As filed on October 2, 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. 42 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 29 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)
------------
Copies to:
Clifford J. Alexander, Esq. Ron M. Feiman, Esq.
Kirkpatrick & Lockhart LLP Mayer, Brown & Platt
1800 Masachusetts Avenue, N.W. 1675 Broadway
Second Floor New York, New York 10019-5820
Washington, D.C. 20036-1800
------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
___ on ______________, pursuant to paragraph (b)
X 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 | ______________, 2000
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YOU SHOULD KNOW WHAT INVESCO KNOWS (R)
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INVESCO MONEY MARKET FUNDS, INC.
INVESCO CASH RESERVES FUND - CLASS K
INVESCO TAX-FREE MONEY FUND - CLASS K
INVESCO U.S. GOVERNMENT MONEY FUND - CLASS K
THREE NO-LOAD CLASSES OF SHARES OF MUTUAL FUNDS DESIGNED FOR INVESTORS
SEEKING A HIGH LEVEL OF CURRENT INCOME, CONSISTENT WITH THE PRESERVATION OF
CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks...........3
Fund Performance.................................5
Fees And Expenses................................6
Investment Risks.................................8
Principal Risks Associated With The Funds........8
Fund Management..................................9
Portfolio Managers...............................9
Potential Rewards...............................10
Share Price.....................................10
How To Buy Shares...............................11
Your Account Services...........................14
How To Sell Shares..............................15
Dividends And Taxes.............................16
Financial Highlights............................18
No dealer, salesperson, 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 FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the
Funds. Together with our affiliated companies, we at INVESCO direct all aspects
of the management and sale of the Funds.
This Prospectus contains important information about the Funds' Class K
shares, which are sold to qualified retirement plans, retirement savings
programs, educational savings programs and wrap programs primarily through third
parties, such as brokers, banks and financial planners. Each Fund also offers
one or more additional classes of shares through separate prospectuses. Each of
the Fund's classes has varying expenses, with resulting 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 infromation about the other classes of shares,
contact INVESCO Distributors, Inc. ("IDI") at 1-800-___-____, or your broker,
bank or financial planner who is offering the Class K shares offered in this
Prospectus.
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
FACTORS COMMON TO ALL THE FUNDS
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Funds are money market funds. They invest 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 each Fund's portfolio
is 90 days or less.
The Funds operate 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 Funds' investments;
o maintaining a short average portfolio maturity;
o ensuring adequate diversification of both the issuers of the Funds'
investments and the guarantors of those investments, if any; and
o monitoring accurate pricing of the Funds' investments so unfairness does
not result from the use of the amortized cost method to value those
investments.
<PAGE>
The Funds are not intended for investors seeking capital appreciation.
While not intended as a complete investment program, any of these Funds may be a
valuable element of your investment portfolio.
An investment in any of the Funds is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or
any other government agency. Although the Funds seek to preserve the value of
your investment at $1.00 per share, there is always a risk that you may lose
money on your investment in a Fund.
[KEY ICON] INVESCO CASH RESERVES FUND - CLASS K
The Fund invests primarily in short-term debt securities issued by large
creditworthy corporations, banks and finance companies, as well as 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.
[KEY ICON] INVESCO TAX-FREE MONEY FUND - CLASS K
The Fund invests primarily in short-term municipal securities issued by state,
county, and city governments, including industrial development obligations and
private activity bonds which generally are not guaranteed by the governmental
entity that issues them. The interest on these securities is generally exempt
from federal income tax, although the interest may be included in your income if
you are subject to the Federal Alternative Minimum Tax. The interest on these
securities may be subject to state and/or local income taxes. These securities
include municipal notes, short-term municipal bonds, and variable rate debt
obligations. Municipal obligations may be purchased or sold on a delayed
delivery or a when-issued basis with settlement taking place in the future. The
Fund may purchase securities together with the right to resell them to the
seller at an agreed-upon price or yield within a specific time period prior to
the maturity date of the securities. This is commonly known as a "demand
feature" or a "put."
The rest of the Fund's investment portfolio may be invested in short-term
taxable instruments. These may include corporate debt securities, bank
obligations, commercial paper, U.S. government debt, and repurchase agreements.
The circumstances under which the Fund will invest in taxable securities include
but are not limited to: (a) pending investment of proceeds or sales of portfolio
securities; (b) pending settlement of portfolio securities; and (c) maintaining
liquidity to meet the need for anticipated redemptions. We seek to manage the
Fund so that substantially all of the income produced is exempt from federal
income tax when paid to you, although we cannot guarantee this result.
<PAGE>
[KEY ICON] INVESCO U.S. GOVERNMENT MONEY FUND - CLASS K
The Fund invests in debt securities issued or guaranteed by the U.S. government
or its agencies. Direct U.S. government obligations include Treasury bonds,
bills and notes, and are backed by the full faith and credit of the U.S.
Treasury. Federal agency securities are direct obligations of the issuing
agency, and may or may not be guaranteed by the U.S. government (GNMA, FNMA,
FHLMC). Treasury bills, notes, bonds and some agency securities are exempt from
state income tax.
[GRAPH ICON] FUND PERFORMANCE
Since the Funds' Class K shares were not offered until _______, 2000, the
bar charts below show the Funds' Investor Class shares actual yearly performance
for the years ended December 31 (commonly known as their "total return") over
the past decade or since inception. Investor Class shares are not offered in
this Prospectus. INVESTOR CLASS AND CLASS K 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 AN ASSET BASED SALES
CHARGE IN EXCESS OF 0.25% OF NET ASSETS; IF IT DID, THE TOTAL RETURN SHOWN WOULD
BE LOWER. The table below shows average annual total returns for various periods
ended December 31, 1999 for each Fund. To obtain a Fund's current 7-day yield
information, please call INVESCO at 1-800-525-8085. The information in the
charts and table provides some indication of the risks of investing in a
particular Fund by showing changes in the year to year performance of each Fund.
Remember, past performance does not indicate how a Fund will perform in the
future.
The three charts below contain the following plot points:
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CASH RESERVES FUND - INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
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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TAX-FREE MONEY FUND - INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
5.25% 3.87% 2.43% 1.88% 2.23% 3.28% 2.86% 3.03% 2.87% 2.58%
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Best Calendar Qtr. 12/90 1.32%
Worst Calendar Qtr. 3/94 0.43%
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<PAGE>
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U.S. GOVERNMENT MONEY FUND - INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(4)
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'92 '93 '94 '95 '96 '97 '98 '99
2.97% 2.36% 3.61% 5.16% 4.59% 4.70% 4.66% 4.28%
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Best Calendar Qtr. 6/95 1.32%
Worst Calendar Qtr. 3/93 0.55%
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<TABLE>
<CAPTION>
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AVERAGE ANNUAL TOTAL RETURN(1),(2),(3)
AS OF 12/31/99
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10 YEARS OR
1 YEAR 5 YEARS SINCE INCEPTION
<S> <C> <C> <C>
Cash Reserves Fund - Investor Class 4.38% 4.78% 4.64%
Tax-Free Money Fund - Investor Class 2.58% 2.92% 3.02%
U.S. Government Money Fund - Investor Class 4.28% 4.68% 4.10%(4)
</TABLE>
(1) Total return figures include reinvested dividends and the effect of each
Fund's expenses.
(2) The returns are for Investor Class shares that are not offered in this
Prospectus. Total returns of Class K shares will differ only to the extent
that the classes do not have the same expenses.
(3) Returns for Investor Class shares of Cash Reserves, Tax-Free Money and
U.S. Government Money Funds were ____%, ____% and ____%, respectively,
year-to-date as of the calendar quarter ended September 30, 2000.
(4) The Fund commenced investment operations on April 26, 1991.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
You pay no fees to purchase Fund shares, to exchange to another INVESCO
fund, or to sell your shares. Accordingly, no fees are paid directly from your
shareholder account.
<PAGE>
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
CASH RESERVES FUND - INVESTOR CLASS
Management Fees 0.40%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
====%
TAX-FREE MONEY FUND - INVESTOR CLASS
Management Fees 0.50%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
====%
U.S. GOVERNMENT MONEY FUND - INVESTOR CLASS
Management Fees 0.50%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
====%
(1) Because the Funds' Class K shares pay 12b-1 distribution and service fees
which are based upon each Fund's assets, if you own shares of a 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
Funds' Class K shares were not offered until December ___, 2000. Certain
expenses of each Fund will be absorbed voluntarily by INVESCO pursuant to
commitments between the Funds and INVESCO. These commitments may be changed
at any time following consultation with the board of directors.
EXAMPLE
The Example is intended to help you compare the cost of investing in the
Funds to the cost of investing in other mutual funds.
