As filed on January 28, 2000 File No. 002-55079
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ____ ___
Post-Effective Amendment No. 38 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 25 X
INVESCO MONEY MARKET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feiman, Esq.
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019-5820
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Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
X on January 31, 2000, pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on _____________, pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on _________, pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
PROSPECTUS | February 15, 2000
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YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
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INVESCO MONEY MARKET FUNDS, INC.
INVESCO CASH RESERVES FUND--CLASS C
A MUTUAL FUND DESIGNED FOR INVESTORS SEEKING A HIGH LEVEL OF CURRENT INCOME,
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
CLASS C SHARES ARE SOLD PRIMARILY THROUGH THIRD PARTIES, SUCH AS BROKERS, BANKS,
AND FINANCIAL PLANNERS.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks.........3
Fund Performance...............................4
Fees And Expenses..............................6
Investment Risks...............................7
Risks Associated With Particular Investments...8
Fund Management................................9
Portfolio Manager..............................9
Potential Rewards.............................10
Share Price...................................10
How To Buy Shares.............................11
How To Sell Shares............................13
Dividends And Taxes...........................14
Financial Highlights..........................15
No dealer, sales person, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and you should not rely on such other information or
representations.
[INVESCO ICON] INVESCO
The Securities and Exchange Commission has not approved or disapproved the
shares of the Fund. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] Investment Goals & Strategies
[ARROWS ICON] Potential Investment Risks
[GRAPH ICON] Past Performance
[INVESCO ICON] Working With INVESCO
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[KEY ICON] [ARROWS ICON] INVESTMENT GOALS, STRATEGIES AND RISKS
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Fund.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management of the Fund.
This Prospectus contains important information about the Fund's Class C shares,
which are sold primarily through third parties, such as brokers, banks, and
financial planners. The Fund also offers one or more additional classes of
shares directly to the public through separate prospectuses. Those other classes
of shares have lower expenses, with resulting positive effects on their
performance. You can choose the class of shares that is best for you, based on
how much you plan to invest and other relevant factors discussed in How To Buy
Shares. To obtain additional information about other classes of shares, contact
INVESCO Distributors, Inc. ("IDI") at 1-800-328-2234 or your broker, bank, or
financial planner who is offering the Class C shares offered in this Prospectus.
FOR MORE DETAILS ABOUT THE FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK, PLEASE
SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Fund is a money market fund. It invests in "money market" securities, which
are high quality debt securities with a life span or remaining maturity of 397
days or less. The average dollar-weighted maturity of the Fund's portfolio is 90
days or less.
The Fund invests primarily in short-term debt securities issued by large
creditworthy corporations, banks and finance companies, and debt securities
issued by the U.S. government. These securities include corporate debt
securities, bank obligations, short-term commercial paper, U.S. government debt,
and repurchase agreements.
The Fund is not intended for investors seeking capital appreciation. While not
intended as a complete investment program, the Fund may be a valuable element of
your investment portfolio.
<PAGE>
The Fund operates under policies designed to ensure compliance with specific
federal regulations applied to money market funds. These policies include
requirements for:
o maintaining high credit quality of the Fund's investments;
o maintaining a short average portfolio maturity;
o ensuring adequate diversification of both the issuers of the Fund's
investments and the guarantors of those investments, if any; and
o monitoring accurate pricing of the Fund's investments so unfairness does not
result from the use of the amortized cost method to value those investments.
An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation ("FDIC") or any other governmental agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
[GRAPH ICON] FUND PERFORMANCE
Since the Fund's Class C shares are not offered until February 15, 2000, the bar
chart below shows the Fund's Investor Class shares' actual yearly performance
for the years ended December 31 (commonly known as its "total return") over the
past decade. Investor Class shares are not offered in this Prospectus. INVESTOR
CLASS AND CLASS C RETURNS WOULD BE SIMILAR BECAUSE BOTH CLASSES OF SHARES INVEST
IN THE SAME PORTFOLIO OF SECURITIES. THE RETURNS OF THE CLASSES WOULD DIFFER,
HOWEVER, TO THE EXTENT OF DIFFERING LEVELS OF EXPENSES. IN THIS REGARD, THE BAR
CHART DOES NOT REFLECT CONTINGENT DEFERRED SALES CHARGES OR ASSET BASED SALES
CHARGES; IF IT DID, THE TOTAL RETURNS SHOWN WOULD BE LOWER. The table below
shows average annual total returns for various periods ended December 31 for the
Fund's Investor Class shares. To obtain current 7-day yield information, please
call INVESCO at 1-800-328-2234. Remember, past performance does not indicate how
the Fund will perform in the future.
<PAGE>
The chart below contains the following plot points:
<TABLE>
<CAPTION>
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Cash Reserves Fund - Investor Class
Actual Annual Total Return(1),(2)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.82% 5.58% 3.16% 2.36% 3.70% 5.26% 4.70% 4.81% 4.74% 4.38%
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Best Calendar Qtr. 6/90 1.93%
Worst Calendar Qtr. 6/93 0.56%
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</TABLE>
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AVERAGE ANNUAL TOTAL RETURN(1)
AS OF 12/31/99
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1 YEAR 5 YEARS 10 YEARS
Cash Reserves Fund--Investor Class 4.38% 4.78% 4.64%
(1) Total return figures include reinvested dividends, and include the effect of
the Fund's expenses.
(2) The total returns are for the Investor Class shares that are not offered in
this Prospectus. Total returns of Class C shares will differ only to the
extent that the classes do not have the same expenses.
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund:
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
CLASS C SHARES
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) 1.00%*
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends and Other Distributions None
Redemption Fee (as a percentage of amount redeemed) None
Exchange Fee None
* A 1% contingent deferred sales charge is charged on redemptions or exchanges
of shares held thirteen months or less, other than shares acquired through
reinvestment of dividends and other distributions.
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
CASH RESERVES FUND--CLASS C
Management Fees 0.40%
Distribution and Service (12b-1) Fees(1) 1.00%
Other Expenses (2) 0.51%
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Total Annual Fund Operating Expenses (2) 1.91%
=====
(1) Because the Fund's Class C shares pay 12b-1 distribution and service fees
which are based upon the Fund's assets, if you own shares of the Fund for a long
period of time, you may pay more than the economic equivalent of the maximum
front-end sales charge permitted for mutual funds by the National Association of
Securities Dealers, Inc.
(2) Based on estimated expenses for the current fiscal year, which may be more
or less than actual expenses. Actual expenses are not provided because the
Fund's Class C shares are not offered until February 15, 2000. Certain expenses
of the Fund will be absorbed by INVESCO in order to ensure that expenses for the
Fund's Class C shares will not exceed 1.90% of the Fund's average net assets
attributable to Class C shares pursuant to an agreement between the Fund and
INVESCO. This commitment may be changed at any time following consultation with
the board of directors. After absorption, the Fund's Class C shares' Other
Expenses and Total Annual Fund Operating Expenses for the fiscal year ending May
31, 2000 are estimated to be 0.50% and 1.90%, respectively, of the Fund's
average net assets attributable to Class C shares.
EXAMPLES
These Examples are intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds.
The Examples assume that you invested $10,000 in Class C shares of the Fund for
the time periods indicated. The first Example assumes that you redeem all of
<PAGE>
your shares at the end of those periods. The second Example assumes that you
keep your shares. Both Examples also assume that your investment had a
hypothetical 5% return each year and that the Fund's Class C shares' operating
expenses remained the same. Although the actual costs and performance of the
Fund's Class C shares may be higher or lower, based on these assumptions your
costs would have been:
IF SHARES ARE REDEEMED 1 year 3 years 5 years 10 years
Cash Reserves Fund-Class C $294 $600 $1,032 $2,233
IF SHARES ARE not REDEEMED 1 year 3 years 5 years 10 years
Cash Reserves Fund-Class C $194 $600 $1,032 $2,233
[ARROWS ICON] INVESTMENT RISKS
BEFORE INVESTING IN THE FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including the Fund,
are:
NOT INSURED. Mutual funds are not insured by the FDIC or any other agency,
unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance.
Investment professionals generally consider money market funds conservative and
safe investments, compared to many other investment alternatives. However, as
with all types of securities investing, investments in money market funds are
not guaranteed, and do present some risk of loss. The Fund will not reimburse
you for any losses.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Fund is designed to be only a part of
your personal investment plan.
<PAGE>
[ARROWS ICON] RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in the Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
INTEREST RATE RISK
Changes in interest rates will affect the resale value of debt securities held
in the Fund's portfolio. When interest rates go up, the market values of
previously issued debt securities generally decline. Also, the Fund's new
investments are likely to be in debt securities paying lower rates than the rest
of the Fund's portfolio when interest rates go down. This reduces the Fund's
yield. A weak economy or strong stock market may cause interest rates to
decline.
CREDIT RISK
The Fund invests in debt instruments, such as notes, bonds and commercial paper.
There is a possibility that the issuers of these instruments will be unable to
meet interest payments or repay principal. Changes in the financial strength of
an issuer may reduce the credit rating of its debt instruments and may affect
their value.
DURATION RISK
Duration is a measure of a debt security's sensitivity to interest rate changes.
Duration of money market securities is usually expressed in terms of days or
months, with longer durations usually more sensitive to interest rate movements.
OPPORTUNITY RISK
With long-term investment plans, there may be a risk that you are not taking
enough risk, and thus missing the opportunity on other less conservative but
potentially more rewarding investments. The Fund has an investment goal of
current income, not capital appreciation. Therefore the Fund, by itself, will
not be a suitable investment for people seeking long-term growth for objectives
such as retirement or the funding of a child's college education.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements. It is the risk
that the other party in the transaction will not fulfill its contractual
obligation to complete the transaction with the Fund.
<PAGE>
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $291 BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
INVESTMENT ADVISER
INVESCO, located at 7800 E. Union Avenue, Denver, Colorado, is the investment
adviser of the Fund. INVESCO was founded in 1932 and manages over $31 billion
for more than 960,478 shareholders of 45 INVESCO mutual funds. INVESCO performs
a wide variety of other services for the Fund, including administrative and
transfer agent functions (the processing of purchases, sales and exchanges of
Fund shares).
A wholly owned subsidiary of INVESCO, IDI is the Fund's distributor and is
responsible for the sale of the Fund's shares.
INVESCO and IDI are subsidiaries of AMVESCAP PLC.
The following table shows the fee the Fund paid to INVESCO for its advisory
services in the fiscal year ended May 31, 1999:
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ADVISORY FEE AS A PERCENTAGE
OF AVERAGE ANNUAL NET ASSETS
UNDER MANAGEMENT
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Cash Reserves Fund 0.40% (Annualized)
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Since the Fund's Class C shares are not offered until February 15, 2000, Class C
shares paid no fees to INVESCO for its advisory services in the period ended May
31, 1999.
[INVESCO ICON] PORTFOLIO MANAGER
The following individual is primarily responsible for the day-to-day management
of the Fund's portfolio holdings:
RICHARD R. HINDERLIE, a vice president of INVESCO, is the portfolio manager of
the Fund. Dick joined INVESCO in 1993. He received his M.B.A. from Arizona State
University and his B.A. in Economics from Pacific Lutheran University.
<PAGE>
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUND FOR LONG-TERM CAPITAL GROWTH PURPOSES.
The Fund offers shareholders the potential for monthly payment of daily income,
while maintaining a stable share value, at a level of risk lower than many other
types of investments. Yields on short-term securities tend to be lower than the
yields on longer-term fixed-income securities. The Fund seeks to provide higher
returns than other money market funds and the money market in general, but
cannot guarantee that performance.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in the Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Fund is most suitable for investors who:
o want to earn income at current money market rates.
o want to preserve the value of their investment.
o do not want to be exposed to a high level of risk.
You probably do not want to invest in the Fund if you are:
o primarily seeking long-term growth (although the Fund may serve as the cash
equivalent portion of a balanced investment program).
[INVESCO ICON] SHARE PRICE
The value of your Fund shares is not likely to change from $1.00, although this
cannot be guaranteed. This value is known as the Net Asset Value per share, or
NAV. INVESCO determines the value of each investment in the Fund's portfolio
each day that the New York Stock Exchange ("NYSE") is open, at the close of the
regular trading day on that exchange (normally 4:00 p.m. Eastern time).
Therefore, shares of the Fund are not priced on days when the NYSE is closed,
which generally is on weekends and national holidays in the U.S.
THE COMBINATION OF THE AMORTIZED COST METHOD OF VALUATION AND THE DAILY
DECLARATION OF DIVIDENDS MEANS THAT THE FUND'S NET ASSET VALUE IS EXPECTED TO BE
$1.00 PER SHARE, DESPITE CHANGES IN THE MARKET VALUE OF THE FUND'S SECURITIES.
The Fund uses the amortized cost method for establishing the value of its
investments. The amortized cost method values securities at their cost at the
time of purchase, and then amortizes the discount or premium to maturity. The
Fund declares dividends daily, based upon the interest earned by the Fund's
investments that day. The combination of the amortized cost method of valuation
and the daily declaration of dividends means that the Fund's net asset value is
expected to be $1.00 per share, despite changes in the market value of the
<PAGE>
Fund's securities. However, we cannot guarantee that the Fund's net asset value
will be maintained at a constant value of $1.00 per share.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
redeem or exchange shares of the Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions that day. If
INVESCO hears from you after that time, your instructions will be processed on
the next day that the NYSE is open.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY 4:00 P.M. EASTERN TIME.
The Fund offers multiple classes of shares. Each class represents an identical
interest in the Fund and has the same rights, except that each class bears its
own distribution and shareholder servicing charges, and other expenses. The
income attributable to each class and the dividends payable on the shares of
each class will be reduced by the amount of the distribution fee or service fee,
if applicable, and other expenses payable by that class.
In deciding which class of shares to purchase, you should consider, among other
things, (i) the length of time you expect to hold your shares, (ii) the
provisions of the distribution plan applicable to that class, if any, (iii) the
eligibility requirements that apply to purchases of a particular class, and (iv)
any services you may receive in making your investment determination. Your
investment representative can help you decide. Contact your investment
representative for several convenient ways to invest in the Fund. Class C shares
are available only through your investment representative.
There is no charge to invest directly through INVESCO. However, with respect to
Class C shares, upon redemption or exchange of Class C shares held thirteen
months or less (other than Class C shares acquired through reinvestment of
dividends or other distributions, or Class C shares exchanged for Class C shares
of another INVESCO fund), a contingent deferred sales charge of 1% of the
current net asset value of Class C shares will be assessed. If you invest in the
Fund through a securities broker, you may be charged a commission or transaction
fee for either purchases or sales of Fund shares. For all new accounts, please
send a completed application form, and specify the fund or funds you wish to
purchase.
INVESCO reserves the right to increase, reduce or waive the Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of the Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy Fund shares, including
purchases by exchange.
<PAGE>
MINIMUM INITIAL INVESTMENT. $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans, including IRAs.
MINIMUM SUBSEQUENT INVESTMENT. $50 (Minimums are lower for certain retirement
plans.)
EXCHANGE POLICY. You may exchange your Class C shares in the Fund for Class C
shares in another INVESCO mutual fund on the basis of their respective NAVs at
the time of the exchange.
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain that
you qualify to purchase certain classes of shares in the new fund. An exchange
is the sale of shares from one fund immediately followed by the purchase of
shares in another. Therefore, any gain or loss realized on the exchange is
recognizable for federal income tax purposes (unless, of course, you or your
account qualifies as tax-deferred under the Internal Revenue Code). If the
shares of the fund you are selling have gone up in value since you bought them,
the sale portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly the
same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of the Fund per 12-month period, but you
may be subject to the contingent deferred sales charge, described below.
o The Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy if it is in the best interests of the Fund and
its shareholders. Notice of all such modifications or terminations that affect
all shareholders of the Fund will be given at least 60 days prior to the
effective date of the change, except in unusual instances, including a
suspension of redemption of the exchanged security under Section 22(e) of the
Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the fund into which you wish to exchange are temporarily stopped.
Please remember that if you pay by check, Automated Clearing House ("ACH"), or
wire and your funds do not clear, you will be responsible for any related loss
to any Fund or INVESCO. If you are already an INVESCO funds shareholder, the
Fund may seek reimbursement for any loss from your existing account(s).
CONTINGENT DEFERRED SALES CHARGE (CDSC). If you redeem or exchange Class C
shares of the Fund after holding them thirteen months or less (other than shares
acquired through reinvestment of dividends or other distributions), a CDSC of 1%
of the current net asset value of the shares being redeemed or exchanged will be
assessed. The fee applies to redemptions from the Fund and exchanges (other than
exchanges into Class C shares) into any of the other mutual funds which are also
advised by INVESCO and distributed by IDI. We will use the "first-in, first-out"
<PAGE>
method to determine your holding period. Under this method, the date of
redemption or exchange will be compared with the earliest purchase date of
shares held in your account. If your holding period is less than thirteen
months, the CDSC will be assessed on the current net asset value of those
shares.
The CDSC for Class C shares generally will be waived:
o to pay account fees;
o for IRA distributions due to death, disability or periodic distributions based
on life expectancy;
o to return excess contributions (and earnings, if applicable) from retirement
plan accounts; or
o for redemptions following the death of a shareholder or beneficial owner.
DISTRIBUTION EXPENSES. We have adopted a Master Distribution Plan and Agreement
(commonly known as a "12b-1 Plan") for the Fund's Class C shares. The 12b-1 fees
paid by the Fund's Class C shares are used to pay distribution fees to IDI for
the sale and distribution of the Fund's shares and fees for services provided to
shareholders, all or a substantial portion of which are paid to the dealer of
record. Because the Fund's Class C shares pay these fees out of their assets on
an ongoing basis, these fees increase the cost of your investment.
HOUSEHOLDING. To save money for the Funds, INVESCO will send only one copy of a
prospectus or financial report to each household address. This process, known as
"householding," is used for most requried shareholder mailings. It does not
apply to account statements. You may, of course, request an additional copy of a
prospectus or financial report at any time by calling or writing INVESCO. You
may also request that householding be eliminated from your required mailings.
[INVESCO ICON] HOW TO SELL SHARES
Contact your investment representative for several convenient ways to sell your
Fund shares. Shares of the Fund may be sold at any time at the next NAV
calculated after your request to sell in proper form is received by INVESCO.
Depending on Fund performance, the NAV at the time you sell your shares may be
more or less than the price you paid to purchase your shares.
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell. Remember that any sale or exchange of shares in a
non-retirement account will likely result in a taxable gain or loss.
While INVESCO attempts to process telephone redemptions promptly, there may be
times - particularly in periods of severe economic or market disruption - when
you may experience delays in redeeming shares by phone.
INVESCO usually mails you the proceeds from the sale of fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances -- for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 15 days.
<PAGE>
If you participate in EasiVest, the Fund's automatic monthly investment program,
and sell all of the shares in your account, we will not make any additional
EasiVest purchases unless you give us other instructions.
Because of the Fund's expense structure, it costs as much to handle a small
account as it does to handle a large one. If the value of your account in the
Fund falls below $250 as a result of your actions (for example, sale of your
Fund shares), the Fund reserves the right to sell all of your shares, send the
proceeds of the sale to you and close your account. Before this is done, you
will be notified and given 60 days to increase the value of your account to $250
or more.
[INVESCO ICON] DIVIDENDS AND TAXES
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Fund.
The Fund earns ordinary or investment income from interest on its investments.
