File No. 2-55079
As filed on ^ July 30, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ________ __
Post-Effective Amendment No. ^ 33 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 20 X
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INVESCO MONEY MARKET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box):
____ immediately upon filing pursuant to paragraph (b)
____ ^ on __________________, pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
X on ^ October 1, 1997, pursuant to paragraph (a)(1)
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____ 75 days after filing pursuant to paragraph (a)(2)
____ on __________________, pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
____ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended May 31, ^ 1997 was
filed on or about July ^ 25, 1997.
Page 1 of 216
Exhibit index is located at page 87
<PAGE>
INVESCO MONEY MARKET FUNDS, INC.
-----------------------------------
CROSS-REFERENCE SHEET
Form N-1A
Item Caption
--------- -------
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses; Essential
Information
3....................... Financial Highlights; ^ Fund
Price and Performance
4....................... Investment ^ Objectives and ^
Strategy; The ^ Funds and ^ Their
Management
5....................... The ^ Funds and ^ Their
Management^
6....................... Fund Services ^; Taxes and
Dividends; Additional Information
7....................... How ^ To Buy Shares; Fund Price
and Performance; Fund Services;
The Funds and Their Management
8....................... Fund Services ^; How to ^ Sell
Shares
9....................... Not Applicable
Part B Statement of Additional
Information
10....................... Cover Page
11....................... Table of Contents
-i-
<PAGE>
Form N-1A
Item Caption
--------- -------
12....................... The ^ Funds and ^ Their
Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The ^ Funds and ^ Their
Management
15....................... The ^ Funds and ^ Their
Management; Additional
Information
16....................... The ^ Funds and ^ Their
Management; Additional
Information
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Fund;
Tax-Deferred Retirement Plans;
How to Redeem Shares
20....................... Taxes and Dividends
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
-ii-
<PAGE>
PROSPECTUS
October 1, 1997
INVESCO MONEY MARKET FUNDS, INC.
U.S. Government Money Fund
Cash Reserves Fund
Tax-Free Money Fund
No-load mutual funds seeking a high level of current income
The three INVESCO MONEY MARKET FUNDS (the "Funds") described in this Prospectus
are actively managed to seek as high a level of current income as is consistent
with liquidity and safety of capital. Income earned by U.S. Government Money
Fund and Cash Reserves Fund will normally be taxable while Tax-Free Money Fund
seeks income exempt from federal income taxes. Each of the Funds invests in a
variety of short-term money market securities. SHARES OF EACH FUND ARE SOLD AT
NET ASSET VALUE, WHICH IS EXPECTED TO ALWAYS BE $1.00 PER SHARE. HOWEVER, THERE
CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET VALUE
OF $1.00 PER SHARE. INVESTMENTS IN THESE FUNDS ARE NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.
This Prospectus provides you with the basic information you should know before
investing in one of the Funds. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Funds, dated October 1, 1997, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus. To
obtain a free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; call 1- 800-525-8085; or on the World Wide Web:
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
CONTENTS
ESSENTIAL INFORMATION............ ............................................6
ANNUAL FUND EXPENSES..........................................................7
INVESTMENT OBJECTIVE AND STRATEGY............................................15
INVESTMENT POLICIES AND RISKS................................................16
THE FUNDS AND THEIR MANAGEMENT...............................................21
FUND PRICE AND PERFORMANCE...................................................23
HOW TO BUY SHARES............................................................24
FUND SERVICES................................................................27
HOW TO SELL SHARES...........................................................27
TAXES AND DIVIDENDS..........................................................30
ADDITIONAL INFORMATION.......................................................31
<PAGE>
ESSENTIAL INFORMATION
- ---------------------
Investment Goal And Strategy. INVESCO Money Funds seek as high a level of
current income as is consistent with safety and liquidity of capital through
specific short-term money market securities. Income earned by U. S. Government
Money Funds and Cash Reserves Fund will normally be taxable, while Tax-Free
Money Fund seeks income exempt from federal income tax. There is no guarantee
that the Funds will meet their objectives. See "Investment Objective And
Strategy."
The Funds Are Designed For: Investors seeking current income with
stability of principal may wish to consider U.S. Government Money Fund or Cash
Reserves Fund. Investors with the additional need for federal tax-exempt income
may wish to consider Tax-Free Money Fund. While not intended as a complete
investment program, any of these Funds may be a valuable element of your
investment portfolio. You also may wish to consider one of the Funds as part of
a Uniform Gift/Transfer To Minors Account or systematic investing strategy. The
Funds may be a suitable investment option for many types of retirement programs,
including IRA, SEP-IRA, SIMPLE IRA, 401(k), Profit Sharing, Money Purchase
Pension, and 403(b) plans.
Time Horizon. In selecting holdings, the Funds do not consider potential
capital appreciation. Investors should consider each of these Funds as a
conservative, short-term investment for emergency savings or as a safe harbor
during periods of market uncertainty.
Risks. Shares of the Funds are not insured or guaranteed by the U.S.
government, or any state or federal agency. See "Investment Objective and
Strategy" and "Investment Policies and Risks."
Organization and Management. Each Fund is a series of INVESCO Money Market
Funds, Inc. (the "Company"), a diversified, managed, no-load mutual fund. Each
Fund is owned by its shareholders. They employ INVESCO Funds Group, Inc.
("IFG"), founded in 1932, to serve as investment adviser, administrator,
distributor, and transfer agent. INVESCO Trust Company ("INVESCO Trust"),
founded in 1969, serves as sub-adviser.
The U.S. Government Money Fund and Cash Reserves Fund are managed by
INVESCO Trust Vice President Richard R. Hinderlie. The Tax-Free Money Fund is
managed by INVESCO Trust Vice President Ingeborg Cosby. See "The Funds And Their
Management."
IFG and INVESCO Trust are subsidiaries of AMVESCAP PLC, an international
investment management company that manages approximately $165 billion in assets.
AMVESCAP PLC is based in London with money managers located in Europe, North
America and the Far East.
<PAGE>
These Funds Offer All of the Following Services at No Charge:
Telephone exchanges
Automatic reinvestment of distributions
Regular investment plans, such as EasiVest (the Fund's automatic monthly
investment program), Direct Payroll Purchase, and Automatic Monthly Exchange
Free Checkwriting
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase.
Minimum Subsequent Investment: $50 (Minimums are lower for certain
retirement plans.)
ANNUAL FUND EXPENSES
- --------------------
The Funds are no-load; there are no fees to purchase, exchange or redeem
shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses benefit
Fund shareholders by increasing a Fund's total return.
Like any company, each Fund has operating expenses -- such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts, and other expenses. These expenses are paid from each Fund's assets.
Lower expenses therefore benefit investors by increasing a Fund's total return.
We calculate annual operating expenses as a percentage of each Fund's
average annual net assets. To keep expenses competitive, the Funds' adviser
voluntarily reimburses Tax-Free Money Fund for amounts in excess of 0.75% of
average net assets, and reimburses U.S. Government Money Fund and Cash Reserves
Fund for amounts in excess of 0.85% of average net assets.
Annual Fund Operating Expenses
- ------------------------------
(as a percentage of average net assets)
U.S. Government Money Fund
- --------------------------
Management Fee 0.50%
12b-1 Fees None
Other Expenses(1),(2) 0.36%
Total Fund Operating Expenses(1),(2) 0.86%
Cash Reserves Fund
- ------------------
Management Fee 0.41%
12b-1 Fee None
Other Expenses(1),(2) 0.45%
Total Fund Operating Expenses(1),(2) 0.86%
<PAGE>
Tax-Free Money Fund
- -------------------
Management Fee 0.50%
12b-1 Fees None
Other Expenses(1),(2) 0.26%
Total Fund Operating Expenses(1),(2) 0.76%
(1) It should be noted that each Fund's actual total operating expenses were
lower than the figures shown because each Fund's custodian fees were reduced
under an expense offset arrangement. However, as a result of an SEC requirement
for mutual funds to state their total operating expenses without crediting any
such expense offset arrangement, the figures shown above do not reflect these
reductions. In comparing expenses for different years, please note that the
Ratios of Expenses to Average Net Assets shown under "Financial Highlights" do
reflect reductions for expense offset arrangements for periods prior to the
fiscal year ended May 31, 1996. See "The Funds And Their Management."
(2) Certain expenses of the Funds are being absorbed voluntarily by IFG. In the
absence of such absorbed expenses, the U. S. Government Money Fund's "Other
Expenses" and "Total Fund Operating Expenses" would have been 0.56% and 1.06%
respectively; the Cash Reserves Fund's "Other Expenses" and "Total Fund"
Operating Expenses" would have been 0.51% and 0.92%, respectively; and the
Tax-Free Money Fund's "Other Expenses" and "Total Fund Operating Expenses" would
have been 0.52% and 1.02%, respectively, based on each Fund's actual expenses
for the fiscal year ended May 31, 1997.
EXAMPLE
A shareholder would pay the following expenses on a $1,000 investment for the
periods shown, assuming a hypothetical 5% annual return and redemption at the
end of each time period. (Of course, actual operating expenses are paid from
each Fund's assets and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
U.S. Government
Money Fund $9 $28 $48 $106
Cash Reserves Fund 9 28 48 106
Tax-Free Money Fund 8 24 42 94
The purpose of this table is to assist you in understanding the various costs
and expenses that you will bear directly or indirectly. THE EXAMPLE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR EXPENSES, AND
ACTUAL ANNUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. For
more information on each Fund's expenses, see "The Funds And Their Management"
and "How To Buy Shares -- Distribution Expenses."
<PAGE>
INVESCO Money Market Fund, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report thereon
appearing in the Company's 1997 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting IFG at the address or telephone number on
the back of the Prospectus.
<TABLE>
<CAPTION>
Period Year Period
Ended Ended Ended
Year Ended May 31 May 31 December 31 December 31
--------------------------------------------- --------- ----------- -----------
1997 1996 1995 1994 1993>> 1992 1991^
U.S. Government Money Fund
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------- --------- ----------- -----------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
Net Investment Income Earned
and Distributed to Shareholders 0.04 0.05 0.05 0.03 0.01 0.03 0.03
--------------------------------------------- --------- ----------- -----------
Net Asset Value - End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
============================================= ========= =========== ===========
TOTAL RETURN 4.57% 4.90% 4.66% 2.56% 0.93%* 2.97% 3.23%*
RATIOS
Net Assets - End of Period
($000 Omitted) $66,451 $79,392 $60,843 $73,912 $34,519 $30,282 $7,203
Ratio of Expenses to Average
Net Assets# 0.86%@ 0.87%@ 0.75% 0.75% 0.75%~ 0.75% 0.74%~
Ratio of Net Investment Income
to Average Net Assets# 4.51% 4.78% 4.55% 2.60% 2.27%~ 2.82% 4.54%~
</TABLE>
<PAGE>
>> From January 1, 1993 to May 31, 1993.
^ From April 26, 1991, commencement of operations, to December 31, 1991.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1997, 1996, 1995 and 1994, the period ended May 31, 1993, the year
ended December 31, 1992 and the period ended December 31, 1991. If such expenses
had not been voluntarily absorbed, ratio of expenses to average net assets would
have been 1.06%, 1.05%, 1.10%, 1.00%, 1.18%, 1.08% and 1.93%, respectively, and
ratio of net investment income to average net assets would have been 4.31%,
4.59%, 4.20%, 2.35%, 1.84%, 2.49% and 3.35%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
INVESCO Money Market Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period
Ended
Year Ended May 31 May 31 Year Ended January 31
----------------------------------- -------- ----------------------------------------------------
1997 1996 1995 1994 1993>> 1993 1992 1991 1990 1989 1988
Cash Reserves Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------- ------- ----------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT
OPERATIONS
Net Investment Income
Earned and Distributed
to Shareholders 0.05 0.05 0.05 0.03 0.01 0.03 0.05 0.07 0.08 0.07 0.06
----------------------------------- ------- ----------------------------------------------------
Net Asset Value -
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=================================== ======= ====================================================
TOTAL RETURN 4.69% 5.01% 4.76% 2.58% 0.75%* 3.00% 5.35% 7.76% 8.79% 7.25% 6.28%
RATIOS
Net Assets - End of Period
($000 Omitted) $661,648 $587,277 $644,341 $747,551 $490,932 $506,337 $557,708 $431,808 $396,286 $317,410 $319,216
Ratio of Expenses to
Average Net Assets# 0.86%@ 0.87%@ 0.75% 0.81% 0.98%~ 0.80% 0.83% 0.76% 0.79% 0.79% 0.82%
Ratio of Net Investment
Income to Average
Net Assets# 4.62% 4.86% 4.65% 2.61% 2.26%~ 2.98% 5.17% 7.49% 8.46% 7.04% 6.24%
</TABLE>
<PAGE>
>> From February 1, 1993 to May 31, 1993.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1997, 1996 and 1995. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 0.92%, 0.92%
and 0.85%, respectively, and ratio of net investment income to average net
assets would have been 4.56%, 4.81% and 4.55%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
INVESCO Money Market Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period
Ended
Year Ended May 31 May 31 Year Ended April 30
---------------------------------- ------- ----------------------------------------------------
1997 1996 1995 1994 1993>> 1993 1992 1991 1990 1989 1988
Tax-Free Money Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------- ------- ----------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT
OPERATIONS
Net Investment Income
Earned and Distributed
to Shareholders 0.03 0.03 0.03 0.02 0.00+ 0.02 0.03 0.05 0.05 0.05 0.04
---------------------------------- ------- ----------------------------------------------------
Net Asset Value -
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
================================== ======= ====================================================
TOTAL RETURN 2.90% 3.08% 2.86% 1.84% 0.16%* 2.16% 3.42% 4.89% 5.51% 5.20% 4.15%
RATIOS
Net Assets -
End of Period
($000 Omitted) $47,577 $51,649 $58,780 $84,521 $63,498 $65,167 $60,413 $40,440 $34,262 $27,709 $31,212
Ratio of Expenses to
Average Net Assets# 0.76%@ 0.77%@ 0.75% 0.75% 0.75%~ 0.75% 0.78% 0.90% 0.93% 0.88% 0.86%
Ratio of Net Investment
Income to Average
Net Assets# 2.86% 3.03% 2.77% 1.83% 2.03%~ 2.13% 3.30% 4.77% 5.37% 5.10% 4.07%
</TABLE>
<PAGE>
>> From May 1, 1993 to May 31, 1993.
+ Net Investment Income Earned and Distributed to Shareholders for the period
ended May 31, 1993 aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and ITC for the
years ended May 31, 1997, 1996, 1995 and 1994, the period ended May 31, 1993,
and the years ended April 30, 1993 and 1992, respectively. If such expenses had
not been voluntarily absorbed, ratio of expenses to average net assets would
have been 1.01%, 1.05%, 1.00%, 1.00%, 1.19%, 1.02% and 0.99%, respectively, and
ratio of net investment income to average net assets would have been 2.61%,
2.75%, 2.52%, 1.58%, 1.59%, 1.86% and 3.09%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
- ---------------------------------
Each Fund seeks as high a level of current income as is consistent with
liquidity and safety of capital by investing in specific short-term money market
securities as described below. Tax-Free Money Fund has the additional objective
of providing income which is exempt from federal income taxes. These investment
objectives are fundamental and cannot be changed without the approval of a
Fund's shareholders. There is no assurance that a Fund's investment objective
will be met.
================================================================================
INVESCO Money Portfolio May Hold
Market Fund
- --------------------------------------------------------------------------------
U.S. Government Debt obligations issued or guaranteed by
Money Fund the U.S. government or its agencies; and
repurchase agreements collateralized by
such obligations.
- --------------------------------------------------------------------------------
Cash Reserves Debt obligations issued or guaranteed by
Fund the U.S. government or its agencies;
corporate debt obligations; commercial paper;
certificates of deposit and bankers' acceptances
issued by domestic banks; and repurchase agreements
collateralized by such obligations
- --------------------------------------------------------------------------------
Tax-Free Money Debt obligations issued by the states,
Fund territories, and possessions of the
United States and District of Columbia
and their political subdivisions,
agencies and instrumentalities, which
pay interest exempt from federal income
taxes; repurchase agreements
collateralized by such obligations;
private activity bonds and taxable
securities.
================================================================================
See "Investment Policies And Risks" below, as well as "Investment Policies
And Restrictions" in the Statement of Additional Information.
The short-term debt obligations in which each Fund invests must mature,
or be deemed to mature, within [397 days] from the date of purchase. Generally,
the Funds intend to hold securities purchased until maturity. However,
securities may be sold without regard for how long they have been held. Each
Fund will maintain a dollar-weighted average portfolio maturity of 90 days or
less.
Because each of the Funds invests in short-term debt obligations their
ability to achieve a high level of current income is limited in comparison to
mutual funds that invest in securities which present a greater credit risk.
<PAGE>
While a Fund may invest in obligations of the federal government, which may
or may not be supported by the full faith and credit of the U.S. government,
shares of the Funds are not issued or guaranteed by the U.S. government.
INVESTMENT POLICIES AND RISKS
- -----------------------------
The return on investment in each Fund will depend upon the interest earned
by each Fund on its security holdings, after deduction of Fund expenses, and is
paid to shareholders in the form of dividends. If interest rates increase, the
value of interest- paying debt securities may decrease, and vice versa. Not
withstanding the possibility of fluctuations in values of a Fund's securities,
as a result of each Fund's use of amortized cost valuation and its declaration
of income dividends daily, it is expected, but cannot be assured, that each
Fund's net asset value will be maintained at a constant value of $1.00 per
share. Under the amortized cost valuation method, securities are valued at their
cost at the time of purchase, and thereafter there is assumed a constant
amortization to maturity of a discount or premium.
U.S. Government Securities. These securities consist of Treasury bills,
notes and bonds, which differ only in their interest rates, maturities, and
dates of issuance, and securities issued or guaranteed by agencies or
instrumentalities of the U.S. government. Obligations of United States
government agencies include Government National Mortgage Association ("GNMA"),
Fannie Mae (formerly known as Federal National Mortgage Association) and Federal
Home Loan Mortgage Corporation ("FHLMC") obligations. Some of these securities
are guaranteed by the U.S. government, others are guaranteed only by the issuing
agency. For more information concerning U.S. government securities, see
"Investment Policies and Restrictions" in the Statement of Additional
Information.
Debt Obligations of Commercial Banks And Corporations. When we assess an
issuer's ability to meet its interest rate obligations and repay its debt when
due, we are referring to "credit risk." Debt obligations are rated based on
their estimated credit risk by independent services such as Standard and Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") or
Moody's Investors Service, Inc. ("Moody's"). S&P and Moody's are nationally
recognized securities rating organizations ("NRSROs"). For an explanation of
these organizations and their ratings, see the Statement of Additional
Information.
"Market risk" refers to sensitivity to changes in interest rates. For
example, when interest rates go up, the market value of a previously issued
obligation generally declines; on the other hand, when interest rates go down,
the market prices of these obligations generally increase. Also, when interest
rates go down, net cash inflows are likely to be invested in portfolio
instruments producing lower yields than the balance of a Fund's portfolio, thus
reducing the Fund's yield.
<PAGE>
Municipal Obligations. Like corporate debt obligations, the debt of
municipalities is also rated by NRSROs. Tax-Free Money Fund will only invest in
municipal bonds rated at the time of purchase in the two highest grades, for
longer-term bonds; municipal notes rated MIG-1 by Moody's; and municipal
commercial paper rated in the highest grades. There is no guarantee that a
municipality will be able to satisfy the payment and interest on a municipal
obligation.
U.S. Government Money Fund
- --------------------------
The U. S. Government Money Fund seeks to achieve its objective by investing
only in debt obligations issued or guaranteed by the U. S. government or its
agencies maturing or deemed to be maturing, in [397 days] or less from the date
of purchase, and in repurchase agreements with respect to such instruments.
The securities in which the U. S. Government Money Fund invests consist of:
direct obligations of the United States such as Treasury bills, Treasury notes,
U. S. government bonds, as well as investments in agencies of the U. S.
government, the securities of which may or may not be supported by the full
faith and credit of the U. S. Treasury, including, but not limited to,
obligations of GNMA, the Department of Housing and Urban Development, the
Farmer's Home Administration, the Small Business Administration, Fannie Mae,
(FHLMC) and the Federal Home Loan Banks. The GNMA, FHLMC and Fannie Mae
certificates in which the U. S. Government Money Fund may invest are
mortgage-backed securities, and are subject to the risk that prepayments of the
underlying mortgages will cause the principal and interest on the certificate to
be paid prior to their stated maturities. In the event of a prepayment during a
period of declining interest rates, the U. S. Government Money Fund may be
required to invest the proceeds at a lower interest rate. The U.S. Government
Money Fund limits the dollar-weighted average maturity of its portfolio
securities to 90 days or less.
Cash Reserves Fund
- ------------------
The Cash Reserves Fund seeks to achieve its objective by investing in a
diversified portfolio of high-quality, short-term debt obligations maturing
within [397 days] from the date of purchase.
The securities in which the Cash Reserves Fund invests consist of: (1) U.S.
government obligations, consisting of securities issued or guaranteed as to
principal or interest by the U.S. government or one of its agencies or
instrumentalites, such as Treasury bills, bonds, notes and GNMA bonds; (2)
commercial paper, limited to obligations which are rated by at least two NRSROs,
generally S&P and Moody's, in the highest short-term rating category CA-1 by S&P
and Prime-1 by Moody's, or where the obligation is rated by only one NRSRO, such
obligation is rated in the highest short-term rating category; obligations of
domestic banks (as described in the Statement of Additional Information) and
their foreign affiliates, consisting of certificates of deposit and bankers'
<PAGE>
acceptances; and (4) corporate obligations, consisting of bonds, debentures and
notes. Domestic bank and corporate obligations must be rated in one of the two
highest short-term rating categories by at least two NRSROs or by one NRSRO, if
the obligation has been rated by only one NRSRO. The Cash Reserves Fund may
invest in obligations that are not rated by any NRSRO but which are of
comparable quality to such obligations rated in the highest grade as determined
by the Cash Reserves Fund's investment adviser in accordance with an analysis
performed by the investment adviser. The Cash Reserves Fund will at all times
invest at least 95% of its total assets in securities rated in the highest
short-term rating category by at least two NRSROs or by one NRSRO, if the
security has been rated by only one NRSRO, or in comparable unrated securities
that the adviser determines present minimal credit risk. For a description of
the relevant rating categories applicable to the Fund's investments, see
Appendix A in the Statement of Additional Information.
The Cash Reserves Fund also may place a portion of its assets in
interest-bearing accounts with domestic banks meeting the criteria set forth in
the Statement of Additional Information under which the Cash Reserves Fund is
free to withdraw its assets at any time without suffering any interest reduction
or other penalty. One year obligations issued not more than 375 days prior to
maturity will be considered as meeting the Cash Reserves Fund's investment
requirements. The Cash Reserves Fund will limit its portfolio investments to
United States dollar-denominated instruments that are eligible for investment by
the Cash Reserves Fund under applicable Securities and Exchange Commission
rules.
Tax-Free Money Fund
- -------------------
Tax-Free Money Fund has the additional objective of providing income which
is exempt from federal income taxes. The Tax-Free Money Fund seeks to achieve
its objectives through investment in a diversified portfolio of high-quality,
short-term debt obligations issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest on which,
in the opinion of the issuer's bond counsel, is exempt from federal income
taxation ("municipal obligations").
Such municipal obligations fall into two principal classifications: (1)
"general obligation" bonds, which are secured by the issuer's full faith and
credit and taxing power for the payment of principal and interest; and (2)
"revenue bonds," which are payable only from revenues produced by a particular
facility or class of facilities or, in some cases, from a special excise tax or
specific revenue source.
<PAGE>
At least 80% of the Tax-Free Money Fund's total assets (measured at the
time any investment is purchased) will, under normal circumstances, be invested
in municipal obligations, the income from which is exempt from federal income
taxes. See "Taxes and Dividends." These obligations consist of: (1) municipal
bonds, comprising what are generally known as high-grade bonds, which are rated
at the time of purchase by at least two NRSROs, generally S&P and Moody's, in
the two highest grades (AAA or AA by S&P and Aaa or Aa by Moody's), or where the
bonds are rated only by S&P or Moody's, such bonds are rated AAA or AA or Aaa or
Aa, or where the Tax-Free Money Fund's investment adviser has determined that it
is appropriate to purchase such bonds based on a credit-worthiness finding; (2)
municipal notes which are rated SP-1 by S&P and MIG-1 by Moody's at time of
purchase; (3) municipal commercial paper which is rated by at least two NRSROs,
generally S&P and Moody's in the highest grade (A-1 by S&P or P-1 by Moody's),
or where the obligation is rated only by S&P or Moody's, such obligation is
rated A-1 or P-1; and (4) other municipal obligations that are not rated by an
NRSRO, but which are of comparable quality to obligations rated in the highest
grade as determined by the Tax- Free Money Fund's investment adviser. For a
description of these ratings, see Appendix A in the Statement of Additional
Information. The Tax-Free Money Fund may invest in any combination of municipal
bonds, notes and commercial paper and may invest more than 25% of its total
assets in industrial development obligations.
The payment of principal and interest by issuers of certain municipal
obligations purchased by the Tax-Free Money Fund may be guaranteed by letters of
credit, insurance or other credit instruments offered by banks or other
financial institutions. Such guarantees will be considered in determining
whether a municipal obligation meets the Tax-Free Money Fund's investment
quality requirements. No assurance can be given that a municipality or guarantor
will be able to satisfy the payment of principal or interest on a municipal
obligation.
Up to 20% of the Tax-Free Money Fund's total assets may be invested in
private activity bonds and in taxable securities. The circumstances under which
the Tax-Free Money Fund will invest in taxable securities include but are not
limited to: (a) pending investment of proceeds of sales of shares or of
portfolio securities; (b) pending settlement of portfolio securities; and (c) to
maintain liquidity for the purpose of meeting anticipated redemptions. The kinds
of taxable securities in which the Tax-Free Money Fund may invest are limited to
the following: (i) obligations of the U. S. government or its agencies,
instrumentalities or authorities; (ii) prime commercial paper obligations which
are rated by at least two NRSROs, generally S&P and Moody's, in the highest
short-term rating category (A-1 by S&P and Prime-1 by Moody's), or where the
obligation is rated only by S&P or Moody's, such obligation is rated A-1 or
Prime-1; (iii) certificates of deposit and bankers' acceptances of domestic
banks (including their foreign branches), as described in the Statement of
Additional Information; and (iv) repurchase agreements with respect to any
portfolio securities. The Tax-Free Money Fund may, for defensive purposes,
<PAGE>
temporarily invest up to 100% of its total assets in such taxable securities
when, in the opinion of the investment adviser, to do so is advisable in light
of prevailing market and economic conditions or for purposes of preserving
liquidity and capital. In addition, the Tax-Free Money Fund may in the future
temporarily invest in other taxable securities determined appropriate for
investment by the board of directors, without obtaining the approval of
shareholders. Shareholders will be notified, however, in the event the board
takes such action.
In computing the remaining maturity and average portfolio maturity for
variable rate obligations, the longer of the date upon which the Tax-Free Money
Fund may obtain prepayment of principal or the date upon which the interest rate
of the obligation is next required to be adjusted may in certain circumstances
be considered as the maturity date. One year obligations issued not more than
375 days prior to maturity will be considered as meeting these investment
requirements.
The Tax-Free Money Fund may purchase securities together with the right to
resell them to the seller at an agreed-upon price or yield within a specific
period prior to the maturity date of such securities. Such a right to resell is
commonly known as a "stand-by commitment" or a "put." Municipal obligations may
at times be purchased or sold on a delayed delivery, or a when-issued basis
(i.e., securities may be purchased or sold by the Tax-Free Money Fund with
settlement taking place in the future, after a month or more). The payment
obligation and the interest rate that will be received on the securities are
fixed at the time the Tax-Free Money Fund enters into the commitment.
Repurchase Agreements. A Fund may invest money, for as short a time as
overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
the instrument if the prior owner defaults on its repurchase obligation. To
reduce that risk, the securities which are the subject of the repurchase
agreement will be maintained with the Fund's custodian in an amount at least
equal to the repurchase price under the agreement (including accrued interest).
These agreements are entered into only with member banks of the Federal Reserve
System, registered broker-dealers, and registered U.S. government securities
dealers that are deemed creditworthy under standards set by the Company's board
of directors. A repo may generate taxable income.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
a Fund's shareholders. Each Fund limits to 5% of its total assets the amount
which may be invested in a single issuer, and to 25% the portion that may be
invested in any one industry (other than U.S. government securities). The Funds'
ability to borrow money is limited to borrowings from banks for temporary or
emergency purposes in amounts not exceeding 10% for the Cash Reserves and
Tax-Free Money Funds and 5% for the U. S. Government Money Fund of each Fund's
total assets. Except where indicated to the contrary, the investment objectives
and policies described in this Prospectus are fundamental and may not be changed
without a vote of that Fund's shareholders.
<PAGE>
For a further discussion of risks associated with an investment in a Fund,
see "Investment Policies and Restrictions" and "Investment Practices" in the
Statement of Additional Information.
THE FUNDS AND THEIR MANAGEMENT
- ------------------------------
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end, management investment company.
Cash Reserves Fund was incorporated on October 14, 1975, and Tax-Free Money Fund
was incorporated on March 4, 1983 under the laws of Colorado. U.S. Government
Money Fund commenced operations as a series of Financial Series Trust, a
Massachusetts business trust, on April 6, 1991. On July 1, 1993, these three
Funds were reorganized as a series of the Company, a Maryland corporation
incorporated on April 2, 1993.
The Company's board of directors has responsibility for overall
supervision of the Funds, and reviews the services provided by the adviser and
sub-adviser. Under an agreement with the Company, IFG, 7800 E. Union Avenue,
Denver, Colorado 80237, serves as the Funds' investment adviser; it is primarily
responsible for providing the Funds with various administrative services. IFG's
wholly-owned subsidiary, INVESCO Trust, is the Funds' sub-adviser and is
primarily responsible for managing each Fund's investments. Together, IFG and
INVESCO Trust constitute "Fund Management."
IFG and INVESCO Trust are indirect wholly owned subsidiaries of AMVESCAP
PLC. AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997, and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
INVESCO Trust will continue to operate under their existing names. AMVESCAP PLC
has approximately $165 billion in assets under management. IFG was established
in 1932 and, as of May 31, 1997, managed 14 mutual funds, consisting of 45
separate portfolios, with combined assets of approximately $14.8 billion on
behalf of over 859,000 shareholders. INVESCO Trust (founded in 1969) served as
advisor or sub-adviser to 58 investment portfolios as of May 31, 1997, including
31 portfolios in the INVESCO group. These 58 portfolios had aggregate assets of
approximately $13.5 billion as of May 31, 1997. In addition, INVESCO Trust
provides investment management services to private clients, including employee
benefit plans that may be invested in a collective trust sponsored by INVESCO
Trust.
Since 1993, Richard R. Hinderlie has had responsibility for the day-to-day
management of the U.S. Government Money Fund and Cash Reserves Fund. He is also
the co-manager of the INVESCO Short-Term Bond Fund. Now a Vice President (since
1996) and portfolio manager (1993 to present) of INVESCO Trust, he previously
served as a securities analyst with Bank Western (1987 to 1992). He earned a BA
from Pacific Lutheran University and an MBA from Arizona State University.
<PAGE>
Since 1992, Ingeborg S. Cosby has had responsibility for the day-to-day
management of the Tax-Free Money Fund. From 1987 to 1992 she was the assistant
portfolio manager of the Fund. Now a Vice President (since 1997) of INVESCO
Trust, from 1985 to 1987, she assisted portfolio managers at INVESCO Trust.
Previously (1982 to 1985), she was assistant to portfolio managers at First
Affiliated Securities, Inc.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Funds or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
Each Fund pays IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily; in turn, IFG pays
INVESCO Trust a sub-advisory fee out of its management fee. The management fee
is computed at the annual rate of 0.50% on the first $300 million of a Fund's
average net assets; 0.40% on the next $200 million of a Fund's average net
assets; and 0.30% on a Fund's average net assets over $500 million. For the
fiscal year ended May 31, 1997, the Funds paid fees equal to the following
percentages of their average net assets: U.S. Government Money, 0.50%; Cash
Reserves Fund, 0.41%; and Tax-Free Money Fund, 0.50%.
Out of these advisory fees, IFG paid to INVESCO Trust as a sub-advisory fee
an amount equal to the following percentages of each Fund's average net assets:
U.S. Government Money, 0.15%; Cash Reserves Fund, 0.15%; and Tax-Free Money
Fund, 0.15%. No fee is paid by the Funds to INVESCO Trust.
Under a Transfer Agency Agreement, IFG acts as registrar, transfer agent,
and dividend disbursing agent for the Funds. Each Fund pays an annual fee of
$27.00 per shareholder account or, where applicable, per participant in an
omnibus account per year. Registered broker-dealers, third party administrators
of tax-qualified retirement plans and other entities, including affiliates of
IFG, may provide equivalent services to the Funds. In these cases, IFG may pay,
out of the fees it receives from the Funds, an annual sub-transfer agency or
recordkeeping fee to the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, record-keeping, and internal sub-accounting services
for the Funds. For such services, IFG was paid, for the fiscal year ended May
31, 1997, a fee equal to the following percentages of each Fund's average net
assets: U.S. Government Money Fund, 0.03%; Cash Reserves Fund, 0.02%; and Tax-
Free Money Fund, 0.03%.
