK. As a result, following the Scheme becoming effective, the Takeover Code will not apply to any offer made to shareholders in Invesco Ltd. to acquire their shares.

 

INVESCO PLC Shareholders should note that, if the Scheme is implemented, they will not receive the protections afforded by the Takeover Code in the event of an offer to acquire their shares in Invesco Ltd.

 

Brief details of the Panel, the Takeover Code and the protections given by the Takeover Code are described below.

 

 

The Takeover Code is issued and administered by the Panel. The Takeover Code and the Panel operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets.

 

 

The Takeover Code is based on a number of general principles which are essentially statements of standards of commercial behaviour. These are set out in Part VI and apply to all transactions with which the Takeover Code is concerned. They are expressed in broad terms and the Takeover Code does not define the precise extent of, or the limitations on, their application. They are applied by the Panel in accordance with their spirit to achieve their underlying purpose.

 

In addition to the general principles, the Takeover Code contains a series of rules, of which some are effectively expansions of the general principles and examples of their application and others are provisions governing specific aspects of takeover procedure. Although most of the rules are expressed in more detailed language than the general principles, they are not framed in technical language and, like the general principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Panel may derogate or grant a waiver to a person from the application of a rule in certain circumstances.

 

 

A summary of key points regarding the application of the Takeover Code to takeovers generally is set out in Part VI of this document. You are encouraged to read this information carefully as it outlines certain important protections which you will be giving up if the Scheme is implemented.

 

The Bye-laws of Invesco Ltd. contain provisions relating to takeovers as described in Part III, “Takeover of Public Companies”.

 

 

 

The Invesco Ltd. Shares are intended to be listed on the NYSE. The listing of the Invesco Ltd. Shares on the NYSE is expected to become effective on the Effective Date and the dealings in the Invesco Ltd. Shares are expected to commence at 9:30 a.m. (New York time) and 2:30 p.m. (London time) on the Effective Date, which, subject to the approval of the Court, is expected to be 4 December 2007.

 

The listing of INVESCO PLC Shares on the Official List and their admission to trading on the London Stock Exchange’s main market for listed securities and the listing of INVESCO PLC ADSs on the NYSE, will be cancelled immediately prior to the commencement of dealings of the Invesco Ltd. Shares on the NYSE.

 

The Invesco Ltd. Shares will not be registered under the Securities Act in reliance upon the exemption from the registration requirements of the Securities Act provided by section 3(a)(10) thereof. Invesco Ltd. Shares issued to a holder of INVESCO PLC Shares or to a holder of INVESCO PLC ADSs who is neither an affiliate, for the purposes of the Securities Act, of INVESCO PLC or Invesco Ltd. prior to the Effective Date nor an affiliate (as defined under the Securities Act) of Invesco Ltd. after the Effective Date may be resold without restriction under the Securities Act. Affiliates of INVESCO PLC and Invesco Ltd. will be subject to timing, manner of sale and volume restrictions on the sale of Invesco Ltd. Shares received in connection with the Scheme under Rule 145(d) of the Securities Act. Persons who may be deemed to be affiliates of INVESCO PLC or Invesco Ltd. include individuals who, or entities that, control directly or indirectly, are controlled by or are under common control with INVESCO PLC or Invesco Ltd. and may include certain officers and directors of INVESCO PLC and Invesco Ltd. and principal shareholders (such as a holder of more than 10 percent of the issued share capital of INVESCO PLC or of the outstanding capital stock of Invesco Ltd.). INVESCO PLC Shareholders and holders of INVESCO PLC ADSs who believe they may be affiliates for the purposes of the Securities Act should consult their own legal advisers prior to any sale of Invesco Ltd. Shares received upon the Scheme becoming effective.

 

For the purpose of qualifying for the exemption from the registration requirements of the Securities Act provided by section 3(a)(10) therein with respect to the Invesco Ltd. Shares issued pursuant to the Scheme, INVESCO PLC will advise the Court that INVESCO PLC and Invesco Ltd. will rely on the section 3(a)(10) exemption based on the Court’s sanctioning of the Scheme and will view the Court’s sanctioning of the Scheme as an approval of the Scheme following a hearing on its fairness to INVESCO PLC Shareholders, at which hearing all such Shareholders are entitled to attend in person or by counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all such INVESCO PLC Shareholders.

 

 

The last dealing day in INVESCO PLC Shares and INVESCO PLC ADSs is expected to be 3 December 2007 (the day prior to the Effective Date), following which the INVESCO PLC Shares will be suspended from trading on the London Stock Exchange and the INVESCO PLC ADSs will be suspended from trading on the NYSE with effect from the start of trading on the Effective Date.

 

However, holders of certificated INVESCO PLC Shares should note that any dealings in certificated INVESCO PLC Shares must have completed (i.e. settled) by the Scheme Record Time, which is expected to be 5:00 p.m. on 3 December 2007. If any trades in certificated INVESCO PLC Shares have not settled by this time, the relevant INVESCO PLC Shareholder will need to make arrangements with his financial adviser and/or broker to ensure that the trade is satisfied by the transfer of Invesco Ltd. Shares.

 

If certificated INVESCO PLC Shareholders are in any doubt as to what action they should take, they should seek the advice of their financial adviser and/or broker.

 

Invesco is applying to list the Invesco Ltd. Shares to be issued under the Scheme on the NYSE. The application is expected to become effective and trading in the Invesco Ltd. Shares is expected to commence on the NYSE at 9:30 a.m. (New York time) and 2:30 p.m. (London time) on the Effective Date, which, subject to approval, is expected to be 4 December 2007.

 

 

Subject to the Scheme and the Share Capital Consolidation becoming effective (and except as provided in paragraph 12 of this Part II in relation to certain non-UK/US INVESCO PLC Shareholders), settlement of the Invesco Ltd. Shares to which any INVESCO PLC Shareholder is entitled under the Scheme will be effected in the following manner:

 

 

To assist certificated holders in facilitating dealings in their Invesco Ltd. Shares, Invesco Ltd. intends to offer a dealing facility under which their entitlement to Invesco Ltd. Shares (after taking account of the Share Capital Consolidation) may be sold, at their request and for their benefit, at any time during the existence of the dealing facility. To effect this dealing facility, the Invesco Ltd. Shares to which all Certificated Holders are entitled will not be issued in certificated form but will instead be issued to the Certificated Holder in book entry form under the direct registration system which exists in the United States. Written notification of the relevant holding in book entry form will be sent to Certificated Holders after the Effective Date. Details of such dealing facility will be sent to Certificated Holders in due course.

 

In any case, Invesco Ltd. reserves the right to settle all or any part of the Invesco Ltd. Shares referred to in this paragraph for all or any Certificated Holder(s) in certificated form in the manner referred to in paragraph (c) below if, for any reason, it wishes to do so.

 

 

To facilitate holding and trading of Invesco Ltd. Shares in uncertificated form for those INVESCO PLC Shareholders who hold INVESCO PLC Shares in a stock account in CREST at the Scheme Record Time, it is intended that the Invesco Ltd. Shares to which they will be entitled will be delivered, held and settled in CREST by means of the CREST International Settlement Links Service, and in particular Euroclear UK’s established link with DTCC, the US settlement and clearance system. This link operates via the services of CREST International Nominees, which is a participant in DTCC. Under the CREST International Settlement Links Service, CREST Depository Limited, a subsidiary of Euroclear UK, issues dematerialised depository interests representing entitlements to non-UK securities such as Invesco Ltd. Shares, called CDIs. CDIs are independent securities constituted under English law, which may be held and transferred through the CREST System.