The Fund expects to distribute substantially all of this investment income, less
Fund expenses, to shareholders. You will ordinarily earn income on each day you
are invested in the Fund, and that income is paid by the Fund to you once a
month. Dividends are automatically reinvested in additional shares of the Fund
at the net asset value on the monthly dividend distribution date, unless you
request that dividends be paid in cash.
Unless you are (or your account is) exempt from income taxes, you must include
all dividends paid to you by the Fund in your taxable income for federal, state
and local income tax purposes. Dividends and other distributions usually are
taxable whether you receive them in cash or automatically reinvest them in
shares of the Fund or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Fund is required by law to withhold 31% of your distributions and any money that
you receive from the sale of shares of the Fund as a backup withholding tax.
We will provide you with detailed information every year about your dividends.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of Investor Class shares of the Fund for the past five years.
Certain information reflects financial results for a single Investor Class
share. Since Class C shares are new, financial information is not available for
this class as of the date of this Prospectus. The total returns in the table
represent the annual percentages that an investor would have earned (or lost) on
an investment in an Investor Class share of the Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report, along with
the financial statements, is included in INVESCO Money Market Funds, Inc.'s 1999
Annual Report to Shareholders, which is incorporated by reference into the
Statement of Additional Information. This Report is available without charge by
contacting IDI at the address or telephone number on the back cover of this
Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
CASH RESERVES FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED
AND DISTRIBUTED TO SHAREHOLDERS 0.04 0.05 0.05 0.05 0.05
=======================================================================================
Net Asset Value--End of Period $1.00 $1.00 $1.00 $1.00 $1.00
=======================================================================================
TOTAL RETURN 4.45% 4.82% 4.69% 5.01% 4.76%
RATIOS
Net Assets--End of Period
($000 Omitted) $814,158 $766,670 $661,648 $587,277 $644,341
Ratio of Expenses to
Average Net Assets(a) 0.90%(b) 0.91%(b) 0.86%(b) 0.87%(b) 0.75%
Ratio of Net Investment Income
to Average Net Assets(a) 4.36% 4.76% 4.62% 4.86% 4.65%
</TABLE>
(a) Various expenses of the Fund were voluntarily absorbed by INVESCO for the
years ended May 31, 1999, 1998, 1997, 1996 and 1995. If such expenses had
not been voluntarily absorbed, ratio of expenses to average net assets would
have been 0.91%, 0.93%, 0.92%, 0.92% and 0.85%, respectively, and ratio of
net investment income to average net assets would have been 4.35%, 4.74%,
4.56%, 4.81% and 4.55%, respectively.
(b) Ratio is based on Total Expenses of the Fund, less expenses absorbed by
INVESCO, which is before any expense offset arrangements.
<PAGE>
FEBRUARY 15, 2000
INVESCO MONEY MARKET FUNDS, INC.
INVESCO CASH RESERVES FUND--CLASS C
You may obtain additional information about the Fund from several sources:
FINANCIAL REPORTS. Although this Prospectus describes the Fund's anticipated
investments and operations, the Fund also prepares annual and semiannual reports
that detail the Fund's actual investments at the report date. These reports
include discussion of the Fund's recent performance, as well as market and
general economic trends affecting the Fund's performance. The annual report also
includes the report of the Fund's independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated February 15, 2000 is a
supplement to this Prospectus and has detailed information about the Fund and
its investment policies and practices. A current SAI for the Fund is on file
with the Securities and Exchange Commission and is incorporated in this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The current Prospectus of the Fund may be accessed through the INVESCO
Web site at www.invesco.com. In addition, the current Prospectus, SAI, annual or
semiannual report are available on the SEC Web site at www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800-328-2234. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected] or by calling 1-202-942-8090. The SEC file numbers for the
Fund are 811-2606 and 002-55079.
811-2606
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INVESCO MONEY MARKET FUNDS, INC.
INVESCO Cash Reserves Fund- Investor Class and Class C
INVESCO Tax-Free Money Fund - Investor Class
INVESCO U.S. Government Money Fund - Investor Class
Address: Mailing Address:
7800 E. Union Ave., Denver, CO 80237 P.O. Box 173706, Denver, CO 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
February 15, 2000
- --------------------------------------------------------------------------------
A Prospectus for the Investor Class shares of INVESCO Cash Reserves, INVESCO
Tax-Free Money and INVESCO U.S. Government Money Funds dated September 30, 1999
and a Prospectus for the Class C shares of INVESCO Cash Reserves Fund dated
February 15, 2000 provide the basic information you should know before investing
in a Fund. This Statement of Additional Information ("SAI") is incorporated by
reference into the Funds' Prospectuses; in other words, this SAI is legally part
of the Funds' Prospectuses. Although this SAI is not a prospectus, it contains
information in addition to that set forth in the Prospectuses. It is intended to
provide additional information regarding the activities and operations of the
Funds and should be read in conjunction with the Prospectuses.
You may obtain, without charge, the current Prospectuses, SAI and annual and
semiannual reports of the Funds by writing to INVESCO Distributors, Inc., P.O.
Box 173706, Denver, CO 80217-3706 , or by calling 1-800-525-8085. The Prospectus
of the Investor Class shares of the Funds and the Prospectus of the Class C
shares of INVESCO Cash Reserves Fund are also available through the INVESCO Web
site at www.invesco.com.
<PAGE>
TABLE OF CONTENTS
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Investments, Policies and Risks . . . . . . . . . . . . . . . . . . . . . . .20
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Management of the Funds . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Other Service Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . . . .50
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Tax Consequences of Owning Shares of a Fund . . . . . . . . . . . . . . . . . 53
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
<PAGE>
THE COMPANY
The Company was incorporated on April 2, 1993, under the laws of Maryland. On
July 1, 1993, the Company, through Cash Reserves Fund, Tax-Free Money Fund and
U.S. Government Money Fund, respectively, assumed all of the assets and
liabilities of Financial Daily Income Shares, Inc. (incorporated in Colorado on
October 14, 1975), Financial Tax-Free Money Fund, Inc. (incorporated in Colorado
on March 4, 1983) and Financial U.S. Government Money Fund, a series of
Financial Series Trust (organized as a Massachusetts business trust on July 15,
1987) (collectively, the "Predecessor Funds"). All financial and other
information about the Funds for the period prior to July 1, 1993, relates to
such Predecessor Funds.
The Company is an open-end, diversified, management investment company currently
consisting of three portfolios of investments: INVESCO Cash Reserves Fund -
Investor Class and Class C, INVESCO Tax-Free Money Fund - Investor Class and
INVESCO U.S. Government Money Fund - Investor Class (each a "Fund" and
collectively, the "Funds"). Additional funds may be offered in the future.
"Open-end" means that each Fund issues an indefinite number of shares which it
continuously offers to redeem at net asset value per share ("NAV"). A
"management" investment company actively buys and sells securities for the
portfolio of each Fund at the direction of a professional manager. Open-end
management investment companies (or one or more series of such companies, such
as the Funds) are commonly referred to as mutual funds. The Funds do not charge
sales fees to purchase their shares. However, the Class C shares of Cash
Reserves Fund pay a 12b-1 distribution/service fee which is computed and paid
monthly at an aggregate annual rate of 1.00% of average net assets attributable
to Class C shares.
INVESTMENTS, POLICIES AND RISKS
The principal investments and policies of the Funds are discussed in the
Prospectuses of the Funds. The investment objective of each of the Funds is to
achieve as high a level of current income as is consistent with the preservation
of capital, the maintenance of liquidity, and investing in high quality debt
securities. (What constitutes a high-quality debt security varies with the type
of security and, where applicable, is noted in the discussion of each security.)
Tax-Free Money Fund also seeks income exempt from federal income tax. Each
Fund's assets are invested in securities having maturities of 397 days or less,
and the dollar-weighted average maturity of the portfolio will not exceed 90
days. The Funds buy only securities determined by INVESCO Funds Group, Inc.
("INVESCO"), the Funds' investment adviser, pursuant to procedures approved by
the board of directors, to be of high quality with minimal credit risk and to be
eligible for investment by the Funds under applicable U.S. Securities and
Exchange Commission ("SEC") rules. Generally, the Funds are required to invest
at least 95% of their total assets in the securities of issuers with the highest
credit rating. Credit ratings are the opinion of the private companies (such as
Standard & Poor's ("S&P") or Moody's Investors Services, Inc. ("Moody's")) that
rate companies on their securities; they are not guarantees. See Appendix A for
descriptions of the investment instruments referred to below, as well as
discussions of the degrees of risk involved in purchasing these instruments.
<PAGE>
CERTIFICATES OF DEPOSIT IN FOREIGN BANKS AND U.S. BRANCHES OF FOREIGN BANKS --
The Funds may maintain time deposits in and invest in U.S. dollar denominated
CDs issued by foreign banks and U.S. branches of foreign banks. The Funds limit
investments in foreign bank obligations to U.S. dollar denominated obligations
of foreign banks which have more than $10 billion in assets, have branches or
agencies in the U.S., and meet other criteria established by the board of
directors. Investments in foreign securities involve special considerations.
There is generally less publicly available information about foreign issuers
since many foreign countries do not have the same disclosure and reporting
requirements as are imposed by U.S. securities laws. Moreover, foreign issuers
are generally not bound by uniform accounting and auditing and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Such investments may also entail the risks of possible
imposition of dividend withholding or confiscatory taxes, possible currency
blockage or transfer restrictions, expropriation, nationalization or other
adverse political or economic developments, and the difficulty of enforcing
obligations in other countries.
The Funds may also invest in bankers' acceptances, time deposits and
certificates of deposit of U.S. branches of foreign banks and foreign branches
of U.S. banks. Investments in instruments of U.S. branches of foreign banks will
be made only with branches that are subject to the same regulations as U.S.
banks. Investments in instruments issued by a foreign branch of a U.S. bank will
be made only if the investment risk associated with such investment is the same
as that involving an investment in instruments issued by the U.S. parent, with
the U.S. parent unconditionally liable in the event that the foreign branch
fails to pay on the investment for any reason.
COMMERCIAL PAPER -- Commercial paper is the term for short-term promissory notes
issued by domestic corporations to meet current working capital needs.
Commercial paper may be unsecured by the corporation's assets but may be backed
by a letter of credit from a bank or other financial institution. The letter of
credit enhances the paper's creditworthiness. The issuer is directly responsible
for payment but the bank "guarantees" that if the note is not paid at maturity
by the issuer, the bank will pay the principal and interest to the buyer.
INVESCO will consider the creditworthiness of the institution issuing the letter
of credit, as well as the creditworthiness of the issuer of the commercial
paper, when purchasing paper enhanced by a letter of credit. Commercial paper is
sold either as interest-bearing or on a discounted basis, with maturities not
exceeding 270 days.
Commercial paper acquired by a Fund must be rated by at least two nationally
recognized securities ratings organizations (NRSROs), generally S&P and Moody's,
in the highest rating category (A-1 by S&P or P-1 by Moody's), or, where the
obligation is rated by only S&P or Moody's and not by any other NRSRO, such
obligation is rated A-1 or P-1. Money market instruments purchased by a Fund
which are not rated by any NRSRO must be determined by INVESCO to be of
equivalent credit quality to the rated securities in which a Fund may invest. In
INVESCO's opinion, obligations that are not rated are not necessarily of lower
quality than those which are rated; however, they may be less marketable and
typically may provide higher yields. The Funds invest in unrated securities only
when such an investment is in accordance with a Fund's investment objective of
achieving a high level of current income and when such investment will not
impair the Fund's ability to comply with requests for redemptions. Commercial
<PAGE>
paper is usually secured by the corporation's assets but may sometimes be backed
by a letter of credit from a bank or other financial institution.
CREDIT ENHANCEMENTS -- The Funds may acquire a right to sell an obligation to
another party at a guaranteed price approximating par value, either on demand or
at specified intervals. The right to sell may form part of the obligation or be
acquired separately by a Fund. These rights may be referred to as demand
features, guarantees or puts, depending on their characteristics (collectively
referred to as "Guarantees"), and may involve letters of credit or other credit
support arrangements supplied by domestic or foreign banks supporting the other
party's ability to purchase the obligation from a Fund. The Funds will acquire
Guarantees solely to facilitate portfolio liquidity and do not intend to
exercise them for trading purposes. In considering whether an obligation meets
the Fund's quality standards, a Fund may look to the creditworthiness of the
party providing the right to sell or to the quality of the obligation itself.
The acquisition of a Guarantee will not affect the valuation of the underlying
obligation which will continue to be valued in accordance with the amortized
cost method of valuation.
DIVERSIFICATION -- The Company is a diversified investment company under the
Investment Company Act of 1940, as amended ("the 1940 Act"). Except to the
extent permitted under Rule 2a-7 of the 1940 Act or any successor rule thereto,
no more than 5% of the value of each Fund's total assets can be invested in the
securities of any one 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).
DOMESTIC BANK OBLIGATIONS -- U.S. banks (including their foreign branches) issue
certificates of deposit ("CDs") and bankers' acceptances which may be purchased
by the Funds if an issuing bank has total assets in excess of $5 billion and the
bank otherwise meets the Funds' credit rating requirements. CDs are issued
against deposits in a commercial bank for a specified period and rate and are
normally negotiable. Eurodollar CDs are certificates issued by a foreign branch
(usually London) of a U.S. domestic bank, and, as such, the credit is deemed to
be that of the domestic bank. Bankers' acceptances are short-term credit
instruments evidencing the promise of the bank (by virtue of the bank's
"acceptance") to pay at maturity a draft which has been drawn on it by a
customer (the "drawer"). Bankers' acceptances are used to finance the import,
export, transfer, or storage of goods and reflect the obligation of both the
bank and the drawer to pay the face amount. Both types of securities are subject
to the ability of the issuing bank to meet its obligations, and are subject to
risks common to all debt securities. In addition, banker's acceptances may be
subject to foreign currency risk and certain other risks of investment in
foreign securities.
ILLIQUID SECURITIES -- Securities which do not trade on stock exchanges or in
the over the counter market, or have restrictions on when and how they may be
sold, are generally considered to be "illiquid." An illiquid security is one
that a Fund may have difficulty -- or may even be legally precluded from --
selling at any particular time. A Fund may invest in illiquid securities,
including restricted securities and other investments which are not readily
marketable. A 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. Repurchase agreements maturing in more than seven days are considered
illiquid for purposes of this restriction.
<PAGE>
The principal risk of investing in illiquid securities is that a Fund may be
unable to dispose of them at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, a Fund might have to bear
the expense and incur the delays associated with registering the security with
the SEC and obtaining listing on a securities exchange or in the over the
counter market.
INSURANCE FUNDING AGREEMENTS -- The Funds may also invest in funding agreements
issued by domestic insurance companies. Such funding agreements will only be
purchased from insurance companies which have outstanding an issue of long-term
debt securities rated AAA or AA by S&P, or Aaa or Aa by Moody's. In all cases,
the Funds will attempt to obtain the right to demand payment, on not more than
seven days' notice, for all or any part of the amount subject to the funding
agreement, plus accrued interest. The Funds intend to execute their right to
demand payment only as needed to provide liquidity to meet redemptions, or to
maintain a high quality investment portfolio. A Fund's investments in funding
agreements that do not have this demand feature, or for which there is not a
readily available market, are considered to be investments in illiquid
securities.
LOAN PARTICIPATION INTERESTS -- The Funds may purchase loan participation
interests in all or part of specific holdings of corporate debt obligations. The
issuer of such debt obligations is also the issuer of the loan participation
interests into which the obligations have been apportioned. A Fund will purchase
only loan participation interests issued by companies whose commercial paper is
currently rated in the highest rating category by at least two NRSROs, generally
S&P and Moody's (A-1 by S&P or P-1 by Moody's), or where such instrument is
rated only by S&P or Moody's and not by any other NRSRO, such instrument is
rated A-1 or P-1. Such loan participation interests will only be purchased from
banks which meet the criteria for banks discussed above and registered
broker-dealers or registered government securities dealers which have
outstanding commercial paper or other short-term debt obligations rated in the
highest rating category by at least two NRSROs or by one NRSRO if such
obligation is rated by only one NRSRO. Such banks and security dealers are not
guarantors of the debt obligations represented by the loan participation
interests, and therefore are not responsible for satisfying such debt
obligations in the event of default. Additionally, such banks and securities
dealers act merely as facilitators, with regard to repayment by the issuer, with
no authority to direct or control repayment. A Fund will attempt to ensure that
there is a readily available market for all of the loan participation interests
in which it invests. The Funds' investments in loan participation interests for
which there is not a readily available market are considered to be investments
in illiquid securities.
MUNICIPAL OBLIGATIONS -- Tax-Free Money Fund may invest in short-term municipal
debt securities including municipal bonds, notes and commercial paper.
MUNICIPAL BONDS -- Municipal bonds are classified as general obligation or
revenue bonds. General obligation bonds are secured by the issuer's pledge
of its full faith, credit and unlimited taxing power for the payment of
principal and interest. Revenue bonds are payable only from the revenues
generated by a particular facility or class of facility, or in some cases
from the proceeds of a special excise tax or specific revenue source.
Industrial development obligations are a particular kind of municipal bond
which are issued by or on behalf of public authorities to obtain funds for
many kinds of local, privately operated facilities. Such obligations are,
<PAGE>
in most cases, revenue bonds that generally are secured by a lease with a
particular private corporation.
MUNICIPAL NOTES -- Municipal notes are short-term debt obligations issued
by municipalities which normally have a maturity at the time of issuance of
six months to three years. Such notes include tax anticipation notes, bond
anticipation notes, revenue anticipation notes and project notes. Notes
sold in anticipation of collection of taxes, a bond sale or receipt of
other revenues are normally obligations of the issuing municipality or
agency.
MUNICIPAL COMMERCIAL PAPER -- Municipal commercial paper is short-term debt
obligations issued by municipalities which may be issued at a discount
(sometimes referred to as Short-Term Discount Notes). These obligations are
issued to meet seasonal working capital needs of a municipality or interim
construction financing and are paid from a municipality's general revenues
or refinanced with long-term debt. Although the availability of municipal
commercial paper has been limited, from time to time the amounts of such
debt obligations offered have increased, and INVESCO believes that this
increase may continue.
VARIABLE RATE OBLIGATIONS -- The interest rate payable on a variable rate
municipal obligation is adjusted either at predetermined periodic intervals
or whenever there is a change in the market rate of interest upon which the
interest rate payable is based. A variable rate obligation may include a
demand feature pursuant to which a Fund would have the right to demand
prepayment of the principal amount of the obligation prior to its stated
maturity. The issuer of the variable rate obligation may retain the right
to prepay the principal amount prior to maturity.
It is a policy of Tax-Free Money Fund that, under normal market conditions, it
will have at least 80% of its net assets invested in municipal obligations that,
based on the opinion of counsel to the issuer, pay interest free from federal
income tax. It is the Fund's present intention to invest its assets so that
substantially all of its annual income will be tax-exempt. Tax-Free Money Fund
may invest in municipal obligations whose interest income may be specially
treated as a tax preference item under the alternative minimum tax ("AMT").
Securities that generate income that is a tax preference item may not be counted
towards the 80% tax exempt threshold described above. Tax-exempt income may
result in an indirect tax preference item for corporations, which may subject an
investor to liability under the AMT depending on its particular situation.
Tax-Free Money Fund, however, will not invest more than 20% of its net assets in
obligations the interest from which gives rise to a preference item for the
purpose of the AMT and in other investments subject to federal income tax.
Distributions from this Fund may be subject to state and local taxes.