Each Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Funds for the fiscal
year ended May 31, 1997, including investment management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to
<PAGE>
the following percentages of each Fund's average net assets: U.S. Government
Money, 0.86%; Cash Reserves Fund, 0.86%; and Tax-Free Money Fund, 0.76%. Certain
Fund expenses are absorbed voluntarily by IFG pursuant to a commitment to the
Funds in order to ensure that a Fund's total operating expenses do not exceed
the following percentages of each Fund's average net assets: U.S. Government
Money, 0.85%; Cash Reserves Fund, 0.85%; and Tax-Free Money Fund, 0.75%. These
commitments may be changed following consultation with the Company's board of
directors. In the absence of this voluntary expense limitation, each Fund's
total operating expenses would have equaled the following percentages of each
Fund's average net assets: U.S. Government Money Fund, 1.06%; Cash Reserves
Fund, 0.92%; and Tax-Free Money Fund, 1.02%.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
at the best available prices. As discussed under "How to Buy Shares --
Distribution Expenses," the Funds may market their shares through intermediary
brokers or dealers that have entered into Dealer Agreements with IFG, as the
Funds' Distributor. The Funds may place orders for portfolio transactions with
qualified broker/dealers which recommend the Funds, or sell shares of the Funds,
to clients, or act as agent in the purchase of shares of the Funds for clients,
if Fund Management believes that the quality of the execution of the transaction
and level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices -- Placement
of Portfolio Brokerage" in the Statement of Additional Information.
FUND PRICE AND PERFORMANCE
- --------------------------
Determining Price. The price per share is also known as the Net Asset Value
("NAV"). Each Fund uses its best efforts to maintain its NAV at $1.00. It is
expected (but cannot be guaranteed) that the value of your investment in a Fund
will not vary. NAV is calculated by adding together the current market value of
all of the Fund's assets, including accrued interest and dividends; then
subtracting liabilities, including accrued expenses; and finally dividing that
dollar amount by the total number of shares outstanding.
Your return on an investment in a Fund will depend upon the interest
earned by such Fund on its holdings, after deduction of Fund expenses. Net
income is declared daily and paid monthly to the shareholders of each Fund.
Performance Data. To keep shareholders and potential investors informed,
we will occasionally advertise a Fund's "current yield," "effective yield" and
"total return" performance. In addition, the U.S. Government Money and Cash
Reserves Funds may advertise a "tax equivalent yield." The yield of a Fund
refers to the income generated by an investment in the Fund over a 7-day period,
and is computed by dividing the net investment income per share earned during
the period by the net asset value per share at the end of the period, then
adjusting the result to provide for semi-annual compounding. The effective yield
is calculated similarly but, when annualized, the income earned by an investment
in a Fund is assumed to be reinvested. This reinvestment may cause the effective
yield to be higher than the current yield. The "tax equivalent yield" of a Fund
<PAGE>
refers to the yield that a taxable money market fund would have to generate in
order to produce an after-tax yield equivalent to that of the Fund. The use of a
tax equivalent yield allows investors to compare the yield of the Fund, which is
excluded from gross income (except to the extent that the alternative minimum
tax is applicable) for federal income tax purposes, with yields of funds which
are not tax-exempt.
When we quote mutual fund rankings published by Lipper Analytical
Services, Inc., we may compare the fund to others in the following categories:
U.S. Government Money Fund -- U.S. Government Money Market Funds; Cash Reserves
Fund, Money Market Funds; and Tax-Free Money Fund -- Tax-Exempt Money Market
Funds. These rankings allow you to compare the Fund to its peers. Other
independent financial media also produce performance- or service- related
comparisons, which you may see in the Funds' promotional materials. For more
information see "Fund Performance" in the Statement of Additional Information.
Performance figures are based on historical investment results and are not
intended to suggest future returns.
HOW TO BUY SHARES
- -----------------
The following chart shows several convenient ways to invest in the Funds.
There is no charge to invest, exchange, or redeem shares when you make
transactions directly through IFG. However, if you invest in a Fund through a
securities broker, you may be charged a commission or transaction fee. For all
new accounts, please send a completed application form. Please specify which
Fund you wish to purchase.
Fund Management reserves the right to increase, reduce or waive the
minimum investment requirements in its sole discretion, where it determines this
action is in the best interests of a Fund. Further, Fund Management reserves the
right in its sole discretion to reject any order for the purchase of Fund shares
(including purchases by exchange) when, in its judgment, such rejection is in a
Fund's best interests. Shares of the Funds are not available for telephone
purchase.
HOW TO BUY SHARES
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check $1,000 for regular If your check does
Mail to: account; not clear, you will
INVESCO Funds $250 for an Indivi- be responsible for
Group, Inc. dual Retirement any related loss
P.O. Box 173706 Account; the Fund or IFG
Denver, CO 80217- $50 minimum for incurs. If you are
3706. each subsequent already a
Or you may send investment. shareholder in the
your check by INVESCO funds, the
overnight courier Fund may seek
to: 7800 E. Union reimbursement from
Ave., your existing
Denver, CO 80237. account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
By Wire $1,000. Payment must be
Call 1-800-525-8085 received within 3
for instructions on business days, or
how to transmit the transaction may
your payment by be canceled.
bank wire.
- --------------------------------------------------------------------------------
With EasiVest or $50 per month for Like all regular
Direct Payroll EasiVest; $50 per investment plans,
Purchase pay period for neither EasiVest
You may enroll on Direct Payroll nor Direct Payroll
the fund Purchase. You may Purchase ensures a
application, or start or stop your profit or protects
call us for the regular investment against loss in a
correct form and plan at any time, falling market.
more details about with two weeks' Because you'll
these automatic notice to IFG. invest continually,
monthly investment regardless of
plans. varying price
levels, consider
your financial
ability to keep buying
through low price levels.
And remember that you
will lose money if you
redeem your shares when
the market value of all
your shares is less than
their cost.
- --------------------------------------------------------------------------------
By PAL $1,000. Be sure to write
Your "Personal down the
Account Line" is confirmation number
available for provided by PAL(R).
exchanges 24-hours Payment must be
a day. Simply call received within 3
1-800-424-8085. business days, or
the transaction may be
cancelled. If a telephone
purchase is cancelled due
to non-payment, you will
be responsible for any
related loss the
Portfolio or IFG incurs.
If you are already a
shareholder in the
INVESCO funds, the
Portfolio may seek
reimbursement from your
existing account(s) for
any loss incurred. See
"Exchange Privilege"
below.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege" below.
another of the for written
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
Automatic Monthly purchases requested
Exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
================================================================================
Your order to purchase Fund shares will not begin earning dividends until
your payment can be converted into available federal funds under regular banking
procedures or, if you are acquiring shares in an exchange from another INVESCO
fund, the Fund receives the proceeds of the exchange. Checks normally are
converted into federal funds (moneys held on deposit within the Federal Reserve
System) within two or three business days after we receive them, although this
period may be longer for checks drawn on banks that are not members of the
Federal Reserve System.
Exchange Privilege. You may exchange your shares in one of the Funds for
those in another INVESCO fund, on the basis of their respective net asset values
at the time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider their differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make four exchanges out of each fund during each
calendar year.
3) An exchange is the redemption of shares from one fund followed by
the purchase of shares in another. Therefore, any gain or loss
realized on the exchange is recognizable for federal income tax
purposes (unless, of course, your account is tax-deferred).
4) Each Fund reserves the right to reject any exchange
request, or to modify or terminate exchange privileges,
in the best interests of the Fund and its shareholders.
Notice of all such modifications or termination will be
given at least 60 days prior to the effective date of the
change in privilege, except for unusual instances (such
as when redemptions of the exchanged shares are suspended
under Section 22(e) of the Investment Company Act of
<PAGE>
1940, or when sales of the fund into which you are exchanging are
temporarily stopped).
FUND SERVICES
- -------------
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges, and redemptions. If you choose certain
recurring transaction plans (for instance, EasiVest), your transactions will be
confirmed on your quarterly Investment Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends are automatically invested in
additional fund shares at the NAV on the ex-dividend date, unless you choose to
have dividends automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Checkwriting. Shareholders with $1,000 or more in their account may redeem
shares of that Fund by check. Personalized checks will be provided at no charge,
and may be made payable to any party in any amount of $500 or more. Shares in
the Fund will be redeemed to cover payment of the check. INVESCO reserves the
right to institute a charge for this service upon notice to all shareholders.
Further information about this option may be obtained from INVESCO.
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application, a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if a Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans and IRAs. Shares of these Funds may be purchased for
Individual Retirement Accounts (IRAs) and many types of tax-deferred retirement
plans. IFG can supply you with information and forms to establish or transfer
your existing plan or account.
HOW TO SELL SHARES
- ------------------
The following chart shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at their current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption is expected, but cannot be guaranteed, to
remain at $1.00.
<PAGE>
Please specify from which Fund you wish to redeem shares. Shareholders
have a separate account for each Fund in which they invest.
HOW TO SELL SHARES
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone $250 (or, if less, These telephone
Call us toll-free full liquidation of redemption
at 1-800-525-8085. the account) for a privileges may be
redemption check; modified or
$1,000 for a wire terminated in the
to bank of record. future at the
The maximum amount discretion of IFG.
which may be
redeemed by
telephone is
generally $25,000.
- --------------------------------------------------------------------------------
In Writing Any amount. The If the shares to be
Mail your request redemption request redeemed are
to INVESCO Funds must be signed by represented by
Group, Inc., P.O. all registered stock certificates,
Box 173706 owners of the the certificates
Denver, CO 80217- account. Payment must be sent to
3706. You may also will be mailed to IFG.
send your request your address of
by overnight record, or to a
courier to 7800 E. pre-designated
Union Ave., Denver, bank.
CO 80237.
- --------------------------------------------------------------------------------
By Check $500 minimum per Personalized checks
check. are available from
IFG without charge upon
request. Checks may be
made payable to any
party.
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege" above.
another of the for written
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
automatic monthly exchanges requested
exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Periodic Withdrawal $100 per payment, You must have at
Plan on a monthly or least $10,000 total
You may call us to quarterly basis. invested with the
request the The redemption INVESCO funds, with
appropriate form check may be made at least $5,000 of
and more payable to any that total invested
information at 1- party you in the fund from
800-525-8085. designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third Any amount. All registered
Party owners of the
Mail your request account must sign
to INVESCO Funds the request, with a
Group, Inc., P.O. signature guarantee
Box 173706 from an eligible
Denver, CO 80217- guarantor financial
3706. institution, such
as a commercial
bank or recognized
national or
regional securities
firm.
================================================================================
While the Funds will attempt to process telephone redemptions promptly,
there may be times -- particularly in periods of severe economic or market
disruption -- when you may experience delays in redeeming shares by phone.
Payments of redemption proceeds will be mailed within seven days following
receipt of the redemption request in proper form. However, payment may be
postponed under unusual circumstances -- for instance, if normal trading is not
taking place on the New York Stock Exchange or during an emergency as defined by
the Securities and Exchange Commission. If your shares were purchased by a check
which has not yet cleared, payment will be made promptly upon clearance of the
purchase check (which will take up to 15 days).
If you participate in EasiVest, the Funds' automatic monthly investment
program, and redeem all of the shares in your account, we will terminate any
further EasiVest purchases unless you instruct us otherwise.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Funds reserve the right to involuntarily redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
TAXES AND DIVIDENDS
- -------------------
Taxes. Each Fund intends to distribute to shareholders substantially all
of its net investment income and net capital gains, if any, in order to continue
to qualify for tax treatment as a regulated investment company. Thus, the Funds
do not expect to pay any federal income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends as taxable income for federal, state, and local income tax purposes.
Dividends are taxable whether they are received in cash or automatically
distributed in shares of a Fund or another fund in the INVESCO group.
Because the Funds do not invest in long-term securities, any capital gains
or losses realized by a Fund will be short-term gains or losses.
In addition, the Tax-Free Money Fund intends to continue to qualify during
each fiscal year to pay "exempt-interest dividends" to shareholders. These
dividends are derived from net income earned by the Fund on municipal
obligations and are excludable from gross income of the shareholders for federal
income tax purposes. Any distributions to shareholders from net interest income
earned by the Fund from taxable temporary investments, or from net capital
gains, would be subject to federal income taxation.
Under the Tax Reform Act of 1986, interest on certain "private activity
bonds" issued after August 7, 1986, is an item of tax preference for purposes of
the alternative minimum tax in taxable years beginning after December 31, 1986.
The Tax-Free Money Fund intends to limit its investments in such "private
activity bonds" to not more than 20% of the Fund's total assets. The portion of
exempt-interest dividends paid by the Fund which is attributable to such
"private activity bonds" would be an item of tax preference to shareholders.
Additionally, certain corporations also may have to include exempt-interest
dividends in calculating alternative minimum taxable income in situations where
the "adjusted current earnings" of the corporation exceeds its alternative
minimum taxable income.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless you are subject to
backup withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax identification
number.
Dividends. Each Fund earns ordinary or net investment income in the form of
dividends and interest on its investments. Each Fund's policy is to distribute
substantially all of this income, less Fund expenses, to shareholders. Dividends
from net investment income are declared daily and paid monthly. Dividends and
capital gains, if any, are automatically reinvested in additional shares of a
Fund at the net asset value on the ex-dividend date, unless otherwise requested.
<PAGE>
Tax-Free Money Fund anticipates that substantially all of the dividends
paid by it will be exempt from federal income taxes. During the fiscal year
ended May 31, 1997, 99.99% of the dividends declared by this Fund were exempt
from federal income taxes. There is no assurance that this will be the case in
future years. Income may be subject to state and local taxes, or to the federal
Alternative Minimum Tax.
At the end of each year, information regarding the tax status of their
dividends is provided to shareholders of each Fund. We encourage you to consult
a tax adviser with respect to these matters. For further information see "Taxes
And Dividends" in the Statement of Additional Information.
ADDITIONAL INFORMATION
- ----------------------
Voting Rights. All shares of the Funds of the Company have equal voting
rights based on one vote for each share owned and a corresponding fractional
vote for each fractional share owned. The Company is not generally required and
does not expect to hold regular annual meetings of shareholders. However, when
requested to do so in writing by the holders of 10% or more of the outstanding
shares of the Company or as may be required by applicable law or the Company's
Articles of Incorporation, the board of directors will call special meetings of
shareholders. Directors may be removed by action of the holders of a majority of
the outstanding shares of the Company. The Funds will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
<PAGE>
INVESCO MONEY MARKET FUNDS, INC.
U.S. Government Money Fund
Cash Reserves Fund
Tax-Free Money Fund
PROSPECTUS
October 1, 1997
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information or responses
to other questions, call toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line call:
1-800-424-8085
You can find us on the World Wide Web:
http://www.invesco.com.
Or write to:
INVESCO Funds Group, Inc., Distributor
7800 E. Union Avenue
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street;
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents filed by the Company with the Securities and Exchange
Commission can be located on a Web site maintained by the Commission at
http://www.sec.gov.
IFG-PSMM
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
October 1, ^ 1997
INVESCO MONEY MARKET FUNDS, INC.
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
- --------------------------------------------------------------------------------
INVESCO Money Market Funds, Inc. (the "Company") is an open-end management
investment company organized in series form in which all three of its Funds, ^
INVESCO U.S. Government Money Fund ("U.S. Government Money Fund"), INVESCO Cash
Reserves Fund (Cash Reserves Fund"), and INVESCO Tax-Free Money Fund ("Tax-Free
Money Fund") (collectively, the "Funds" and individually, a "Fund"), are money
market funds which seek to provide shareholders with as high a level of current
income as is consistent with liquidity and safety of capital. Tax-Free Money
Fund has the additional objective of seeking income exempt from federal income
tax. It is expected, but cannot be assured, that the value of all of the Funds'
shares will be maintained at a constant $1.00 per share. Investors may purchase
shares of any or all three Funds.
The ^ U.S. Government Money Fund will pursue its investment objective by
investing only in debt obligations issued or guaranteed by the U.S. government
or its agencies.
^ The Cash Reserves Fund will pursue its investment objective by investing
in a diversified portfolio of high-quality, short-term debt obligations.
^ The Tax-Free Money Fund will pursue its investment objective by
investing in a diversified portfolio of high-quality, short-term debt
obligations issued by states, territories and possessions of the United States
and the District of Columbia and their political subdivisions, agencies and
instrumentalities, the interest on which is exempt from federal income taxation.
Such obligations may include municipal bonds, notes and commercial paper.
<PAGE>
^ A Prospectus for the Funds dated October 1, ^ 1997, which ^ provides the
basic information you should know before investing in the Funds, may be obtained
without charge from INVESCO Funds Group, Inc., P.O. Box 173706, Denver, Colorado
80217-3706. This Statement of Additional Information is not a Prospectus, but
contains information in addition to and more detailed than that set forth in the
Prospectus. It is intended to provide you with additional information regarding
the activities and operations of the Fund, and should be read in conjunction
with the Prospectus.
Investment Adviser and Distributor: INVESCO FUNDS GROUP, INC.
TABLE OF CONTENTS
-----------------
Page
INVESTMENT POLICIES AND RESTRICTIONS........................................35
THE FUNDS AND THEIR MANAGEMENT..............................................48
HOW SHARES CAN BE PURCHASED.................................................61
HOW SHARES ARE VALUED.......................................................61
^ FUND PERFORMANCE..........................................................63
SERVICES PROVIDED BY THE FUNDS..............................................65
TAX-DEFERRED RETIREMENT PLANS...............................................66
HOW TO REDEEM SHARES........................................................67
DIVIDENDS AND TAXES.........................................................67
INVESTMENT PRACTICES........................................................68
ADDITIONAL INFORMATION......................................................70
APPENDIX A..................................................................73
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
- ------------------------------------
As discussed in ^ the Prospectus in the section entitled "Investment
Objective and ^ Strategy," the Funds may invest in a variety of short-term money
market securities in seeking to achieve their respective investment objectives.
Such securities include the following:
U.S. Government Obligations. The ^ Cash Reserve Fund and ^ U.S. Government
Money Fund may invest in U.S. ^ government obligations without limit. The ^
Tax-Free Money Fund may invest up to 20% of its total assets in U.S. ^
government obligations. These securities consist of treasury bills, treasury
notes, and treasury bonds, which differ only in their interest rates,
maturities, and dates of issuance, and securities issued or guaranteed by
agencies or instrumentalities of the U.S. ^ government. Treasury bills have a
face maturity of one year or less. Treasury notes generally have face maturities
of one to ten years, and treasury bonds generally have face maturities of more
than ten years.
Some obligations of United States ^ government agencies, which are
established under the authority of an act of Congress, such as Government
National Mortgage Association (GNMA) participation certificates, are supported
by the full faith and credit of the United States Treasury. GNMA ^ certificates
are mortgage-backed securities representing part ownership of a pool of mortgage
loans. These loans -- issued by lenders such as mortgage bankers, commercial
banks and savings and loan associations -- are either insured by the Federal
Housing Administration or guaranteed by the Veterans Administration. A "pool" or
group of such mortgages is assembled and, after being approved by GNMA, is
offered to investors through securities dealers. Once approved by GNMA, the
timely payment of interest and principal on each mortgage is guaranteed by GNMA
and backed by the full faith and credit of the United States ^ government. The
market value of GNMA Certificates is not guaranteed. GNMA Certificates differ
from bonds in that principal is paid back monthly by the borrower over the term
of the loan rather than returned in a lump sum at maturity. GNMA Certificates
are called "pass-through" securities because both interest and principal
payments (including prepayments) are passed through to the holder of the
Certificate. Upon receipt, principal payments will be used by the Funds to
purchase additional GNMA certificates or other U.S.
government securities.
Other ^ U.S. government obligations, such as securities of the Federal
Home Loan Banks, are supported by the ^ Treasury's discretionary authority to
lend to the issuer. Still others, such as bonds issued by Fannie Mae (formerly,
the Federal National Mortgage Association), a federally chartered private
corporation, are supported only by the credit of the instrumentality. In the
case of securities not backed by the full faith and credit of the United States,
the Funds must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
<PAGE>
meet its commitments. The Funds will invest in securities of such
instrumentalities only when their investment adviser and sub-adviser
(collectively, "Fund Management") are satisfied that the credit risk with
respect to any such instrumentality is minimal.
Obligations of Domestic Banks. The ^ Cash Reserves Fund and ^ Tax-Free
Money Fund may invest in these obligations, which consist of certificates of
deposit ^("CDs") and bankers' acceptances, rated in one of the two highest
short-term rating categories by at least two nationally recognized statistical
rating organizations ("NRSROs") or one NRSRO if such obligations are rated by
only one NRSRO, issued by domestic banks (including their foreign branches)
which have total assets in excess of $4 billion and meet other criteria
established by the board of directors. ^ CDs are issued against deposits in a
commercial bank for a specified period and rate and are normally negotiable.
Eurodollar ^ CDs are certificates issued by a foreign branch (usually London) of
a U.S. ^ domestic bank, and, as such, the credit is deemed to be that of the
domestic bank.
Bankers' acceptances are short-term credit instruments evidencing the
promise by a bank (by virtue of the bank's "acceptance") to pay at maturity a
draft which has been drawn on it by a customer (the "drawer"). These instruments
are used to finance the import, export, transfer, or storage of goods and
reflect the obligation of both the bank and the drawer to pay the face amount.
Commercial Paper. ^ Cash Reserves Fund may invest in these obligations,
which are short-term promissory notes issued by domestic corporations to meet
current working capital requirements. Such paper may be unsecured or backed by a
letter of credit. Commercial paper issued with a letter of credit is, in effect,
"two party paper," with the issuer directly responsible for payment, plus a
bank's guarantee that if the note is not paid at maturity by the issuer, the
bank will pay the principal and interest to the buyer. Commercial paper is sold
either as interest-bearing or on a discounted basis, with maturities not
exceeding 270 days.
The ^ Cash Reserves Fund may not purchase securities that are not readily
marketable. However, the ^ Fund's investments in commercial paper may include
commercial paper issued pursuant to the exemption from registration contained in
Section 4(2) of the Securities Act of 1993 ("Section 4(2) Paper") if a liquid
trading market exists. The liquidity of the ^ Fund's investments in Section 4(2)
Paper could be impaired if dealers or institutional investors become
uninterested in purchasing these securities. The ^ Company's board of directors
has delegated to ^ Fund Management the authority to determine the liquidity of
Section 4(2) Paper pursuant to guidelines approved by the board. In the event
that an issue of Section 4(2) Paper subsequently is determined to be illiquid,
the security will be sold as soon as that can be done in an orderly fashion
consistent with the best interests of the ^ Fund's shareholders.
<PAGE>
The corporate obligations which may be part of the ^ Cash Reserves Fund's
investments consist of bonds, debentures, and notes issued by corporations in
order to finance longer term credit needs.
Repurchase Agreements. ^ As discussed in the Funds' Prospectus, the Funds
may enter into repurchase agreements with ^ respect to debt instruments eligible
for investment by each Fund with member banks of the Federal Reserve System,
registered broker-dealers, and registered government securities dealers, which
are deemed creditworthy^ under standards established by the Company's board of
directors. A repurchase agreement may be considered a loan collateralized by
securities. The resale price reflects an agreed upon interest rate effective for
the period the instrument is held by a Fund and is unrelated to the interest
rate on the underlying instrument. In these transactions, the securities
acquired by a Fund (including accrued interest earned thereon) must have a total
value at least equal to the value of the repurchase agreement, ^ and are held as
collateral by the Fund's custodian bank until the repurchase agreement is
completed. Repos may generate taxable income.
Investment Ratings. If a security originally rated in the highest rating
category by an NRSRO has been downgraded to the second highest rating category,
the Funds' investment adviser must assess promptly whether the security presents
minimal credit risk and must take such action with respect to the security as it
determines to be in the best interest of the affected Fund. If a Fund security
is downgraded below the second highest rating of an NRSRO, is in default, or no
longer presents a minimal credit risk, the security must be disposed of either
within five business days of the investment adviser becoming aware of the new
rating, the default, or the credit risk, or as soon as practicable consistent
with achieving an orderly disposition of the security, whichever is the first to
occur, unless the executive committee of the ^ Company's board of directors
determines within the aforesaid five business days that holding the security is
in the best interest of ^ the Funds. The ratings of any NRSRO represent its
opinions as to the quality of the issuers and securities which it undertakes to
rate. It should be emphasized, however, that ratings are general and not
absolute standards of quality.
Municipal Obligations
- ---------------------
As discussed in the section entitled "Investment Objective and ^ Strategy"
of its Prospectus, the ^ Tax-Free Money Fund may invest in a variety of
short-term, tax-exempt securities in seeking to achieve its investment
objective. Such securities include the following:
Municipal Bonds. Municipal bonds are debt obligations issued to obtain
funds for various public purposes, including the construction of a wide range of
public facilities such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets, and water and sewer works. Other public
purposes for which municipal bonds may be issued include refunding outstanding
<PAGE>
obligations, obtaining funds for general operating expenses and obtaining
funds to ^ lend to other public institutions and facilities. In addition,
certain types of industrial development bonds are issued by or on behalf of
public authorities to obtain funds to provide to privately operated housing
facilities, sports facilities, convention or trade show facilities, airport,
mass transit, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas, electricity,
sewage or solid waste disposal. Such obligations are considered to be municipal
bonds if the interest paid thereon qualifies as exempt from federal income
taxation. Other kinds of industrial development bonds, the proceeds from which
are used for the construction, equipment, repair or improvement of privately
operated industrial or commercial facilities, may also be considered municipal
bonds. Although the current federal tax laws impose substantial limitations on
the size of such issues, ^ the Tax-Free Money Fund will only invest in those
industrial development bonds, the interest from which, in the opinion of counsel
to the issuer, is exempt from federal income taxation.
There are two principal classifications of ^ municipal bonds: "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and unlimited taxing power for the
payment of principal and interest. Revenue bonds are payable only from the
revenues generated by a particular facility or class of facility, or in some
cases from the proceeds of a special excise tax or specific revenue source.
Industrial development obligations are a particular kind of municipal bond which
are issued by or on behalf of public authorities to obtain funds for many kinds
of local, privately operated facilities. Such obligations are, in most cases,
revenue bonds that generally are secured by a lease with a particular private
corporation. The INVESCO Tax-Free Money Fund's portfolio may consist of any
combination of general obligation and revenue bonds.
From time to time, proposals to restrict or eliminate the federal income
tax exemption for interest on municipal bonds have been introduced before
Congress. Similar proposals may be introduced in the future. If such a proposal
were enacted, the availability of municipal bonds for investment by ^ the
Tax-Free Money Fund might be adversely affected. In such event, ^ the Tax-Free
Money Fund would reevaluate its investment objective and policies and submit
possible changes in the structure of ^ the Tax-Free Money Fund for the
consideration of shareholders.
For a description of the minimum bond ratings by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("S&P") required for a municipal bond to be eligible for
inclusion in the Fund's portfolio, see "Appendix A" to this Statement of
Additional Information.
Municipal Notes. Municipal notes, eligible for purchase by INVESCO Tax-Free
Money Fund, are short-term debt obligations issued by municipalities which
normally have a maturity at the time of issuance of from six months to three
<PAGE>
years. The principal classifications of such notes are tax anticipation
notes, bond anticipation notes, revenue anticipation notes, and project notes.
Notes sold in anticipation of collection of taxes, a bond sale or receipt of
other revenues are normally obligations of the issuing municipality or agency.
Municipal Commercial Paper. ^ Tax-Free Money Fund also may invest in
municipal commercial paper, which refers to short-term debt obligations issued
by municipalities which may be issued at a discount (sometimes referred to as
Short-Term Discount Notes). Such obligations normally are issued to meet
seasonal working capital needs of a municipality or interim construction
financing and are paid from a municipality's general revenues or refinanced with
long-term debt. Although the availability of municipal commercial paper has been
limited, from time to time the amounts of such debt obligations offered have
increased, and the Fund's investment adviser believes that this increase may
continue.
As discussed in ^ the Prospectus, to be eligible for purchase by the
INVESCO Tax-Free Money Fund, municipal obligations must satisfy certain
investment quality requirements. After the Fund has purchased an issue of
municipal obligations, such issue might cease to be rated, or its rating might
be reduced below the minimum required for purchase by the Fund. If a security
originally rated in the highest rating category by a nationally recognized
statistical rating organization ("NRSRO") has been downgraded to the second
highest rating category, the Fund's investment adviser must assess promptly
whether the security presents minimal credit risk and must take such action with
respect to the security as it determines to be in the best interest of the Fund.
If a Fund security is downgraded below the second highest rating of an NRSRO, is
in default, or no longer presents a minimal credit risk, the security must be
disposed of either within five business days of the investment adviser becoming
aware of the new rating, the default, or the credit risk, or as soon as
practicable consistent with achieving an orderly disposition of the security,
whichever is the first to occur, unless the executive committee of the Fund's
board of directors determines within the aforesaid five business days that
holding the security is in the best interest of the Fund. The ratings of any
NRSRO represent its opinions as to the quality of the municipal obligations
which it undertakes to rate. It should be emphasized, however, that ratings are
general and not absolute standards of quality. Consequently, tax-exempt
obligations with the same maturity and rating may have different yields, while
obligations of the same maturity with different ratings may have the same yield.
The ^ Tax-Free Money Fund will not purchase a municipal obligation unless
the issuer's bond counsel has rendered an opinion that such obligation has been
validly issued and that the interest thereon is exempt from federal income
taxation. In addition, the Tax-Free Money Fund will not purchase a municipal
obligation that, in the opinion of the Fund's investment adviser, is reasonably
<PAGE>
likely to be held not to be validly issued or to pay interest thereon which
is not exempt from federal income taxation.
Variable Rate Obligations. As discussed in ^ the Prospectus, the Tax-Free
Money Fund may invest in variable rate municipal obligations. The interest rate
payable on a variable rate municipal obligation is adjusted either at
predetermined periodic intervals or whenever there is a change in the market
rate of interest upon which the interest rate payable is based. A variable rate
obligation may include a demand feature pursuant to which the Fund would have
the right to demand prepayment of the principal amount of the obligation prior
to its stated maturity. In addition, the issuer of a variable rate obligation
may retain the right to prepay the principal amount prior to maturity.
The principal benefit of a variable rate municipal obligation is that the
interest rate adjustment minimizes changes in the market value of the
obligation. As a result, the purchase of variable rate municipal obligations
should enhance the ability of the Fund to maintain a stable net asset value per
share and to sell an obligation prior to maturity at a price approximating the
full principal amount of the obligation. The principal benefit to the Fund of
purchasing obligations with a demand feature is that liquidity, and the ability
of the Fund to obtain repayment of the full principal amount of a municipal
obligation prior to maturity, are enhanced. The investment adviser will
continually monitor the creditworthiness of issuers of variable rate obligations
and their ability to make payments on demand.
Stand-by Commitments. As discussed in ^ the Prospectus, the Tax-Free Money
Fund may acquire stand-by commitments under which the Fund purchases securities
together with a right to resell them to the seller at an agreed-upon price or
yield within a specific period prior to the maturity date of such securities.
The benefit to the Fund of acquiring stand-by commitments would be to facilitate
the ability of the Fund to invest its assets fully in securities on which the
interest is exempt from federal income taxation while preserving the necessary
flexibility and liquidity to meet unusually large redemptions and to purchase at
a later date securities other than those subject to the commitment. Stand-by
commitments generally will be available without the payment of any direct or
indirect consideration. If it is believed to be necessary or advisable, the Fund
may pay for stand-by commitments, either separately, in cash, or by paying a
higher price for the securities that are acquired subject to the stand-by
commitment. As a matter of policy, however, the total amount "paid" in either
manner for outstanding commitments held by the Fund will not exceed 1/2 of 1% of
the value of its total assets calculated after any stand-by commitment is
acquired.
In determining whether to exercise stand-by commitments and in selecting
which commitments to exercise in which circumstances, the investment adviser
will consider, among other things, the amount of cash available to the Fund, the
expiration dates of the available commitments, any future commitments for
securities, alternate investment opportunities and the desirabiliyt of retaining
<PAGE>
the underlying securities in the Fund. The Fund will refrain from
exercising stand-by commitments to avoid imposing a loss on a dealer and
jeopardizing its business relationship with that dealer. Any stand-by
commitments acquired by the Fund will have the following features: (1) the
commitments will be in writing and will be physically held by the Fund's
custodian; (2) they will be exercisable at any time prior to the underlying
security's maturity; (3) rights of the Fund to exercise commitments will be
unconditional and unqualified; (4) stand-by commitments will be entered into
only with dealers, banks and brokers which present a minimal risk of default as
determined by the investment adviser under procedures adopted by the board of
directors; (5) although the commitments will not be transferable, the municipal
obligations purchased subject to such commitments may be sold to a third party
at any time, even though a commitment may be outstanding; and (6) their exercise
price in each case will be (i) the Fund's acquisition cost of the municipal
obligation that is subject to this commitment (excluding any accrued interest
that the Fund paid on acquisition of the security), less any amortized market
premium or plus any amortized market or original issue discount during the
period the Fund owned the municipal obligation, plus (ii) all interest accrued
on the municipal obligation since the last interest payment date during the
period such obligation was owned by the Fund. In addition, the acquisition,
exercisability and duration of stand-by commitments will not be factors in
determining the dollar-weighted average of the Fund or the value of the
securities it holds. No value is given to stand-by commitments in determining
the Fund's net asset value per share, and any amounts paid for such commitments
will be reflected as unrealized depreciation for the period during which the
commitment is held.