 

Accordingly, the Invesco Ltd. Shares to which electing Scheme Shareholders will be entitled will be delivered to CREST International Nominees’ account at DTCC, and CREST Depository Limited will then issue Invesco Ltd. CDIs through CREST to the appropriate stock account in CREST of the INVESCO PLC Shareholder concerned. The stock account concerned will be an account under the same participant ID as the relevant INVESCO PLC Shareholder currently has. Following distribution of the Invesco Ltd. CDIs, such holders will be entitled to arrange for the transfer of their Invesco Ltd. CDIs to other CREST holders, or the underlying Invesco Ltd. Shares to another participant in DTCC, if they so wish.

 

As from the Effective Date, INVESCO PLC Shares held within CREST will be cancelled.

 

The crediting of Invesco Ltd. CDIs through CREST will take place as soon as reasonably practicable after the Effective Date and in any event after the Share Capital Consolidation. Statements of entitlement detailing the holding of INVESCO Ltd. CDIs will be despatched no later than 14 days after the Effective Date.

 

INVESCO PLC Shareholders should note that they will have no rights in respect of Invesco Ltd. Shares or INVESCO Ltd. CDIs held through CREST against Euroclear UK or its subsidiaries. Normal CREST procedures (including timings) apply in relation to any INVESCO PLC Shares that are, or are to be, converted from uncertificated to certificated form, or from certificated to uncertificated form prior to the Effective Date.

 

A nominal custody fee, as determined by Euroclear UK from time to time, will be charged to users for the use of INVESCO Ltd. CDIs.

 

Following issue of the Invesco Ltd. CDIs, holders of the Invesco Ltd. CDIs will, at their option, be able to effect the cancellation of their Invesco Ltd. CDIs in CREST in order to hold their underlying Invesco Ltd. Shares directly by sending an instruction to CREST to that effect and will be entitled to arrange for the transfer of their Invesco Ltd. Shares (as represented by their holding of Invesco Ltd. CDIs) either into the direct registration service in the United States or into a shareholding account with a depositary financial institution which is a participant in DTCC. Certain transfer fees will be payable by a holder of Invesco Ltd. CDIs who makes such a transfer.

 

 

All documents and cheques sent by or to INVESCO PLC Shareholders, or as such persons shall direct, will be sent at their own risk and will be sent by post either to the holder’s address as set out on the register of members at the Scheme Record Time or to such other address of the holder as is notified as a change of address in writing by an INVESCO PLC Shareholder to INVESCO PLC prior to the Effective Date and, in the case of joint holders, to the holder whose name stands first in such register in respect of the joint holdings concerned.

 

Once the written notifications relating to the holding of such Invesco Ltd. Shares in book entry form have been issued, INVESCO PLC Shareholders should destroy their certificates for INVESCO PLC Shares.

 

If dividends are declared, Invesco Ltd. Shareholders will be paid dividends in US dollars. Otherwise, mandates in force at the Effective Date relating to other instructions given by INVESCO PLC Shareholders will, unless revoked, be deemed as from the Effective Date to relate to the corresponding Invesco Ltd. Shares.

 

INVESCO PLC has confirmed that, except as provided for in the Scheme, settlement of the Invesco Ltd. Shares and any other payment which an INVESCO PLC Shareholder is entitled to receive from INVESCO PLC or Invesco Ltd. will be implemented in full without regard to any lien, right of set-off, counter claim or other analogous right to which INVESCO PLC or Invesco Ltd. may be, or claim to be, entitled against such shareholder.

 

INVESCO PLC ADS holders should read paragraph 9 of this Part II, which contains further important information which is relevant to them.

 

 

Each INVESCO PLC ADS currently represents two INVESCO PLC Shares. The Bank of New York Mellon, as Depositary, is the record holder of the INVESCO PLC Shares underlying the INVESCO PLC ADSs. The Depositary, as an INVESCO PLC Shareholder, under the Scheme will be entitled to:

 

One Invesco Ltd. Share for each INVESCO PLC Share

 

held by it at the Scheme Record Time.

 

As soon as practicable after the Effective Date and after the Share Capital Consolidation as described in paragraph 5 of this Part II, the Depositary will, after the satisfaction of certain pre-conditions set forth below, distribute directly to INVESCO PLC ADS holders their proportionate entitlement to the Invesco Ltd. Shares, in the following proportions:

 

One Invesco Ltd. Share for each INVESCO PLC ADS

 

held by INVESCO PLC ADS holders at the Scheme Record Time and otherwise on the terms and conditions set out in this document and the Deposit Agreement.

 

INVESCO PLC ADS holders who hold their INVESCO PLC ADSs in book entry form will have their relevant proportion of the Invesco Ltd. Shares automatically credited to their relevant book entry account. However, Invesco Ltd. reserves the right to settle all or any part of the Invesco Ltd. Shares in certificated form.

 

With respect to INVESCO PLC ADS holders who hold certificates representing INVESCO PLC ADSs, as soon as reasonably practicable, and in any event within ten business days after the Effective Date, the Depositary will mail to each such holder a letter of transmittal which such INVESCO PLC ADS holder must properly complete and deliver to the Depositary along with the relevant holder’s certificate representing the INVESCO PLC ADSs and instructions for effecting surrender of the INVESCO PLC ADSs.

 

Until properly surrendered as set out above, each certificate representing an INVESCO PLC ADS will, after the Effective Date, represent the right to receive, upon proper surrender, Invesco Ltd. Shares. Upon receipt of such INVESCO PLC ADSs, the Depositary will transfer to the former INVESCO PLC ADS holder one Invesco Ltd. Share for every one INVESCO PLC ADS cancelled by making a book entry in the direct registration system in the United States. After the Effective Date, the ADS programme for the INVESCO PLC ADSs will be terminated.

 

All documents shall be sent to INVESCO PLC ADS holders at their own risk and will be sent by post either to the ADS holder’s address as set out on the register of INVESCO PLC ADS holders at the Scheme Record Time or to such other address of the ADS holder as is notified as a change of address in writing by an INVESCO PLC ADS holder to the Depositary prior to the Effective Date and, in the case of joint ADS holders, to the ADS holder whose name stands first in such register in respect of the joint holdings concerned.

 

It should be noted that INVESCO PLC ADS holders will not be entitled to attend the INVESCO PLC Meetings. However, INVESCO PLC ADS holders will be able to have their votes represented at the Court Meeting and the Extraordinary General Meeting by proxy through procedures established pursuant to the Deposit Agreement. INVESCO PLC ADS holders who wish to attend the INVESCO PLC Meetings as an INVESCO PLC Shareholder should take steps to present their INVESCO PLC ADSs to the Depositary for cancellation and delivery of INVESCO PLC Shares so as to become holders of record of INVESCO PLC Shares prior to the INVESCO PLC Meetings. If INVESCO PLC ADS holders wish to attend the INVESCO PLC Meetings, they must present their INVESCO PLC ADSs to the Depositary for cancellation by no later than 30 October 2007, although no guarantee can be given by the Depositary that it will be able to procure that the relevant INVESCO PLC ADS holder becomes a holder of record of INVESCO PLC Shares in time for the relevant meetings.