Tax-Free Money Fund will not purchase a municipal obligations unless the Fund
has been advised that the issuer's bond counsel has rendered an opinion that
such obligations have been validly issued and that the interest thereon is
exempt from federal income taxation. In addition, Tax-Free Money Fund will not
purchase a municipal obligation that, in the opinion of INVESCO, is reasonably
likely to be held not to be validly issued or to pay interest thereon which is
not exempt from federal income taxation.
<PAGE>
Municipal obligations purchased by the Fund must be rated by at least two NRSROs
- - generally S&P and Moody's - in the highest rating category (AAA or AA by S&P
or Aaa or Aa by Moody's), or by one NRSRO in the highest rating category if such
obligations are rated by only one NRSRO. Municipal notes or municipal commercial
paper must be rated in the highest rating category by at least two NRSROs, or
where the note or paper is rated only by one NRSRO, in the highest rating
category by that NRSRO. If a security is unrated, the Fund may invest in such
security if the Adviser determines, in an analysis similar to that performed by
Moody's or S&P in rating similar securities and issuers, that the security is
comparable to that eligible for investment by the Fund. After the Fund has
purchased an issue of municipal obligations, such issue might cease to be rated
or its rating might be reduced below the minimum required for purchase. If a
security originally rated in the highest rating category by a NRSRO has been
downgraded to the second highest rating category, INVESCO must assess promptly
whether the security presents minimal credit risk and must take such action with
respect to the security as it determines to be in the best interest of the Fund.
If a security is downgraded below the second highest rating of an NRSRO, is in
default, or no longer presents a minimal credit risk, the security must be
disposed of either within five business days of INVESCO becoming aware of the
new rating, the default or the credit risk, or as soon as practicable consistent
with achieving an orderly disposition of the security, whichever is the first to
occur, unless the executive committee of the Company's board of directors
determines within the aforesaid five business days that holding the security is
in the best interest of the Fund.
PORTFOLIO SECURITIES LOANS -- The Company, on behalf of each of the Funds, may
lend limited amounts of the Funds' portfolio securities (not to exceed 33 1/3%
of a Fund's total assets). Because there could be delays in recovery of loaned
securities or even a loss of rights in collateral should the borrower fail
financially, loans will be made only to firms deemed by INVESCO to be of good
standing and will not be made unless, in the judgment of INVESCO, the
consideration to be earned from such loans would justify the risk. INVESCO will
evaluate the creditworthiness of such borrowers in accordance with procedures
adopted and monitored by the board of directors. It is expected that the
Company, on behalf of the applicable Fund, will use the cash portions of loan
collateral to invest in short-term income producing securities for the Fund's
account and that the Company may share some of the income from these investments
with the borrower. See "Portfolio Securities Loans" at Appendix A to this SAI.
REPURCHASE AGREEMENTS -- A Fund may enter into repurchase agreements and reverse
repurchase agreements. (See Appendix A for a discussion of these agreements and
the risks involved with such transactions.) The Funds will enter into repurchase
agreements and reverse repurchase agreements only with (i) banks which have
total assets in excess of $4 billion and meet other criteria established by the
board of directors and (ii) with registered broker-dealers or registered
government securities dealers which have outstanding commercial paper or other
debt obligations rated in the highest rating category by at least two NRSROs or
by one NRSRO if such obligations are rated by only one NRSRO. INVESCO will
monitor the creditworthiness of such entities in accordance with procedures
adopted and monitored by the board of directors. The Funds will enter into
repurchase agreements whenever, in the opinion of INVESCO, such transactions
would be advantageous to the Funds. Repurchase agreements afford an opportunity
for the Funds to earn a return on temporarily available cash. The Funds will
enter into reverse repurchase agreements only for the purpose of obtaining funds
<PAGE>
necessary for meeting redemption requests of shareholders. Interest earned by
the Funds on repurchase agreements would not be tax-exempt, and thus would
constitute taxable income.
TEMPORARY DEFENSIVE POSITION -- From time to time, on a temporary basis for
defensive purposes, Tax-Free Money Fund may also hold 100% of its assets in cash
or invest in taxable short term investments ("taxable investments"), including
obligations of the U.S. government, its agencies or instrumentalities;
commercial paper limited to obligations which are rated by at least two NRSROs
generally S&P and Moody's - in the highest rating category (A-1 by S&P and P-1
by Moody's), or by one NRSRO if such obligations are rated by only one NRSRO;
certificates of deposit of U.S. domestic banks, including foreign branches of
domestic banks meeting the criteria described in the discussion above; time
deposits; and repurchase agreements with respect to any of the foregoing with
registered broker-dealers, registered government securities dealers or banks.
U.S. GOVERNMENT SECURITIES -- Each Fund may purchase debt securities issued by
the U.S. government without limit. These securities include Treasury bills,
notes and bonds. Treasury bills have a maturity of one year or less, Treasury
notes generally have a maturity of one to ten years and Treasury bonds generally
have maturities of more than ten years.
U.S. government debt securities also include securities issued or guaranteed by
agencies or instrumentalities of the U.S. government. Some obligations of U.S.
government agencies, which are established under the authority of an act of
Congress, such as Government National Mortgage Association ("GNMA")
Participation Certificates, are supported by the full faith and credit of the
U.S. Treasury. GNMA Certificates are mortgage-backed securities representing
part ownership of a pool of mortgage loans. These loans -- issued by lenders
such as mortgage bankers, commercial banks and savings and loan associations --
are either insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled and,
after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal on
each mortgage is guaranteed by GNMA and backed by the full faith and credit of
the U.S. government. The market value of GNMA Certificates is not guaranteed.
GNMA Certificates are different from bonds because principal is paid back
monthly by the borrower over the term of the loan rather than returned in a lump
sum at maturity, as is the case with a bond. GNMA Certificates are called
"pass-through" securities because both interest and principal payments
(including prepayments) are passed through to the holder of the GNMA
Certificate.
Other United States government debt securities, such as securities of the
Federal Home Loan Banks, are supported by the right of the issuer to borrow from
the Treasury. Others, such as bonds issued by Fannie Mae, a federally chartered
private corporation, are supported only by the credit of the corporation. In the
case of securities not backed by the full faith and credit of the United States,
a Fund must look principally to the agency issuing or guaranteeing the
obligation in the event the agency or instrumentality does not meet its
commitments. A Fund will invest in securities of such instrumentalities only
when INVESCO is satisfied that the credit risk with respect to any such
instrumentality is comparatively minimal.
<PAGE>
WHEN-ISSUED/DELAYED DELIVERY -- The Funds normally buy and sell securities on an
ordinary settlement basis. That means that the buy or sell order is sent, and a
Fund actually takes delivery or gives up physical possession of the security on
the "settlement date," which is three business days later. However, the Funds
also may purchase and sell securities on a when-issued or delayed delivery
basis.
When-issued or delayed delivery transactions occur when securities are purchased
or sold by a Fund and payment and delivery take place at an agreed-upon time in
the future. The Funds may engage in this practice in an effort to secure an
advantageous price and yield. However, the yield on a comparable security
available when delivery actually takes place may vary from the yield on the
security at the time the when-issued or delayed delivery transaction was entered
into. When a Fund engages in when-issued and delayed delivery transactions, it
relies on the seller or buyer to consummate the sale at the future date. If the
seller or buyer fails to act as promised, that failure may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. No payment or delivery is made by a Fund until it receives
delivery or payment from the other party to the transaction. However,
fluctuation in the value of the security from the time of commitment until
delivery could adversely affect a Fund.
INVESTMENT RESTRICTIONS
The Funds operate under certain investment restrictions. For purposes of the
following restrictions, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
resulting from fluctuations in value does not require elimination of any
security from a Fund.
The following restrictions are fundamental and may not be changed without prior
approval of a majority of the outstanding voting securities of a Fund, as
defined in the 1940 Act. Each Fund may not:
1. 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;
2. except to the extent permitted under Rule 2a-7 of the 1940 Act, or any
successor rule thereto, 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;
3. underwrite securities of other issuers, except insofar as it may be
deemed to be an underwriter under the Securities Act of 1933 (the "1933
Act"), as amended, in connection with the disposition of the Fund's
portfolio securities;
<PAGE>
4. 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);
5. issue senior securities, except as permitted under the 1940 Act;
6. 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;
7. 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; or
8. 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).
9. Each 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 or an affiliate
or a successor thereof, with substantially the same fundamental investment
objective, policies and limitations as the Fund.
In addition, each Fund has the following non-fundamental policies, which may be
changed without shareholder approval:
A. 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.
B. The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO or an affiliate or a
successor thereof for temporary or emergency purposes (not for leveraging
or investing) or by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements will be treated as borrowings for
purposes of fundamental limitation (4)).
C. 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
<PAGE>
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
D. 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.
E. With respect to fundamental limitation (1), domestic and foreign
banking will be considered to be different industries.
In addition, with respect to a Fund that may invest in municipal obligations,
the following non-fundamental policy applies, which may be changed without
shareholder approval:
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 multi-state 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 revenues of the non-governmental user, then
that non-governmental user would be deemed to be the sole issuer.
Following is a chart outlining some of the limitations pursuant to
non-fundamental investment policies set by the board of directors. These
non-fundamental policies may be changed by the board of directors without
shareholder approval:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
INVESTMENT CASH RESERVES TAX-FREE MONEY U.S. GOVERNMENT MONEY
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DEBT SECURITIES At least 95% in the
Corporate Debt highest short-term
rating category
- -----------------------------------------------------------------------------------------------------------
U.S. Government No Limit Up to 20%, including No Limit
Obligations private activity bonds
and other taxable
instruments
- -----------------------------------------------------------------------------------------------------------
Municipal Obligations At least 80%
- -----------------------------------------------------------------------------------------------------------
Private Activity Bonds Up to 20%, including
and taxable securities U.S. govern ment
obligations
- -----------------------------------------------------------------------------------------------------------
TEMPORARY TAXABLE Up to 100% for
defensive purposes
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
MANAGEMENT OF THE FUNDS
THE INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the Company's
investment adviser. INVESCO was founded in 1932 and serves as investment adviser
to:
INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc. (formerly, INVESCO Flexible
Funds, Inc.)
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Treasurer's Series Funds, Inc. (formerly, INVESCO Treasurer's
Series Trust)
INVESCO Variable Investment Funds, Inc.
As of December 31, 1999, INVESCO managed 45 mutual funds having combined assets
of over $31 billion, on behalf of more than 960,478 shareholders.
INVESCO is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly
traded holding company. Through its subsidiaries, AMVESCAP PLC engages in the
business of investment management on an international basis. AMVESCAP PLC is one
of the largest independent investment management businesses in the world with
approximately $291 billion in assets under management on September 30, 1999.
AMVESCAP PLC's North American subsidiaries include:
INVESCO Retirement and Benefit Services, Inc. ("IRBS"), Atlanta, Georgia,
develops and provides domestic and international defined contribution
retirement plan services to plan sponsors, institutional retirement plan
sponsors, institutional plan providers and foreign governments.
INVESCO Retirement Plan Services ("IRPS"), Atlanta, Georgia, a
division of IRBS, provides recordkeeping and investment selection
services to defined contribution plan sponsors of plans with between
$2 million and $200 million in assets. Additionally, IRPS provides
investment consulting services to institutions seeking to provide
retirement plan products and services.
Institutional Trust Company, doing business as INVESCO Trust Company
("ITC"), Denver, Colorado, a division of IRBS, provides retirement
account custodian and/or trust services for individual retirement
accounts ("IRAs") and other retirement plan accounts. This includes
services such as recordkeeping, tax reporting and compliance. ITC acts
as trustee or custodian to these plans. ITC accepts contributions and
provides complete transfer agency functions: correspondence,
sub-accounting, telephone communications and processing of
distributions.
<PAGE>
INVESCO, Inc., Atlanta, Georgia, manages individualized investment
portfolios of equity, fixed-income and real estate securities for
institutional clients, including mutual funds and the collective investment
entities. INVESCO, Inc. includes the following Divisions:
INVESCO Capital Management Division, Atlanta, Georgia, manages
institutional investment portfolios, consisting primarily of
discretionary employee benefit plans for corporations and state and
local governments, and endowment funds.
INVESCO Management & Research Division, Boston, Massachusetts,
primarily manages pension and endowment accounts.
PRIMCO Capital Management Division, Louisville, Kentucky, specializes
in managing stable return investments, principally on behalf of
Section 401(k) retirement plans.
INVESCO Realty Advisors Division, Dallas, Texas, is responsible for
providing advisory services in the U.S. real estate markets for
AMVESCAP PLC's clients worldwide. Clients include corporate pension
plans and public pension funds as well as endowment and foundation
accounts.
INVESCO (NY) Division, New York, is an investment adviser for
separately managed accounts, such as corporate and municipal pension
plans, Taft-Hartley Plans, insurance companies, charitable
institutions and private individuals. INVESCO NY further serves as
investment adviser to several closed-end investment companies, and as
sub-adviser with respect to certain commingled employee benefit
trusts.
A I M Advisors, Inc., Houston, Texas, provides investment advisory and
administrative services for retail and institutional mutual funds.
A I M Capital Management, Inc., Houston, Texas, provides investment
advisory services to individuals, corporations, pension plans and other
private investment advisory accounts and also serves as a sub-adviser to
certain retail and institutional mutual funds, one Canadian mutual fund and
one portfolio of an open-end registered investment company that is offered
to separate accounts of insurance companies.
A I M Distributors, Inc. and Fund Management Company, Houston, Texas, are
registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire Square,
London, EC2M4YR, England.
THE INVESTMENT ADVISORY AGREEMENT
INVESCO serves as investment adviser to the Funds under an investment advisory
agreement dated February 28, 1997 (the "Agreement") with the Company.
The Agreement requires that INVESCO manage the investment portfolio of each Fund
in a way that conforms with the Fund's investment policies. INVESCO may directly
<PAGE>
manage a Fund itself, or may hire a sub-adviser, which may be an affiliate of
INVESCO, to do so. Specifically, INVESCO is responsible for:
o managing the investment and reinvestment of all the assets of the Funds,
and executing all purchases and sales of portfolio securities;
o maintaining a continuous investment program for the Funds, consistent
with (i) each Fund's investment policies as set forth in the Company's
Articles of Incorporation, Bylaws and Registration Statement, as from
time to time amended, under the 1940 Act, and in any prospectus and/or
statement of additional information of the Funds, as from time to time
amended and in use under the 1933 Act, and (ii) the Company's status as
a regulated investment company under the Internal Revenue Code of 1986,
as amended;
o determining what securities are to be purchased or sold for the Funds,
unless otherwise directed by the directors of the Company, and executing
transactions accordingly;
o providing the Funds the benefit of all of the investment analysis and
research, the reviews of current economic conditions and trends, and the
consideration of a long-range investment policy now or hereafter
generally available to the investment advisory customers of the adviser
or any sub-adviser;
o determining what portion of each Fund's assets should be invested in the
various types of securities authorized for purchase by a Fund; and
o making recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to a Fund's
portfolio securities shall be exercised.
INVESCO also performs all of the following services for the Funds:
o administrative;
o internal accounting (including computation of net asset value);
o clerical and statistical;
o secretarial;
o all other services necessary or incidental to the administration of the
affairs of the Funds;
o supplying the Company with officers, clerical staff and other employees;
o furnishing office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related to
shareholder accounts;
o conducting periodic compliance reviews of the Funds' operations;
preparation and review of required documents, reports and filings by
INVESCO's in-house legal and accounting staff or in conjunction with
independent attorneys and accountants (including prospectuses,
<PAGE>
statements of additional information, proxy statements, shareholder
reports, tax returns, reports to the SEC, and other corporate documents
of the Funds);
o supplying basic telephone service and other utilities; and
o preparing and maintaining certain of the books and records required to
be prepared and maintained by the Funds under the 1940 Act.
Expenses not assumed by INVESCO are borne by the Funds. As full compensation for
its advisory services to the Company, INVESCO receives a monthly fee from each
Fund. The fee is calculated at the annual rate of 0.50% on the first $300
million of each Fund's average net assets, 0.40% on the next $200 million of
each Fund's average net assets and 0.30% on each Fund's average net assets in
excess of $500 million.
During the fiscal years ended May 31, 1999, 1998 and 1997, the Funds paid
INVESCO advisory fees in the dollar amounts shown below. Since Cash Reserves
Fund's Class C shares are not offered until February 15, 2000, no advisory fee
was paid with respect to Class C shares for that Fund for the periods shown
below. If applicable, the advisory fees were offset by credits in the amounts
shown below, so that the Funds' fees were not in excess of the expense
limitations shown below, which have been voluntarily agreed to by the Company
and INVESCO.
ADVISORY TOTAL EXPENSE TOTAL EXPENSE
FEE DOLLARS REIMBURSEMENTS LIMITATIONS
----------- -------------- -------------
Cash Reserves Fund - Investor Class
May 31, 1999 $3,157,241 $ 87,157 0.90%
May 31, 1998 $2,789,986 $140,835 0.90%
May 31, 1997 $2,978,520 $430,651 0.85%
Tax-free Money Fund - Investor Class
May 31, 1999 $ 246,764 $123,371 0.85%*
May 31, 1998 $ 238,537 $144,423 0.75%
May 31, 1997 $ 282,216 $143,085 0.75%
U.S. Government Money Fund - Investor Class
May 31, 1999 $ 450,781 $195,925 0.85%
May 31, 1998 $ 369,593 $187,969 0.85%
May 31, 1997 $ 426,139 $172,695 0.85%
*0.75% prior to May 13, 1999.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
INVESCO, either directly or through affiliated companies, provides certain
administrative, sub-accounting, and recordkeeping services to the Funds pursuant
to an Administrative Services Agreement dated February 28, 1997 with the
Company.
The Administrative Services Agreement requires INVESCO to provide the following
services to the Funds:
o such sub-accounting and recordkeeping services and functions as are
reasonably necessary for the operation of the Funds; and
o such sub-accounting, recordkeeping, and administrative services and
functions, which may be provided by affiliates of INVESCO, as are
reasonably necessary for the operation of Fund shareholder accounts
maintained by certain retirement plans and employee benefit plans for
the benefit of participants in such plans.
As full compensation for services provided under the Administrative Services
Agreement, each Fund pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% of the average net assets of each Fund prior
to May 13, 1999, and 0.045% per year of the average net assets of each Fund
effective May 13, 1999.
TRANSFER AGENCY AGREEMENT
INVESCO also performs transfer agent, dividend disbursing agent, and registrar
services for the Funds pursuant to a Transfer Agency Agreement dated February
28, 1997 with the Company.
The Transfer Agency Agreement provides that each Fund pays INVESCO an annual fee
of $27.00 per shareholder account, or, where applicable, per participant in an
omnibus account. This fee is paid monthly at the rate of 1/12 of the annual fee
and is based upon the actual number of shareholder accounts and omnibus account
participants in each Fund at any time during each month.
FEES PAID TO INVESCO
For the fiscal years ended May 31, 1999, 1998 and 1997, the Funds' Investor
Class shares paid the following fees to INVESCO (prior to the absorption of
certain Fund expenses by INVESCO). Since Cash Reserves Fund's Class C shares are
not offered until February 15, 2000, no fees were paid with respect to Class C
shares for that Fund for the periods shown below.
