INVESCO MONEY MARKET FUNDS INC, DEF 14A, 1999-03-26

INVESCO MONEY MARKET FUNDS INC
DEF 14A, 1999-03-26

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SCHEDULE 14a INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>

INVESCO Money Market Funds, Inc.
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(Name of Registrant as Specified in Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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[INVESCO LOGO]
INVESCO CASH RESERVES FUND
INVESCO TAX-FREE MONEY FUND
INVESCO U.S. GOVERNMENT MONEY FUND
(EACH A SERIES OF INVESCO MONEY MARKET FUNDS, INC.)
MARCH 23, 1999
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Dear Shareholder:

The attached proxy materials seek your approval to make certain changes to
the fundamental investment restrictions of each of INVESCO Cash Reserves Fund
("Cash Reserves Fund"), INVESCO Tax-Free Money Fund ("Tax-Free Money Fund") and
INVESCO U.S. Government Money Fund ("U.S. Government Money Fund") (collectively,
the "Funds"), each a series of INVESCO Money Market Funds, Inc. ("Money Market
Funds"), to elect directors of Money Market Funds, and to ratify the appointment
of PricewaterhouseCoopers LLP as independent accountants of the Funds.

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL
PROPOSALS. The changes to the fundamental investment restrictions of the Funds
have been approved by the board of directors in order to simplify and modernize
the Funds' fundamental investment restrictions and make them more uniform with
those of the other INVESCO Funds. The attached proxy materials provide more
information about the proposed changes in fundamental investment restrictions
and the other matters you are being asked to vote upon.

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit the Funds to avoid costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, date and
sign your proxy card and mail it in the enclosed return envelope promptly. As an
alternative to using the paper proxy card to vote, you may vote by telephone, by
facsimile, through the Internet, or in person.

Very truly yours,
/s/MARK H. WILLIAMSON
--------------------------------
Mark H. Williamson
President
INVESCO Money Market Funds, Inc.
9961

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INVESCO CASH RESERVES FUND
INVESCO TAX-FREE MONEY FUND
INVESCO U.S. GOVERNMENT MONEY FUND
(EACH A SERIES OF INVESCO MONEY MARKET FUNDS, INC.)

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999
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To The Shareholders:

NOTICE IS HEREBY GIVEN that a special meeting of shareholders of INVESCO
Cash Reserves Fund, INVESCO Tax-Free Money Fund and INVESCO U.S. Government
Money Fund (each a "Fund"), each a series of INVESCO Money Market Funds, Inc.
("Money Market Funds"), will be held on May 20, 1999, at 10:00 a.m., Mountain
Time, at the office of INVESCO Funds Group, Inc., 7800 East Union Avenue,
Denver, Colorado, for the following purposes:

(1) To approve certain changes to the fundamental investment
restrictions of each Fund;

(2) To elect a board of directors of Money Market Funds;

(3) To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of each Fund; and

(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.

You are entitled to vote at the meeting and any adjournment thereof if you
owned shares of any Fund at the close of business on March 12, 1999. IF YOU
ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

By order of the Board of Directors,

/s/ GLEN A. PAYNE
--------------------------------
Glen A. Payne
Secretary

March 23, 1999
Denver, Colorado

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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

Please indicate your voting instructions on the enclosed proxy card, date
and sign the card, and return it in the envelope provided. IF YOU DATE, SIGN AND
RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED
"FOR" THE PROPOSALS NOTICED ABOVE. In order to avoid the additional expense of
further solicitation, we ask your cooperation in mailing your proxy card
promptly. As an alternative to using the paper proxy card to vote, you may vote
by telephone, through the Internet, by facsimile machine or in person. To vote
by telephone, please call 1-800-690-6903. Shares that are registered in your
name, as well as shares held in "street name" through a broker, may be voted via
the Internet or by telephone. To vote in this manner, you will need the 12-digit
"control" number that appears on your proxy card. To vote via the Internet,
please access http://www.proxyvote.com on the World Wide Web. In addition,
shares that are registered in your name may be voted by faxing your completed
proxy card to 1-800-733-1885. If we do not receive your completed proxy card
after several weeks, you may be contacted by our proxy solicitor, Shareholder
Communications Corporation. Our proxy solicitor will remind you to vote your
shares or will record your vote over the phone if you choose to vote in that
manner.

Unless proxy card(s) submitted by corporations and partnerships are signed
by the appropriate persons as indicated in the voting instructions on the proxy
card, they will not be voted.
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INVESCO CASH RESERVES FUND
INVESCO TAX-FREE MONEY FUND
INVESCO U.S. GOVERNMENT MONEY FUND
(EACH A SERIES OF INVESCO MONEY MARKET FUNDS, INC.)
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7800 EAST UNION AVENUE
DENVER, COLORADO 80237
(TOLL FREE) 1-800-646-8372

PROXY STATEMENT

SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1999

VOTING INFORMATION

This Proxy Statement is being furnished to shareholders of INVESCO Cash
Reserves Fund ("Cash Reserves Fund"), INVESCO Tax-Free Money Fund ("Tax-Free
Money Fund") and INVESCO U.S. Government Money Fund ("U.S. Government Money
Fund") (each a "Fund" or collectively the "Funds"), each a series of INVESCO
Money Market Funds, Inc. ("Money Market Funds"), in connection with the
solicitation of proxies from shareholders of the Funds by the board of directors
of Money Market Funds (the "Board") for use at a special meeting of shareholders
to be held on May 20, 1999 (the "Meeting"), and at any adjournment of the
Meeting. This Proxy Statement will first be mailed to shareholders on or about
March 23, 1999.

For each Fund, one-third of the Fund's shares outstanding on March 12, 1999
(the "Record Date"), represented in person or by proxy, shall constitute a
quorum and must be present for the transaction of business at the Meeting. If a
quorum is not present at the Meeting or a quorum is present but sufficient votes
to approve one or more of the proposals set forth in this Proxy Statement are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of a majority of those shares represented at
the Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST a proposal
against such adjournment. A shareholder vote may be taken on one or more of the
proposals in this Proxy Statement prior to any such adjournment if a quorum is
present and sufficient votes have been received with respect to such proposal
and it is otherwise appropriate.

Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present or outstanding. Abstentions
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and broker non-votes will not be counted, however, as votes cast for purposes of
determining whether sufficient votes have been received to approve a proposal.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on that proxy card, if it is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card, but give no
voting instructions, your shares will be voted in favor of approval of each of
the proposals. In addition, if you sign, date and return the proxy card, but
give no voting instructions, the duly appointed proxies may, in their
discretion, vote upon such other matters as may come before the Meeting. The
proxy card may be revoked by giving another proxy or by letter or telegram
revoking the initial proxy. To be effective, revocation must be received by
Money Market Funds prior to the Meeting and must indicate your name and account
number. If you attend the Meeting in person you may, if you wish, vote by ballot
at the Meeting, thereby canceling any proxy previously given.

In order to reduce costs, notices to a shareholder having more than one
account in a Fund listed under the same Social Security number at a single
address have been combined. The proxy cards have been coded so that a
shareholder's votes will be counted for each such account.

As of the Record Date, each Fund had the following shares of common stock
outstanding: Cash Reserves Fund 730,231,025.697; Tax-Free Money Fund
45,628,488.654; and U.S. Government Money Fund 87,776,536.628. The solicitation
of proxies, the cost of which will be borne half by INVESCO Funds Group, Inc.
("INVESCO"), the investment adviser and transfer agent of the Funds, and half by
the Funds, will be made primarily by mail but also may be made by telephone or
oral communications by representatives of INVESCO and INVESCO Distributors, Inc.
("IDI"), the distributor of the INVESCO group of investment companies (the
"INVESCO Funds"), none of whom will receive any compensation for these
activities from the Funds, or by Shareholder Communications Corporation,
professional proxy solicitors, which will be paid fees and expenses of up to
approximately $55,000 for soliciting services. If votes are recorded by
telephone, Shareholder Communications Corporation will use procedures designed
to authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that a shareholder's instructions have been properly recorded. You may also vote
by mail, by facsimile or through a secure Internet site. Proxies voted by
telephone, facsimile or Internet may be revoked at any time before they are
voted at the Meeting in the same manner that proxies voted by mail may be
revoked.

COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS MAY REQUEST COPIES OF THESE REPORTS, WITHOUT CHARGE, BY WRITING TO
INVESCO DISTRIBUTORS, INC., P.O. BOX 173706, DENVER, COLORADO 80217-3706, OR BY
CALLING TOLL-FREE 1-800-646-8372.