The Example assumes that you invested $10,000 in a Fund for the time
periods indicated and redeemed all of your shares at the end of each period. The
Example also assumes that your investment had a hypothetical 5% return each year
and that a Fund's operating expenses remained the same. Although the actual
costs and performance of a Fund may be higher or lower, based on these
assumptions your costs would have been:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Cash Reserves Fund - Class K $___ $___ $___ $_____
Tax-Free Money Fund - Class K $___ $___ $___ $_____
U.S. Government Money Fund - Class K $___ $___ $___ $_____
<PAGE>
[ARROWS ICON] INVESTMENT RISKS
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 these
Funds, are:
BEFORE INVESTING IN A 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.
NOT INSURED. Mutual funds are not insured by the FDIC or any other
government 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
Funds 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 Funds are designed to be only a part
of your personal investment plan.
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUNDS
You should consider the special factors associated with the policies
discussed below in determining the appropriateness of investing in a 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 a Fund's portfolio. When interest rates go up, the market values of
previously issued debt securities generally decline. Also, a Fund's new
investments are likely to be in debt securities paying lower rates than the rest
of a Fund's portfolio when interest rates go down. This reduces a Fund's yield.
A weak economy or strong stock market may cause interest rates to decline.
CREDIT RISK
The Funds invest 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
fluctuations.
<PAGE>
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 Funds have an investment goal of
current income, not capital appreciation. Therefore the Funds, by themselves,
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 a Fund.
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $___ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
THE INVESTMENT ADVISER
INVESCO, located at 7800 E. Union Avenue, Denver, Colorado, is the investment
adviser of the Funds. INVESCO was founded in 1932 and manages over $____ billion
for more than _________ shareholders of __ INVESCO mutual funds. INVESCO
performs a wide variety of other services for the Funds, 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 Funds' distributor and is
responsible for the sale of the Funds' shares.
INVESCO and IDI are subsidiaries of AMVESCAP PLC.
The following table shows the fees the Funds paid to INVESCO for its
advisory services in the fiscal year ended May 31, 2000:
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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%
Tax-Free Money Fund 0.50%
U.S. Government Money Fund 0.50%
[INVESCO ICON] PORTFOLIO MANAGERS
The following individuals are primarily responsible for the day-to-day
management of their respective Fund's or Funds' portfolio holdings:
RICHARD R. HINDERLIE, a vice president of INVESCO, is the portfolio manager
of Cash Reserves Fund and U.S. Government Money Fund. Prior to joining INVESCO
<PAGE>
in 1993, Dick was a portfolio manager with Bank Western. He holds an M.B.A. from
Arizona State University and a B.A. in Economics from Pacific Lutheran
University.
INGEBORG S. COSBY, a vice president of INVESCO, is the portfolio manager of
Tax-Free Money Fund. Inge joined INVESCO in 1985. She became assistant portfolio
manager of the Fund in 1987 and portfolio manager in 1992. Before joining
INVESCO, Inge was a portfolio manager assistant at First Affiliated Securities,
Inc.
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUNDS FOR LONG-TERM CAPITAL GROWTH PURPOSES.
The Funds offer 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 Funds seek 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 a 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 Funds are 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.
o are seeking federally tax-exempt income (Tax-Free Money Fund only).
o are seeking state tax-exempt income (U.S. Government Money Fund only).
You probably do not want to invest in the Funds if you are:
o primarily seeking long-term growth (although the Funds 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 market value of each investment in each 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 Funds are not priced on days when the NYSE is
closed, which generally is on weekends and national holidays in the U.S.
<PAGE>
THE COMBINATION OF THE AMORTIZED COST METHOD OF VALUATION AND THE DAILY
DECLARATION OF DIVIDENDS MEANS THAT EACH FUND'S NET ASSET VALUE IS EXPECTED TO
BE $1.00 PER SHARE, DESPITE CHANGES IN THE MARKET VALUE OF A FUND'S SECURITIES.
The Funds use the amortized cost method for establishing the value of their
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
Funds declare dividends daily, based upon the interest earned by the Funds'
investments that day. The combination of the amortized cost method of valuation
and the daily declaration of dividends means that each Fund's net asset value is
expected to be $1.00 per share, despite changes in the market value of a Fund's
securities. However, we cannot guarantee that each 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 a Fund. Your instructions must be
received by INVESCO no later than the close of the NYSE to effect transactions
at that day's NAV. If INVESCO hears from you after that time, your instructions
will be processed at the NAV calculated at the end of 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 Funds offer multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Funds. A share of each class represents
an identical interest in a Fund and has the same rights, except that each class
bears its own distribution and shareholder services 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 the other expenses payable by that class.
There is no charge to invest, exchange or redeem shares when you make
transactions directly through INVESCO. However, if you invest in a 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 and class or classes
of shares you wish to purchase. If you do not specify a fund or funds, your
initial investment and any subsequent purchases will automatically go into
INVESCO Cash Reserves Fund-Investor Class. You will receive a confirmation of
this transaction and may contact INVESCO to exchange into the fund you choose.
<PAGE>
INVESCO reserves the right to increase, reduce or waive each Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of that Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy Fund shares, including
purchases by exchange.
QUALIFIED RETIREMENT PLANS
Minimum Total Plan Assets $_________
Minimum Initial Investment $_________
Minimum Balance $_________
Minimum Subsequent Investment $_________
EXCHANGE POLICY. You may exchange your shares in any of the Funds for
shares of the same class in another INVESCO 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 each Fund per 12-month period.
o Each 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 a Fund or INVESCO. If you are already an INVESCO funds shareholder, the
Fund may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. Cash Reserves Fund has multiple classes of shares,
each class representing an interest in the same portfolio of investments. 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 the class, if any, (iii) the
<PAGE>
eligibility requirements that apply to purchases of a particular class, and (iv)
any services you may receive in making your investment decision. Your investment
representative can help you decide among the various classes. Please contact
your investment representative for several convenient ways to invest in the
Funds. Class K shares are available only to qualified retirement plans,
retirement savings programs, educational savings programs and wrap programs
through your investment representative.
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
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BY CHECK Please refer to Class K shares are
Mail to: investment mini- offered only to
INVESCO Funds Group, mums described on qualified retirement
Inc., P.O. Box ______ page ___. plans, retirement
Denver, CO ________. savings programs,
You may send your educational savings
check by overnight programs and wrap
courier to: programs.
7800 E. Union Ave.
Denver, CO 80237.
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BY WIRE Please refer to Class K shares are
You may send your investment mini- offered only to
payment by mums described on qualified retirement
bank wire (call page __. plans, retirement
1-800-___-____ for savings programs,
instructions). educational savings
programs and wrap
programs.
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BY EXCHANGE Please refer to Class K shares are
Between the same investment mini- offered only to
class of any two mums described on qualified retirement
INVESCO funds. Call page __. plans, retirement
1-800-525-8085 for savings programs,
prospectuses of educational savings
other INVESCO funds. programs and wrap
Exchanges may be programs.
made in writing or
by telephone. You
may also establish
an automatic
monthly exchange
service between two
INVESCO funds; call
us for further
details and the
correct form.
DISTRIBUTION EXPENSES. We have adopted a Plan and Agreement of Distribution
- Class K (commonly known as "12b-1 Plan") for the Funds' Class K shares. The
12b-1 fee paid by each Fund's Class K shares is used to pay distribution and
service fees to IDI for the sale and distribution of the Funds' shares and fees
for services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the Funds' Class K shares pay these fees
out of their assets on an ongoing basis, these fees increase the cost of your
investment.
<PAGE>
[INVESCO ICON] YOUR ACCOUNT SERVICES
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains
your current Fund holdings. The Funds do not issue share certificates.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you will receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of your INVESCO funds.
TRANSACTION CONFIRMATIONS. You will receive detailed confirmations of
individual purchases, exchanges and sales. If you choose certain recurring
transaction plans (for instance, EasiVest), your transactions are confirmed on
your quarterly Investment Summaries.
CHECKWRITING. If you have $1,000 or more in your account, you may redeem
shares of a Fund by check. We will provide personalized checks at no charge
within 30 days of your account opening. Checks may be made payable to any party
in any amount of $500 or more. Shares of the Fund will be redeemed to cover
payment of the check. INVESCO reserves the right to institute a charge for this
service upon notice to all shareholders. Further information about this option
may be obtained from INVESCO.
YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, INVESCOFUNDS.COM.
TELEPHONE TRANSACTIONS. You may exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account Application.
Unless you decline the telephone transaction privileges, when you fill out
and sign the new account Application, a Telephone Transaction Authorization
Form, or use your telephone transaction privileges, you lose certain rights if
someone gives fraudulent or unauthorized instructions to INVESCO that result in
a loss to you. In general, if INVESCO has followed reasonable procedures, such
as recording telephone instructions and sending written transaction
confirmations, INVESCO is not liable for following telephone instructions that
it believes to be genuine. Therefore, you have the risk of loss due to
unauthorized or fraudulent instructions.
