File No. 33-3429
As filed on ^ October 30, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
Post-Effective Amendment No. ^ 21 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 21 X
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INVESCO VALUE TRUST
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feinman
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
___ ^ on _______________, pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
X on ^ January 1, 1998, pursuant to paragraph (a)(1)
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___ 75 days after filing pursuant to paragraph (a)(2)
___ on (date) 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.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended August ^31, 1997, was
filed on or about October ^ 24, 1997.
Page 1 of 219
Exhibit index is located at page 138
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INVESCO VALUE TRUST
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CROSS-REFERENCE SHEET
Form N-1A
Item Caption
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Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses
3....................... Financial Highlights; Performance
Data
4....................... Investment Objectives and Policies;
The Trust and Its Management
5....................... The Trust and Its Management;
Additional Information
5A...................... Not Applicable
6....................... Services Provided by the Trust;
Taxes, Dividends and ^ Other
Distributions; Additional
Information
7....................... How Shares Can Be Purchased;
Services Provided by the Trust
8....................... Services Provided by the Trust; How
to Redeem Shares
9....................... Not Applicable
Part B Statement of Additional Information
10....................... Cover Page
11....................... Table of Contents
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<PAGE>
Form N-1A
Item Caption
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12....................... The Trust and Its Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Trust and Its Management
15....................... The Trust and Its Management
16....................... The Trust and Its Management
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Trust; Tax-Deferred
Retirement Plans; How to Redeem
Shares
20....................... Dividends, ^ Other Distributions,
and Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
-ii-
<PAGE>
PROSPECTUS
January 1, ^ 1998
INVESCO VALUE TRUST
INVESCO Intermediate Government Bond Fund
INVESCO Intermediate Government Bond Fund (the "Fund") seeks to achieve a
high total return on investments through capital appreciation and current income
by investing primarily in obligations of the U.S. government and its agencies
and instrumentalities maturing in three to five years.
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This ^ Prospectus relates to shares of INVESCO Intermediate
Government Bond Fund. Separate prospectuses are available upon request from
INVESCO ^ Distributors, Inc. for the Trust's other two funds, INVESCO Value
Equity Fund and INVESCO Total Return Fund. Investors may purchase shares of any
or all funds. Additional funds may be offered in the future.
This ^ Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, ^ 1998, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this ^ Prospectus. To
obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; ^ call 1-800-525-8085; or ^ visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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<PAGE>
TABLE OF CONTENTS
Page
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ANNUAL FUND EXPENSES.........................................................6
FINANCIAL HIGHLIGHTS.........................................................8
PERFORMANCE DATA............................................................10
INVESTMENT OBJECTIVE AND POLICIES...........................................11
RISK FACTORS................................................................12
THE TRUST AND ITS MANAGEMENT................................................16
HOW SHARES CAN BE PURCHASED.................................................19
SERVICES PROVIDED BY THE TRUST..............................................22
HOW TO REDEEM SHARES........................................................25
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS..................................27
ADDITIONAL INFORMATION......................................................28
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or redeem
shares^. The Fund, however, is authorized to pay a Rule 12b-1 distribution fee
of one quarter of one percent of the Fund's average net assets each year. The
12b-1 fee is assessed on new sales of shares, exchanges into the Fund and
reinvestments of dividends and capital gain distributions occurring on or after
November 1, 1997. Lower expenses benefit Fund shareholders by increasing the
Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees ^[0.25%]
Other Expenses (after absorbed ^ expenses)(2) [0.17%]
Transfer Agency ^ Fee(3) [0.56%]
General Services, Administrative
Services, Registration, Postage (after
voluntary expense ^ limitation)(2)(4) [-0.39%]
Total Fund Operating Expenses
(after absorbed ^ expenses)(1)(2)(5) [1.02%]
^(1) Does not include 12b-1 fees as these fees were not charged until
November 1, 1997.
(2) Certain Fund expenses are being voluntarily absorbed by INVESCO Funds
Group, Inc. ^("IFG") to ensure that the Fund's annualized total operating
expenses do not exceed 1.00% of the Fund's average net assets. ^ Ratio reflects
total expenses less absorbed expenses by IFG, before any expense offset ^
arrangements. In the absence of such voluntary expense limitation, the Fund's
"Other Expenses" and "Total Fund Operating Expenses" would have been ^ 0.77% and
^ 1.62%, respectively, based on the Fund's actual expenses for the fiscal year
ended August 31, ^ 1997.
^(3) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
^(4) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, ^ securities pricing
^ services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
<PAGE>
^(5) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees ^ were
reduced under an expense offset arrangement. However, as a result of an SEC
requirement for mutual funds to state their total operating expenses without
crediting any such expense offset arrangement, the figures shown above DO NOT
reflect these reductions. In comparing expenses for different years, please note
that the ratios of Expenses to Average Net Assets shown under "Financial
Highlights" DO reflect reductions for periods prior to the fiscal year ended
August 31, 1996^ See "The Trust And Its Management."
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
^ $10 $33 $57 $125
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust
And Its Management.") The above figures for INVESCO Intermediate Government Bond
Fund are based on fiscal year-end information. The Fund charges no sales load,
redemption fee or exchange fee ^. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The assumed 5% annual return is hypothetical and should
not be considered a representation of past or future annual returns, which may
be greater or less than the assumed amount.
Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time 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.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the ^ four years ended August 31, ^
1997, the eight-month fiscal period ended August 31, 1993, and each of the ^
five years ended December 31, 1992, has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the report of independent accountants
thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO ^ Distributors, Inc., at the
address or telephone number on the cover of this ^ Prospectus. All per share
data has been adjusted to reflect an 80 to 1 stock split which was effected on
January 2, 1991.
<TABLE>
<CAPTION>
Period
Ended
Year Ended August 31 August 31 Year Ended December 31
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1997 1996 1995 1994 1993^^ 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19 $12.88
--------------------------------------------------------------------------------------------------
INCOME FROM ^ INVESTMENT
OPERATIONS
Net Investment Income 0.66 0.73 0.73 0.70 0.48 0.90 0.89 1.00 1.03 0.81 0.66
Net Gains or (Losses)
on ^ Securities (Both
Realized and
^ Unrealized) 0.14 (0.34) 0.48 (0.75) 0.57 (0.16) 0.77 0.05 0.17 (0.28) (0.52)
--------------------------------------------------------------------------------------------------
Total from Investment
Operations 0.80 0.39 1.21 (0.05) 1.05 0.74 1.66 1.05 1.20 0.53 0.14
--------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.66 0.73 0.73 0.70 0.48 0.90 0.90 0.99 1.03 0.82 0.83
Distributions from
Capital Gains 0.00 0.00 0.00 0.34 0.00 0.05 0.00 0.00 0.00 0.00 0.00
--------------------------------------------------------------------------------------------------
Total Distributions 0.66 0.73 0.73 1.04 0.48 0.95 0.90 0.99 1.03 0.82 0.83
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Net Asset Value -
End of Period $12.44 $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19
==================================================================================================
<PAGE>
TOTAL RETURN 6.64% 3.12% 10.36% (0.37%) 8.38%* 6.03% 14.16% 9.08% 10.52% 5.48% 1.20%
RATIOS
Net Assets - End
of Period
($000 Omitted) $44,441 $39,949 $37,339 $31,861 $39,384 $29,649 $24,385 $18,380 $19,805 $18,042 $15,049
Ratio of Expenses
to Average
Net Assets# 1.02%@ 1.15%@ 1.20% 1.07% 0.96%~ 0.97% 0.93% 0.85% 0.85% 0.85% 0.94%
Ratio of Net
Investment Income
to Average
Net Assets# 5.32% 5.81% 6.04% 5.58% 5.48%~ 6.38% 7.28% 8.16% 8.45% 7.92% 7.31%
Portfolio Turnover
Rate 37% 63% 92% 49% 34%* 93% 51% 31% 52% 6% 28%
</TABLE>
^^ From January 1, 1993 to August 31, 1993^.
+ Distributions in excess of net investment income for the year ended August 31,
1994, aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended August 31, 1997 and 1996, and the years ended December 31, 1990, 1989,
1988 and 1987. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.37%, 1.24%, 0.96%, 1.00%, 1.08%
and 1.30%, respectively, and ratio of net investment income to average net
assets would have been 4.97%, 5.72%, 8.05%, 8.30%, 7.69% and 6.95%,
respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Thus, a given report of
total return performance should not be considered as representative of future
performance. The Fund charges no sales load, redemption fee or exchange fee
which would affect total return computations.
The yield of the Fund is calculated by utilizing the Fund's calculated
income, expenses and average outstanding shares for the most recent 30-day or
one-month period, dividing it by the month-end net asset value and annualizing
the resulting number. Unlike "total return" quotations, quotations of "yield" do
not include the effect of capital changes. The Fund charges no sales load,
redemption fee or exchange fee. Accordingly, both purchase price and redemption
price equal net asset value per share, and no adjustments are made in either
yield or total return performance calculations to reflect nonrecurring charges.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance or yield
for a given period and recognized bond indices and 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, Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., Lipper Analytical Services, 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 the 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 service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Intermediate U.S. Government Funds" Lipper mutual fund groupings, in
addition to the broad-based Lipper general fund grouping.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred
to as the "Funds"), each represented by a different series of the Trust's
shares. This ^ Prospectus relates to INVESCO Intermediate Government Bond Fund;
separate prospectuses for INVESCO Value Equity Fund and INVESCO Total Return
Fund are available. The investment objective of the Fund is to seek a high total
return on investment through capital appreciation and current income. Funds
having an investment objective of seeking a high total return may be limited in
their ability to obtain their objective by the limitations on the types of
securities in which they may invest. Therefore, no assurance can be given that
the Fund will be able to achieve its investment objective.
The Fund invests primarily in obligations of the U.S. government and its
agencies and instrumentalities maturing in three to five years. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
government obligations consisting of direct obligations of the U.S. government
(U.S. Treasury Bills, Notes and Bonds), obligations guaranteed by the U.S.
government, such as Government National Mortgage Association obligations, and
obligations of U.S. government authorities, agencies and instrumentalities,
which are supported only by the assets of the issuer, such as Fannie Mae
(formerly, Federal National Mortgage Association), Federal Home Loan ^ Banks,
Federal Financing Bank and Federal Farm Credit Bank. The remaining 35% of the
Fund's total assets may be invested under normal circumstances in corporate debt
obligations which are rated by Moody's Investors Service, Inc. ("Moody's") in
its four highest ratings of corporate obligations (Aaa, Aa, A and Baa) or by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") in its four highest ratings of corporate obligations (AAA, AA, A
and BBB) or, if not rated, which in the opinion of the Fund's investment adviser
or sub-adviser (collectively, "Fund Management") have investment characteristics
similar to those described in such ratings. A bond rating of Baa by Moody's
indicates that the bond issue is of "medium grade," 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 have speculative characteristics as
well. A bond rating of BBB by S&P indicates that the bond issue is in the lowest
"investment grade" security rating. Bonds rated BBB are regarded as having an
adequate capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay principal
and interest for bonds in this category than for bonds in the A category, and
they may have speculative characteristics. (See Appendix A to the Statement of
Additional Information for specific descriptions of these corporate bond rating
categories.) The dollar weighted average maturity of the Fund's investments will
normally be from three to ten years. (See "Risk Factors" section of this
prospectus for an analysis of the risks presented by this Fund's ability to
enter into contracts for the future delivery of fixed income securities commonly
referred to as "interest rate futures contracts" and its ability to use options
to purchase or sell interest rate futures contracts or debt securities and to
write covered call options and cash secured puts.)