Except as set forth in Appendix A, INVESCO does not know of any person who
owns beneficially 5% or more of the shares of any Fund. Directors and officers
of Money Market Funds own in the aggregate less than 1% of the shares of each
Fund.

VOTE REQUIRED. Approval of Proposal 1 with respect to a Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, as defined in the Investment Company Act of 1940, as amended ("1940 Act").
This means that for a Fund, Proposal 1 must be approved by the lesser of (1) 67%
of that Fund's shares present at a meeting of shareholders if the owners of more
than 50% of that Fund's shares then outstanding are present in person or by
proxy or (2) more than 50% of that Fund's outstanding shares. A plurality of the
votes of Money Market Funds cast at the Meeting is sufficient to
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approve Proposal 2. Approval of Proposal 3 with respect to any Fund requires the
affirmative vote of a majority of the votes of such Fund present at the Meeting,
provided a quorum is present. Each outstanding full share of each Fund is
entitled to one vote, and each outstanding fractional share thereof is entitled
to a proportionate fractional share of one vote. If any Proposal is not approved
by the requisite vote of shareholders, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies.

PROPOSAL 1: TO APPROVE AMENDMENTS TO THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF
THE FUNDS

As required by the 1940 Act, each Fund has adopted certain fundamental
investment restrictions ("fundamental restrictions"), which are set forth in
that Fund's Statement of Additional Information. These fundamental restrictions
may be changed only with shareholder approval. Restrictions and policies that a
Fund has not specifically designated as fundamental are considered to be
"non-fundamental" and may be changed by the Board without shareholder approval.

Some of the Funds' fundamental restrictions reflect past regulatory,
business or industry conditions, practices or requirements that are no longer in
effect. Also, as other INVESCO Funds have been created over the years, they have
adopted substantially similar fundamental restrictions that often have been
phrased in slightly different ways, resulting in minor but unintended
differences in effect or potentially giving rise to unintended differences in
interpretation. Accordingly, the Board has approved revisions to the Funds'
fundamental restrictions in order to simplify, modernize and make the Funds'
fundamental restrictions more uniform with those of the other INVESCO Funds.

The Board believes that eliminating the disparities among the INVESCO
Funds' fundamental restrictions will enhance management's ability to manage the
Funds' assets efficiently and effectively in changing regulatory and investment
environments and permit the Board to review and monitor investment policies more
easily. In addition, standardizing the fundamental restrictions of the INVESCO
Funds will assist the INVESCO Funds in making required regulatory filings in a
more efficient and cost-effective way. Although the proposed changes in
fundamental restrictions will allow each Fund greater investment flexibility to
respond to future investment opportunities, the Board does not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
any Fund.

The text and a summary description of each proposed change to each Fund's
fundamental restrictions are set forth below, together with the text of each
current corresponding fundamental restriction. The text below also describes any
non-fundamental restrictions that would be adopted by the Board in conjunction
with the revision of certain fundamental restrictions. Any non-fundamental
restriction may be modified or eliminated by the Board at any future date
without further shareholder approval.

If approved by the shareholders of a Fund at the Meeting, the proposed
changes in a Fund's fundamental restrictions will be adopted by the Fund. The
Funds' Statement of Additional Information will be revised to reflect those
changes as soon as practicable following the Meeting.

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A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUER DIVERSIFICATION

Cash Reserves Fund's current fundamental restriction on issuer
diversification is as follows:

The Fund may not 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 the 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.

Tax-Free Money Fund's current fundamental restriction on issuer
diversification is as follows:

The Fund may not 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 the
limitation regarding purchases of securities of issuers in which the
directors or officers of the Fund or its adviser hold an interest,
which would be eliminated if Proposal 1(m) below is approved], 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.

U.S. Government Money Fund's current fundamental restriction on issuer
diversification is as follows:

The Fund may not 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, would be invested in such issuer or more than 10% of
such issuer's outstanding voting securities would be owned by the
Fund.

The Board recommends that shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction:

Except to the extent permitted under Rule 2a-7 of the 1940 Act, or any
successor rule thereto, the Fund may not purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, or securities
of other investment companies) if, as a result, (i) more than 5% of
the Fund's total assets would be invested in the securities of that
issuer, or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.

The primary purpose of the modification is to revise each Fund's
fundamental restriction on issuer diversification to conform to a restriction
that is expected to become standard for all INVESCO Funds. The proposed change
would standardize the language of the Funds' fundamental restriction on issuer
diversification. In the case of Cash Reserve Fund and Tax-Free Money Fund, the
change would eliminate the limitation

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prohibiting the Fund from owning more than 10% of the outstanding debt
obligations of a single issuer and replace it with a limitation prohibiting the
Fund from owning 10% of an issuer's voting securities. In addition, the proposal
would allow the Funds to invest to the extent permitted by the 1940 Act in other
investment companies. The ability of mutual funds to invest in other investment
companies is currently generally restricted by rules under the 1940 Act,
including by a rule limiting all such investments to 10% of a mutual fund's
total assets and investment in any one investment company to an aggregate of 5%
of the value of the investing fund's total assets and 3% of the total
outstanding voting stock of the acquired investment company.

With respect to Tax-Free Money Fund only, the proposed change would also
eliminate from that Fund's fundamental policies the interpretation regarding
treatment of separate subdivisions, agencies or instrumentalities of a single
state as separate issuers of municipal securities. That interpretation currently
also is applied to the limitation regarding purchases of securities of issuers
in which the directors or officers of the Fund or its adviser hold an interest
(which would be eliminated if proposal 1(m) is approved). If the proposal is
approved, the Board will adopt the following non-fundamental policy with respect
to the issuers of municipal securities:

Each state (including the District of Columbia and Puerto Rico),
territory and possession of the United States, each political
subdivision, agency, instrumentality and authority thereof, and each
multistate agency of which a state is a member is a separate "issuer."
When the assets and revenues of an agency, authority, instrumentality
or other political subdivision are separate from the government
creating the subdivision and the security is backed only by assets and
revenues of the subdivision, such subdivision would be deemed to be
the sole issuer. Similarly, in the case of an Industrial Development
Bond or Private Activity Bond, if that bond is backed only by the
assets and revenue of the non-governmental user, then that
non-governmental user would be deemed to be the sole issuer.

B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INDUSTRY CONCENTRATION

Cash Reserves Fund's current fundamental restriction on industry
concentration is as follows:

The Fund may not invest more than 25% of the value of Fund's assets in
one particular industry (obligations of the U.S. Government and of
domestic banks are excepted).

Tax-Free Money Fund's current fundamental restriction on industry
concentration is as follows:

The Fund may not 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.

U.S. Government Money Fund's current fundamental restriction on industry
concentration is as follows:

The Fund may not, 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
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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.

The Board recommends that shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction:

The Fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities, municipal securities, or securities
issued or guaranteed by domestic banks, including U.S. branches of
foreign banks and foreign branches of U.S. banks) if, as a result,
more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry.

The primary purpose of the modification is to eliminate minor differences
in the wording of the INVESCO Funds' current restrictions on concentration for
greater uniformity and to avoid unintended limitations, without materially
altering the restriction. The proposed changes to the Funds' fundamental
concentration restriction would exclude from the restriction municipal
securities, securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, and securities issued or guaranteed by domestic banks. The
exclusion of municipal securities would be new for Cash Reserve Fund and U.S.
Government Money Fund (which do not normally invest in municipal securities in
any event). The exclusion of bank securities is new for Tax-Free Money Fund and
U.S. Government Money Fund. With respect to U.S. Government Money Fund only, the
proposed change would also remove from that Fund's fundamental restrictions the
interpretation that investments in securities issued by foreign governments
shall be deemed to be investments in a single industry.

If the proposal is approved, the Board will adopt a non-fundamental policy
with respect to industry classifications for each Fund providing that domestic
and foreign banking will be considered to be different industries.

C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES

Cash Reserves Fund's current fundamental restriction on underwriting
securities is as follows:

The Fund may not engage in the underwriting of any securities.

Tax-Free Money Fund's current fundamental restriction on underwriting
securities is as follows:

The Fund may not 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.

U.S. Government Money Fund's current fundamental restriction on
underwriting securities is as follows:

The Fund may not 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.

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The Board recommends that shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction:

The Fund may not underwrite securities of other issuers, except
insofar as it may be deemed to be an underwriter under the Securities
Act of 1933, as amended, in connection with the disposition of the
Fund's portfolio securities.

The purpose of this proposal is to eliminate minor differences in the
wording of the INVESCO Funds' current restrictions on underwriting for greater
uniformity with the fundamental restrictions of the other INVESCO Funds.