The Internal Revenue Service ("IRS") has issued a revenue ruling and
several favorable letter rulings to the effect that a regulated investment
company will be the owner of municipal obligations acquired subject to a
stand-by commitment and that interest on the securities will be tax-exempt to
the company. The IRS has announced, however, that it will no longer issue
advance rulings in this area. There is no assurance that stand-by commitments
will be available to the ^ Tax-Free Money Fund, nor can it be assumed that such
commitments will continue to be available under all market conditions.
When-Issued Purchases. As discussed in ^ the Prospectus, the ^ Tax-Free
Money Fund may at times acquire municipal obligations on a when-issued basis.
Securities purchased on a when-issued basis and the securities held in the
Fund's portfolio are subject to changes in value based on the public's
perception of the creditworthiness of the issuers and changes in the level of
interest rates (generally resulting in depreciation when interest rates rise.)
The Fund will maintain a ^ segregated account with its custodian bank consisting
of ^ cash, liquid securities or a combination thereof marked to market daily
equal in value to the amount of such commitments. The Fund will only make
commitments to purchase securities with the intention of actually acquiring the
<PAGE>
securities; however, the Fund may sell these commitments before the
settlement date if to do so is deemed advisable as a matter of investment
strategy.
^ To the extent the Fund remains substantially invested in debt securities
at the same time that it has committed to purchase securities on a when-issued
basis, which it would normally expect to do, there is a greater potential for
fluctuation in the Fund's net asset value than if it set aside cash to pay for
when-issued securities. In addition, there will be a greater potential for the
realization of capital gains, which are not exempt from federal income taxation,
and of capital losses. When the payment of when-issued securities must be met,
the Fund will provide payment from available cash flow, sale of portfolio
securities (possibly at a gain or loss) or, although it would not normally
expect to do so, from sale of the when-issued securities themselves (which may
at the time of sale have a value greater or less than the Fund's payment
obligation). The INVESCO Tax-Free Money Fund intends to enter into commitments
to purchase securities on a when-issued basis only to the extent necessary to
assure compliance with its investment objective and policies regarding permitted
investments. Such commitments will not ordinarily involve a substantial portion
of the Fund's assets.
Investment Restrictions. As described in the section of the ^ Funds'
Prospectus entitled "Investment Objective and ^ Strategy," the Funds operate
under certain investment restrictions. These policies are fundamental and may
not be changed with respect to a particular Fund without the prior approval of
the holders of a majority, as defined in the Investment Company Act of 1940 (the
"1940 Act"), of the outstanding voting securities of that Fund. For purposes of
the following limitations, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
resulting from fluctuations in value does not require elimination of any
security from the Fund.
U.S. Government Money Fund
Under these restrictions, the U.S. Government Money Fund may not:
(1) other than investments by the Fund in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, invest in the securities of issuers
conducting their principal business activities in the same
industry (investments in obligations issued by a foreign
government, including the agencies or instrumentalities of
a foreign government, are considered to be investments in
a single industry), if immediately after such investment
the value of the Fund's investments in such industry would
exceed 25% of the value of the Fund's total assets;
(2) invest in the securities of any one issuer, other than the United
States government, if immediately after such investment more than 5%
of the value of the Fund's total assets, taken at market value,
<PAGE>
would be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by the Fund;
(3) underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the Securities Act of
1933, as amended, in connection with the disposition of the Fund's
portfolio securities;
(4) invest in companies for the purpose of exercising control
or management;
(5) issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes not in
excess of 5% of the value of the Fund's total assets at the time the
borrowing is made;
(6) mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to an extent
not greater than 5% of the value of the Fund's total assets;
(7) make short sales of securities or maintain a short
position;
(8) purchase securities on margin, except that the Fund may obtain such
short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities;
(9) purchase or sell real estate or interests in real estate. The Fund
may invest in securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts,
which invest in real estate or interests therein;
(10) purchase or sell commodities or commodity contracts;
(11) make loans to other persons, except that the Fund may purchase debt
obligations consistent with its investment objective and policies;
(12) purchase securities of other investment companies except in
connection with a merger, consolidation, acquisition or
reorganization; and
(13) invest in securities for which there are legal or
contractual restrictions on resale.
In applying restriction (1) above, the U.S. Government Money Fund uses an
industry classification system based on the O'Neil Database published by William
O'Neil & Co., Inc. ^
<PAGE>
Cash Reserves Fund
Under these restrictions, ^ the Cash Reserves Fund may not:
(1) issue preference shares or create any funded debt;
(2) sell short or buy on margin;
(3) mortgage, pledge or hypothecate its portfolio securities or borrow
money, except from banks for temporary or emergency purposes (but
not for investment) and then in an amount not exceeding 10% of the
value of the Fund's total net assets. The Fund will not purchase
additional securities while any such borrowings exist;
(4) invest in the securities of any other investment company except for
a purchase or acquisition in accordance with a plan of
reorganization, merger or consolidation;
(5) purchase securities, other than obligations issued or
guaranteed by the U.S. ^ government, if the purchase would
cause the Fund, at the time, to have more than 5% of the
value of its total assets invested in securities of any one
issuer or to own more than 10% of the outstanding debt
obligations of any one issuer. For this purpose, all
indebtedness of an issuer shall be deemed a single class of
security;
(6) lend money or securities to any person (except through the purchase
of debt securities or entering into repurchase agreements in
accordance with the Fund's investment policies);
(7) buy or sell commodities, commodity contracts or real estate
(however, the Fund may purchase securities of companies investing in
real estate);
(8) invest in any company for the purpose of exercising control
or management;
(9) buy other than readily marketable securities;
(10) engage in the underwriting of any securities;
(11) purchase securities of any company in which any officer or director
of the Fund or of its investment adviser beneficially owns more than
1/2 of 1% of the outstanding securities, and in which all of the
officers and directors of the Fund and its investment adviser, as a
group, beneficially own more than 5% of such securities;
(12) purchase common or preferred stocks or securities
convertible into stocks;
<PAGE>
(13) purchase the securities of any issuer having a record, together with
predecessors, of less than three years continuous operation;
(14) buy or sell oil, gas or other mineral interests or
exploration programs;
(15) invest more than 25% of the value of the Fund's assets in
one particular industry (obligations of the U.S. ^
government and of domestic banks are excepted); and
(16) participate on a joint or joint and several basis in any securities
trading account, or purchase warrants, or write, purchase or sell
puts, calls, straddles or any other option contract or combination
thereof.
With respect to investment restriction (9) above, the board of directors
has delegated to Fund Management the authority to determine that a liquid market
exists for Section 4(2) Paper, and that such securities are not subject to
restriction (9) above. Under guidelines established by the board of directors,
Fund Management will consider the following factors, among others, in making
this determination: (1) the unregistered nature of Section 4(2) Paper, (2) the
frequency of trades and quotes for the security; (3) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (4) dealer undertakings to make a market in the security; and (5)
the nature of the security and the nature of marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer).
In applying restriction (15), above, the ^ Cash Reserves Fund uses an
industry classification system based on the O'Neil Database published by William
O'Neil & Co., Inc. In addition, the ^ Cash Reserves Fund considers captive
finance companies to be within separate industry categories based on the
operating industries to which they are related.
^ Tax-Free Money Fund
Under these restrictions, the ^ Tax-Free Money Fund may not:
(1) invest in equity securities or securities convertible into
equity securities;
(2) sell short or buy on margin, or write or purchase put or call
options, provided, however, that the Fund may enter into stand-by
commitments as described under "Investment ^ Policies ^ and
Restrictions";
(3) mortgage, pledge or hypothecate its portfolio securities or borrow
money, except from banks for temporary or emergency purposes (but
not for investment) and then in an amount not to exceed 10% of the
value of the Fund's total net assets;
<PAGE>
the Fund will not purchase additional securities while any such
borrowings exist;
(4) lend money or securities to any person (except through the purchase
of debt securities or entering into repurchase agreements in
accordance with the Fund's investment policies);
(5) engage in the underwriting of any securities of other issuers except
to the extent that the purchase of municipal obligations or other
permitted investments directly from the issuer thereof and the
subsequent disposition of such investments may be deemed to be an
underwriting;
(6) issue senior securities as defined in the Investment Company Act
(except insofar as the Fund may be deemed to have issued a senior
security by reason of entering into a repurchase agreement or
borrowing money in accordance with the restrictions described above
or purchasing any securities on a when-issued basis);
(7) invest in the securities of any other investment company except for
a purchase or acquisition in accordance with a plan of
reorganization, merger or consolidation;
(8) purchase securities (except obligations issued or
guaranteed by the U.S. ^ government, its agencies or
instrumentalities) if the purchase would cause the Fund, at
the time, to have more than 5% of the value of its total
assets invested in securities of any one issuer or to own
more than 10% of the outstanding debt obligations of any
one issuer. For the purposes of this limitation and that
set forth in item (11) below, the Fund will regard each
state and each political subdivision, agency or
instrumentality of such state and such multi-state agency
of which such state is a member as a separate issuer; in
addition, all indebtedness of an issuer shall be deemed a
single class of security, provided, however, that if the
creating government or some other entity guarantees a
security, such a guarantee would be considered a separate
security and would be treated as an issue of such
government or other entity;
(9) buy or sell commodities or commodity contracts, oil, gas, or other
mineral interests or exploration programs or real estate or
interests therein. However, the Fund may purchase municipal
obligations or other permitted securities secured by real estate or
which may represent indirect interests therein;
(10) invest in any issuer for the purpose of exercising control
or management;
<PAGE>
(11) purchase or retain securities of any issuer in which any officer or
director of the Fund or of its investment adviser beneficially owns
more than 1/2 of 1% of the outstanding securities, and in which all
of the officers or directors of the Fund and its investment adviser,
as a group, beneficially own more than 5% of such securities;
(12) purchase the securities of any issuer having a record, together with
predecessors, of less than three years continuous operation;
(13) invest more than 25% of its total assets in any particular
industry or industries, except municipal securities, or
obligations issued or guaranteed by the U.S. ^ government,
its agencies or instrumentalities; industrial development
bonds are grouped into an "industry" if the payment of
principal and interest is the ultimate responsibility of
companies within the same industry; and
(14) purchase securities of any issuer if as a result more than
10% of the value of the Fund's total assets would be
invested in securities that are subject to legal or
contractual restrictions on resale ("restricted
securities") and in securities for which there are no
readily available market quotations; or enter into
repurchase agreements maturing in more than seven days, if
as a result such repurchase agreements together with
restricted securities and securities for which there are no
readily available market quotations would constitute more
than 10% of the Fund's assets.
Rule 5b-2 under the 1940 Act provides that a guarantee of a security shall
not be deemed to be a security issued by the guarantor, provided that the value
of all securities issued or guaranteed by the guarantor, and owned by a Fund,
does not exceed 10% of the value of the total assets of the Fund. Pursuant to
this rule, INVESCO Tax-Free Money Fund interprets restriction (8), above, as
permitting the Fund to own securities guaranteed by a single entity in an amount
up to 10% of the value of the Fund's total assets.
In applying restriction (13) above, the ^ Tax-Free Money Fund uses an
industry classification system based on the O'Neil Database published by William
O'Neil & Co., Inc.
In applying restriction (14) above, the ^ Tax-Free Money Fund also
includes illiquid securities (those which cannot be sold in the ordinary course
of business within seven days at approximately the valuation given to them by
the Fund) among the securities subject to the 10% of total assets limit.
^
<PAGE>
THE FUNDS AND THEIR MANAGEMENT
- ------------------------------
The Company. The Company was incorporated on April 2, 1993, under the laws
of Maryland. On July 1, 1993, the Company, through the ^ Cash Reserves Fund, ^
Tax-Free Money Fund and ^ U.S. Government Money Fund, respectively, assumed all
of the assets and liabilities of Financial Daily Income Shares, Inc.
(incorporated in Colorado on October 14, 1975), Financial Tax-Free Money Fund,
Inc. (incorporated in Colorado on March 4, 1983) and the Financial U.S.
Government Money Fund, a series of Financial Series Trust (organized as a
Massachusetts business trust on July 15, 1987) (collectively the "Predecessor
Funds"). All financial and other information about the Funds for periods prior
to July 1, 1993, relates to such Predecessor Funds.
The Investment Adviser. INVESCO Funds Group, Inc., ^ a Delaware
Corporation ("IFG") is employed as the Company's investment adviser. ^ IFG was
established in 1932 and also serves as an investment adviser to INVESCO Capital
Appreciation Funds, Inc. (formerly INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Multiple Asset Funds, Inc.,
INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc., INVESCO
Tax-Free Income Funds, Inc., INVESCO Value Trust^ and INVESCO Variable
Investment Funds, Inc.
^ IFG is an indirect wholly owned subsidiary of AMVESCAP ^ PLC, a
publicly-traded holding company ^ that, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO PLC changed
its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as
part of a merger between a direct subsidiary of INVESCO PLC and A I M Management
Group, Inc. that created one of the largest independent management businesses in
the world with approximately $165 billion in assets under management. IFG was
established in 1932 and as of May 31, 1997, managed 14 mutual funds, consisting
of ^ 44 separate portfolios, on behalf of over ^ 859,115 shareholders. ^
AMVESCAP PLC's North American subsidiaries include the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker/dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. ^ of Boston, Massachusetts primarily
manages pension and endowment accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
<PAGE>
--INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for
providing advisory services in the U.S. real estate markets for ^ pension plans
and public pension funds, ^ as well as endowment and
foundation accounts.
--A I M Advisors, Inc. Of Houston, Texas provides investment advisory and
administrative services for retail and institutional mutual funds.
--A I M Capital Management, Inc. Of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-adviser to certain retail
and institutional mutual funds, one Canadian mutual fund and one portfolio of an
open-end registered investment company that is offered to separate accounts of
variable insurance companies.
--A I M Distributors, Inc. and Fund Management Company of Houston, Texas
are registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of ^ AMVESCAP PLC are located at 11 Devonshire
Square, London, ^ EC2M4YR, England.
The Sub-Adviser. IFG, as investment adviser, has contracted with INVESCO
Trust Company ("INVESCO Trust") to provide investment advisory and research
services to the Company. INVESCO Trust has the primary responsibility for
providing portfolio investment management services to the Funds. INVESCO Trust,
a trust company founded in 1969, is a wholly owned subsidiary of IFG.
As indicated in the Funds' ^ Prospectus, IFG and INVESCO Trust permit
investment and other personnel to purchase and sell securities for their own
accounts in accordance with a compliance policy governing personal investing by
directors, officers and employees of ^ IFG, INVESCO Trust and their North
American affiliates. The policy requires officers, inside directors, investment
and other personnel of ^ IFG, INVESCO Trust and their North American affiliates
to pre- clear all transactions in securities not otherwise exempt under the
policy. Requests for trading authority will be denied when, among other reasons,
the proposed personal transaction would be contrary to the provisions of the
policy or would be deemed to adversely affect any transaction then known to be
under consideration for or to have been effected on behalf of any client
account, including the Funds.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of ^ IFG,
INVESCO Trust and their North American affiliates to various trading
restrictions and reporting obligations. All reportable transactions are reviewed
for compliance with the policy. The provisions of this policy are ^ administered
by and subject to exceptions authorized by INVESCO or INVESCO Trust.
<PAGE>
Investment Advisory Agreement. ^ IFG serves as investment adviser to each
of the Funds pursuant to an investment advisory agreement dated February 28,
1997 (the "Agreement") with the Company which was approved ^ by the board of
directors on November 6, 1996, by a vote cast in person by a majority of the
directors of the Company, including a majority of the directors who are not
"interested persons" of the Company or ^ IFG at a meeting called for such
purpose. ^ Shareholders of each of the Funds approved the Agreement on ^ January
31, 1997, for an initial term expiring ^ February 28, 1999. This Agreement may
be continued from year to year with respect to each Fund as long as each such
continuance is specifically approved at least annually by the board of directors
of the Company, or by a vote of the holders of a majority, as defined in the
1940 Act, of the outstanding shares of ^ such Fund. Any such continuance also
must be approved by a majority of the Company's directors who are not parties to
the Agreement or interested persons (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
continuance. The Agreement may be terminated at any time without penalty by
either party, or by a Fund with respect to that Fund, upon sixty (60) days'
written notice and terminates automatically in the event of an assignment to the
extent required by the 1940 Act and the rules thereunder.
The Agreement provides that ^ IFG shall manage the investment portfolios of
the Funds in conformity with each Fund's investment policies (either directly or
by delegation to a sub-adviser which may be a company affiliated with ^ IFG).
Further, ^ IFG shall perform all administrative, internal accounting (including
computation of net asset value), clerical, statistical, secretarial and all
other services necessary or incidental to the administration of the affairs of
the Funds excluding, however, those services that are the subject of separate
agreement between the Company and ^ IFG or any affiliate thereof, including the
distribution and sale of Fund shares and provision of transfer agency, dividend
disbursing agency, and registrar services, and services furnished under an
Administrative Services Agreement with ^ IFG discussed below. Services provided
under the Agreement include, but are not limited to: supplying the Company with
officers, clerical staff and other employees, if any, who are necessary in
connection with the Funds' operations; furnishing office space, facilities,
equipment, and supplies; providing personnel and facilities required to respond
to inquiries related to shareholder accounts; conducting periodic compliance
reviews of the Funds' operations; preparation and review of required documents,
reports and filings by ^ IFG's in-house legal and accounting staff (including
the prospectuses, statement of additional information, proxy statements,
shareholder reports, tax returns, reports to the SEC, and other corporate
documents of the Funds), except insofar as the assistance of independent
accountants or attorneys is necessary or desirable; supplying basic telephone
service and other utilities; and preparing and maintaining certain of the books
and records required to be prepared and maintained by the Funds under the 1940
Act. Expenses not assumed by ^ IFG are borne by the Funds.
<PAGE>
As full compensation for its advisory services provided to the Company, ^
IFG receives a monthly fee. The fee is based upon a percentage of each Fund's
average net assets, determined daily as follows: 0.50% on the first $300 million
of each Fund's average net assets; 0.40% on the next $200 million of each Fund's
average net assets; and 0.30% on each Fund's average net assets in excess of
$500 million.
^
Sub-Advisory Agreement. INVESCO Trust serves as sub-adviser to ^ each of
the Funds pursuant to a sub-advisory agreement dated February 28, 1997 (the
"Sub-Agreement") with ^ IFG which was approved on ^ November 6, 1996, by a vote
cast in person by a majority of the directors of the Company, including a
majority of the directors who are not "interested persons" of the Company, ^
IFG, or INVESCO Trust at a meeting called for such purpose. ^ Shareholders of
each of the Funds approved the Sub-Agreement on ^ January 31, 1997, for an
initial term expiring ^ February 28, 1999. Thereafter, the Sub-Agreement may be
continued from year to year as long as each such continuance is specifically
approved by the board of directors of the Company, or by a vote of the holders
of a majority, as defined in the 1940 Act, of the outstanding shares of each of
the Funds. Each such continuance also must be approved by a majority of the
directors who are not parties to the Sub-Agreement or interested persons (as
defined in the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such continuance. The Sub-Agreement may be
terminated at any time without penalty by either party or the Company upon sixty
(60) days' written notice, and terminates automatically in the event of an
assignment to the extent required by the 1940 Act and the rules thereunder.
The Sub-Agreement provides that INVESCO Trust, subject to the supervision
of ^ IFG, shall manage the investment portfolio of each Fund in conformity with
each Fund's investment policies. These management services include: (a) managing
the investment and reinvestment of all the assets, now or hereafter acquired, of
each Fund, and executing all purchases and sales of portfolio securities; (b)
maintaining a continuous investment program for the Funds, consistent with (i)
each Fund's investment policies as set forth in the Company's Articles of
Incorporation, Bylaws, and Registration Statement, as from time to time amended,
under the 1940 Act, and in any prospectus and/or statement of additional
information of the Funds, as from time to time amended and in use under the
Securities Act of 1933 (the "1933 Act"), as amended, and (ii) the Company's
status as a regulated investment company under the Internal Revenue Code of
1986, as amended; (c) determining what securities are to be purchased or sold
for each Fund, unless otherwise directed by the directors of the Company or ^
IFG, and executing transactions accordingly; (d) providing the Funds the benefit
of all of the investment analysis and research, the reviews of current economic
<PAGE>
conditions and trends, and the consideration of long-range investment policy
now or hereafter generally available to investment advisory customers of the
Sub-Adviser; (e) determining what portion of each Fund should be invested in the
various types of securities authorized for purchase by each Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Company action and any other rights pertaining to each Fund's portfolio
securities, shall be exercised.
The Sub-Agreement provides that as compensation for its services, INVESCO
Trust shall receive from ^ IFG, at the end of each month, a fee at the annual
rate of 0.15% of each Fund's average net assets. The Sub-Advisory fee is paid by
^ IFG, NOT the Funds.
Administrative Services Agreement. ^ IFG, either directly or through
affiliated companies, provides certain administrative, sub-accounting, and
recordkeeping services to the Funds pursuant to an Administrative Services
Agreement dated ^ February 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved on ^ November 6, 1996, by a vote cast in
person by all of the directors of the Company, including all of the directors
who are not "interested persons" of the Company or ^ IFG at a meeting called for
such purpose. The Administrative Agreement ^ is for an initial term expiring ^
February 28, 1998 and has been extended by action of the board of directors
until May 15, 1998. The Administrative Agreement may be continued from year to
year as long as each such continuance is specifically approved by the board of
directors of the Company, including a majority of the directors who are not
parties to the Administrative Agreement or interested persons (as defined in the
1940 Act) of any such party, cast in person at a meeting called for the purpose
of voting on such continuance. The Administrative Agreement may be terminated at
any time without penalty by ^ IFG on sixty (60) days' written notice, or by the
Company upon thirty (30) days' written notice, and terminates automatically in
the event of an assignment unless the Company's board of directors approves such
assignment.
The Administrative Agreement provides that ^ IFG shall provide the
following services to the Funds: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Funds; and (B) such sub-accounting, recordkeeping, and administrative services
and functions, which may be provided by affiliates of ^ IFG, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants in
such plans.
As full compensation for services provided under the Administrative
Agreement, each Fund pays a monthly fee to ^ IFG consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% per year of the average net assets of the
Fund.
<PAGE>
Transfer Agency Agreement. ^ IFG also performs transfer agent, dividend
disbursing agent, and registrar services for the Company pursuant to a Transfer
Agency Agreement dated February 28, 1997 which was approved by the board of
directors of the Company, including a majority of the Company's directors who
are not parties to the Transfer Agency Agreement or "interested persons" of any
such party, on ^ November 6, 1996, for an initial term expiring ^ February 28,
1998 and has been extended by action of the board of directors ^ until May 15,
1998. Thereafter, the Transfer Agency Agreement may be continued from year to
year as long as such continuance is specifically approved at least annually by
the board of directors of the Company, or by a vote of the holders of a majority
of the outstanding shares of each of the Funds. Any such continuance also must
be approved by a majority of the Company's directors who are not parties to the
Transfer Agency Agreement or interested persons (as defined by the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such continuance. The Transfer Agency Agreement may be terminated at any time
without penalty by either party upon sixty (60) days' written notice and
terminates automatically in the event of assignment.
The Transfer Agency Agreement provides that the Company shall pay to ^ IFG
an annual fee of $27.00 per shareholder account or, where applicable, per
participant in an omnibus account ^ per year. This fee is paid monthly at 1/12
of the annual fee and is based upon the actual number of shareholder accounts ^
and omnibus account participants in existence at any time during each month.
<PAGE>
Set forth below are ^ the advisory fees, administrative ^ fees and
transfer agency fees paid by each of the Funds for the periods indicated:
^ INVESCO U.S. Government Money Fund
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
May 31, ^ 1997 May 31, 1996 May 31, 1995
----------------- ----------------- -----------------
^ Advisory Fee(1) $426,139 $377,802 $338,959
Administrative
Services Fee 22,784 21,334 20,169
Transfer Agency Fee 339,383 280,826 273,251
- ----------------
(1) These amounts do not reflect the voluntary expense limitations applicable
to the Funds described in the Funds' Prospectus.
INVESCO Cash Reserves Fund
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
May 31, 1997 May 31, 1996 May 31, 1995
----------------- ----------------- -----------------
Advisory Fee(1) $2,978,520 $2,739,278 $2,931,431 ^
Administrative
Services Fee 118,983 106,900 116,614 ^
Transfer Agency Fee 2,995,219 2,445,244 2,333,326
^-----------------
^(1) These amounts do not reflect the voluntary expense limitations applicable
to the Funds described in the Funds' Prospectus.
<PAGE>
INVESCO Tax-Free Money Fund
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
May 31, 1997 May 31, 1996 May 31, 1995
----------------- ----------------- -----------------
^
Advisory Fee(1) $282,216 $286,046 ^ 359,656
Administrative
Services Fee 18,463 18,582 20,789 ^
Transfer Agency Fee 174,207 177,342 203,616 ^
- --------------
(1) These amounts do not reflect the voluntary expense limitations applicable
to the Funds described in the Funds' Prospectus. ^
<PAGE>
Officers and Directors of the ^ Company. The overall direction and
supervision of the Company is the responsibility of the board of directors,
which has the primary duty of seeing that the general investment policies and
programs of each of the Funds are carried out and that the Funds' portfolios are
properly administered. The officers of the Company, all of whom are officers and
employees of, and are paid by, ^ IFG, are responsible for the day-to-day
administration of the Company and each of the Funds. The investment adviser for
the Company has the primary responsibility for making investment decisions on
behalf the Company. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of the Company hold comparable positions
with INVESCO ^ Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics
Fund, Inc.), INVESCO ^ Diversified Funds, Inc., INVESCO Emerging Opportunity
Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable
Investment Funds, Inc. All of the directors of the Company also serve as
trustees of INVESCO Value Trust. In addition, all of the directors of the
Company ^, with the exception of ^ Dan Hesser, serve as trustees of INVESCO
Treasurer's Series Trust. All of the officers of the Company also hold
comparable positions with INVESCO Value Trust. Set forth below is information
with respect to each of the Company's officers and directors. Unless otherwise
indicated, the address of the directors and officers is Post Office Box 173706,
Denver, Colorado 80217-3706. Their affiliations represent their principal
occupations during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of ^ AMVESCAP PLC, London, England, and of various subsidiaries
thereof. Chairman of the Board of INVESCO ^ Treasurer's Series Trust^. Address:
1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Treasurer's Series Trust. Trustee of ^ INVESCO Global Health Sciences Fund.
Formerly, Chairman of the Executive Committee and Chairman of the Board of
Security Life of Denver Insurance Company, Denver, Colorado; Director of ING
America Life Insurance Company, Urbaine Life Insurance Company and Midwestern
United Life Insurance Company. Address: Security Life Center, 1290 Broadway,
Denver, Colorado. Born: January 12, 1928.
DAN J. HESSER,+* President, CEO and Director. Chairman of the Board,
President, and Chief Executive Officer of INVESCO Funds Group, Inc.; President
and Director of INVESCO Trust Company^; President and Chief Operating Officer of
INVESCO Global Health Sciences Fund. Born: December 27, 1939.
VICTOR L. ANDREWS,** Director. Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance at Georgia State
University, Atlanta, Georgia; President, Andrews Financial Associates, Inc.
(consulting firm); since October 1984, Director of the Center for the Study of
Regulated Industry at Georgia State University; formerly, member of the
<PAGE>
faculties of the Harvard Business School and the Sloan School of Management of
MIT. Dr. Andrews is also a director of the Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19
Kingsbridge Way, Madison, Connecticut. Born: August 1, 1923.
^
KENNETH T. KING,** Director. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# Director. Retired. Formerly, Vice Chairman of the Board
of Directors of the Citizens and Southern Corporation and Chairman of the Board
and Chief Executive Officer of the Citizens and Southern Georgia Corporation and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of ^ INVESCO Global Health Sciences Fund and Gables Residential Trust.
Address: ^ 7 Piedmont Center, Suite 100, Atlanta, Georgia 30305. Born: September
14, 1930.
LARRY SOLL, Ph.D., Director. Formerly, Chairman of the Board (1987 to
1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President
(1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in
1982. Director of ISD Pharmaceuticals, Inc., Trustee of INVESCO Global Health
Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26,
1942.
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company^;
Vice President (May 1989 to April 1995), Secretary and General Counsel of
INVESCO Funds Group, Inc.; formerly, employee of a U.S. regulatory agency,
Washington, D.C., (June 1973 through May 1989). Born: September 25, 1947.
<PAGE>
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company ^ since
July 1995 and formerly (August 1992 to July 1995) Vice President of INVESCO
Funds Group, Inc. and trust officer of INVESCO Trust Company. Formerly,Vice
President of 440 Financial Group from June 1990 to August 1992; Assistant Vice
President of Putnam Companies from November 1986 to June 1990. Born: August 21,
1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Company.
+Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Company as defined in the
1940 Act.
**Member of the management liaison committee of the Company.
As of ^ July 11, 1997, officers and directors of the Company, as a group,
beneficially owned less than ^ 1% of the Company's outstanding shares, and less
than ^ 1%, 1% and ^ 2%, respectively, of the outstanding shares of the INVESCO ^
U.S. Government Money Fund, Cash Reserves Fund and the ^ Tax-Free Money Fund.
Director Compensation
- ---------------------
The following table sets forth, for the fiscal year ended May 31, ^ 1997:
the compensation paid by the Fund to its eight independent directors for
services rendered in their capacities as directors of the ^ Funds; the benefits
accrued as Fund expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these directors upon retirement as a result of their service to the
Fund. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Funds Group, Inc. (including the Funds),
INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and ^ INVESCO
Global Health Sciences Fund (collectively, the "INVESCO Complex") to these
<PAGE>
directors for services rendered in their capacities as directors or trustees
during the year ended December 31, ^ 1996. As of December 31, ^ 1996, there were
^ 49 funds in the INVESCO Complex. Dr. Soll became an independent director of
the Company effective May 15, 1997.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Company Upon Paid To
Company(1) Expenses(2) Retirement(3) Directors(1)
Fred A.Deering, ^ $5,567 $1,611 $1,569 $98,850
Vice Chairman of
the Board
Victor L. Andrews ^ 5,468 1,523 1,816 84,350
Bob R. Baker ^ 5,609 1,360 2,434 84,850
Lawrence H. Budner ^ 5,328 1,523 1,816 80,350
Daniel D. Chabris ^ 5,447 1,738 1,291 84,850
A. D. Frazier, Jr.(4) ^ 2,305 0 0 81,500
Kenneth T. King 4,782 1,673 1,423 71,350
John W. McIntyre 5,225 0 0 90,350
Larry Soll 1,078 0 0 17,500
------- ------ ------- --------
Total $40,809 $9,428 $10,349 $693,950
% of Net Assets 0.0050%(5) 0.0011%(5) 0.0045%(6)
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
<PAGE>
(3)These figures represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ INVESCO Global Health
Sciences Fund which does not participate in any retirement plan) upon the ^
directors' retirement, calculated using the current method of allocating
director compensation among the funds in the INVESCO Complex. These estimated
benefits assume retirement at age 72 and that the basic retainer payable to the
directors will be adjusted periodically for inflation, for increases in the
number of funds in the INVESCO Complex, and for other reasons during the period
in which retirement benefits are accrued on behalf of the respective directors.
This results in lower estimated benefits for directors who are closer to
retirement and higher estimated benefits for directors who are further from
retirement. With the exception of Messrs. Frazier and McIntyre, each of these
directors has served as a director/trustee of one or more of the funds in the
INVESCO Complex for the minimum five-year period required to be eligible to
participate in the Defined Benefit Deferred Compensation Plan.
^ (4)Effective February 28, 1997, Mr. Frazier resigned as a director of the
Company. Effective November 1, 1996, Mr. Frazier was employed by AMVESCAP PLC, a
company affiliated with ^ IFG. Because it was possible that Mr. Frazier would be
employed with AMVESCAP PLC, he was deemed to be an ^"interested person^" of the
Company and of the other funds in the INVESCO Complex, effective May 1, 1996. ^
Effective November 1, 1996, Mr. Frazier no longer received any director's fees
or other compensation from the Company or other funds in the INVESCO Complex for
his service as a director.
^ (5)Totals as a percentage of the Company's net assets as of May 31, ^
1997.