 

Pursuant to the Deposit Agreement, the Depositary has fixed the close of business in New York on 11 October 2007 as the ADS Record Date. All INVESCO PLC ADS holders on record at the ADS Record Date will be sent a notice containing (i) this document, (ii) a statement that the INVESCO PLC ADS holders as of the ADS Record Date will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of INVESCO PLC Shares represented by their respective INVESCO PLC ADSs, and (iii) a statement that such instructions may be given by returning a properly executed ADS Voting Instruction Card (in the form enclosed with this document) to the Depositary. INVESCO PLC Shares represented by properly executed ADS Voting Instruction Cards received by the Depositary before 5:00 p.m. (New York time) on 6 November 2007, unless such ADS Voting Instruction Cards have been revoked, will be voted by the Depositary in accordance with the instructions set forth on such ADS Voting Instruction Card. In accordance with the provisions of the Deposit Agreement, if no instructions are indicated, or an INVESCO PLC ADS holder does not return the ADS Voting Instruction Card, such INVESCO PLC ADS holder will be deemed to have instructed the Depositary to give, and the Depositary will give, a discretionary proxy to a person designated by INVESCO PLC with respect to such INVESCO PLC Shares represented by such holder’s INVESCO PLC ADSs. INVESCO PLC Shares covered by such discretionary proxy will be voted to approve the Scheme.

 

Any INVESCO PLC ADS holder giving instructions to the Depositary has the power to revoke or modify the instructions by delivery of a revocation or new ADS Voting Instruction Card to the Depositary at The Bank of New York Mellon, P.O. Box 11230, New York, NY 10203-0230, by no later than 5:00 p.m. (New York time) on 6 November 2007.

 

In addition, a completed ADS Voting Instruction Card returned by an INVESCO PLC ADS holder will authorise the disclosure to INVESCO PLC of the name and address of such INVESCO PLC ADS holder together with details of the instructions on the ADS Voting Instruction Card.

 

In accordance with the terms of the Deposit Agreement, a fee will be charged for the cancellation of the INVESCO PLC ADSs. Invesco Ltd. will pay the entire fee.

 

 

INVESCO Inc. Exchangeable Shares are shares in INVESCO Inc., a corporation incorporated in Canada and an indirect subsidiary of INVESCO PLC. INVESCO Inc. Exchangeable Shares are generally exchangeable for INVESCO PLC Shares on a one-for-one basis at any time at the request of the relevant INVESCO Inc. Exchangeable Shareholder.

 

The INVESCO PLC SV Share is a share in INVESCO PLC which was issued in connection with the issuance of the INVESCO Inc. Exchangeable Shares. The INVESCO PLC SV Share is held by CIBC Mellon Trust Company. It carries voting rights in INVESCO PLC and its holder exercises those voting rights in accordance with the instructions of the INVESCO Inc. Exchangeable Shareholders.

 

As announced on 22 October 2007, the Board of Directors of INVESCO Inc. has resolved that, if the Scheme is sanctioned at the First Court Hearing, the INVESCO Inc. Exchangeable Shares will be redeemed in accordance with their terms and each holder of INVESCO Inc. Exchangeable Shares will receive one INVESCO PLC Share for each INVESCO Inc. Exchangeable Share held on that date.

 

The INVESCO PLC Shares issued in respect of the INVESCO Inc. Exchangeable Shares will be subject to the Scheme and are therefore expected to be replaced with Invesco Ltd. Shares on the same basis as set out in paragraph 2.1 above. Similarly the Invesco Ltd. Shares issued in respect of the INVESCO Inc. Exchangeable Shares will be subject to the Share Capital Consolidation on the terms set out in paragraph 2.3 above.

 

Therefore, after implementation of the Proposal, the former holders of INVESCO Inc. Exchangeable Shares will be holders of Invesco Ltd. Shares and will enjoy the same rights and privileges as the former INVESCO PLC Shareholders. The INVESCO PLC SV Share will also be redeemed after the Scheme becomes effective.

 

Separate guidance to holders of INVESCO Inc. Exchangeable Shares has been sent with this document to holders of INVESCO Inc. Exchangeable Shares, and includes details on how to instruct the INVESCO PLC SV Shareholder to vote at the Extraordinary General Meeting.

 

 

The following are brief and general summaries of the United Kingdom and United States taxation treatment of the Proposal. The summaries are based on existing law, including statutes, regulations, administrative rulings and court decisions, and what is understood to be current HM Revenue and Customs and United States Internal Revenue Service (“IRS”) practice, all as in effect on the date of this document. Future legislative, judicial or administrative changes or interpretations could alter or modify statements and conclusions set forth below, and these changes or interpretations could be retroactive and could affect the tax consequences of the Proposal to INVESCO PLC Shareholders and INVESCO PLC ADS holders. The summaries do not consider the consequences of the Proposal under tax laws of countries other than the United Kingdom and the United States (or any US laws other than those pertaining to income tax), nor do the summaries consider any alternative minimum tax or state or local consequences of the Proposal.

 

The summaries provide general guidance to persons resident, ordinarily resident and domiciled for tax purposes in the United Kingdom who hold INVESCO PLC Shares and/or INVESCO PLC ADSs as an investment, and to US holders (as defined below) that hold INVESCO PLC Shares and/or INVESCO PLC ADSs as capital assets (within the meaning of section 1221 of the US Internal Revenue Code), and not to any holders who are subject to special tax rules, such as banks, financial institutions, broker-dealers, persons that elect mark-to-market treatment, UK resident individuals who hold their INVESCO PLC Shares under a personal equity plan or an individual savings account, persons that hold their INVESCO PLC Shares and/or INVESCO PLC ADSs as a position in part of a straddle, conversion transaction, constructive sale or other integrated investment, US holders whose “functional currency” is not the US dollar, persons who received their INVESCO PLC Shares and/or INVESCO PLC ADSs by exercising employee stock options or otherwise as compensation, S corporations or other pass-through entities (or investors in S corporations or other pass-through entities), mutual funds, insurance companies and exempt organisations. In addition, this discussion does not address US holders of INVESCO PLC Shares and/or INVESCO PLC ADSs who will own 5 percent or more of the Invesco Ltd. Shares, measured by vote or value, either directly or indirectly

through attribution rules, immediately after the Scheme becomes effective, because those shareholders are subject to special US federal income tax rules, would generally be required to enter into a “gain recognition agreement” with the IRS to avoid current taxation upon receipt of Invesco Ltd. Shares under the Scheme, and may be required to recognise taxable gain or loss for US federal income tax purposes in respect of the Scheme in certain circumstances. Each such US holder is urged to consult his tax advisor concerning the decision to file a gain recognition agreement and the procedures to be followed in connection with that filing. The summaries are not intended to provide specific advice and no action should be taken or omitted to be taken in reliance upon it. If you are in any doubt about your taxation position, or if you are ordinarily resident or domiciled outside the United Kingdom or resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom or the United States, you should consult your own professional advisers immediately.

 

 

Invesco Ltd. will be incorporated in Bermuda. The Directors intend to conduct Invesco Ltd.’s affairs such that, based on current law and practice of the relevant tax authorities, Invesco Ltd. will not become resident for tax purposes in any other territory. This section is written on the basis that Invesco Ltd. does not become resident in a territory other than Bermuda. Dividends paid by Invesco Ltd. will, on this basis, be regarded as Bermudan dividends.

 

 

 

 

If an INVESCO PLC Shareholder does not hold (either alone or together with persons connected with him) more than five percent of, or of any class of, shares in or debentures of INVESCO PLC, he will not be treated as having made a disposal of his INVESCO PLC Shares. Instead, the Invesco Ltd. Shares should be treated as the same asset as those INVESCO PLC Shares acquired at the same time and for the same consideration as the INVESCO PLC Shares.