D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON BORROWING AND ELIMINATION OF
RESTRICTION ON PLEDGING ASSETS

Cash Reserve Fund's current fundamental restriction on borrowing is as
follows:

The Fund may not 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. The Fund
will not purchase additional securities while any such borrowings
exist.

Tax-Free Money Fund's current fundamental restriction on borrowing is as
follows:

The Fund may not 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; the Fund
will not purchase additional securities while any such borrowings
exist.

U.S. Government Money Fund's current fundamental restriction on borrowing
is as follows:

The Fund may not 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.

In addition, U.S. Government Money Fund has the following additional
fundamental restriction:

The Fund may not 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.

The Board recommends that shareholders of each Fund vote to replace the
restrictions set forth above with the following fundamental restriction:

The Fund may not borrow money, except that the Fund may borrow money
in an amount not exceeding 33 1/3% of its total assets (including the
amount borrowed) less liabilities (other than borrowings).

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Currently, the fundamental restrictions of the Funds are significantly more
limiting than the restrictions imposed by the 1940 Act in that they limit the
purposes for which the Funds may borrow and they limit borrowings to 10% of the
Fund's assets, in the case of Cash Reserve Fund and Tax-Free Money Fund, and 5%
of the Fund's assets, in the case of U.S. Government Money Fund. The proposal
eliminates the fundamental nature of the restrictions on the purposes for which
the Funds may borrow money and increases each Fund's fundamental borrowing
authority to 33 1/3% of the Fund's total assets. In addition, the proposal would
eliminate the prohibition on mortgaging, pledging or hypothecating a Fund's
securities to secure indebtedness. This prohibition is derived from a state
"blue sky" requirement that has been preempted by recent amendments to the
federal securities laws.

With respect to each of Cash Reserves Fund and Tax-Free Money Fund, the
proposal also eliminates the restriction on purchases of securities while
borrowings exist. With respect to U.S. Government Money Fund, the proposal would
also eliminate the current restriction on the issuance of senior securities,
which would be replaced if proposal 1(e) is approved.

If this proposal is approved, the Board will adopt a non-fundamental
restriction for each Fund as follows:

The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency
purposes (not for leveraging or investing) or by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
will be treated as borrowings for purposes of [the fundamental
limitation on borrowing]).

The non-fundamental restriction reflects the current policy of the Funds
that borrowing by a Fund may only be done for temporary or emergency purposes.
In addition to borrowing from banks, as permitted by the Funds' current
policies, the non-fundamental restriction permits the Funds to borrow from
open-end funds managed by INVESCO or an affiliate or successor thereof. The
Funds would not be able to do so, however, unless they obtain permission for
such borrowings from the Securities and Exchange Commission (the "SEC"). The
non-fundamental restriction also would clarify that reverse repurchase
agreements will be treated as borrowings.

The Board believes that this approach, making the Funds' fundamental
restrictions on borrowing no more limiting than is required under the 1940 Act,
while incorporating more strict limits on borrowing in the Funds'
non-fundamental restrictions, will maximize the Funds' flexibility for future
contingencies.

E. MODIFICATION AND ADOPTION OF FUNDAMENTAL RESTRICTION ON THE ISSUANCE OF
SENIOR SECURITIES

Tax-Free Money Fund's current fundamental restriction on the issuance of
senior securities is as follows:

The Fund may not 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).

8
<PAGE> 13

Cash Reserves Fund currently has the following fundamental restriction:

The Fund may not issue preference shares or create any funded debt.

U.S. Government Money Fund's current fundamental restriction on the
issuance of senior securities is combined with its fundamental restriction on
borrowing set forth above under proposal 1(d).

The Board recommends that shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction with respect to the issuance of senior securities:

The Fund may not issue senior securities, except as permitted under
the Investment Company Act of 1940.

The Board believes that the adoption of the proposed fundamental
restriction, which does not specify the manner in which senior securities may be
issued and is no more limiting than is required under the 1940 Act, will
maximize each Fund's flexibility for future contingencies and will conform to
the fundamental restrictions of the other INVESCO Funds on the issuance of
senior securities.

F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON LOANS

The current fundamental restriction on loans for each of Tax-Free Money
Fund and Cash Reserves Fund is as follows:

The Fund may not 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).

U.S. Government Money Fund's current fundamental restriction on loans is as
follows:

The Fund may not make loans to other persons, except that the Fund may
purchase debt obligations consistent with its investment objective and
policies.

The Board recommends that the shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction:

The Fund may not lend any security or make any loan if, as a result,
more than 33 1/3% of its total assets would be lent to other parties,
but this limitation does not apply to the purchase of debt securities
or to repurchase agreements.

The primary purpose of this proposal is to eliminate the prohibition
against making loans of money or securities and to conform the restriction to
the wording of the other INVESCO Funds' current restrictions on loans to achieve
greater uniformity. The Board believes that adoption of the proposed fundamental
restriction is no more limiting than is required under the 1940 Act. In
addition, the Board believes the proposal will provide greater flexibility and
maximize each Fund's lending capabilities.

9
<PAGE> 14

G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES AND
ELIMINATION OF TAX-FREE MONEY FUND'S FUNDAMENTAL RESTRICTION ON OIL AND GAS
INVESTMENTS

Cash Reserves Fund's current fundamental restriction on investing in
commodities is as follows:

The Fund may not buy or sell commodities, commodity contracts or real
estate (however, the Fund may purchase securities of companies
investing in real estate).

Tax-Free Money Fund's current fundamental restriction on investing in
commodities is as follows:

The Fund may not buy or sell commodities or commodity contracts, oil,
gas, or other mineral interests or exploration programs or real estate
or interest therein. However, the Fund may purchase municipal
obligations or other permitted securities secured by real estate or
which may represent indirect interests therein.

U.S. Government Money Fund's current fundamental restriction on investing
in commodities is as follows:

The Fund may not purchase or sell commodities or commodity contracts.

The Board recommends that the shareholders of each Fund vote to replace the
applicable restriction set forth above with the following fundamental
restriction:

The Fund will not purchase or sell physical commodities; however, this
policy shall not prevent the Fund from purchasing and selling foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.

The proposed changes are intended to conform the restriction to that of the
other INVESCO Funds and ensure that each Fund will have the maximum flexibility
to enter into hedging or other transactions utilizing financial contracts and
derivative products when doing so is permitted by operating policies established
for the Funds by the Board. Due to the rapid and continuing development of
derivative products and the possibility of changes in the definition of
"commodities," particularly in the context of the jurisdiction of the
Commodities Futures Trading Commission, it is important for each Fund's policy
to be flexible enough to allow it to enter into hedging and other transactions
using these products when doing so is deemed appropriate by INVESCO and is
within the investment parameters established by the Board. To maximize that
flexibility, the Board recommends that each Fund's fundamental restriction on
commodities investments be clear in permitting the use of derivative products,
even if the current non-fundamental investment policies of that Fund would not
permit investment in one or more of the permitted transactions.

With respect to Cash Reserves Fund and Tax-Free Money Fund, the proposal
also eliminates the Funds' restrictions on real estate related investments,
which would be replaced if proposal 1(h) is approved.

With respect to Tax-Free Money Fund only, this proposal eliminates the
Fund's restriction on investments in oil, gas, or other mineral interests or
exploration programs. Investment in oil, gas or other mineral leases or programs
is not prohibited by Federal law for mutual funds, but was prohibited in the
past by some state regulations that are no longer applicable. Although the Fund
has no current intention to invest in oil, gas or other mineral leases, the
Board recommends that shareholders eliminate the fundamental restriction

10
<PAGE> 15

for greater flexibility and uniformity with other INVESCO Funds. (Proposal 1(n)
would eliminate a similar fundamental restriction for Cash Reserves Fund.)

H. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS

The current fundamental restrictions of Cash Reserve Fund and Tax-Free
Money Fund on real estate investments are combined with their current
fundamental restrictions on investing in commodities set forth in proposal 1(g)
above.

U.S. Government Money Fund's current fundamental restriction on real estate
investments is as follows:

The Fund may not 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.

The Board recommends that the shareholders of each Fund vote to replace the
applicable restriction on real estate investments with the following fundamental
restriction:

The Fund may not purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).

In addition to conforming each Fund's fundamental restriction to that of
the other INVESCO Funds, the proposed amendment more completely describes the
types of real estate-related securities investments that are permissible for the
Funds and permits the Funds to purchase or sell real estate acquired as a result
of ownership of securities or other instruments (e.g., through foreclosure on a
mortgage in which the Fund directly or indirectly holds an interest). The Board
believes that this clarification will make it easier for decisions to be made
concerning each Fund's investments in real estate-related securities without
materially altering the general restriction on direct investments in real estate
or interests in real estate.