<PAGE>
Obligations of certain U.S. government agencies and instrumentalities may
not be supported by the full faith and credit of the United States. Some are
backed by the right of the issuer to borrow from the U.S. Treasury; others, such
as the Federal National Mortgage Association, by discretionary authority of the
U.S. government to purchase the agencies' obligations; while still others, such
as obligations of the Student Loan Marketing Association, are supported only by
the credit of the instrumentality. In the case of securities not backed by the
full faith and credit of the United States, the 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. The Fund will invest in
securities of such instrumentalities only when Fund Management is satisfied that
the credit risk with respect to any such instrumentality is minimal.
The investment objective of the Fund and its investment policies, ^ where
indicated ^, are deemed to be fundamental policies and thus may not be changed
without prior approval by the holders of a majority of its outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940 (the
"1940 Act"). In addition, the Trust and this Fund are subject to certain
investment restrictions which are set forth in the Statement of Additional
Information and which may not be altered without approval of the Fund's
shareholders. One of those restrictions limits the Fund's borrowing of money to
borrowings from banks for temporary or emergency purposes (but not for
leveraging or investment) in an amount not exceeding 33 1/3% of the value of the
Fund's total assets.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Intermediate Government Bond Fund. The Fund's policies regarding
investments in foreign securities and foreign currencies are not fundamental and
may be changed by vote of the Trust's board of trustees.
Interest Rate Risk. The obligations in which the Fund invests are subject
to interest rate risk, which means that their values and, therefore, the net
asset value of the Fund, can be expected to fall when interest rates rise. The
Fund attempts to reduce this risk through diversification, credit analysis and
attention to interest rate trends and other factors.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign securities, although it currently does not intend to invest more than 5%
of its total assets in foreign securities. Investments in securities of foreign
companies and in foreign debt or equity markets involve certain additional risks
not associated with investments in domestic companies and markets, including the
risks of fluctuations in foreign currency exchange rates and of political or
economic instability, the difficulty of predicting international trade patterns,
and the possibility of imposition of exchange controls or currency blockage. In
<PAGE>
addition, there may be less information publicly available about a foreign
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States. As one way of managing exchange rate
risk, the Fund may enter into forward foreign currency exchange contracts (i.e.,
purchasing or selling foreign currencies at a future date). For additional
information regarding forward foreign currency exchange contracts, see the
Trust's Statement of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers and registered government securities dealers,
which are deemed creditworthy by Fund Management under guidelines established by
the board of trustees. A repurchase agreement is a transaction in which the 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. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. However, in the absence of compelling legal
precedents in this area, there can be no assurance that the Trust 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 Fund
would suffer a loss. Although the Fund has not adopted any limit on the amount
of its total assets that may be invested in repurchase agreements, the Fund
intends that at no time will the market value of the Fund's securities subject
to repurchase agreements exceed 20% of the total assets of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the value of the
Fund's total assets. The Fund is not required to receive registration rights in
connection with the purchase of restricted securities and, in the absence of
such rights, marketability and value can be adversely affected because the Fund
may be unable to dispose of such securities at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registrations.
<PAGE>
Interest Rate Futures Contracts and Options. The Fund may enter into
interest rate futures contracts for hedging or other non-speculative purposes
within the meaning and intent of applicable rules of the Commodity Futures
Trading Commission ("CFTC"). Interest rate futures contracts are purchased or
sold to attempt to hedge against the effects of interest or exchange rate
changes on the Fund's current or intended investments in fixed income
securities. In the event that an anticipated decrease in the value of portfolio
securities occurs as a result of a general increase in interest rates, the
adverse effects of such changes may be offset, in whole or part, by gains on the
sale of interest rate futures contracts. Conversely, the increased cost of
portfolio securities to be acquired, caused by a general decline in interest
rates, may be offset, in whole or part, by gains on interest rate futures
contracts purchased by the Fund. The Fund will incur brokerage fees when it
purchases and sells interest rate futures contracts, and it will be required to
maintain margin deposits.
The Fund also may use options to buy or sell interest rate futures
contracts or debt securities. Such investment strategies will be used as a hedge
and not for speculation. The Fund will not enter into interest rate futures
contracts or options to buy and sell such contracts or debt securities if the
aggregate initial margin and premiums thereon would exceed 5% of the Fund's
total assets.
Put and call options on interest rate futures contracts may be traded by
the Fund in order to protect against declines in the values of portfolio
securities or against increases in the cost of securities to be acquired.
Purchases of options on interest rate futures contracts may present less dollar
risk in hedging the portfolio of the Fund than the purchase and sale of the
underlying interest rate futures contracts, because the potential loss is
limited to the amount of the premium plus related transaction costs. The premium
paid for such a put or call option plus any transaction costs will reduce the
benefit, if any, realized by the Fund upon exercise or liquidation of the
option, and, unless the price of the underlying interest rate futures contract
changes sufficiently, the option may expire without value to the Fund. The
writing of such covered options, however, does not present less risk than the
trading of interest rate futures contracts and will constitute only a partial
hedge, up to the amount of the premium received, and, if an option is exercised,
the Fund may suffer a loss on the transaction.
The Fund will purchase put or call options on debt securities in
anticipation of changes in interest rates or other factors which may adversely
affect the value of its portfolio or the prices of debt securities which the
Fund anticipates purchasing at a later date. The Fund may be able to offset such
adverse effects on its portfolio, in whole or in part, through the options
purchased. The premium paid for a put or call option plus any transaction costs
will reduce the benefit, if any, realized by the Fund upon exercise or
liquidation of the option, and, unless the price of the underlying security
changes sufficiently, the option may expire without value to the Fund.
<PAGE>
The Fund may, from time to time, also sell ("write") covered call options
or cash secured puts in order to attempt to increase the yield on its portfolio
or to protect against declines in the value of its portfolio securities. Such
covered call options and cash secured puts will not exceed 25% of the Fund's
total assets. By writing a covered call option, the Fund, in return for the
premium income realized from the sale of the option, gives up the opportunity to
profit from a price increase in the underlying security above the option
exercise price, where the price increase occurs while the option is in effect.
In addition, the Fund's ability to sell the underlying security will be limited
while the option is in effect. By writing a cash secured put, the Fund, which
receives the premium, has the obligation during the option period, upon
assignment of an exercise notice, to buy the underlying security at a specified
price. A put is secured by cash if the Fund maintains at all times cash,
Treasury bills or other high grade short-term obligations with a value equal to
the option exercise price in a segregated account with its custodian.
Although the Fund will enter into interest rate futures contracts and
options on debt securities and interest rate futures contracts solely for
hedging or other nonspeculative purposes, within the meaning and intent of
applicable rules of the CFTC, their use does involve certain risks. For example,
a lack of correlation between the value of an instrument underlying an option or
interest rate futures contract and the assets being hedged, or unexpected
adverse price movements, could render the Fund's hedging strategy unsuccessful
and could result in losses. In addition, there can be no assurance that a liquid
secondary market will exist for any contract purchased or sold, and the Fund may
be required to maintain a position until exercise or expiration, which could
result in losses. Further, forward contracts entail particular risks related to
conditions affecting the underlying currency. Forward contracts also involve
risks arising from the lack of an organized exchange trading environment.
Transactions in futures contracts, forward contracts and options are subject to
other risks as well.
The risks related to transactions in options and futures to be entered
into by the Fund are set forth in greater detail in the Statement of Additional
Information, which should be reviewed in conjunction with the foregoing
discussion.
Securities Lending. ^ The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
<PAGE>
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
THE TRUST AND ITS MANAGEMENT
^
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the Trust is the
responsibility of its board of trustees.
INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver,
Colorado, serves as the Trust's investment adviser pursuant to an investment
advisory agreement. Under this agreement, ^ IFG provides the Fund with various
management services and supervises the Fund's daily business affairs.
Specifically, ^ IFG performs all administrative, clerical, statistical,
secretarial and all other services necessary or incidental to the administration
of the affairs of the Trust, excluding, however, those services that are the
subject of a separate agreement between the Trust and ^ IFG or any affiliate
thereof. Services provided pursuant to separate agreement include ^ provision of
transfer agency, dividend disbursing agency and registrar services, and services
furnished under an Administrative Services Agreement with ^ IFG dated as of
February ^ 28, 1997. INVESCO Distributors, Inc. ("IDI") provides services
relating to the distribution and sale of the Fund's shares.
^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM ^ currently manages in excess of ^
$__ billion of assets on behalf of tax-exempt accounts (such as pension and
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by ^ IFG and ICM
are subject to review by the Trust's board of trustees.
<PAGE>
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
ICM continued to operate under their existing names. Together, IFG and ICM
constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in
assets under management. IFG was established in 1932 and, as of August 31, 1997,
managed 14 mutual funds, consisting of 46 separate portfolios, with combined
assets of approximately $15.9 billion on behalf of over 854,448 shareholders.
IDI was established in 1997 and is the distributor for 14 mutual funds
consisting of 46 separate portfolios.
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
James O. Baker Portfolio manager of the Fund since 1993;
^ portfolio manager of INVESCO Capital Management,
Inc. (1992 to present); portfolio manager, Willis
Investment Counsel (1990 to 1992); broker, Morgan
Keegan (1989 to 1990); broker, Drexel Burnham
Lambert (1985 to 1990); began investment career in
1977; B.A., Mercer University; Chartered Financial
Analyst.
Ralph H. Jenkins, Jr. Assistant portfolio manager of the Fund since
1993; ^ vice president (1991 to present) and
portfolio manager (1988 to present) of INVESCO
Capital Management, Inc.; began investment career
in 1969; B.B.C., Auburn University; M.A.,
University of Alabama; Chartered Financial
Analyst; Chartered Investment Counselor.
Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly
fee at the following annual rates, based on the average net assets of the Fund:
0.60% on the first $500 million of the Fund's average net assets; 0.50% on the
next $500 million of the Fund's average net assets; and 0.40% on the average net
assets of the Fund in excess of $1 billion. For the fiscal year ended August 31,
^ 1997, the advisory fees paid to ^ IFG amounted to 0.60% of the average net
assets of the Fund.
Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM,
as the Fund's sub-adviser ^, a monthly fee, which is computed at the ^ following
annual rates: prior to January 1, 1998, 0.16% on the first $500 million of the
Fund's average net assets^, 0.13% on the next $500 million of the Fund's average
net assets ^ and 0.11% on the Fund's average net assets in excess of $1 billion
<PAGE>
and effective January 1, 1998, 0.20% on the first $500 million of the Fund's
average net assets, 0.1667% on the next $500 million of the Fund's average net
assets, and 0.1333% on the Fund's average net assets in excess of $1 billion. No
fee is paid by the Fund to ICM.
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses, allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund for the fiscal year ended August
31, ^ 1997, including investment advisory fees (but excluding brokerage
commissions), amounted to ^ 1.02% (prior to expense offset arrangements) of the
Fund's average net assets. Certain Fund expenses are being absorbed voluntarily
by ^ IFG pursuant to a commitment to the Fund in order to ensure that the Fund's
total expenses do not exceed 1.00% of the Fund's average net assets. This
commitment ^ may be changed following consultation with the ^ Trust's board of
trustees.