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 required 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 all your required
mailings.
IRAS AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for IRAs and many other types of tax-deferred retirement plans. Please
<PAGE>
call INVESCO for information and forms to establish or transfer your existing
retirement plan or account.
[INVESCO ICON] HOW TO SELL SHARES
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Funds 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 and specify the class of shares. 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 telephone.
INVESCO usually forwards 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 12 business days.
METHOD REDEMPTION MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY TELEPHONE $250 (or, if less, INVESCO's telephone
Call us toll-free full liquidation redemption
at: of the account) privileges may be
1-800-___-____. for a redemption modified or
check. terminated in the
future at INVESCO's
discretion. The
maximum amount
which may be
redeemed by
telephone is
generally $25,000.
<PAGE>
METHOD REDEMPTION MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
IN WRITING Any amount. The redemption
Mail your request to request must be
INVESCO Funds Group, signed by all
Inc., registered account
P.O. Box _______, owners. Payment
Denver, CO will be mailed to
80217-____. your address as it
You may also send appears on
your request by INVESCO's records,
overnight courier to or to a bank
7800 E. Union Ave., designated by you
Denver, CO 80237. in writing.
--------------------------------------------------------------------------------
BY CHECK $500 per check. Personalized checks
are available from
INVESCO at no charge
within 30 days of
your account opening
upon request. Checks
may be made payable
to any party.
--------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered
Mail your request to account owners must
INVESCO Funds Group, sign the request,
Inc. P.O. Box ____, with signature
Denver, CO guarantees from an
80217-_____. eligible guarantor
financial
institution, such
as a commercial
bank or a
recognized national
or regional
securities firm.
[INVESCO ICON] DIVIDENDS AND TAXES
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY
OR TAXPAYER IDENTIFICATION NUMBER. WE WILL PROVIDE YOU WITH DETAILED INFORMATION
EVERY YEAR ABOUT YOUR DIVIDENDS.
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 Funds.
Each Fund earns ordinary or investment income from interest on its
investments. The Funds expect 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 one of the Funds, and that income is paid by the
Fund to you once a month. Dividends are automatically reinvested in additional
shares of a 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 Cash Reserves and U.S. Government Money
Funds in your taxable income for federal, state and local income tax purposes.
<PAGE>
Dividends and other distributions usually are taxable whether you receive them
in cash or automatically reinvest them in shares of the distributing Fund or
other INVESCO funds.
Substantially all of the dividends that you receive from Tax-Free Money
Fund are expected to be exempt from federal income taxes, but there is no
assurance that this will be the case. For the fiscal year ended May 31, 2000,
97.49% of the dividends declared by this Fund were exempt from federal income
taxes. There is no assurance that this will be the case in future years.
Dividends that you receive from Tax-Free Money Fund may be subject to state and
local taxes, or to the federal Alternative Minimum Tax.
If you have not provided INVESCO with complete, correct tax information,
the Funds are required by law to withhold 31% of your distributions and any
money that you receive from the sale of shares of the Funds as a backup
withholding tax.
Each year, we will provide you with detailed information about your
dividends, and the tax status of your dividends, that is required for you to
complete your yearly tax filings.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
financial performance of Investor Class shares of each Fund for the past five
years. Certain information reflects financial results for a single Investor
Class share. Since Class K 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 the Investor Class shares of a 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 2000 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
-------------------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
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 0.05 0.04 0.05 0.05 0.05
==========================================================================================
Net Asset Value-End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================
TOTAL RETURN 4.87% 4.45% 4.82% 4.69% 5.01%
RATIOS
Net Assets-End of Period
($000 Omitted) $912,135 $814,158 $766,670 $661,648 $587,277
Ratio of Expenses to
Average Net Assets(a)(b) 0.91% 0.90% 0.91% 0.86% 0.87%
Ratio of Net Investment
Income to Average Net
Assets(a) 4.75% 4.36% 4.76% 4.62% 4.86%
</TABLE>
(a) Various expenses of the Class were voluntarily absorbed by INVESCO for the
years ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had
not been absorbed, ratio of expenses to average net assets would have been
0.94%, 0.91%, 0.93%, 0.92% and 0.92%, respectively, and ratio of net
investment income to average net assets would have been 4.72%, 4.35%, 4.74%,
4.56% and 4.81%, respectively.
(b) Ratio is based on total expenses of the Class, less expenses absorbed by
INVESCO, which is before any expense offset arrangements (which may include
custodian fees).
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
-------------------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
TAX-FREE MONEY 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 0.03 0.03 0.03 0.03 0.03
==========================================================================================
Net Asset Value-End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================
TOTAL RETURN 2.86% 2.63% 3.03% 2.90% 3.08%
RATIOS
Net Assets-End of Period
($000 Omitted) $40,396 $50,697 $54,801 $47,577 $51,649
Ratio of Expenses to
Average Net Assets(a)(b) 0.87% 0.77% 0.76% 0.76% 0.77%
Ratio of Net Investment
Income to Average Net
Assets(a) 2.82% 2.61% 3.01% 2.86% 3.03%
</TABLE>
(a) Various expenses of the Fund were voluntarily absorbed by INVESCO for the
years ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had
not been absorbed, ratio of expenses to average net assets would have been
1.11%, 1.02%, 1.06%, 1.01% and 1.05%, respectively, and ratio of net
investment income to average net assets would have been 2.58%, 2.36%, 2.71%,
2.61% and 2.75%, respectively.
(b) Ratio is based on total expenses of the Class, less expenses absorbed by
INVESCO, which is before any expense offset arrangements (which may include
custodian fees).
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
-------------------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT MONEY 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 0.05 0.04 0.05 0.04 0.05
==========================================================================================
Net Asset Value-End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================
TOTAL RETURN 4.74% 4.36% 4.74% 4.57% 4.90%
RATIOS
Net Assets-End of Period
($000 Omitted) $86,060 $91,509 $73,918 $66,451 $79,392
Ratio of Expenses to
Average Net Assets(a)(b) 0.86% 0.86% 0.87% 0.86% 0.87%
Ratio of Net Investment
Income to Average Net
Assets(a) 4.63% 4.28% 4.72% 4.51% 4.78%
</TABLE>
(a) Various expenses of the Fund were voluntarily absorbed by INVESCO for the
years ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had
not been absorbed, ratio of expenses to average net assets would have been
1.16%, 1.08%, 1.12%, 1.06% and 1.05%, respectively, and ratio of net
investment income to average net assets would have been 4.33%, 4.06%, 4.47%,
4.31% and 4.59%, respectively.
(b) Ratio is based on total expenses of the Class, less expenses absorbed by
INVESCO, which is before any expense offset arrangements (which may include
custodian fees).
<PAGE>
____________, 2000
INVESCO MONEY MARKET FUNDS, INC.
INVESCO CASH RESERVES FUND-CLASS K
INVESCO TAX-FREE MONEY FUND-CLASS K
INVESCO U.S. GOVERNMENT MONEY FUND-CLASS K
You may obtain additional information about the Funds from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Funds'
anticipated investments and operations, the Funds also prepare annual and
semiannual reports that detail the Funds' actual investments at the report date.
These reports include discussion of each Fund's recent performance, as well as
market and general economic trends affecting each Fund's performance. The annual
report also includes the report of the Funds' independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated _________, 2000 is a
supplement to this Prospectus, and has detailed information about the Funds and
their investment policies and practices. A current SAI for the Funds is on file
with the Securities and Exchange Commission and is incorporated into 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 Funds may be accessed through the
INVESCO Web site at invescofunds.com. In addition, the Prospectus, SAI, annual
report and semiannual report of the Funds 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 1-800-525-8085. 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
Funds are 811-2606 and 002-55079.
811-2606
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INVESCO MONEY MARKET FUNDS, INC.
INVESCO Cash Reserves Fund - Investor Class, Class A, B C and Class K
INVESCO Tax-Free Money - Investor Class and Class K
INVESCO U.S. Government Money Fund - Investor Class and Class K
Address: Mailing Address:
7800 E. Union Ave., Denver, CO 80237 P.O. Box 173706, Denver, CO 80217-3706
Telephone:
In continental U.S., 1-800-328-2234
___________, 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, 2000,
a Prospectus for the Class A, B and C shares of INVESCO Cash Reserves Fund dated
September 30, 2000 and a Prospectus for the Class K shares of INVESCO Cash
Reserves, INVESCO Tax-Free Money and INVESCO U.S. Government Money Funds dated
________, 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 for Investor
Class, 1-800-328-2234 for Class A, B and C and 1-800-___-____ for Class K. The
Prospectus of the Investor Class shares of the Funds and the Prospectus of the
Class A, B and C shares of INVESCO Cash Reserves Fund are also available through
the INVESCO Web site at invescofunds.com.