I. MODIFICATION OF FUNDAMENTAL RESTRICTION AND ADOPTION OF NON-FUNDAMENTAL
RESTRICTION ON INVESTING IN ANOTHER INVESTMENT COMPANY

Cash Reserves Fund and Tax-Free Money Fund each currently has the following
fundamental restriction regarding investment in another investment company:

The Fund may not 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.

U.S. Government Money Fund's current fundamental restriction regarding
investment in another investment company is as follows:

The Fund may not purchase securities of other investment companies
except in connection with a merger, consolidation, acquisition or
reorganization.

11
<PAGE> 16

The Board recommends that the shareholders vote to replace the applicable
fundamental restriction set forth above with the following fundamental
restriction:

The Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by INVESCO Funds Group,
Inc. or an affiliate or successor thereof, with substantially the same
fundamental investment objective, policies and limitations as the
Fund.

The proposed revision to each Fund's current fundamental restriction will
ensure that the INVESCO Funds have uniform policies permitting each Fund to
adopt a "master/feeder" structure whereby one or more Funds invest all of their
assets in another Fund. The master/feeder structure has the potential, under
certain circumstances, to minimize administration costs and maximize the
possibility of gaining a broader investor base. Currently, none of the INVESCO
Funds intend to establish a master/feeder structure; however, the Board
recommends that each Fund's shareholders adopt a policy that would permit this
structure in the event that the Board determines to recommend the adoption of a
master/feeder structure by any Fund. The proposed revision would require that
any fund in which a Fund may invest under a master/feeder structure be advised
by INVESCO or an affiliate thereof.

If the proposed revision is approved, the Board will adopt a
non-fundamental restriction for each Fund as follows:

The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.

The primary purpose of this non-fundamental restriction is to conform to
the other INVESCO Funds and to the 1940 Act requirements for investing in other
investment companies. Currently, each Fund's fundamental restriction is much
more limiting that the restrictions imposed by the 1940 Act. Adoption of this
non-fundamental restriction will enable each Fund to purchase the securities of
other investment companies to the extent permitted under the 1940 Act or
pursuant to an exemption granted by the SEC. If a Fund did purchase the
securities of another investment company, shareholders might incur additional
expenses because the Fund would have to pay its ratable share of the expenses of
the other investment company.

J. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SHORT SALES AND MARGIN PURCHASES

Cash Reserves Fund's current fundamental restriction on selling short and
buying on margin is as follows:

The Fund may not sell short or buy on margin.

Tax-Free Money Fund's current fundamental restriction on selling short and
buying on margin is as follows:

The Fund may not sell short or buy on margin, or write or purchase put
or call options, provided, however, that the Fund may enter into
demand features as described under "Investment Policies and
Restrictions."

12
<PAGE> 17

U.S. Government Money Fund's current fundamental restrictions on selling
short and buying on margin are as follows:

The Fund may not make short sales of securities or maintain a short
position.

The Fund may not 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.

The Board recommends that shareholders of each Fund vote to eliminate the
applicable fundamental investment restrictions set forth above. If the proposal
is approved by shareholders, the Board will adopt the following non-fundamental
restriction for each Fund:

The Fund may not sell securities short (unless it owns or has the
right to obtain securities equivalent in kind and amount to the
securities sold short) or purchase securities on margin, except that
(i) this policy does not prevent the Fund from entering into short
positions in foreign currency, futures contracts, options, forward
contracts, swaps, caps, floors, collars and other financial
instruments, (ii) the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and (iii) the Fund may
make margin payments in connection with futures contracts, options,
forward contracts, swaps, caps, floors, collars and other financial
instruments.

The proposed changes clarify the wording of the restrictions and expand the
exceptions to the restrictions, which generally prohibit the Funds from selling
securities short or buying securities on margin. Margin purchases involve the
purchase of securities with money borrowed from a broker. "Margin" is the cash
or eligible securities that the borrower places with a broker as collateral
against the loan. In a short sale, an investor sells a borrowed security and has
a corresponding obligation to the lender to return the identical security. The
proposed non-fundamental restriction permits short sales against the box, when
an investor sells securities short while owning the same securities in the same
amount or having the right to obtain equivalent securities. It also permits the
Funds to borrow a security on a short-term basis and to enter into short
positions and make margin payments in a variety of financial instruments. The
Board believes that elimination of the fundamental restriction and adoption of
the non-fundamental restriction will provide the Funds with greater investment
flexibility.

K. ELIMINATION OF FUNDAMENTAL RESTRICTION REGARDING INVESTMENTS FOR THE PURPOSE
OF EXERCISING CONTROL

Cash Reserve Fund's current fundamental restriction on investments for the
purpose of exercising control is as follows:

The Fund may not invest in any company for the purpose of exercising
control or management.

13
<PAGE> 18

Tax-Free Money Fund's current fundamental restriction on investments for
the purpose of exercising control is as follows:

The Fund may not invest in any issuer for the purpose of exercising
control or management.

U.S. Government Money Fund's current fundamental restriction on investments
for the purpose of exercising control is as follows:

The Fund may not invest in companies for the purpose of exercising
control or management.

The Board recommends that shareholders of each Fund vote to eliminate the
applicable restriction set forth above. There is no legal requirement that a
fund have an affirmative policy on investment for the purpose of exercising
control or management if it does not intend to make investments for that
purpose. None of the Funds has the present intention of investing in any company
for the purpose of exercising control or management. By eliminating this
restriction, the Board may, however, be able to authorize such a strategy in the
future if it concludes that doing so would be in the best interest of the Funds
and their respective shareholders.

L. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING RESTRICTED SECURITIES

Cash Reserves Fund's current fundamental restriction on investment in
restricted securities is as follows:

The Fund may not buy other than readily marketable securities.

Tax-Free Money Fund's current fundamental restriction on investment in
restricted securities is as follows:

The Fund may not 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.

In applying this restriction, 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.

14
<PAGE> 19

U.S. Government Money Fund's current fundamental restriction on investment
in restricted securities is as follows:

The Fund may not invest in securities for which there are legal or
contractual restrictions on resale.

The Board recommends that shareholders of each Fund vote to eliminate the
applicable restriction set forth above. If the proposal is approved, the Board
will adopt the following non-fundamental restriction for each Fund:

The Fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

The primary purpose of the proposal is to conform to the federal securities
law requirements regarding investment in illiquid securities and to conform the
investment restrictions of the Funds to those of the other INVESCO Funds.
Currently, a fundamental restriction of Cash Reserves Fund and U.S. Government
Money Funds prohibits investment in restricted securities by those Funds. The
proposed non-fundamental restriction would permit those Funds to invest in
illiquid securities, but would restrict investment in such securities to 10% of
the Fund's net assets. The Board believes that the proposed elimination of the
fundamental restriction and subsequent adoption of the uniform non-fundamental
restriction will make the policy more accurately reflect market conditions and
will maximize the flexibility of the Funds for future contingencies. The Board
may delegate to INVESCO, the Funds' investment advisor, the authority to
determine whether a security is liquid for the purposes of this investment
limitation.

M. ELIMINATION OF FUNDAMENTAL RESTRICTION ON FUND OWNERSHIP OF SECURITIES OF
ISSUERS ALSO OWNED BY DIRECTORS AND OFFICERS OF EACH FUND OR ITS INVESTMENT
ADVISOR (CASH RESERVES FUND AND TAX-FREE FUND ONLY)

Cash Reserves Fund's current fundamental restriction on ownership of
securities also owned by directors and officers of that Fund or its investment
advisor is as follows:

The Fund may not 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 or directors of the Fund and its
investment adviser, as a group, beneficially own more than 5% of such
securities.

Tax-Free Money Fund's current fundamental restriction on ownership of
securities also owned by directors and officer of that Fund or its investment
advisor is as follows:

The Fund may not 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.

15
<PAGE> 20

The Board recommends that shareholders of Cash Reserves Fund and Tax-Free
Money Fund vote to eliminate the fundamental restrictions set forth above. Funds
are not legally required to have a fundamental restriction limiting or
prohibiting the purchase of securities of companies that are also owned by
affiliated parties of the fund. This restriction was derived from state laws
that are no longer applicable. The concerns that this restriction was designed
to address are sufficiently safeguarded against by provisions of the 1940 Act
applicable to the Funds, as well as by each Fund's other investment policies.
Specifically, to the extent that this restriction seeks to limit possible
conflicts of interest arising out of transactions with affiliated parties, the
restriction is unnecessary and unduly burdensome because the Funds are subject
to the extensive affiliated transaction provisions of the 1940 Act. Moreover,
because the Funds are money market funds, issuers of securities in which they
invest are normally not of a type in which affiliated persons would be likely to
hold a substantial percentage of outstanding securities. Because this
restriction does not provide substantial additional protection to shareholders,
the Board recommends that this investment restriction be eliminated.

N. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN OIL AND GAS PROGRAMS
AND OTHER MINERAL LEASES OR PROGRAMS (CASH RESERVE FUND ONLY)

Cash Reserves Fund's current fundamental restriction on investing in oil,
gas, or other mineral leases or programs is as follows:

The Fund may not buy or sell oil, gas or other mineral interests or
exploration programs.

Investment in oil, gas or other mineral leases or programs is not
prohibited under Federal law for mutual funds, but was prohibited in the past by
some state regulations that are no longer applicable. Although the Fund has no
current intention to invest in oil, gas or mineral leases or programs, the Board
recommends that shareholders eliminate the fundamental restriction for greater
flexibility and uniformity with other INVESCO funds.

O. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN SECURITIES OF
NEWLY-FORMED ISSUERS (CASH RESERVE FUND AND TAX-FREE MONEY FUND ONLY)

The current fundamental restriction on investing in the securities of
newly-formed issuers of Cash Reserves Fund and Tax-Free Money Fund is as
follows:

The Fund may not purchase the securities of any issuer having a
record, together with predecessors, of less than three years
continuous operation.

The Board recommends that shareholders of Cash Reserves Fund and Tax-Free
Money Fund vote to eliminate this fundamental restriction. This restriction was
derived from a state "blue sky" requirement that has been pre-empted by recent
amendments of the federal securities laws. Companies with less than three years
of continuous operation are typically referred to as newly-formed issuers or
"unseasoned issuers." Because newly formed companies have no proven track record
in business, their prospects may be uncertain. Their securities may fluctuate in
price more widely than securities of established companies. The Board believes
that elimination of this fundamental investment restriction will provide the
Funds with greater investment flexibility. If the proposal is approved, Cash
Reserves Fund and Tax-Free Money Fund could invest in the securities of
newly-formed issuers in accordance with their respective investment objectives,
policies and limitations.
16
<PAGE> 21

P. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING EQUITY SECURITIES AND
SECURITIES CONVERTIBLE INTO EQUITY SECURITIES (CASH RESERVE FUND AND TAX-FREE
MONEY FUND ONLY)

Cash Reserves Fund's current fundamental restriction on the purchase of
equity securities is as follows:

The Fund may not purchase common or preferred stocks or securities
convertible into stocks.

Tax-Free Money Fund's current fundamental restriction on purchasing equity
securities is as follows:

The Fund may not invest in equity securities or securities convertible
into equity securities.

The Board recommends that the shareholders of Cash Reserves Fund and
Tax-Free Money Fund vote to eliminate the applicable fundamental restriction set
forth above. This is an outdated restriction that fulfills no legal or
regulatory requirements. It is not necessary for the Funds to state
affirmatively the type of investments they do not intend to make. In addition,
elimination of these restrictions would aid in standardizing the fundamental
restrictions of the INVESCO Funds, as few of the INVESCO Funds currently have
such a restriction. It is not expected that elimination of these restrictions
will have any impact on how the Funds are managed or the securities in which
they invest since, as money market funds, they do not normally invest in equity
securities.

Q. ELIMINATION OF FUNDAMENTAL RESTRICTION ON JOINT TRADING ACTIVITIES, PURCHASE
OF WARRANTS AND CERTAIN OTHER INVESTMENT ACTIVITIES (CASH RESERVE FUND ONLY)

Cash Reserves Fund's current fundamental restriction on joint trading
activities and purchase of warrants is as follows:

The Fund may not 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.

The Board recommends that shareholders of Cash Reserves Fund vote to
eliminate this fundamental restriction. This restriction is derived from a 1940
Act requirement, which makes it unlawful for a registered investment company to
participate on a joint or a joint and several basis in any trading account in
securities, except in connection with an underwriting in which such registered
investment company is a participant. The 1940 Act does not, however, require
that this limitation be stated as a fundamental restriction. Accordingly, the
Board recommends that this restriction be eliminated.

The Board also recommends that shareholders vote to eliminate this
restriction because it prohibits the purchase of warrants and the purchase or
sale of various options contracts. These prohibitions were derived from state
laws that are no longer applicable. The Board believes that the concerns that
this restriction was designed to address are sufficiently safeguarded against by
provisions of the 1940 Act applicable to the Fund, as well as by the Fund's
other investment policies. Accordingly, the Board recommends the elimination of
this restriction to provide for greater investment flexibility.

17
<PAGE> 22

REQUIRED VOTE. Approval of Proposal 1 with respect to each Fund requires
the affirmative vote of a "majority of the outstanding voting securities" of
that Fund, which for this purpose means the affirmative vote of the lesser of:
(1) 67% or more of the shares of that Fund present at the Meeting or represented
by proxy if more than 50% of the outstanding shares of that Fund are so present
or represented; or (2) more than 50% of the outstanding shares of that Fund.
SHAREHOLDERS WHO VOTE "FOR" PROPOSAL 1 WILL VOTE "FOR" EACH PROPOSED CHANGE
DESCRIBED ABOVE THAT IS APPLICABLE TO THEIR FUND. THOSE SHAREHOLDERS WHO WISH TO
VOTE AGAINST ANY OF THE SPECIFIC PROPOSED CHANGES DESCRIBED ABOVE MAY DO SO ON
THE PROXY PROVIDED.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 1.

PROPOSAL 2: TO ELECT THE DIRECTORS OF MONEY MARKET FUNDS

The Board has nominated the individuals identified below for election to
the Board at the Meeting. Money Market Funds currently has ten directors.
Vacancies on the Board are generally filled by appointment by the remaining
directors. However, the 1940 Act provides that vacancies may not be filled by
directors unless thereafter at least two-thirds of the directors shall have been
elected by shareholders. To ensure continued compliance with this rule without
incurring the expense of calling additional shareholder meetings, shareholders
are being asked at this meeting to elect the current ten directors to hold
office until the next meeting of shareholders. Consistent with the provisions of
Money Market Funds' by-laws, and as permitted by Maryland law, Money Market
Funds does not anticipate holding annual shareholder meetings. Thus, the
directors will be elected for indefinite terms, subject to termination or
resignation. Each nominee has indicated a willingness to serve if elected. If
any of the nominees should not be available for election, the persons named as
proxies (or their substitutes) may vote for other persons in their discretion.
Management has no reason to believe that any nominee will be unavailable for
election.

All of the Independent Directors now being proposed for election were
nominated and selected by Independent Directors. Eight of the ten current
directors are Independent Directors.

The persons named as attorneys-in-fact in the enclosed proxy have advised
Money Market Funds that unless a proxy instructs them to withhold authority to
vote for all listed nominees or for any individual nominee, they will vote all
validly executed proxies for the election of the nominees named below.

18
<PAGE> 23

The nominees for director, their ages, a description of their principal
occupations, the number of Money Market Funds shares owned by each, and their
respective memberships on Board committees are listed in the table below.

FRED A. DEERING, Trustee of INVESCO Global 1993 38277.2900 (2), (3), (5)
Vice Chairman of the Health Sciences Fund.
Board, Age 71 Formerly, Chairman of the
Executive Committee and
Chairman of the Board of
Security Life of Denver
Insurance Company, Denver,
Colorado; Director of ING
American Holdings Company,
and First ING Life
Insurance Company of New
York
</TABLE>

19
<PAGE> 24

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARK H. WILLIAMSON, President, Chief Executive 1998 0 (3), (5)
President, Chief Officer and Director,
Executive Officer, and INVESCO Distributors Inc.;
Director, Age 47* President, Chief Executive
Officer, and Director,
INVESCO; President, Chief
Operating Officer, and
Trustee, INVESCO Global
Health Sciences Fund.
Formerly, Chairman of the
Board and Chief Executive
Officer, NationsBanc
Advisors, Inc. (1995-
1997); Chairman of the
Board, NationsBanc
Investments, Inc.
(1997-1998).
</TABLE>

20
<PAGE> 25

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. VICTOR L. ANDREWS, Professor Emeritus, 1993 385.5800 (4), (6), (8)
Director, Age 68 Chairman Emeritus and
Chairman of the CFO
Roundtable of the
Department of Finance of
Georgia State University,
Atlanta, Georgia and
President, Andrews
Financial Associates, Inc.
(consulting firm).
Formerly, member of the
faculties of the Harvard
Business School and the
Sloan School of Management
of MIT. Dr. Andrews is also
a director of the Sheffield
Funds, Inc.