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with ^ IFG. Pursuant to the Administrative
Agreement, ^ IFG performs certain administrative and internal accounting
services, including, without limitation, maintaining general ledger and capital
stock accounts, preparing a daily trial balance, calculating net asset value
daily and providing selected general ledger reports and providing sub-
accounting and recordkeeping services for the shareholder accounts maintained by
certain retirement and employee benefit plans for the benefit of participants in
such plans. For such services, the Fund pays ^ IFG a fee consisting of a base
fee of $10,000 per year, plus an additional incremental fee computed at an
annual rate not to exceed a maximum of 0.015% per annum of the average net
assets of the applicable Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon their evaluation of broker-dealer
financial responsibility coupled with broker-dealer ability to effect
transactions at the best available prices. The Trust may place orders for
portfolio transactions with qualified broker-dealers that recommend the various
funds of the Trust to clients, or act as agent in the purchase of fund shares
for clients, if Fund Management believes that the quality of the execution of
the transaction and level of commission are comparable to those available from
other qualified brokerage firms. For further information, see "Investment
Practices -- Placement of Portfolio Brokerage" in the Statement of Additional
Information.
<PAGE>
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by ^ IDI, as the Fund's ^
distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the ^ section entitled "Services Provided by the Trust," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this ^
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
<PAGE>
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or ^
IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has
the option to redeem shares from any identically registered account in the Fund
or any other INVESCO fund as reimbursement for any loss incurred. You also may
be prohibited or restricted from making future purchases in any of the INVESCO
funds.
Your order to purchase Fund shares will not begin earning dividends or
other distributions until your payment can be converted into available federal
funds under regular banking procedures or, if you are acquiring shares in an
exchange from another INVESCO fund, the Fund receives the proceeds of the
exchange. Checks normally are converted into federal funds (moneys held on
deposit within the Federal Reserve System) within two or three business days
after they have been received by ^ IFG, although this period may be longer for
checks drawn on banks that are not members of the Federal Reserve System.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction if the broker so elects. Any investor may deal directly with the
Fund in any transaction. In that event, there is no such charge. ^ IFG or IDI
may from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
^(generally 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share for the Fund is
calculated by dividing the market value of the Fund's securities plus the value
of its other assets (including dividends and interest accrued but not
collected), less all liabilities (including accrued expenses), by the number of
outstanding shares of the Fund. If market quotations are not readily available,
a security will be valued at fair value as determined in good faith by the board
of trustees. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Trust's board of trustees believes that such value represents
fair value.
<PAGE>
Under certain circumstances, the Fund may offer its shares, in lieu of
cash payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this ^ Prospectus.
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. Under the Plan, monthly payments may be
made by the Fund to IDI to permit IDI, at its discretion, to engage in certain
activities, and provide certain services approved by the board of trustees in
connection with the distribution of the Fund's shares to investors. These
activities and services may include the payment of compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IDI-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers, and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund.
In addition, other permissible activities and services include advertising,
the preparation, printing and distribution of sales literature, printing and
distribution of prospectuses to prospective investors, and such other services
and promotional activities for the Fund as may from time to time be agreed upon
by the Trust and the board of trustees, including public relations efforts and
marketing programs to communicate with investors and prospective investors.
These services and activities may be conducted by the staff of IDI or its
affiliates or by third parties.
Under the Plan, the Trust's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's new sales
of shares, exchanges into the Fund and reinvestments of dividends and capital
gain distributions added after November 1, 1997. IDI is not entitled to payment
for overhead expenses under the Plan, but may be paid for all or a portion of
<PAGE>
the compensation paid for salaries and other employee benefits for the personnel
of IFG or IDI whose primary responsibilities involve marketing shares of the
INVESCO Mutual Funds, including the Fund. Payment amounts by the Fund under the
Plan, for any month, may be made to compensate IDI for permissible activities
engaged in and services provided by IDI during the rolling 12-month period in
which that month falls. Therefore, any obligations incurred by IDI in excess of
the limitations described above will not be paid by the Fund under the Plan, and
will be borne by IDI. In addition, IDI and its affiliates may from time to time
make additional payments from its revenues to securities dealers and other
financial institutions that provide distribution-related and/or administrative
services for the Fund. No further payments will be made by the Fund under the
Plan in the event of its termination. Also, any payments made by the Fund may
not be used to finance directly the distribution of shares of any other Fund of
the Trust or other mutual fund advised by IFG. Payments made by the Fund under
the Plan for compensation of marketing personnel, as noted above, are based on
an allocation formula designed to ensure that all such payments are appropriate.
IDI will bear any distribution- and service-related expenses in excess of the
amounts which are compensated pursuant to the Plan. The Plan also authorizes any
financing of distribution which may result from IDI's use of its own resources,
including profits from investment advisory fees received from the Fund, provided
that such fees are legitimate and not excessive. For more information see see
"How Shares Can Be Purchased" in the Statement of Additional Information.
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. ^ IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call ^ IFG by using the telephone number
on the cover of this ^ Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend date. A shareholder may,
however, elect to reinvest dividends and other distributions in certain of the
other no-load mutual funds advised by IFG and distributed by ^ IDI, or to
receive payment of all dividends and other distributions in excess of $10.00 by
check by giving written notice to ^ IFG at least two weeks prior to the record
date on which the change is to take effect. Further information concerning these
options can be obtained by contacting ^ IFG.
<PAGE>
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by ^ IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting ^ IFG.
Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised ^ by IFG, on the basis of their
respective net asset values at the time of the exchange: INVESCO Capital
Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax- Free Income Funds, Inc.
An exchange involves the redemption of shares in the Fund and investment of
the redemption proceeds in shares of another fund of the Trust or in shares of
one of the funds listed above. Exchanges will be made at the net asset value per
share next determined after receipt of an exchange request in proper order. Any
gain or loss realized on such an exchange is recognizable for federal income tax
purposes by the shareholder. Exchange requests may be made either by telephone
or by written request to ^ IFG, using the telephone number or address on the
cover of this ^ Prospectus. Exchanges made by telephone must be in the amount of
at least $250, if the exchange is being made into an existing account of one of
the INVESCO funds. All exchanges that establish a new account must meet the
fund's applicable minimum initial investment requirements. Written exchange
requests into an existing account have no minimum requirements other than the
fund's applicable minimum subsequent investment requirements.
The ^ option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange ^ option, the investor has agreed that the Fund will not
be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that exchange transactions are
genuine. These may include recording telephone instructions and providing
written confirmations of exchange transactions. As a result of this policy, the
investor may bear the risk of any loss due to unauthorized or fraudulent
instructions; provided, however, that if the Fund fails to follow these or other
reasonable procedures, the Fund may be liable.
<PAGE>
In order to prevent abuse of this ^ policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange ^ option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange ^ policy also may be modified or terminated at
any time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange ^ policy will be
given at least 60 days prior to the date of termination or the effective date of
the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences^. Shareholders interested
in exercising the exchange ^ option may contact ^ IFG for information concerning
their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis,
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying ^ IFG at least two weeks prior to the date the change
is to be made. Further information regarding this service can be obtained by
contacting ^ IFG.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by ^ notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting ^ IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting ^ IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified
employee pension plans and corporate retirement plans. In addition, shares can
be used to fund tax qualified plans established under Section 403(b) of the
Internal Revenue Code by educational institutions, including public school
systems and private schools, and certain kinds of non-profit organizations,
which provide deferred compensation arrangements for their employees.
<PAGE>
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG,
is qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call ^ IDI at the telephone number listed on the cover of this
prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. (See "How Shares Can Be Purchased.") Net asset value per share of the
Fund at the time of the redemption may be more or less than the price originally
paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to ^ IFG at the address noted
above. Redemption requests sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the
name of a corporation, additional documentation may be necessary. Call or write
for specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an eligible guarantor institution. Redemption
procedures with respect to accounts registered in the names of broker-dealers
may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which ^ will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in ^ a Fund account, ^ IFG
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
<PAGE>
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250), held in
accounts maintained in their name by telephoning redemption instructions to ^
IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO
Trust Company-sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless Fund Management permits a
larger redemption request to be placed by telephone, a shareholder may not place
a redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank
which the shareholder has designated to receive the proceeds of telephone
redemptions. The Fund charges no fee for effecting such telephone redemptions. ^
The telephone redemption ^ policy may be modified or terminated in the future at
the discretion of Fund Management. Shareholders should understand that while the
Fund will attempt to process all telephone redemption requests on an expedited
basis, there may be times, particularly in periods of severe economic or market
disruption, when (a) they may encounter difficulty in placing a telephone
redemption request, and (b) processing telephone redemptions will require up to
seven days following receipt of the redemption request, or additional time
because of the unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow its
established procedures, the Fund may be liable.
<PAGE>
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders ^ all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and ^ other distributions in taxable income for federal, state and
local income tax purposes. Dividends and other distributions are taxable whether
they are received in cash or automatically ^ reinvested in shares of the Fund or
another fund in the INVESCO group.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%. The Tax Act, however, does not address the application of these
rules to distributions of net capital gain (excess of long-term capital gain
over short-term capital losses) by a regulated investment company, including
whether such distributions may be treated by its shareholders in accordance with
the Fund's holding period for the assets it sold that generated the gain. The
application of the new capital gain rules must be determined by further
legislation or future regulations that are not available as this Prospectus is
being prepared. At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to ^ withholding of foreign taxes on dividends or
interest ^ received on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund ^.
^ Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other distributions
and redemption proceeds. Unless ^ you are subject to backup withholding for
other reasons, ^ you can avoid backup withholding on ^ your Fund account by
ensuring that ^ we have a correct, certified tax identification number.
<PAGE>
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other ^ Distributions. The Fund earns ordinary or net
investment income in the form of ^ interest on its investments. ^ Dividends paid
by the Fund will be based solely on the income earned by it. The Fund's policy
is to distribute substantially all of this income, less Fund expenses, to
shareholders. Dividends from net investment income are declared daily and paid
monthly^ at the discretion of the ^ Trust's Board of Trustees. Dividends are
automatically reinvested in additional shares of the Fund at the net asset value
on the ex-dividend date unless otherwise requested.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital ^ gain
distributions are automatically reinvested in additional shares of the Fund at
the net asset value on the ex-dividend date unless otherwise requested. ^
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of trustees, will be by
all funds of the Trust voting together. In other cases, such as voting upon the
investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required, and does not expect, to hold regular annual meetings of
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
required by applicable law or the Trust's Declaration of Trust, and the Trust
will assist shareholders in communicating with other shareholders as required by
the 1940 Act. Trustees may be removed by action of the holders of two-thirds of
the outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this prospectus.
<PAGE>
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $26.00 per shareholder
account or where applicable, per participant in an omnibus account ^. The
transfer agency fee is not charged to each shareholder's or participant's
account but is an expense of the Fund to be paid from the Fund's assets.
Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of ^ IFG, may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by ^ IFG. In such cases,
^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping
fee out of the transfer agency fee which is paid to ^ IFG by the Fund.
<PAGE>
INVESCO VALUE TRUST
INVESCO Intermediate Government Bond
Fund
PROSPECTUS
January 1, ^ 1998
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
^ In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
January 1, ^ 1998
INVESCO VALUE TRUST
INVESCO Value Equity Fund
INVESCO Value Equity Fund (the "Fund") seeks to achieve a high total
return on investment through capital appreciation and current income by
investing substantially all of its assets in common stocks and, to a lesser
degree, securities convertible into common stock. Such securities generally will
be issued by companies that are listed on a national securities exchange and
which usually pay regular dividends. This Fund's investments may consist in part
of securities which may be deemed to be speculative. (See "Investment Objective
and Policies.")
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This ^ Prospectus relates to shares of INVESCO Value Equity Fund.
Separate prospectuses are available upon request from INVESCO ^ Distributors,
Inc. for the Trust's other two funds, INVESCO Intermediate Government Bond Fund
and INVESCO Total Return Fund. Investors may purchase shares of any or all
funds. Additional funds may be offered in the future.