^ (6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
Messrs. Brady^ and Hesser, as "interested persons" of the Company and
other funds in the INVESCO Complex, receive compensation as officers or
employees of INVESCO or its affiliated companies, and do not receive any
director's fees or other compensation from the Company or other funds in the
INVESCO Complex for their services as directors.
The boards of directors/trustees of the mutual funds managed by ^ IFG and
INVESCO Treasurer's Series Trust have adopted a Defined Benefit Deferred
Compensation Plan for the non-interested directors and trustees of the funds.
Under this plan, each director or trustee who is not an interested person of the
funds (as defined in the 1940 Act) and who has served for at least five years (a
"qualified director") is entitled to receive, upon retiring from the boards at
the retirement age of 72 (or the retirement age of 73 to 74, if the retirement
date is extended by the boards for one or two years, but less than three years)
continuation of payment for one year (the "first year retirement benefit") of
the annual basic retainer payable by the funds to the qualified director at the
time of his retirement (the "basic retainer"). Commencing with any such ^
director's second year of retirement, and commencing with the first year of
retirement of a director whose retirement has been extended by the board for
three years, a qualified director shall receive quarterly payments at an annual
<PAGE>
rate equal to ^ 40% of the basic retainer. These payments will continue for the
remainder of the qualified director's life or ten years, whichever is longer
(the "reduced retainer payments"). If a qualified director dies or becomes
disabled after age 72 and before age 74 while still a director of the funds, the
first year retirement benefit and the reduced retainer payments will be made to
him or to his beneficiary or estate. If a qualified director becomes disabled or
dies either prior to age 72 or during his/her 74th year while still a director
of the funds, the director will not be entitled to receive the first year
retirement benefit; however, the reduced retainer payments will be made to his
beneficiary or estate. The plan is administered by a committee of three
directors who are also participants in the plan and one director who is not a
plan participant. The cost of the plan will be allocated among the ^ IFG and
Treasurer's Series Trust funds in a manner determined to be fair and equitable
by the committee. The Company is not making any payments to directors under the
plan as of the date of this Statement of Additional Information. The Company has
no stock options or other pension or retirement plans for management or other
personnel and pays no salary or compensation to any of its officers.
The Company has an audit committee which is comprised of four of the
directors who are not interested persons of the Company. The committee meets
periodically with the Company's independent accountants and officers to review
accounting principles used by the Company, the adequacy of internal controls,
the responsibilities and fees of the independent accountants, and other matters.
The Company also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Company, and (b) to review
legal and operational matters which have been assigned to the committee by the
board of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
- ---------------------------
^ Shares of the Funds are sold on a continuous basis at the net asset value
per share next calculated after receipt of a purchase order in good form. The
net asset value per share for each Fund is computed once each day that the New
York Stock Exchange is open as of the close of regular trading on that Exchange,
but also may be computed at other times. See "How Shares Are Valued." ^ IFG acts
as the Funds' Distributor under a distribution agreement with the Company under
which it receives no compensation and bears all expenses, including the costs of
printing and distributing prospectuses, incident to direct sales and
distribution of each of the Fund's shares on a no-load basis.
HOW SHARES ARE VALUED
- ---------------------
As described in the section of the Funds' ^ Prospectus entitled "How To Buy
Shares," the net asset value of shares of each Fund is computed once each day
that the New York Stock Exchange is open as of the close of regular trading on
that Exchange (usually 4:00 p.m., New York time) and applies to purchase and
<PAGE>
redemption orders received prior to that time. Net asset value per share is
also computed on any other day on which there is a sufficient degree of trading
in the portfolio securities held by a Fund that the current net asset value per
share might be materially affected by changes in the value of the securities
held, but only if on such day the Fund receives a request to purchase or redeem
shares. Net asset value per share is not calculated on days the New York Stock
Exchange is closed such as federal holidays, including New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
The net asset value per share of each Fund is calculated by dividing the
value of all securities held by that Fund and its other assets, less the Fund's
liabilities (including accrued expenses), by the number of outstanding shares of
that Fund.
The value of securities held by ^ the Funds are determined pursuant to the
amortized cost method of valuation. Amortized cost involves valuing a security
at its cost at the time of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates upon the market value of the security. This valuation
method may result in periods during which the value of a security as determined
by amortized cost may be higher or lower than the price a Fund would receive if
it sold that security. During such periods, a Fund's yield may differ somewhat
from the yield that would have been obtained if securities were valued on the
basis of their market prices. For example, if use of amortized cost resulted in
a lower (or higher) aggregate portfolio value on a particular day than would
result from the use of a valuation method using market prices, a prospective
investor in the Fund would be able to obtain a somewhat higher (or lower) yield
than would otherwise be the case, and existing shareholders would receive less
(or more) investment income. Amortized cost valuation is utilized by each Fund
to attempt to maintain a constant net asset value per share of $1.00.
Each Fund uses amortized cost valuation pursuant to a rule issued by the
Securities and Exchange Commission under the 1940 Act. That rule requires each
Fund to adhere to various procedures under which the board of directors: (a) is
obligated, as a particular responsibility within the overall duty of care owed
to shareholders, to establish procedures reasonably designed, taking into
account current market conditions and each Fund's investment objective, to
stabilize the net asset value per share as computed for the purpose of
distribution and redemption at $1.00 per share; (b) must review periodically, as
it deems appropriate and at such intervals as are reasonable in light of current
market conditions, the relationship between the net asset value per share using
amortized cost valuation and net asset value per share based upon the market
prices of portfolio securities; (c) is required to consider what steps, if any,
should be taken in the event of a difference of more than 1/2 of 1% between the
two valuation methods; and (d) must take such steps as it considers appropriate
(such as shortening the Fund's average portfolio maturity, realizing gains or
<PAGE>
losses, or reducing the Fund's daily dividends) to minimize any material
dilution or other unfair results which might otherwise arise. If necessary to
avoid such dilution or other unfair results, the board of directors may
determine to value a Fund's securities at market prices instead of using
amortized cost, in which case that Fund's net asset value per share may deviate
from $1.00.
With respect to the ^ Tax-Free Money Fund, for purposes of monitoring the
relationship between the net asset value per share using amortized cost and net
asset value per share based upon the market value of its portfolio securities,
the Fund may determine the market values of municipal securities (including
commitments to purchase such securities on a when-issued basis) on the basis of
prices provided by a pricing service which uses information with respect to
transactions in municipal obligations, quotations from dealers in municipal
obligations, market transactions in comparable securities and various
relationships between securities in determining values. The Company's directors
have approved the use of these pricing procedures and will evaluate their
appropriateness periodically. Under these procedures, where reliable market
quotations are readily available for an issue of municipal securities held by
the Fund, such securities are valued at the bid price on the basis of such
quotations. Securities which are not tax-exempt and for which market quotations
are readily available are valued on a consistent basis at market value based
upon such quotations; any securities for which market quotations are not readily
available and other assets would be valued on a consistent basis at fair value
as determined in good faith using methods prescribed by the Company's board of
directors.
^ FUND PERFORMANCE
- ------------------
As discussed in the Funds' ^ Prospectus, the Company advertises the yield,
current yield and total return performance of the Funds. These yield quotations
are based on each Fund's investment results during the latest seven ^ day
period, computed by determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account having a balance of one share
at the beginning of the period, dividing the net change in account value by the
value of the account at the beginning of the base period to obtain the base
period return, and multiplying the base period return by 365/7. The Funds also
may quote an "effective yield," computed by compounding the unannualized base
period return by adding one to that figure, raising the sum to a power equal to
365 divided by 7, and subtracting one from the result. At May 31, ^ 1997, the
INVESCO ^ U.S. Government Money Fund's current and effective yields were ^ 4.61%
and ^ 4.72%, respectively; the INVESCO ^ Cash Reserves Fund's current and
effective yields were ^ 4.87% and ^ 4.99%, respectively; and the INVESCO ^
Tax-Free Money Fund's current and effective yields were ^ 3.39% and ^ 3.45%,
respectively.
<PAGE>
Current yield and effective yield will fluctuate from day to day and are
not necessarily representative of future results. A shareholder should remember
that yield is a function of the kind and quality of the instruments in a Fund's
portfolio, portfolio maturity and operating expenses. A number of factors should
be taken into account before using yield information as a basis for comparison
with alternative investments. An investment in a Fund is not insured and its
yield is not guaranteed.
With respect to ^ Tax-Free Money Fund, any tax equivalent yield quotation
of the Fund shall be calculated as follows: If the entire current yield
quotation for such period is tax-exempt, the tax equivalent yield will be the
current yield quotation divided by one minus a stated income tax rate or rates.
If a portion of the current yield quotation is not tax exempt, the tax
equivalent yield will be the sum of (a) that portion of the yield which is
tax-exempt divided by one minus a stated income tax rate or rates and (b) the
portion of the yield which is not tax-exempt.
Average annual total return performance for each of the Funds for the
indicated periods ended May 31, ^ 1997 was as follows:
1 5 10
Fund Year Years Years
- ---- ---- ----- -----
Cash Reserves Fund ^ 4.69 3.93 5.42
Tax-Free Money Fund ^ 2.90 2.55 3.57
U.S. Gov't Money Fund ^ 4.57 3.84 3.87#
# From inception ^(April 1991).
Average annual total return performance for each of the periods indicated
was computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV
where: P = initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period and Fund
indicated.
In conjunction with performance reports, comparative data between any of
the Fund's performance for a given period and other types of investment
vehicles, including certificates of deposit, may be provided to prospective
investors and shareholders.
<PAGE>
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
Funds. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
The Wall Street Journal
Wiesenberger Investment Companies Service
Working Woman
Worth
SERVICES PROVIDED BY THE FUNDS
- ------------------------------
Periodic Withdrawal Plan. As described in the section of ^ the Funds'
Prospectus entitled ^"How To Sell Shares," each Fund offers a Periodic
Withdrawal Plan. All dividends and distributions on shares owned by shareholders
participating in this Plan are reinvested in additional shares. ^ Because
withdrawal payments represent the proceeds from sales of shares, the amount of
shareholders' investments in ^ a Fund will be reduced to the extent that
<PAGE>
withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment, and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such Plan do not represent income or a return
on investment.
^ Participation in the Periodic Withdrawal Plan may be terminated at any
time by directing a written request to INVESCO. Upon termination, all future
dividends and capital gain distributions will be reinvested in additional shares
unless a shareholder requests otherwise.
Exchange Privilege. As discussed in the section of ^ the Funds' Prospectus
entitled ^"How to Buy Shares -- Exchange Privilege," each Fund offers
shareholders the privilege of exchanging shares of ^ a Fund for shares of
certain other mutual funds advised by ^ IFG. Exchange requests may be made
either by telephone or by written request to INVESCO Funds Group, Inc. using the
telephone number or address on the cover of this Statement of Additional
Information. Exchanges made by telephone must be in an amount of at least $250,
if the exchange is being made into an existing account of one of the INVESCO
funds. All exchanges that have established a new account must meet the fund's
applicable minimum initial investment requirements. Written exchange requests
into an existing account have no minimum requirements other than the fund's
applicable minimum subsequent investment requirements. Any gain or loss realized
on such an exchange is recognized for federal income tax purposes. This
privilege is not an option or right to purchase securities, but is a revocable
privilege permitted under the present policies of each of the funds and is not
available in any state or other jurisdiction where the shares of the mutual fund
into which transfer is to be made are not qualified for sale, or when the net
asset value of the shares presented for exchange is less than the minimum dollar
purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
- -----------------------------
As described in the section of the Funds' ^ Prospectus entitled ^"Fund
Services," shares of the ^ U.S. Government Money Fund and Cash Reserves Fund may
be purchased as the investment medium for various tax-deferred retirement plans.
Persons who request information regarding these plans from ^ IFG will be
provided with prototype documents and other supporting information regarding the
type of plan requested. Each of these plans involves a long-term commitment of
assets and is subject to possible regulatory penalties for excess contributions,
premature distributions or for insufficient distributions after age 70-1/2. The
legal and tax implications may vary according to the circumstances of the
individual investor. Therefore, the investor is urged to consult with an
attorney or tax adviser prior to the establishment of such a plan.
<PAGE>
HOW TO REDEEM SHARES
- --------------------
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
each Fund's Prospectus entitled "How to ^ Sell Shares." The right of redemption
may be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
a particular Fund of securities owned by it is not reasonably practicable or it
is not reasonably practicable for a particular Fund fairly to determine the
value of its net assets; or (d) the SEC by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Company's investment adviser, make it undesirable for a Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Company is obligated under the 1940 Act to redeem for cash
all shares of a Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
DIVIDENDS AND TAXES
- -------------------
Each Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. Each of the Funds so qualified in the fiscal
year ended May 31, ^ 1997 and intends to continue to qualify during ^ its
current fiscal year. As a result, it is anticipated that the Funds will pay no
federal income taxes and will be accorded conduit or "pass through" treatment
for federal income tax purposes.
With respect to ^ U.S. Government Money Fund and Cash Reserves Fund, all
dividends are regarded as taxable to the investor, whether or not such dividends
are reinvested in additional shares. Dividends paid by these Funds from net
investment income are for federal income tax purposes taxable as ordinary income
to shareholders. The Funds' investment objectives and policies, including their
policy of maintaining a constant net asset value of $1.00, make it unlikely that
any future capital gains will be realized.
<PAGE>
^ A portion of any dividend distributions from ^ U.S. Government Money
Fund may be subject to applicable state and local taxes. Dividends from Cash
Reserves Fund generally will be subject to applicable state and local taxes.
As discussed in the Prospectus, the ^ Tax-Free Money Fund intends to
qualify to pay "exempt-interest dividends" to its shareholders. The Fund will so
qualify if at least 50% of its total assets are invested in municipal securities
at the close of each quarter of that Fund's fiscal year. The exempt interest
portion of the income dividend which is payable monthly may be based on the
ratio of that Fund's tax-exempt income to taxable income for the entire fiscal
year. In such a case, the ratio would be determined and reported to shareholders
after the close of each fiscal year of the Fund. Thus, the tax-exempt portion of
any particular dividend may be based upon the tax-exempt portion of all
distributions for the year, rather than upon the tax-exempt portion of that
particular dividend. Exemption of exempt-interest dividends for federal income
tax purposes does not necessarily result in exemption under the income or other
tax laws of any state or local taxing authority. Although these dividends
generally will be subject to such state and local taxes, the laws of the several
states and local taxing authorities vary with respect to the taxation of such
exempt-interest dividends, other dividends and distributions of capital gains.
In addition, interest on indebtedness incurred or continued by a shareholder to
purchase or carry shares of this Fund is not deductible for federal income tax
purposes. Shareholders of the ^ Tax-Free Money Fund are advised to consult their
own tax advisers with respect to these matters.
As discussed in the ^ Prospectus, certain corporations which are subject
to the alternative minimum tax may have to include exempt-interest dividends in
calculating their alternative taxable income in situations where the "adjusted
current earnings" of the corporation exceeds its alternative minimum taxable
income. In addition, to the extent that the Fund invests in certain "private
activity bonds" issued after August 7, 1986, a portion of exempt-interest
dividends attributable to such bonds would be an item of tax preference to
shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Qualification as a regulated
investment company under the Internal Revenue Code of 1986, as amended for
income tax purposes does not entail government supervision of management or
investment policies.
INVESTMENT PRACTICES
- --------------------
Portfolio Turnover. As a general practice, each Fund intends to hold
securities purchased until maturity. Where Fund Management deems it advisable in
light of prevailing market or business conditions, however, the Funds may
dispose of securities prior to maturity and reinvest on the basis of yield
disparities. There is no assurance that the judgment upon which such a technique
is premised will be accurate or that such technique when employed will be
effective. Due to the short maturities of securities purchased and the intention
<PAGE>
to invest and reinvest on the basis of yield disparities, each Fund is expected
to have a high portfolio turnover. This should not affect income or net asset
value, since brokerage commissions are not normally charged on the purchase and
sale of securities of the kind in which the Funds may invest. Such transactions
may, however, involve transaction costs in the form of spreads between bid and
asked prices.
Placement of Portfolio Brokerage. Either ^ IFG, as the Company's investment
adviser, or INVESCO Trust, as the Company's sub-adviser, places orders for the
purchase and sale of securities with brokers and dealers based upon ^ IFG's or
INVESCO Trust's evaluation of their financial responsibility, subject to their
ability to effect transactions at the best available prices. Fund Management
evaluates the overall reasonableness of any brokerage commissions paid by
reviewing the quality of executions obtained on each Fund's portfolio
transactions, viewed in terms of the size of transactions, prevailing market
conditions in the security purchased or sold and general economic and market
conditions. In seeking to ensure that any commissions charged the Fund are
consistent with prevailing and reasonable commissions, Fund Management also
endeavors to monitor brokerage industry practices with regard to the commissions
charged by brokers and dealers on transactions effected for other comparable
institutional investors. While Fund Management seeks reasonably competitive
rates, the Funds do not necessarily pay the lowest commission or spread.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, Fund Management may select brokers that provide research
services to effect such transactions. Research services consist of statistical
and analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to Fund Management in
making informed investment decisions. Research services prepared and furnished
by brokers through which the Funds effect securities transactions may be used by
Fund Management in servicing all of their respective accounts and not all such
services may be used by Fund Management in connection with the Funds.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, Fund Management, consistent with the
standard of seeking to obtain the best execution on portfolio transactions, may
place orders with such brokers for the execution of transactions for the Funds
on which the ^ mark-ups are in excess of those which other brokers might have
charged for effecting the same transactions.
Portfolio transactions may be effected through qualified broker-dealers
who recommend the Funds to their clients, or who act as agent in the purchase of
any of the Funds' shares for their clients. When a number of brokers and dealers
can provide comparable best price and execution on a particular transaction, the
Company's adviser may consider the sale of Fund shares by a broker or dealer in
selecting among qualified broker-dealers.
<PAGE>
No brokerage commissions on purchases and sales of portfolio securities
were incurred for the fiscal years ended May 31, 1997, 1996^ and 1995 ^ for the
Funds.
At May 31, ^ 1997, the Funds held securities of their regular brokers or
dealers, or their parents, as follows:
Value of Securities
- -------------------
Value at
Broker or Dealer ^ 5/31/97
- ---------------- ---------
^ U.S. Government Money Fund -0-
Cash Reserves Fund $113,985,000 ^
Tax-Free Money Fund -0-^
^ Neither IFG nor INVESCO Trust receives any brokerage commissions on
portfolio transactions effected on behalf of any of the Funds, and there is no
affiliation between ^ IFG, INVESCO Trust, or any person affiliated with ^ IFG,
INVESCO Trust, or the Funds, and any broker or dealer that executes transactions
for the Funds.
ADDITIONAL INFORMATION
- ----------------------
Common Stock. The Company has 10,000,000,000 authorized shares of common
stock with a par value of $0.01 per share. Of the Company's authorized shares,
5,000,000,000 shares have been allocated to INVESCO Cash Reserves Fund and
1,000,000,000 shares have been allocated to each of INVESCO Tax-Free Money Fund
and INVESCO U.S. Government Money Fund. As of May 31, ^ 1997, 661,647,800 shares
of the Cash Reserves Fund, ^ 47,577,125 shares of the Tax-Free Money Fund and ^
66,451,479 shares of the U.S. Government Money Fund were outstanding. All shares
issued and outstanding are, and all shares offered hereby, when issued, will be,
fully paid and nonassessable. The board of directors has the authority to
designate additional classes of common stock without seeking the approval of
shareholders and may classify and reclassify any authorized but unissued shares.
Shares of each class represent the interests of the shareholders of such
class in a particular portfolio of investments of the Company. Each class of the
Company's shares is preferred over all other classes in respect of the assets
specifically allocated to that class, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
<PAGE>
allocated to shares of that class. The assets of each class are segregated on
the books of account and are charged with the liabilities of that class and with
a share of the Company's general liabilities. The board of directors determines
those assets and liabilities deemed to be general assets or liabilities of the
Company, and these items are allocated among classes in a manner deemed by the
board to be fair and equitable. Generally, such allocation will be based upon
the relative total net assets of each class. In the unlikely event that a
liability allocable to one class exceeds the assets belonging to the class, all
or a portion of such liability may have to be borne by the holders of shares of
the Company's other classes.
All shares, regardless of class, have equal voting rights. Voting with
respect to certain matters, such as ratification of independent accountants or
election of directors, will be by all classes of the Company. When not all
classes are affected by a matter to be voted upon, such as approval of an
investment advisory contract or changes in a Fund's investment policies, only
shareholders of the class affected by the matter may be entitled to vote.
Company shares have noncumulative voting rights, which means that the holders of
a majority of the shares voting for the election of directors can elect 100% of
the directors if they choose to do so. In such event, the holders of the
remaining shares voting for the election of directors will not be able to elect
any person or persons to the board of directors. After they have been elected by
shareholders, the directors will continue to serve until their successors are
elected and have qualified or they are removed from office, in either case by a
shareholder vote, or until death, resignation, or retirement. They may appoint
their own successors, provided that always at least a majority of the directors
have been elected by the Company's shareholders. It is the intention of the
Company not to hold annual meetings of shareholders. The directors will call
annual or special meetings of shareholders for action by shareholder vote as may
be required by the Investment Company Act of 1940 or the Company's Articles of
Incorporation, or at their discretion.
Principal Shareholders. As of ^ June 30, 1997, there were no entities that
held more than 5% of the Funds' outstanding securities:
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the
Company. The independent accountants are responsible for auditing the financial
statements of the Company.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Company. The bank is also responsible for, among other things,
receipt and delivery of each Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement.
Transfer Agent. The Company is provided with transfer agent, registrar,
and dividend disbursing agent services by ^ IFG, 7800 E. Union Avenue, Denver,
Colorado 80237, pursuant to the Transfer Agency Agreement described ^ herein.
<PAGE>
Such services include the issuance, cancellation and transfer of shares of each
of the Funds and the maintenance of records regarding the ownership of such
shares.
Reports to Shareholders. The Company's fiscal year ends on May 31. The
Fund distributes reports at least semiannually to its shareholders. Financial
statements regarding the Company, audited by the independent accountants, are
sent to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Company. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Company.
Financial Statements. The Funds' audited financial statements and the
notes thereto for the fiscal year ended May 31, ^ 1997 and the report of Price
Waterhouse LLP with respect to such financial statements are incorporated herein
by reference from the Company's Annual Report to Shareholders for the fiscal
year ended May 31, ^ 1997.
^ Prospectus. The Company will furnish, without charge, a copy of the ^
Prospectus for ^ the Funds, upon request. ^ Such requests should be made to the
Company at the mailing address or telephone number set forth on the first page
of this Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the ^
Prospectus do not contain all of the information set forth in the Registration
Statement the Company has filed with the Securities and Exchange Commission. The
complete Registration Statement may be obtained from the Securities and Exchange
Commission upon payment of the fee prescribed by the rules and regulations of
the Commission.
<PAGE>
APPENDIX A
- ----------
BOND AND COMMERCIAL PAPER RATINGS.
- ---------------------------------
INVESCO Cash Reserves Fund and INVESCO Tax-Free Money Fund are required to
limit their investments to instruments which the board of directors determines
present minimal credit risks and which are rated by at least two nationally
recognized securities rating organizations ("NRSROs"), or one NRSRO if such
instruments are only rated by one NRSRO, in one of the two highest rating
categories (or in comparable unrated securities). The highest rating categories
for ^ S&P and Moody's ^ are AAA and Aaa, respectively; the second highest rating
categories provided by S&P and Moody's are AA and Aa, respectively.
Bond Ratings. Bonds which are rated Aaa by Moody's are judged to be of the
best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Bonds which are rated Aa by Moody's are judged to be of high quality by
all standards. Together with the Aaa group, they comprise what is generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation of
the protective elements may be greater, or there may be other elements present
which make the long-term risks appear somewhat larger than Aaa rated securities.
Bonds rated AAA by ^ S&P are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest. Market-wise, they
move with interest rates and hence provide the maximum safety on all counts.
Bonds rated AA by S&P also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in small degree. Here, too,
prices move with the long-term money market.
Moody's Ratings of Municipal Notes. MIG-1: the best quality. MIG-2: high
quality, with ample margins of protection, although not as large as in the
preceding group.
Commercial Paper Ratings. ^ S&P's quality ratings of the issuer are graded
into six classifications, ranging from A-1 for the highest quality designation
down to A-2, A-3, B, C and D for the lowest.
The requirements a company must meet to qualify for an A rating are as
follows: Liquidity ratios are adequate to meet cash requirements. Long-term
senior debt is rated "A" or better, although in some cases "BBB" credits may be
allowed. The issuer has access to at least two additional channels of borrowing.
Basic earnings and cash flow have an upward trend with allowance made for
unusual circumstances. Typically, the issuer's industry is well established
<PAGE>
and the issuer has a strong position within the industry. The reliability
and quality of management are unquestioned.
Moody's rates commercial paper pursuant to the following graded rating
classification system in order to suggest a more precise delineation of the
relative risks involved in different issues: Prime-1; Prime-2; Prime-3; and Not
rated. The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the management
of obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in ^ Prospectus (Part A):
Financial Highlights for INVESCO U.S. 9
Government Money Fund for the years
ended May 31, 1997, 1996, 1995 and 1994,
the five-month period ended May 31, 1993,
the year ended December 31, 1992 and for
the period from commencement of operations
(April 26, 1991) to December 31, 1991.
Financial Highlights for INVESCO Cash 11
Reserves Fund for the years ended May 31,
1997, 1996, 1995 and 1994, the four-month
period ended May 31, 1993 and for each
of the ^ six years in the period ended
January 31, 1993.
Financial Highlights for INVESCO Tax-Free 13
Money Fund for the years ended May 31,
1997, 1996, 1995 and 1994, the one-month
period ended May 31, 1993 and for each
of the ^ six years in the period ended
April 30, 1993.
^
(2) The following audited financial
statements of the ^ U.S. Government
Money Fund, the Cash Reserves Fund,
and the Tax-Free Money Fund and the
notes thereto for the fiscal year
ended May 31, ^ 1997 and the report
of Price Waterhouse LLP with
respect to such financial
statements are incorporated in the
Statement of Additional Information
by reference from the Company's
Annual Report to Shareholders for
the fiscal year ended May 31, ^
1997: Statement of Investment
Securities for INVESCO Money Market
<PAGE>
Funds, Inc. as of May 31, ^ 1997;
Statement of Assets and Liabilities
for INVESCO Money Market Funds, Inc.
as of May 31, ^ 1997; Statement of
Operations for INVESCO Money Market
Funds, Inc. for the year ended May 31,
^ 1997; Statement of Changes in
Net Assets for INVESCO Money Market
Funds, Inc. for the periods indicated;
Financial Highlights for each of the
three Funds for the periods indicated
above.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted
as all information has been
presented in the financial
statements.
(b) Exhibits:
(1) Articles of Incorporation
^(Charter).
(2) ^ Bylaws.
(3) Not applicable.
(4) ^ Not required to be
filed on EDGAR.
(5) (a) Investment Advisory
Agreement between
the Company and
INVESCO Funds Group,
Inc. dated ^
February 28, 1997.
(b) Sub-Advisory Agreement
between INVESCO Funds
Group, Inc. and INVESCO
Trust Company dated ^
February 28, 1997.
(6) General Distribution Agreement
dated ^ February 28, 1997.
<PAGE>
(7) Amended Defined Benefit
Deferred Compensation Plan for
Non-Interested Directors and ^
Trustees.
(8) Custody Agreement between
Registrant and State Street
Bank and Trust Company dated
July 1, ^ 1993.
(a) Additional Fund Letter
Agreement dated January
20, 1994 to Custody
Agreement.
(b) Amendment dated October
25, 1995 to Custody
Agreement.
(c) Data Access Addendum to
Custody Agreement.
(9) (a) Transfer Agency Agreement
between Registrant and
INVESCO Funds Group, Inc.
dated February 28, 1997.
^
(b) Administrative Services
Agreement between the
Company and INVESCO
Funds Group, Inc.,
dated ^ February 28, 1997.
(10) Opinion and consent of counsel
as to each of the three Funds
as to the legality of the
securities being registered,
indicating whether they will,
when sold, be legally issued,
fully paid and non-assessable,
dated June 4, ^ 1993.
(11) Consent of Independent
Accountants.
(12) Not applicable.
(13) Not applicable.
<PAGE>
(14) Copies of model plans used in
the establishment of
retirement plans as follows:
Non-standardized Profit
Sharing Plan; Non-standardized
Money Purchase Pension Plan;
Standardized Profit Sharing
Plan Adoption Agreement;
Standardized Money Purchase
Pension Plan; Non-standardized
401(k) Plan Adoption
Agreement; Standardized 401
^(k) Paired Profit Sharing
Plan; Standardized Simplified
Profit Sharing Plan;
Standardized Simplified Money
Purchase Plan; Defined
Contribution Master Plan &
Trust Agreement; and Financial
403 ^(b) Retirement Plan all
filed with Registration Statement
of INVESCO International Funds,
Inc. (File No. 33-63498), filed
May 27, 1993, and herein
incorporated by reference.
^(15) Not Applicable.
(16) (a) Schedule for computation
of performance data - for
U.S. ^ Government Money
Fund.
(b) Schedule for computation
of performance data for
Cash Reserves Fund.
(c) Schedule for computation
of performance data for
Tax-Free Money Fund.
(d) Schedule for computation
of total return
performance for U.S.
Government Money Fund.
<PAGE>
(e) Schedule for computation
of total return
performance for Cash
Reserves Fund.
(f) Schedule for computation
of total return
performance for Tax-Free
Money Fund.
(17) (a) Financial Data Schedule
for U.S. Government Money
Fund.
(b) Financial Data Schedule
for Cash Reserves Fund.
(c) Financial Data Schedule
for Tax-Free Money Fund.
(18) Not applicable.
^
Item 25. Persons Controlled by or Under Common Control with ^ Registrant
---------------------------------------------------------------
No person is presently controlled by or under common control with
Registrant.
Item 26. Number of Holders of Securities
-------------------------------
Number of Record
Holders as of
Title of Class June 30, 1997 ^
-------------- ----------------
INVESCO U.S. Government Money Fund ^
Beneficial Interest 5,574
INVESCO Cash Reserves Fund
Common Stock 57,005
INVESCO Tax-Free Money Fund
Common Stock 3,721
Item 27. Indemnification
---------------
Indemnification provisions for officers and directors of Registrant
are set forth in Article VII, Section 2 of the Articles of Incorporation, and
<PAGE>
are hereby incorporated by reference. See Item 24(b)(1) above. Under these
Articles, directors and officers will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
Fund directors and officers cannot be protected against liability to the Company
or its shareholders to which they would be subject because of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
their office. The Company also maintains liability insurance policies covering
its directors and officers.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
See "The Funds and Their Management" in the Funds' ^ Prospectus and
in the Statement of Additional Information for information regarding the
business of the investment adviser. For information as to the business,
profession, vocation or employment of a substantial nature of each of the
officers and directors of INVESCO Funds Group, Inc., reference is made to the
Schedule Ds to the Form ADV filed under the Investment Advisers Act of 1940 by
INVESCO Funds Group, Inc., which schedules are herein incorporated by
reference.
Item 29. Principal Underwriters
(a) INVESCO Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, Inc.
^ INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
^
Charles W. Brady Chairman of
1315 Peachtree Street NE the Board
Atlanta, GA 30309
Darryl Celkupa Vice President
7800 E. Union Ave.
Denver, CO 80237
M. Anthony Cox Senior Vice
1315 Peachtree St., N.E. President
Atlanta, GA 30309
^ Robert D. Cromwell Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
^
William J. Galvin, Jr. Senior Vice Asst. Sec.
7800 E. Union Avenue President
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Avenue
Denver, CO 80237
Ronald L. Grooms Senior Vice Treasurer &
7800 E. Union Avenue President Chief Fin'l
Denver, CO 80237 & Treasurer Officer and
Chief Acct
Officer
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
^
Hubert L. Harris, Jr. Director
1315 Peachtree Street, N.E.
Atlanta, GA 30309
^
Dan J. Hesser Chairman of the President, CEO
7800 E. Union Avenue Board, President, & Director
Denver, CO 80237 Chief Executive
Officer & Director
^ Gregory E. Hyde Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
James F. Lummanick Assistant Vice President;
7800 E. Union Avenue Asst. General
Denver, CO 80237 Counsel
^ Charles P. Mayer Director
7800 E. Union Avenue
^ Denver, CO 80237
Robert J. O'Connor Director
^ 1201 Peachtree Street NE
Atlanta, GA ^ 30361
Donald R. Paddock Asst. Vice
7800 E. Union Ave. President
Denver, CO 80237
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel
Pamela J. Piro Asst. Vice
7800 E. Union Avenue President
Denver, CO 80237
Gary J. Ruhl Vice President
7800 E. Union Ave.
Denver, CO 80237
^ Kent Schmeckpepper Assistant
7800 E. Union Avenue Vice President ^
^ Denver, CO 80237
^
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
Tane T. Tyler Assistant
7800 E. Union Ave. Vice President
Denver, CO 80237
^
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
The following is a list of officers of INVESCO Retirement Plan Services, Inc.