<PAGE>
TABLE OF CONTENTS
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . .24
Investments, Policies and Risks. . . . . . . . . . . . . . . . .24
Investment Restrictions. . . . . . . . . . . . . . . . . . . . .31
Management of the Funds . . . . . . . . . . . . . . . . . . . .34
Other Service Providers. . . . . . . . . . . . . . . . . . . . .59
Brokerage Allocation and Other Practices . . . . . . . . . . . .60
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . .61
Tax Consequences of Owning Shares of a Fund. . . . . . . . . . .62
Performance . . . . . . . . . . . . . . . . . . . . . . . . . .63
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . .66
Financial Statements . . . . . . . . . . . . . . . . . . . . . .66
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . .67
<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, Class A, Class B, Class C and Class K, INVESCO Tax-Free Money
Fund - Investor Class and Class K and INVESCO U.S. Government Money Fund -
Investor Class and Class K (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.
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 Service, Inc. ("Moody's")) that
rate companies on their securities; they are not guarantees. See Appendix A for
additional descriptions of the Funds' investments, as well as discussions of the
degrees of risk involved in such investments.
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
certificates of deposit 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
<PAGE>
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 Funds Group, Inc. ("INVESCO"), the Funds' investment adviser, 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
in an interest-bearing form 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
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.
<PAGE>
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 (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.
The principal risk of investing in illiquid securities is that a Fund may be
<PAGE>
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,
in most cases, revenue bonds that generally are secured by a lease with a
<PAGE>
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 obligation 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.
Municipal obligations purchased by the Fund must be rated by at least two
<PAGE>
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 INVESCO 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
necessary for meeting redemption requests of shareholders. Interest earned by
the Funds on repurchase agreements would not be tax-exempt, and thus would
<PAGE>
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.
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
<PAGE>
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
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
<PAGE>
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%
Corporate Debt in the highest
short-term
rating category
-------------------------------------------------------------------------------------------------------
U.S. Government
Obligations No Limit Up to 20%, includ- No Limit
ing private activity
bonds and other tax-
able instruments
-------------------------------------------------------------------------------------------------------
Municipal Obligations At least 80%
-------------------------------------------------------------------------------------------------------
Private Activity Bonds and Up to 20%, includ-
taxable securities ing 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 Advantage Series Funds, Inc.
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.
As of October 31, 2000, INVESCO managed __ mutual funds having combined assets
of over $____ billion, on behalf of more than _________ 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 $___ billion in assets under management as of September 30, 2000.
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
<PAGE>
and processing of distributions.
INVESCO, Inc., Atlanta, Georgia, manages individualized investment
portfolios of equity, fixed-income and real estate securities for
institutional clients, including mutual funds and 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, EC2M 4YR, England.
<PAGE>
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
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;
<PAGE>
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, 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, 2000, 1999 and 1998, the Funds paid
INVESCO advisory fees in the dollar amounts shown below. Since Cash Reserves
Fund's Class A and B shares and the Funds' Class K shares were not offered until
August 15, 2000 and _________, 2000, respectively no advisory fees were paid
with respect to those classes of 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
Investor Class Fee Dollars Reimbursements Limitations
-------------- ----------- -------------- -----------
Cash Reserves Fund
May 31, 2000 $3,202,302 $301,539 0.90%
May 31, 1999 3,157,241 87,157 0.90%
May 31, 1998 2,789,986 140,835 0.90%
Tax-Free Money Fund
May 31, 2000 $ 207,298 $ 98,939 0.85%
May 31, 1999 246,764 123,371 0.85%(1)
May 31, 1998 238,537 144,423 0.75%
U.S. Government Money Fund
May 31, 2000 $ 432,748 $256,535 0.85%
May 31, 1999 450,781 195,925 0.85%
May 31, 1998 369,593 187,969 0.85%
<PAGE>
Advisory Total Expense Total Expense
Class C Fee Dollars Reimbursements Limitations
------- ----------- -------------- -----------
Cash Reserves Fund(2)
May 31, 2000 $ 4,442 N/A 1.90%
May 31, 1999 N/A N/A N/A
May 31, 1998 N/A N/A N/A
(1) 0.75% prior to May 13, 1999.
(2) For the period February 15, 2000, commencement of the sale of Class C
shares, through May 31, 2000.
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 June 1, 2000 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 June 1,
2000 with the Company.
The Transfer Agency Agreement provides that each Fund pays INVESCO an annual fee
of $29.50 per shareholder account, or, where applicable, per participant in an
omnibus account. Prior to June 1, 2000 this fee was $27.00. 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.
<PAGE>
FEES PAID TO INVESCO
During the fiscal years ended May 31, 2000, 1999 and 1998, the Funds paid
INVESCO the following fees in the dollar amounts shown below (prior to the
absorption of certain Fund expenses by INVESCO). Since Cash Reserves Fund's
Class A and B shares and the Funds' Class K shares were not offered until August
15, 2000 and ________, 2000, respectively no fees were paid with respect to
those Classes of that Fund for the periods shown below.
Administrative Transfer
Investor Class Advisory Services Agency
-------------- -------- -------- ------
Cash Reserves Fund
May 31, 2000 $3,202,302 $370,493 $3,312,180
May 31, 1999 3,157,241 140,326 3,167,337
May 31, 1998 2,789,986 109,499 2,779,935
Tax-Free Money Fund
May 31, 2000 $ 207,298 $ 28,657 $ 123,690
May 31, 1999 246,764 18,152 138,487
May 31, 1998 238,537 17,156 151,577
U.S. Government Money Fund
May 31, 2000 $ 432,748 $ 48,947 $ 391,337
May 31, 1999 450,781 24,949 363,724
May 31, 1998 369,593 21,088 303,712
Administrative Transfer
Investor Class Advisory Services Agency
-------------- -------- -------- ------
Cash Reserves Fund(1)
May 31, 2000 $4,442 $519 $592
May 31, 1999 N/A N/A N/A
May 31, 1998 N/A N/A N/A
(1) For the period February 15, 2000, commencement of the sale of Class C
shares, through May 31, 2000.
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
internalcontrols, the responsibilities and fees of the independent accountants,
and other matters.
<PAGE>
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 derivative 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.
The Company has a legal committee, an insurance committee and a compensation
committee. These committees meet when necessary to review legal, insurance and
compensation matters of importance to the directors of the Company.
The Company has a nominating committee. The committee meets periodically to
review and nominate candidates for positions as independent directors to fill
vacancies on the board of directors.
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 Advantage Series Funds, Inc.
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>
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
Mark H. Williamson(2)(3)(10) President, Chief President, Chief Executive
7800 E. Union Avenue Executive Officer Officer and Chairman of
Denver, Colorado and Chairman of the the Board of INVESCO Funds
Age: 49 Board Group, Inc.; President,
Chief Executive Officer
and Chairman of the Board
of INVESCO Distributors,
Inc.; President, Chief
Operating Officer and
Chairman of the Board
of INVESCO Global
Health Sciences Fund;
formerly, Chairman and
Chief Executive Officer
of NationsBanc Advisors,
Inc.; formerly, Chairman
of NationsBanc
Investments, Inc.
Fred A. Deering(1)(2)(7)(8) Vice Chairman of the Trustee of INVESCO Global
Security Life Center Board Health Sciences Fund;
1290 Broadway formerly, Chairman of the
Denver, Colorado Executive Committee and
Age: 72 Chairman of the Board of
Security Life of Denver
Insurance Company;
Director of ING American
Holdings Company and First
ING Life Insurance
Company of New York.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years
Victor L. Andrews, Director Professor Emeritus,
Ph.D.(4)(6)(10) Chairman Emeritus and
34 Seawatch Drive Chairman of the CFO
Savannah, Georgia Roundtable of the
Age: 70 Deparment of Finance of
Georgia State University;
President, Andrews
Financial Associates,
Inc. (consulting firm);
Director of The Sheffield
Funds, Inc.; formerly,
member of the faculties of
the Harvard Business
School and the Sloan
School of Management of
MIT.
Bob R. Baker(2)(4)(5)(9) Director Consultant (since 2000);
37 Castle Pines Dr., North formerly, President and
North Castle Rock, Colorado Chief Executive Officer
Age: 64 (1989 to 2000) of AMC
Cancer Research Center,
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.
Charles W. Brady(3) Director Chief Executive Officer
1315 Peachtree St., N.E. and Chairman of AMVESCAP
Atlanta, Georgia PLC, London, England and
Age: 65 various subsidiaries of
AMVESCAP PLC; Trustee of
INVESCO Global Health
Sciences Fund.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years
Lawrence H. Budner(1)(5)(10) Director Trust Consultant; prior
7608 Glen Albens Circle to June 30, 1987, Senior
Dallas, Texas Vice President and Senior
Age: 70 Trust Officer of
InterFirst Bank, Dallas,
Texas.