This ^ Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, ^ 1998, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this ^ Prospectus. To
obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; ^ call 1-800-525-8085; or ^ visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL
INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
----------
<PAGE>
TABLE OF CONTENTS
Page
----
ANNUAL FUND EXPENSES 33
FINANCIAL HIGHLIGHTS 35
PERFORMANCE DATA 37
INVESTMENT OBJECTIVE AND POLICIES 37
RISK FACTORS 38
THE TRUST AND ITS MANAGEMENT 42
HOW SHARES CAN BE PURCHASED 45
SERVICES PROVIDED BY THE TRUST 48
HOW TO REDEEM SHARES 51
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS 52
ADDITIONAL INFORMATION 54
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares^. The Fund, however, is authorized to pay a Rule 12b-1
distribution fee of one quarter of one percent of the Fund's average net assets
each year. The 12b-1 fee is assessed on new sales of shares, exchanges into the
Fund and reinvestments of dividends and capital gain distributions occuring on
or after November 1, 1997. Lower expenses benefit Fund shareholders by
increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees ^[0.25%]
Other Expenses ^[0.29]
Transfer Agency ^ Fee(2) [0.20%]
General Services, Administrative
Services, Registration, ^ Postage(3) [0.09%]
Total Fund Operating ^ Expenses(1)(4) [1.29%]
^(1) Does not include 12b-1 fees as these fees were not charged until
November 1, 1997.
(2) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
^(3) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, ^ securities pricing
^ services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
^(4) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees and ^
transfer agent fees were reduced under ^ expense offset ^ arrangements. However,
as a result of an SEC requirement for mutual funds to state their total
operating expenses without crediting any such expense offset arrangement, the
figures shown above DO NOT reflect these reductions. In comparing expenses for
different years, please note that the ratios of Expenses to Average Net Assets
shown under "Financial Highlights" DO reflect reductions for periods prior to
the fiscal year ended August 31, 1996. See "The Trust And Its Management."
<PAGE>
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
^ $11 $33 $58 $128
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust
and Its Management.") The above figures for INVESCO Value Equity Fund are based
on fiscal year-end information. The Fund charges no sales load, redemption fee
or exchange fee ^. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed amount.
Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time 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.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the ^ four years ended August 31, ^
1997, the eight-month fiscal period ended August 31, 1993, and each of the ^
five years ended December 31, 1992, has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the report of independent accountants
thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO ^ Distributors, Inc., at the
address or telephone number on the cover of this ^ Prospectus. All per share
data has been adjusted to reflect an 80 to 1 stock split which was effected on
January 2, 1991.
<TABLE>
<CAPTION>
Period
Ended
Year Ended August 31 August 31 Year Ended December 31
--------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993^^ 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40 $12.75
--------------------------------------------------------------------------------------------------
INCOME FROM ^ INVESTMENT
OPERATIONS
Net Investment Income 0.35 0.35 0.39 0.36 0.24 0.36 0.40 0.44 0.48 0.37 0.40
Net Gains ^(or Losses)
on ^ Securities
(Both Realized
and Unrealized) 6.62 3.09 2.58 1.20 0.88 0.45 4.54 (1.33) 2.42 1.62 0.39
--------------------------------------------------------------------------------------------------
Total from Investment
Operations 6.97 3.44 2.97 1.56 1.12 0.81 4.94 (0.89) 2.90 1.99 0.79
--------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.35 0.35 0.39 0.31 0.24 0.34 0.40 0.47 0.49 0.36 0.50
In Excess of Net
Investment Income 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 0.56 0.38 1.17 0.88 0.00 0.13 1.85 0.06 0.83 0.31 0.64
--------------------------------------------------------------------------------------------------
Total Distributions 0.91 0.73 1.56 1.23 0.24 0.47 2.25 0.53 1.32 0.67 1.14
--------------------------------------------------------------------------------------------------
Net Asset Value -
End of Period $28.30 $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40
==================================================================================================
TOTAL RETURN 32.04% 17.77% 17.84% 9.09% 6.65%* ^ 4.98% 35.84% (5.80%) 21.34% 16.89% 5.98%
<PAGE>
RATIOS
Net Assets - End of
Period^
($000 Omitted) $369,766 $200,046 $153,171 $111,850 $81,914 $78,609 $39,741 $29,825 $36,592 $27,434 $14,933
Ratio of Expenses
to ^ Average
Net Assets# 1.04%@ 1.01%@ 0.97% 1.01% 1.00%~ 0.91% 0.98% 1.00% 1.00% 1.00% 1.00%
Ratio of Net
Investment ^ Income
to Average
Net Assets# 1.35% 1.64% 2.17% 1.80% 2.07%~ 2.19% 2.39% 3.00% 3.29% 3.48% 2.95%
Portfolio Turnover
Rate 37% 27% 34% 53% 35%* 37% 64% 23% 30% 16% 20%
Average Commission
Rate Paid^^ $0.0538 $0.0589 - - - - - - - -
</TABLE>
^^ From January 1, 1993 to August 31, 1993^.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1990, 1989, 1988 and 1987. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have been
1.04%, 1.09%, 1.19% and 1.42% respectively, and ratio of net investment income
to average net assets would have been 2.96%, 3.20%, 3.29% and 2.53%,
respectively.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold^ which is required to be disclosed
effective for fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Thus, a given report of
total return performance should not be considered as representative of future
performance. The Fund charges no sales load, redemption fee or exchange fee
which would affect total return computations.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized bond indices and 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, Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., Lipper Analytical Services, 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 the 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 service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Growth and Income Funds" Lipper mutual fund groupings, in addition to
the broad-based Lipper general fund grouping.
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred to
as the "Funds"), each represented by a different series of the Trust's shares.
This ^ Prospectus relates to INVESCO Value Equity Fund; separate prospectuses
for INVESCO Intermediate Government Bond Fund and INVESCO Total Return Fund are
available. The investment objective of the Fund is to seek a high total return
on investment through capital appreciation and current income. Funds having an
investment objective of seeking a high total return may be limited in their
ability to obtain their objective by the limitations on the types of securities
in which they may invest. Therefore, no assurance can be given that the Fund
will be able to achieve its investment objective.
<PAGE>
Substantially all of the Fund's assets will be invested in common stocks
and, to a lesser extent, securities convertible into common stocks
(collectively, "equity securities"). Such securities generally will be issued by
companies which are listed on a national securities exchange, such as the New
York Stock Exchange, and which usually pay regular dividends, although the Fund
also may invest in securities traded on regional stock exchanges or on the
over-the-counter market. During normal market conditions, at least 65% of the
Fund's investments will consist of equity securities. The Trust has not
established any minimum investment standards such as an issuer's asset level,
earnings history, type of industry, dividend payment history, etc. with respect
to the Fund's investments in common stocks, although in selecting common stocks
for the Fund, the investment adviser and sub-adviser (collectively, "Fund
Management") generally apply an investment discipline which seeks to achieve a
yield higher than the overall equity market. Therefore, because smaller
companies may be subject to more significant losses as well as have the
potential for more substantial growth than larger, more established companies,
investors in the Fund should consider that the Fund's investments may consist in
part of securities which may be deemed to be speculative. When market or
economic conditions indicate, in the judgment of Fund Management, that a
defensive investment stance should be assumed, all or part of the assets of the
Fund may be invested temporarily in other securities consisting of high quality
(rated AA or above by Standard & Poor's or Aa by Moody's Investors Service,
Inc.) corporate preferred stocks, bonds, debentures or other evidences of
indebtedness, and in obligations issued or guaranteed by the United States or
any instrumentality thereof, or held in cash.
The investment objective of the Fund and its investment policies, ^ where
indicated ^, are fundamental policies and thus may not be changed without prior
approval by the holders of a majority of the outstanding voting securities of
the Fund, as defined in the Investment Company Act of 1940 (the "1940 Act"). In
addition, the Trust and this Fund are subject to certain investment restrictions
which are set forth in the Statement of Additional Information and which may not
be altered without approval of the Fund's shareholders. One of those
restrictions limits the Fund's borrowing of money to borrowings from banks for
temporary or emergency purposes (but not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of the Fund's total assets.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Value Equity Fund. The Fund's policies regarding investments in foreign
securities and foreign currencies are not fundamental and may be changed by vote
of the Trust's board of trustees.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign equity or debt securities. Investments in securities of foreign
companies and in foreign markets involve certain additional risks not associated
with investments in domestic companies and markets, including the risks of
<PAGE>
fluctuations in foreign currency exchange rates and of political or economic
instability, the difficulty of predicting international trade patterns and the
possibility of imposition of exchange controls or currency blockage. In
addition, there may be less information publicly available about a foreign
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States.
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions and will enter into
forward contracts only to the extent, if any, deemed appropriate by Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions may preclude the opportunity for gain if the value of the hedged
currency should rise. No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. Forward contracts may from time
to time be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed below. For
additional information regarding forward foreign currency contracts, see the
Trust's Statement of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers and registered government securities dealers
which are deemed creditworthy by Fund Management, under guidelines established
by the board of trustees. A repurchase agreement is a transaction in which the
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. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. However, in the absence of compelling legal
<PAGE>
precedents in this area, there can be no assurance that the Fund 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 Fund
would suffer a loss. Although the Fund has not adopted any limit on the amount
of its total assets that may be invested in repurchase agreements, the Fund
intends that at no time will the market value of its securities subject to
repurchase agreements exceed 20% of the total assets of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the Fund's total
assets. The Fund is not required to receive registration rights in connection
with the purchase of restricted securities and, in the absence of such rights,
marketability and value can be adversely affected because the Fund may be unable
to dispose of such securities at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, the Fund might have to bear
the expense and incur the delays associated with effecting registration.
Futures and Options. A futures contract is an agreement to buy or sell a
specific amount of a financial instrument or commodity at a particular price on
a particular date. The Fund will use futures contracts only to hedge against
price changes in the value of its current or intended investments in securities.
In the event that an anticipated decrease in the value of portfolio securities
occurs as a result of a general decrease in prices, the adverse effects of such
changes may be offset, at least in part, by gains on the sale of futures
contracts. Conversely, the increased cost of portfolio securities to be
acquired, caused by a general increase in prices, may be offset, at least in
part, by gains on futures contracts purchased by the Fund. Brokerage fees are
paid to trade futures contracts, and the Fund is required to maintain margin
deposits.
Put and call options on futures contracts or securities may be traded by
the Fund in order to protect against declines in the value of portfolio
securities or against increases in the cost of securities to be acquired. The
purchaser of an option purchases the right to effect a transaction in the
underlying future or security at a specified price (the "strike price") before a
specified date (the "expiration date"). In exchange for the right, the purchaser
pays a "premium" to the seller, which represents the price of the right to buy
or to sell the underlying instrument. In exchange for the premium, the seller of
the option becomes obligated to effect a transaction in the underlying future or
security, at the strike price, at any time prior to the expiration date, should
the buyer choose to exercise the option. A call option contract grants the
<PAGE>
purchaser the right to buy the underlying future or security, at the strike
price, before the expiration date. A put option contract grants the purchaser
the right to sell the underlying future or security, at the strike price, before
the expiration date. Purchases of options on futures contracts may present less
dollar risk in hedging the Fund's portfolio than the purchase and sale of the
underlying futures contracts, since the potential loss is limited to the amount
of the premium plus related transaction costs. The premium paid for such a put
or call option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise or liquidation of the option, and, unless the
price of the underlying futures contract or security changes sufficiently, the
option may expire without value to the Fund.