("IRPS"), a division of INVESCO Funds Group, Inc., the underwriter:
Name and Principal Positions and Offices
Business Address with IRPS
- ------------------ ---------------------
Frederick W. Braley Chief Financial Officer
400 Colony Square, Suite 2200 and Treasurer
1201 Peachtree St., N.E.
Atlanta, GA 30361
Scott P. Brogan Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Rayane S. Clark Vice President - Defined
400 Colony Square, Suite 2200 Contributions Operations
1201 Peachtree St., N.E.
Atlanta, GA 30361
M. Anthony Cox Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Mary Ann Dallenbach Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Douglas P. Dohm Regional Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Joseph B. Jennings Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Mark A. Jones Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
<PAGE>
Name and Principal Positions and Offices
Business Address with IRPS
- ------------------ ---------------------
Barbara L. March Senior Vice President
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
Robert J. O'Connor Chief Executive Officer
400 Colony Square, Suite 2200
1201 Peachtree St., N.E.
Atlanta, GA 30361
E. Eric Starr Secretary and General
400 Colony Square, Suite 2200 Counsel
1201 Peachtree St., N.E.
Atlanta, GA 30361^
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant shall furnish each person to whom a prospectus is
addressed with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant ^ has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the ^30th day of ^ July, 1997.
Attest: INVESCO Money Market Funds, Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------------- -------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this ^30th day of ^
July, 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------- -------------------------------------
Dan J. Hesser, President Lawrence H. Budner, Director
& Director
(Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------- -------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ -------------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ ^ Larry Soll
- ------------------------------------ -------------------------------------
Bob R. Baker, Director ^ Larry Soll, Director
^/s/ Charles W. Brady /s/ Kenneth T. King, Director
- ------------------------------------ -------------------------------------
Charles W. Brady, Director Kenneth T. King, Director
/s/ John W. McIntyre
- ------------------------------------
John W. McIntyre, Director
By* By* /s/ Glen A. Payne
-------------------------------- ---------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A.
Payne, and each of them, to execute this post-effective amendment to the
Registration Statement of the Registrant on behalf of the above-named directors
and officers of the Registrant (with the exception of Larry Soll) have been
filed with the Securities and Exchange Commission on April 12 and May 12, 1990,
May 27, 1992, September 26, 1994, and September 21, 1995.
<PAGE>
Exhibit Index
-------------
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
^ 1 88
2 99
5(a) 118
5(b) 125
6 131
7 140
8 146
8(a) 169
8(b) 170
8(c) 171
9(a) 185
9(b) 200
10 204
11 206
16(a) 207
16(b) 208
16(c) 209
16(d) 210
16(e) 211
16(f) 212
17(a) 213
17(b) 214
17(c) 215
Ex 99.POA Soll 216
ARTICLES OF INCORPORATION
OF
INVESCO MONEY MARKET FUNDS, INC.
THIS IS TO CERTIFY to the Maryland State Department of Assessments that
the undersigned, Dan J. Hesser, whose post office address is 7800 E. Union
Avenue, Suite 800, Denver, Colorado 80237, and being at least 18 years of age,
does hereby declare that he is an incorporator intending to form a corporation
under and by virtue of the general laws of the State of Maryland authorizing the
formation of corporations.
ARTICLE I
NAME AND TERM
The name of the corporation is INVESCO Money Market Funds, Inc. The
corporation shall have perpetual existence.
ARTICLE II
POWERS AND PURPOSES
The nature of the business and the objects and purposes to be transacted,
promoted and carried on by the corporation are as follows:
1. To engage in the business of an incorporated investment company of
open-end management type and to engage in all legally permissible
activities and operations usual, customary, or necessary in
connection therewith.
2. In general, to engage in any other business permitted to
corporations by the laws of the State of Maryland and to have and
exercise all powers conferred upon or permitted to corporations by
the Maryland General Corporation Law and any other laws of the State
of Maryland; provided, however, that the corporation shall be
restricted from engaging in any activities or taking any actions
which would preclude its compliance with applicable provisions of
the Investment Company Act of 1940, as amended, applicable to open-
end management type investment companies or applicable rules
promulgated thereunder.
<PAGE>
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares the corporation shall have the
authority to issue is ten billion (10,000,000,000) shares of Common Stock,
having a par value of one cent ($0.01) per share. The aggregate par value of all
shares which the corporation shall have the authority to issue is one hundred
million dollars ($100,000,000). Such stock may be issued as full shares or as
fractional shares.
In the exercise of the powers granted to the board of directors pursuant
to section 3 of this Article III, the board of directors initially designates
three classes of shares of Common Stock of the corporation, to be designated as
the INVESCO Cash Reserves Fund, INVESCO U. S. Government Money Fund, and the
INVESCO Tax-Free Money Fund, respectively. Initially, one billion
(1,000,000,000) shares of the corporation's Common Stock are classified as and
are allocated to the INVESCO U.S. Government Money Fund and the INVESCO Tax-Free
Money Fund and five billion (5,000,000,000) shares of the corporation's common
stock are classified as and are allocated to the INVESCO Cash Reserves Fund.
Unless otherwise prohibited by law, so long as the corporation is
registered as an open-end investment company under the Investment Company Act of
1940, as amended, the total number of shares which the corporation is authorized
to issue may be increased or decreased by the board of directors in accordance
with the applicable provisions of the Maryland General Corporation Law.
Section 2. No holder of stock of the corporation shall be entitled as a
matter of right to purchase or subscribe for any shares of the capital stock of
the corporation which it may issue or sell, whether out of the number of shares
authorized by these articles of incorporation, or out of any shares of the
capital stock of the corporation acquired by it after the issue thereof.
Section 3. The corporation is authorized to issue its stock in one or more
series or one or more classes of shares, and, subject to the requirements of the
Investment Company Act of 1940, as amended, particularly Section 18(f) thereof
and Rule 18f-2 thereunder, the different series and classes, if any, shall be
established and designated, and the variations in the relative preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as between the
different series or classes shall be fixed and determined and may be classified
and reclassified by the board of directors; provided that the board of directors
shall not classify or reclassify any of such shares into any class or series of
<PAGE>
stock which is prior to any class or series of stock then outstanding with
respect to rights upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the general assets of, the corporation, except
that there may be variations so fixed and determined between different series or
classes as to investment objective, purchase price, right of redemption, special
rights as to dividends and on liquidation with respect to assets and income
belonging to a particular series or class, voting powers and conversion rights.
All references to shares in these articles of incorporation shall be deemed to
be shares of any or all series and classes of shares of the corporation's
capital stock as the context may require.
(a) The number of authorized shares allocated to each series or class
and the number of shares of each series or of each class that may be
issued shall be in such number as may be determined by the board of
directors. The directors may classify or reclassify any unissued
shares or any shares previously issued and reacquired of any series
or class into one or more series or one or more classes that may be
established and designated by the board of directors from time to
time. The directors may hold as treasury shares (of the same or
some other series or class), reissue for such consideration and on
such terms as they may determine, or cancel any shares of any series
or any class reacquired by the corporation at their discretion from
time to time.
(b) All consideration received by the corporation for the issue or sale
of shares of a particular series or class, together with all assets
in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that
series or class for all purposes, subject only to the rights of
creditors of that series or class, and shall be so recorded upon the
books of account of the corporation. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any
particular series or class, the directors shall allocate them among
any one or more of the series or classes established and designated
from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable. Each such allocation by
the corporation shall be conclusive and binding upon the
stockholders of all series or classes for all purposes. The
directors shall have full discretion, to the extent not inconsistent
<PAGE>
with the Investment Company Act of 1940, as amended, and the
Maryland General Corporation Law to determine which items shall be
treated as income and which items shall be treated as capital; and
each such determination and allocation shall be conclusive and
binding upon the stockholders.
(c) The assets belonging to each particular class or series shall be
charged with the liabilities of the corporation in respect to that
class or series and all expenses, costs, charges and reserves
attributable to that class or series, and any general liabilities,
expenses, costs, charges or reserves of the corporation which are
not readily identifiable as belonging to any particular class or
series shall be allocated and charged by the directors to and among
any one or more of the classes or series established and designated
from time to time in such manner and on such basis as the directors
in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the
directors shall be conclusive and binding upon the stockholders of
all series and classes for all purposes.
(d) Dividends and distributions on shares of a particular series or
class may be paid with such frequency as the directors may
determine, which may be daily or otherwise, pursuant to a standing
resolution or resolutions adopted only once or with such frequency
as the board of directors may determine, to the holders of shares of
that series or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that series or
class, as the directors may determine, after providing for actual
and accrued liabilities belonging to that series or class. All
dividends and distributions on shares of a particular series or
class shall be distributed pro rata to the holders of that series or
class in proportion to the number of shares of that series or class
held by such holders at the date and time of record established for
the payment of such dividends or distributions except that in
connection with any dividend or distribution program or procedure,
the board of directors may determine that no dividend or
distribution shall be payable on shares as to which the
stockholder's purchase order and/or payment have not been received
by the time or times established by the board of directors under
such program or procedure.
The corporation intends to have each series that may be established
to represent interests of a separate investment portfolio qualify as
<PAGE>
a "regulated investment company" under the Internal Revenue Code of
1986, or any successor comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income
and gains for federal income tax purposes may vary from the
computation thereof on the books of the corporation, the board of
directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends
designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the board of directors, to
enable the respective series to qualify as regulated investment
companies and to avoid liability of such series for federal income
tax in respect of that year. However, nothing in the foregoing shall
limit the authority of the board of directors to make distributions
greater than or less than the amount necessary to qualify the series
as regulated investment companies and to avoid liability of such
series for such tax.
(e) Dividends and distributions may be made in cash, property or
additional shares of the same or another class or series, or a
combination thereof, as determined by the board of directors or
pursuant to any program that the board of directors may have in
effect at the time for the election by each stockholder of the mode
of the making of such dividend or distribution to that stockholder.
Any such dividend or distribution paid in shares will be paid at the
net asset value thereof as defined in section (4) below.
(f) In the event of the liquidation or dissolution of the corporation or
of a particular class or series, the stockholders of each class or
series that has been established and designated and is being
liquidated shall be entitled to receive, as a class or series, when
and as declared by the board of directors, the excess of the assets
belonging to that class or series over the liabilities belonging to
that class or series. The holders of shares of any particular class
or series shall not be entitled thereby to any distribution upon
liquidation of any other class or series. The assets so
distributable to the stockholders of any particular class or series
shall be distributed among such stockholders in proportion to the
number of shares of that class or series held by them and recorded
on the books of the corporation. The liquidation of any particular
class or series in which there are shares then outstanding may be
authorized by vote of a majority of the board of directors then in
office, subject to the approval of a majority of the outstanding
securities of that class or series, as defined in the Investment
<PAGE>
Company Act of 1940, as amended, and without the vote of the holders
of any other class or series. The liquidation or dissolution of a
particular class or series may be accomplished, in whole or in part,
by the transfer of assets of such class or series to another class
or series or by the exchange of shares of such class or series for
the shares of another class or series.
(g) On each matter submitted to a vote of the stockholders, each holder
of a share shall be entitled to one vote for each share standing in
his name on the books of the corporation, irrespective of the class
or series thereof, and all shares of all classes or series shall
vote as a single class or series ("single class voting"); provided,
however that (i) as to any matter with respect to which a separate
vote of any class or series is required by the Investment Company
Act of 1940, as amended, or by the Maryland General Corporation Law,
such requirement as to a separate vote by that class or series shall
apply in lieu of single class voting as described above; (ii) in the
event that the separate vote requirements referred to in (i) above
apply with respect to one or more but not all classes or series,
then, subject to (iii) below, the shares of all other classes or
series shall vote as a single class or series; and (iii) as to any
matter which does not affect the interest of a particular class or
series, only the holders of shares of the one or more affected
classes shall be entitled to vote. Holders of shares of the stock
of the corporation shall not be entitled to exercise cumulative
voting in the election of directors or on any other matter.
(h) The establishment and designation of any series or class of shares,
in addition to the initial class of shares which has been
established in section (1) above, shall be effective upon the
adoption by a majority of the then directors of a resolution setting
forth such establishment and designation and the relative rights and
preferences of such series or class, or as otherwise provided in
such instrument and the filing with the proper authority of the
State of Maryland of Articles Supplementary setting forth such
establishment and designation and relative rights and preferences.
Section 4. The corporation shall, upon due presentation of a share or
shares of stock for redemption, redeem such share or shares of stock at a
redemption price prescribed by the board of directors in accordance with
applicable laws and regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such class or series as
determined in accordance with the provisions of this section (4), less such
<PAGE>
redemption or other charge as is determined by the board of directors. Subject
to applicable law, the corporation may redeem shares, not offered by a
stockholder for redemption, held by any stockholder whose shares of a class or
series, had a value less than such minimum amount as may be fixed by the board
of directors from time to time or prescribed by applicable law, other than as a
result of a decline in value of such shares because of market action; provided
that before the corporation redeems such shares it must notify the shareholder
by first-class mail that the value of his shares is less than the required
minimum value and allow him 60 days to make an additional investment in an
amount which will increase the value of his account to the required minimum
value. Unless otherwise required by applicable law, the price to be paid for
shares redeemed pursuant to the preceding sentence shall be the aggregate net
asset value of the shares at the close of business on the date of redemption,
and the shareholder shall have no right to object to the redemption of his
shares. The corporation shall pay redemption prices in cash, except that the
corporation may at its sole option pay redemption prices in kind in such manner
as is consistent with and not in contravention of Section 18(f) of the
Investment Company Act of 1940, as amended, and any Rules or Regulations
thereunder. Redemption prices shall be paid exclusively out of the assets of the
class or series whose shares are being redeemed.
Notwithstanding the foregoing, the corporation may postpone payment of
redemption proceeds and may suspend the right of the holders of shares of any
class or series to require the corporation to redeem shares of that class or
series during any period or at any time when and to the extent permissible under
the Investment Company Act of 1940, as amended, or any rule or order thereunder.
The net asset value of a share of any class or series of common stock of
the corporation shall be determined in accordance with applicable laws and
regulations or under the supervision of such persons and at such time or times
as shall from time to time be prescribed by the board of directors.
Section 5. The corporation may issue, sell, redeem, repurchase and
otherwise deal in and with shares of its stock in fractional denominations and
such fractional denominations shall, for all purposes, be shares having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the corporation; provided that the issue of shares in fractional
denominations shall be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the bylaws.
<PAGE>
Section 6. The corporation shall not be obligated to issue certificates
representing shares of any class or series unless it shall receive a written
request therefor from the record holder thereof in accordance with procedures
established in the bylaws or by the board of directors.
ARTICLE IV
PREEMPTIVE RIGHTS
No stockholder of the corporation of any class or series, whether now or
hereafter authorized, shall have any preemptive or preferential or other right
of purchase of or subscription to any share of any class or series of stock, or
shares convertible into, exchangeable for or evidencing the right to purchase
stock of any class or series whatsoever, whether or not the stock in question be
of the same class or series as may be held by such stockholder, and whether now
or hereafter authorized and whether issued for cash, property, services or
otherwise, other than such, if any, as the board of directors in its discretion
may from time to time fix.
ARTICLE V
PRINCIPAL OFFICE AND REGISTERED AGENT
The post office address of the principal office of the corporation in the
State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident
agent of the corporation is The Corporation Trust Incorporated, whose post
office address is 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a corporation of the State of Maryland.
ARTICLE VI
DIRECTORS
Section 1. The initial board of directors shall consist of three members
who need not be residents of the State of Maryland or stockholders of the
corporation.
Section 2. The names of the persons who shall act as directors until the
first meeting of stockholders or until their successors shall have been elected
and qualified are as follows:
Charles W. Brady 1315 Peachtree Street, N.E., Atlanta, Georgia
John M. Butler 7800 E. Union Avenue, Denver, Colorado
Dan J. Hesser 7800 E. Union Avenue, Denver, Colorado
<PAGE>
Section 3. The number of directors may be increased or decreased in
accordance with the bylaws, provided that the number shall not be reduced to
less than three.
Section 4. A majority of the directors shall constitute a quorum for the
transaction of business, unless the bylaws shall provide that a different number
shall constitute a quorum; provided, however, that in no case shall a quorum be
less than one-third (1/3) of the total number of directors or less than two (2)
directors.
Section 5. No person shall serve as a director, unless elected by the
stockholders at an annual meeting or a special meeting called for such purpose;
except that vacancies occurring between such meetings may be filled by the
directors in accordance with the bylaws, and subject to such limitations as may
be set forth by applicable laws and regulations.
Section 6. The board of directors of the corporation is hereby empowered
to authorize the issuance from time to time of shares of stock, whether of a
class or series now or hereafter authorized, for such consideration as it deems
advisable, subject to such limitations as may be set forth herein, in the
bylaws, in the Maryland General Corporation Law, and in the Investment Company
Act of 1940, as amended.
Section 7. The board of directors of the corporation may make, alter or
repeal from time to time any of the bylaws of the corporation except any
particular bylaw which is specified as not subject to alternation or repeal by
the board of directors.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. Directors and officers of the corporation, including persons
who formerly have served in such capacities, shall have limitations on, and/or
immunity from, liability of such directors and officers to the fullest extent
permitted by the Maryland General Corporation Law, subject only to such
restrictions as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Such limitations and/or immunity will apply
to acts or omissions occurring at the time an individual serves as a director or
officer of the corporation, whether such person is a director or officer of the
corporation at the time of any proceeding in which liability is asserted against
the director or officer. No amendment to these Articles of Incorporation or
repeal of any of its provisions shall limit or eliminate the benefits provided
<PAGE>
to directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
Section 2. The corporation shall indemnify and advance expenses to its
directors and officers, including persons who formerly have served in such
capacities, to the fullest extent permitted to directors by the Maryland General
Corporation Law and the bylaws of the corporation, as such Law and bylaws now or
in the future may be in effect, subject only to such limitations as may be
required by the Investment Company Act of 1940, as amended, and the rules
thereunder.
ARTICLE VIII
SPECIAL VOTING AND MEETING PROVISIONS
Section 1. Notwithstanding any provision of Maryland law requiring a
greater proportion than a majority of the votes of all classes or of any class
of stock entitled to be cast to take or authorize any action, the corporation
may take or authorize any such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
Section 2. The presence in person or by proxy of the holders of one-third
of the shares of stock of the corporation entitled to vote without regard to
class shall constitute a quorum at any meeting of stockholders, except with
respect to any matter which by law requires the approval of one or more classes
of stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class entitled to vote on the matter
shall constitute a quorum.
Section 3. So long as the corporation is registered pursuant to the
Investment Company Act of 1940, as amended, the corporation will not be required
to hold annual shareholder meetings in years in which the election of directors
is not required to be acted upon under the Investment Company Act of 1940, as
amended.
ARTICLE IX
AMENDMENT
The corporation reserves the right from time to time to make any amendment
of its articles of incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in such
articles, of any outstanding stock by classification, reclassification or
<PAGE>
otherwise, but no such amendment which changes the terms or rights of any of its
outstanding shares shall be valid unless such amendment shall have been
authorized by not less than a majority of the aggregate number of votes entitled
to be cast thereon, by a vote at a meeting or in writing with or without a
meeting.
IN WITNESS WHEREOF, I have signed these articles of incorporation on this
___ day of April, 1993.
/s/ Dan J. Hesser
------------------------------------
Dan J. Hesser
Attest: /s/ Glen A. Payne
-----------------
Glen A. Payne
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I hereby certify that on the 1st day of April, 1993, before me, the
subscriber, a Notary Public of the State of Colorado, in and for the City and
County of Denver, personally appeared Dan J. Hesser who acknowledged the
foregoing articles of incorporation to be his act.
WITNESS my hand and notarial seal, the day and year first above written.
/s/ Cheryl K. Howlett
------------------------------
Notary Public
My commission expires: February 22, 1995.
BYLAWS
OF
INVESCO MONEY MARKET FUNDS, INC.
AS OF APRIL 5, 1993
ARTICLE I.
SHAREHOLDERS
Section 1. Annual Meeting. Unless otherwise determined by the
board of directors or required by applicable law, no
annual meeting of shareholders shall be required to be
held in any year in which the election of directors is
not required under the Investment Company Act of 1940.
If the corporation is required to hold a meeting of
shareholders to elect directors, the meeting shall be
designated as the annual meeting of shareholders for
that year, and shall be held no later than 120 days
after occurrence of the event requiring the meeting at
a place within or without the State of Maryland.
Section 2. Special Meetings. Special meetings of the shareholders
entitled to vote shall be called upon the request in
writing of the president or, in his absence, a vice
president, or by a vote of a majority of the board of
directors, or upon the request in writing of
shareholders of the Company representing not less than
ten percent (10%) of the votes entitled to be cast at
the meeting.
Section 3. Place of Meetings. Each annual and any special meeting
of the shareholders shall be held at the principal
office of the corporation in Denver, Colorado, or at
such alternate site as may be determined by the board
of directors.
Section 4. Notices. Notices of every meeting, annual or special,
shall specify the place, day and hour of the meeting and
shall be mailed not less than ten (10) days nor more
than ninety (90) days before such meeting. Such notice
shall be given by the Secretary of the Corporation to
each shareholder entitled to notice of and entitled to
vote at the meeting. In the event that a special
meeting is called by the shareholders entitled to vote,
the Secretary of the Corporation shall inform the
shareholders who make the request of the reasonably
estimated cost of preparing and mailing a notice of the
meeting, and upon payment of these costs to the
Corporation, shall notify each shareholder entitled to
notice of the meeting. Notice of every special meeting
shall indicate briefly its purpose. Notice shall be
deemed delivered where it is personally delivered to the
individual, left at the individual's usual place of
business, or mailed to the individual at the
individual's address as it appears on the records of
the Corporation.
<PAGE>
Section 5. Quorum. At every meeting of the shareholders, the
presence in person or by proxy of the holders of
one-third of all of the shares of stock of the
corporation issued and outstanding and entitled to vote
without regard to class shall constitute a quorum,
except with respect to any matter which by law requires
the approval of one or more classes of stock, in which
case the presence in person or by proxy of the holders
of one-third of the shares of stock of each class
entitled to vote on the matter shall constitute a
quorum; provided, however, that at every meeting of the
shareholders, the representation of a larger number of
shareholders shall constitute a quorum if required by
the Investment Company Act of 1940, as amended, other
applicable law, or by the Articles of Incorporation.
Section 6. Voting. At every meeting of the shareholders at which a
quorum is present, each shareholder entitled to vote
shall be entitled to vote in person, or by proxy
appointed by instrument in writing subscribed by such
shareholder, or his duly authorized attorney, and he
shall have one (1) vote for each share of stock standing
registered in his name on each matter submitted at the
meeting on which such share is entitled to vote and for
each director to be elected. Fractional shares shall be
entitled to proportionate fractional votes. Every proxy
shall be dated and no proxy shall be valid after eleven
(11) months from its date unless otherwise provided in
the proxy. There shall be no cumulative voting in the
election of directors. Except as otherwise provided by
law, by the charter of the corporation, or by these
bylaws, at each meeting of stockholders at which a
quorum is present, all matters shall be decided by a
majority of the votes cast by the stockholders present
in person or represented by proxy and entitled to vote
with respect to any such matter.
Section 7. Qualification of Voters. At every meeting of
shareholders, unless the voting is conducted by
inspectors, the proxies and ballots shall be received,
and all questions with respect to the qualification of
voters and the validity of proxies and the acceptance or
rejection of votes shall be decided by the chairman of
the meeting. If demanded by shareholders present in
person or by proxy entitled to cast twenty-five per cent
(25%) in number of votes, or if ordered by the chairman
of the meeting, the vote upon any election or question
shall be taken by ballot and, upon such demand or order,
the voting shall be conducted by two (2) inspectors
appointed by the chairman, in which event the proxies
and ballots shall be received and all questions with
respect to the qualification of votes and the validity
of proxies and the acceptance or rejection of votes
<PAGE>
shall be decided by such inspectors. Unless so demanded
or ordered, no vote need be by ballot and the voting
need not be conducted by inspectors.
Section 8. Waiver of Notice. A waiver of notice of any meeting of
shareholders signed by any shareholder entitled to such
notice filed with the records of the meeting, whether
before or after the holding thereof or actual attendance
at the meeting in person or by proxy, shall be deemed
equivalent to the giving of notice to such shareholder.
Section 9. Adjournment. A meeting of shareholders convened on
the date for which it was called may be adjourned from
time to time without further notice to a date not more
than 120 days after the original record date of the
meeting.
Section 10. Action by Shareholders Without Meeting. Except as
otherwise provided by law, the provisions of these
bylaws relating to notices and meetings to the contrary
notwithstanding, any action required or permitted to be
taken at any meeting of shareholders may be taken
without a meeting if a consent in writing setting forth
the action shall be signed by all the shareholders
entitled to vote upon the action and such consent
shall be filed with the records of the corporation.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Powers. The business and property of the corporation
shall be conducted and managed by its board of
directors, which may exercise all of the powers of the
corporation, except such as are by statute, by the
charter or by the bylaws, conferred upon or reserved to
the shareholders. The board of directors shall keep full
and complete records of its transactions.
Section 2. Number. By vote of a majority of the entire board of
directors, the number of directors may be increased or
decreased from time to time; provided that, in no event,
may the number be decreased to less than three.
Section 3. Election. The members of the board of directors shall be
elected by the shareholders by plurality vote at the
annual meeting, or at any special meeting called for
such purpose. Each director shall hold office until his
successor shall have been duly chosen and qualified, or
until he shall have resigned or shall have been removed
in the manner provided by law. Any vacancy, including
<PAGE>
one created by an increase in the number of directors
on the board (except where such vacancy is created by
removal by the shareholders), may be filled by the
vote of a majority of the remaining directors, although
such majority is less than a quorum; provided, however,
that immediately after filling any vacancy by such
action of the board of directors, at least two-thirds
(2/3) of the directors then holding office shall have
been elected by the shareholders at an annual or special
meeting.
Section 4. Regular Meetings. The board of directors shall
schedule an Annual Meeting at such place and time as
they may designate for the purpose of organization, the
election of officers, and the transaction of other
business. Other regular meetings may be held as
scheduled by a majority of the directors.
Section 5. Special Meetings. Special meetings of the board of
directors may be called at any time by the president or
by a majority of the directors or by a majority of the
executive committee.
Section 6. Notice of Meetings. Notice of the place, day and hour
of every special meeting shall be given to each director
at least two (2) days before the meeting, by written
announcement, telephone, telegraph and/or mail addressed
to him at his post office address, according to the
records of the corporation. Unless required by
resolution of the board of directors, no notice of any
meeting of the board of directors need state the
business to be transacted thereat. No notice of any
meeting of the board of directors need be given to any
director who attends, or to any director who, in writing
executed and filed with the records of the meeting
either before or after the holding thereof, waives such
notice. Any meeting of the board of directors may
adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any
such adjourned meeting other than by announcement.
Section 7. Quorum. At all meetings of the board of directors, one-
third of the total number of directors or not less than
two (2) directors shall constitute a quorum for the
transaction of business. In the absence of a quorum,
the directors present by a majority vote and without
notice other than by announcement may adjourn the
meeting from time to time until a quorum shall be
present. At any such adjourned meeting, any business
may be transacted which might have been transacted at
the meeting as originally notified.
<PAGE>
Section 8. Compensation of Directors. Directors shall be entitled
to receive such compensation from the corporation for
their services as may from time to time be voted by the
board of directors. All directors shall be reimbursed
for their reasonable expenses of attendance, if any, at
the board and committee meetings. Any director of the
corporation may also serve the corporation in any other
capacity and receive compensation therefor.
Section 9. Vacancies. Any vacancy occurring in the board of
directors may be filled by the affirmative vote of a
majority of the remaining directors though less than a
quorum of the board of directors. A director elected to
fill a vacancy shall be elected for the unexpired term
of his predecessor in office. Any directorship to be
filled by reason of an increase in the number of
directors may be filled by election by the board of
directors for a term of office continuing only until the
next election of directors by the shareholders.
Section 10. Resignation and Removal of Directors. Any director or
member of any committee may resign at any time. Such
resignation shall be made in writing and shall take
effect at the time specified therein. If no time is
specified, it shall take effect from the time of its
receipt by the Secretary, who shall record such
resignation, noting the day and hour of its reception.
The acceptance of a resignation shall not be necessary
to make it effective. Notwithstanding anything to the
contrary in Article I, Section 2 hereof, a meeting for
removing a director shall be called in accordance with
the procedures specified in Section 16(c) of the
Investment Company Act of 1940, and the shareholder
communications provisions of said Section 16(c) shall
be following by the corporation. At any meeting of
shareholders, duly called and at which a quorum is
present, the shareholders may, by affirmative vote of
the holders of a majority of the votes entitled to be
cast thereon, remove any director or directors from
office and may elect a successor or successors to fill
any resulting vacancies to hold office until the next
annual meeting of shareholders or until a successor or
successors are elected and qualify.
Section 11. Telephone Meetings. Any member or members of the board
of directors or of any committee designated by the board
of directors, may participate in a meeting of the board,
or any such committee, as the case may be, by means of a
conference telephone or similar communications equipment
<PAGE>
if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting
by these means constitutes presence in person at the
meeting. This Section 11 shall not be applicable to
meetings held for the purpose of voting in respect of
approval of contracts or agreements whereby a person
undertakes to serve or act as investment adviser of, or
principal underwriter for, the corporation or in respect
to other matters as to which the Investment Company Act
of 1940 or the rules thereunder require that votes be
cast in person.
Section 12. Action by Directors Without Meeting. The provisions of
these bylaws covering notices and meetings to the
contrary notwithstanding, and except as required by law
(including Section 15 of the Investment Company Act of
1940), any action required or permitted to be taken at
any meeting of the board of directors may be taken
without a meeting if a consent in writing setting forth
the action shall be signed by all of the directors
entitled to vote upon the action and such written
consent is filed with the minutes of proceedings of the
board of directors.
ARTICLE III.
COMMITTEES
Section 1. Executive Committee. The board of directors, by
resolution adopted by a majority of the whole board of
directors, may provide for an executive committee of
three (3) or more directors. If provision be made for an
executive committee, the members thereof shall be
elected by the board of directors to serve during the
pleasure of the board of directors. Unless otherwise
provided by resolution of the board of directors, the
president shall be a member and the chairman of the
executive committee shall preside at all meetings
thereof. During the intervals between the meetings of
the board of directors, the executive committee shall
possess and may exercise all of the powers of the board
of directors in the management of the business and
affairs of the corporation conferred by the bylaws or
otherwise, to the extent authorized by the resolution
providing for such executive committee or by subsequent
resolution adopted by a majority of the whole board of
directors, in all cases in which specific directions
shall not have been given by the board of directors.
<PAGE>
Notwithstanding the foregoing, the executive committee
shall not have the power to: (i) declare dividends or
distributions on stock; (ii) issue stock other than as
provided by the Maryland General Corporation Law; (iii)
recommend to the shareholders any action which requires
shareholder approval; (iv) amend these bylaws; or (v)
approve any merger or share exchange which does not
require shareholder approval. The executive committee
shall maintain written records of its transactions.
All action by the executive committee shall be reported
to the board of directors at its meeting next succeeding
such action, and shall be subject to ratification, with
or without revision or alteration, by such vote of the
board of directors as would have been required under
Article II, Section 7, hereof, had such action been
taken by the board of directors. Vacancies in the
executive committee shall be filled by the board of
directors.
Section 2. Meetings of the Executive Committee. The executive
committee shall fix its own rules of procedure and shall
meet as provided by such rules or by resolution of the
board of directors, and it shall also meet at the call
of the chairman or of any two (2) members of the
committee. A majority of the executive committee shall
constitute a quorum. Except in cases in which it is
otherwise provided by resolution of the board of
directors, the vote of a majority of such quorum at
a duly constituted meeting shall be sufficient to elect
and to pass any measure, subject to ratification by the
board of directors as provided in Section 1 of this
Article III.
Section 3. Other Committees. The board of directors may by
resolution provide for such other standing or special
committees as it deems desirable, and discontinue the
same at its pleasure. Each such committee shall have
such powers and perform such duties as may be assigned
to it by the board of directors.
Section 4. Committee Action Without Meeting. The provisions of
these bylaws covering notices and meetings to the
contrary notwithstanding, and except as required by law,
any action required or permitted to be taken at any
meeting of any committee of the board of directors
appointed pursuant to these bylaws may be taken without
<PAGE>
a meeting if a consent in writing setting forth the
action shall be signed by all members of the committee
entitled to vote upon the action, and such written
consent is filed with the records of the proceedings of
the committee.
ARTICLE IV.
OFFICERS
Section 1. Numbers; Qualifications; Term of Office; Vacancies. The
board of directors may select one of their number as
chairman of the board and may select one of their number
as vice chairman of the board (neither of which
positions shall be considered to be the designation of a
position as an officer of the corporation), and shall
choose as officers a president from among the directors
and a treasurer and a secretary who need not be
directors. The board of directors may also choose one
or more vice presidents, one or more assistant
secretaries and one or more assistant treasurers, none
of whom need be a director. Any two or more of such
offices, except those of president and vice president,
may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more
than one capacity if such instrument is required by law
or by the certificate of incorporation or by these
bylaws or by resolution of the board of directors to be
executed, acknowledged or verified by any two or more
officers. Each such officer shall hold office until the
first meeting of the board of directors after the annual
meeting of the shareholders next following his election
or, if no such annual meeting of the shareholders is
held, until the annual meeting of the board of directors
in the year following his election, and, until his
successor is chosen and qualified or until he shall have
resigned or died, or until he shall have been removed as
hereinafter provided in Section 3 of this Article IV.