 

Any INVESCO PLC Shareholder who holds (either alone or together with persons connected with him) more than five percent of, or of any class of, shares in or debentures of INVESCO PLC is advised that clearance has been granted by HM Revenue and Customs under section 138 of the Taxation of Chargeable Gains Act 1992 in respect of the Scheme. As a result, any such shareholder will be treated in the manner described in the preceding paragraph.

 

 

For the purposes of United Kingdom taxation of capital gains, the Share Capital Consolidation will be regarded as a reorganisation of the share capital of Invesco Ltd.

 

Accordingly, other than in respect of any fractional entitlements referred to below you will not be treated as making a disposal of all or part of your holding of Invesco Ltd. Shares by reason of the Share Capital Consolidation and no liability to tax on capital gains should arise in respect of the Share Capital Consolidation.

 

Your existing and post-Share Capital Consolidation Invesco Ltd. Shares will be treated as the same asset acquired at the time you acquired your existing INVESCO PLC Shares.

 

You may, depending on your circumstances, incur a liability to tax on capital gains in respect of any cash received for the sale of any fractional entitlements arising to you as a result of the Share Capital Consolidation. However, you may be treated as making no disposal for the purpose of tax on capital gains if the cash payment is “small” as compared to the value of the INVESCO PLC Shares in respect of which the rights arose. No liability to tax on capital gains will then arise as a result of the disposal of your fractional entitlements, but the proceeds will be deducted from the base cost of your holding of existing INVESCO PLC Shares. HM Revenue and Customs interprets “small” as five percent or less of the value of the INVESCO PLC Shares in respect of which the rights arose or £3,000 or less, regardless of whether or not it would pass the five percent test.

 

 

A subsequent disposal of the Invesco Ltd. Shares may, depending on individual circumstances (including the availability of exemptions and allowable losses), give rise to a liability to UK tax on capital gains.

 

Any chargeable gain or allowable loss on a disposal of the Invesco Ltd. Shares should be calculated taking into account the allowable cost to the holder of acquiring his INVESCO PLC Shares. To this should be added, when calculating a chargeable gain but not an allowable loss, indexation allowance on the allowable cost. For corporate shareholders, this indexation allowance will be calculated by reference to the date of disposal of the Invesco Ltd. Shares. For individual shareholders, the indexation allowance will be applied until April 1998 with taper relief (if available) applying thereafter until disposal, depending on the number of complete years for which the Invesco Ltd. Shares have been held. The UK Government has announced that for disposals occurring on or after 6 April 2008 indexation allowance and taper relief will cease to be available to individual shareholders and that they will be subject to capital gains tax at the rate of 18% in respect of any chargeable gain.

 

 

A UK resident Invesco Ltd. Shareholder or a holder of Invesco Ltd. Shares who carries on a trade, profession or vocation in the United Kingdom through a branch or agency or, in the case of a company, a permanent establishment in connection with which the Invesco Ltd. Shares are held will generally, depending upon the holder’s particular circumstances, be subject to UK income tax or corporation tax (as the case may be), on any dividends paid by Invesco Ltd. on the Invesco Ltd. Shares.

 

The UK government is currently considering the tax treatment of portfolio dividends received by UK tax resident companies with a view to achieving parity of treatment between UK and foreign portfolio dividends.

 

A UK resident individual Invesco Ltd. Shareholder who is liable to UK income tax at no more than the basic rate will be liable to income tax on the dividend income at the dividend ordinary rate (10 percent in 2007-2008). A UK resident individual Invesco Ltd. Shareholder who is liable to UK income tax at the higher rate will be subject to income tax on the dividend income at the dividend upper rate (32.5 percent in 2007-2008). It is expected that a new regime concerning the taxation of non-UK source dividends received by individuals resident in the United Kingdom will be introduced in the next tax year and that under the new regime individuals in receipt of dividends from non-resident companies will, if they own less than a 10 percent shareholding in Invesco Ltd and in total they receive less than £5,000 of dividends a year from non UK resident companies, be entitled to the same non-payable dividend tax credit as individuals in receipt of UK dividends.

 

 

 

No ad valorem United Kingdom stamp duty or SDRT will be payable by INVESCO PLC Shareholders as a result of the Scheme or the Share Capital Consolidation.

 

 

As used in this discussion, the term “US holder” means a beneficial owner of INVESCO PLC Shares, INVESCO PLC ADSs and/or Invesco Ltd. Shares who is for US federal income tax purposes: (i) an individual US citizen or resident, (ii) a corporation, or entity treated as a corporation, created or organised in or under the laws of the United States, (iii) an estate the income of which is subject to US federal income taxation regardless of its source, or (iv) a trust if either (a) a court within the US is able to exercise primary supervision over the administration of such trust and one or more US holders have the authority to control all substantial decisions of such trust or (b) the trust has a valid election in effect to be treated as a US holder for US federal income tax purposes.

 

 

If you are a US holder of INVESCO PLC Shares and/or INVESCO PLC ADSs, you generally should not recognise any taxable gain or loss for US federal income tax purposes upon your receipt of Invesco Ltd. Shares under the Proposal. Different rules, however, apply to any cash received in lieu of fractional interests in Invesco Ltd. Shares, as discussed further below.

 

The aggregate tax basis of the Invesco Ltd. Shares received by you under the Proposal, including any fractional interests in Invesco Ltd. Shares to which you would be entitled but for the special treatment of fractional interests described below, will equal the aggregate tax basis of the INVESCO PLC Shares and/or INVESCO PLC ADSs exchanged for Invesco Ltd. Shares. The holding period of the Invesco Ltd. Shares

received will include the holding period of the INVESCO PLC Shares and/or INVESCO PLC ADSs exchanged therefor.

 

 

Fractional interests in Invesco Ltd. Shares will not be issued to former holders of INVESCO PLC Shares under the Proposal. Instead, any fractional share interests that such holders otherwise would have been entitled to receive will be aggregated and sold in the market and the proceeds will be paid to those shareholders. If you receive cash in respect of a fractional interest in an Invesco Ltd. Share, you generally will recognise a taxable gain or loss equal to the difference between the amount of cash received for the fractional share interest and your tax basis in the INVESCO PLC Shares exchanged which is allocable to the fractional share interest. Any such gain or loss generally will be capital gain or loss, and generally will be long-term capital gain or loss with respect to INVESCO PLC Shares held for more than one year at the effective time of the Scheme.

 

 

Distributions made with respect to Invesco Ltd. Shares will generally be includable in the income of a US holder as ordinary dividend income, to the extent paid out of current or accumulated earnings and profits of Invesco Ltd. as determined in accordance with US federal income tax principles. The amount of such dividends will generally be treated as foreign-source dividend income and will not be eligible for the “dividends received deduction” generally allowed to US corporations under the Code. Subject to applicable limitations, dividends paid to non-corporate US holders in taxable years beginning before 1 January 2011 will generally be taxable at a maximum tax rate of 15 percent.

 

Gain or loss realised by a U.S. holder on the sale or exchange of Invesco Ltd. Shares generally will be subject to US federal income tax as capital gain or loss in an amount equal to the difference between the US holder’s tax basis in the Invesco Ltd. Shares and the amount realised on the disposition. Such gain or loss will be long-term capital gain or loss if the US holder held the Invesco Ltd. Shares for more than one year. Gain or loss, if any, will generally be US source for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

 

 

Cash payments received in the transaction by a US holder (as well as future payments of dividends on, and the proceeds from a sale or other disposition of, Invesco Ltd. Shares) may, under certain circumstances, be subject to information reporting and backup withholding at a rate of 28 percent of the cash payable to the holder, unless the holder provides proof of an applicable exemption or furnishes its taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a US holder under the backup withholding rules are not additional tax and should be allowed as a refund or credit against the US holder’s US federal income tax liability, provided the required information is timely furnished to the IRS.