James T. Bunch(4)(5)(9) Director Principal and Founder of
3600 Republic Plaza Green Manning & Bunch
370 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, Director Self-employed (since
Ph.D.(4)(6)(9) 1993); Distinguished
3401 N. Fairfax Senior Fellow and
Arlington, VA Director, Regulatory
Age: 55 Studies Program, Mercatus
Center George Mason
University, VA; formerly,
Chairman, Commodity
Futures Trading
Commission; Administrator
for Information and
Regulatory Affairs at the
Office of Management and
Budget; Also, Director of
Enron Corporation, IBP,
Inc., State Farm Insurance
Company, International
Republic Institute, and
the Texas Public Policy
Foun dation; formerly,
Director of the Chicago
Mercantile Exchange (1994
to 1999), Kinetic
Concepts, Inc. (1996 to
1997), and the Independent
Women's Forum (1994 to
1999).
Richard W. Healey(3) Director Director and Senior Vice
7800 E. Union Avenue President of INVESCO Funds
Denver, Colorado Group, Inc.; Director and
Age: 46 Senior Vice President of
INVESCO Distributors,
Inc.; formerly, Senior
Vice President of GT
Global-North America
(1996 to 1998) and The
Boston Company (1993 to
1996).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years
Gerald J. Lewis(1)(6)(7) Director Chairman of Lawsuit
701 "B" Street Resolution Services, San
Suite 2100 Diego, California since
San Diego, California 1987; Director of General
Age: 67 Chemical Group, Inc.,
Hampdon, New Hampshire,
since 1996; formerly,
Associate Justice of the
California Court of
Appeals; Director of
Wheelabrator Technologies,
Inc., Fisher Scientific,
Inc., Henley
Manufacturing, Inc., and
California Coastal
Properties, Inc.; Of
Counsel, Latham & Watkins,
San Diego, California
(1987 to 1997).
John W. McIntyre(1)(2)(5)(7) Director Retired. Formerly, Vice
7 Piedmont Center Chairman of the Board of
Suite 100 Directors of The Citizens
Atlanta, Georgia and Southern Corporation
Age: 70 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, Director Retired. Formerly,
Ph.D.(4)(6)(9)(10) Chairman of the Board
345 Poorman Road (1987 to 1994), Chief
Boulder, Colorado Executive Officer 1982 to
Age: 58 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 Funds
Age: 53 Group, Inc.; Senior Vice
President, Secretary and
General Counsel of INVESCO
Distributors, Inc.;
Secretary of INVESCO
Global Health Sciences
Fund; formerly, General
Counsel of INVESCO
Trust Company (1989 to
to 1998) and employee of
a U.S. regulatory
agency, Washington, D.C.
(1973 to 1989).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years
Ronald L. Grooms Chief Accounting Senior Vice President,
7800 E. Union Avenue Officer, Chief Finan- Treasurer and Director
Denver, Colorado cial Officer and of INVESCO Funds Group,
Age: 53 Treasurer Inc.; Senior Vice
President, Treasurer and
Director of INVESCO
Distributors, Inc.;
Treasurer and Principal
Financial and Accounting
Officer of INVESCO Global
Health Sciences Fund;
formerly, Senior Vice
President and Treasurer
of INVESCO Trust Company
(1988 to 1998).
William J. Galvin, Jr. Assistant Secretary Senior Vice President and
7800 E. Union Avenue Assistant Secretary of
Denver, Colorado INVESCO Funds Group, Inc.;
Age: 43 Senior Vice President and
Assistant Secretary of
INVESCO Distributors,
Inc.; formerly, Trust
Officer of INVESCO Trust
Company (1995 to 1998).
Pamela J. Piro Assistant Treasurer Vice President and
7800 E. Union Avenue Assistant Treasurer of
Denver, Colorado INVESCO Funds Group, Inc.;
Age: 40 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).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years
Alan I. Watson Assistant Secretary Vice President of INVESCO
7800 E. Union Avenue Funds Group, Inc.;
Denver, Colorado formerly, Trust Officer of
Age: 58 INVESCO Trust Company.
Judy P. Wiese Assistant Secretary Vice President and
7800 E. Union Avenue Assistant Secretary of
Denver, Colorado INVESCO Funds Group,
Age: 52 Inc.; Assistant
Secretary of INVESCO
Distributors, Inc.;
formerly, Trust Officer
of INVESCO Trust Company.
(1) Member of the audit committee of the Company.
(2) 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.
(3) These directors are "interested persons" of the Company as defined in the
1940 Act.
(4) Member of the management liaison committee of the Company.
(5) Member of the brokerage committee of the Company.
(6) Member of the derivatives committee of the Company.
(7) Member of the legal committee of the Company.
(8) Member of the insurance committee of the Company.
(9) Member of the nominating committee of the Company.
(10) Member of the compensation 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
<PAGE>
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, 2000.
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.
--------------------------------------------------------------------------------
Name of Person Aggregate Benefits Estimated Total Compensa-
and Position Compensation Accrued As Annual tion From
From Part of Benefits INVESCO Complex
Company(1) Company Upon Paid To
Expenses(2) Retirement(3) Directors(7)
--------------------------------------------------------------------------------
Fred A. Deering, $4,479 $2,543 $1,241 $107,050
Vice Chairman of
the Board
--------------------------------------------------------------------------------
Victor L. Andrews 4,390 2,436 1,437 84,700
--------------------------------------------------------------------------------
Bob R. Baker 4,360 2,175 1,926 82,850
--------------------------------------------------------------------------------
Lawrence H. Budner 4,332 2,436 1,437 82,850
--------------------------------------------------------------------------------
James T. Bunch(4) 1,962 0 0 0
--------------------------------------------------------------------------------
Daniel D. Chabris(5) 2,250 2,428 1,182 34,000
--------------------------------------------------------------------------------
Wendy L. Gramm 4,277 0 0 81,350
--------------------------------------------------------------------------------
Kenneth T. King(5) 4,662 2,574 1,182 85,850
--------------------------------------------------------------------------------
Gerald J. Lewis(4) 1,986 0 0 0
--------------------------------------------------------------------------------
John W. McIntyre 4,450 671 1,437 108,700
--------------------------------------------------------------------------------
Larry Soll 4,315 0 0 100,900
--------------------------------------------------------------------------------
Total $41,463 $15,263 $9,842 $768,250
--------------------------------------------------------------------------------
% of Net Assets 0.0042%(6) 0.0016%(6) 0.0024%(7)
-------------------------------------------------------------------------------
(1) The vice chairman of the board, the chairs 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
<PAGE>
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. These estimated benefits assume retirement at age 72. 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. Mr. McIntyre became eligible to participate
in the Defined Benefit Deferred Compensation Plan as of November 1, 1998, and
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, 2000.
(7) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1999.
Messrs. Brady, Healey 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), payment of a basic benefit for one year (the "First
Year Retirement 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 First Year Retirement 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 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
<PAGE>
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. Each of the Independent
Directors has agreed to invest a minimum of $100,000 of his or her own resources
in shares of the INVESCO Funds. Compensation contributed to a deferred
compensation plan may constitute all or a portion of this $100,000 commitment.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of ________, 2000, no persons owned more than 5% of the outstanding shares of
a Fund. This level of share ownership is considered to be a "principal
shareholder" relationship with a Fund under the 1940 Act.
As of ________, 2000, officers and directors of the Company, as a group,
beneficially owned less than __% of any Fund's outstanding shares.
DISTRIBUTOR
INVESCO Distributors, Inc. ("IDI"), a wholly owned subsidiary of INVESCO, is the
distributor of the Funds. IDI bears all expenses, including the cost of printing
and distributing prospectuses, incident to marketing of the Funds' shares,
except for such distribution expenses as are paid out of Fund assets under the
Company's Plans of Distribution (the "Plans"), which have been adopted by Cash
Reserves Fund - Classes A, B, C and K pursuant to Rule 12b-1 under the 1940 Act.
CLASS A. The Company has adopted a Master Distribution Plan and Agreement -
Class A pursuant to Rule 12b-1 under the 1940 Act relating to the Class A shares
of Cash Reserves Fund (the "Class A Plan"). Under the Class A Plan, Class A
shares of Cash Reserves Fund pay compensation to IDI at an annual rate of 0.35%
per annum of the average daily net assets attributable to Class A shares for the
purpose of financing any activity which is primarily intended to result in the
sale of Class A shares. During any period in which Cash Reserves Fund is closed
due to high net asset levels, the Class A shares of the Fund will reduce this
payment of 0.35% to 0.25% per annum.