Any vacancy in any of the above offices may be filled by
the board of directors at any regular or special
meeting. All officers and agents of the corporation, as
between themselves and the corporation, shall have such
authority and perform such duties in the management of
the corporation as may be provided in or pursuant to
these bylaws, or, to the extent not so provided, as may
be prescribed by the board of directors; provided, that
no rights of any third party shall be affected or
impaired by any such bylaws or resolution of the board
unless the third party has knowledge thereof.
Section 2. Subordinate Officers. The board of directors, or any
officer thereunto authorized by it, may appoint from
time to time such other officers and agents for such
terms of office and with such powers and duties as may
be prescribed by the board of directors or the officer
making such appointment.
<PAGE>
Section 3. Removal. Any officer or agent may be removed by the
board of directors whenever, in its judgment, the best
interests of the corporation will be served thereby, but
such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
Section 4. Chairman of the Board. The chairman of the board, if
one shall be elected, shall preside at all meetings of
the board of directors, and shall appoint all committees
except such as are required by statute, these bylaws or
a resolution of the board of directors or of the
executive committee to be otherwise appointed, and shall
have other such duties as may be assigned to him from
time to time by the board of directors. In recognition
of notable and distinguished services to the
corporation, the board of directors may designate one of
its members as honorary chairman, who shall have such
duties as the board may, from time to time, assign
him by appropriate resolution, excluding, however, any
authority or duty vested by law or these bylaws in any
other officer.
Section 5. Vice Chairman of the Board. The vice chairman of the
board, if one shall be elected, shall preside at all
meetings of the board of directors at which the chairman
of the board is not present, shall call at his
discretion and shall preside at meetings of those
directors of the corporation who are not affiliated with
the corporation's investment adviser, distributor, or
affiliates thereof, and shall perform such other duties
as may be assigned to the vice chairman from time to
time by the board of directors.
Section 6. President. The president shall preside at all meetings
of the shareholders and, in the absence of the chairman
and the vice chairman of the board or if a chairman and
vice chairman of the board are not elected, at all
meetings of the board of directors. Unless otherwise
provided by the board of directors, he shall have direct
control of and any authority over the business and
affairs and over the officers of the corporation, and
shall preside at all meetings of the executive
committee. The president shall also perform all such
other duties as are incident to his office and as may be
assigned to him from time to time by the board of
directors.
Section 7. Vice Presidents. The vice president or vice presidents,
at the request of the president or in his absence or
inability to act, shall perform the duties and exercise
the functions of the president in such manner as may be
directed by the president, the board of directors or the
<PAGE>
executive committee. The vice president or vice
presidents shall have such other powers and perform all
such other duties as may be assigned to them by the
board of directors, the executive committee, or the
president.
Section 8. Secretary. The secretary shall see that all notices
are duly given in accordance with these bylaws; he shall
keep the minutes of all meetings of the shareholders
and, if directed to do so by the chairman of the
meeting, of meetings of the board of directors and of
the executive committee at which he shall be present; he
shall have charge of the books and records and the
corporate seal or seals of the corporation; he shall see
that the corporate seal is affixed to all documents,
the execution of which under the seal of the corporation
is duly authorized and is necessary; and he shall make
such reports and perform all such other duties as are
incident to his office and as may be assigned to him
from time to time by the board of directors or by the
president.
Section 9. Treasurer. The treasurer shall be the chief financial
officer of the corporation, and as such shall have
supervision of the custody of all funds, securities and
valuable documents of the corporation, subject to such
arrangements as may be authorized or approved by the
board of directors with respect to the custody of assets
of the corporation; shall receive, or cause to be
received, and give, or cause to be given, receipts for
all funds, securities or valuable documents paid or
delivered to, or for the account of, the corporation,
and cause such funds, securities or valuable documents
to be deposited for the account of the corporation with
such banks or trust companies as shall be designated by
the board of directors; shall pay or cause to be paid
out of the funds of the corporation all just debts of
the corporation upon their maturity; shall maintain, or
cause to be maintained, accurate records of all
receipts, disbursements, assets, liabilities, and
transactions of the corporation; shall see that adequate
audits thereof are regularly made; shall, when required
by the board of directors, render accurate statements
of the condition of the corporation; and shall perform
all such other duties as are incident to his office and
as may be assigned to him by the board of directors or
by the president.
Section 10. Assistant Secretaries, Assistant Treasurers. The
assistant secretaries and assistant treasurers shall
have such duties as from time to time may be assigned
to them by the board of directors, or by the president.
<PAGE>
Section 11. Compensation. The board of directors shall have the
power to fix the compensation of all officers and agents
of the corporation, but may delegate to any officer or
committee the power of determining the amount of salary
to be paid to any officer or agent of the corporation
other than the chairman of the board, the president, the
vice presidents, the secretary and the treasurer.
Section 12. Contracts. Except as otherwise provided by law or by the
charter, no contract or transaction between the
corporation and any partnership or corporation, and no
act of the corporation, shall in any way be affected or
invalidated by the fact that any officer or director of
the corporation is pecuniarily or otherwise interested
therein or is a member, officer or director of such
other partnership or corporation if such interest shall
be known to the board of directors of the corporation.
Specifically, but without limitation of the foregoing,
the corporation may enter into one or more contracts
appointing INVESCO Funds Group, Inc. investment adviser
of the corporation, and may otherwise do business with
INVESCO Funds Group, Inc., notwithstanding the fact that
one or more of the directors of the corporation and some
or all of its officers are, have been or may become
directors, officers, members, employees, or shareholders
of INVESCO Funds Group, Inc. and may deal freely with
each other, and neither such contract appointing INVESCO
Funds Group, Inc. investment adviser to the corporation
nor any other contract or transaction between the
corporation and INVESCO Funds Group, Inc. shall be
invalidated or in any way affected thereby, nor shall
any director or officer of the corporation by reason
thereof be liable to the corporation or to any
shareholder or creditor of the corporation or to any
other person for any loss incurred under or by reason of
any such contract or transaction. For purposes of this
paragraph, any reference to "INVESCO Funds Group, Inc."
shall be deemed to include said company and any parent,
subsidiary or affiliate of said company and any
successor (by merger, consolidation or otherwise) to
said company or any such parent, subsidiary or
affiliate.
Section 13. Delegation of Duties. Whenever an officer is absent
or disabled, or whenever for any reason the board of
directors may deem it desirable, the board may delegate
the powers and duties of an officer to any other officer
or officers or to any director or directors.
<PAGE>
ARTICLE V.
CAPITAL STOCK
Section 1. Issuance of Stock. The corporation shall not issue its
shares of capital stock except as approved by the board
of directors. Upon the sale of each share of its common
stock, except as otherwise permitted by applicable laws
and regulations, the corporation shall receive in cash
or in securities valued as provided in Article VIII of
these bylaws, not less than the current net asset value
thereof, exclusive of any distributing commission or
discount, and in no event less than the par value
thereof.
Section 2. Certificates. Certificates for the Corporation's classes
of Common Stock shall be issued only upon the specific
request of a shareholder. If certificates are requested,
they shall be issued in such a form as may be approved
by the board of directors, they shall be respectively
numbered serially for each class of shares, or series
thereof, as they are issued, and shall be signed by, or
bear a facsimile of the signatures of, the president or
a vice president, and shall also be signed by, or bear a
facsimile of the signature of some other person who is
one of the following: the treasurer, an assistant
treasurer, the secretary, or an assistant secretary;
and shall be sealed with, or bear a facsimile of, the
seal of the corporation. In case any officer of the
corporation whose signature or facsimile signature
appears on such certificates shall cease to be such
officer, whether because of death, resignation or
otherwise, certificates may nevertheless be issued and
delivered as though such person had not ceased to be an
officer.
Section 3. Transfers. Subject to the Maryland General Corporation
Law, the board of directors shall have power and
authority to make all such rules and regulations as it
may deem expedient concerning the issue, transfer and
registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of
transfer agent and registrar may be combined.
Section 4. Stock Ledgers. Original or duplicate stock ledgers,
containing the names and addresses of the shareholders
of the corporation and the number of shares of each
class held by them respectively, shall be kept at an
office or agency of the corporation in such city or town
as may be designated by the board of directors.
<PAGE>
Section 5. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a
determination of shareholders for any other purpose, the
board of directors of the Corporation may provide that
the share transfer books shall be closed for a stated
period but not to exceed, in any case, twenty days. If
the share transfer books shall be closed for the purpose
of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be
closed for at least ten days immediately preceding such
meeting. In lieu of closing the share transfer books,
the board of directors may fix in advance a date as the
record date for any such determination of shareholders,
such date in any case to be not more than ninety days
and, in case of a meeting of shareholders, not less than
ten days prior to the date on which the particular
action, requiring such determination of shareholders, is
to be taken. If the share transfer books are not closed
and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a
meeting of shareholders, the later of the close of
business on the date on which notice of the meeting is
mailed or the thirtieth day before the meeting shall be
the record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders. The
record date for determining shareholders entitled to
receive payment of a dividend or an allotment of any
rights shall be the close of business on the day on
which the resolution of the board of directors declaring
such dividend or allotment of rights is adopted. But
the payment or allotment may not be made more than 60
days after the date on which the resolution is adopted.
When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided
in this section, such determination shall apply to any
adjournment thereof.
Section 6. New Certificates. In case any certificate of stock is
lost, stolen, mutilated or destroyed, the board of
directors may authorize the issue of a new certificate
in place thereof upon such terms and conditions as it
may deem advisable; or the board of directors may
delegate such power to any officer or officers of the
corporation; but the board of directors or such officer
or officers, in their discretion, may refuse to issue
such new certificate, save upon the order of some court
having jurisdiction in the premises.
<PAGE>
Section 7. Registered Owners of Stock. The corporation shall be
entitled to recognize the exclusive right of a person
registered on its books as the owner of shares of stock
to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person
registered on its books as the owner of shares of stock,
and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on
the part of any other person, whether or not it shall
have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
Section 8. Fractional Denominations. Subject to any applicable
provisions of law and the charter of the corporation,
the corporation may issue shares of its capital stock in
fractional denominations, provided that the transactions
in which and the terms and conditions upon which shares
in fractional denominations may be issued from time to
time be limited or determined by or under the authority
of the board of directors.
ARTICLE VI.
FINANCES
Section 1. Checks, drafts, etc. All instruments, documents, and
other papers shall be executed in the name and on behalf
of the corporation, and all drafts, checks, notes and
other obligations for the payment of money by the
corporation shall, unless otherwise provided by
resolution of the board of directors, be signed by the
president or vice president and countersigned by the
secretary or treasurer.
Section 2. Annual Reports. A statement of the affairs of the
corporation shall be submitted at the annual meeting of
the shareholders and, within twenty (20) days after the
meeting, shall be placed on file at the corporation's
principal office. If the corporation is not required to
hold an annual meeting of shareholders, the
corporation's statement of affairs shall be placed on
file at the corporation's principal office within one
hundred and twenty (120) days after the end of its
fiscal year. Such statement shall be prepared by such
executive officer of the corporation as may be
designated by resolution of the board of directors. If
no other executive officer is so designated, it shall be
the duty of the president to prepare such statement.
<PAGE>
Section 3. Fiscal Year. The fiscal year of the corporation shall
begin on 1st day of June in each year and end on the
31st day of May following.
Section 4. Dividends and Distributions. Subject to any applicable
provisions of law and the charter of the corporation,
dividends and distributions upon the common stock of the
corporation may be declared at such intervals as the
board of directors may determine, in cash, in securities
or other property, or in shares of stock of the
corporation, from any sources permitted by law, all as
the board of directors shall from time to time
determine.
Section 5. Location of Books and Records. The books and records
of the corporation may be kept outside the State of
Maryland at the principal office of the corporation or
at such place or places as the board of directors may
from time to time determine, except as otherwise
required by law.
ARTICLE VII.
REDEMPTION OF STOCK
The registered owner of the outstanding stock of the corporation shall
have the right to require the corporation to redeem his shares at the asset
value thereof, as hereinafter defined in Article VIII of these bylaws, upon
delivery to the corporation of any certificate, or certificates, properly
endorsed, which have been issued as evidence of ownership of such stock, and a
written request for redemption in a form satisfactory to the corporation.
Stock of the corporation shall be redeemed at the current net asset value
per share next determined after a request in proper form has been received from
the registered owner or owner's designee at the office of the corporation
designated to receive redemption requests. Any certificates delivered at the
designated principal place of business of the corporation on a day which is not
a business day as herein defined, shall be deemed to have been received on the
business day next succeeding the day of such delivery. Subject to the
limitations of the Investment Company Act of 1940, the board of directors shall
have authority to fix a reasonable service charge for redemption of its stock,
including redemption pursuant to any periodic withdrawal or variable payment
plan or contract.
ARTICLE VIII.
DETERMINATION OF ASSET VALUE
Section 1. Net Asset Value. The net asset value of a share of
common stock of the corporation shall be determined in
<PAGE>
accordance with applicable laws and regulations under
the supervision of such persons and at such time or
times, including the close of business on each business
day, as shall be prescribed by the board of directors.
Each such determination shall be made by subtracting
from the value of the assets of the corporation (as
determined pursuant to Section 2 of this Article of the
bylaws) the amount of its liabilities, dividing the
remainder by the number of shares of common stock issued
and outstanding, and adjusting the results to the
nearest full cent per share.
Section 2. Valuation of Portfolio Securities and Other Assets.
Except as otherwise required by any applicable law or
regulation of any regulatory agency having jurisdiction
over the activities of the corporation, the corporation
shall determine the value of its portfolio securities
and other assets as follows:
(a) securities for which market quotations are readily
available shall be valued at current market value
determined in such manner as the board of directors
may from time to time prescribe;
(b) all other securities and assets shall be valued at
amounts deemed best to reflect their fair value as
determined in good faith by or under the
supervision of such persons and at such time or
times as shall from time to time be prescribed by
the board of directors;
All quotations, sale prices, bid and asked prices and
other information shall be obtained from such sources as
the persons making such determination believe to be
reliable, and any determination of net asset value based
thereon shall be conclusive.
ARTICLE IX.
PERIOD OF EMERGENCY
During any period of emergency, the board of directors, at its option, may
suspend the computation of asset value for the purpose of issuing or redeeming
it stock, and may suspend any obligation to accept payments for the acquisition
of additional stock of the corporation and may suspend the obligation of the
corporation to redeem stock. A period of emergency is defined to be:
(a) A period during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, or during which trading
on the New York Stock Exchange is restricted;
<PAGE>
(b) A period during which disposal by the corporation of securities
owned by it is not reasonably practicable, or during which it is not
reasonably practicable for the corporation to fairly to determine
the value of its net assets; or
(c) Such other periods as the Securities and Exchange Commission
pursuant to the provisions of the Investment Company Act of 1940 may
by order declare as an emergency period or periods.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 1. Seal. The board of directors shall provide a suitable
seal, bearing the name of the corporation, which shall
be in the charge of the secretary. The board of
directors may authorize one or more duplicate seals and
provide for the custody thereof.
Section 2. Bonds. The board of directors may require any officer,
agent or employee of the corporation to give a bond to
the corporation, conditioned upon the faithful discharge
of his duties, with one or more sureties and in such
amount as may be satisfactory to the board of directors.
Section 3. Voting upon Stock in Other Corporations. Any stock in
other corporations or associations, which may from time
to time be held by the corporation, may be voted at any
meeting of the shareholders thereof by the president or
a vice president of the corporation or by proxy or
proxies appointed by the president or one of the vice
presidents of the corporation. The board of directors,
however, may by resolution appoint some other person or
persons to vote such stock, in which case, such person
or persons shall be entitled to vote such stock upon the
production of a certified copy of such resolution.
Section 4. Bylaws. The board of directors shall have the power to
make, amend and repeal the bylaws of the corporation
which may contain any provision for regulation and
management of the affairs of the corporation not
inconsistent with law or the certificate of
incorporation; provided that any and all provisions of
the bylaws, notwithstanding the power of the directors
to act with respect thereto, may be altered or repealed,
and new provisions may be adopted by the shareholders
or at any annual meeting or any special meeting called
for that purpose.
<PAGE>
Section 5. Appointment and Duties of Custodian. The corporation
shall at all times employ a bank or trust company having
the qualifications specified by the Investment Company
Act of 1940, as amended, as custodian with authority as
its agent, but subject to such restrictions, limitations
and other requirements, if any, as may be contained in
these bylaws and the Investment Company Act of 1940, as
amended:
(1) to receive and hold the securities owned by the
corporation and deliver the same upon written
order;
(2) to receive and receipt for any moneys due to the
corporation and deposit the same in its own
banking department or elsewhere as the board of
directors may direct;
(3) to disburse such funds upon orders or vouchers;
(4) and to provide such additional services as may be
requested by the corporation;
all upon such basis of compensation as may be agreed
upon between the board of directors and the custodian.
The board of directors may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may be
agreed upon between the custodian and such sub-custodian and approved by
the board of directors.
Section 6. Central Certification System. Subject to such rules,
regulations and orders as the U.S. Securities and
Exchange Commission may adopt, the board of directors
may direct the custodian to deposit all or any part of
the securities owned by the corporation in a system for
the central handling of securities established by a
national securities exchange or a national securities
association registered with the SEC under the Securities
Exchange Act of 1934, or such other person as may be
permitted by the SEC or its staff in accordance with
the Investment Company Act of 1940, as amended, and any
rule or staff interpretation thereof, pursuant to which
system all securities of any particular class or series
of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the
corporation.
<PAGE>
Section 7. Compliance with Federal Regulations. The board of
directors is hereby empowered to take such action as it
may deem to be necessary, desirable or appropriate so
that the corporation is or shall be in compliance with
any federal or state statute, rule or regulation with
which compliance by the corporation is required.
Section 8. Waiver of Notice. Whenever any notice of the time, place
or purpose of any meeting of shareholders, directors, or
of any committee is required to be given under the
provisions of statute or under the provisions of the
charter of the corporation or these bylaws, a waiver
thereof in writing, signed by the person or person
entitled to such notice and filed with the records of
the meeting, whether before or after the holding
thereof, or actual attendance at the meeting of
directors or committee in person, shall be deemed
equivalent to the giving of such notice to such person.
Section 9. Offices. The principal office of the corporation in the
State of Maryland shall be in the City of Baltimore. In
addition to its principal office in the State of
Maryland, the corporation may have an office or offices
in the City of Denver, State of Colorado, and at such
other places as the board of directors may from time to
time designate or the business of the corporation may
require.
Section 10. Definitions. For all purposes of the certificate of
incorporation and these bylaws, the terms:
(a) "business day" shall be defined as a day with
respect to which the New York Stock Exchange is
open for business, and with respect to which the
actual time of closing of such exchange is that
time which shall have been scheduled for such
closing in advance of the opening of such
exchange;
(b) "the close of business" shall be defined as the
time of closing of the New York Stock Exchange.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Denver, Colorado,
by and between INVESCO FUNDS GROUP, INC. (the "Adviser"), a Delaware
corporation, and INVESCO Money Market Funds, Inc., a Maryland corporation (the
"Fund").
WITNESSETH:
WHEREAS, the Fund is a corporation organized under the laws of the State of
Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end management
investment company and has one class of shares which is divided into three
series (the "Shares"), each representing an interest in a separate portfolio of
investments (such series initially being the INVESCO Cash Reserves Fund; the
INVESCO U.S. Government Money Fund; and the INVESCO Tax-Free Money Fund (the
"Portfolios")); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and the Adviser desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby agrees to manage the
investment operations of the Fund's three Portfolios, subject to the terms of
this Agreement and to the supervision of the Fund's directors (the "Directors").
The Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's three Portfolios;
(b) to maintain a continuous investment program for the Fund's three
Portfolios, consistent with (i) the Portfolios' investment policies as set
forth in the Fund's Articles of Incorporation, Bylaws, and Registration
Statement, as from time to time amended, under the Investment Company Act of
1940, as amended (the "1940 Act"), and in any prospectus and/or statement of
additional information of the Fund or any Portfolio of the Fund, as from time
to time amended and in use under the Securities Act of 1933, as amended, and
(ii) the Fund's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund's three Portfolios, unless otherwise directed by the Directors of the
Fund, and to execute transactions accordingly;
(d) to provide to the Fund's three Portfolios the benefit of all of the
investment analyses and research, the reviews of current economic conditions
and trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Adviser;
<PAGE>
(e) to determine what portion of the Fund's three Portfolios should be
invested in the various types of securities authorized for purchase by the
Fund;
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund and/or Portfolio action and any other rights
pertaining to the Portfolios' securities shall be exercised; and
(g) to calculate the net asset value of the Fund and each Portfolio, as
applicable, as required by the 1940 Act, subject to such procedures as may be
established from time to time by the Fund's Directors, based upon the
information provided to the Adviser by the Fund or by the custodian, co-
custodian or sub-custodian of the Fund's or any of the Portfolios' assets
(the "Custodian") or such other source as designated by the Directors from
time to time.
With respect to execution of transactions for the Fund's three Portfolios,
the Adviser shall place, or arrange for the placement of, all orders for the
purchase or sale of portfolio securities with brokers or dealers selected by the
Adviser. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed at all times to obtain for the
Fund's three Portfolios the most favorable execution and price; after fulfilling
this primary requirement of obtaining the most favorable execution and price,
the Adviser is hereby expressly authorized to consider as a secondary factor in
selecting brokers or dealers with which such orders may be placed whether such
firms furnish statistical, research and other information or services to the
Adviser. Receipt by the Adviser of any such statistical or other information and
services should not be deemed to give rise to any requirement for adjustment of
the advisory fee payable pursuant to paragraph 4 hereof. The Adviser may follow
a policy of considering sales of shares of the Fund as a factor in the selection
of broker/dealers to execute portfolio transactions, subject to the requirements
of best execution discussed above.
The Adviser shall for all purposes herein provided be deemed to be an
independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall reimburse the Fund
monthly for any salaries paid by the Fund to officers, Directors, and full-time
employees of the Fund who also are officers, general partners or employees of
the Adviser or its affiliates. Except for such sub-accounting, recordkeeping,
and administrative services which are to be provided by the Adviser to the Fund
under the Administrative Services Agreement between the Fund and the Adviser
dated April 30, 1993, which was approved on April 21, 1993, by the Fund's board
of directors, including all of the independent directors, at the Fund's request
the Adviser shall also furnish to the Fund, at the expense of the Adviser, such
competent executive, statistical, administrative, internal accounting and
clerical services as may be required in the judgment of the Directors of the
Fund. These services will include, among other things, the maintenance (but not
preparation) of the Fund's accounts and records, and the preparation (apart from
legal and accounting costs) of all requisite corporate documents such as tax
returns and reports to the Securities and Exchange Commission and Fund
<PAGE>
shareholders. The Adviser also will furnish, at the Adviser's expense, such
office space, equipment and facilities as may be reasonably requested by the
Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and except to
the extent required by law to be paid by the Adviser, the Fund shall pay all
costs and expenses in connection with the operations and organization of the
Fund. Without limiting the generality of the foregoing, such costs and expenses
payable by the Fund include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund and any Portfolio in connection with securities
transactions to which the Fund or any Portfolio is a party or in connection
with securities owned by the Fund's three Portfolios;
(b) the fees, charges and expenses of any independent public accountants,
custodian, depository, dividend disbursing agent, dividend reinvestment
agent, transfer agent, registrar, independent pricing services and legal
counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by the Fund or any of
the Fund's three Portfolios;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Fund or any Portfolio to
federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration and
qualification of the Fund and of its shares under laws administered by the
Securities and Exchange Commission or under other applicable regulatory
requirements;
(f) the compensation and expenses of its Directors;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices, prospectuses,
statements of additional information and other communications to the Fund's
shareholders, as well as all expenses of shareholders' meetings and
Directors' meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Fund's Articles of Incorporation, including
its initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial registration
and qualification of its securities under the laws of any state and the
approval of the Fund's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Fund;
(j) insurance premiums;
<PAGE>
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund's three Portfolios;
(l) extraordinary expenses, including fees and disbursements of Fund
counsel, in connection with litigation by or against the Fund or any
Portfolio;
(m) premiums for the fidelity bond maintained by the Fund pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder (except for
such premiums as may be allocated to the Adviser as an insured thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid by the
Fund pursuant to a Plan and Agreement of Distribution adopted under Rule
12b-1 of the Investment Company Act of 1940.
3. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the
Adviser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of written
approval of the Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this Agreement
and that all costs and expenses associated with the providing of services by any
such companies or employees and required by this Agreement to be borne by the
Adviser shall be borne by the Adviser or its affiliated companies.
4. Compensation of the Adviser. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund shall pay
to the Adviser an advisory fee which will be computed on a daily basis and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of each of the three Portfolios of the Fund,
as determined by valuations made in accordance with the Fund's procedure for
calculating its net asset value as described in the Fund's Prospectuses and/or
Statement of Additional Information. The advisory fee to the Adviser with
respect to each of the Portfolios shall be computed at the following annual
rates: 0.50% of such Portfolio's average net assets up to $300 million; 0.40% of
such Portfolio's average net assets in excess of $300 million but not more than
$500 million; and 0.30% of such Portfolio's average net assets in excess of $500
million.
During any period when the determination of the Fund's net asset value is
suspended by the Directors of the Fund, the net asset value of a share of the
Fund as of the last business day prior to such suspension shall, for the purpose
of this Paragraph 4, be deemed to be the net asset value at the close of each
succeeding business day until it is again determined. However, no such fee shall
be paid to the Adviser with respect to any assets of the Fund or any Portfolio
thereof which may be invested in any other investment company for which the
Adviser serves as investment adviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect for the entire
month.
<PAGE>
If, in any given year, the sum of a Portfolio's expenses exceeds the most
restrictive state imposed annual expense limitation, the Adviser will be
required to reimburse that Portfolio for such excess expenses promptly.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for purposes of this paragraph and shall be borne by the Fund or
Portfolio in any event. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and shall not be deemed
to be expenses for purposes of this paragraph.
5. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolio of
the Fund's three Portfolios, neither the Adviser nor its officers or employees,
will act as a principal or agent for any party other than the Fund's three
Portfolios or receive any commissions. The Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; and all rules and regulations
duly promulgated under the foregoing.
6. Duration and Termination. This Agreement shall become effective as of the
date it is approved by a majority of the outstanding voting securities of the
Portfolios of the Fund, and unless sooner terminated as hereinafter provided,
shall remain in force for an initial term ending two years from the date of
execution, and from year to year thereafter, but only as long as such
continuance is specifically approved at least annually (i) by a vote of a
majority of the outstanding voting securities of the Portfolios of the Fund or
by the Directors of the Fund, and (ii) by a majority of the Directors of the
Fund who are not interested persons of the Adviser or the Fund by votes cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund's three Portfolios, as
the case may be, or by the Adviser. This Agreement shall immediately terminate
in the event of its assignment, unless an order is issued by the Securities and
Exchange Commission conditionally or unconditionally exempting such assignment
from the provisions of Section 15(a) of the 1940 Act, in which event this
Agreement shall remain in full force and effect subject to the terms and
provisions of said order. In interpreting the provisions of this paragraph 6,
the definitions contained in Section 2(a) of the 1940 Act and the applicable
rules under the 1940 Act (particularly the definitions of "interested person,"
"assignment" and "vote of a majority of the outstanding voting securities")
shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such information
on an annual basis as may reasonably be necessary to evaluate the terms of this
Agreement.
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation described in
paragraph 4 earned prior to such termination.
<PAGE>
7. Non-Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to others,
including, without limitation, other investment companies with similar
objectives to those of the Fund's three Portfolios. The Adviser may, when it
deems such to be advisable, aggregate orders for its other customers together
with any securities of the same type to be sold or purchased for the Fund's
three Portfolios in order to obtain best execution and lower brokerage
commissions. In such event, the Adviser shall allocate the shares so purchased
or sold, as well as the expenses incurred in the transaction, in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund's three Portfolios and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Fund or any
Portfolio or to the Fund's shareholders or creditors, for any error of judgment,
mistake of law, or for any loss arising out of any investment, nor for any other
act or omission, in the performance of its obligations to the Fund or any
Portfolio not involving willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties hereunder.
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Amendments Hereof. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Fund and the Adviser, and no material amendment of this Agreement shall be
effective unless approved by (1) the vote of a majority of the Directors of the
Fund, including a majority of the Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote of a
majority of the outstanding voting securities of any of the Fund's three
Portfolios as to which such amendment is applicable; provided, however, that
this paragraph shall not prevent any immaterial amendment(s) to this Agreement,
which amendment(s) may be made without shareholder approval, if such
amendment(s) are made with the approval of (1) the Directors and (2) a majority
of the Directors of the Fund who are not interested persons of the Adviser or
the Fund.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with the laws
of the State of Colorado and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with applicable provisions of the 1940 Act, the
latter shall control.
<PAGE>
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this Agreement
to be duly executed on its behalf by an officer thereunto duly authorized, the
day and year first above written.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Dan J. Hesser
-----------------
President
ATTEST:
/s/ Glen A. Payne
- ---------------------
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ---------------------
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO Funds
Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO TRUST COMPANY, a
Colorado corporation ("the Sub-Adviser").
WITNESSETH:
WHEREAS, INVESCO MONEY MARKET FUNDS, INC. (the "Company") is engaged in
business as a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act") and has one class of shares (the "Shares"), which
is divided into series, each representing an interest in a separate portfolio of
investments, with such series being designated the INVESCO Cash Reserves Fund,
the INVESCO U.S. Government Money Fund and the INVESCO Tax-Free Money Fund
(collectively, the "Funds"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with the
Company (the "INVESCO Investment Advisory Agreement"), pursuant to which INVESCO
is required to provide investment advisory services to the Company, and, upon
receipt of written approval of the Company, is authorized to retain companies
which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and in the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
The Sub-Adviser hereby agrees to manage the investment operations of the
Funds, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Funds, and to execute all purchases and sales of
portfolio securities;
<PAGE>
(b) to maintain a continuous investment program for the Funds, consistent
with (i) the Funds' investment policies as set forth in the Company's
Articles of Incorporation, Bylaws, and Registration Statement, as from time
to time amended, under the Investment Company Act of 1940, as amended (the
"1940 Act"), and in any prospectus and/or statement of additional information
of the Funds, as from time to time amended and in use under the Securities
Act of 1933, as amended, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Funds, unless otherwise directed by the Directors of the Company or INVESCO,
and to execute transactions accordingly;
(d) to provide to the Funds the benefit of all of the investment analysis
and research, the reviews of current economic conditions and trends, and the
consideration of long-range investment policy now or hereafter generally
available to investment advisory customers of the Sub-Adviser;
(e) to determine what portion of the Funds should be invested in the
various types of securities authorized for purchase by the Funds; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Funds action and any other rights pertaining to the
Funds' portfolio securities shall be exercised.
With respect to execution of transactions for the Funds, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Funds to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Funds, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Funds may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Funds. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Funds of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge or
familiarity with sources from or to whom such securities may be purchased or
sold. Where the commission rate reflects services, reliability and other
relevant factors in addition to the cost of execution, the Sub-Adviser shall
have the burden of demonstrating that such expenditures were bona fide and for
the benefit of the Funds.
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement. Except to the extent expressly assumed by
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, INVESCO and/or the Company shall pay all costs and expenses in
connection with the operations of the Funds.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by the
Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Funds, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.15% of each Fund's daily net assets. During any period when the
determination of the Funds' net asset value is suspended by the Directors of the
Funds, the net asset value of a share of the Funds as of the last business day
prior to such suspension shall, for the purpose of this Article III, be deemed
to be the net asset value at the close of each succeeding business day until it
is again determined. However, no such fee shall be paid to the Sub-Adviser with
respect to any assets of the Funds which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub-adviser.
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the INVESCO
Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Funds are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Funds are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Funds as directors, officers and employees.
<PAGE>
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolios of the Funds, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Funds or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended, and all rules and regulations
duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATON OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Funds, and unless sooner
terminated as hereinafter provided, shall remain in force for an initial term
ending two years from the date of execution, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (i) a vote of a majority of the outstanding voting securities of the Funds or
by the Directors of the Company, and (ii) a majority of the Directors of the
Company who are not interested persons of the Advisor or the Company by votes
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Funds by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Funds, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company shall require such notice to each of the parties. This Agreement
shall automatically terminate in the event of its assignment to the extent
required by the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF HIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
<PAGE>
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the Funds (other than an amendment which can be
effective without shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- -------------------
Secretary
INVESCO TRUST COMPANY
By: /s/ Dan J. Hesser
-----------------
President
ATTEST:
/s/ Glen A. Payne
- --------------------
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 between INVESCO
MONEY MARKET FUNDS, INC., a Maryland corporation (the "Fund"), and INVESCO FUNDS
GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares") which is
divided into three series, and which may be divided into additional series (the
"Series"), each representing an interest in a separate portfolio of investments,
and it is in the interest of the Fund to offer the Shares for sale continuously;
and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the
distribution of Shares of each Series in jurisdictions wherein such
Shares legally may be offered for sale; provided, however, that the
Fund in its absolute discretion may (a) issue or sell Shares of each
Series directly to purchasers, or (b) issue or sell Shares of a
particular Series to the shareholders of any other Series or to the
shareholders of any other investment company, for which the
Underwriter or any affiliate thereof shall act as exclusive
distributor, who wish to exchange all or a portion of their
investment in Shares of such Series or in shares of such other
investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable. The Fund reserves
the right to reject any subscription in whole or in part for
any reason.