<PAGE>
ADMINISTRATIVE TRANSFER
ADVISORY SERVICES AGENCY
-------- -------------- --------
Cash Reserves Fund - Investor Class
May 31, 1999 $3,157,241 $140,326 $3,167,337
May 31, 1998 2,789,986 109,499 2,779,935
May 31, 1997 2,978,520 118,983 2,995,219
Tax-Free Money Fund - Investor Class
May 31, 1999 $ 246,764 $ 18,152 $ 138,487
May 31, 1998 238,537 17,156 151,577
May 31, 1997 282,216 18,463 174,207
U.S. Government Money Fund - Investor Class
May 31, 1999 $ 450,781 $ 24,949 $ 363,724
May 31, 1998 369,593 21,088 303,712
May 31, 1997 426,139 22,784 339,383
DIRECTORS AND OFFICERS OF THE COMPANY
The overall direction and supervision of the Company come from the board of
directors. The board of directors is responsible for making sure that the Funds'
general investment policies and programs are carried out and that the Funds are
properly administered.
The board of directors has an audit committee comprised of four of the directors
who are not affiliated with INVESCO (the "Independent Directors"). The committee
meets quarterly with the Company's independent accountants and officers to
review accounting principles used by the Company, the adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters.
The Company has a management liaison committee which meets quarterly with
various management personnel of INVESCO in order to facilitate better
understanding of management and operations of the Company, and to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
The Company has a brokerage committee. The committee meets periodically to
review soft dollar and other brokerage transactions by the Funds, and to review
policies and procedures of INVESCO with respect to brokerage transactions. It
reports on these matters to the Company's board of directors.
The Company has a derivatives committee. The committee meets periodically to
review derivatives investments made by the Funds. It monitors derivative usage
by the Funds and the procedures utilized by INVESCO to ensure that the use of
such instruments follows the policies on such instruments adopted by the
Company's board of directors. It reports on these matters to the Company's board
of directors.
<PAGE>
The officers of the Company, all of whom are officers and employees of INVESCO,
are responsible for the day-to-day administration of the Company and the Funds.
The officers of the Company receive no direct compensation from the Company or
the Funds for their services as officers. INVESCO has the primary responsibility
for making investment decisions on behalf of the Funds. These investment
decisions are reviewed by the investment committee of INVESCO.
All of the officers and directors of the Company hold comparable positions with
the following funds, which, with the Company, are collectively referred to as
the "INVESCO Funds":
INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc. (formerly, INVESCO Flexible
Funds, Inc.)
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Treasurer's Series Funds, Inc. (formerly, INVESCO Treasurer's
Series Trust)
INVESCO Variable Investment Funds, Inc.
The table below provides information about each of the Company's directors and
officers. Their affiliations represent their principal occupations.
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Charles W. Brady *+ Director and Chairman Chairman of the Board of
1315 Peachtree St., N.E. of the Board INVESCO Global Health
Atlanta, Georgia Sciences Fund; Chief
Age: 64 Executive Officer and
Director of AMVESCAP
PLC, London, England and
various subsidiaries of
AMVESCAP PLC.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Fred A. Deering +# Director and Vice Trustee of INVESCO
Security Life Center Chairman of the Board Global Health Sciences
1290 Broadway Fund; formerly, Chairman
Denver, Colorado of the Executive
Age: 72 Committee and Chairman
of the Board of Security
Life of Denver Insurance
Company; Director of ING
Ameri can Holdings
Company and First ING
Life Insurance Company
of New York.
Mark H. Williamson *+ President, Chief President, Chief
7800 E. Union Avenue Executive Officer Executive Officer and
Denver, Colorado and Director Director of INVESCO
Age: 48 Funds Group, Inc.;
President, Chief
Executive Officer and
Director of INVESCO
Distributors, Inc.;
President, Chief
Operating Officer and
Trustee of INVESCO
Global Health Sciences
Fund; formerly, Chairman
and Chief Executive
Officer of Nations Banc
Advisors, Inc.;
formerly, Chairman of
NationsBanc Investments,
Inc.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Victor L. Andrews, Ph.D. **! Director Professor Emeritus,
34 Seawatch Drive Chairman Emeritus and
Savannah, Georgia Chairman of the CFO
Age: 69 Roundtable of the
Department of Finance of
Georgia State
University; 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;
Director of The
Sheffield Funds, Inc.
Bob R. Baker +**@ Director Consultant (since 2000)
AMC Cancer Research Center and President and Chief
1600 Pierce Street Executive Officer (1988
Denver, Colorado to 2000) of AMC Cancer
Age: 63 Research Cente Denver,
Colorado; until
mid-December 1988, Vice
Chairman of the Board of
First Columbia Financial
Corporation, Englewood,
Colorado; formerly,
Chairman of the Board
and Chief Executive
Officer of First
Columbia Financial
Corporation.
Lawrence H. Budner # @ Director Trust Consultant; prior
7608 Glen Albens Circle to June 30, 1987, Senior
Dallas, Texas Vice President and
Age: 69 Senior Trust Officer of
InterFirst Bank, Dallas,
Texas.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
James T. Bunch**@ Director Principal and Founder of
3600 Republic Plaza Green Manning & Bunch
320 Seventeenth Street Ltd., Denver, Colorado,
Denver, Colorado since August 1988;
Age: 57 Director and Secretary
of Green Manning & Bunch
Securities, Inc.,
Denver, Colorado since
September 1993;
Vice President and
Director of Western
Golf Association
and Evans Scholars
Foundation;
formerly, General
Counsel and Director of
Boettcher & Co., Denver,
Colorado; formerly,
Chairman and Managing
Partner of Davis Graham
& Stubbs, Denver,
Colorado.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Wendy L. Gramm, Ph.D.**! Director Self-employed (since
4201 Yuma Street, N.W. 1993); Professor of
Washington, DC Economics and Public
Age: 55 Administration,
University of Texas at
Arlington; formerly,
Chairman, Commodity
Futures Trading
Commission;
Administrator for
Information and
Regulatory Affairs at
the Office of Management
and Budget; Executive
Director of the
Presidential Task Force
on Regulatory Relief;
and Director of the
Federal Trade
Commission's Bureau of
Economics; also,
Director of 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. Also,
Member of Board of
Visitors, College of
Business Administration,
University of Iowa, and
Member of Board of
Visitors, Center for
Study of Public Choice,
George Mason University.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Gerald J. Lewis#! Director Chairman of Lawsuit
701 "B" Street Resolution Services, San
Suite 2100 Diego, California since
San Diego, California 1987; Director of
Age: 65 General Chemical Group,
Inc., Hampdon, New
Hampshire, since 1996;
formerly, Associate
Justice of the
California Court of
Appeals; formerly,
Director of Wheelabrator
Technologies, Inc.,
Fisher Scientific, Inc.,
Henley Manufacturing,
Inc., and California
Coastal Properties,
Inc.; formerly, Of
Counsel, Latham &
Watkins, San Diego,
California (1987 to
1997).
John W. McIntyre + #@ Director Retired. Formerly, Vice
7 Piedmont Center Suite 100 Chairman of the Board of
Atlanta, Georgia Directors of the
Age: 69 Citizens and Southern
Corporation and Chairman
of the Board and Chief
Executive Officer of the
Citizens and Southern
Georgia Corp. and the
Citizens and Southern
National Bank; Trustee
of INVESCO Global Health
Sciences Fund, Gables
Residential Trust,
Employee's Retirement
System of GA, Emory
University and J.M. Tull
Charitable Foundation;
Director of Kaiser
Foundation Health Plans
of Georgia, Inc.
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
Larry Soll, Ph.D.!** Director Retired. Formerly,
345 Poorman Road Chairman of the Board
Boulder, Colorado (1987 to 1994), Chief
Age: 57 Executive Officer (1982
to 1989 and 1993 to
1994) and President
(1982 to 1989) of
Synergen Inc.; Director
of Synergen since
incorporation in 1982;
Director of Isis
Pharmaceuticals, Inc.;
Trustee of INVESCO
Global Health Sciences
Fund.
Glen A. Payne Secretary Senior Vice President,
7800 E. Union Avenue General Counsel and
Denver, Colorado Secretary of INVESCO
Age: 52 Funds Group, Inc.;
Senior Vice President,
Secretary and General
Counsel of INVESCO
Distributors, Inc.;
Secretary, INVESCO
Global Health Sciences
Fund; formerly, General
Counsel of INVESCO Trust
Company (1989 to1998);
formerly, employee of a
U.S. regulatory agency,
Washington, D.C. (1973
to 1989).
Ronald L. Grooms Chief Accounting Senior Vice President,
7800 E. Union Avenue Officer, Chief Treasurer and Director
Denver, Colorado Financial Officer of INVESCO Funds Group,
Age: 53 and Treasurer Inc.; Senior Vice
President and Treasurer
of INVESCO Distributors,
Inc.; Treasurer,
Principal Financial and
Accounting Officer of
INVESCO Global Health
Sciences Fund; formerly,
Senior Vice President
and Treasurer of INVESCO
Trust Company (1988 to
1998).
<PAGE>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE WITH COMPANY DURING PAST FIVE YEARS
- ---------------------- ---------------- ------------------------
William J. Galvin, Jr. Assistant Secretary Senior Vice President
7800 E. Union Avenue and Assistant Secretary
Denver, Colorado of INVESCO Funds Group,
Age: 43 Inc.; Senior Vice
President and Assistant
Secretary of INVESCO
Distributors, Inc.;
formerly, Trust Officer
of INVESCO Trust
Company.
Pamela J. Piro Assistant Treasurer Vice President and
7800 E. Union Avenue Assistant Treasurer of
Denver, Colorado INVESCO Funds Group,
Age: 39 Inc.; Assistant
Treasurer of INVESCO
Distributors, Inc.;
formerly, Assistant Vice
President (1996 to
1997), Director -
Portfolio Accounting
(1994 to 1996),
Portfolio Accounting
Manager (1993 to 1994)
and Assistant Accounting
Manager (1990 to 1993).
Alan I. Watson Assistant Secretary Vice President of
7800 E. Union Avenue INVESCO Funds Group,
Denver, Colorado Inc.; formerly, Trust
Age: 58 Officer of INVESCO Trust
Company.
Judy P. Wiese Assistant Secretary Vice President and
7800 E. Union Avenue Assistant Secretary of
Denver, Colorado INVESCO Funds Group,
Age: 51 Inc.; Assistant
Secretary of INVESCO
Distributors, Inc.;
formerly, Trust
Officer of INVESCO Trust
Company.
<PAGE>
# Member of the audit committee of the Company.
+ Member of the executive committee of the Company. On occasion, the executive
committee acts upon the current and ordinary business of the Company between
meetings of the board of directors. Except for certain powers which, under
applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
* These directors are "interested persons" of the Company as defined in the 1940
Act.
** Member of the management liaison committee of the Company.
@ Member of the brokerage committee of the Company.
! Member of the derivatives committee of the Company.
The following table shows the compensation paid by the Company to its
Independent Directors for services rendered in their capacities as directors of
the Company; the benefits accrued as Company expenses with respect to the
Defined Benefit Deferred Compensation Plan discussed below; and the estimated
annual benefits to be received by these directors upon retirement as a result of
their service to the Company, all for the fiscal year ended May 31, 1999.
<PAGE>
In addition, the table sets forth the total compensation paid by all of the
INVESCO Funds and INVESCO Global Health Sciences Fund (collectively, the
"INVESCO Complex") to these directors or trustees for services rendered in their
capacities as directors or trustees during the year ended December 31, 1999. As
of December 31, 1999, there were 46 funds in the INVESCO Complex.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Benefits Total
Accrued as Estimated Compensation
Aggregate Part of Annual From Invesco
Name of Person Compensation Company Benefits Upon Complex Paid
and Position From Company(1) Expenses(2) Retirement(3) to Directors(7)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred A. Deering, $4,671 $3,014 $2,036 $107,050
Vice Chairman of
the Board
- -------------------------------------------------------------------------------------------
Victor L. Andrews 4,345 2,883 2,244 84,700
- -------------------------------------------------------------------------------------------
Bob R. Baker 4,423 2,574 3,007 82,850
- -------------------------------------------------------------------------------------------
Lawrence H. Budner 4,330 2,883 2,244 82,850
- -------------------------------------------------------------------------------------------
James T. Bunch(4) 0 0 0 0
- -------------------------------------------------------------------------------------------
Daniel D. Chabris(5) 2,752 2,946 1,846 34,000
- -------------------------------------------------------------------------------------------
Wendy L. Gramm 4,280 0 0 81,350
- -------------------------------------------------------------------------------------------
Kenneth T. King(5) 4,573 3,076 1,846 85,850
- -------------------------------------------------------------------------------------------
Gerald J. Lewis(4) 0 0 0 0
- -------------------------------------------------------------------------------------------
John W. McIntyre 4,555 0 0 108,700
- -------------------------------------------------------------------------------------------
Larry Soll 4,280 0 0 100,900
- -------------------------------------------------------------------------------------------
Total $38,209 $17,376 $13,223 $768,250
- -------------------------------------------------------------------------------------------
% of Net Assets 0.0039%(6) 0.0018%(6) 0.0024%(7)
- -------------------------------------------------------------------------------------------
</TABLE>
(1) The vice chairman of the board, the chairmen of the Funds' committees who
are Independent Directors, and the members of the Funds' committees who are
Independent Directors each receive compensation for serving in such capacities
in addition to the compensation paid to all Independent Directors.
(2) Represents estimated benefits accrued with respect to the Defined Benefit
Deferred Compensation Plan discussed below, and not compensation deferred at the
election of the directors.
(3) These amounts represent the Company's share of the estimated annual benefits
payable by the INVESCO Funds upon the directors' retirement, calculated using
the current method of allocating director compensation among the INVESCO Funds.
<PAGE>
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 Funds, and for other reasons
during the period in which retirement benefits are accrued on behalf of the
respective directors. This results in lower estimated benefits for directors who
are closer to retirement and higher estimated benefits for directors who are
further from retirement. With the exception of Drs. Soll and Gramm and Messrs.
Bunch and Lewis, each of these directors has served as a director of one or more
of the funds in 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 was not included in the
calculation of retirement benefits until November 1, 1999.
(4) Messrs. Bunch and Lewis became directors of the Company on January 1, 2000.
(5) Mr. Chabris retired as a director of the Company on September 30, 1998. Mr.
King retired as a director of the Company on December 31, 1999.
(6) Total as a percentage of the Company's net assets as of May 31, 1999.
(7) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1999.
Messrs. Brady and Williamson, as "interested persons" of the Company and the
other INVESCO Funds, receive compensation as officers or employees of INVESCO or
its affiliated companies, and do not receive any director's fees or other
compensation from the Company or the other funds in the INVESCO Funds for their
service as directors.
The boards of directors of the mutual funds in the INVESCO Funds have adopted a
Defined Benefit Deferred Compensation Plan (the "Plan") for the Independent
Directors of the funds. Under this Plan, each director 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,
if the Qualified Director retires upon reaching 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/her retirement (the "Basic Benefit"). Commencing with any such director's
second year of retirement, commencing with the first year of retirement of any
Qualified Director whose retirement has been extended by the boards for three
years, and commencing with attainment of age 72 by a Qualified Director who
voluntarily retired prior to reaching age 72, 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/her or to his/her beneficiary or estate. If a
<PAGE>
Qualified Director becomes disabled or dies either prior to age 72 or during
his/her 74th year while still a director of the funds, the director will not be
entitled to receive the First Year Retirement Benefit; however, the Reduced
Benefit Payments will be made to him/her or to his/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 Company began making
payments under the Plan to Mr. Chabris as of October 1, 1998 and to Mr. King as
of January 1, 2000. The Company has no stock options or other pension or
retirement plans for management or other personnel and pays no salary or
compensation to any of its officers. A similar plan has been adopted by INVESCO
Global Health Sciences Fund's board of trustees. All trustees of INVESCO Global
Health Sciences Fund are also directors of the INVESCO Funds.
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. Certain of the deferred amounts have been invested in the shares of all
INVESCO Funds, except Funds offered by INVESCO Variable Investment Funds, Inc.,
in which the directors are legally precluded from investing. Each Independent
Director may, therefore, be deemed to have an indirect interest in shares of
each such INVESCO Fund, in addition to any INVESCO Fund shares the Independent
Directors may own either directly or beneficially.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of December 31, 1999, no persons owned more than 5% of the outstanding
shares of the Funds.
As of December 31, 1999, officers and directors of the Company, as a group,
beneficially owned less than 3% of any Fund's outstanding shares.
DISTRIBUTOR
INVESCO Distributors, Inc. ("IDI"), a wholly owned subsidiary of INVESCO, is the
distributor of the Funds. IDI receives no compensation and bears all expenses,
including the cost of printing and distributing prospectuses, incident to
marketing of the Fund's shares, except for such distribution expenses as are
paid out of Fund assets under the Company's Master Distribution Plan and
Agreement, which has been adopted by Cash Reserves Fund - Class C pursuant to
Rule 12b-1 under the 1940 Act.
The Company has adopted a Master Distribution Plan and Agreement pursuant to
Rule 12b-1 under the 1940 Act relating to the Class C shares of Cash Reserves
Fund (the "Class C Plan"). Under the Class C Plan, Class C shares of the Fund
pay compensation to IDI at an annual rate of 1.00% per annum of the average
daily net assets attributable to Class C shares for the purpose of financing any
activity which is primarily intended to result in the sale of Class C shares.
The Class C Plan is designed to compensate IDI for certain promotional and other
sales-related costs, and to implement a dealer incentive program which provides
<PAGE>
for periodic payments to selected dealers who furnish continuing personal
shareholder services to their customers who purchase and own Class C shares of
the Fund. Payments can also be directed by IDI to selected institutions that
have entered into service agreements with respect to Class C shares of the Cash
Reserves Fund and that provide continuing personal services to their customers
who own such Class C shares of the Fund. Activities appropriate for financing
under the Class C Plan include, but are not limited to, the following: printing
of prospectuses and statements of additional information and reports for other
than existing shareholders; preparation and distribution of advertising material
and sales literature; expenses of organizing and conducting sales seminars;
supplemental payments to dealers and other institutions such as asset-based
sales charges or as payments of service fees under shareholder service
arrangements; and costs of administering the Class C Plan.
Of the aggregate amount payable under the Class C Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own Class C shares of Cash Reserves
Fund, in amounts of up to 0.25% of the average daily net assets of the Class C
shares of the Fund attributable to the customers of such dealers or financial
institutions are characterized as a service fee. Payments to dealers and other
financial institutions in excess of such amounts and payments to IDI would be
characterized as an asset-based sales charge pursuant to the Class C Plan.
Payments pursuant to the Class C Plan are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Class C Plan conforms to rules of the NASD by limiting payments
made to dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own Class C shares of
the Cash Reserves Fund to no more than 0.25% per annum of the average daily net
assets of the Class C shares of the Fund attributable to the customers of such
dealers or financial institutions, and by imposing a cap on the total sales
charges, including asset-based sales charges, that may be paid by the Fund.
IDI may pay sales commissions to dealers and institutions who sell Class C
shares of Cash Reserves Fund at the time of such sales. Payments with respect to
Class C shares will equal 1.00% of the purchase price of the Class C shares sold
by the dealer or institution, and will consist of a sales commission of 0.75% of
the purchase price of Class C shares sold plus an advance of the first year
service fee of 0.25% with respect to such shares. IDI will retain all payments
received by it relating to Class C shares for the first thirteen months after
they are purchased. The portion of the payments to IDI under the Class C Plan
attributable to Class C shares which constitutes an asset-based sales charge
(0.75%) is intended in part to permit IDI to recoup a portion of on-going sales
commissions to dealers plus financing costs, if any. After the first thirteen
months, IDI will make such payments quarterly to dealers and institutions based
on the average net asset value of Class C shares which are attributable to
shareholders for whom the dealers and institutions are designated as dealers of
record.