Although the Fund will enter into futures contracts and options on futures
contracts and securities solely for hedging or other nonspeculative purposes,
their use does involve certain risks. For example, a lack of correlation between
the value of an instrument underlying an option or futures contract and the
assets being hedged, or unexpected adverse price movements, could render a
Fund's hedging strategy unsuccessful and could result in losses. In addition,
there can be no assurance that a liquid secondary market will exist for any
contract purchased or sold, and the Fund may be required to maintain a position
until exercise or expiration, which could result in losses. Transactions in
futures contracts and options are subject to other risks as well, which are set
forth in greater detail in the Statement of Additional Information and Appendix
B therein.
Securities Lending. ^ The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
<PAGE>
THE TRUST AND ITS MANAGEMENT
^
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the Trust is the
responsibility of its board of trustees.
INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver,
Colorado, serves as the Trust's investment adviser pursuant to an investment
advisory agreement. Under this agreement, ^ IFG provides the Fund with various
management services and supervises the Fund's daily business affairs.
Specifically, ^ IFG performs all administrative, clerical, statistical,
secretarial and all other services necessary or incidental to the administration
of the affairs of the Trust excluding, however, those services that are the
subject of a separate agreement between the Trust and ^ IFG or any affiliate
thereof. Services provided pursuant to separate agreement include the ^
provision of transfer agency, dividend disbursing agency and registrar services,
and services furnished under an Administrative Services Agreement with ^ IFG
dated as of February ^ 28, 1997. INVESCO Distributors, Inc. ("IDI") provides
services relating to the distribution and sale of the Fund's shares.
^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM ^ currently manages in excess of ^
$__ billion of assets on behalf of tax-exempt accounts (such as pension and
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by ^ IFG and ICM
are subject to review by the Trust's board of trustees.
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
ICM continued to operate under their existing names. Together, IFG and ICM
constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in
<PAGE>
assets under management. IFG was established in 1932 and, as of August 31, 1997,
managed 14 mutual funds, consisting of 46 separate portfolios, with combined
assets of approximately $15.9 billion on behalf of over 854,448 shareholders.
IDI was established in 1997 and is the distributor for 14 mutual funds
consisting of 46 separate portfolios.
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
Michael C. Harhai Portfolio manager of the Fund since 1993;
^ portfolio manager for INVESCO Capital
Management, Inc. (1993 to present); senior vice
president and manager, Sovran Capital Management
Corp. (1992 to 1993); senior vice president and
portfolio manager, C&S/Sovran Capital Management
(1991 to 1992); senior vice president and
portfolio manager, Citizens & Southern Investment
Advisors, Inc. (1984 to 1991); began investment
career in 1972; B.A., University of South Florida;
M.B.A., University of Central Florida; Chartered
Financial Analyst; trustee, Atlanta Society of
Financial Analysts.
Terrence Irrgang Assistant portfolio manager of the Fund
since 1993; ^ portfolio manager for INVESCO
Capital Management, Inc. (1992 to present);
consultant, Towers, Perrin & Forster & Crosby
(1988 to 1992); began investment career in 1981;
B.A., Gettysburg College; M.B.A., Temple
University; Chartered Financial Analyst.
Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly
fee at the following annual rates based on the average net assets of the Fund:
0.75% on the first $500 million of the Fund's average net assets; 0.65% on the
next $500 million of the Fund's average net assets; and 0.50% on the average net
assets of the Fund in excess of $1 billion. ^ For the fiscal year ended August
31, ^ 1997, the advisory fees paid to ^ IFG amounted to 0.75% of the average net
assets of the Fund.
Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM,
as the Fund's sub-adviser ^, a monthly fee which is computed at the ^ following
annual rates: prior to January 1, 1998, 0.20% on the first $500 million of the
Fund's average net assets^, 0.17% on the next $500 million of the Fund's average
net assets ^ and 0.13% on the Fund's average net assets in excess of $1 billion
and effective January 1, 1998, 0.25% on the first $500 million of the Fund's
average net assets, 0.2167% on the next $500 million of the Fund's average net
assets and 0.1667% on the Fund's average net assets in excess of $1 billion. No
fee is paid by the Fund to ICM.
<PAGE>
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund, including investment advisory
fees (but excluding brokerage commissions), as a percentage of its average net
assets for the fiscal year ended August 31, ^ 1997, were ^ 1.04%.
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with ^ IFG. Pursuant to the Administrative
Agreement, ^ IFG performs certain administrative and internal accounting
services, including without limitation, maintaining general ledger and capital
stock accounts, preparing a daily trial balance, calculating net asset value
daily and providing selected general ledger reports and providing sub-
accounting and recordkeeping services for shareholder accounts maintained by
certain retirement and employee benefit plans for the benefit of participants in
such plans. For such services, the Fund pays ^ IFG a fee consisting of a base
fee of $10,000 per year, plus an additional incremental fee computed at an
annual rate not to exceed a maximum of 0.015% per annum of the average net
assets of the Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
^ Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon ^ Fund Management's evaluation of
broker-dealer financial responsibility coupled with broker-dealer ability to
effect transactions at the best available prices. The Trust may place orders for
portfolio transactions with qualified broker-dealers that recommend the various
funds of the Trust to clients, or act as agent in the purchase of fund shares
for clients, if Fund Management believes that the quality of the execution of
the transaction and level of commission are comparable to those available from
other qualified brokerage firms. For further information, see "Investment
Practices -- Placement of Portfolio Brokerage" in the Statement of Additional
Information.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
<PAGE>
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by ^ IDI, as the Fund's
^ distributor, at the net asset value per share next calculated after receipt of
a purchase order in good form. No sales charge is imposed upon the sale of
shares of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the ^ section entitled "Services Provided by the Trust," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this ^
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
<PAGE>
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or ^
IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has
the option to redeem shares from any identically registered account in the Fund
or any other INVESCO fund as reimbursement for any loss incurred. You also may
be prohibited or restricted from making future purchases in any of the INVESCO
funds.
Persons who invest in the Fund through a securities broker may be charged a
commission or transaction fee by the broker for the handling of the transaction
if the broker so elects. Any investor may deal directly with the Fund in any
transaction. In that event, there is no such charge. ^ IFG or IDI may from time
to time make payments from its revenues to securities dealers and other
financial institutions that provide distribution-related and/or administrative
services for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
^(generally 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share for the Fund is
calculated by dividing the market value of the Fund's securities plus the value
of its other assets (including dividends and interest accrued but not
collected), less all liabilities (including accrued expenses), by the number of
outstanding shares of the Fund. If market quotations are not readily available,
a security will be valued at fair value as determined in good faith by the board
of trustees. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Trust's board of trustees believes that such value represents
fair value.
Under certain circumstances, the Fund may offer its shares, in lieu of
cash payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
<PAGE>
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this ^ Prospectus.
Distribution Expenses. The Fund is authorized under a Plan and Agreement of
Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. Under the Plan, monthly payments may be
made by the Fund to IDI to permit IDI, at its discretion, to engage in certain
activities, and provide certain services approved by the board of trustees in
connection with the distribution of the Fund's shares to investors. These
activities and services may include the payment of compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IDI-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers, and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund.
In addition, other permissible activities and services include
advertising, the preparation, printing and distribution of sales literature,
printing and distribution of prospectuses to prospective investors, and such
other services and promotional activities for the Fund as may from time to time
be agreed upon by the Trust and the board of trustees, including public
relations efforts and marketing programs to communicate with investors and
prospective investors. These services and activities may be conducted by the
staff of IFG or its affiliates or by third parties.
Under the Plan, the Trust's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's new sales
of shares, exchanges into the Fund and reinvestments of dividends and capital
gain distributions added after November 1, 1997. IDI is not entitled to payment
for overhead expenses under the Plan, but may be paid for all or a portion of
the compensation paid for salaries and other employee benefits for the personnel
of IFG or IDI whose primary responsibilities involve marketing shares of the
INVESCO Mutual Funds, including the Fund. Payment amounts by the Fund under the
Plan, for any month, may be made to compensate IDI for permissible activities
engaged in and services provided by IDI during the rolling 12-month period in
which that month falls. Therefore, any obligations incurred by IDI in excess of
the limitations described above will not be paid by the Fund under the Plan, and
will be borne by IDI. In addition, IDI and its affiliates may from time to time
<PAGE>
make additional payments from its revenues to securities dealers, financial
advisers and financial institutions that provide distribution- related and/or
administrative services for the Fund. No further payments will be made by the
Fund under the Plan in the event of its termination. Also, any payments made by
the Fund may not be used to finance directly the distribution of shares of any
other Fund of the Trust or other mutual fund advised by IFG. Payments made by
the Fund under the Plan for compensation of marketing personnel, as noted above,
are based on an allocation formula designed to ensure that all such payments are
appropriate. IDI will bear any distribution- and service-related expenses in
excess of the amounts which are compensated pursuant to the Plan. The Plan also
authorizes any financing of distribution which may result from IDI's use of its
own resources, including profits from investment advisory fees received from the
Fund, provided that such fees are legitimate and not excessive. For more
information see see "How Shares Can Be Purchased" in the Statement of Additional
information.
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. ^ IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call ^ IFG by using the telephone number
on the cover of this ^ Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend date. A shareholder may,
however, elect to reinvest dividends and other distributions in certain of the
other no-load mutual funds advised by IFG and distributed by ^ IDI, or to
receive payment of all dividends and other distributions in excess of $10.00 by
check by giving written notice to ^ IFG at least two weeks prior to the record
date on which the change is to take effect. Further information concerning these
options can be obtained by contacting ^ IFG.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by ^ IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting ^ IFG.
<PAGE>
Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised ^ by IFG, on the basis of their
respective net asset values at the time of the exchange: INVESCO Capital
Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax- Free Income Funds, Inc.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Trust or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to ^ IFG, using the telephone number or address
on the cover of this ^ Prospectus. Exchanges made by telephone must be in the
amount of at least $250, if the exchange is being made into an existing account
of one of the INVESCO funds. All exchanges that establish a new account must
meet the fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the fund's applicable minimum subsequent investment requirements.
The ^ option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange ^ option, the investor has agreed that the Fund will not
be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that exchange transactions are
genuine. These may include recording telephone instructions and providing
written confirmations of exchange transactions. As a result of this policy, the
investor may bear the risk of any loss due to unauthorized or fraudulent
instructions; provided, however, that if the Fund fails to follow these or other
reasonable procedures, the Fund may be liable.
In order to prevent abuse of this ^ policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange ^ option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange ^ policy also may be modified or terminated at
any time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange ^ policy will be
given at least 60 days prior to the date of termination or the effective date of
the modification.