<PAGE>
The Class A Plan is designed to compensate IDI, on a monthly basis, for certain
promotional and other sales-related costs, and to implement a dealer incentive
program which provides for periodic payments to selected dealers who furnish
continuing personal shareholder services to their customers who purchase and own
Class A shares of Cash Reserves Fund. Payments can also be directed by IDI to
selected institutions that have entered into service agreements with respect to
Class A shares of Cash Reserves Fund and that provide continuing personal
services to their customers who own Class A shares of the Fund. The service fees
payable to selected institutions are calculated at the annual rate of 0.25% of
the average daily net asset value of those Fund shares that are held in such
institutions' customers' accounts.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own Class A shares of Cash Reserves
Fund, in amounts up to 0.25% of the average daily net assets of the Class A
shares of the Fund attributable to the customers of such dealers or financial
institutions, are characterized as service fees. Payments to dealers and other
financial institutions in excess of such amount and payments to IDI would be
characterized as an asset-based sales charge pursuant to the Class A Plan. The
Class A Plan also imposes a cap on the total amount of sales charges, including
asset-based sales charges, that may be paid by the Company with respect to Class
A shares of Cash Reserves Fund.
CLASS B. The Company has also adopted a Master Distribution Plan and Agreement -
Class B pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of
Cash Reserves Fund (the "Class B Plan"). Under the Class B Plan, Class B shares
of Cash Reserves Fund pay compensation to IDI at an annual rate of 1.00% per
annum of the average daily net assets attributable to Class B shares for the
purpose of financing any activity which is primarily intended to result in the
sale of Class B shares. Of such amount, Cash Reserves Fund pays a service fee of
0.25% of the average daily net assets attributable to Class B shares to selected
dealers and other institutions which furnish continuing personal shareholder
services to their customers who purchase and own Class B shares. Any amounts not
paid as a service fee would constitute an asset-based sales charge. The Class B
Plan imposes a cap on the total amount of sales charges, including asset-based
sales charges, that may be paid by the Company with respect to the Class B
shares of Cash Reserves Fund.
CLASS C. The Company has also adopted a Master Distribution Plan and Agreement -
Class C 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 Cash Reserves 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 for periodic payments to selected dealers who
furnish continuing personal shareholder services to their customers who purchase
and own Class C shares of Cash Reserves Fund. Payments can also be directed by
IDI to selected institutions that have entered into service agreements with
respect to Class C shares of Cash Reserves Fund and that provide continuing
personal services to their customers who own Class C shares of Cash Reserves
Fund.
<PAGE>
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 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 service fees. Payments to dealers and other
financial institutions in excess of such amount and payments to IDI would be
characterized as an asset-based sales charge pursuant to the Class C Plan. The
Class C Plan also imposes a cap on the total amount of sales charges, including
asset-based sales charges, that may be paid by the Company with respect to the
Class C shares of Cash Reserves 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.
CLASS K. The Company has adopted a Plan and Agreement of Distribution - Class K
pursuant to Rule 12b-1 under the 1940 Act relating to Class K shares (the "Class
K Plan"). Under the Class K Plan, Class K shares of the Funds pay compensation
to IDI at an annual rate of 0.45% of average net assets attributable to Class K
shares for the purpose of financing any activity which is primarily intended to
result in the sale of Class K shares. The Class K Plan is designed to compensate
IDI for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class K shares of a Fund. Payments can also be directed by
IDI to selected institutions that have entered into service agreements with
respect to Class K shares of each Fund and that provide continuing personal
services to their customers who own such Class K shares of a Fund.
Of the aggregate amount payable under the Class K Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own Class K shares of a Fund, in
amounts of up to 0.20% of the average daily net assets of the Class K shares of
the Fund attributable to the customers of such dealers or financial
institutions, are characterized as a service fee.
IDI may pay investment dealers or other financial service firms for share
purchases (measured on an annual basis) of Class K shares of all Funds sold at
net asset value to an employee benefit plan as follows: 1.00% of the first $2
million of such purchases, plus 0.80% of the next $1 million of such purchases,
<PAGE>
plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in
excess of $20 million of such purchases.
ALL PLANS. Activities appropriate for financing under the Plans 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; and supplemental payments
to dealers and other institutions such as asset-based sales charges or as
payments of service fees under shareholder service arrangements. Pursuant to an
incentive program, IDI may enter into agreements ("Shareholder Service
Agreements") with investment dealers selected from time to time by IDI for the
provision of distribution assistance in connection with the sale of Cash
Reserves Fund's shares to such dealers' customers, and for the provision of
continuing personal shareholder services to customers who may from time to time
directly or beneficially own shares of the Fund. The distribution assistance and
continuing personal shareholder services to be rendered by dealers under the
Shareholder Service Agreements may include, but shall not be limited to, the
following: preparing and distributing advertising materials and sales
literature; answering routine customer inquiries concerning the Fund; assisting
customers in changing dividend options, account designations and addresses, and
in enrolling in any of several special investment plans in connection with the
purchase of the Fund's shares; assisting in the establishment and maintenance of
customer accounts and in arranging for any capital gains distributions
automatically to be invested in the Fund's shares; and providing such other
information and services as the Fund or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased Fund shares. Services
provided pursuant to Shareholder Service Agreements with banks may include some
or all of the following: answering shareholder inquiries regarding the Fund and
the Company; performing sub-accounting; establishing and maintaining shareholder
accounts and records; processing customer purchase and redemption transactions;
providing periodic statements showing a shareholder's account balance and the
integration of such statements with those of other transactions and balances in
the shareholder's other accounts serviced by the bank; forwarding applicable
prospectuses, proxy statements, reports and notices to bank clients who hold
Fund shares; and such other administrative services as the Fund reasonably may
request, to the extent permitted by applicable statute, rule or regulation.
Similar agreements may be permitted under the Plans for institutions which
provide recordkeeping for and administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation
for selling shares of Cash Reserves Fund may receive different compensation for
selling shares of different classes.
Under a Shareholder Service Agreement, Cash Reserves Fund agrees to pay fees
periodically to selected dealers and other institutions that render the
foregoing services to their customers. The fees payable under a Shareholder
Service Agreement generally will be calculated at the end of each payment period
for each business day of Cash Reserves Fund during such period at the annual
rate of 0.35% and 1.00% of the average daily net asset value of Cash Reserves
<PAGE>
Fund's shares with respect to Class A shares and Class B and C shares,
respectively. Fees calculated in this manner shall be paid only to those
selected dealers or other institutions who are dealers or institutions of record
at the close of business on the last business day of the applicable payment
period for the account in which Cash Reserves Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by the rules of the National Association of Securities Dealers, Inc. ("NASD").
The Plans conform 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 shares of Cash Reserves Fund to
no more than 0.25% per annum of the average daily net assets of the applicable
class of 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 Cash Reserves Fund and
its shares.
Each Plan provides that no provision of the Plan will be interpreted to prohibit
payments during periods when sales of shares of Cash Reserves Fund have been
discontinued, suspended or otherwise limited.
Under the Plans, certain financial institutions which have entered into services
agreements and which sell shares of Cash Reserves Fund on an agency basis may
receive payments from the Fund pursuant to the respective Plan. IDI does not act
as principal, but rather as agent for the Fund, in making dealer incentive and
shareholder servicing payments under the Plans. These payments are an obligation
of Cash Reserves Fund and not of IDI.
For the fiscal period ended May 31, 2000, with respect to its Class C shares,
Cash Reserves Fund paid IDI under the Plan $7,182. In addition, as of May 31,
2000, $3,757 of additional distribution accruals had been incurred by the Class
C shares of Cash Reserves Fund and will be paid during the fiscal year ended May
31, 2001. Since the Funds' Class A and B shares were not offered until August
15, 2000, the Funds' Class A and B shares made no payment to IDI under the Plans
during the year ended May 31, 2000.
An estimate by category of actual fees paid by the Cash Reserves Fund under the
Class C Plan during the fiscal period ended May 31, 2000 were allocated as
follows:
Advertising $ 0
Sales literature, printing and postage $ 0
Direct mail $ 0
Public relations/promotion $ 0
Compensation to securities dealers and other organizations $ 7,182
Marketing personnel $ 0
The Plans require IDI to provide, at least quarterly, the board of directors
with a written report of the amounts expended pursuant to the Plans and the
purposes for which such expenditures were made. The board of directors reviews
these reports in connection with their decisions with respect to the Plans.
<PAGE>
The Class B and Class C Plans require that the Distribution Agreements provide
that IDI (or dealers or financial institutions that offer and sell Class B and C
shares) will be deemed to have performed all services required to be performed
in order to receive an asset-based sales charge on the average daily net assets
attributable to Class B or Class C shares upon settlement of each sale of a
Class B or Class C shares.