A significant expenditure under the Class C Plan is compensation paid to
securities companies and other financial institutions and organizations, which
may include INVESCO-affiliated companies, in order to obtain various
distribution-related and/or administrative services for Cash Reserves Fund. Cash
Reserves Fund is authorized by the Class C Plan to use its assets to finance the
payments made to obtain those services. Payments will be made by IDI to
broker-dealers who sell shares of Cash Reserves Fund and may be made to banks,
savings and loan associations and other depository institutions. Although the
<PAGE>
Glass-Steagall Act limits the ability of certain banks to act as underwriters of
mutual fund shares, INVESCO does not believe that these limitations would affect
the ability of such banks to enter into arrangements with IDI, but can give no
assurance in this regard. However, to the extent it is determined otherwise in
the future, arrangements with banks might have to be modified or terminated,
and, in that case, the size of the Fund possibly could decrease to the extent
that the banks would no longer invest customer assets in the Fund. Neither the
Company nor its investment adviser will give any preference to banks or other
depository institutions which enter into such arrangements when selecting
investments to be made by Cash Reserves Fund. Financial institutions and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one particular class
instead of another.
Since Cash Reserves Fund's Class C shares are not offered until February 15,
2000, no payments were made to IDI under the Class C Plan for the fiscal year
ended May 31, 1999.
The services which are provided by securities dealers and other organizations
may vary by dealer but include, among other things, processing new shareholder
account applications, preparing and transmitting to the Company's Transfer Agent
computer-processable tapes of all Fund transactions by customers, serving as the
primary source of information to customers in answering questions concerning
Cash Reserves Fund, and assisting in other customer transactions with the Fund.
The Class C Plan provides that it shall continue in effect with respect to the
Fund as long as such continuance is approved at least annually by the vote of
the board of directors of the Company cast in person at a meeting called for the
purpose of voting on such continuance, including the vote of a majority of the
Independent Directors. The Class C Plan can also be terminated at any time by
Cash Reserves Fund, without penalty, if a majority of the Independent Directors,
or shareholders of the Class C shares of the Fund, vote to terminate the Class C
Plan. The Company may, in its absolute discretion, suspend, discontinue or limit
the offering of its shares at any time. In determining whether any such action
should be taken, the board of directors intends to consider all relevant factors
including, without limitation, the size of Cash Reserves Fund, the investment
climate for the Fund, general market conditions, and the volume of sales and
redemptions of the Fund's shares. The Class C Plan may continue in effect and
payments may be made under the Class C Plan following any temporary suspension
or limitation of the offering of Fund shares; however, the Company is not
contractually obligated to continue the Class C Plan for any particular period
of time. Suspension of the offering of Cash Reserves Fund's shares would not, of
course, affect a shareholder's ability to redeem his or her shares.
So long as the Class C Plan is in effect, the selection and nomination of
persons to serve as Independent Directors of the Company shall be committed to
the Independent Directors then in office at the time of such selection or
nomination. The Class C Plan may not be amended to increase the amount of Cash
Reserves Fund's payments under the Class C Plan without approval of the
shareholders of the affected class of the Fund's shares, and all material
amendments to the Class C Plan must be approved by the board of directors of the
Company, including a majority of the Independent Directors. Under the agreement
implementing the Class C Plan, IDI or Cash Reserves Fund, the latter by vote of
a majority of the Independent Directors, or a majority of the holders of the
<PAGE>
Fund's Class C shares' outstanding voting securities, may terminate such
agreement without penalty upon 30 days' written notice to the other party. No
further payments will be made by Cash Reserves Fund under the Class C Plan in
the event of its termination.
To the extent that the Class C Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of Fund assets in the amounts and for the purposes set
forth therein, notwithstanding the occurrence of an assignment, as defined by
the 1940 Act, and rules thereunder. To the extent it constitutes an agreement
pursuant to a plan, Cash Reserves Fund's obligation to make payments to IDI
shall terminate automatically, in the event of such "assignment." In this event,
Cash Reserves Fund may continue to make payments pursuant to the Class C Plan
only upon the approval of new arrangements regarding the use of the amounts
authorized to be paid by the Fund under the Class C Plan. Such new arrangements
must be approved by the directors, including a majority of the Independent
Directors, by a vote cast in person at a meeting called for such purpose. These
new arrangements might or might not be with IDI. On a quarterly basis, the
directors review information about the distribution services that have been
provided to Cash Reserves Fund and the 12b-1 fees paid for such services. On an
annual basis, the directors consider whether the Class C Plan should be
continued and, if so, whether any amendment to the Class C Plan, including
changes in the amount of 12b-1 fees paid by Class C shares of Cash Reserves
Fund, should be made.
The only Company directors and interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, who have a direct or indirect financial
interest in the operation of the Class C Plan are the officers and directors of
the Company who are also officers either of IDI or other companies affiliated
with IDI. The benefits which the Company believes will be reasonably likely to
flow to Cash Reserves Fund and its shareholders under the Class C Plan include
the following:
o Enhanced marketing efforts, if successful, should result in an increase
in net assets through the sale of additional shares and afford greater
resources with which to pursue the investment objectives of the Fund;
o The sale of additional shares reduces the likelihood that redemption of
shares will require the liquidation of securities of the Fund in amounts
and at times that are disadvantageous for investment purposes; and
o Increased Fund assets may result in reducing each investor's share of
certain expenses through economies of scale (e.g., exceeding established
breakpoints in an advisory fee schedule and allocating fixed expenses over
a larger asset base), thereby partially offsetting the costs of the Class C
Plan.
The positive effect which increased Fund assets will have on INVESCO's revenues
could allow INVESCO and its affiliated companies:
o To have greater resources to make the financial commitments necessary to
improve the quality and level of the Fund's shareholder services (in both
systems and personnel);
o To increase the number and type of mutual funds available to investors
from INVESCO and its affiliated companies (and support them in their
<PAGE>
infancy), and thereby expand the investment choices available to all
shareholders; and
o To acquire and retain talented employees who desire to be associated with
a growing organization.
OTHER SERVICE PROVIDERS
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500, Denver,
Colorado, are the independent accountants of the Company. The independent
accountants are responsible for auditing the financial statements of the Funds.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, is the
custodian of the cash and investment securities of the Company. The custodian is
also responsible for, among other things, receipt and delivery of each Fund's
investment securities in accordance with procedures and conditions specified in
the custody agreement with the Company. The custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories.
TRANSFER AGENT
INVESCO, 7800 E. Union Avenue, Denver, Colorado, is the Company's transfer
agent, registrar, and dividend disbursing agent. Services provided by INVESCO
include the issuance, cancellation and transfer of shares of the Funds, and the
maintenance of records regarding the ownership of such shares.
LEGAL COUNSEL
The firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., 2nd
Floor, Washington, D.C., is legal counsel for the Company. The firm of Moye,
Giles, O'Keefe, Vermeire & Gorrell LLP, 1225 17th Street, Suite 2900, Denver,
Colorado, acts as special counsel to the Company.
BROKERAGE ALLOCATION AND OTHER PRACTICES
As the investment adviser to the Funds, INVESCO places orders for the purchase
and sale of securities with broker-dealers based upon an evaluation of the
financial responsibility of the broker-dealers and the ability of the
broker-dealers to effect transactions at the best available prices.
Consistent with the standard of seeking to obtain favorable execution on
portfolio transactions, INVESCO may select brokers that provide research
services to INVESCO and the Company, as well as other INVESCO mutual funds and
other accounts managed by INVESCO. Research services include statistical and
<PAGE>
analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to INVESCO in making
informed investment decisions. Research services prepared and furnished by
brokers through which a Fund effects securities transactions may be used by
INVESCO in servicing all of its accounts and not all such services may be used
by INVESCO in connection with a particular Fund. Conversely, a Fund receives
benefits of research acquired through the brokerage transactions of other
clients of INVESCO.
Because the securities that the Funds invest in are generally traded on a
principal basis, it is unusual for a Fund to pay any brokerage commissions. The
Funds paid no brokerage commissions for the fiscal years ended May 31, 1999,
1998 and 1997. For the fiscal year ended May 31, 1999, brokers providing
research services received $0 in commissions on portfolio transactions effected
for the Funds. The aggregate dollar amount of such portfolio transactions was
$0. Commissions totaling $0 were allocated to certain brokers in recognition of
their sales of shares of the Funds on portfolio transactions of the Funds
effected during the fiscal year ended May 31, 1999.
At May 31, 1999, each Fund held debt securities of its regular brokers or
dealers, or their parents, as follows:
- --------------------------------------------------------------------------------
VALUE OF SECURITIES
FUND BROKER OR DEALER AT MAY 31, 1999
================================================================================
Cash Reserves Heller Financial $45,000,000.00
- --------------------------------------------------------------------------------
American Express Credit $43,000,000.00
- --------------------------------------------------------------------------------
General Electric Company $43,000,000.00
- --------------------------------------------------------------------------------
Associates Corp of North America $40,000,000.00
- --------------------------------------------------------------------------------
Ford Motor Credit $40,000,000.00
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter $39,994,654.31
- --------------------------------------------------------------------------------
Household Finance $38,000,000.00
- --------------------------------------------------------------------------------
General Motors Acceptance $31,822,934.33
- --------------------------------------------------------------------------------
Merrill Lynch $19,973,171.93
- --------------------------------------------------------------------------------
State Street Bank and Trust $2,940,000.00
- --------------------------------------------------------------------------------
Tax-Free Money General Electric Capital $2,200,000.00
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Value of Securities
Fund Broker or Dealer At May 31, 1999
- --------------------------------------------------------------------------------
U.S. Government Money State Street Bank and Trust $13,205,000.00
- --------------------------------------------------------------------------------
Neither INVESCO nor any affiliate of INVESCO receives any brokerage commissions
on portfolio transactions effected on behalf of the Funds, and there is no
affiliation between INVESCO or any person affiliated with INVESCO or the Funds
and any broker or dealer that executes transactions for the Funds.
CAPITAL STOCK
The Company is authorized to issue up to ten billion shares of common stock with
a par value of $0.01 per share. As of December 31, 1999, the following shares of
each Fund were outstanding:
Cash Reserves Fund - Investor Class 730,005,310
Cash Reserves Fund - Class C 0
Tax-Free Money Fund - Investor Class 39,469,698
U.S. Government Money Fund - Investor Class 119,154,196
A share of each class of a Fund represents an identical interest in that Fund's
investment portfolio and has the same rights, privileges and preferences.
However, each class may differ with respect to sales charges, if any,
distribution and/or service fees, if any, other expenses allocable exclusively
to each class, voting rights on matters exclusively affecting that class, and
its exchange privilege, if any. The different sales charges and other expenses
applicable to the different classes of shares of the Funds will affect the
performance of those classes. Each share of a Fund is entitled to participate
equally in dividends for that class, other distributions and the proceeds of any
liquidation of a class of that Fund. However, due to the differing expenses of
the classes, dividends and liquidation proceeds on Investor Class and Class C
shares will differ. All shares of a Fund will be voted together, except that
only the shareholders of a particular class of a Fund may vote on matters
exclusively affecting that class, such as terms of a Rule 12b-1 Plan as it
relates to the class. All shares issued and outstanding are, and all shares
offered hereby when issued will be, fully paid and nonassessable. The board of
directors has the authority to designate additional classes of common stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.
Shares have no preemptive rights and are freely transferable on the books of
each Fund.
All shares of the Company have equal voting rights based on one vote for each
share owned. The Company is not generally required and does not expect to hold
regular annual meetings of shareholders. However, when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders.
<PAGE>
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company. The Funds will assist shareholders in
communicating with other shareholders as required by the 1940 Act.
Fund shares have noncumulative voting rights, which means that the holders of a
majority of the shares of the Company voting for the election of directors of
the Company can elect 100% of the directors if they choose to do so. If that
occurs, the holders of the remaining shares voting for the election of directors
will not be able to elect any person or persons to the board of directors.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company.
TAX CONSEQUENCES OF OWNING SHARES OF A FUND
Each Fund intends to continue to conduct its business and satisfy the applicable
diversification of assets, distribution and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. Each Fund qualified as a regulated investment
company and intends to continue to qualify during its current fiscal year. It is
the policy of each Fund to distribute all investment company taxable income. As
a result of this policy and the Funds' qualifications as regulated investment
companies, it is anticipated that none of the Funds will pay federal income or
excise taxes and that the Funds will be accorded conduit or "pass through"
treatment for federal income tax purposes. Therefore, any taxes that a Fund
would ordinarily owe are paid by its shareholders on a pro-rata basis. If a Fund
does not distribute all of its net investment income, it will be subject to
income and excise taxes on the amount that is not distributed. If a Fund does
not qualify as a regulated investment company, it will be subject to corporate
income tax on its net investment income at the corporate tax rates.
Tax-Free Money Fund intends to qualify to pay "exempt-interest dividends" to its
shareholders. The Fund will qualify if at least 50% of the value of its total
assets are invested in municipal securities at the end of each quarter of the
Fund's fiscal year. The exempt interest portion of the monthly income dividend
may be based on the ratio of that Fund's tax-exempt income to taxable income for
the entire fiscal year. The ratio is calculated and reported to shareholders at
the end of each fiscal year of the Fund. The tax-exempt portion of any
particular dividend may be based on the tax-exempt portion of all distributions
for the year, rather than on the tax-exempt portion of that particular dividend.
A corporation includes exempt-interest dividends in calculating its alternative
minimum taxable income in situations where the adjusted current earnings of the
corporation exceed its alternative minimum taxable income.
Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by private activity bonds or
industrial development bonds should consult their tax advisers before purchasing
shares of the Tax-Exempt Fund because, for users of certain of these facilities,
the interest on such bonds is not exempt from federal income tax. For these
purposes, the term "substantial user" is defined generally to include a
"non-exempt person" who regularly uses in trade or business a part of a facility
financed from the proceeds of such bonds.
<PAGE>
The Funds' investment objectives and policies, including their policy of
attempting to maintain a net asset value of $1.00 per share, make it unlikely
that any capital gains will be paid to investors. However, each Fund cannot
guarantee that such a net asset value will be maintained. Accordingly, a
shareholder may realize a capital gain or loss upon redemption of shares of a
Fund. Capital gain or loss on shares held for one year or less is classified as
short-term capital gain or loss while capital gain or loss on shares held for
more than one year is classified as long-term capital gain or loss. Any loss
realized on the redemption of fund shares held for six months or less is
nondeductible to the extent of any exempt-interest dividends paid with respect
to such shares. Each Fund will be subject to a nondeductible 4% excise tax to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and its net capital gains for the
one-year period ending on October 31 of that year, plus certain other amounts.
You should consult your own tax adviser regarding specific questions as to
federal, state and local taxes. Dividends will generally be subject to
applicable state and local taxes. Qualification as a regulated investment
company under the Internal Revenue Code of 1986, as amended, for income tax
purposes does not entail government supervision of management or investment
policies.
PERFORMANCE
To keep shareholders and potential investors informed, INVESCO will occasionally
advertise the Funds' total returns for one-, five-, and ten-year periods (or
since inception). Total return figures show the rate of return on a $10,000
investment in a Fund, assuming reinvestment of all dividends for the periods
cited.
Cumulative total return shows the actual rate of return on an investment for the
period cited; average annual total return represents the average annual
percentage change in the value of an investment. Both cumulative and average
annual total returns tend to "smooth out" fluctuations in a Fund's investment
results, because they do not show the interim variations in performance over the
periods cited. More information about the Funds' recent and historical
performance is contained in the Company's Annual Report to Shareholders. You can
get a free copy by calling or writing to INVESCO using the telephone number or
address on the back cover of the Funds' Prospectuses.
We may also advertise a Fund's "current yield" and "effective yield." Both yield
figures are based on historical earnings and are not intended to indicate future
performance. The "current yield" of a Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
the advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because of the
compounding effect of this assumed reinvestment. For the seven days ended May
31, 1999, Cash Reserves Fund's current and effective yields were 4.00% and
4.08%, respectively; Tax-Free Money Fund's current and effective yields were
2.61% and 2.64%, respectively; and U.S. Government Money Fund's current and
effective yields were 4.00% and 4.08%, respectively.
<PAGE>
When we quote mutual fund rankings published by Lipper Inc., we may compare a
Fund to others in its appropriate Lipper category, as well as the broad-based
Lipper general fund groupings. These rankings allow you to compare a Fund to its
peers. Other independent financial media also produce performance- or
service-related comparisons, which you may see in our promotional materials.
Performance figures are based on historical earnings and are not intended to
suggest future performance.
Average annual total return performance for the one-, five-, and ten-year
periods (or since inception) ended May 31, 1999 was:
10 Year or
Name of Fund 1 Year 5 Year Since Inception
- ------------ ------ ------ ---------------
Cash Reserves Fund - Investor Class 4.45% 4.74% 4.87%
Tax-Free Money Fund - Investor Class 2.63% 2.90% 3.19%
U.S. Government Money Fund - Investor Class 4.36% 4.65% 4.07%*
* Since inception April 26, 1991
Average annual total return performance is not provided for Cash Reserves Fund's
Class C shares since Class C shares are not offered until February 15, 2000.
Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV
where: P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were determined
by solving the above formula for "T" for each time period indicated.
In conjunction with performance reports, comparative data between a Fund's
performance for a given period and other types of investment vehicles, including
certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder services
for a Fund, comparative data between that Fund's performance for a given period
and recognized indices of investment results for the same period, and/or
assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company, S&P,
Lipper Inc., Lehman Brothers, National Association of Securities Dealers
<PAGE>
Automated Quotations, Frank Russell Company, Value Line Investment Survey, the
American Stock Exchange, Morgan Stanley Capital International, Wilshire
Associates, the Financial Times Stock Exchange, the New York Stock Exchange, the
Nikkei Stock Average and Deutcher Aktienindex, all of which are unmanaged market
indicators. In addition, rankings, ratings, and comparisons of investment
performance and/or assessments of the quality of shareholder services made by
independent sources may be used in advertisements, sales literature or
shareholder reports, including reprints of, or selections from, editorials or
articles about the Fund. These sources utilize information compiled (i)
internally; (ii) by Lipper Inc.; or (iii) by other recognized analytical
services. The Lipper Inc. mutual fund rankings and comparisons which may be used
by the Fund in performance reports will be drawn from the following mutual fund
groupings, in addition to the broad-based Lipper general fund groupings:
Lipper Mutual
Fund Fund Category
- ---- -------------
Cash Reserve Fund Money Market Funds
Tax-Free Money Fund Tax-Exempt Money Market Funds
U.S. Government Money Fund U.S. Government Money Market Funds
Sources for Fund performance information and articles about the Funds include,
but are not limited to, the following:
AMERICAN ASSOCIATION OF INDIVIDUAL INVESTORS' JOURNAL
BANXQUOTE
BARRON'S
BUSINESS WEEK
CDA INVESTMENT TECHNOLOGIES
CNBC
CNN
CONSUMER DIGEST
FINANCIAL TIMES
FINANCIAL WORLD
FORBES
FORTUNE
IBBOTSON ASSOCIATES, INC.
INSTITUTIONAL INVESTOR
INVESTMENT COMPANY DATA, INC.