2. The Underwriter hereby agrees to serve as agent for the
distribution of the Shares and agrees that it will use its best
efforts with reasonable promptness to sell such part of the
authorized Shares remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933, as amended
(the "1933 Act"), at such prices and on such terms as hereinafter
set forth, all subject to applicable federal and state securities
laws and regulations. Nothing herein shall be construed to prohibit
the Underwriter from engaging in other related or unrelated
businesses.
<PAGE>
3. In addition to serving as the Fund's agent in the
distribution of the Shares, the Underwriter shall also provide to
the holders of the Shares certain maintenance, support or similar
services ("Shareholder Services"). Such services shall include,
without limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in considering whether to
change dividend options and helping to effectuate such changes,
arranging for bank wires, and providing such other services as the
Fund may reasonably request from time to time. It is expressly
understood that the Underwriter or the Fund may enter into one or
more agreements with third parties pursuant to which such third
parties may provide the Shareholder Services provided for in
this paragraph. Nothing herein shall be construed to impose upon the
Underwriter any duty or expense in connection with the services of
any registrar, transfer agent or custodian appointed by the Fund,
the computation of the asset value or offering price of Shares, the
preparation and distribution of notices of meetings, proxy
soliciting material, annual and periodic reports, dividends
and dividend notices, or any other responsibility of the Fund.
4. Except as otherwise specifically provided for in this
Agreement, the Underwriter shall sell the Shares directly to
purchasers, or through qualified broker-dealers or others, in such
manner, not inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the 1933 Act (the
"Registration Statement") and related Prospectus (the "Prospectus")
and Statement of Additional Information ("SAI") of the Fund as the
Underwriter may determine from time to time; provided that no
broker-dealer or other person shall be appointed or authorized to
act as agent of the Fund without the prior consent of the directors
(the "Directors") of the Fund. The Underwriter will require each
broker-dealer to conform to the provisions hereof and of the
Registration Statement (and related Prospectus and SAI) at the time
in effect under the 1933 Act with respect to the public offering
price of the Shares of any Series. The Fund will have no obligation
to pay any commissions or other remuneration to such broker-dealers
5. The Shares of each Series offered for sale or sold by the
Underwriter shall be offered or sold at the net asset value per
share determined in accordance with the then current Prospectus
and/or SAI relating to the sale of the Shares of the appropriate
Series except as departure from such prices shall be permitted by
the then current Prospectus and/or SAI of the Fund, in accordance
with applicable rules and regulations of the Securities and Exchange
Commission. The price the Fund shall receive for the Shares of each
Series purchased from the Fund shall be the net asset value per
share of such Share, determined in accordance with the Prospectus
and/or SAI applicable to the sale of the Shares of such Series.
<PAGE>
6. Except as may be otherwise agreed to by the Fund, the
Underwriter shall be responsible for issuing and delivering such
confirmations of sales made by it pursuant to this Agreement as may
be required; provided, however, that the Underwriter or the Fund may
utilize the services of other persons or entities believed by it to
be competent to perform such functions. Shares shall be registered
on the transfer books of the Fund in such names and denominations as
the Underwriter may specify.
7. The Fund will execute any and all documents and furnish any
and all information which may be reasonably necessary in connection
with the qualification of the Shares for sale (including the
qualification of the Fund as a broker-dealer where necessary or
advisable) in such states as the Underwriter may reasonably request
(it being understood that the Fund shall not be required without its
consent to comply with any requirement which in the opinion of the
Directors of the Fund is unduly burdensome). The Underwriter, at its
own expense, will effect all qualifications of itself as broker or
dealer, or otherwise, under all applicable state or Federal laws
required in order that the Shares may be sold in such states or
jurisdictions as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter from
time to time the most recent form of the Prospectus and/or SAI of
the Fund and/or of each Series of the Fund. The Fund authorizes the
Underwriter to use the Prospectus and/or SAI, in the forms furnished
to the Underwriter from time to time, in connection with the sale of
the Shares of the Fund and/or of each Series of the Fund. The Fund
will furnish to the Underwriter from time to time such information
with respect to the Fund, each Series, and the Shares as the
Underwriter may reasonably request for use in connection with the
sale of the Shares. The Underwriter agrees that it will not use or
distribute or authorize the use, distribution or dissemination by
broker-dealers or others in connection with the sale of the Shares
any statements, other than those contained in a current Prospectus
and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under
Federal and state securities laws and regulations, and that it will
promptly furnish the Fund with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may
cause the redemption or repurchase of the Shares at such prices and
upon such terms and conditions as shall be specified in a then
current Prospectus and/or SAI. In selling, redeeming or repurchasing
<PAGE>
the Shares for the account of the Fund, the Underwriter will in all
respects conform to the requirements of all state and federal laws
and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale, redemption or
repurchase, as the case may be. The Underwriter will observe and be
bound by all the provisions of the Articles of Incorporation or
Bylaws of the Fund and of any provisions in the Registration
Statement, Prospectus and SAI, as such may be amended or
supplemented from time to time, notice of which shall have been
given to the Underwriter, which at the time in any way require,
limit, restrict or prohibit or otherwise regulate any action on the
part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such
claims, demands or liabilities and any attorney fees incurred
in connection therewith) which the Underwriter, its officers
and directors or any such controlling person, may incur under
the federal securities laws, the common law or otherwise,
arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or any
related Prospectus and/or SAI or arising out of or based upon
any alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
Notwithstanding the foregoing, this indemnity agreement, to the
extent that it might require indemnity of the Underwriter or any
person who is an officer, director or controlling person of the
Underwriter, shall not inure to the benefit of the Underwriter
or officer, director or controlling person thereof unless a
court of competent jurisdiction shall determine, or it shall
have been determined by controlling precedent, that such result
would not be against public policy as expressed in the federal
securities laws and in no event shall anything contained herein
be so construed as to protect the Underwriter against any
liability to the Fund, the Directors or the Fund's shareholders
to which the Underwriter would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against whom
such action is brought within ten (10) days after the summons or
other first legal process shall have been served upon the
<PAGE>
Underwriter, its officers or directors or any such controlling
person. The failure to notify the Fund of any such action shall
not relieve the Fund from any liability which it may have to the
person against whom such action is brought by reason of any such
alleged untrue statement or omission otherwise than on account
of the indemnity agreement contained in this paragraph. The
Fund shall be entitled to assume the defense of any suit brought
to enforce such claim, demand, or liability, but in such case
the defense shall be conducted by counsel chosen by the Fund and
approved by the Underwriter, which approval shall not be
unreasonably withheld. If the Fund elects to assume the defense
of any such suit and retain counsel approved by the Underwriter,
the defendant or defendants in such suit shall bear the fees and
expenses of an additional counsel obtained by any of them.
Should the Fund elect not to assume the defense of any such
suit, or should the Underwriter not approve of counsel chosen
by the Fund, the Fund will reimburse the Underwriter, its
officers and directors or the controlling person or persons
named as defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained by the
Underwriter or them. In addition, the Underwriter shall have
the right to employ counsel to represent it, its officers and
directors and any such controlling person who may be subject
to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriter against the Fund
hereunder if in the reasonable judgment of the Underwriter it
is advisable for the Underwriter, its officers and directors
or such controlling person to be represented by separate
counsel, in which event the reasonable fees and expenses of
such separate counsel shall be borne by the Fund. This
indemnity agreement and the Fund's representations and
warranties in this Agreement shall remain operative and in
full force and effect and shall survive the delivery of any of
the Shares as provided in this Agreement. This indemnity
agreement shall inure exclusively to the benefit of the
Underwriter and its successors, the Underwriter's officers and
directors and their respective estates and any such
controlling person and their successors and estates. The Fund
shall promptly notify the Underwriter of the commencement of
any litigation or proceeding against it in connection with the
issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Fund, its Directors and any person who controls the Fund
within the meaning of the 1933 Act, from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities
and any attorney fees incurred in connection therewith) which
the Fund, its Directors or any such controlling person may
incur under the Federal securities laws, the common law or
otherwise, but only to the extent that such liability or expense
incurred by the Fund, its Directors or such controlling person
<PAGE>
resulting from such claims or demands shall arise out of or be
based upon (a) any alleged untrue statement of a material fact
contained in information furnished in writing by the Underwriter
to the Fund specifically for use in the Registration Statement
or any related Prospectus and/or SAI or shall arise out of or be
based upon any alleged omission to state a material fact in
connection with such information required to be stated in the
Registration Statement or the related Prospectus and/or SAI or
necessary to make such information not misleading and (b) any
alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the
Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to the
extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado, and
sent to the Underwriter by the person against whom such action
is brought, within ten (10) days after the summons or other
first legal process shall have been served upon the Fund, its
Directors or any such controlling person. The failure to notify
the Underwriter of any such action shall not relieve the
Underwriter from any liability which it may have to the person
against whom such action is brought by reason of any such
alleged untrue statement or omission otherwise than on account
of the indemnity agreement contained in this paragraph. The
Underwriter shall be entitled to assume the defense of any
suit brought to enforce such claim, demand, or liability, but
in such case the defense shall be conducted by counsel chosen
by the Underwriter and approved by the Fund, which approval
shall not be unreasonably withheld. If the Underwriter elects
to assume the defense of any such suit and retain counsel
approved by the Fund, the defendant or defendants in such suit
shall bear the fees and expenses of an additional counsel
<PAGE>
obtained by any of them. Should the Underwriter elect not to
assume the defense of any such suit, or should the Fund not
approve of counsel chosen by the Underwriter, the Underwriter
will reimburse the Fund, its Directors or the controlling
person or persons named as defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel
retained by the Fund or them. In addition, the Fund shall have
the right to employ counsel to represent it, its Directors and
any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be
sought by the Fund against the Underwriter hereunder if in the
reasonable judgment of the Fund it is advisable for the Fund,
its Directors or such controlling person to be represented by
separate counsel, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the
Underwriter. This indemnity agreement and the Underwriter's
representations and warranties in this Agreement shall remain
operative and in full force and effect and shall survive the
delivery of any of the Shares as provided in this Agreement.
This indemnity agreement shall inure exclusively to the
benefit of the Fund and its successors, the Fund's Directors
and their respective estates and any such controlling person
and their successors and estates. The Underwriter shall
promptly notify the Fund of the commencement of any litigation
or proceeding against it in connection with the issue and sale
of the Shares.
12. The Fund will pay or cause to be paid (a) expenses
(including the fees and disbursements of its own counsel)
of any registration of the Shares under the 1933 Act, as
amended, (b) expenses incident to the issuance of the Shares,
and (c) expenses (including the fees and disbursements of its
own counsel) incurred in connection with the preparation,
printing and distribution of the Fund's Prospectuses, SAIs, and
periodic and other reports sent to holders of the Shares in
their capacity as such. The Underwriter shall prepare and
provide necessary copies of all sales literature subject to the
Fund's approval thereof.
13. This Agreement shall become effective as of the date it is
approved by a majority vote of the Directors of the Fund, as
well as a majority vote of the Directors who are not "interested
persons" (as defined in the Investment Company Act) of the
Fund, and shall continue in effect for an initial term expiring
February 28, 1998, and from year to year thereafter, but only so
long as such continuance is specifically approved at least
annually (a)(i) by a vote of the Directors of the Fund or (ii)
by a vote of a majority of the outstanding voting securities of
the Fund, and (b) by a vote of a majority of the Directors of
the Fund who are not "interested persons," as defined in the
Investment Company Act, of the Fund cast in person at a meeting
for the purpose of voting on this Agreement.
<PAGE>
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at
least 60 days' prior written notice of such termination
specifying the date fixed therefor. In particular, this
Agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of the members of the Directors
of the Fund or by a vote of a majority of the outstanding
voting securities of the Fund on not more than 60 days' written
notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for
in this Agreement or otherwise, the Fund may terminate this
Agreement at any time immediately upon the Underwriter's failure
to fulfill any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything
to the contrary herein, or in any applicable law, it will
look solely to the assets of the Fund for any obligations of the
Fund hereunder and nothing herein shall be construed to create
any personal liability on the part of any Director or any
shareholder of the Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15,
the definition of "assignment" contained in the Investment
Company Act shall be applied.
16. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at
such address as such other party may designate for the receipt
of such notice.
17. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the Fund and the Underwriter and, if
applicable, approved in the manner required by the Investment
Company Act.
18. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such
illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation hereof
shall be governed exclusively by the laws of the State of
Colorado.
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO MONEY MARKET FUNDS, INC.
ATTEST:
By: /s/ Dan J. Hesser
-----------------
/s/ Glen A. Payne Dan J. Hesser
- -------------------- President
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
--------------------
/s/ Glen A. Payne Ronald L. Grooms
- -------------------- Senior Vice President
Glen A. Payne
Secretary
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
a. Service Termination. Service Termination means termination of service
(other than by disability or death) of an Independent Director which results
from the Director's having reached his Service Termination Date.
b. Service Termination Date. An Independent Director's Service Termination
Date is normally the last day of the calendar quarter in which such Director's
seventy-second birthday occurs. A majority of the Board of a Fund may annually
extend a Director's Service Termination Date for a maximum period of three
years, through the date not later than the last day of the calendar quarter in
which such Director's seventy-fifth birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean an Independent Director's normal Service Termination Date, or the
Director's extended Service Termination Date, whichever may be applicable to the
Independent Director.
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not later than the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director will receive
four quarterly payments during the first twelve months subsequent to his Service
Termination Date (the "First Year Retirement Payments"), with each payment to be
equal to 25 percent of the annual basic retainer payable by each Fund to the
Independent Director on his Service Termination Date (excluding any fees
relating to attending meetings or chairing committees).
<PAGE>
b. Benefit. Commencing with the first anniversary of the Service
Termination Date of any Independent Director who has received the First Year
Retirement Payments, and commencing as of the Service Termination Date of an
Independent Director whose Service Termination Date is subsequent to the date of
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurred, the Independent Director will receive, for the remainder of
his life, a benefit (the "Benefit"), payable quarterly, with each quarterly
payment to be equal to 10 percent of the annual basic retainer payable by each
Fund to the Independent Director on his Service Termination Date (excluding any
fees relating to attending meetings or chairing committees).
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for a period of ten years, with quarterly payments to
be made to the designated beneficiary.
If an Independent Director's service as a Director is terminated because of
his death prior to the last day of the calendar quarter in which such Director's
seventy-second birthday occurs or subsequent to the last day of the calendar
quarter in which such Director's seventy-fourth birthday occurred, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his disability subsequent to the last day of
the calendar quarter in which such Director's seventy-second birthday occurred
and prior to the last day of the calendar quarter in which such Director's
seventy-fourth birthday occurs, the Independent Director shall receive the First
Year Retirement Payments and shall, commencing with the quarter following the
quarter in which the last First Year Retirement Payment is made, receive the
Benefit for the remainder of his life, with quarterly payments to be made to the
disabled Independent Director. If the disabled Independent Director should die
before the First Year Retirement Payments are completed and before forty
quarterly Benefit payments are made, such payments will continue to be made to
the Independent Director's designated beneficiary until the aggregate of the
First Year Retirement Payments and forty quarterly Benefit payments have been
made to the disabled Independent Director and the Director's designated
beneficiary.
If an Independent Director's service as a Director is terminated because of
his disability prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
Independent Director shall receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
<PAGE>
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If the Independent
Director and his designated beneficiary should die before the First Year
Retirement Payments and/or a total of forty quarterly Benefit payments are made,
the remaining value of the Independent Director's First Year Retirement Payments
and/or Benefit shall be determined as of the date of the death of the
Independent Director's designated beneficiary and shall be paid to the estate of
the designated beneficiary in one lump sum or in periodic payments, with the
determinations with respect to the value of the First Year Retirement Payments
and/or Benefit and the method and frequency of payment to be made by the
Committee (as defined in paragraph 8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
First Year Retirement Payments and/or Benefit shall be determined as of the date
of the death of the Independent Director by the Committee and shall be paid as
promptly as possible in one lump sum to the Independent Director's estate.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will be
paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit:
Allocation of Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or Benefit applicable to the Fund, as well as its
proportionate share of all expenses of administration of the Plan, including
without limitation all accounting and legal fees and expenses and fees and
expenses of any Actuary. The obligations of each Fund to pay such First Year
<PAGE>
Retirement Payments and/or Benefit and expenses will not be secured or funded in
any manner, and such obligations will not have any preference over the lawful
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or Benefit is paid by more than one Fund, such
costs and expenses will be allocated among such Funds in a manner that is
determined by the Committee to be fair and equitable under the circumstances. To
the extent that one or more of such Funds consist of one or more separate
portfolios, such costs and expenses allocated to any such Fund will thereafter
be allocated among such portfolios by the Board of the Fund in a manner that is
determined by such Board to be fair and equitable under the circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. Except as
otherwise provided herein, the Committee will make all interpretations and
determinations necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive. Committee
members will be elected annually.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board of any Fund to nominate any Independent Director for
reelection.
<PAGE>
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993. Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
The INVESCO Advisor Funds, Inc.
INVESCO Treasurer's Series Trust
CUSTODIAN CONTRACT
Between
INVESCO MONEY MARKET FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENT
Page
----
1. Employment of Custodian and Property to be held by It 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian in the United States 3
2.1 Holding Securities 3
2.2 Delivery of Securities 3
2.3 Registration of Securities 8
2.4 Bank Accounts 9
2.5 Availability of Federal Funds 10
2.6 Collection of Income 10
2.7 Payment of Fund Monies 11
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased 14
2.9 Appointment of Agents 15
2.10 Deposit of Fund Assets in Securities System 15
2.10A Fund Assets Held in the Custodian's Direct
Paper System 18
2.11 Segregated Account 20
2.12 Ownership Certificates for Tax Purposes 21
2.13 Proxies 22
2.14 Communications Relating to Portfolio Securities 22
3. Duties of the Custodian with Respect to Property of the
Fund Held Outside of the United States 23
3.1 Appointment of Foreign Sub-Custodians 23
3.2 Assets to be Held 23
3.3 Foreign Securities Depositories 24
3.4 Agreements with Foreign Banking Institutions 24
3.5 Access of Independent Accountants of the Fund 25
3.6 Reports by Custodian 25
3.7 Transactions in Foreign Custody Account 26
3.8 Liability of Foreign Sub-Custodians 27
3.9 Liability of Custodian 27
3.10 Reimbursement for Advances 28
3.11 Monitoring Responsibilities 29
3.12 Branches of U.S. Banks 29
3.13 Tax Laws 30
4. Payments for Sales or Repurchase or Redemptions of
Shares of the Fund 31
5. Proper Instructions 32
6. Actions Permitted Without Express Authority 33
7. Evidence of Authority 33
<PAGE>
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income 34
9. Record 34
10. Opinion of Fund's Independent Accountants 35
11. Reports to Fund by Independent Public Accountants 35
12. Compensation of Custodian 36
13. Responsibility of Custodian 36
14. Effective Period, Termination and Amendment 38
15. Successor Custodian 40
16. Interpretive and Additional Provisions 41
17. Additional Funds 42
18. Massachusetts Law to Apply 42
19. Prior Contracts 42
20. Shareholder Communications 43
<PAGE>
CUSTODIAN CONTRACT
This Contract between Invesco Money Market Funds, Inc., a corporation
organized and existing under the laws of Maryland, having its principal place of
business at 7800 E. Union Avenue, Denver, Colorado 80237 hereinafter called the
"Fund", and State Street Bank and Trust Company, a Massachusetts trust company,
having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in two series, the
Invesco Cash Reserve Fund and Invesco Tax Free Money Fund (such series together
with all other series subsequently established by the Fund and made subject to
this Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund representing interests in the Portfolios, ("Shares") as may be issued
or sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
<PAGE>
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by it
in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee name
of any sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities are to be
delivered to the Custodian;
<PAGE>
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a receipt,
for examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund on behalf of
the Portfolio, which may be in the form of cash or obligations
issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the receipt
of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by the
Fund on behalf of the Portfolio, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Securities Exchange Act of
1934 (the "Exchange Act") and a member of The National Association
of Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian, and a
Futures Commission Merchant registered under the Commodity Exchange
<PAGE>
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind, as may
be described from time to time in the currently effective prospectus
and statement of additional information of the Fund, related to the
Portfolio ("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board
of Directors or of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio to be delivered, setting
forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for the
account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as
<PAGE>
it may in its discretion deem necessary or desirable; provided, however,
that every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each such bank
or trust company and the funds to be deposited with each such bank or
trust company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Directors of the Fund. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of
the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options on
futures contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to
act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Portfolio or
<PAGE>
in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the Portfolio
and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
the Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio declared
pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions from the Fund on behalf of the Portfolio, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment is to
be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
a Portfolio is made by the Custodian in advance of receipt of the
<PAGE>
securities purchased in the absence of specific written instructions from
the Fund on behalf of such Portfolio to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such of
the provisions of this Article 2 as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are represented in
an account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Portfolio. The
Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Portfolio.
Copies of all advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the Custodian and be
provided to the Fund at its request. Upon request, the Custodian
shall furnish the Fund on behalf of the Portfolio confirmation of
each transfer to or from the account of the Portfolio in the form of
a written advice or notice and shall furnish to the Fund on behalf
of the Portfolio copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account of the
Portfolio.
<PAGE>
4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System;
5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or
their employees or from failure of the Custodian or any such agent
to enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made whole for any
such loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System. The Custodian may
deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the Fund
on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
<PAGE>
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the Portfolio with
any report on its system of internal accounting control as the Fund
may reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of Directors or
of the Executive Committee signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
<PAGE>
2.14 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Portfolio
shall notify the Custodian at least three business days prior to the date
on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Directors, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the Portfolios
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the provisions
set forth in Section 3.4 hereof.
<PAGE>
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance
of such foreign banking institution under its agreement with the
Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of each applicable Portfolio indicating, as to securities acquired
for a Portfolio, the identity of the entity having physical possession of
such securities.
3.7 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.7, the provision of Sections
2.2 and 2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians. (b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the account
of each applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer. (c)
Securities maintained in the custody of a foreign sub-custodian may be
<PAGE>
maintained in the name of such entity's nominee to the same extent as set
forth in Section 2.3 of this Contract, and the Fund agrees to hold any
such nominee harmless from any liability as a holder of record of such
securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and hold harmless, the
Custodian and each Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set forth
with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
contemplated by paragraph 3.12 hereof, the Custodian shall not be liable
for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.9, in delegating custody duties to State Street London Ltd.,
the Custodian shall not be relieved of any responsibility to the Fund for
any loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Portfolios assets to the extent necessary to obtain reimbursement.
<PAGE>
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection with
the initial approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract. (b) Cash
held for each Portfolio of the Fund in the United Kingdom shall be
maintained in an interest bearing account established for the Fund with
the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
3.13 Tax Law. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the responsibility
of the Fund to notify the Custodian of the obligations imposed on the Fund
or the Custodian as custodian of the Fund by the tax law of jurisdictions
other than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to
use reasonable efforts to assist the Fund with respect to any claim for
exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
<PAGE>
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
<PAGE>
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Portfolio except as otherwise directed by the
Board of Directors of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, if directed in writing to do so
by the Fund on behalf of the Portfolio, shall itself keep such books of account
and/or compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Portfolio as described in the
Fund's currently effective prospectus related to such Portfolio and shall advise
the Fund and the Transfer Agent daily of the total amounts of such net income
and, if instructed in writing by an officer of the Fund to do so, shall advise
the Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share and the
daily income of each Portfolio shall be made at the time or times described from
time to time in the Fund's currently effective prospectus related to such
Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the Investment Company Act
of 1940, with particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the Fund and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by each Portfolio and held by the Custodian and shall, when requested to
do so by the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.
<PAGE>
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
<PAGE>
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody of any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement)
for the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange or in the event that the Custodian
or its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Contract, except such as may arise from its or its nominee's own negligent
action, negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities System by such Portfolio, as
required by Rule 17f-4 under the Investment Company Act of 1940, as amended and
that the Custodian shall not with respect to a Portfolio act under Section 2.10A
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Directors has approved the initial use
of the Direct Paper System by such Portfolio; provided further, however, that
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Articles of
Incorporation, and further provided, that the Fund on behalf of one or more of
the Portfolios may at any time by action of its Board of Directors (i)
<PAGE>
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Contract in
the event of the appointment of a conservator or receiver for the Custodian by
the Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Directors of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
<PAGE>
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Articles of Incorporation of the Fund.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to Invesco Cash Reserves Fund and Invesco Tax-Free Money Fund with
respect to which it desires to have the Custodian render services as custodian
under the terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
20. Shareholder Communications
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether the Fund authorizes
the Custodian to provide the Fund's name, address, and share position to
requesting companies whose stock the Fund owns. If the Fund tells the Custodian
"no", the Custodian will not provide this information to requesting companies.
If the Fund tells the Custodian "yes" or do not check either "yes" or "no"
below, the Custodian is required by the rule to treat the Fund as consenting to
disclosure of this information for all securities owned by the Fund or any funds
or accounts established by the Fund. For the Fund's protection, the Rule
prohibits the requesting company from using the Fund's name and address for any
purpose other than corporate communications. Please indicate below whether the
Fund consent or object by checking one of the alternatives below.
<PAGE>
YES [ ] You are authorized to release our name, address,
and share positions.
NO [ X ] You are not authorized to release our name, address,
and share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the lst day of July, 1993.
ATTEST INVESCO MONEY MARKET FUNDS, INC.
By /s/ John M. Butler
----------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Thomas A. Forrester By /s/ Ronald E. Logue
- ----------------------- ----------------------------
Asssistant Secretary Executive Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, Colorado 80237
Post Office Box 173706
Denver, Colorado 80217-3706
Telephone: 303-930-6300
January 20, 1994
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
Gentlemen:
This is to advise you that INVESCO Money Market Funds, Inc. has established a
new series of shares to be known as INVESCO U.S. Government Money Fund. In
accordance with the Additional Funds provision in Section 17 of the Custodian
Contract dated July 1, 1993 between the Fund and State Street Bank and Trust
Company, the Fund hereby requests that you act as Custodian for the new shares
under the terms of the respective contract beginning the close of business on
January 31, 1994.
Please indicate your acceptance of the foregoing by executing two copies of this
Letter Agreement, returning one to the Fund and retaining one copy for your
records.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Dan J. Hesser
---------------------------
Dan J. Hesser, President
Agreed to this 31 day of January, 1994
By: Charles N. Whittemore, Jr.
--------------------------
Vice President
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and INVESCO Money Market Funds, Inc. (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated July 1, 1993 (the "Custodian Contract") governing the terms and conditions
under which the Custodian maintains custody of the securities and other assets
of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by bookentry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 25th day of October, 1995.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Glen A. Payne
----------------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By: /s/ Charles N. Whittemore Jr.
-----------------------------
Title: Vice President
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between each Fund listed on Appendix A, (individually a
"Customer" and collectively, the "Customers") and State Street Bank and Trust
Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
each Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Customers;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZONR
Accounting System, in its role as custodian of each Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Customer with access to State Street's
Multicurrency HORIZONR Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Customer and
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Customer to originate
electronic instructions to State Street on behalf of each Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
<PAGE>
c. Additional Services. State Street may from time to time agree to make
available to a Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, a Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, each Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of a Customer or the Investment Advisor or
Independent Auditor located in Denver, Colorado ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Customer agree
that each will engage or retain the services of trained personnel to enable both
State Street and the Customer to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. Each Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
<PAGE>
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Customer's access to services performed by the System or
to Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, a
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
g. Security Procedures. Each Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. Each Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of the
System and the Data Access Services by the Customer and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Customer and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Customer's or the Investment Advisor's business.
<PAGE>
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to each Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Customer agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. Each Customer further acknowledges that State Street
shall not be required to provide the Investment Advisor or the Investment
Auditor with access to the System unless it has first received from the
Investment Advisor of the Investment Auditor an undertaking with respect to
State Street's Proprietary Information in the form of Attachment C and/or
Attachment C-1 to this Agreement. Each Customer shall use all commercially
reasonable efforts to assist State Street in identifying and preventing any
unauthorized use, copying or disclosure of the Proprietary Information or any
portions thereof or any of the logic, formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and each Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief. Each Customer acknowledges that the disclosure of any
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive the termination
of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. Each Customer agrees
any liability of State Street to the Customer or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
<PAGE>
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither State Street or a Customer shall be liable for
any costs or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including without
limitation, cessation of services hereunder or any damages resulting therefrom
to the other party, or the Customer as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
Each Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor or the Independent Auditor of the Customer and (ii) any loss
resulting from incorrect Client Originated Electronic Financial Instructions.
State Street shall be entitled to rely on the validity and authenticity of
Client Originated Electronic Financial Instructions without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by State Street from time to time.
<PAGE>
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Agreement, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by each Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated State
Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. Each Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the Data
Access Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation
to enable both parties to perform their respective obligations
under this Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
<PAGE>
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date of
its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i) for
any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of the Agreement by giving the other
party written notice of termination. In the event the Customer shall cease doing
business, shall become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Agreement and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Customer.
Termination of this Agreement with respect to any given Customer shall in no way
affect the continued validity of this Agreement with respect to any other
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Agreement for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Agreement for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Customer terminates this Agreement or
the Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by State Street and the Customer.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations of
each Customer and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
<PAGE>
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Agreement is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
or any right hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
IN WITNESS WHEREOF, each of the undersigned Funds severally has caused this
Agreement to be duly executed in its name and through its duly authorized
officer as of the date hereof.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald R. Logue
-------------------------
Title: Executive Vice President
Date: _________________________
EACH FUND LISTED ON APPENDIX A
By: /s/ Glen A. Payne
-------------------------
Title: Secretary
-------------------------
Date: May 19, 1997
<PAGE>
APPENDIX A
INVESCO FUNDS
INVESCO Diversified Funds, Inc.
INVESCO Small Company Value Fund
INVESCO Dynamics Fund, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Small Company Growth Fund
INVESCO Worldwide Emerging Markets Fund
INVESCO Growth Fund, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO High Yield Fund
INVESCO Select Income Fund
INVESCO Short-Term Bond Fund
INVESCO U.S. Government Bond Fund
INVESCO Industrial Income Fund, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO European Fund
INVESCO International Growth Fund
INVESCO Pacific Basin Fund
INVESCO Money Market Funds, Inc.
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
INVESCO U.S. Government Money Fund
INVESCO Multiple Asset Funds, Inc.
INVESCO Balanced Fund
INVESCO Multi-Asset Allocation Fund
<PAGE>
INVESCO Specialty Funds, Inc.
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Realty Fund
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
INVESCO Strategic Portfolios, Inc.
Energy Portfolio
Environmental Services Portfolio
Financial Services Portfolio
Gold Portfolio
Health Sciences Portfolio
Leisure Portfolio
Technology Portfolio
Utilities Portfolio
INVESCO Tax-Free Income Funds, Inc.
INVESCO Tax-Free Intermediate Bond Fund
INVESCO Tax-Free Long-Term Bond Fund
INVESCO Treasurer's Series Trust
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Prime Reserve Fund
INVESCO Treasurer's Special Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
INVESCO Value Trust
INVESCO Intermediate Government Bond Fund
INVESCO Total Return Fund
INVESCO Value Equity Fund
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Dynamics Portfolio
INVESCO VIF-Health Sciences Portfolio
INVESCO VIF-High Yield Portfolio
INVESCO VIF-Industrial Income Portfolio
INVESCO VIF-Small Company Growth Portfolio
INVESCO VIF-Technology Portfolio
INVESCO VIF-Total Return Portfolio
INVESCO VIF-Utilities Portfolio
INVESCO VIF-Growth Portfolio*
*Effective May 1, 1997.
<PAGE>
ATTACHMENT A
Multicurrency HORIZONR Accounting System
System Product Description
I. The Multicurrency HORIZONR Accounting System is designed to provide lot level
portfolio and general ledger accounting for SEC and ERISA type requirements and
includes the following services: 1) recording of general ledger entries; 2)
calculation of daily income and expense; 3) reconciliation of daily activity
with the trial balance, and 4) appropriate automated feeding mechanisms to (i)
domestic and international settlement systems, (ii) daily, weekly and monthly
evaluation services, (iii) portfolio performance and analytic services, (iv)
customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuestR GlobalQuestR is designed to provide customer access to the
following information maintained on The Multicurrency HORIZONR Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund receivables; 5) daily priced positions; 6) open
trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.