<PAGE>
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences^. Shareholders interested
in exercising the exchange ^ option may contact ^ IFG for information concerning
their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis,
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying ^ IFG at least two weeks prior to the date the change
is to be made. Further information regarding this service can be obtained by
contacting ^ IFG.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by ^ notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting ^ IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting ^ IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified
employee pension plans and corporate retirement plans. In addition, shares can
be used to fund tax qualified plans established under Section 403(b) of the
Internal Revenue Code by educational institutions, including public school
systems and private schools, and certain kinds of non-profit organizations,
which provide deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG,
is qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call ^ IDI at the telephone number listed on the cover of this
^ Prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
<PAGE>
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. (See "How Shares Can Be Purchased.") Net asset value per share of the
Fund at the time of the redemption may be more or less than the price originally
paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to ^ IFG at the address noted
above. Redemption requests sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the
name of a corporation, additional documentation may be necessary. Call or write
for specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an eligible guarantor institution. Redemption
procedures with respect to accounts registered in the names of broker-dealers
may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which ^ will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in ^ a Fund account, ^ IFG
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
<PAGE>
accounts maintained in their name by telephoning redemption instructions to ^
IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO
Trust Company sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless Fund Management permits a
larger redemption request to be placed by telephone, a shareholder may not place
a redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank
which the shareholder has designated to receive the proceeds of telephone
redemptions. The Fund charges no fee for effecting such telephone redemptions. ^
The telephone redemption ^ policy may be modified or terminated in the future at
the discretion of Fund Management. Shareholders should understand that while the
Fund will attempt to process all telephone redemption requests on an expedited
basis, there may be times, particularly in periods of severe economic or market
disruption, when (a) they may encounter difficulty in placing a telephone
redemption request, and (b) processing telephone redemptions will require up to
seven days following receipt of the redemption request, or additional time
because of the unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions inititated by telephone. As a result of
this policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders ^ all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and ^ other distributions in taxable income for federal, state and
local income tax purposes. Dividends and other distributions are taxable whether
they are received in cash or automatically ^ reinvested in shares of the Fund or
another fund in the INVESCO group.
<PAGE>
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%. The Tax Act, however, does not address the application of these
rules to distributions of net capital gain (excess of long-term capital gain
over short-term capital losses) by a regulated investment company, including
whether such distributions may be treated by its shareholders in accordance with
the Fund's holding period for the assets it sold that generated the gain. The
application of the new capital gain rules must be determined by further
legislation or future regulations that are not available as this Prospectus is
being prepared. At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to ^ withholding of foreign taxes on dividends or
interest ^ received on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund ^.
^ Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other distributions
and redemption proceeds. Unless ^ you are subject to backup withholding for
other reasons, ^ you can avoid backup withholding on ^ your Fund account by
ensuring that ^ we have a correct, certified tax identification number.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other ^ Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. ^
Dividends paid by the Fund will be based solely on the income earned by it. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders. Dividends from net investment income are paid on a
quarterly basis, at the end of November, February, May and August, at the
discretion of the ^ Trust's Board of Trustees. Dividends are automatically
reinvested in additional shares of the Fund at the net asset value on the
ex-dividend date unless otherwise requested.
<PAGE>
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in additional shares of the Fund at the net asset
value on the ex-dividend date unless otherwise requested.
Dividends and other ^ distributions are paid to ^ holders of shares on the
record date of ^ distribution regardless of how long the Fund shares have been
held by the shareholder. The ^ Fund's share price will then drop on the
ex-dividend date by the amount of the distribution ^. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have ^"bought" the distribution by paying the full purchase price, a portion of
which is then returned in the form of a taxable distribution.
^
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of trustees, will be by
all funds of the Trust voting together. In other cases, such as voting upon the
investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required, and does not expect, to hold regular annual meetings of
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
required by applicable law or the Trust's Declaration of Trust. The Trust will
assist shareholders in communicating with other shareholders as required by the
1940 Act. Trustees may be removed by action of the holders of two-thirds of the
outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this prospectus.
<PAGE>
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $20.00 per shareholder
account or, where applicable, per participant in an omnibus account ^. The
transfer agency fee is not charged to each shareholder's or participant's
account but is an expense of the Fund to be paid from the Fund's assets.
Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of ^ IFG, may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by ^ IFG. In such cases,
^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping
fee out of the transfer agency fee which is paid to ^ IFG by the Fund.
<PAGE>
INVESCO VALUE TRUST
INVESCO Value Equity Fund
PROSPECTUS
January 1, ^ 1998
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
^ In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
January 1, ^ 1998
INVESCO VALUE TRUST
INVESCO Total Return Fund
INVESCO Total Return Fund (the "Fund") seeks to achieve a high total
return on investment through capital appreciation and current income by
investing in a combination of equity securities (consisting of common stocks
and, to a lesser degree, securities convertible into common stock) and fixed
income securities. The equity securities purchased by the Fund generally will be
issued by companies which are listed on a national securities exchange and which
usually pay regular dividends. This Fund seeks reasonably consistent total
returns over a variety of market cycles.
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This ^ Prospectus relates to shares of INVESCO Total Return Fund.
Separate prospectuses are available upon request from INVESCO ^ Distributors,
Inc. for the Trust's other two funds, INVESCO Value Equity Fund and INVESCO
Intermediate Government Bond Fund. Investors may purchase shares of any or all
funds. Additional funds may be offered in the future.
This ^ Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, 1997, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this prospectus. To
obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; or call 1-800-525-8085; or ^ visit our web site at:
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL
INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
----------
<PAGE>
TABLE OF CONTENTS
Page
----
ANNUAL FUND EXPENSES 59
FINANCIAL HIGHLIGHTS 61
PERFORMANCE DATA 64
INVESTMENT OBJECTIVE AND POLICIES 64
RISK FACTORS 67
THE TRUST AND ITS MANAGEMENT 70
HOW SHARES CAN BE PURCHASED 73
SERVICES PROVIDED BY THE TRUST 75
HOW TO REDEEM SHARES 78
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS 80
ADDITIONAL INFORMATION 81
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses
benefit Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee ^ 0.64%
12b-1 Fees None
Other Expenses ^ 0.22%
Transfer Agency Fee(1) ^ 0.16%
General Services, Administrative
Services, Registration, Postage(2) ^ 0.06%
Total Fund Operating Expenses(3) ^ 0.86%
(1) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(2) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, a securities pricing
service, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
(3) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees and pricing
expenses were reduced under ^ expense offset ^ arrangements. However, as a
result of an SEC requirement for mutual funds to state their total operating
expenses without crediting any such expense offset arrangement, the figures
shown above do not reflect these reductions. In comparing expenses for different
years, please note that the ratios of Expenses to Average Net Assets shown under
"Financial Highlights" do reflect reductions for periods prior to the fiscal
year ended August 31, 1996. See "The Trust And Its Management."
<PAGE>
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$9 ^ $28 $48 $106
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust
And Its Management.") The above figures for INVESCO Total Return Fund are based
on fiscal year-end information. The Fund charges no sales load, redemption fee
or exchange fee and bears no distribution expenses. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the ^ four years ended August 31, ^
1997, the eight-month fiscal period ended August 31, 1993, and each of the ^
five years ended December 31, 1992, has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the report of independent accountants
thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO ^ Distributors, Inc., at the
address or telephone number on the cover of this ^ Prospectus. All per share
data has been adjusted to reflect an 80 to 1 stock split which was effected on
January 2, 1991.
<TABLE>
<CAPTION>
Period Period
Ended Ended
Year Ended August 31 August 31 Year Ended December 31 December 31
------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993^ 1992 1991 1990 1989 1988 1987^
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of
Period $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56 $12.50
------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT ^ OPERATIONS
Net Investment
Income 0.77 0.73 0.72 0.69 0.40 0.66 0.71 0.74 0.79 0.39 0.22
Net Gains or
(Losses) on
Securities (Both
Realized and
^ Unrealized) 5.26 1.78 2.46 0.60 1.09 0.93 2.78 (0.80) 1.74 0.93 0.00
------------------------------------------------------------------------------------------------------
Total from
Investment
Operations 6.03 2.51 3.18 1.29 1.49 1.59 3.49 (0.06) 2.53 1.32 0.22
------------------------------------------------------------------------------------------------------
<PAGE>
LESS DISTRIBUTIONS
Dividends from Net
Investment
Income 0.77 0.73 0.72 0.60 0.40 0.65 0.72 0.75 0.78 0.40 0.16
In Excess of Net
Investment
Income+ 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital^ Gains 0.09 0.13 0.05 0.17 0.00 0.19 0.55 0.06 0.13 0.02 0.00
In Excess of
Capital Gains 0.00 0.00 0.00 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------
Total
^ Distributions 0.86 0.86 0.77 1.02 0.40 0.84 1.27 0.81 0.91 0.42 0.16
------------------------------------------------------------------------------------------------------
Net Asset Value -
End of Period $27.77 $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56
=========================================================================================================
TOTAL RETURN 27.01% ^ 12.06% 17.54% 7.22% 8.72%* 9.84% 24.96% (0.35%) 19.13% 11.53% 1.72%^
RATIOS
Net Assets - End
of Period
($000 Omitted) $1,845,594 $1,032,151 $563,468 $292,765 $220,224 $137,196 $82,219 $54,874 $44,957 $28,432 $219
Ratio of Expenses
to ^ Average Net
Assets# 0.86%@ 0.89%@ 0.95% 0.96% 0.93%~ 0.88% 0.92% 1.00% 1.00% 1.00% 0.81%^
Ratio of Net
Investment Income
to Average
Net Assets# 3.11% 3.44% 3.97% 3.31% 3.51%~ 4.06% 4.62% 5.22% 5.46% 5.56% 6.44%^
Portfolio Turnover
Rate 4% 10% 30% 12% 19%* 13% 49% 24% 28% 13% 0%^
Average Comission
Rate Paid^^ $0.0520 $0.0539 - - - - - - - - -
</TABLE>
^ From January 1, 1993 to August 31, 1993^.
> From September 22, 1987, commencement of investment operations, to December
31, 1987.
+ Distributions in excess of net investment income for the year ended August ^
31,1995, aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1989, 1988 and the period ended December 31, 1987. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 1.05%, 1.21% and 2.00%, respectively, and ratio of net
investment income to average net assets would have been 5.41%, 5.35% and 5.25%,
respectively.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period.
Thus, a given report of total return performance should not be considered
as representative of future performance. The Fund charges no sales load,
redemption fee or exchange fee which would affect total return computations.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized bond indices and 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, Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P"), Lipper Analytical Services, 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 the 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 service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Flexible Portfolio Funds" Lipper mutual fund groupings, in addition to
the broad-based Lipper general fund grouping.
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred to
as the "Funds"), each represented by a different class of the Trust's shares.
This ^ Prospectus relates to INVESCO Total Return Fund; separate prospectuses
for INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund are
available. The investment objective of the Fund is to seek a high total return
on investment through capital appreciation and current income. Funds having an
investment objective of seeking a high total return may be limited in their
<PAGE>
ability to ^ attain their objective by the limitations on the types of
securities in which they may invest. Therefore, no assurance can be given that
the Fund will be able to achieve its investment objective.
The Fund intends to accomplish its ^ objective by investing in a
combination of equity securities and fixed income securities. The equity
securities to be acquired by the Fund will consist of common stocks and, to a
lesser extent, securities convertible into common stocks. Such securities
generally will be issued by companies which are listed on a national securities
exchange, such as the New York Stock Exchange, and which usually pay regular
dividends, although the Fund also may invest in securities traded on regional
stock exchanges or on the over-the-counter market. The Trust has not established
any minimum investment standards, such as an issuer's asset level, earnings
history, type of industry, dividend payment history, etc. with respect to the
Fund's investments in common stocks, although in selecting common stocks for the
Fund, the investment adviser and sub-adviser (collectively, "Fund Management")
generally apply an investment discipline which seeks to achieve a yield higher
than the overall equity market. Therefore, because smaller companies may be
subject to more significant losses, as well as have the potential for more
substantial growth, than larger, more established companies, investors in the
Fund should consider that the Fund's investments may consist in part of
securities which may be deemed to be speculative.