INVESTOR'S BUSINESS DAILY
KIPLINGER'S PERSONAL FINANCE
LIPPER INC.'S MUTUAL FUND PERFORMANCE ANALYSIS
MONEY
MORNINGSTAR
MUTUAL FUND FORECASTER
NO-LOAD ANALYST
NO-LOAD FUND X
PERSONAL INVESTOR
<PAGE>
SMART MONEY
THE NEW YORK TIMES
THE NO-LOAD FUND INVESTOR
U.S. NEWS AND WORLD REPORT
UNITED MUTUAL FUND SELECTOR
USA TODAY
THE WALL STREET JOURNAL
WIESENBERGER INVESTMENT COMPANIES SERVICES
WORKING WOMAN
WORTH
FINANCIAL STATEMENTS
The financial statements for the Funds for the fiscal year ended May 31, 1999
are incorporated herein by reference from the INVESCO Money Market Funds, Inc.'s
Annual Report to Shareholders dated May 31, 1999.
<PAGE>
APPENDIX A
Some of the terms used in the Statement of Additional Information are
described below.
BANK OBLIGATIONS include certificates of deposit which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually from 14 days to one
year) at a stated interest rate.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation of a
bank to pay a draft which has been drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face amount
of the instrument upon maturity.
BOND ANTICIPATION NOTES normally are issued to provide interim financing
until long-term financing can be arranged. The long-term bonds then provide the
money for the repayment of the Notes.
MUNICIPAL BONDS may be issued to raise money for various public purposes --
like constructing public facilities and making loans to public institutions.
Certain types of municipal bonds, such as certain project notes, are backed by
the full faith and credit of the United States. Certain types of municipal bonds
are issued to obtain funding for privately operated facilities. The two
principal classifications of municipal bonds are "general obligation" and
"revenue" bonds. General obligation bonds are backed by the taxing power of the
issuing municipality and are considered the safest type of municipal bond.
Issuers of general obligation bonds include states, counties, cities, towns and
regional districts. The proceeds of these obligations are used to fund a wide
range of public projects including the construction or improvement of schools,
highways and roads, water and sewer systems and a variety of other public
purposes. The basic security of general obligation bonds is the issuer's pledge
of its faith, credit, and taxing power for the payment of principal and
interest. Revenue bonds are backed by the net revenues derived from a particular
facility or group of facilities of a municipality or, in some cases, from the
proceeds of a special excise or other specific revenue source. Although the
principal security behind these bonds varies widely, many provide additional
security in the form of a debt service reserve fund whose monies may also be
used to make principal and interest payments on the issuer's obligations.
Industrial development revenue bonds are a specific type of revenue bond backed
by the credit and security of a private user and therefore investments in these
bonds have more potential risk. Although nominally issued by municipal
authorities, industrial development revenue bonds are generally not secured by
the taxing power of the municipality but are secured by the revenues of the
authority derived from payments by the industrial user.
COMMERCIAL PAPER consists of short-term (usually one to 180 days) unsecured
promissory notes issued by corporations in order to finance their current
operations.
CORPORATE DEBT OBLIGATIONS are bonds and notes issued by corporations and
other business organizations, including business trusts, in order to finance
their long-term credit needs.
MONEY MARKET refers to the marketplace composed of the financial
institutions which handle the purchase and sale of liquid, short-term,
high-grade debt instruments. The money market is not a single entity, but
<PAGE>
consists of numerous separate markets, each of which deals in a different type
of short-term debt instrument. These include U.S. government securities,
commercial paper, certificates of deposit and bankers' acceptances, which are
generally referred to as money market instruments.
PORTFOLIO SECURITIES LOANS: The Company, on behalf of each of the Funds,
may lend limited amounts of its portfolio securities (not to exceed 33 1/3% of a
particular Fund's total assets). Management of the Company understands that it
is the current view of the staff of the SEC that the Funds are permitted to
engage in loan transactions only if the following conditions are met: (1) the
applicable Fund must receive 100% collateral in the form of cash or cash
equivalents, e.g., U.S. Treasury bills or notes, from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities (determined on a daily basis) rises above the level of the
collateral; (3) the Company must be able to terminate the loan after notice; (4)
the applicable Fund must receive reasonable interest on the loan or a flat fee
from the borrower, as well as amounts equivalent to any dividends, interest or
other distributions on the securities loaned and any increase in market value;
(5) the applicable Fund may pay only reasonable custodian fees in connection
with the loan; (6) voting rights on the securities loaned may pass to the
borrower; however, if a material event affecting the investment occurs, the
Company must be able to terminate the loan and vote proxies or enter into an
alternative arrangement with the borrower to enable the Company to vote proxies.
Excluding items (1) and (2), these practices may be amended from time to time as
regulatory provisions permit.
REPURCHASE AGREEMENTS: A repurchase agreement is a transaction in which a
Fund purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. A Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. In the opinion of
management this risk is not material; if the seller defaults, the underlying
security constitutes collateral for the seller's obligations to pay. This
collateral will be held by the custodian for the Company's assets. However, in
the absence of compelling legal precedents in this area, there can be no
assurance that the Company will be able to maintain its rights to such
collateral upon default of the issuer of the repurchase agreement. To the extent
that the proceeds from a sale upon a default in the obligation to repurchase are
less than the repurchase price, the particular Fund would suffer a loss.
REVENUE ANTICIPATION NOTES are issued in expectation of receipt of other
kinds of revenue, such as federal revenues available under the Federal Revenue
Sharing Program.
REVERSE REPURCHASE AGREEMENTS are transactions where a Fund temporarily
transfers possession of a portfolio security to another party, such as a bank or
broker-dealer, in return for cash, and agrees to buy the security back at a
future date and price. The use of reverse repurchase agreements will create
leverage, which is speculative. Reverse repurchase agreements are borrowings
subject to the Funds' investment restrictions applicable to that activity. The
Company will enter into reverse repurchase agreements solely for the purpose of
obtaining funds necessary for meeting redemption requests. The proceeds received
from a reverse repurchase agreement will not be used to purchase securities for
investment purposes.
<PAGE>
SHORT-TERM DISCOUNT NOTES (tax-exempt commercial paper) are promissory
notes issued by municipalities to supplement their cash flow. The ratings A-1
and P-1 are the highest commercial paper ratings assigned by S&P and Moody's,
respectively.
TAX ANTICIPATION NOTES are to finance working capital needs of
municipalities and are issued in anticipation of various seasonal tax revenues,
to be payable from these specific future taxes.
TIME DEPOSITS are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Funds will not benefit from insurance from the
Federal Deposit Insurance Corporation.
U.S. GOVERNMENT SECURITIES are debt securities (including bills, notes, and
bonds) issued by the U.S. Treasury or issued by an agency or instrumentality of
the U.S. government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
Fannie Mae, Ginnie Mae (also known as Government National Mortgage Association),
the Federal Farm Credit Bank, and the Federal Home Loan Banks. Although all
obligations of agencies, authorities and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on these
obligations may be backed directly or indirectly by the U.S. government. This
support can range from the backing of the full faith and credit of the United
States to U.S. Treasury guarantees, or to the backing solely of the issuing
instrumentality itself. In the case of securities not backed by the full faith
and credit of the United States, a Fund must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitments.
RATINGS OF MUNICIPAL AND CORPORATE DEBT OBLIGATIONS
The four highest ratings of Moody's and S&P for municipal and corporate
debt obligations are Aaa, Aa, A and Baa and AAA, AA, A and BBB, respectively.
MOODY'S. The characteristics of these debt obligations rated by Moody's are
generally as follows:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
Moody's applies the numerical modifiers 1, 2 and 3 to the Aa rating
classification. The modifier 1 indicates a ranking for the security in the
higher end of this rating category; the modifier 2 indicates a mid-range
<PAGE>
ranking; and the modifier 3 indicates a ranking in the lower end of this rating
category.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG"). This distinction is in
recognition of the difference between short-term credit and long-term credit. A
short-term rating may also be assigned on an issue having a demand feature. Such
ratings are designated as VMIG. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon demand rather than fixed maturity dates and
payment relying on external liquidity.
MIG 1/VMIG 1 -- Notes and loans bearing this designation are of the best
quality, enjoying strong protection from established cash flows of funds for
their servicing or from established and broad-based access to the market for
refinancing, or both.
MIG 2/VMIG 2 -- Notes and loans bearing this designation are of high
quality, with margins of protection ample although not so large as in the
preceding group.
S&P'S RATING SERVICES. The characteristics of these debt obligations rated by
S&P are generally as follows:
AAA -- This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA -- Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
<PAGE>
S&P ratings for short-term notes are as follows:
SP-1 -- Very strong capacity to pay principal and interest.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
A debt rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
RATINGS OF COMMERCIAL PAPER
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS. Among the factors
considered by Moody's Investors Services, Inc. in assigning commercial paper
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
the risks which may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4) liquidity; (5)
amount and quality of long-term debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative differences in strength and
weakness in respect to these criteria would establish a rating of one of three
classifications; P-1 (Highest Quality), P-2 (Higher Quality) or P-3 (High
Quality).
DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS. An S&P commercial paper rating
is a current assessment of the likelihood of timely payment of debt having an
original maturity of no more than 365 days. Ratings are graded into four
categories, ranging from "A" for the highest quality obligations to "D" for the
lowest. The "A" categories are as follows:
A -- Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 -- This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
A-3 -- Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Articles of Incorporation.(1)
(1) Articles of Amendment to Articles of Incorporation filed
December 2, 1999.
(b) Bylaws.(1)
(c) Not applicable.
(d) (1) Investment Advisory Agreement between Registrant and
INVESCO Funds Group, Inc. dated February 28, 1997.(1)
(e) (1) Distribution Agreement between Registrant and INVESCO
Distributors, Inc. dated September 30, 1997.(2)
(f) (1) Amended Defined Benefit Deferred Compensation Plan for
Non-Interested Directors and Trustees.
(g) Custody Agreement between Registrant and State Street Bank and
Trust Company dated July 1, 1993.(1)
(1) Additional Fund Letter Agreement dated January 20, 1994 to
Custody Agreement.(1)
(2) Amendment dated October 25, 1995 to Custody Agreement.(1)
(3) Data Access Services Addendum to Custody Agreement.(1)
(4) Amended Fee Schedule effective January 1, 2000.
(h) (1) Transfer Agency Agreement between Registrant and INVESCO
Funds Group, Inc. dated February 28, 1997.(1)
(2) Administrative Services Agreement between Registrant and
INVESCO Funds Group, Inc. dated February 28, 1997.(1)
(a) Amendment to Administrative Services Agreement dated
May 13, 1999.(3)
(i) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, be legally issued, fully paid and non-assessable dated
June 4, 1993.(1)
(j) Consent of Independent Accountants.
(k) Not applicable.
(l) Not Applicable.
<PAGE>
(m) Form of Master Distribution Plan and Agreement adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 dated
January __, 2000 with respect to INVESCO Cash Reserves Fund
Class C shares.
(n) Not Applicable
(o) Plan pursuant to Rule 18-3 under the Investment Company Act of
1940 by the Company with respect to INVESCO Cash Reserves Fund
adopted by the board of Directors November 9, 1999.
(1) Previously filed with Post-Effective Amendment No. 33 to the Registration
Statement on July 30, 1997, and incorporated by reference herein.
(2) Previously filed with Post-Effective Amendment No. 34 to the Registration
Statement on September 28, 1998 and incorporated by reference herein.
(3) Previously filed with Post-Effective Amendment No. 35 to the Registration
Statement on July 28, 1999 and incorporated by reference herein.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH INVESCO MONEY
MARKET FUNDS, INC. (THE "COMPANY")
No person is presently controlled by or under common control with the Company.
ITEM 25. INDEMNIFICATION
Indemnification provisions for officers, directors and employees of the Company
are set forth in Article Seventh of the Articles of Incorporation, and are
hereby incorporated by reference. See Item 23(a) above. Under these Articles,
directors and officers will be indemnified to the fullest extent permitted to
directors by the Maryland General Corporation Law, subject only to such
limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
directors and officers of the Company cannot be protected against liability to a
Fund or its shareholders to which they would be subject because of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
their office. The Company also maintains liability insurance policies covering
its directors and officers.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Fund Management" in the Funds' Prospectuses and "Management of the Funds"
in the Statement of Additional Information for information regarding the
business of the investment adviser, INVESCO.
<PAGE>
Following are the names and principal occupations of each director and officer
of the investment adviser, INVESCO. Certain of these persons hold positions with
IDI, a subsidiary of INVESCO.
- --------------------------------------------------------------------------------
POSITION PRINCIPAL OCCUPATION
NAME WITH ADVISER AND COMPANY AFFILIATION
- --------------------------------------------------------------------------------
Mark H. Williamson Chairman, Director President &
and Officer Chief Executive Officer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Raymond R. Cunningham Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
William J. Galvin, Jr. Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Ronald L. Grooms Officer & Director Senior Vice President &
Treasurer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Richard W. Healey Officer & Director Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
William R. Keithler Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Charles P. Mayer Officer & Director Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Timothy J. Miller Officer & Director Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Donovan J. (Jerry) Paul Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Glen A. Payne Officer Senior Vice President,
Secretary & General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
John R. Schroer, II Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Marie E. Aro Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Ingeborg S. Cosby Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Stacie Cowell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Dawn Daggy-Mangerson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Elroy E. Frye, Jr. Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Linda J. Gieger Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Mark D. Greenberg Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Brian B. Hayward Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Richard R. Hinderlie Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Stuart A. Holland Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas M. Hurley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Patricia F. Johnston Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Steve King Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas A. Kolbe Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Ronald C. Lively Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Campbell C. Judge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Peter M. Lovell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
James F. Lummanick Officer Vice President &
Assistant General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas A. Mantone, Jr. Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
George A. Matyas Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Trent E. May Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Corey M. McClintock Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Douglas J. McEldowney Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Frederick R. (Fritz) Meyer Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Stephen A. Moran Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Jeffrey G. Morris Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Laura M. Parsons Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Jon B. Pauley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Pamela J. Piro Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Anthony R. Rogers Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Gary L. Rulh Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
James B. Sandidge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
John S. Segner Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Terri B. Smith Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Tane T. Tyler Officer Vice President &
Assistant General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas R. Wald Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Alan I. Watson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Judy P. Wiese Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas H. Scanlan Officer Regional Vice President
INVESCO Funds Group, Inc.
12028 Edgepark Court
Potomac, MD 20854
- --------------------------------------------------------------------------------
Reagan A. Shopp Officer Regional Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Michael D. Legoski Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
William S. Mechling Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Donald R. Paddack Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Kent T. Schmeckpeper Officer Assistant Vice President
Account Relationship INVESCO Funds Group, Inc.
Manager 7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Jeraldine E. Kraus Officer Assistant Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
ITEM 27. (a) PRINCIPAL UNDERWRITERS
INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
POSITIONS AND POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH OFFICES WITH
BUSINESS ADDRESS UNDERWRITER THE COMPANY
- ------------------ ------------ -------------
William J. Galvin, Jr. Senior Vice Assistant Secretary
7800 E. Union Avenue President &
Denver, CO 80237 Asst. Secretary
Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President, Chief Fin'l
Denver, CO 80237 Treasurer, & Officer, and
Director Chief Acctg. Off.
Richard W. Healey Senior Vice
7800 E. Union Avenue President &
Denver, CO 80237 Director
Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Timothy J. Miller Director
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel
Pamela J. Piro Assistant Treasurer Assistant Treasurer
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Assistant Secretary Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Mark H. Williamson Chairman of the Board, President,
7800 E. Union Avenue President, & Chief CEO & Director
Denver, CO 80237 Executive Officer
<PAGE>
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Mark H. Williamson
7800 E. Union Avenue
Denver, CO 80237
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund certifies that it meets all the requirements for
effectiveness of this registration statement under Rule 485(b) under the
Securities Act and has duly caused this post-effective amendment to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Denver,
County of Denver, and State of Colorado, on the 28th day of January, 2000.
Attest: INVESCO Money Market Funds, Inc.
/s/ Glen A. Payne /s/ Mark H. Williamson
- ------------------------------- ----------------------------------
Glen A. Payne, Secretary Mark H. Williamson, President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
/s/ Mark H. Williamson /s/ Lawrence H. Budner*
- ------------------------------- -----------------------------
Mark H. Williamson, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ John W. McIntyre*
- ------------------------------- -----------------------------
Ronald L. Grooms, Treasurer John W. McIntyre, Director
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews* /s/ Fred A. Deering*
- ------------------------------- -----------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker* /s/ Larry Soll*
- ------------------------------- -----------------------------
Bob R. Baker, Director Larry Soll, Director
/s/ Charles W. Brady*
- -------------------------------
Charles W. Brady, Director
/s/ Wendy L. Gramm*
- -------------------------------
Wendy L. Gramm, Director
By By /s/ Glen A. Payne
- -------------------- -------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
April 12 and May 12, 1990, May 27, 1992, September 26, 1994, September 21, 1995,
July 30, 1997 and September 28, 1998, respectively.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
a(1) 75
f(1) 77
g(4) 84
j 90
m 91
o 103
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
INVESCO MONEY MARKET FUNDS, INC.
INVESCO Money Market Funds, Inc., a corporation organized and existing
under the General Corporation Law of the State of Maryland (the "Company"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: Prior to this amendment, the aggregate number of shares which the
Company had the authority to issue was ten billion (10,000,000,000) shares, with
a par value of one cent ($0.01) per share of all authorized shares, having an
aggregate par value of one hundred million dollars ($100,000,000). Pursuant to
the power granted to the board of directors, Article III, Section 1 of the
Articles of Incorporation of the Company is hereby amended as follows:
ARTICLE III
CAPITALIZATION
Section 1. The aggregate number of shares of stock of all series that the
Company shall have the authority to issue is fifteen billion (15,000,000,000)
shares of Common Stock, having a par value of one cent ($0.01) per share of all
authorized shares, having an aggregate par value of one hundred and fifty
million dollars ($150,000,000). Such stock may be issued as full shares or as
fractional shares.
In the exercise of the powers granted to the board of directors pursuant
to Section 3 of this Article III, the board of directors designates three series
of shares of common stock of the Company, with two or more classes of shares of
common stock for each series, designated as follows:
<TABLE>
<CAPTION>
Fund Name & Class Allocated Shares
----------------- ----------------
<S> <C>
INVESCO Cash Reserves Fund-Investor Class Five billion shares (5,000,000,000)
INVESCO Cash Reserves Fund-Class C Five billion shares (5,000,000,000)
INVESCO Tax-Free Money Fund-Investor Class One billion shares (1,000,000,000)
INVESCO U.S. Government Money Fund-Investor Class One billion shares (1,000,000,000)
</TABLE>
Unless otherwise prohibited by law, so long as the Company is registered
as an open-end investment company under the Investment Company Act of 1940, as
amended, the total number of shares that the Company is authorized to issue may
be increased or decreased by the board of directors in accordance with the
applicable provisions of the Maryland General Corporation Law.
SECOND: Shares of each class have been duly authorized and classified by
the board of directors pursuant to authority and power contained in the Articles
of Incorporation of the Company. The information required by Section 2-607,
subsection (b)(2)(i) of the General Corporation Law of Maryland was not changed
by these Articles of Amendment.
THIRD: The provisions set forth in these Articles of Amendment were
approved by a majority of the entire board of directors of the Company, in
accordance with the requirements of Section 2-607 of the General Corporation Law
of Maryland.
<PAGE>
The undersigned President of the Company, who is executing on behalf of
the Company these Articles of Amendment, of which this paragraph is a part,
hereby acknowledges, in the name and on behalf of the Company, the foregoing
Articles of Amendment to be the corporate act of the Company and further
verifies under oath that, to the best of his knowledge, information and belief,
the matters and facts set forth herein are true in all material respects, under
the penalties of perjury.
IN WITNESS WHEREOF, INVESCO Money Market Funds, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf by its
President and witnessed by its Secretary on this 29th day of November, 1999.