As required by Rule 12b-1, the Plans were approved by the board of directors,
including a majority of the directors who are not "interested persons" (as
defined in the 1940 Act) of the Company and who have no direct or indirect
financial interest in the operation of the Plans ("Independent Directors"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
directors considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each affected class of Cash Reserves
Fund and its respective shareholders.
The Plans do not obligate Cash Reserves Fund to reimburse IDI for the actual
expenses IDI may incur in fulfilling its obligations under the Plans. Thus, even
if IDI's actual expenses exceed the fee payable to IDI thereunder at any given
time, Cash Reserves Fund will not be obligated to pay more than that fee. If
IDI's expenses are less than the fee it receives, IDI will retain the full
amount of the fee.
Unless the Plans are terminated earlier in accordance with their terms, they
continue as long as such continuance is specifically approved at least annually
by the board of directors, including a majority of the Independent Directors.
The Plans may be terminated with respect to a class by the vote of a majority of
the Independent Directors, or by the vote of a majority of the outstanding
voting securities of such class of Cash Reserves Fund.
Any change in the Plans that would increase materially the distribution expenses
paid by the applicable class requires approval by the shareholders of that class
of shares; otherwise, they may be amended by the directors, including a majority
of the Independent Directors, by votes cast in person at a meeting called for
the purpose of voting upon such amendment. As long as the Plans are in effect,
the selection or nomination of the Independent Directors is committed to the
discretion of the Independent Directors. In the event the Class A Plan is
amended in a manner which the board of directors determines would materially
increase the charges paid by holders of Class A shares of Cash Reserves Fund
under the Class A Plan, the Class B shares of Cash Reserves Fund will no longer
convert into Class A shares of the Fund unless the Class B shares, voting
separately, approve such amendment. If the Class B shareholders do not approve
such amendment, the board of directors will (i) create a new class of shares of
Cash Reserves Fund which is identical in all material respects to the Class A
shares as they existed prior to the implementation of the amendment, and (ii)
ensure that the existing Class B shares of Cash Reserves Fund will be exchanged
or converted into such new class of shares no later than the date the Class B
shares were scheduled to convert into Class A shares.
The principal difference between the Class A Plan, the Class B Plan and the
Class C Plan are: (i) the Class A Plan pays to IDI 0.35% of the average daily
net assets of Cash Reserves Fund's Class A shares and each of the Class B and
Class C Plans pay IDI or dealers or financial institutions 1.00% of the average
<PAGE>
daily net assets of the respective Class B and Class C shares; (ii) the Class B
Plan obligates the Class B shares to continue to make payments to IDI following
termination of the Class B shares' Distribution Agreement with respect to Class
B shares sold by or attributable to the distribution efforts of IDI unless there
has been a complete termination of the Class B Plan (as defined in such Plan);
and (iii) the Class B Plan expressly authorizes IDI to assign, transfer or
pledge its rights to payments pursuant to the Class B Plan.
DEALER CONCESSIONS
IDI may pay a dealer concession and/or advance a service fee on such
transactions as set forth below.
In addition to amounts paid to dealers as a dealer concession, IDI may, from
time to time, at its expense or as an expense for which it may be compensated
under a distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of INVESCO
Cash Reserves Fund during a specified period of time. At the option of the
dealer, such incentives may take the form of payment for travel expenses,
including lodging, incurred in connection with trips taken by qualifying
registered representatives and their families to places within or outside the
United States. The total amount of such additional bonus payments or other
consideration shall not exceed 0.25% of the public offering price of the shares
sold. Any such bonus or incentive programs will not change the price paid by
investors for the purchase of Cash Reserves Fund's shares or the amount the Fund
will receive as proceeds from such sales. Dealers may not use sales of Cash
Reserves Fund's shares to qualify for any incentives to the extent that such
incentives may be prohibited by the laws of any state.
IDI may pay sales commissions to dealers and institutions that 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 the 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 year after they are
purchased. The portion of the payments to IDI under the Class C Plan 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 full year, 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. These commissions are not paid
on sales to investors who may not pay the CDSC and in circumstances where IDI
grants an exemption on particular transactions.
IDI may pay investment dealers or other financial service firms for share
purchases (measured on an annual basis) of Class A shares of all Funds sold at
net asset value to an employee benefit plan as follows: 1.00% of the first $2
million of such purchases, plus 0.80% of the next $1 million of such purchases,
plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in
excess of $20 million of such purchases.
<PAGE>
PURCHASES AT NET ASSET VALUE. Purchases of shares of Cash Reserves Fund at net
asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and distributions from the
Fund; (b) exchanges of shares of certain funds; or (c) a merger, consolidation
or acquisition of assets of a fund.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
CDSCs will not apply to the following:
o Redemptions following the death or post-purchase disability of (1) any
registered shareholders on an account or (2) a settler of a living trust,
of shares held in the account at the time of death or initial determination
of post-purchase disability;
o Certain distributions from individual retirement accounts, Section 403(b)
retirement plans, Section 457 deferred compensation plans and Section 401
qualified plans, where redemptions result from (i) required minimum
distributions to plan participants or beneficiaries who are age 70-1/2 or
older, and only with respect to that portion of such distributions that
does not exceed 10% annually of the participant's or beneficiary's account
value in a particular INVESCO Fund; (ii) in kind transfers of assets where
the participant or beneficiary notifies the distributor of the transfer not
later than the time the transfer occurs; (iii) tax-free rollovers or
transfers of assets to another plan of the type described above invested in
Class B or Class C shares of Cash Reserves Fund; (iv) tax-free returns of
excess contributions or returns of excess deferral amounts; and (v)
distributions on the death or disability (as defined in the Internal
Revenue Code of 1986, as amended) of the participant or beneficiary;
o Liquidation by Cash Reserves Fund when the account value falls below the
minimum required account size of $250;
o Investment account(s) of INVESCO; and
o Class C shares if the investor's dealer of record notifies IDI prior to
the time of investment that the dealer waives the payment otherwise payable
to him.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of the Funds may be
purchased appears in the Prospectus under the caption "How To Buy Shares."
Information concerning redemption of the Cash Reserves Fund shares is set forth
in the Prospectus under the caption "How To Sell Shares." Shares of the Fund may
be redeemed directly through IDI or through any dealer who has entered into an
agreement with IDI. In addition to the Fund's obligation to redeem shares, IDI
may also repurchase shares as an accommodation to the shareholders. To effect a
repurchase, those dealers who have executed Selected Dealer Agreements with IDI
must phone orders to the order desk of Cash Reserves Fund at 1-800-328-2234 and
<PAGE>
guarantee delivery of all required documents in good order. A repurchase is
effected at the net asset value of the Fund next determined after such order is
received. Such arrangement is subject to timely receipt by IDI of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by the Fund or by IDI (other than any applicable
CDSC) when shares are redeemed or repurchased, dealers may charge a fair service
fee for handling the transaction. INVESCO intends to redeem all shares of the
Fund in cash.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency as determined by the SEC exists making
disposition of portfolio securities or the valuation of the net assets of the
Fund not reasonably practicable.
OTHER SERVICE PROVIDERS
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1670 Broadway, Suite 1000, 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.
<PAGE>
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
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, 2000,
1999 and 1998. For the fiscal year ended May 31, 2000, 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, 2000.
At May 31, 2000, each Fund held debt securities of its regular brokers or
dealers, or their parents, as follows:
--------------------------------------------------------------------------------
Fund Broker or Dealer Value of Securities
at May 31, 2000
================================================================================
Cash Reserves State Street Bank and Trust $3,775,000
--------------------------------------------------------------------------------
GE Capital Services $15,000,000
--------------------------------------------------------------------------------
Merrill Lynch $22,908,673
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter $40,848,860
--------------------------------------------------------------------------------
GE Company $45,000,000
--------------------------------------------------------------------------------
General Motors Acceptance $45,694,935
--------------------------------------------------------------------------------
Sears Roebuck Acceptance $12,000,000
--------------------------------------------------------------------------------
Heller Financial $47,000,000
--------------------------------------------------------------------------------
General Motors $44,896,428
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Fund Broker or Dealer Value of Securities
at May 31, 2000
================================================================================
Tax-Free Money None
--------------------------------------------------------------------------------
U.S. Government Money None
--------------------------------------------------------------------------------
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 twenty billion shares of common stock
with a par value of $0.01 per share. As of October 31, 2000, the following
shares of each Fund were outstanding:
Cash Reserves Fund - Investor Class
Cash Reserves Fund - Class A
Cash Reserves Fund - Class B
Cash Reserves Fund - Class C
Cash Reserves Fund - Class K
Tax-Free Money Fund - Investor Class
Tax-Free Money Fund - Class K
U.S. Government Money Fund - Investor Class
U.S. Government Money Fund - Class K
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 the Fund. However, due to the differing expenses of
the classes, dividends and liquidation proceeds on Investor Class shares and
Class A, Class B and Class C shares of Cash Reserves Fund 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. Other than the automatic conversion of Class B Shares to
Class A shares of Cash Reserves Fund, there are no conversion rights. 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.