The income securities to be acquired by the Fund primarily will include
obligations of the U.S. government and its agencies. These U.S. government
obligations consist of direct obligations of the U.S. government (U.S. Treasury
Bills, Notes and Bonds), obligations guaranteed by the U.S. government, such as
Government National Mortgage Association obligations, and obligations of U.S.
government authorities, agencies and instrumentalities, which are supported only
by the assets of the issuer, such as the Federal National Mortgage Association,
Federal Home Loan Bank, Federal Financing Bank and Federal Farm Credit Bank. The
Fund also may invest in corporate debt obligations which are rated by Moody's
Investors Service, Inc. ("Moody's") in its four highest ratings of corporate
obligations (Aaa, Aa, A and Baa) or by ^ S&P in its four highest ratings of
corporate obligations (AAA, AA, A and BBB) or, if not rated, which in Fund
Management's opinion have investment characteristics similar to those described
in such ratings. A bond rating of Baa by Moody's indicates that the bond issue
is of "medium grade," 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 have speculative characteristics as well. A bond rating of BBB by S&P
indicates that the bond issue is in the lowest "investment grade" security
rating. Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category, and they may have speculative
characteristics. (See Appendix A to the Statement of Additional Information for
<PAGE>
specific descriptions of these corporate bond rating categories.) Although there
is no limitation on the maturity of the Fund's investment in income securities,
the dollar weighted average maturity of such investments normally will be from 3
to 15 years.
Obligations of certain U.S. government agencies and instrumentalities may
not be supported by the full faith and credit of the United States. Some are
backed by the right of the issuer to borrow from the U.S. Treasury; others, such
as the Federal National Mortgage Association, by discretionary authority of the
U.S. government to purchase the agencies' obligations; while still others, such
as the Student Loan Marketing Association, are supported only by the credit of
the instrumentality. In the case of securities not backed by the full faith and
credit of the United States, the 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. The Fund will invest in
securities of such instrumentalities only when Fund Management is satisfied that
the credit risk with respect to any such instrumentality is minimal.
Typically, the Fund will maintain a minimum investment in equities of 30%
of total assets, and a 30% minimum will be invested in fixed and variable income
securities. The remaining 40% of the portfolio will vary in asset allocation
according to Fund Management's assessment of business, economic and market
conditions. The analytical process associated with making allocation decisions
is based upon a combination of demonstrated historic financial results, current
prices for stocks and the current yield to maturity available in the market for
bonds. The premium return available from one category relative to the other
determines the actual asset deployment. Fund Management's asset allocation
process is systematic and is based on current information rather than forecasted
change. The Fund seeks reasonably consistent returns over a variety of market
cycles. (See "Risk Factors" section of this ^ Prospectus for an analysis of the
risks presented by this Fund's ability to enter into contracts for the future
delivery of fixed income securities commonly referred to as "interest rate
futures contracts," and its ability to use options to purchase or sell interest
rate futures contracts or debt securities and to write covered call options and
cash secured puts.)
The investment objective of the Fund and its investment policies, except
where indicated to the contrary, are deemed to be fundamental policies and thus
may not be changed without prior approval by the holders of a majority of the
outstanding voting securities of the Fund, as defined in the 1940 Act. In
addition, the Trust and this Fund are subject to certain investment restrictions
which are set forth in the Statement of Additional Information and which may not
be altered without approval of the Fund's shareholders. One of those
restrictions limits the Fund's borrowing of money to borrowings from banks for
temporary or emergency purposes (but not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of the Fund's total assets.
<PAGE>
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Total Return Fund. The Fund's policies regarding investments in foreign
securities and foreign currencies are not fundamental and may be changed by vote
of the Trust's board of trustees.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign equity or debt securities. Investments in securities of foreign
companies and in foreign markets involve certain additional risks not associated
with investments in domestic companies and markets, including the risks of
fluctuations in foreign currency exchange rates and of political or economic
instability, the difficulty of predicting international trade patterns, and the
possibility of imposition of exchange controls or currency blockage. In
addition, there may be less information publicly available about a foreign
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States.
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions and will enter into
forward contracts only to the extent, if any, deemed appropriate by Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions may preclude the opportunity for gain if the value of the hedged
currency should rise. No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. Forward contracts may, from
time to time, be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed below. For
additional information regarding foreign securities, see the Trust's Statement
of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers, and registered government securities dealers
which are deemed creditworthy by Fund Management under guidelines established by
the board of trustees. A repurchase agreement is a transaction in which the Fund
<PAGE>
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. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. However, in the absence of compelling legal
precedents in this area, there can be no assurance that the Fund 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 Fund
would suffer a loss. Although the Fund has not adopted any limit on the amount
of its total assets that may be invested in repurchase agreements, the Fund
intends that at no time will the market value of its securities subject to
repurchase agreements exceed 20% of the total assets of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the value of the
Fund's total assets. The Fund is not required to receive registration rights in
connection with the purchase of restricted securities and, in the absence of
such rights, marketability and value can be adversely affected because the Fund
may be unable to dispose of such securities at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registrations.
^ Futures and Options. A futures contract is an agreement to buy or sell a
specific amount of a financial instrument or commodity at a particular price on
a particular date. The Fund will use futures contracts only to hedge against
price changes in the value of its current or intended investments in ^
securities. In the event that an anticipated decrease in the value of portfolio
securities occurs as a result of a general ^ decrease in prices, the adverse
effects of such changes may be offset, ^ at least in part, by gains on the sale
of ^ futures contracts. Conversely, the increased cost of portfolio securities
to be acquired, caused by a general ^ increase in prices, may be offset, ^ at
least in part, by gains on ^ futures contracts purchased by the Fund. ^
Brokerage fees are paid to trade futures contracts, and ^ the Fund is required
to maintain margin deposits.
^
<PAGE>
Put and call options on ^ futures contracts or securities may be traded by
the Fund in order to protect against declines in the ^ value of portfolio
securities or against increases in the cost of securities to be acquired. The
purchaser of an option purchases the right to effect a transaction in the
underlying future or security at a specified price (the "strike price") before a
specified date (the "expiration date"). In exchange for the right, the purchaser
pays a "premium" to the seller, which represents the price of the right to buy
or to sell the underlying instrument. In exchange for the premium, the seller of
the option becomes obligated to effect a transaction in the underlying future or
security, at the strike price, at any time prior to the expiration date, should
the buyer choose to exercise the option. A call option contract grants the
purchaser the right to buy the underlying future or security, at the strike
price, before the expiration date. A put option contract grants the purchaser
the right to sell the underlying future or security, at the strike price, before
the expiration date. Purchases of options on ^ futures contracts may present
less dollar risk in hedging the Fund's portfolio ^ than the purchase and sale of
the underlying ^ futures contracts, ^ since the potential loss is limited to the
amount of the premium plus related transaction costs. The premium paid for such
a put or call option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise or liquidation of the option, and, unless the
price of the underlying futures contract or ^ security changes sufficiently, the
option may expire without value to the Fund.
^
Although the Fund will enter into ^ futures contracts and options on ^
futures contracts and securities solely for hedging or other nonspeculative
purposes, within the meaning and intent of applicable rules of the CFTC, their
use does involve certain risks. For example, a lack of correlation between the
value of an instrument underlying an option or ^ futures contract and the assets
being hedged, or unexpected adverse price movements, could render the Fund's
hedging strategy unsuccessful and could result in losses. In addition, there can
be no assurance that a liquid secondary market will exist for any contract
purchased or sold, and the Fund may be required to maintain a position until
exercise or expiration, which could result in losses. ^ Transactions in futures
^ contracts and options are subject to other risks as well, which^ are set forth
in greater detail in the Statement of Additional Information^ and Appendix B
therein.
Securities Lending. ^ The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
<PAGE>
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
THE TRUST AND ITS MANAGEMENT
^
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the Trust is the
responsibility of its board of trustees.
INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver,
Colorado, serves as the Trust's investment adviser pursuant to an investment
advisory agreement. Under this agreement, ^ IFG provides the Fund with various
management services and supervises the Fund's daily business affairs.
Specifically, ^ IFG performs all administrative, clerical, statistical,
secretarial and all other services necessary or incidental to the administration
of the affairs of the Trust, excluding, however, those services that are the
subject of a separate agreement between the Trust and ^ IFG or any affiliate
thereof. Services provided pursuant to separate agreement include the
distribution and sale of Trust shares and provision of transfer agency, dividend
disbursing agency and registrar services, and services furnished under an
Administrative Services Agreement with ^ IFG dated as of February ^ 28, 1997.
INVESCO Distributors, Inc. ("IDI") provides services relating to the
distribution and sale of the Fund's shares.
^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM ^ currently manages in excess of ^
$__ billion of assets on behalf of tax-exempt accounts (such as pension and
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by ^ IFG and ICM
are subject to review by the Trust's board of trustees.
<PAGE>
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management, Inc. that created one of the
largest independent investment management businesses in the world. IFG and ICM
continued to operate under their existing names. Together, IFG and ICM
constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in
assets under management. IFG was established in 1932 and, as of August 31, 1997,
managed 14 mutual funds, consisting of 46 separate portfolios, with combined
assets of approximately 15.9 billion on behalf of more than 854,448
shareholders. IDI was established in 1997 and is the distributor for 14 mutual
funds consisting of 46 separate portfolios.
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
Edward C. Mitchell, Jr., C.F.A. Portfolio manager of the Fund since
1987; ^ president (1992 to present),
vice president (1979 to 1991) and
director (1979 to present) of INVESCO
Capital Management, Inc.; began
investment career in 1969; B.A.,
University of Virginia; M.B.A.,
University of Colorado; Chartered
Financial Analyst; Chartered
Investment Counselor.
David S. Griffin Assistant portfolio manager of the
Fund since 1993; ^ portfolio manager
for INVESCO Capital Management, Inc.
(1991 to present); mutual fund sales
representative, INVESCO Services, Inc.
(1986 to 1991); began investment
career in 1982; B.A., Ohio Wesleyan
University; M.B.A., William and Mary;
Chartered Financial Analyst.
Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly
fee at the following annual rates, based on the average net assets of the Fund:
0.75% on the first $500 million of the Fund's average net assets; 0.65% on the
next $500 million of the Fund's average net assets; and 0.50% on the average net
assets of the Fund in excess of $1 billion. ^ For the fiscal year ended August
31, ^ 1997, the advisory fees paid to ^ IFG amounted to ^ 0.64% of the average
net assets of the Fund.
<PAGE>
Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM,
as the Fund's sub-adviser ^, a monthly fee, which is computed at the ^ following
annual rates: prior to January 1, 1998, 0.20% on the first $500 million of the
Fund's average net assets^, 0.17% on the next $500 million of the Fund's average
net assets ^ and 0.13% on the Fund's average net assets in excess of $1 billion
and effective January 1, 1998, 0.25% on the first $500 million of the Fund's
average net assets, 0.2167% on the second $500 million of the Fund's average net
assets and 0.1667% on the Fund's average net assets in excess of $1 billion. No
fee is paid by the Fund to ICM.
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses, allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund, including investment advisory
fees (but excluding brokerage commissions), as a percentage of its average net
assets for the fiscal year ended August 31, ^ 1997, were ^ 0.86%.