 

 

A non-US corporation will be classified as a passive foreign investment company (a “PFIC”) for any taxable year if at least 75 percent of its gross income consists of passive income (such as dividends, interest, rents, royalties or gains on the disposition of certain minority interests), or at least 50 percent of the average value of its assets consists of assets that produce, or are held for the production of, passive income. If either INVESCO PLC or Invesco Ltd. were characterised as a PFIC, US holders would suffer adverse tax consequences, and US federal income tax consequences different from those described above may apply. These consequences may include having gains realised on the disposition of INVESCO PLC Shares and/or Invesco Ltd. Shares treated as ordinary income rather than capital gain and being subject to punitive interest charges on certain dividends and on the proceeds of the sale or other disposition of INVESCO PLC Shares and/or Invesco Ltd. Shares. US holders should consult their own tax advisors regarding the potential application of the PFIC rules to their acquisition of Invesco Ltd. Shares pursuant to the Scheme and their ownership of Invesco Ltd. Shares acquired in connection with the Scheme.

 

 

As regards INVESCO PLC Shareholders or INVESCO PLC ADS holders not resident in, or citizens of, the United Kingdom or the United States (“overseas shareholders”), the Scheme may be affected by the laws of the relevant jurisdictions. Such overseas shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of overseas shareholders to satisfy themselves as to the full observance of

the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

 

In any case, where the issue of Invesco Ltd. Shares would or might infringe the laws of any jurisdiction outside the United Kingdom or the United States or would or might necessitate compliance with any special requirement with which Invesco Ltd. is unable to comply or which it regards as unduly onerous, the Scheme provides that such shares shall be issued to the overseas shareholder and sold on his behalf with the net proceeds of sale (after the deduction of all expenses and commissions including any value added tax payable thereon) being remitted to the overseas shareholder by sending a cheque to the holder of such Invesco Ltd. Shares in accordance with the provisions of the Scheme.

 

 

It is intended that options and awards in respect of INVESCO PLC Shares under the INVESCO PLC Share Plans will continue after the Scheme as rights to acquire Invesco Ltd. Shares on the same terms. There will, therefore, be no changes to the operation of the INVESCO PLC Share Plans for existing options and awards.

 

Appropriate adjustments will be made to options and awards to take account of the Share Capital Consolidation. Where necessary, such adjustments will be approved by HM Revenue and Customs. Participants holding restricted shares will, as beneficial owners of such shares, take part in the Scheme and the Share Capital Consolidation.

 

A separate communication will be despatched to the participants in the INVESCO PLC Share Plans providing further details in relation to the above.

 

 

Implementation of the Scheme will require the approval of INVESCO PLC Shareholders at the Court Meeting which has been convened by order of the Court and which is to be held at 11:30 a.m. on 14 November 2007. The Scheme will also require the approval of INVESCO PLC Shareholders and the INVESCO PLC SV Shareholder at the Extraordinary General Meeting to be held at 11:45 a.m. on the same day (or as soon thereafter as the Court Meeting shall have concluded or been adjourned). If the Scheme becomes effective, it will be binding on all INVESCO PLC Shareholders, including any shareholders who did not vote to approve the Scheme or who voted against the Scheme.

 

INVESCO PLC Shareholders will find enclosed different coloured forms of proxy to be used in connection with the Court Meeting and the Extraordinary General Meeting (as detailed on page 5 of this document under the heading “Enclosures”). Whether or not INVESCO PLC Shareholders intend to attend these meetings, they are requested to complete and sign each form of proxy enclosed with this document and return them in accordance with the instructions printed thereon to Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, so as to arrive as soon as possible and in any event at least 48 hours prior to the relevant meeting. If the BLUE forms of proxy relating to the Court Meeting are not lodged by then, they may be handed to the chairman of the Court Meeting before the start of that meeting. However, in the case of the Extraordinary General Meeting, unless the WHITE form of proxy is lodged so as to be received by the time mentioned in the instructions on that form of proxy, it will be invalid.

 

The completion and return of the BLUE form of proxy for the Court Meeting will not preclude INVESCO PLC Shareholders from attending the Court Meeting and voting in person, if they so wish. The completion and return of the WHITE form of proxy will not preclude INVESCO PLC Shareholders from attending the Extraordinary General Meeting and voting in person, if they so wish.

 

It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of INVESCO PLC Shareholder opinion. You are therefore strongly urged to sign and return both forms of proxy as soon as possible.

 

INVESCO PLC ADS holders should read paragraph 9 of this Part II, which contains further important information which is relevant to them. INVESCO PLC ADS holders are strongly urged to sign and return the ADS Voting Instruction Card as soon as possible.

 

Participants in INVESCO PLC Share Plans should read paragraph 13 of this Part II, which contains further important information which is relevant to them.

 

If you are in any doubt as to the action to be taken, please contact the helpline shown below.

 

For INVESCO PLC Shareholders:

 

For callers dialling from within the UK, the helpline number is 0800 030 4452.

 

For callers dialling from outside the UK, the helpline number is +44 208 639 3314.

 

For INVESCO PLC ADS Holders:

 

For callers dialling from within the US, the helpline number is 877 277 9899.

 

For callers dialling from outside the US, the helpline number is + 1 201 680 6686.

 

 

The text of the Scheme is set out in full in Part V of this document. Details of documents available for inspection are given in paragraph 12 of Part VII of this document.

 

Yours faithfully,

 

 

Rahul Luthra

Director

UBS Limited

 

PART III
CHANGES IN THE RIGHTS OF INVESCO PLC SHAREHOLDERS AND LEGAL
CONSEQUENCES

 

As a result of the Scheme, INVESCO PLC Shareholders and INVESCO PLC ADS holders will be entitled to receive Invesco Ltd. Shares. Invesco Ltd. is incorporated in Bermuda and INVESCO PLC is incorporated under the laws of England and Wales. The following is a summary comparison of material differences between the rights of an Invesco Ltd. Shareholder and an INVESCO PLC Shareholder arising from the differences between the corporate laws of Bermuda and those of England and Wales, the governing instruments of the two companies, and the securities laws and regulations governing INVESCO PLC and, upon completion of the Scheme, governing Invesco Ltd. The summary of Invesco Ltd.’s governing instruments is of those instruments as they are expected to be adopted prior to the Effective Date. This summary is not a complete description of the laws of Bermuda or of England and Wales, the other rules or laws referred to in this summary, the Invesco Ltd. memorandum of association, the Invesco Ltd. Bye-laws or the INVESCO PLC memorandum and articles of association.

 

Copies of the Invesco Ltd. memorandum of association and Bye-laws in the forms to be effective at the Effective Date are available for inspection at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ. The descriptions of the memorandum of association and Bye-laws contained herein are qualified by reference to the actual documents.

 

Unless the context otherwise requires, references to “shareholder” or “shareholders” means the person(s) whose name(s) appears on a company’s register of members or shareholders and who are the legal owners of the shares concerned.

 

 

PART IV
CONDITIONS TO THE IMPLEMENTATION OF THE SCHEME

 

 

 

 

 

 

 

 

PART V
SCHEME OF ARRANGEMENT

 

CHANCERY DIVISION

COMPANIES COURT

 

IN THE MATTER OF INVESCO PLC

 

and

 

IN THE MATTER OF THE COMPANIES ACT 1985

 

 

SCHEME OF ARRANGEMENT

 

(under section 425 of the Companies Act 1985)

 

between

 

INVESCO PLC

 

and

 

THE HOLDERS OF ITS SCHEME SHARES

 

(as hereinafter defined)

 

 

PRELIMINARY

 

 

 

and references to Clauses are to Clauses of this Scheme.