III. HORIZONR Gateway. HORIZONR Gateway provides customers with the ability
to (i) generate reports using information maintained on the Multicurrency
HORIZONR Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency HORIZONR
Accounting System; and (iii) access previous day and historical data. The
following information which may be accessed for these purposes: 1) holdings; 2)
holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger
and 7) cash.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to each of the Funds (individually a, "Customer" ,
collectively, the "Customers") it will have access to State Street Bank and
Trust Company's ("State Street") Multicurrency HORIZON Accounting System and
other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
By: /s/ Glen A. Payne
------------------------
Title: Secretary
------------------------
Date: May 19, 1997
------------------------
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's HORIZONR Help Desk and Customer Assistance Center between the hours of
8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of
obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to support
the Customer's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, between INVESCO
SPECIALTY FUNDS, INC., a Maryland corporation, having its principal office and
place of business at 7800 East Union Avenue, Denver, Colorado 80237 (hereinafter
referred to as the "Fund") and INVESCO FUNDS GROUP, INC., a Delaware
corporation, having its principal place of business at 7800 East Union Avenue,
Denver, Colorado 80237 (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise
requires, shall have the following meanings:
(a) "Authorized Person" shall be deemed to include the
President, any Vice President, the Secretary,
Treasurer, or any other person, whether or not any
such person is an officer or employee of the Fund,
duly authorized to give Oral Instructions and
Written Instructions on behalf of the Fund as
indicated in a certification as may be received by
the Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction
or other instrument in writing, authorized or
required by this Agreement to be given to the
Transfer Agent, which is actually received by the
Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in the
1940 Act;
(d) "Custodian" refers to the custodian of all of the
securities and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions
actually received by the Transfer Agent from a
person reasonably believed by the Transfer Agent to
be an Authorized Person;
(f) "Prospectus" shall mean the currently effective
prospectus relating to the Fund's Shares
registered under the Securities Act of 1933;
(g) "Shares" refers to the shares of common stock, $.01
par value, of the Fund;
(h) "Shareholder" means a record owner of Shares;
<PAGE>
(i) "Written Instructions" shall mean a written communication
actually received by the Transfer Agent where the receiver is
able to verify with a reasonable degree of certainty the
authenticity of the sender of such communication; and
(j) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time.
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it has an effective
registration statement on SEC Form TA-1 and, accordingly, has duly
registered as a transfer agent as provided in Section 17A(c) of the
Securities Exchange Act of 1934.
3. Appointment of the Transfer Agent. The Fund hereby
appoints and constitutes the Transfer Agent as transfer
agent for all of the Shares of the Fund authorized as of
the date hereof, and the Transfer Agent accepts such
appointment and agrees to perform the duties herein set
forth. If the board of directors of the Fund hereafter
reclassifies the Shares, by the creation of one or more
additional series or otherwise, the Transfer Agent agrees
that it will act as transfer agent for the Shares so
reclassified on the terms set forth herein.
4. Compensation.
(a) The Fund will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the
fees set forth in the Fee Schedule annexed hereto and
incorporated herein.
(b) The parties hereto will agree upon the compensation
for acting as transfer agent for any series of
Shares hereafter designated and established at the
time that the Transfer Agent commences serving as
such for said series, and such agreement shall be
reflected in a Fee Schedule for that series, dated
and signed by an authorized officer of each party
hereto, to be attached to this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Fee Schedule,
dated and signed by an authorized officer of each party
hereto, and a certified copy of the resolution of the board of
directors of the Fund authorizing such revised Fee Schedule.
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
<PAGE>
5. Documents. In connection with the appointment of the
Transfer Agent, the Fund shall, on or before the date
this Agreement goes into effect, file with the Transfer
Agent the following documents:
(a) A certified copy of the Articles of Incorporation
of the Fund, including all amendments thereto, as
then in effect;
(b) A certified copy of the Bylaws of the Fund, as then
in effect;
(c) Certified copies of the resolutions of the board of directors
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the board of directors, with a certificate of
the Secretary of the Fund as to such approval;
(e) All account application forms and other documents
relating to Shareholder accounts;
(f) A certified list of Shareholders of the Fund with
the name, address and tax identification number of
each Shareholder, and the number of Shares held by
each, certificate numbers and denominations (if any
certificates have been issued), lists of any
accounts against which stops have been placed,
together with the reasons for said stops, and the
number of Shares redeemed by the Fund;
(g) Copies of all agreements then in effect between the
Fund and any agent with respect to the issuance,
sale, or cancellation of Shares; and
(h) An opinion of counsel for the Fund with respect to
the validity of the Shares.
6. Further Documentation. The Fund will also furnish from
time to time the following documents:
(a) Each resolution of the board of directors
authorizing the original issue of Shares;
(b) Each Registration Statement filed with the
Commission, and amendments and orders with
respect thereto, in effect with respect to the
sale of Shares of the Fund;
(c) A certified copy of each amendment to the Articles
of Incorporation and the Bylaws of the Fund;
<PAGE>
(d) Certified copies of each resolution of the board of
directors designating Authorized Persons to give
instructions to the Transfer Agent;
(e) Certificates as to any change in any officer,
director, or Authorized Person of the Fund;
(f) Specimens of all new certificates for Shares
accompanied by the Fund's resolutions of the board
of directors approving such forms; and
(g) Such other certificates, documents or opinions as
may mutually be deemed necessary or appropriate
for the Transfer Agent in the proper performance
of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent
shall maintain an adequate supply of blank share
certificates to meet the Transfer Agent's
requirements therefor. Such share certificates
shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund
whose signature appears on such certificates, the
Transfer Agent may continue to countersign
certificates which bear such signatures until
otherwise directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and
mail certificates as requested by the Shareholders
for Shares of the Fund in accordance with the
instructions of the Fund and to confirm such
issuance to the Shareholder and the Fund or its
designee.
(c) The Fund hereby authorizes the Transfer Agent to
issue replacement share certificates in lieu of
certificates which have been lost, stolen or
destroyed, without any further action by the board
of directors or any officer of the Fund, upon
receipt by the Transfer Agent of properly executed
affidavits or lost certificate bonds, in form
satisfactory to the Transfer Agent, with the Fund
and the Transfer Agent as obligees under any such
bond.
<PAGE>
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall
sell or cause to be sold any Shares, the Fund or
its authorized agent shall provide or cause to be
provided to the Transfer Agent information
including: (i) the number of Shares sold, trade
date, and price; (ii) the amount of money to be
delivered to the Custodian for the sale of such
Shares; (iii) in the case of a new account, a new
account application or sufficient information to
establish an account.
(b) The Transfer Agent will, upon receipt by it of a
check or other payment identified by it as an
investment in Shares of the Fund and drawn or
endorsed to the Transfer Agent as agent for, or
identified as being for the account of, the Fund,
promptly deposit such check or other payment to
the appropriate account postings necessary to
reflect the investment. The Transfer Agent will
notify the Fund, or its designee, and the
Custodian of all purchases and related account
adjustments.
(c) Upon receipt of the notification required under
paragraph (a) hereof and the notification from the
Custodian that such money has been received by it,
the Transfer Agent shall issue to the purchaser or
his authorized agent such Shares as he is entitled
to receive, based on the appropriate net asset
value of the Fund's Shares, determined in
accordance with applicable federal law or
regulation, as described in the Prospectus for the
Fund. In issuing Shares to a purchaser or his
authorized agent, the Transfer Agent shall be
entitled to rely upon the latest written
directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized
agent concerning the delivery of such Shares.
<PAGE>
(d) The Transfer Agent shall not be required to issue
any Shares of the Fund where it has received
Written Instructions from the Fund or written
notification from any appropriate federal or state
authority that the sale of the Shares of the Fund
has been suspended or discontinued, and the
Transfer Agent shall be entitled to rely upon such
Written Instructions or written notification.
(e) Upon the issuance of any Shares of the Fund in
accordance with the foregoing provision of this
Article, the Transfer Agent shall not be responsible
for the payment of any original issue or other
taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other
order for the payment of money is returned unpaid for any
reason, the Transfer Agent will: (i) give prompt notice
of such return to the Fund or its designee; (ii) place a
stop transfer order against all Shares issued or held on
deposit as a result of such check or order; (iii) in the
case of any Shareholder who has obtained redemption
checks, place a stop payment order on the checking
account on which such checks are issued; and (iv) take
such other steps as the Transfer Agent may, in its
discretion, deem appropriate or as the Fund or its
designee may instruct.
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the
Fund will be redeemed upon receipt by the Transfer
Agent of: (i) a written request for redemption,
signed by each registered owner exactly as the
Shares are registered; (ii) certificates properly
endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the
extent required by the Transfer Agent as described
in the Prospectus for the Fund; and (iv) any
additional documents required by the Transfer Agent
for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer
Agent will, consistent with procedures which may be
established by the Fund from time to time for
redemption by wire or telephone, upon receipt of
such a wire order or telephone redemption request,
redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as
directed. All wire or telephone redemptions will be
<PAGE>
subject to such additional requirements as may be
described in the Prospectus for the Fund. Both the
Fund and the Transfer Agent reserve the right to
modify or terminate the procedures for wire order
or telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all
necessary information and documentation relating to
a redemption, the Transfer Agent will issue to the
Custodian an advice setting forth the number of
Shares of the Fund received by the Transfer Agent
for redemption and that such shares are valid and
in good form for redemption. The Transfer Agent
shall, upon receipt of the moneys paid to it by the
Custodian for the redemption of Shares, pay such
moneys to the Shareholder, his authorized agent or
legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized
to review and process transfers of Shares of the Fund and
to the extent, if any, permitted in the Prospectus for
the Fund, exchanges between the Fund and other mutual
funds advised by INVESCO Funds Group, Inc., on the
records of the Fund maintained by the Transfer Agent. If
Shares to be transferred are represented by outstanding
certificates, the Transfer Agent will, upon surrender to
it of the certificates in proper form for transfer, and
upon cancellation thereof, countersign and issue new
certificates for a like number of Shares and deliver the
same. If the Shares to be transferred are not represented
by outstanding certificates, the Transfer Agent will,
upon an order therefor by or on behalf of the registered
holder thereof in proper form, credit the same to the
transferee on its books. If Shares are to be exchanged
for Shares of another mutual fund, the Transfer Agent
will process such exchange in the same manner as a
redemption and sale of Shares, except that it may in its
discretion waive requirements for information and
documentation.
12. Right to Seek Assurances. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers
or redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
<PAGE>
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of
the declaration of any dividend or distribution.
The Fund shall furnish to the Transfer Agent a
resolution of the board of directors of the Fund
certified by the Secretary authorizing the
declaration of dividends and authorizing the
Transfer Agent to rely on Oral Instructions or a
Certificate specifying the date of the declaration
of such dividend or distribution, the date of
payment thereof, the record date as of which
Shareholders entitled to payment shall be
determined, the amount payable per share to
Shareholders of record as of that date, and the
total amount payable to the Transfer Agent on the
payment date.
(b) The Transfer Agent will, on or before the payable
date of any dividend or distribution, notify the
Custodian of the estimated amount of cash required
to pay said dividend or distribution, and the Fund
agrees that, on or before the mailing date of such
dividend or distribution, it shall instruct the
Custodian to place in a dividend disbursing account
funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder
instructions, will calculate, prepare and mail
checks to, or (where appropriatd) credit such
dividend or distribution to the account of, Fund
Shareholders, and maintain and safeguard all
underlying records.
(c) The Transfer Agent will replace lost checks upon receipt of
properly executed affidavits and maintain stop payment orders
against replaced checks.
(d) The Transfer Agent will maintain all records necessary to
reflect the crediting of dividends which are reinvested in
Shares of the Fund.
(e) The Transfer Agent shall not be liable for any improper
payments made in accordance with the resolution of the board
of directors of the Fund.
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
<PAGE>
14. Other Duties. In addition to the duties expressly
provided for herein, the Transfer Agent shall perform
such other duties and functions as are set forth in the
Fee Schedules(s) hereto from time to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing
for each investor's account the following: (i)
names, addresses, tax identifying numbers and
assigned account numbers; (ii) numbers of Shares
held; (iii) historical information regarding the
account of each Shareholder, including dividends
paid and date and price of all transactions on a
Shareholder's account; (iv) any stop or restraining
order placed against a Shareholder's account; (v)
information with respect to withholdings in the
case of a foreign account; (vi) any capital gain
or dividend reinvestment order, plan application,
dividend address and correspondence relating to
the current maintenance of a Shareholder's account;
(vii) certificate numbers and denominations for any
Shareholders holding certificates; and (viii) any
information required in order for the Transfer
Agent to perform the calculations contemplated or
required by this Agreement.
(b) Any records required to be maintained by Rule 31a-1
under the 1940 Act will be preserved for the
periods prescribed in Rule 31a-2 under the 1940
Act. Such records may be inspected by the Fund at
reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the
Fund's demand, turn over to the Fund and cease to
retain in the Transfer Agent's files, records and
documents created and maintained by the Transfer
Agent in performance of its services or for its
protection. At the end of the six-year retention
period, such records and documents will either be
turned over to the Fund, or destroyed in accordance
with the Fund's authorization.
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
<PAGE>
(b) The Transfer Agent will address and mail all
communications to Shareholders or their nominees,
including proxy material and periodic reports to
Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting
upon any paper or document believed by it to be
genuine and to have been signed by an Authorized
Person and shall not be held to have any notice of
any change of authority of any person until receipt
of written certification thereof from the Fund. It
shall also be protected in processing Share
certificates which it reasonably believes to bear
the proper manual or facsimile signatures of the
officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any
Authorized Person of the Fund for Written
Instructions, and, at the expense of the Fund, may
seek advice from legal counsel for the Fund, with
respect to any matter arising in connection with
this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good
faith in accordance with such Written Instructions
or with the opinion of such counsel. In addition,
the Transfer Agent, its officers, agents or
employees, shall accept instructions or requests
given to them by any person representing or acting
on behalf of the Fund only if said representative
is known by the Transfer Agent, its officers,
agents or employees, to be an Authorized Person.
The Transfer Agent shall have no duty or obligation
to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it
upon the request or direction of Authorized Persons
of the Fund.
(c) Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under
no duty or obligation to inquire into, and shall
not be liable for: (i) the legality of the issue or
<PAGE>
sale of any Shares of the Fund, or the sufficiency
of the amount to be received therefor; (ii) the
legality of the redemption of any Shares of the
Fund, or the propriety of the amount to be paid
therefor; (iii) the legality of the declaration of
any dividend by the Fund, or the legality of the
issue of any Shares of the Fund in payment of any
stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of
the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold
harmless the Transfer Agent from and against any
and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of
any and every nature which the Transfer Agent may
sustain or incur or which may be asserted against
the Transfer Agent by any person by reason of, or
as a result of: (i) any action taken or omitted to
be taken by the Transfer Agent in good faith in
reliance upon any Certificate, instrument, order or
stock certificate believed by it to be genuine and
to be signed, countersigned or executed by any duly
Authorized Person, upon the Oral Instructions or
Written Instructions of an Authorized Person of the
Fund or upon the opinion of legal counsel for the
Fund or its own counsel; or (ii) any action taken
or omitted to be taken by the Transfer Agent in
connection with its appointment in good faith in
reliance upon any law, act, regulation or
interpretation of the same even though the same
may thereafter have been altered, changed, amended
or repealed. However, indemnification hereunder
shall not apply to actions or omissions of the
Transfer Agent or its directors, officers,
employees or agents in cases of its own gross
negligence, willful misconduct, bad faith, or
reckless disregard of its or their own duties
hereunder.
20. Affiliation Between Fund and Transfer Agent. It is
understood that the directors, officers, employees,
agents and Shareholders of the Fund, and the officers,
<PAGE>
directors, employees, agents and shareholders of the
Fund's investment adviser, INVESCO Funds Group, Inc. (the
"Adviser"), are or may be interested in the Transfer
Agent as directors, officers, employees, agents,
shareholders, or otherwise, and that the directors,
officers, employees, agents or shareholders of the
Transfer Agent may be interested in the Fund as
directors, officers, employees, agents, shareholders, or
otherwise, or in the Adviser as officers, directors,
employees, agents, shareholders or otherwise.
21. Term.
(a) This Agreement shall become effective on February
28, 1997 after approval by vote of a majority (as
defined in the 1940 Act) of the Fund's board of
directors, including a majority of the directors
who are not interested persons of the Fund (as
defined in the 1940 Act), and shall continue in
effect for an initial term expiring February 28,
1998 and from year to year thereafter, so long as
such continuance is specifically approved at least
annually both: (i) by either the board of directors
or the vote of a majority of the outstanding voting
securities of the Fund; and (ii) by a vote of the
majority of the directors who are not interested
persons of the Fund (as defined in the 1940 Act)
cast in person at a meeting called for the purpose
of voting upon such approval.
(b) Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in
writing specifying the date of such termination,
which shall not be less than 60 days after the date
of receipt of such notice. In the event such notice
is given by the Fund, it shall be accompanied by a
resolution of the board of directors, certified by
the Secretary, electing to terminate this Agreement
and designating a successor transfer agent.
22. Amendment. This Agreement may not be amended or modified
in any manner except by a written agreement executed by
both parties with the formality of this Agreement, and
(i) authorized or approved by the resolution of the board
of directors, including a majority of the directors of
the Fund who are not interested persons of the Fund as
defined in the 1940 Act, or (ii) authorized and approved
by such other procedures as may be permitted or required
by the 1940 Act.
23. Subcontracting. The Fund agrees that the Transfer Agent
may, in its discretion, subcontract for certain of the
services to be provided hereunder; provided, however,
<PAGE>
that the transfer agent will be liable to the Fund for
any loss arising out of or in connection with the actions
of any subcontractor, if the subcontractor fails to act
in good faith and with due diligence or is negligent or
guilty of any willful misconduct.
24. Miscellaneous.
(a) Any notice and other instrument in writing, authorized or
required by this Agreement to be given to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to
that party and mailed or delivered to it at its office set
forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
INVESCO Specialty Funds, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Ronald L. Grooms, Senior Vice President
(b) This Agreement shall not be assignable and in the event of its
assignment (in the sense contemplated by the 1940 Act), it
shall automatically terminate.
(c) This Agreement shall be construed in accordance
with the laws of the State of Colorado.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
INVESCO SPECIALTY FUNDS, INC.
By: /s/ Dan J. Hesser
-----------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-----------------------------
Ronald L. Grooms, Senior Vice
ATTEST: President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated February 28, 1997,
between INVESCO Specialty Funds, Inc. (the "Fund") and INVESCO Funds Group, Inc.
as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 28th day of February, 1997.
INVESCO SPECIALTY FUNDS, INC.
By: /s/ Dan J. Hesser
------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-----------------------
Ronald L. Grooms,
ATTEST: Senior Vice President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 28th day of February, 1997, in Denver, Colorado,
by and between INVESCO MONEY MARKET FUNDS, INC., a Maryland corporation (the
"Fund"), and INVESCO FUNDS GROUP, INC., a Delaware corporation (hereinafter
referred to as "INVESCO").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"), and is authorized to issue shares representing
interests in the following separate portfolios of investments: (1) INVESCO Cash
Reserves Fund, (2) INVESCO Tax-Free Money Fund, and (3) INVESCO U.S. Government
Money Fund (the "Portfolios"); and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting
and recordkeeping services to certain investment companies, including the Fund;
and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon receipt of written
approval of the Fund arrange for other companies, including affiliates of
INVESCO, to provide to the Portfolios: A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Portfolios. Such services shall include, but shall not be limited to,
preparation and maintenance of the following required books, records and other
documents: (1) journals containing daily itemized records of all purchases and
sales, and receipts and deliveries of securities and all receipts and
disbursements of cash and all other debits and credits, in the form required by
Rule 31a-1(b)(1) under the Act; (2) general and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, in the form
required by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities record
or ledger reflecting separately for each portfolio security as of trade date all
"long" and "short" positions carried by the Portfolios for the account of the
Portfolios, if any, and showing the location of all securities long and the
off-setting position to all securities short, in the form required by Rule
31a-1(b)(3) under the Act; (4) a record of all portfolio purchases or sales, in
the form required by Rule 31a-1(b)(6) under the Act; (5) a record of all puts,
calls, spreads, straddles and all other options, if any, in which the Portfolios
have any direct or indirect interest or which the Portfolios have granted or
guaranteed, in the form required by Rule 31a-1(b)(7) under the Act; (6) a record
of the proof of money balances in all ledger accounts maintained pursuant to
this Agreement, in the form required by Rule 31a- 1(b)(8) under the Act; and (7)
<PAGE>
price make-up sheets and such records as are necessary to reflect the
determination of the Portfolios' net asset value. The foregoing books and
records shall be maintained and preserved by INVESCO in accordance with and for
the time periods specified by applicable rules and regulations, including Rule
31a-2 under the Act. All such books and records shall be the property of the
Fund and, upon request therefor, INVESCO shall surrender to the Fund such of the
books and records so requested; and B) such sub-accounting, recordkeeping and
administrative services and functions, which shall be furnished by a
wholly-owned subsidiary of INVESCO, as are reasonably necessary for the
operation of Portfolio shareholder accounts maintained by certain retirement
plans and employee benefit plans for the benefit of participants in such plans.
Such services and functions shall include, but shall not be limited to: (1)
establishing new retirement plan participant accounts; (2) receipt and posting
of weekly, bi-weekly and monthly retirement plan contributions; (3) allocation
of contributions to each participant's individual Portfolio account; (4)
maintenance of separate account balances for each source of retirement plan
money (i.e., Company, Employee, Voluntary, Rollover) invested in the Portfolios;
(5) purchase, sale, exchange or transfer of monies in the retirement plan as
directed by the relevant party; (6) distribution of monies for participant
loans, hardships, terminations, death or disability payments; (7) distribution
of periodic payments for retired participants; (8) posting of distributions of
interest, dividends and long-term capital gains to participants by the
Portfolios; (9) production of monthly, quarterly and/or annual statements of all
Portfolio activity for the relevant parties; (10) processing of participant
maintenance information for investment election changes, address changes,
beneficiary changes and Qualified Domestic Relations Orders; (11) responding to
telephone and written inquiries concerning Portfolio investments, retirement
plan provisions and compliance issues; (12) performing discrimination testing
and counseling employers on cure options on failed tests; (13) preparation of
1099R and W2P participant IRS tax forms; (14) preparation of, or assisting in
the preparation of, 5500 Series tax forms, Summary Plan Descriptions and
Determination Letters; and (15) reviewing legislative and IRS changes to keep
the retirement plan in compliance with applicable law.
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, such staff and personnel shall be deemed to include officers of
INVESCO and persons employed or otherwise retained by INVESCO to provide or
assist in providing the Services to the Portfolios.
3. INVESCO shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer equipment,
communication lines and supplies) and such clerical help and other services as
shall be necessary to provide the Services to the Portfolios. In addition,
INVESCO may arrange on behalf of the Fund to obtain pricing information
regarding the Portfolios' investment securities from such company or companies
as are approved by a majority of the Fund's board of directors; and, if
necessary, the Fund shall be financially responsible to such company or
companies for the reasonable cost of providing such pricing information.
<PAGE>
4. The Fund will, from time to time, furnish or otherwise make available to
INVESCO such information relating to the business and affairs of the Portfolios
as INVESCO may reasonably require in order to discharge its duties and
obligations hereunder.
5. For the services rendered, facilities furnished, and expenses assumed
by INVESCO under this Agreement, the Fund shall pay to INVESCO a $10,000 per
year per Portfolio base fee, plus an additional fee, computed on a daily basis
and paid on a monthly basis. For purposes of each daily calculation of this
additional fee, the most recently determined net asset value of each Portfolio,
as determined by a valuation made in accordance with the Fund's procedure for
calculating each Portfolio's net asset value as described in the Portfolios'
Prospectus and/or Statement of Additional Information, shall be used. The
additional fee to INVESCO under this Agreement shall be computed at the annual
rate of 0.015% of each Portfolio's daily net assets as so determined. During any
period when the determination of a Portfolio's net asset value is suspended by
the directors of the Fund, the net asset value of a share of that Portfolio as
of the last business day prior to such suspension shall, for the purpose of this
Paragraph 5, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
6. INVESCO will permit representatives of the Fund including the Fund's
independent auditors to have reasonable access to the personnel and records of
INVESCO in order to enable such representatives to monitor the quality of
services being provided and the level of fees due INVESCO pursuant to this
Agreement. In addition, INVESCO shall promptly deliver to the board of directors
of the Fund such information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination regarding
continuation of this Agreement and the payments contemplated to be made
hereunder.
7. This Agreement shall remain in effect until no later than February 28,
1998 and from year to year thereafter provided such continuance is approved at
least annually by the vote of a majority of the directors of the Fund who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; and further provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days written notice to INVESCO; (b) the Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Act and the Rules thereunder) unless the Board of Directors of the Fund approves
such assignment; and (c) INVESCO may terminate this Agreement without payment of
penalty on sixty days written notice to the Fund. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed postage
pre-paid, to the other party at the principal office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the extent the
applicable law of the State of Colorado or any of the provisions herein conflict
with the applicable provisions of the Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Dan J. Hesser
-------------------------
ATTEST: Dan J. Hesser
President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
-------------------------
ATTEST: Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne
Secretary
MOYE, GILES, O'KEEFE, VERMEIRE & GORRELL
A Law Partnership
Including Professional Corporations
29th Floor
1225 Seventeenth Street
Denver, Colorado 80202-5529
Telephone (303) 292-2900
Telecopier (303) 292-4510
June 4, 1993
INVESCO Money Market Funds, Inc.
P.O. Box 20407800 E. Union Avenue, Suite 800
Denver, Colorado 80201
Gentlemen:
This is in response to your request for our opinion as to the legality of
the registration of an indefinite number of shares of capital stock ($0.01) par
value per share) of INVESCO Money Market Funds, Inc., being registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 and
the Securities Act of 1933, as amended (Form N-1A). This share registration is
being requested pursuant to the provisions of Rule 24f-2 under Section 24(f) of
the Investment Company Act of 1940.
We have examined the articles of incorporation of INVESCO Money Market
Funds, Inc., as filed for record with the State Department of Assessments and
Taxation of the State of Maryland on April 2, 1993; the bylaws; the minute book
setting forth, among other things, the actions taken by the board of directors
authorizing the issuance and sale of the corporation's capital stock and related
acts and procedures; the registration statement including all exhibits thereto;
and have made such other examinations as deemed necessary in the premises.
Based upon our examination, we are of the opinion that INVESCO Money Market
Funds, Inc. is a corporation duly organized and existing under and by virtue of
the laws of the State of Maryland, with full power to issue its shares of
capital stock. Said shares, up to the maximum amount hereinafter indicated, when
issued and sold in the manner and on the terms set forth in the registration
statement, will be legally and validly issued, fully paid and non-assessable
shares of the corporation of the par value of $0.01 per share. The maximum
number of shares which has been authorized by the Corporation, and thus the
maximum number which may be legally and validly be issued, is ten billion shares
of such capital stock.
<PAGE>
INVESCO Money Market Funds, Inc.
June 4, 1993
Page 2
We hereby consent to the use of this opinion in the registration statement
and further consent to the reference to our name therein.
Very truly yours,
MOYE, GILES, O'KEEFE,
VERMEIRE & GORRELL
By: Edward F. O'Keefe, P.C.
By: /s/ Edward F. O'Keefe
---------------------------
Edward F. O'Keefe, President
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 33 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated July 2, 1997, relating to the financial
statements and financial highlights appearing in the May 31, 1997 Annual Report
to Shareholders of INVESCO Money Market Funds, Inc., which is also incorporated
by reference in to the Registration Statement. We also consent to the references
to us under the heading "Financial Highlights" in the Prospectus and under the
headings "Independent Accountants" and Financial Statements" in the Statement of
Additional Information.
/s/ Price Waterhouse LLP
- ------------------------------
Price Waterhouse LLP
Denver, Colorado
July 25, 1997
16(a) U.S. Government Money Fund
COMPUTATION OF PERFORMANCE DATA
Current yield quotations are based on the fund's investment results during
the latest seven days, computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, dividing the net change in
account value by the value of the account at the beginning of the base period to
obtain the base period return, and multiplying the base period return by 365/7.
Effective yield is computed by compounding the unannualized base period return
by dividing the base period return by 7, adding one to the quotient, raising the
sum to the 365th power, and subtracting one from the result.
Formulas are as follows, where D = dividend paid on one share during the latest
7 days:
Current Yield = D / 7 x 365
Compounded Yield = ((1 + D / 7)365) - 1
16(b) Cash Reserves Fund
COMPUTATION OF PERFORMANCE DATA
Current yield quotations are based on the fund's investment results during
the latest seven days, computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, dividing the net change in
account value by the value of the account at the beginning of the base period to
obtain the base period return, and multiplying the base period return by 365/7.
Effective yield is computed by compounding the unannualized base period return
by dividing the base period return by 7, adding one to the quotient, raising the
sum to the 365th power, and subtracting one from the result.
Formulas are as follows, where D = dividend paid on one share during the latest
7 days:
Current Yield = D / 7 x 365
Compounded Yield = ((1 + D / 7)365) - 1
16(c) Tax-Free Money Fund
COMPUTATION OF PERFORMANCE DATA
Current yield quotations are based on the fund's investment results during
the latest seven days, computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, dividing the net change in
account value by the value of the account at the beginning of the base period to
obtain the base period return, and multiplying the base period return by 365/7.
Effective yield is computed by compounding the unannualized base period return
by dividing the base period return by 7, adding one to the quotient, raising the
sum to the 365th power, and subtracting one from the result.
Formulas are as follows, where D = dividend paid on one share during the latest
7 days:
Current Yield = D / 7 x 365
Compounded Yield = ((1 + D / 7)365) - 1
16(d)
SCHEDULE FOR COMPUTATION OF RETURN PERFORMANCE
INVESCO U.S. Government Money Fund
TOTAL RETURN
Formula prescribed by Item 22 of Form N-1A:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1+T)n = ERV
for the year ended May 31, 1994:
1000(1 + 2.58%) = 1025.60
annualized percentage:
1000(1 - 7.51%)(5 / 12) = 1025.60
The formula given in Item 22 is written to solve for Ending Redeemable Value.
However, the quantity to be reported is T (Average Annual Total Return).
Because P, n and ERV are known values, we have solved for T as follows,
T = n /((ERV / P) - 1)
for the year ended May 31, 1994:
+.0258 = (1025.60 / 1000) -1
annualized percentage:
-.0751 = ((5 / 12)/(1025.60 / 1000)) - 1
and have reported those amounts as the total return.
16(e)
SCHEDULE FOR COMPUTATION OF RETURN PERFORMANCE
INVESCO Cash Reserves Fund
TOTAL RETURN
Formula prescribed by Item 22 of Form N-1A:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1+T)n = ERV
for the year ended May 31, 1994:
1000(1 + 2.58%) = 1025.80
annualized percentage:
1000(1 - 7.51%)(5 / 12) = 1025.80
The formula given in Item 22 is written to solve for Ending Redeemable Value.
However, the quantity to be reported is T (Average Annual Total Return).
Because P, n and ERV are known values, we have solved for T as follows,
T = n /((ERV / P) - 1)
for the year ended May 31, 1994:
+.0258 = (1025.80 / 1000) -1
annualized percentage:
-.0751 = ((5 / 12)/(1025.80 / 1000)) - 1
and have reported those amounts as the total return.
16(f)
SCHEDULE FOR COMPUTATION OF RETURN PERFORMANCE
INVESCO Tax-Free Money Fund
TOTAL RETURN
Formula prescribed by Item 22 of Form N-1A:
P = $1,000 initial payment
T = average annual total return
n = number of years (including fractional portions)
ERV = ending redeemable value
P(1+T)n = ERV
for the year ended May 31, 1994:
1000(1 + 1.84%) = 1018.40
annualized percentage:
1000(1 - 7.51%)(5 / 12) = 1018.40
The formula given in Item 22 is written to solve for Ending Redeemable Value.
However, the quantity to be reported is T (Average Annual Total Return).
Because P, n and ERV are known values, we have solved for T as follows,
T = n /((ERV / P) - 1)
for the year ended May 31, 1994:
+.0184 = (1018.40 / 1000) -1
annualized percentage:
-.0751 = ((5 / 12)/(1018.40 / 1000)) - 1
and have reported those amounts as the total return.
<TABLE> <S> <C>
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<DISTRIBUTIONS-OF-INCOME> 33561267
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<NUMBER-OF-SHARES-SOLD> 5620288150
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<SHARES-REINVESTED> 25866718
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<PER-SHARE-NII> 0.050
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<NET-INVESTMENT-INCOME> 1618005
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<DISTRIBUTIONS-OF-INCOME> 1618005
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POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 4th day of June, 1997.
/s/ Larry Soll
------------------------------------------
Larry Soll
STATE OF WASHINGTON )
)
COUNTY OF SAN JUAN )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Larry Soll, as a
director or trustee of each of the above-described entities, this 4th day of
June, 1997.
Mary Paulette Weaver
------------------------------------------
Notary Public
My Commission Expires: 1-27-99