BOB R. BAKER, President and Chief 1993 398.1800 (3), (4), (5)
Director, Age 62 Executive Officer of AMC
Cancer Research Center,
Denver, Colorado, since
January 1989; until
December 1988, Vice
Chairman of the Board,
First Columbia Financial
Corporation, Englewood,
Colorado. Formerly,
Chairman of the Board and
Chief Executive Officer of
First Columbia Financial
Corporation.
</TABLE>

21
<PAGE> 26

22
<PAGE> 27

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. WENDY LEE GRAMM, Self-employed (since 1993). 1997 379.6000 (4), (8)
Director, Age 54 Professor of Economics and
Public Administration,
University of Texas at
Arlington. Formerly,
Chairman, Commodities
Futures Trading Commission
(1988-1993); Administrator
for Information and
Regulatory Affairs, Office
of Management and Budget
(1985-1988); Executive
Director, Presidential Task
Force on Regulatory Relief;
Director, Federal Trade
Commission's Bureau of
Economics. Director of the
Chicago Mercantile
Exchange; Enron
Corporation; IBP, Inc.;
State Farm Insurance
Company; Independent
Women's Forum;
International Republic
Institute; and the
Republican Women's Federal
Forum.
</TABLE>

23
<PAGE> 28

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KENNETH T. KING, Presently retired. 1993 11569.7900 (2), (3), (5),
Director, Age 73 Formerly, Chairman of the (6), (7)
Board, The Capitol Life
Insurance Company,
Providence Washington
Insurance Company, and
Director of numerous U.S.
subsidiaries thereof.
Formerly, Chairman of the
Board, The Providence
Capitol Companies in the
United Kingdom and
Guernsey. Until 1987,
Chairman of the Board,
Symbion Corporation.
</TABLE>

24
<PAGE> 29

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JOHN W. MCINTYRE, Presently retired. 1995 375.8000 (2), (3), (5),
Director, Age 68 Formerly, Vice Chairman of (7)
the Board, The Citizens and
Southern Corporation;
Chairman of the Board and
Chief Executive Officer,
The Citizens and Southern
Georgia Corporation;
Chairman of the Board and
Chief Executive Officer,
The Citizens and Southern
National Bank. Trustee of
INVESCO Global Health
Sciences Fund and Gables
Residential Trust,
Employee's Retirement
System of Georgia, Emory
University, and J.M. Tull
Charitable Foundation;
Director of Kaiser
Foundation of Health Plans
of Georgia, Inc.
</TABLE>

25
<PAGE> 30

<TABLE>
<CAPTION>
NUMBER OF
PRINCIPAL OCCUPATION AND DIRECTOR OR COMPANY SHARES
BUSINESS EXECUTIVE BENEFICIALLY OWNED
NAME, POSITION WITH EXPERIENCE (DURING THE PAST OFFICER OF DIRECTLY OR INDIRECTLY MEMBER OF
COMPANY, AND AGE FIVE YEARS) COMPANY SINCE ON DEC. 31, 1998(1) COMMITTEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DR. LARRY SOLL, Presently retired. 1997 375.8000 (4), (8)
Director, Age 56 Formerly, Chairman of the
Board (1987-1994), Chief
Executive Officer
(1982-1989 and 1993-1994)
and President (1982-1989)
of Synergen Inc. Director
of Synergen Inc. since
incorporation in 1982.
Director of Isis
Pharmaceuticals, Inc.
Trustee of INVESCO Global
Health Sciences Fund.
</TABLE>

- ---------------

* Because of his affiliation with INVESCO, with a Fund's investment adviser,
or with companies affiliated with INVESCO, this individual is deemed to be
an "interested person" of Money Market Funds as that term is defined in the
1940 Act.

(1) As interpreted by the SEC, a security is beneficially owned by a person if
that person has or shares voting power or investment power with respect to
that security. The persons listed have partial or complete voting and
investment power with respect to their respective Fund shares.

(2) Member of the Audit Committee

(3) Member of the Executive Committee

(4) Member of the Management Liaison Committee

(5) Member of the Valuation Committee

(6) Member of the Compensation Committee

(7) Member of the Soft Dollar Brokerage Committee

(8) Member of the Derivatives Committee

The Board has audit, management liaison, soft dollar brokerage and
derivatives committees consisting of Independent Directors, and compensation,
executive and valuation committees consisting of Independent Directors and
non-independent directors. The Board does not have a nominating committee. The
audit committee, consisting of four Independent Directors, meets quarterly with
Money Market Funds' independent accountants and executive officers of Money
Market Funds. This committee reviews the accounting principles being applied by
Money Market Funds in financial reporting, the scope and adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters. All of the recommendations of the

26
<PAGE> 31

audit committee are reported to the full Board. During the intervals between the
meetings of the Board, the executive committee may exercise all powers and
authority of the Board in the management of Money Market Funds' business, except
for certain powers which, under applicable law and/or Money Market Funds'
by-laws, may only be exercised by the full Board. All decisions are subsequently
submitted for ratification by the Board. The management liaison committee meets
quarterly with various management personnel of INVESCO in order to facilitate
better understanding of the management and operations of Money Market Funds, and
to review legal and operational matters that have been assigned to the committee
by the Board, in furtherance of the Board's overall duty of supervision. The
soft dollar brokerage committee meets periodically to review soft dollar
transactions by the Funds, and to review policies and procedures of the Funds'
adviser with respect to soft dollar brokerage transactions. The committee then
reports on these matters to the Board. The derivatives committee meets
periodically to review derivatives investments made by the Funds. The committee
monitors derivatives usage by the Funds and the procedures utilized by the
Funds' adviser to ensure that the use of such instruments follows the policies
on such instruments adopted by the Board. The committee then reports on these
matters to the Board.

Each Independent Director receives an annual retainer of $56,000 for their
service to the INVESCO Funds. Additionally, each Independent Director receives
$3,000 for in-person attendance at each board meeting and $1,000 for in-person
attendance at each committee meeting. The chairmen of the audit and management
liaison committees receive an annual fee of $4,000 for serving in such capacity.

During the past fiscal year, the Board met five times, the audit committee
met four times, the compensation committee met twice, the management liaison
committee met four times, the soft dollar brokerage committee met twice, and the
derivatives committee met three times. The executive committee did not meet.
During Money Market Funds' last fiscal year, each Director nominee attended 75%
or more of the Board meetings and meetings of the committees of the Board on
which he or she served.

The Independent Directors nominate individuals to serve as Independent
Directors, without any specific nominating committee. The Board ordinarily will
not consider unsolicited director nominations recommended by the Funds'
shareholders. The Board, including its Independent Directors, unanimously
approved the nomination of the foregoing persons to serve as directors and
directed that the election of these nominees be submitted to Money Market Funds'
shareholders.

The following table sets forth information relating to the compensation
paid to directors during the last fiscal year:

COMPENSATION TABLE
AMOUNTS PAID DURING THE MOST RECENT
FISCAL YEAR BY MONEY MARKET FUNDS TO DIRECTORS

27
<PAGE> 32

<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION FROM
COMPENSATION FROM BENEFITS ACCRUED AS PART ESTIMATED ANNUAL MONEY MARKET FUNDS AND THE
MONEY MARKET OF MONEY MARKET BENEFITS UPON OTHER 14 INVESCO FUNDS
NAME OF PERSON, POSITION FUNDS(1) FUNDS' EXPENSES(2) RETIREMENT(3) PAID TO DIRECTORS(1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bob R. Baker,
Director $ 4,888 $1,430 $1,686 $ 84,000
Lawrence H. Budner,
Director $ 4,632 $1,601 $1,258 $ 79,350
Daniel D. Chabris(4),
Director $ 4,763 $1,730 $ 939 $ 70,000
Dr. Wendy L. Gramm,
Director $ 4,436 $ 0 $ 0 $ 79,000
Kenneth T. King,
Director $ 4,532 $1,759 $ 986 $ 77,050
John W. McIntyre,
Director $ 4,527 $ 0 $ 0 $ 98,500
Dr. Larry Soll,
Director $ 4,527 $ 0 $ 0 $ 96,000
------- ------ ------ --------
TOTAL $41,889 $9,815 $7,214 $767,950
======= ====== ====== ========
AS A PERCENTAGE OF NET
ASSETS 0.0049%(5) 0.0012%(5) 0.0035%(6)
</TABLE>

- ---------------

(1) The Vice Chairman of the Board, the chairmen of the audit, management
liaison, derivatives, soft dollar brokerage and compensation committees, and
the Independent Director members of the committees of each Fund receive
compensation for serving in such capacities in addition to the compensation
paid to all Independent Directors.