These Articles of Amendment shall be effective upon acceptance by the
Maryland State Department of Assessments and Taxation.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Mark H. Williamson
-----------------------
Mark H. Williamson, President
[SEAL]
WITNESSED
By: /s/ Glen A. Payne
------------------
Glen A. Payne, Secretary
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
I, Ruth A. Christensen, a Notary Public in the City and County of Denver,
State of Colorado, do hereby certify that Mark H. Williamson, personally known
to me to be the person whose name is subscribed to the foregoing Articles of
Incorporation, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his full and voluntary act and
deed for the uses and purposes therein set forth.
Witness my hand and official seal this 29 day of November, 1999.
Ruth A. Christensen
-------------------
Notary Public
My commission expires March 16, 2002.
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS
As Amended November 10, 1999
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors of the Funds who
are not interested directors thereof as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("Independent Directors").
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, for an aggregate of at least five years at the time of his/her Service
Termination Date (as defined in paragraph 2) will be entitled to receive
benefits under the Plan. An Independent Director's period of Eligible Service
commences on the date of election to the board of directors of any one or more
of the Funds ("Board"). Hereafter, references in this Plan to Independent
Directors shall be deemed to include only those Directors who have met the
Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
a. Service Termination. Service Termination means termination of service
(other than by disability or death) of an Independent Director which results
from the Director's having reached his/her Service Termination Date.
b. Service Termination Date. An Independent Director's Service Termination
Date is that date upon which he or she no longer serves as a Director. Normally,
an Independent Director's Service Termination Date will be the last day of the
calendar quarter in which such Director's seventy-second birthday occurs. A
majority of the Board of a Fund may annually extend a Director's normal Service
Termination Date for a maximum period of three years, through the date not later
than the last day of the calendar quarter in which such Director's seventy-fifth
birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean the date upon which the Director no longer serves as a Director.
<PAGE>
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not earlier than the last day of the calendar quarter in which such
Director's seventy-second birthday occurs and not later than the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurs, the
Independent Director will receive four successive quarterly payments (the "First
Year Retirement Payments"), with each payment to be equal to 25 percent of the
sum of the annual basic retainer and annualized quarterly Board meeting fees
payable by each Fund to the Independent Director on his/her Service Termination
Date (excluding any fees relating to attending or chairing committee meetings or
other fees payable to an Independent Director). The first quarterly First Year
Retirement Payment shall be made on the first day of the calendar quarter
subsequent to the Independent Director's Service Termination Date.
b. Benefit. Commencing with the first day of the calendar quarter following
the calendar quarter in which an Independent Director has received the last of
four First Year Retirement Payments, and commencing as of the Service
Termination Date of an Independent Director whose Service Termination Date is
subsequent to the date of the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurred, the Independent Director will
receive, for the remainder of his/her life, a benefit (the "Benefit"), payable
quarterly, with each quarterly payment to be equal to 12.50 percent of the sum
of the annual basic retainer and annualized quarterly Board meeting fees payable
by each Fund to the Independent Director on his/her Service Termination Date
(excluding any fees relating to attending or chairing committee meetings or
other fees payable to an Independent Director).
If an Independent Director's Service Termination Date occurs prior to the
date of the last day of the calendar quarter in which such Director's
seventy-second birthday occurs as a result of the Director's voluntary
resignation, the Independent Director will receive the Benefit commencing on the
first day of the calendar quarter following the calendar quarter in which such
Director's seventy-second birthday occurs.
Example: As of July 1, 1998, the annual Benefit would be $34,000 (annual
basic retainer of $56,000 plus annualized quarterly Board meeting fees of
$12,000 times 12.50 percent of the total each quarter: $56,000 + $12,000 =
$68,000 x .125 = $8,500 x 4 = $34,000). As of July 1, 1998, the vice chairman of
the Funds receives an aggregate annual retainer of $62,000. The vice chairman's
annual Benefit would be $37,000. The annual Benefit may increase or decrease in
the future in accordance with changes in the Independent Directors' annual basic
retainer and/or Board meeting fees.
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his/her death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for a period of ten years, with quarterly payments to
be made to the designated beneficiary.
<PAGE>
If an Independent Director's service as a Director is terminated because
of his/her death prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his/her disability subsequent to the last day
of the calendar quarter in which such Director's seventy-second birthday
occurred and prior to the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for the remainder of his/her life, with quarterly
payments to be made to the disabled Independent Director. If the disabled
Independent Director should die before the First Year Retirement Payments are
completed and before forty quarterly Benefit payments are made, such payments
will continue to be made to the Independent Director's designated beneficiary
until the aggregate of the First Year Retirement Payments and forty quarterly
Benefit payments have been made to the disabled Independent Director and the
Director's designated beneficiary.
If an Independent Director's service as a Director is terminated because
of his/her disability prior to the last day of the calendar quarter in which
such Director's seventy-second birthday occurs or subsequent to the last day of
the calendar quarter in which such Director's seventy-fourth birthday occurred,
the Independent Director shall receive the Benefit for the remainder of his/her
life, with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If, subsequent to the
death of the Independent Director, his/her designated beneficiary should die
before the First Year Retirement Payments (if applicable) and/or a total of
forty quarterly Benefit payments are made, the remaining value of the
Independent Director's First Year Retirement Payments, if any, and/or Benefit
(which Benefit shall in no event exceed the value of forty quarterly payments
minus the number of payments made) shall be determined as of the date of the
death of the Independent Director's designated beneficiary and shall be paid to
the estate of the designated beneficiary in one lump sum or in periodic
payments, with the determinations with respect to the value of the First Year
Retirement Payments, if any, and/or Benefit and the method and frequency of
payment to be made by the Committee (as defined in paragraph 8.a.) in its sole
discretion.
<PAGE>
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee (or its designee as described on the form) before the Independent
Director's death. If no such beneficiary shall have been designated, or if no
designated beneficiary shall survive the Independent Director, the value or
remaining value of the Independent Director's First Year Retirement Payments, if
any, and/or Benefit (which Benefit shall in no event exceed the value of forty
quarterly payments minus the number of payments made) shall be determined as of
the date of the death of the Independent Director by the Committee and shall be
paid as promptly as possible in one lump sum to the Independent Director's
estate.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his/her responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will
be paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit; Allocation of
Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or Benefit applicable to the Fund, as well as its
proportionate share of all expenses of administration of the Plan, including
without limitation all accounting and legal fees and expenses and fees and
expenses of any Actuary. The obligations of each Fund to pay such First Year
Retirement Payments and/or Benefit and expenses will not be secured or funded in
any manner, and such obligations will not have any preference over the lawful
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or Benefit is paid by more than one Fund, such
costs and expenses will be allocated among such Funds in a manner that is
determined by the Committee to be fair and equitable under the circumstances. To
the extent that one or more of such Funds consist of one or more separate
portfolios, such costs and expenses allocated to any such Fund will thereafter
be allocated among such portfolios by the Board of the Fund in a manner that is
determined by such Board to be fair and equitable under the circumstances.
<PAGE>
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. Except as
otherwise provided herein, the Committee will make all interpretations and
determinations necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive. Committee
members will be elected annually.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver. Notwithstanding any other provisions of this Plan which
may imply the contrary, amendments to the Plan which directly or indirectly
increase or otherwise enhance or improve the First Year Retirement Payments, the
Benefit, or other Plan provisions will be applied prospectively, but not
retroactively, to Independent Directors who have reached their Service
Termination Dates and who either are eligible in the future to receive, or are
receiving, First Year Retirement Payments or Benefits.
c. No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board of any Fund to nominate any Independent Director for
reelection.
d. Consulting. Subsequent to his/her Service Termination Date, an
Independent Director may render such services for any Fund, for such
compensation, as may be agreed upon from time to time by such Independent
Director and the Board of the Fund which desires to procure such services.
<PAGE>
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993.
Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
Amended May 13, 1998, effective July 1, 1998.
Amended November 10, 1999.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS
INVESCO Bond Funds, Inc.
INVESCO Combination Stock and Bond Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Variable Investment Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
December 1, 1999
STATE STREET BANK
INVESCO Funds Group - per Attached Addendum
Custodian Fee Schedule
- --------------------------------------------------------------------------------
I. Administration
Custody Service - Maintain custody of fund assets. Settle portfolio purchases
and sales. Report buy and sell fails. Determine and collect portfolio income.
Make cash disbursements and report cash transactions. Monitor corporate actions.
The administration fee shown below is an annual charge, billed and payable
monthly, based on average monthly net assets.
ANNUAL FEES (BASIS POINTS) GROUP A
----------------------------------
Aggregate
Fund Net Assets Complex Wide
- --------------- ------------
First $10 Billion 1.40 Basis Points
Next $10 Billion .70 Basis Points
Next $10 Billion .40 Basis Points
Remainder .25 Basis Points
Minimum Monthly Charge None
II. Global Custody
Maintain custody of fund assets. Settle portfolio purchases and sales. Report
buy and sell fails. Determine and collect portfolio income. Make cash
disbursements and report cash transactions in local and base currency. Withhold
foreign taxes. File foreign tax reclaims. Monitor corporate actions.
Report portfolio positions.
A. Country Grouping
Group B Group C Group D Group E
- -------- ------- ------- -------
Australia Austria Botswana Argentina
Canada Belgium Brazil Bangladesh
Denmark Finland China Bolivia*
Euroclear Hong Kong Czech Republic Chile
France Indonesia Ecuador* Colombia
Germany Ireland Egypt Cyprus
Italy Malaysia Ghana Greece
Japan Mexico Israel Hungary
New Zealand Netherlands Kenya India
Spain Norway Luxembourg Jamaica*
Switzerland Philippines Morocco Jordan
U.K. Portugal South Africa Mauritus
Singapore Sri Lanka Namibia
Sweden Taiwan Pakistan
Thailand Trinidad and Tobago* Peru
Turkey Poland
Zambia Slovakia*
Zimbabwe South Korea
Tunisia *
Uruguay
Venezuela
* 17f-5 Ineligible at this time
<PAGE>
B. Transaction Charges
Group B Group C Group D Group E
------- ------- ------- -------
$25 $50 $100 $150
C. Holding Charges in Basis Points (Annual Fee)
Group B Group C Group D Group E
------- ------- ------- -------
7.5 15.0 40.0 50.0
III. Portfolio Trades - For each line item processed - Group A
State Street Bank Repos $7.00
DTC or Fed Book Entry $7.00
New York Physical Settlements $20.00
Maturity Collections N/C
PTC Purchase, Sale, Deposit or Withdrawal $8.00
All other trades $16.00
IV. Options
Option charge for each option written or closing
contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
V. Lending of Securities
Deliver loaned securities versus cash collateral $20.00
Deliver loaned securities versus securities collateral $30.00
Receive/deliver additional cash collateral $6.00
Substitutions of securities collateral $30.00
Deliver cash collateral versus receipt
of loaned securities $15.00
Deliver securities collateral versus receipt
of loaned securities $25.00
Loan administration--mark-to-market per day, per loan $3.00
<PAGE>
VI. Interest Rate Futures
Transactions--no security movement $8.00
VIl. Principal Reduction Payments
Per Paydown $10.00
VIll. Dividend Charges (For items $50.00
held at the Request of Traders
over record date in street form)
IX. Special Services
Fees for activities of a non-recurring nature such as fund consolidations
or reorganizations, extraordinary security shipments and the preparation of
special reports will be subject to negotiation.
X. Shareholder-Check Writing Withdrawal
Per Item $0.30
XI. Out-of-Pocket Expenses
A billing for the recovery of the following out-of-pocket expenses will be
made as of the end of each month.
Wire Charges ($5.00 per wire in and $5.50 out)
Legal Fees
Sub-custodian Charges limited to telex charges and taxes
Other out-of-pocket expenses as negotiated by State Street and INVESCO
XIl. Payment
Upon proper notification of the above fees will be charged against the
fund's custodian checking account within five (5) business days.
XIII. Balance Credits
Balance credits will be calculated based upon 90% of the monthly average
balance of accounts at State Street using 91 day Treasury Bill Rate in
effect at the month end. Balance Credits will be applied against Custody
Fees. Excess balance credits may accumulate from month to month and will be
reviewed and resolved periodically by State Street and INVESCO.
XIV. Effective Date
This schedule will be effective on January 1, 2000.
<PAGE>
INVESCO Funds Group State Street Bank
By: /s/ Ronald L. Grooms By: /s/ Charles R. Whittemore, Jr.
-------------------- ------------------------------
Title: Senior Vice President Title: Vice President
Date: December 20, 1999 Date: December 16, 1999
<PAGE>
INVESCO Funds Group - Appendix A
INVIESCO Stock Funds, Inc.
INVESCO Endeavor Fund
INVESCO Dynamics Fund
INVESCO Blue Chip Growth Fund
INVESCO Growth & Income Fund
INVESCO S & P 500 Index Fund
INVESCO Small Company Growth Fund
INVESCO Value Equity Fund
INVESCO Bond Funds, Inc.
INVESCO High Yield Fund
INVESCO Tax-Free Bond Fund
INVESCO Select Income Fund
INVESCO U.S. Government Securities Fund
INVESCO Combination Stock and Bond Funds, Inc.
INVESCO Balanced Fund
INVESCO Equity Income Fund
INVESCO Total Return Fund
INVESCO International Funds, Inc.
INVESCO International Blue Chip Fund
INVESCO Latin American Growth Fund
INVESCO Pacific Basin Fund
INVESCO European Fund
INVESCO Money Maket Funds, Inc.
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
INVESCO U.S. Government Money Fund
INVESCO Sector Funds, Inc.
INVESCO Telecommunications Fund
INVESCO Energy Fund
INVESCO Financial Services Fund
INVESCO Gold Fund
INVESCO Health Sciences Fund
INVESCO Leisure Fund
INVESCO Realty Fund
INVESCO Technology Fund
INVESCO Utilities Fund
<PAGE>
INVESCO Treasurer's Series Funds, Inc.
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
INVESCO Variable Investment Funds, Inc.
INVESCO VIF - Dynamics Fund
INVESCO VIF - Blue Chip Growth Fund
INVESCO VIF - Health Sciences Fund
INVESCO VIF - High Yield Fund
INVESCO VIF - Equity Income Fund
INVESCO VIF - Realty Fund
INVESCO VIF - Small Company Growth Fund
INVESCO VIF - Technology Fund
INVESCO VIF - Total Return Fund
INVESCO VIF - Utilities Fund
INVESCO VIF - Financial Services Fund
INVESCO VIF - Market Neutral Fund
INVESCO VIF - Telecommunications Fund
INVESCO Global Health Sciences Fund
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form N-1A of our report dated July 6, 1999, relating to the
financial statements and financial highlights which appears in the May 31, 1999
Annual Report to Shareholders of INVESCO Money Market Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and "Independent
Accountants" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
January 27, 2000
FORM OF MASTER DISTRIBUTION PLAN AND AGREEMENT
BETWEEN
INVESCO _______ FUNDS, INC.
(CLASS C SHARES)
AND
INVESCO DISTRIBUTORS, INC.
THIS AGREEMENT made as of the ____ day of January, 2000, by and between
INVESCO ____________FUNDS, Inc. a Maryland Corporation (the "Company"), with
respect to the series of shares of the common stock of the Funds set forth on
Appendix A to this Agreement (the "Funds") (the shares of each of the Funds
hereinafter referred to as the "Class C Shares") and INVESCO DISTRIBUTORS, INC.,
a Delaware corporation (the "Distributor").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of the Class C
Shares of common stock of each Fund, together with the Class C Shares of any
additional Fund that may hereafter be offered to the public, in accordance with
this Master Distribution Plan and Agreement of Distribution pursuant to Rule
12b-1 under the Act (the "Plan and Agreement"); and
WHEREAS, Distributor desires to be retained to perform services in
accordance with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Independent Directors"), cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and Distributor hereby enter into this Agreement pursuant to the
Plan in accordance with the requirements of Rule 12b-1 under the Act, and
provide and agree as follows:
<PAGE>
FIRST: The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b-1 under the Act and authorizes
payments as described herein. The Agreement is defined as those provisions of
this document by which the Company retains Distributor to provide distribution
services beyond those required by the General Distribution Agreement between the
parties, as are described herein. The Company may retain the Plan
notwithstanding termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. Each Fund is hereby authorized to utilize
the assets of the Company to finance certain activities in connection with
distribution of the Company's Class C Shares.
SECOND: The Company on behalf of the Class C Shares hereby appoints the
Distributor as its exclusive agent for the sale of the Class C Shares to the
public directly and through investment dealers and financial institutions in the
United States and throughout the world in accordance with the terms of the
current prospectuses applicable to the Funds.
THIRD: The Class C shares of each Fund may incur expenses per annum of the
average daily net assets of the Company attributable to the Class C Shares at
the rates set forth in Schedule A subject to any limitations imposed from time
to time by applicable rules of the National Association of Securities Dealers,
Inc.
FOURTH: The Company shall not sell any Class C Shares except through the
Distributor and under the terms and conditions set forth in the FIFTH paragraph
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Class C Shares to any other investment company
or personal holding company, or to the shareholders thereof, in exchange for all
or a majority of the shares or assets of any such company; and
(B) the Company may issue Class C Shares at their net asset value in
connection with certain classes of transactions or to certain categories of
persons, in accordance with Rule 22d-1 under the Act, provided that any such
category is specified in the then current prospectus of the applicable Class C
Shares.
FIFTH: The Distributor hereby accepts appointment as exclusive agent for
the sale of the Class C Shares and agrees that it will use its best efforts to
sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of
the Class C Shares shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the Company, no sales should
be made because of market or other economic considerations or abnormal
circumstances of any kind; and
(B) the Company may withdraw the offering of the Class C Shares at any
time without the consent of the Distributor. It is mutually understood and
agreed that the Distributor does not undertake to sell any specific amount of
the Class C Shares. The Company shall have the right to specify minimum amounts
for initial and subsequent orders for the purchase of Class C Shares.
<PAGE>
(C) To the extent that obligations incurred by Distributor out of its own
resources to finance any activity primarily intended to result in the sale of
Class C Shares of a Fund, pursuant to this Plan and Agreement or otherwise, may
be deemed to constitute the indirect use of Class C Shares Fund assets, such
indirect use of Class C Shares Fund assets is hereby authorized in addition to,
and not in lieu of, any other payments authorized under this Plan and Agreement.
(D) Distributor shall provide to the Company's Board of Directors and the
Board of Directors shall review, at least quarterly, a written report of the
amounts expended pursuant to the Plan and Agreement and the purposes for which
such expenditures were made.
SIXTH:
(A) The public offering price of the Class C shares shall be the net asset
value per share of the applicable Class C shares. Net asset value per share
shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Fund. The
Company's Board of Directors may establish a schedule of contingent deferred
sales charges to be imposed at the time of redemption of the Class C Shares, and
such schedule shall be disclosed in the current prospectus or statement of
additional information of each Fund. Such schedule of contingent deferred sales
charges may reflect variations in or waivers of such charges on redemptions of
Class C shares, either generally to the public or to any specified class of
shareholders and/or in connection with any specified class of transactions, in
accordance with applicable rules and regulations and exemptive relief granted by
the Securities and Exchange Commission, and as set forth in the Funds' current
prospectus(es) or statement(s) of additional information. The Distributor and
the Company shall apply any then applicable scheduled variation in or waiver of
contingent deferred sales charges uniformly to all shareholders and/or all
transactions belonging to a specified class.
(B) The Distributor may pay to investment dealers and other financial
institutions through whom Class C Shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales commissions
shall be the sole obligation of the Distributor.