 

 

THE SCHEME

 

 

 

 

 

 

 

 

 

On the Effective Date, Invesco Ltd. will allot and issue the Invesco Ltd. Shares to be allotted and issued pursuant to Clause 2.1 to the relevant holders of Scheme Shares (other than the Company), and will make the requisite entries in the register of members of Invesco Ltd. to reflect the allotment and issue of such shares.

 

 

 

 

 

 

provided that, in the case of Scheme Shares which at the Scheme Record Time are in certificated form, Invesco Ltd. reserves the right to settle all or part of the relevant Invesco Ltd. Shares in certificated form in the manner set out in Clause 5.3 if, for any reason, it wishes to do so and, in the case of Scheme Shares which at the Scheme Record Time are in uncertificated form, Invesco Ltd. reserves the right to settle all or part of the relevant Invesco Ltd. Shares in book entry (uncertificated) form in the manner set out in Clause 5.2.1 if, for any reason, it wishes to do so.

 

 

 

With effect from and including the Effective Date:

 

 

 

All instructions to the Company in force at the Scheme Record Time relating to the Scheme Shares shall, unless they relate to dividends (in which case they shall be deemed to be revoked) and unless and until otherwise revoked or amended, be deemed as from the Effective Date to be valid and effective mandates and instructions to Invesco Ltd. in relation to the Invesco Ltd. Shares issued in respect thereof.

 

 

 

 

The Company and Invesco Ltd. may jointly consent on behalf of all concerned to any modification of, or addition to, this Scheme or to any condition which the Court may approve or impose.

 

Dated 22 October 2007

 

PART VI
IMPORTANT INFORMATION FOR SHAREHOLDERS

 

This Part VI highlights some of the key aspects of the Proposal which could materially affect Invesco Ltd. and the Invesco Ltd. Shares. The items below should be considered together with all other information contained in this document and INVESCO PLC Shareholders are urged to read this document in its entirety.

 

 

As noted at paragraph 7 of Part II of this document, as Invesco Ltd. is incorporated in Bermuda, once the Scheme has become effective, the Takeover Code will not apply to Invesco Ltd.

 

 

 

 

The following is a summary of key provisions of the Takeover Code which apply to transactions to which the Takeover Code applies. You should note that, if the Scheme is implemented, you will be giving up the protections afforded by the Takeover Code.

 

 

General Principle 1 of the Takeover Code states that all holders of securities of an offeree company of the same class must be afforded equivalent treatment. Furthermore, Rule 16 requires that, except with the consent of the Panel, special arrangements may not be made with certain shareholders in the company if there are favourable conditions attached which are not being extended to all shareholders.

 

 

General Principle 2 requires that holders of securities of an offeree company must have sufficient time and information to enable them to reach a properly informed decision on a bid. Consequently, a document setting out full details of an offer must be sent to the offeree company’s shareholders.

 

 

The board of the offeree company is required by Rule 3.1 of the Takeover Code to obtain competent independent advice on an offer and the substance of such advice must be made known to its shareholders. Rule 25.1 requires that the board of the offeree company must circulate its opinion on the offer and its reasons for forming that opinion. That opinion must include the board’s views on: the effects of implementation of the offer on all the company’s interests, including, specifically, employment; and on the offeror’s strategic plans for the offeree company and their likely repercussions on employment and the locations of the offeree company’s places of business.

 

The circular from the offeree company must also deal with other matters such as interests and recent dealings in the securities of the offeror and the offeree company by relevant parties and whether the directors

of the offeree company intend to accept or reject the offer in respect of their own beneficial shareholdings. Rule 20.1 states that information about the companies involved in the offer must be made equally available to all offeree company shareholders as nearly as possible at the same time and in the same manner.

 

 

Rule 15 of the Takeover Code provides that, when a Takeover Code offer is made for voting equity share capital or other transferable securities carrying voting rights and the offeree company has convertible securities outstanding, the offeror must make an appropriate offer or proposal to the stockholders to ensure their interests are safeguarded. Rule 15 also applies in relation to holders of options and other subscription rights. If the Scheme is implemented, these protections will be lost.

 

Your attention is also drawn to Part III of this document where key differences between the rights of a shareholder of INVESCO PLC and that of shareholders in Invesco Ltd. are summarised.

 

 

Non US INVESCO Shareholders should note that dividends will be declared and paid by Invesco Ltd. in US dollars. Invesco Ltd. is exploring the feasibility of permitting Invesco Ltd. Shareholders to elect to receive their dividends in pounds sterling. If implemented, details of this facility will be made available to Invesco Ltd. Shareholders in due course.

 

UK resident INVESCO Shareholders should also note that, as described in paragraph 11.2(b) of Part II of this document, the tax treatment of their dividends in Invesco Ltd. will be different from that of dividends paid by INVESCO PLC.

 

 

As inclusion in the S&P 500 is at the discretion of the S&P Index Committee, there can be no guarantee that, despite the listing of the Invesco Ltd. Shares on the NYSE, Invesco Ltd. will be included in the S&P 500.

 

 

As described in paragraph 8 of Part II of this document, Invesco Ltd. Shares will, unlike INVESCO PLC Shares, not be capable of being admitted and settled directly in the usual UK settlement systems.

 

To facilitate holding and trading of Invesco Ltd. Shares in uncertificated form for those INVESCO PLC Shareholders who hold INVESCO PLC Shares in a stock account in CREST at the Scheme Record Time, it is intended that the Invesco Ltd. Shares to which they will be entitled will be delivered, held and settled in CREST by means of the CREST International Settlement Links Service, and in particular Euroclear UK’s established link with DTCC, the US settlement and clearance system.

 

Under the CREST International Settlement Links Services, CREST Depository Limited, a subsidiary of Euroclear UK, issues dematerialised depositary interests representing entitlements to non-UK securities (in this case the Invesco Ltd. Shares), known as CREST Depository Interests or CDIs. CDIs may be held, transferred and settled solely within CREST. However, CDI holders (provided they cancel their CDIs) are able to deliver their underlying shares to a participant in the relevant settlement system (e.g. DTCC). Upon receipt of Invesco Ltd. CDIs, INVESCO PLC Shareholders will therefore not be the registered holders of the Invesco Ltd. Shares to which they are entitled as a result of the Scheme and Share Capital Consolidation. However, ownership of Invesco Ltd. CDIs will represent each INVESCO PLC Shareholder’s entitlement to such Invesco Ltd. Shares.

 

Following issue of the Invesco Ltd. CDIs, holders of the Invesco Ltd. CDIs will, at their option, be able to effect the cancellation of their Invesco Ltd. CDIs in CREST in order to hold their underlying Invesco Ltd. Shares directly by sending an instruction to CREST to that effect and will be entitled to arrange for the transfer of their Invesco Ltd. Shares (as represented by their holding of Invesco Ltd. CDIs) either into the direct registration service in the United States or into a shareholding account with a depositary financial institution which is a participant in DTCC. Certain transfer fees will be payable by a holder of Invesco Ltd. CDIs who makes such a transfer.

 

The terms and conditions upon which Invesco Ltd. CDIs are issued and held in CREST are set out in the CREST Deed Poll and other related documents in the CREST Manual including, in particular, the CREST International Manual.