<PAGE>
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.
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.
<PAGE>
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-Free Money 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.
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).
Each Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares of Cash Reserves Fund reflects the deduction of the maximum initial
sales charge at the time of purchase. Standardized total return for Class B and
Class C shares of Cash Reserves Fund reflects the deduction of the maximum
applicable contingent deferred sales charge on a redemption of shares held for
the period. Total returns quoted in advertising reflect all aspects of a Fund's
return, including the effect of reinvesting dividends and capital gain
distributions, and any change in a Fund's net asset value per share over the
period. Average annual returns are calculated by determining the growth or
decline in value of a hypothetical investment in a Fund over a stated period,
and then calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value has been
constant over the period. Because average annual returns tend to even out
variations in a Fund's returns, investors should realize that a Fund's
performance is not constant over time, but changes from year to year, and that
average annual returns do not represent the actual year-to-year performance of a
Fund.
In addition to average annual returns, the Funds may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Cumulative total return shows the actual rate of return on
<PAGE>
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. Total returns may be quoted with or without
taking Cash Reserves Fund's Class A, B or Class C contingent deferred sales
charge into account. Excluding sales charges from a total return calculation
produces a higher total return figure.
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, 2000, Cash Reserves Fund's current and effective yields for Investor Class
shares were 5.59% and 5.74%, respectively; Cash Reserves Fund's current and
effective yields for Class C shares were 5.04% and 5.16%, respectively; Tax-Free
Money Fund's current and effective yields were 3.33% and 3.38%, respectively;
and U.S. Government Money Fund's current and effective yields were 5.40% and
5.55%, respectively.
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.
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, 2000 was:
<TABLE>
<CAPTION>
10 Years or
Name of Fund 1 Year 5 Years Since Inception
------------ ------ ------- ---------------
<S> <C> <C> <C>
Cash Reserves Fund - Investor Class 4.87% 4.77% 4.54%
Cash Reserves Fund - Class C N/A N/A 1.36%(1)
Tax-Free Money Fund - Investor Class 2.86% 2.90% 2.93%
U.S. Government Money Fund - Investor Class 4.74% 4.66% 4.15%(2)
</TABLE>
<PAGE>
(1) Class C shares were offered beginning February 15, 2000.
(2) Since inception April 26, 1991.
Average annual total return performance is not provided for Cash Reserves Fund's
Class A and B shares since those classes were not offered until August 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) exponential 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
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
<PAGE>
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
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
CODE OF ETHICS
INVESCO permits investment and other personnel to purchase and sell securities
for their own accounts, subject to a compliance policy governing personal
investing. This policy requires INVESCO's personnel to conduct their personal
investment activities in a manner that INVESCO believes is not detrimental to
the Funds or INVESCO's other advisory clients. The Code of Ethics is on file
with, and may be obtained from, the Commission.
FINANCIAL STATEMENTS
The financial statements for the Funds for the fiscal year ended May 31, 2000
are incorporated herein by reference from the INVESCO Money Market Funds, Inc.'s
Annual Report to Shareholders dated May 31, 2000.
<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 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.(4)
(2) Articles of Amendment to Articles of Incorporation filed
May 17, 2000.(5)
(b) Bylaws.(1)
(c) Not applicable.
(d) Investment Advisory Agreement between Registrant and INVESCO
Funds Group, Inc. dated February 28, 1997.(1)
(e) Underwriting Agreement between Registrant and INVESCO Distribu-
tors, Inc. dated June 1, 2000.(7)
(f) Defined Benefit Deferred Compensation Plan for Non-Interested
Directors as amended June 1, 2000.(7)
(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.(4)
(h) (1) Transfer Agency Agreement between Registrant and INVESCO
Funds Group, Inc. dated June 1, 2000.(7)
(2) Administrative Services Agreement between Registrant and
INVESCO Funds Group, Inc. dated June 1, 2000.(7)
(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.
<PAGE>
(l) Not Applicable.
(m) (1) Master Plan and Agreement of Distribution adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940 dated June 1, 2000 with respect to Investor Class
shares.(6)
(2) Master Distribution Plan and Agreement adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940 dated June 1, 2000 with respect to INVESCO Cash Reserves
Fund's Class A shares.(7)
(3) Master Distribution Plan and Agreement adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940 dated August 23, 2000 with respect to INVESCO Cash
Reserves Fund's Class B shares.(7)
(4) Master Distribution Plan and Agreement adopted pursuant
to Rule 12b-1 under the Investment Company Act of
1940 dated June 1, 2000 with respect to INVESCO Cash Reserves
Fund's Class C shares.(7)
(n) Not Applicable.
(o) Plan Pursuant to Rule 18f-3 under the Investment Company Act
of 1940 by the Company with respect to Cash Reserves Fund
adopted by the Board of Directors November 9, 1999.(4)
(p) Code of Ethics Pursuant to Rule 17j-1.(6)
(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.
(4) Previously filed with Post-Effective Amendment No. 38 to the Registration
Statement on January 28, 2000 and incorporated by reference herein.
(5) Previously filed with Post-Effective Amendment No. 39 to the Registration
Statement on May 30, 2000 and incorporated by reference herein.
(6) Previously filed with Post-Effective Amendment No. 40 to the Registration
Statement on July 28, 2000 and incorporated by reference herein.
(7) Previously filed with Post-Effective Amendment No. 41 to the Registration
Statement on September 21, 2000 and incorporated by reference herein.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH INVESCO MONEY
MARKET FUNDS, INC. (THE "COMPANY")
<PAGE>
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 Seven 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.
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 with Principal Occupation and
Name Adviser Company Affiliation
--------------------------------------------------------------------------------
Mark H. Williamson Chairman and Chairman of the Board, President
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
& Assistant Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Ronald L. Grooms Officer & Senior Vice President & Treasurer
Director INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Richard W. Healey Officer & Senior Vice President
Director 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
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Trent E. May Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Charles P. Mayer Officer & Senior Vice President
Director INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Timothy J. Miller Officer & Senior Vice President
Director & Chief Investment Officer
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
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
Jeffrey R. Botwinick Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Michael K. Brugman 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
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Delta L. Donohue Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Harvey I. Fladeland 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
--------------------------------------------------------------------------------
Stuart 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
--------------------------------------------------------------------------------
Campbell C. Judge 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
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Thomas E. Pellowe Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Dean C. Phillips Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Pamela J. Piro Officer Vice President & Assistant
Treasurer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Sean F. Reardon 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
--------------------------------------------------------------------------------
Thomas R. Samuelson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
James B. Sandidge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas H. Scanlan Officer Vice President
INVESCO Funds Group, Inc.
12028 Edgepark Court
Potomac, MD 20854
--------------------------------------------------------------------------------
Harvey T. Schwartz 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
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Reagan A. Shopp 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 & Assistant
Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Vaughn A. Greenlees Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Matthew A. Kunze Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Christopher T. Lawson Officer Assistant 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 Assistant 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
--------------------------------------------------------------------------------
Craig J. St. Thomas Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Kent T. Schmeckpeper Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Charles V. Sellers Officer Assistant Vice President
INESCO Funds Group, Inc.
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 Advantage Series Funds, Inc.
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
----------------- ------------ -------------
Raymond R. Cunningham Senior Vice
7800 E. Union Avenue President
Denver, CO 80237
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 and
Denver, CO 80237 Treasurer, & Acctg. Off.
Director
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, Chairman, President &
7800 E. Union Avenue President, &Chief Chief Executive Off.
Denver, CO 80237 Executive Officer
(c) Not applicable.
<PAGE>
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 Company 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 2nd day of October, 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/ Richard W. Healey*
------------------------------- -----------------------------
Victor L. Andrews, Director Richard W. Healey, Director
/s/ Bob R. Baker* /s/ Fred A. Deering*
------------------------------- -----------------------------
Bob R. Baker, Director Fred A. Deering, Director
/s/ Charles W. Brady* /s/ Larry Soll*
------------------------------- -----------------------------
Charles W. Brady, Director Larry Soll, Director
/s/ James T. Bunch* /s/ Wendy L. Gramm*
------------------------------- -----------------------------
James T. Bunch, Director Wendy L. Gramm, Director
/s/ Gerald J. Lewis*
-----------------------------
Gerald J. Lewis, Director
By /s/ Glen A. Payne
By _____________________________ -----------------------------
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, September 28, 1998 and May 30, 2000, respectively.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
-------------- ----------------------
j 85