(C) Amounts set forth in Schedule A may be used to finance any activity
which is primarily intended to result in the sale of the Class C Shares,
including, but not limited to, expenses of organizing and conducting sales
seminars, advertising programs, finders fees, printing of prospectuses and
statements of additional information (and supplements thereto) and reports for
other than existing shareholders, preparation and distribution of advertising
material and sales literature, supplemental payments to dealers and other
institutions as asset-based sales charges and providing such other services and
activities as may from time to time be agreed upon by the Company. Such reports,
prospectuses and statements of additional information (and supplements thereto),
sales literature, advertising and other services and activities may be prepared
and/or conducted either by Distributor's own staff, the staff of affiliated
companies of the Distributor, or third parties.
<PAGE>
(D) Amounts set forth in Schedule A may also be used to finance payments
of service fees under a shareholder service arrangement to be established by
Distributor in accordance with Section E below, and the costs of administering
the Plan and Agreement. To the extent that amounts paid hereunder are not used
specifically to compensate Distributor for any such expense, such amounts may be
treated as compensation for Distributor's distribution-related services. All
amounts expended pursuant to the Plan and Agreement shall be paid to Distributor
and are the legal obligation of the Company and not of Distributor. That portion
of the amounts paid under the Plan and Agreement that is not paid or advanced by
Distributor to dealers or other institutions that provide personal continuing
shareholder service as a service fee pursuant to Section E below shall be deemed
an asset-based sales charge. No provision of this Plan and Agreement shall be
interpreted to prohibit any payments by the Company during periods when the
Company has suspended or otherwise limited sales.
(E) Amounts expended by the Company under the Plan shall be used in part
for the implementation by Distributor of shareholder service arrangements. The
maximum service fee paid to any service provider shall be twenty-five
one-hundredths of one percent (0.25%), per annum of the average daily net assets
of the Company attributable to the Shares owned by the customers of such service
provider, or such lower rate for the Fund as is specified on Schedule A.
(1) Pursuant to this program, Distributor may enter into agreements
("Service Agreements") with such broker-dealers ("Dealers") as may
be selected from time to time by Distributor for the provision of
distribution-related personal shareholder services in connection
with the sale of Shares to the Dealers' clients and customers
("Customers") to Customers who may from time to time directly or
beneficially own Shares. The distribution-related personal
continuing shareholder services to be rendered by Dealers under the
Service Agreements may include, but shall not be limited to, the
following : (i) distributing sales literature; (ii) answering
routine Customer inquiries concerning the Company and the Shares;
(iii) assisting Customers in changing dividend options, account
designations and addresses, and in enrolling into any of several
retirement plans offered in connection with the purchase of Shares;
(iv) assisting in the establishment and maintenance of customer
accounts and records, and in the processing of purchase and
redemption transactions; (v) investing dividends and capital gains
distributions automatically in Shares; and (vi) providing such
other information and services as the Company or the Customer may
reasonably request.
<PAGE>
(2) Distributor may also enter into agreements ("Third Party
Agreements") with selected banks, financial planners, retirement
plan service providers and other appropriate third parties acting in
an agency capacity for their customers ("Third Parties"). Third
Parties acting in such capacity will provide some or all of the
shareholder services to their customers as set forth in the Third
Party Agreements from time to time.
(3) Distributor may also enter into variable group annuity
contractholder service agreements ("Variable Contract Agreements")
with selected insurance companies ("Insurance Companies") offering
variable annuity contracts to employers as funding vehicles for
retirement plans qualified under Section 401(a) of the Internal
Revenue Code, where amounts contributed under such plans are
invested pursuant to such variable annuity contracts in Shares of
the Company. The Insurance Companies receiving payments under such
Variable Contract Agreements will provide specialized services to
contractholders and plan participants, as set forth in the Variable
Contract Agreements from time to time.
(4) Distributor may also enter into shareholder service agreements
("Bank Trust Department Agreements and Brokers for Bank Trust
Department Agreements") with selected bank trust departments and
brokers for bank trust departments. Such bank trust departments and
brokers for bank trust departments will provide some or all of the
shareholder services to their customers as set forth in the Bank
Trust Department Agreements and Brokers for Bank Trust Department
Agreements.
(F) No provision of this Plan and Agreement shall be deemed to prohibit
any payments by a Fund to the Distributor or by a Fund or the Distributor to
investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under the Plan and Agreement.
(G) The Company shall redeem Class C Shares from shareholders in
accordance with the terms set forth from time to time in the current prospectus
and statement of additional information of each Fund. The price to be paid to a
shareholder to redeem Class C Shares shall be equal to the net asset value of
the Class C Shares being redeemed, less any applicable contingent deferred sales
charge. The Distributor shall be entitled to receive the amount of any
applicable contingent deferred sales charge that has been subtracted from gross
redemption proceeds. The Company shall pay or cause the Company's transfer agent
to pay the applicable contingent deferred sales charge to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.
<PAGE>
SEVENTH: The Distributor shall act as agent of the Company on behalf of
each Fund in connection with the sale and repurchase of Class C Shares. Except
with respect to such sales and repurchases, the Distributor shall act as
principal in all matters relating to the promotion or the sale of Class C Shares
and shall enter into all of its own engagements, agreements and contracts as
principal on its own account. The Distributor shall enter into agreements with
investment dealers and financial institutions selected by the Distributor,
authorizing such investment dealers and financial institutions to offer and sell
Class C Shares to the public upon the terms and conditions set forth therein,
which shall not be inconsistent with the provisions of this Agreement. Each
agreement shall provide that the investment dealer and financial institution
shall act as a principal, and not as an agent, of the Company on behalf of the
Funds. The Distributor or such other investment dealers or financial
institutions will be deemed to have performed all services required to be
performed in order to be entitled to receive the asset based sales charge
portion of any amounts payable with respect to Class C Shares to the Distributor
pursuant to the Plan and Agreement adopted by the Company on behalf of each Fund
upon the settlement of each sale of a Class C Share (or a share of another fund
from which the Class C Share derives).
EIGHTH: The Funds shall bear:
(A) the expenses of qualification of Class C Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
NINTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the Funds' prospectuses and statements of additional
information (including supplements thereto) relating to public offerings made by
the Distributor pursuant to this Agreement (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to shareholders of each Fund), and any other promotional or
sales literature used by the Distributor or furnished by the Distributor to
dealers in connection with such public offerings, and expenses of advertising in
connection with such public offerings.
(B) The Distributor may be compensated for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by the Plan and Agreement.
TENTH: The Distributor will accept orders for the purchase of Class C
Shares only to the extent of purchase orders actually received and not in excess
of such orders, and it will not avail itself of any opportunity of making a
profit by expediting or withholding orders. It is mutually understood and agreed
that the Company may reject purchase orders where, in the judgment of the
Company, such rejection is in the best interest of the Company.
<PAGE>
ELEVENTH: The Company, on behalf of the Funds, and the Distributor shall
each comply with all applicable provisions of the Act, the Securities Act of
1933, rules and regulations of the National Association of Securities Dealers,
Inc. and its affiliates, and of all other federal and state laws, rules and
regulations governing the issuance and sale of Class C Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Funds agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Funds, or any omission to state a material fact therein, the omission of which
makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or Fund in connection therewith by or on behalf of the
Distributor. The Distributor agrees to indemnify the Company and the Funds
against any and all claims, demands, liabilities and expenses which the Company
or the Funds may incur arising out of or based upon any act or deed of the
Distributor or its sales representatives which has not been authorized by the
Company or the Funds in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Funds against
any and all claims, demands, liabilities and expenses which the Company or the
Funds may incur under the Securities Act of 1933, or common law or otherwise,
arising out of or based upon any alleged untrue statement of a material fact
contained in any registration statement or prospectus of the Funds, or any
omission to state a material fact therein if such statement or omission was made
in reliance upon, and in conformity with, information furnished to the Company
or the Funds in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor
shall not be liable for any errors of the Funds' transfer agent, or for any
failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, or to
any applicable statute or regulation.
<PAGE>
FOURTEENTH: This Plan and Agreement shall become effective as of the date
hereof, shall continue in force and effect until May 30, 2000, and shall
continue in force and effect from year to year thereafter, provided that such
continuance is specifically approved at least annually (a)(i) by the Board of
Directors of the Company or (ii) by the vote of a majority of the Funds'
outstanding voting securities of Class C Shares (as defined in Section 2(a)(42)
of the 1940 Act), and (b) by vote of a majority of the Company's directors who
are not parties to this Plan and Agreement or "interested persons" (as defined
in Section 2(a)(19) of the 1940 Act) of any party to this Plan and Agreement
cast in person at a meeting called for such purpose.
Any amendment to this Plan and Agreement that requires the approval of the
shareholders of Class C Shares pursuant to Rule 12b-1 under the 1940 Act shall
become effective as to such Class C Shares upon the approval of such amendment
by a "majority of the outstanding voting securities" (as defined in the 1940
Act) of such Class C Shares, provided that the Board of Directors of the Company
has approved such amendment.
FIFTEENTH: This Plan and Agreement, any amendment to this Plan and
Agreement and any agreements related to this Plan and Agreement shall become
effective immediately upon the receipt by the Company of both (a) the
affirmative vote of a majority of the Board of Directors of the Company, and (b)
the affirmative vote of a majority of those directors of the Company who are not
"interested persons" of the Company (as defined in the 1940 Act) and have no
direct or indirect financial interest in the operation of this Plan and
Agreement or any agreements related to it (the "Independent Directors"), cast in
person at a meeting called for the purpose of voting on this Plan and Agreement
or such agreements. Notwithstanding the foregoing, no such amendment that
requires the approval of the shareholders of Class C Shares of a Company shall
become effective as to such Class C Shares until such amendment has been
approved by the shareholders of such Class C Shares in accordance with the
provisions of the Fourteenth paragraph of this Plan and Agreement.
This Plan and Agreement may not be amended to increase materially the
amount of distribution expenses provided for in Schedule A hereof unless such
amendment is approved in the manner provided herein, and no material amendment
to the Plan and Agreement shall be made unless approved in the manner provided
for in the Fourteenth paragraph hereof.
So long as the Plan and Agreement remains in effect, the selection and
nomination of persons to serve as directors of the Company who are not
"interested persons" of the Company shall be committed to the discretion of the
directors then in office who are not "interested persons" of the Company.
However, nothing contained herein shall prevent the participation of other
persons in the selection and nomination process, provided that a final decision
on any such selection or nomination is within the discretion of, and approved
by, a majority of the directors of the Company then in office who are not
"interested persons" of the Company.
<PAGE>
SIXTEENTH:
(A) This Plan and Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Directors of the
Company or by vote of a majority of the outstanding voting
securities of Class C Shares of each Fund, or by the Distributor, on
sixty (60) days' written notice to the other party.
(B) In the event that neither Distributor nor any affiliate of
Distributor serves the Company as investment adviser, the agreement
with Distributor pursuant to this Plan shall terminate at such time.
The board of directors may determine to approve a continuance of the
Plan and/or a continuance of the Agreement, hereunder.
(C) To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it
shall remain in effect as such, so as to authorize the use by the
Class C Shares of each Fund of its assets in the amounts and for
the purposes set forth herein, notwithstanding the occurrence of
an "assignment," as defined by the Act and the rules thereunder.
To the extent it constitutes an agreement with INVESCO pursuant
to a plan, it shall terminate automatically in the event of such
"assignment." Upon a termination of the agreement with
Distributor, the Funds may continue to make payments pursuant to
the Plan only upon the approval of a new agreement under this
Plan and Agreement, which may or may not be with Distributor, or
the adoption of other arrangements regarding the use of the
amounts authorized to be paid by the Funds hereunder, by the
Company's board of directors in accordance with the procedures
set forth above.
SEVENTEENTH: Any notice under this Plan and Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 7800 East Union Avenue, Mail Stop 201,
Denver, Colorado 80237.
EIGHTEENTH: This Plan and Agreement shall be governed by and construed
in accordance with the laws (without reference to conflicts of law
provisions) of the State of Maryland.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Plan and Agreement to be
executed in duplicate on the day and year first above written.
INVESCO _______FUNDS, Inc.
Attest:
By: ________________________
____________________ Name: Mark H. Williamson
Name: Title: President
Title:
INVESCO DISTRIBUTORS, INC.
Attest:
By: ______________________
____________________ Name: Glen A. Payne
Name: Title: Secretary
Title:
<PAGE>
APPENDIX A
TO
MASTER DISTRIBUTION PLAN AND AGREEMENT
OF
INVESCO __________ FUNDS, Inc.
CLASS C SHARES
INVESCO _______ Fund
INVESCO _______ Fund
<PAGE>
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN and AGREEMENT
OF
INVESCO __________FUNDS, INC.
(DISTRIBUTION FEE)
The Company shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan and
Agreement for each Fund (or Class thereof) designated below, a Distribution Fee*
determined by applying the annual rate set forth below as to each Fund (or Class
thereof) to the average daily net assets of the Fund (or Class thereof) for the
plan year, computed in a manner used for the determination of the offering price
of shares of the Fund.
Maximum Asset Maximum Maximum
Fund Based Sales Service Aggregate
Class C Shares Charge Fee Fee
-------------- ------------- -------- ---------
INVESCO _______ Fund 0.75% 0.25% 1.00%
INVESCO _______ Fund 0.75% 0.25% 1.00%
- -----------------
* The Distribution Fee is payable apart from the sales charge, if any, as
stated in the current prospectus for the applicable Fund (or Class
thereof).
INVESCO CASH RESERVES FUND PLAN PURSUANT TO RULE 18F-3
November 9, 1999
1. The Plan. This Plan is the written multiple class plan for the INVESCO
Cash Reserves Fund (the "Fund") for INVESCO Distributors, Inc. ("IDI"),
the general distributor of shares of the Fund and INVESCO Funds Group,
Inc. ("INVESCO"), the investment adviser of the Fund. It is the
written plan contemplated by Rule 18f-3 (the "Rule") under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which the
Fund may issue multiple classes of shares. The terms and provisions of
this Plan shall be interpreted and defined in a manner consistent with
the provisions and definitions contained in the Rule.
2. Similarities and Differences Among Classes. The Fund agrees that one or
more classes of that Fund:
(1) may have a separate service plan or distribution and service
plan ("12b-1 Plan"), and shall pay all of the expenses incurred
pursuant to that arrangement, and may pay a different share of
expenses ("Class Expenses") if such expenses are actually incurred
in a different amount by that class, or if the class receives
services of a different kind or to a different degree than that of
other classes. Class Expenses are those expenses specifically
attributable to the particular class of shares, namely (a) 12b-1
Plan fees, (b) transfer and shareholder servicing agent fees and
administrative service fees, (c) shareholder meeting expenses, (d)
blue sky and SEC registration fees and (e) any other incremental
expenses subsequently identified that should be allocated to one
class which shall be approved by a vote of that Fund's Board of
Directors (the "Directors"). Expenses identified in Items (c)
through (e) may involve issues relating either to a specific class
or to the entire Fund; such expenses constitute Class Expenses only
when they are attributable to a specific class. Because Class
Expenses may be accrued at different rates for each class of the
Fund, dividends distributable to shareholders and net asset values
per share may differ for shares of different classes of the Fund.
<PAGE>
(2) shall have exclusive voting rights on any matters that relate solely
to that class's arrangements, including without limitation voting with
respect to a 12b-1 Plan for that class;
(3) shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the
interests of any other class;
(4) may have a different arrangement for shareholder services, including
different sales charges, sales charge waivers, purchase and redemption
features, exchange privileges, loan privileges, the availability of
certificated shares and/or conversion features; and
(5) shall have in all other respects the same rights and obligations as
each other class.
3. Allocations of Income, Capital Gains and Losses and Expenses. Income,
realized and unrealized capital gains and losses, and expenses of the Fund
other than Class Expenses allocated to a particular class shall be
allocated to each class on the basis of the net asset value of that class
in relation to the net asset value of the Fund.
4. Expense Waivers and Reimbursements. From time to time the Adviser may
voluntarily undertake to (i) waive any portion of the management fee
charged to the Fund, and/or (ii) reimburse any portion of the expenses
of the Fund or of one or more of its classes, but is not required to do
so or to continue to do so for any period of time. The quarterly
report by the Advisor to the Directors of Fund expense reimbursements
shall disclose any reimbursements that are not equal for all classes of
the Fund.
<PAGE>
5. Disclosure. The classes of shares to be offered by the Fund, and other
material distribution arrangements with respect to such classes, shall be
disclosed in the prospectus and/or statement of additional information
used to offer that class of shares. Such prospectus or statement of
additional information shall be supplemented or amended to reflect any
change(s) in classes of shares to be offered or in the material
distribution arrangements with respect to such classes.
6. Independent Audit. The methodology and procedures for calculating the net
asset value, dividends and distributions of each class shall be reviewed
by an independent auditing firm (the "Expert"). At least annually, the
Expert, or an appropriate substitute expert, will render a report to the
Funds on policies and procedures placed in operation and tests of
operating effectiveness as defined and described in SAS 70 of the AICPA.
7. Offers and Sales of Shares. INVESCO will maintain compliance standards as
to when each class of shares may appropriately be sold to particular
investors, and will require all persons selling shares of the Fund to
agree to conform to such standards.
8. Rule 12b-1 Payments. The Treasurer of INVESCO Money Market Funds,
Inc. (the "Company") shall provide to the Directors of the Company,
and the Directors shall review, at least quarterly, the written report
required by the Company's 12b-1 Plan. The report shall include
information on (i) the amounts expended pursuant to the 12b-1 Plan,
(ii) the purposes for which such expenditures were made and (iii) the
amount of INVESCO's unpaid distribution costs (if recovery of such
costs in future periods is permitted by that 12b-1 Plan), taking
into account 12b-1 Plan payments paid to INVESCO.
<PAGE>
9. Conflicts. On an ongoing basis, the Directors of the Company, pursuant to
their fiduciary responsibilities under the 1940 Act and otherwise, will
monitor the Fund for the existence of any material conflicts among the
interests of the classes. INVESCO will be responsible for reporting any
potential or existing conflicts to the Directors. In the event a conflict
arises, the Directors shall take such action as they deem appropriate.
10. Effectiveness and Amendment. This Plan takes effect for the Fund as of
the date of adoption shown below. This Plan has been approved by a
majority vote of the Board of the Company and of the Company's Board
members who are not "interested persons" (as defined in the 1940 Act)
and who have no direct or indirect financial interest in the operation
of the Plan or any agreements relating to the Plan (the "Independent
Directors") of the Fund at meetings called on this Plan. Prior to that
vote, (i) the Board was furnished by the methodology used for net asset
value and dividend and distribution determinations for the Fund, and
(ii) a majority of the Board and its Independent Directors determined
that the Plan as proposed to be adopted, including the expenses
allocation, is in the best interests of the Fund as a whole and to each
class of the Fund individually. Prior to any material amendment to the
Plan, the Board shall request and evaluate, and INVESCO shall furnish,
such information as may be reasonably necessary to evaluate such
amendment, and a majority of the Board and its Independent Directors
shall find that the Plan as proposed to be amended, including the
expense allocation, is in the best interest of each class, the Fund as
a whole and each class of the Fund individually. No material amendment
to the Plan shall be made by any Fund's Prospectus or Statement of
Additional Information or any supplement to either of the foregoing,
unless such amendment has first been approved by a majority of the
Fund's Board and its Independent Directors.
Adopted by the Board of INVESCO Money Market Funds, Inc. on November 9, 1999.
/s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