 

Although holders of Invesco Ltd. CDIs will not be the registered owners of the Invesco Ltd. Shares, Invesco Ltd. has entered into arrangements to ensure that Invesco Ltd. CDI holders will receive notices sent by Invesco Ltd., will be able to give instructions as to voting at general meetings of Invesco Ltd. and will be treated in the same manner as registered Invesco Ltd. Shareholders in respect of all other rights attaching to the relevant Invesco Ltd. Shares, in each case in so far as reasonably practicable and possible in accordance with applicable CREST Regulations and CREST Requirements and applicable law.

 

PART VII
ADDITIONAL INFORMATION

 

 

The Directors of INVESCO PLC, whose names appear in paragraph 2 of this Part VII, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

 

 

The Directors of INVESCO PLC are as follows:

 

 

The business address of the Directors is 1360 Peachtree Street N.E., Atlanta, Georgia.

 

 

INVESCO PLC was incorporated on 19 December 1935 under the Companies Act 1929 as a private limited company with the name H. Lotery & Company Limited. INVESCO PLC was re-registered under the Companies Acts 1948 to 1980 as a public limited company with the name BRITANNIA ARROW HOLDINGS PUBLIC LIMITED COMPANY on 19 March 1982. INVESCO PLC’s name was changed to INVESCO MIM PLC on 31 January 1990, to INVESCO PLC on 21 June 1993, to AMVESCO PLC on 3 March 1997, to AMVESCAP PLC 8 May 1997 and to its current name on 23 May 2007.

 

INVESCO PLC is registered for VAT with VAT Registration Number 245 0557 71.

 

INVESCO PLC’s principal executive offices are located at 1360 Peachtree Street N.E., Atlanta, Georgia.

 

 

Invesco Ltd. was incorporated under the laws of Bermuda on 12 September 2007.

 

Invesco Ltd.’s principal executive offices are located at 1360 Peachtree Street N.E., Atlanta, Georgia.

 

 

The following table sets forth certain information with respect to the beneficial ownership of Shares of INVESCO PLC that are entitled to vote at the meetings for each person or entity who INVESCO PLC knows beneficially owns more than 3 percent of the INVESCO PLC’s Shares; each of INVESCO PLC’s Directors; each of INVESCO PLC’s executive officers who are not also Directors; and all of INVESCO’s executive officers and Directors as a group. To INVESCO PLC’s knowledge, except as indicated by footnotes and subject to applicable community property laws in the United States, each person named in the table below has sole voting and investment power with respect to the Shares set forth opposite such person’s name. Unless otherwise indicated, the address of INVESCO PLC’s officers and Directors is 1360 Peachtree Street N.E., Atlanta, Georgia.

 

 

            Directors and Executive Officers:

 

The following table sets out the interests in INVESCO PLC Shares held by Directors and executive officers as at 19 October 2007 (being the latest practicable date prior to publication of this documents) in accordance with both SEC and FSA requirements.

 

						Under FSA Rules2
										UK Non
		Under SEC				UK Beneficial				Beneficial
		Rules1				Disclosure				Disclosure
Directors:
Rex D. Adams			75,292				75,292
Sir John Banham			18,271				18,271
Joseph R. Canion			24,621				24,621
Martin L. Flanagan			1,756,850				5,718,749
Denis Kessler			13,064				13,064
Edward Lawrence			15,771				15,771
J. Thomas Presby			5,016				5,016
James I. Robertson			1,565,964				1,788,159
Chief Accounting Officer											—
David Hartley			358,858				338,241
Senior Managing Directors											—
G. Mark Armour			75,690				111,236				—
Kevin M. Carome			176,892				221,218				—
Andrew Lo			312,975				1,001,941				—
John “Jack” S. Markwalter			333,978				1,176,951				—
Colin D. Meadows			—				268,081				—
Loren M. Starr			62,078				572,549				—
Philip Taylor			376,286				23,386				—
Robert J. Yerbury			828,829				1,533,217				—
Aggregate ownership of Directors and Executive Officers (as a group)			6,000,435				12,905,763				—

 

 

Notes:

 

 

Three Percent Shareholders (other than Directors):

 

						Percentage of
		Number of				total voting rights in
Name of Beneficial Owner		INVESCO PLC Shares				INVESCO PLC
Wellington Management Co LLP			104,447,503				12.23
Franklin Resources Inc and its affiliates			60,110,981				7.04
Legal & General Investment Management			27,905,563				3.27

 

 

 

 

The Scheme of Arrangement described herein is not considered an acquisition or disposal for accounting purposes and as a result the assets and liabilities of the Invesco group are not materially affected by the proposed transaction. As described elsewhere, apart from the impact of fractional interests, the proportional interest of Invesco Ltd. shareholders in Invesco Ltd. will be the same as their previous interest in INVESCO PLC.

 

 

The costs associated with the proposed Scheme of Arrangement are largely fees paid to advisors both financial and legal and associated costs of printing, mailing and administration of the scheme. The costs are estimated to be approximately US$12 million and are expected to be expensed as incurred.

 

 

UBS Limited and JPMorgan Cazenove Limited have given and not withdrawn their respective written consents to the issue of this document with the inclusion of the references to their respective names in the form and context in which they appear.

 

 

In this document, references to time are references to London time except unless otherwise expressly provided.

 

 

If the Scheme is approved and effected, Invesco Ltd. will hold an annual meeting of shareholders for the year 2008. The submission dates by which proposals must be received are set forth below. Since Invesco Ltd. will be assuming the SEC reporting obligations of INVESCO PLC under the Exchange Act, the submission dates are based on the annual general meeting of INVESCO PLC held in 2007.

 

 

In order for a proposal by a Shareholder to be included in the proxy statement relating to Invesco Ltd.’s. annual meeting of shareholders to be held in 2008, that proposal must comply with the requirements of Rule 14a-8 of the Exchange Act. To be eligible for inclusion, the proposal must be received in writing by Invesco Ltd. at its principal executive offices, located at 1360 Peachtree Street N.E., Atlanta, Georgia, no later than 30 November 2007.

 

Under Invesco Ltd.’s Bye-laws, if you wish to present other business before the 2008 annual general meeting of shareholders, or nominate a director candidate, proper written notice of any such business or nomination must be given to Invesco Ltd.’s corporate secretary not before 24 January 2008 and not after 23 February 2008. If the 2008 annual general meeting is not within thirty days before or more than 60 days after 23 May 2008, the anniversary date of this year’s annual general meeting of INVESCO PLC’s shareholders, notice must be delivered not earlier than the close of business on the one hundred and twentieth day prior to the annual general meeting and not later than the close of business on the later of the ninetieth day prior to the annual general meeting and the tenth day following the day on which public announcement of the date of such meeting is first made. Any such notice must include the information specified in the Bye-laws of Invesco Ltd. concerning the business or nominee. Invesco Ltd.’s Bye-laws set forth the information that must be furnished to Invesco Ltd.’s corporate secretary in order for any such notice to be proper.

 

If the Scheme is not approved and does not take effect, then, under the Companies Act, in order for shareholders to requisition an Extraordinary General Meeting such proposal must have been requisitioned by shareholders representing at least 10 percent of the votes of all shareholders having a right to vote at such Extraordinary General Meeting. Such proposal must have been signed by all requisitionists and submitted to the registered office of INVESCO PLC having the right to vote at such Extraordinary General Meeting.