(2) Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the
election of the directors.

(3) These figures represent the Funds' share of the estimated annual benefits
payable by the INVESCO Complex (excluding INVESCO Global Health Sciences
Fund which does not participate in this retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the INVESCO Funds. These estimated benefits assume
retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex, and for other reasons during the period in
which retirement benefits are accrued on behalf of the respective directors.
This results in lower estimated benefits for directors who are closer to
retirement and higher estimated benefits for directors who are farther from
retirement. With the exception of Drs. Soll and Gramm, each of these
directors has served as director of one or more of the INVESCO Funds for the
minimum five-year period required to be eligible to participate in the
Defined Benefit Deferred Compensation Plan. Although Mr. McIntyre became
eligible to participate in the Defined Benefit Deferred Compensation Plan as
of November 1, 1998, he will not be included in the calculation of
retirement benefits until November 1, 1999.

(4) Mr. Chabris retired as a director effective September 30, 1998.

(5) Total as a percentage of the Funds' net assets as of May 31, 1998.

(6) Total as a percentage of the 15 INVESCO Funds in the INVESCO Complex as of
December 31, 1998.

Money Market Funds pays its Independent Directors, Board vice chairman,
committee chairmen and committee members the fees described above. Money Market
Funds also reimburses its Independent Directors for travel expenses incurred in
attending meetings. Charles W. Brady, Chairman of the Board, and Mark H.
Williamson, President, Chief Executive Officer, and Director, as "interested
persons" of Money Market Funds and of other INVESCO Funds, receive compensation
and are reimbursed for travel expenses

28
<PAGE> 33

incurred in attending meetings as officers or employees of INVESCO or its
affiliated companies, but do not receive any director's fees or other
compensation from Money Market Funds or other INVESCO Funds for their services
as directors.

The overall direction and supervision of each Fund is the responsibility of
the Board, which has the primary duty of ensuring that each Fund's general
investment policies and programs are adhered to and that each Fund is properly
administered. The officers of each Fund, all of whom are officers and employees
of and paid by INVESCO, are responsible for the day-to-day administration of the
Funds. The investment adviser for a Fund has the primary responsibility for
making investment decisions on behalf of that Fund. These investment decisions
are reviewed by the investment committee of INVESCO.

All of the officers and directors of Money Market Funds hold comparable
positions with the following INVESCO Funds: INVESCO Bond Funds, Inc. (formerly,
INVESCO Income Funds, Inc.), INVESCO Combination Stock & Bond Funds, Inc.
(formerly, INVESCO Flexible Funds, Inc. and INVESCO Multiple Asset Funds, Inc.),
INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc.,
INVESCO Growth Funds, Inc. (formerly INVESCO Growth Fund, Inc.), INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Sector
Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.), INVESCO Specialty
Funds, Inc., INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc. and
INVESCO Capital Appreciation Funds, Inc.), INVESCO Tax-Free Income Funds, Inc.,
INVESCO Variable Investment Funds, Inc., INVESCO Value Trust, and INVESCO
Treasurer's Series Trust (the "INVESCO Funds").

The Boards of the Funds managed by INVESCO have adopted a Defined Benefit
Deferred Compensation Plan (the "Plan") for the non-interested directors and
trustees of the Funds. Under the Plan, each director or trustee who is not an
interested person of the Funds (as defined in Section 2(a)(19) of the 1940 Act)
and who has served for at least five years (a "Qualified Director") is entitled
to receive, upon termination of service as director (normally at retirement age
72 or the retirement age of 73 or 74, if the retirement date is extended by the
Boards for one or two years, but less than three years) continuation of payment
for one year (the "First Year Retirement Benefit") of the annual basic retainer
and annualized board meeting fees payable by the Funds to the Qualified Director
at the time of his or her retirement (the "Basic Benefit"). Commencing with any
such director's second year of retirement, and commencing with the first year of
retirement of any director whose retirement has been extended by the Board for
three years, a Qualified Director shall receive quarterly payments at an annual
rate equal to 50% of the Basic Benefit. These payments will continue for the
remainder of the Qualified Director's life or ten years, whichever is longer
(the "Reduced Benefit Payments"). If a Qualified Director dies or becomes
disabled after age 72 and before age 74 while still a director of the Funds, the
First Year Retirement Benefit and Reduced Benefit Payments will be made to him
or her or to his or her beneficiary or estate. If a Qualified Director becomes
disabled or dies either prior to age 72 or during his or her 74th year while
still a director of the Funds, the director will not be entitled to receive the
First Year Retirement Benefit; however, the Reduced Benefit Payments will be
made to his or her beneficiary or estate. The Plan is administered by a
committee of three directors who are also participants in the Plan and one
director who is not a Plan participant. The cost of the Plan will be allocated
among the INVESCO Funds in a manner determined to be fair and equitable by the
committee. The Funds began making payments to Mr. Chabris as of October 1, 1998
under the Plan. Money Market Funds has no stock options or other pension or
retirement plans for management or other personnel and pays no salary or
compensation to any of its officers.

29
<PAGE> 34

The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of certain of the INVESCO
Funds. The deferred amounts have been invested in shares of certain INVESCO
Funds. Each Independent Director may, therefore, be deemed to have an indirect
interest in shares of each such INVESCO fund, in addition to any fund shares
that they may own directly or beneficially.

REQUIRED VOTE. Election of each nominee as a director of Money Market Funds
requires the affirmative vote of a plurality of the votes cast at the Meeting in
person or by proxy.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE NOMINEES IN PROPOSAL 2.

PROPOSAL 3: RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS

The Board, including all of its Independent Directors, has selected
PricewaterhouseCoopers LLP to continue to serve as independent accountants of
each Fund, subject to ratification by each Fund's shareholders.
PricewaterhouseCoopers LLP has no direct financial interest or material indirect
financial interest in any Fund. Representatives of PricewaterhouseCoopers LLP
are not expected to attend the Meeting, but have been given the opportunity to
make a statement if they so desire, and will be available should any matter
arise requiring their presence.

The independent accountants examine annual financial statements for the
Funds and provide other audit and tax-related services. In recommending the
selection of PricewaterhouseCoopers LLP, the directors reviewed the nature and
scope of the services to be provided (including non-audit services) and whether
the performance of such services would affect the accountants' independence.

REQUIRED VOTE. Ratification of the selection of PricewaterhouseCoopers LLP
as independent accountants with respect to a Fund requires the affirmative vote
of a majority of the votes of that Fund present at the Meeting, provided a
quorum is present.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 3.

INFORMATION CONCERNING ADVISER,
DISTRIBUTOR AND AFFILIATED COMPANIES

INVESCO, a Delaware corporation, serves as each Fund's investment adviser,
and provides other services to each Fund and Money Market Funds. INVESCO
Distributors, Inc. ("IDI"), a Delaware corporation that serves as each Fund's
distributor, is a wholly owned subsidiary of INVESCO. INVESCO is a wholly owned
subsidiary of INVESCO North American Holdings, Inc. ("INAH"), 1315 Peachtree
Street,

30
<PAGE> 35

N.E., Atlanta, Georgia 30309. INAH is an indirect wholly owned subsidiary of
AMVESCAP PLC.(1) The corporate headquarters of AMVESCAP PLC are located at 11
Devonshire Square, London, EC2M 4YR, England. INVESCO's and IDI's offices are
located at 7800 East Union Avenue, Denver, Colorado 80237. INVESCO currently
serves as investment adviser of 14 open-end investment companies having
approximate aggregate net assets of $21.1 billion as of December 31, 1998.

The principal executive officers and directors of INVESCO and their
principal occupations are:

Mark H. Williamson, Chairman of the Board, President, Chief Executive
Officer and Director, also, President and Chief Executive Officer of IDI;
Charles P. Mayer, Senior Vice President and Director, also, Senior Vice
President and Director of IDI; Ronald L. Grooms, Director, Senior Vice-President
and Treasurer, also, Director, Senior Vice-President and Treasurer of IDI;
Richard W. Healey, Senior Vice President and Director, also, Senior Vice
President and Director of IDI; Timothy J. Miller, Senior Vice President and
Director, also, Senior Vice President and Director of IDI; and Glen A. Payne,
Senior Vice-President, Secretary and General Counsel, also Senior
Vice-President, Secretary and General Counsel of IDI.

The address of each of the foregoing officers and directors is 7800 East
Union Avenue, Denver, Colorado 80237.

Pursuant to an Administrative Services Agreement between Money Market Funds
and INVESCO, INVESCO provides administrative services to Money Market Funds,
including sub-accounting and recordkeeping services and functions. During the
fiscal year ended May 31, 1998, Money Market Funds paid INVESCO total
compensation of $147,743 for such services.

During the fiscal year ended May 31, 1998, Money Market Funds paid INVESCO,
which also serves as Money Market Funds' transfer agent and dividend disbursing
agent, total compensation of $3,235,224 for such services.

OTHER BUSINESS

The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.

- ---------------

(1) The intermediary companies between INAH and AMVESCAP PLC are as follows:
INVESCO, Inc., AMVESCAP Group Services, Inc., AVZ, Inc. and INVESCO North
American Group, Ltd., each of which is wholly owned by its immediate parent.
31
<PAGE> 36

SHAREHOLDER PROPOSALS

Money Market Funds does not hold annual meetings of shareholders.
Shareholders wishing to submit proposals for inclusion in a proxy statement and
form of proxy for a subsequent shareholders' meeting should send their written
proposals to the Secretary of Money Market Funds, 7800 East Union Avenue,
Denver, Colorado 80237. Money Market Funds has not received any shareholder
proposals to be presented at this meeting.

By order of the Board of Directors

/s/ Glen A. Payne
--------------------------------
Glen A. Payne
Secretary

March 23, 1999

32
<PAGE> 37

APPENDIX A

PRINCIPAL SHAREHOLDERS

As of March 12, 1999 there were no individuals who owned 5% or more of any
Fund's outstanding equity securities.

A-1
<PAGE> 38
[Name and Address]

INVESCO CASH RESERVES FUND
INVESCO MONEY MARKET FUNDS, INC.

PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999

This proxy is being solicited on behalf of the Board of Directors of
INVESCO Money Market Funds, Inc. (the "Company") and relates to the proposals
with respect to the Company and to INVESCO Cash Reserves Fund, a series of the
Company ("Fund"). The undersigned hereby appoints as proxies Fred A. Deering and
Mark H. Williamson, and each of them (with power of substitution), to vote all
shares of common stock of the undersigned in the Fund at the Special Meeting of
Shareholders to be held at 10:00 a.m., Mountain Standard Time, on May 20, 1999,
at the offices of the Company, 7800 East Union Avenue, Denver, Colorado 80237,
and any adjournment thereof ("Meeting"), with all the power the undersigned
would have if personally present.

The shares represented by this proxy will be voted as instructed.
Unless indicated to the contrary, this proxy shall be deemed to grant authority
to vote "FOR" all proposals relating to the Company and the Fund with
discretionary power to vote upon such other business as may properly come before
the Meeting.

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-800-690-6903 TOLL
FREE OR VISIT HTTP://WWW.PROXYVOTE.COM. TO VOTE BY FACSIMILE TRANSMISSION,
PLEASE FAX YOUR COMPLETED PROXY CARD TO 1-800-733-1885.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

[X] KEEP THIS PORTION FOR YOUR RECORDS

<PAGE> 39

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

INVESCO CASH RESERVES FUND
INVESCO MONEY MARKET FUNDS, INC.

VOTE ON DIRECTORS FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
2. Election of the Company's Board of Directors: [ ] [ ] [ ] To withhold authority
(1) Charles W. Brady; (2) Fred A. Deering; (3) to vote, mark "For All
Mark H. Williamson; (4) Dr. Victor L. Andrews; Except" and write the
(5) Bob R. Baker; (6) Lawrence H. Budner; nominee's number on the
(7) Dr. Wendy Lee Gramm; (8) Kenneth T. King; line below.
(9) John W. McIntyre; and (10) Dr. Larry Soll;
-----------------------

VOTE ON PROPOSALS FOR AGAINST ABSTAIN
ALL ALL ALL
1. Approval of changes to the fundamental investment restrictions; [ ] [ ] [ ]

[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT LEFT and indicate the letter(s) (as set forth in
the proxy statement) of the investment restriction or restrictions
you do not want to change on the line on the reverse side. IF YOU
CHOOSE TO VOTE DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL
IN YOUR PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND INTERNET VOTING
ARE AVAILABLE.
FOR AGAINST ABSTAIN
3. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's [ ] [ ] [ ]
Independent Public Accountants.
</TABLE>

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.

- ------------------------------------------------ ------------------------------
Signature Date

- ------------------------------------------------ ------------------------------
Signature (Joint Owners) Date

<PAGE> 40

[Back]

To vote against the proposed changes to one or more of the
specific fundamental investment restrictions, indicate the
letter(s) (as set forth in the proxy statement) of the
investment restriction or restrictions you do not want to
change on the line at the right. IF YOU CHOOSE TO VOTE
DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN
YOUR PROXY CARD. IF YOU CHOOSE TO VOTE THE SAME ON ALL
RESTRICTIONS PERTAINING TO YOUR FUND, TELEPHONE AND INTERNET
VOTING ARE AVAILABLE.

1._______________________________

<PAGE> 41
[Name and Address]

INVESCO TAX-FREE MONEY FUND
INVESCO MONEY MARKET FUNDS, INC.

PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999

This proxy is being solicited on behalf of the Board of Directors of
INVESCO Money Market Funds, Inc. (the "Company") and relates to the proposals
with respect to the Company and to INVESCO Tax-Free Money Fund, a series of the
Company ("Fund"). The undersigned hereby appoints as proxies Fred A. Deering and
Mark H. Williamson, and each of them (with power of substitution), to vote all
shares of common stock of the undersigned in the Fund at the Special Meeting of
Shareholders to be held at 10:00 a.m., Mountain Standard Time, on May 20, 1999,
at the offices of the Company, 7800 East Union Avenue, Denver, Colorado 80237,
and any adjournment thereof ("Meeting"), with all the power the undersigned
would have if personally present.

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

[X] KEEP THIS PORTION FOR YOUR RECORDS

<PAGE> 42

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

INVESCO TAX-FREE MONEY FUND
INVESCO MONEY MARKET FUNDS, INC.

VOTE ON PROPOSALS FOR AGAINST ABSTAIN
ALL ALL ALL
1. Approval of changes to the fundamental investment restrictions; [ ] [ ] [ ]

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

- ------------------------------------------------ ------------------------------
Signature Date

- ------------------------------------------------ ------------------------------
Signature (Joint Owners) Date

<PAGE> 43

[Back]

1.___________________________

<PAGE> 44

[Name and Address]

INVESCO U.S. GOVERNMENT MONEY FUND
INVESCO MONEY MARKET FUNDS, INC.

PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
May 20, 1999

This proxy is being solicited on behalf of the Board of Directors of
INVESCO Money Market Funds, Inc. (the "Company") and relates to the proposals
with respect to the Company and to INVESCO U.S. Government Money Fund, a series
of the Company ("Fund"). The undersigned hereby appoints as proxies Fred A.
Deering and Mark H. Williamson, and each of them (with power of substitution),
to vote all shares of common stock of the undersigned in the Fund at the Special
Meeting of Shareholders to be held at 10:00 a.m., Mountain Standard Time, on May
20, 1999, at the offices of the Company, 7800 East Union Avenue, Denver,
Colorado 80237, and any adjournment thereof ("Meeting"), with all the power the
undersigned would have if personally present.

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

[X] KEEP THIS PORTION FOR YOUR RECORDS

<PAGE> 45

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

INVESCO U.S. GOVERNMENT MONEY FUND
INVESCO MONEY MARKET FUNDS, INC.

VOTE ON PROPOSALS FOR AGAINST ABSTAIN
ALL ALL ALL
1. Approval of changes to the fundamental investment restrictions; [ ] [ ] [ ]

[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN
"X" IN THE BOX AT LEFT and indicate the letter(s) (as set forth in the
proxy statement) of the investment restriction or restrictions you do not
want to change on the line on the reverse side. IF YOU CHOOSE TO VOTE
DIFFERENTLY ON INDIVIDUAL RESTRICTIONS, YOU MUST MAIL IN YOUR PROXY CARD.
IF YOU CHOOSE TO VOTE THE SAME ON ALL RESTRICTIONS PERTAINING TO YOUR FUND,
TELEPHONE AND INTERNET VOTING ARE AVAILABLE.

FOR AGAINST ABSTAIN
3. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's [ ] [ ] [ ]
Independent Public Accountants.
</TABLE>

YOUR VOTE IS IMPORTANT. IF YOU ARE NOT VOTING BY PHONE, FACSIMILE, OR INTERNET,
PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.

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Signature Date

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Signature (Joint Owners) Date

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