 

 

This proxy solicitation is being made and paid for by INVESCO PLC on behalf of its Board. Although INVESCO PLC has not retained a third party to assist in the solicitation of proxies for the meetings, it may in the future determine to do so, in which case INVESCO PLC would pay such third party a customary fee in connection therewith and reimburse such third party for its reasonable out of pocket expenses. INVESCO PLC’s directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. INVESCO PLC will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of INVESCO PLC entitled to vote that the brokers and fiduciaries hold of record. Upon request, INVESCO PLC will reimburse them for their reasonable out-of-pocket expenses.

 

 

Copies of the following documents may be inspected at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ during usual business hours on any weekday (Saturdays, Sundays, public holidays excepted) from the date of this document until the earlier of the Effective Date or 30 June 2008:

 

 

 

 

22 October 2007

 

PART VIII
DEFINITIONS

 

The following definitions apply throughout this document (other than Part V of this document and in the notices of the INVESCO PLC Meetings), unless the context otherwise requires:

 

 

 

 

NOTICE OF COURT MEETING

 

 

CHANCERY DIVISION

COMPANIES COURT

REGISTRAR DERRETT

 

 

IN THE MATTER OF INVESCO PLC

 

— and —

 

IN THE MATTER OF THE COMPANIES ACT 1985

 

 

NOTICE IS HEREBY GIVEN that by an Order dated 19 October 2007 made in the above matters the Court has directed a meeting to be convened of the holders of the ordinary shares of 10 US cents each in the capital of INVESCO PLC (the “Company”) for the purpose of considering and, if thought fit, approving (with or without modification) a scheme of arrangement proposed to be made between the Company and the holders of the Scheme Shares (as defined in the said Scheme of Arrangement), and that such Meeting will be held at the offices of UBS Limited at 1 Finsbury Avenue, London EC2M 2PP on 14 November 2007 at 11:30 a.m., at which place and time all holders of the said shares are requested to attend.

 

A copy of the said scheme of arrangement and a copy of the explanatory statement required to be furnished pursuant to section 426 of the Companies Act 1985 are incorporated in the document of which this notice forms part.

 

Shareholders entitled to attend and vote at the meeting may vote in person at the said meeting or they may appoint another person, whether a member of the Company or not, as their proxy to attend and vote in their stead. A BLUE form of proxy for use at the meeting is enclosed with this notice. Completion of the form of proxy will not prevent a holder of ordinary shares from attending and voting at the said meeting.

 

Shareholders are entitled to appoint a proxy in respect of some or all of their shares. Shareholders are also entitled to appoint more than one proxy. A space has been included in the BLUE form of proxy to allow shareholders to specify the number of shares in respect of which that proxy is appointed. Shareholders who return the BLUE form of proxy duly executed but leave this space blank will be deemed to have appointed the proxy in respect of all of their shares.

 

Shareholders who wish to appoint more than one proxy in respect of their shareholding should contact the Company for further BLUE forms of proxy or photocopy the form of proxy as required. Such shareholders should also read the “Multiple Proxy Voting Instructions” set out on the BLUE form of proxy, and note the principles that will be applied in relation to multiple proxies.

 

It is requested that BLUE forms of proxy be lodged with the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, not less than 48 hours before the time appointed for the said meeting, but if forms are not so lodged they may be handed to the chairman at the meeting.

 

Shareholders entitled to attend and vote at the meeting who are members of CREST may appoint a proxy electronically by making a CREST electronic proxy appointment.

 

In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holder(s), and, for this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

 

Entitlement to attend and vote at the meeting or any adjournment thereof and the number of votes which may be cast thereat will be determined by reference to the register of members of the Company at 6:00 p.m. on the day which is two days before the date of the meeting or adjourned meeting (as the case may be). In each case, changes to the register of members of the Company after such time shall be disregarded.

 

By the said Order, the Court has appointed Rex D. Adams or, failing him, Martin L. Flanagan or, failing him, any other Director of the Company to act as chairman of the said meeting and has directed the chairman to report the results thereof to the Court.

 

The said Scheme of Arrangement will be subject to the subsequent sanction of the Court.

 

Dated: 22 October 2007

Linklaters LLP

One Silk Street

London EC2Y 8HQ

 

Solicitors to the Company

 

NOTICE OF EXTRAORDINARY GENERAL MEETING

 

INVESCO PLC

 

(Registered in England and Wales
with registered no.308372)

 

NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of the Company will be held at the offices of UBS Limited at 1 Finsbury Avenue, London EC2M 2PP on 14 November 2007 at 11:45 a.m. (or as soon thereafter as the Court Meeting (as defined in the document of which this Notice forms part) shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions, which will be proposed as special resolutions:

 

SPECIAL RESOLUTIONS

 

 

 

 

 

“165 Scheme of Arrangement

 

 

 

 

 

 

 

BY ORDER of the Board

 

Michael S. Perman

Company Secretary

 

London EC2A 1AG

 

Notes:

 

 

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Extraordinary General Meeting (and any adjournment(s) thereof) by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

 

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Capita Registrars (ID RA10) by the latest time(s) for receipt of proxy appointments specified in Note (4) above. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Capita Registrars is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated through other means.

 

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning physical limitations of the CREST system and timings.

 

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

 

 

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

 

 

If you are in any doubt as to the action you should take in relation to this document, you are recommended to seek immediately your own advice from your stockbroker, bank manager, solicitor, accountant or other independent adviser duly authorised under the Financial Services and Markets Act 2000.

 

If you have sold or otherwise transferred all of your holding of shares in INVESCO PLC (“INVESCO”) please send this document at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

 

 

22 October 2007

 

 

To the Participants of the INVESCO Employee Share Service (“ESS”)

 

 

Dear ESS Participant,

 

Termination of INVESCO Employee Share Service.

 

 

As you know, INVESCO has announced proposals to move its primary listing from the London Stock Exchange to the New York Stock Exchange and to domicile the company in Bermuda. The proposed transactions which are described in detail in the enclosed circular and the UK Scheme of Arrangement will be voted on by shareholders at an Extraordinary General Meeting to be held on 14 November 2007.

 

The purpose of this letter is to explain to you how you will be affected as a participant in the ESS provided by Capita IRG Trustees Limited.

 

The transfer of primary listing from London to New York and the cancellation of the London listing will mean that the ESS will be discontinued.

 

As a consequence, Capita IRG Trustees Limited, the Nominee for the ESS hereby gives you notice that the ESS will terminate with effect from close of business London time on 30 November 2007 (“Termination Date”).

 

All shareholders of INVESCO who remain in the ESS at close of business on 30 November 2007 will be transferred onto the INVESCO PLC share register. Should the Court grant approval of the Scheme of Arrangement the names of such holders will be further transferred onto the direct registration system maintained by our new US transfer agent Bank of New York Mellon (“BNYM”) in the United States. We expect this to occur around 4 December 2007. Following such approval BNYM will issue to you a statement of your holding on the direct registration system. Additional information on the direct registration system will be sent to you separately by BNYM.

 

If you hold restricted shares in the ESS that are subject to a Restricted Share Award such shares will continue to be restricted until vesting in the normal manner.

 

BNYM will provide you with a statement of your holding on the direct registration system once the change of listing takes place on 4 December 2007. If you are a holder of unrestricted shares you will be able to deal in the shares of INVESCO through arrangements provided by BNYM (www.melloninvestor.com/isd). Your Investor ID number and how to establish a PIN will be included with the credit advice. Instructions for dealing in the shares will also be included and will be available either on the website or by phone. If you wish to do so you will also be able to electronically transfer your shares into a US brokerage account. Instructions for completing this transfer will also be part of the material distributed with the credit advice.

 

Share certificates will not be issued for holdings on the direct registration system.

 

Yours sincerely