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with ^ IFG. Pursuant to the Administrative
Agreement, INVESCO performs certain administrative and internal accounting
services, including without limitation, maintaining general ledger and capital
stock accounts, preparing a daily trial balance, calculating net asset value
daily and providing selected general ledger reports and providing sub-
accounting and recordkeeping services for shareholder accounts maintained by
certain retirement and employee benefit plans for the benefit of participants in
such plans. For such services, the Fund pays INVESCO a fee consisting of a base
fee of $10,000 per year, plus an additional incremental fee computed at an
annual rate not to exceed a maximum of 0.015% per annum of the average net
assets of the ^ Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon ^ Fund Management's evaluation of
broker-dealer financial responsibility coupled with broker-dealer ability to
effect transactions at the best available prices. The ^ Fund may place orders
for portfolio transactions with qualified broker-dealers that recommend the ^
<PAGE>
Fund or sell shares of the ^ Fund to clients, or act as agent in the purchase of
fund shares for clients, if Fund Management believes that the quality of the
execution of the transaction and level of commission are comparable to those
available from other qualified brokerage firms. For further information, see
"Investment Practices -- Placement of Portfolio Brokerage" in the Statement of
Additional Information.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by ^ IFG, as the Fund's ^
distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the ^ section entitled "Services Provided by the Fund," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
<PAGE>
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this ^
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or ^
IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has
the option to redeem shares from any identically registered account in the Fund
or any other INVESCO fund as reimbursement for any loss incurred. You also may
be prohibited or restricted from making future purchases in any of the INVESCO
funds.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction if the broker so elects. Any investor may deal directly with the
Fund in any transaction. In that event, there is no such charge. ^ IFG or IDI
may from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
^(generally 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share for the Fund is
calculated by dividing the market value of the Fund's securities plus the value
of its other assets (including dividends and interest accrued but not
<PAGE>
collected), less all liabilities (including accrued expenses), by the number of
outstanding shares of the Fund. If market quotations are not readily available,
a security will be valued at fair value as determined in good faith by the board
of trustees. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Trust's board of trustees believes that such value represents
fair value.
Under certain circumstances, the Fund may offer its shares, in lieu of cash
payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this ^ Prospectus.
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. ^ IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each Fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call ^ IFG by using the telephone number
on the cover of this ^ Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend date. A shareholder may,
however, elect to reinvest dividends and other distributions in certain of the
<PAGE>
other no-load mutual funds advised by IFG and distributed by ^ IDI, or to
receive payment of all dividends and other distributions in excess of $10.00 by
check by giving written notice to ^ IFG at least two weeks prior to the record
date on which the change is to take effect. Further information concerning these
options can be obtained by contacting ^ IFG.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by ^ IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting ^ IFG.
Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
^ Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.,
INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc.,
INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income
Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax-Free Income Funds, Inc.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Trust or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to ^ IFG, using the telephone number or address
on the cover of this ^ Prospectus. Exchanges made by telephone must be in the
amount of at least $250 if the exchange is being made into an existing account
of one of the INVESCO funds. All exchanges that establish a new account must
meet the fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the fund's applicable minimum subsequent investment requirements.
The ^ option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange ^, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange transactions are genuine. These
<PAGE>
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this ^ policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange ^ option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange ^ policy also may be modified or terminated at
any time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange privilege will
be given at least 60 days prior to the date of termination or the effective date
of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences^. Shareholders interested
in exercising the exchange ^ option may contact ^ IFG for information concerning
their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis,
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying ^ IFG at least two weeks prior to the date the change
is to be made. Further information regarding this service can be obtained by
contacting ^ IFG.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by ^ notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting ^ IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting ^ IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified
employee pension plans and corporate retirement plans. In addition, shares can
<PAGE>
be used to fund tax qualified plans established under Section 403(b) of the
Internal Revenue Code by educational institutions, including public school
systems and private schools, and certain kinds of non-profit organizations,
which provide deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG,
is qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call ^ IDI at the telephone number listed on the cover of this
prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. Redemption requests sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. (See "How Shares Can Be
Purchased.") Net asset value per share of the Fund at the time of the redemption
may be more or less than the price originally paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to ^ IFG at the address noted
above. If shares are held in the name of a corporation, additional documentation
may be necessary. Call or write for ^ specific information. If payment for the
redeemed shares is to be made to someone other than the registered owner(s), the
signature(s) must be guaranteed by a financial institution which qualifies as an
eligible guarantor institution. Redemption procedures with respect to accounts
registered in the names of broker-dealers may differ from those applicable to
other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which ^ will take up to 15 days).
<PAGE>
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in ^ a Fund account, ^ IFG
will terminate any ^ EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
accounts maintained in their name by telephoning redemption instructions to ^
IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO
Trust Company sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless ^ IFG permits a larger
redemption request to be placed by telephone, a shareholder may not place a
redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank
which the shareholder has designated to receive the proceeds of telephone
redemptions. The Fund charges no fee for effecting such telephone redemptions. ^
The telephone redemption ^ policy may be modified or terminated in the future at
the discretion of Fund Management. Shareholders should understand that while the
Fund will attempt to process all telephone redemption requests on an expedited
basis, there may be times, particularly in periods of severe economic or market
disruption, when (a) they may encounter difficulty in placing a telephone
redemption request, and (b) processing telephone redemptions will require up to
seven days following receipt of the redemption request, or additional time
because of the unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmations of transactions initiated by telephone. As a result of
this policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
<PAGE>
TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders ^ all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and ^ other distributions in taxable income for federal, state and
local income tax purposes. Dividends and other distributions are taxable whether
they are received in cash or automatically ^ reinvested in shares of the Fund or
another fund in the INVESCO group.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%. The Tax Act, however, does not address the application of these
rules to distributions of net capital gain (excess of long-term capital gain
over short-term capital losses) by a regulated investment company, including
whether such distributions may be treated by its shareholders in accordance with
the Fund's holding period for the assets it sold that generated the gain. The
application of the new capital gain rules must be determined by further
legislation or future regulations that are not available as this Prospectus is
being prepared. At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to ^ withholding of foreign taxes on dividends or
interest ^ received on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund ^.
^ Individuals and certain other non-corporate shareholders may be subject
to backup withholding of 31% on dividends, capital gain and other distributions
and redemption proceeds. Unless ^ you are subject to backup withholding for
other reasons, ^ you can avoid backup withholding on ^ your Fund account by
ensuring that ^ we have a correct, certified tax identification number.
<PAGE>
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other ^ Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments. ^
Dividends paid by the Fund will be based solely on the income earned by it. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders. Dividends from net investment income are paid on a
quarterly basis, at the end of November, February, May and August, at the
discretion of the ^ Trust's Board of Trustees. Dividends are automatically
reinvested in additional shares of the Fund at the net asset value on the
ex-dividend date unless otherwise requested.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in additional shares of the Fund at the net asset
value on the ex-dividend date unless otherwise requested.
Dividends and other ^ distributions are paid to ^ holders of shares on the
record date of ^ distribution regardless of how long the Fund shares have been
held by the shareholder. The ^ Fund's share price will then drop on the
ex-dividend date by the amount of the distribution ^. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have ^"bought" the distribution by paying the full purchase price, a portion of
which is then returned in the form of a taxable distribution.
^
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of trustees, will be by
all funds of the Trust voting together. In other cases, such as voting upon the
investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required and does not expect, to hold regular annual meetings of
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
<PAGE>
required by applicable law or the Trust's Declaration of Trust. The Trust will
assist shareholders in communicating with other shareholders as required by the
1940 Act. Trustees may be removed by action of the holders of two-thirds of the
outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this ^ Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $20.00 per shareholder
account or, where applicable, per participant in an omnibus account ^. The
transfer agency fee is not charged to each shareholder's or participant's
account but is an expense of the Fund to be paid from the Fund's assets.
Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of ^ IFG, may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by ^ IFG. In such cases,
^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping
fee out of the transfer agency fee which is paid to ^ IFG by the Fund.
<PAGE>
INVESCO VALUE TRUST
INVESCO Total Return Fund
PROSPECTUS
January 1, ^ 1998
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
^ In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
January 1, ^ 1998
INVESCO VALUE TRUST
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800/525-8085
INVESCO VALUE TRUST (the "Trust"), is an open-end management investment
company organized in series form in which all of the Funds seek to provide
investors with a high total return on investment through capital appreciation
and current income. Each of the Trust's three individual funds (collectively,
the "Funds") has separate investment policies. Investors may purchase shares of
any or all Funds. The following Funds are available:
INVESCO VALUE EQUITY Fund
INVESCO INTERMEDIATE GOVERNMENT BOND Fund
INVESCO TOTAL RETURN Fund
Additional Funds may be offered in the future.
Prospectuses for the Funds dated January 1, ^ 1998, which provide the
basic information you should know before investing in a Fund, may be obtained
without charge from INVESCO ^ Distributors, Inc., Post Office Box 173706,
Denver, Colorado 80217-3706. This Statement of Additional Information is not a ^
prospectus but contains information in addition to and more detailed than that
set forth in each Prospectus. It is intended to provide additional information
regarding the activities and operations of the Trust and should be read in
conjunction with the Prospectus.
Investment Adviser ^: INVESCO FUNDS GROUP, INC.
Distributor: INVESCO ^ DISTRIBUTORS, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
INVESTMENT POLICIES AND RESTRICTIONS 86
THE TRUST AND ITS MANAGEMENT 92
HOW SHARES CAN BE PURCHASED 105
HOW SHARES ARE VALUED 108
TRUST PERFORMANCE 109
SERVICES PROVIDED BY THE TRUST 111
TAX-DEFERRED RETIREMENT PLANS 112
HOW TO REDEEM SHARES 112
DIVIDENDS, ^ OTHER DISTRIBUTIONS AND TAXES 113
INVESTMENT PRACTICES 116
ADDITIONAL INFORMATION 119
APPENDIX A 123
APPENDIX B 125
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
Reference is made to the section entitled "Investment Objectives And
Policies" in the Prospectuses for a discussion of the investment objectives and
policies of the Funds. In addition, set forth below is further information
relating to the INVESCO Value Equity, Intermediate Government Bond and Total
Return Funds.
Loans of Portfolio Securities. As described in the section entitled "Risk
Factors" in the Prospectuses, all of the Funds may lend their portfolio
securities to brokers, dealers, and other financial institutions, provided that
such loans are callable at any time by the Funds and are at all times secured by
collateral held by the Funds' custodian consisting of cash or securities issued
or guaranteed by the United States Government or its agencies, or any
combination thereof, equal to at least the market value, determined daily, of
the loaned securities. The advantage of such loans is that such a Fund continues
to earn income on the loaned securities, while at the same time receiving
interest from the borrower of the securities. Loans will be made only to firms
deemed by the adviser or sub-adviser (collectively, "Fund Management"), under
procedures established by the Trust's Board of Trustees, to be creditworthy and
when the amount of interest to be received justifies the inherent risks. A loan
may be terminated by the borrower on one business day's notice, or by such Fund
at any time. If at any time the borrower fails to maintain the required amount
of collateral (at least 100% of the market value of the borrowed securities),
the Fund will require the deposit of additional collateral not later than the
business day following the day on which a collateral deficiency occurs or the
collateral appears inadequate. If the deficiency is not remedied by the end of
that period, such Fund will use the collateral to replace the securities while
holding the borrower liable for any excess of replacement cost over collateral.
Upon termination of the loan, the borrower is required to return the securities
to such Fund. Any gain or loss during the loan period would inure to such Fund.
^ Futures and Options on ^ Futures. As described in the Funds'
Prospectuses, each Fund may enter into futures contracts, and purchase and sell
("write") options to buy or sell ^ futures contracts ^. The Funds will comply
with and adhere to all limitations in the manner and extent to which ^ it
effects transactions in futures and options on such futures currently imposed by
the rules and policy guidelines of the Commodity Futures Trading Commission
("CFTC") as conditions for exemption of a mutual fund, or investment advisers
thereto, from registration as a commodity pool operator. ^ No Fund will, as to
any positions, whether long, short or a combination thereof, enter into futures
and options thereon for which the aggregate initial margins and premiums exceed
5% of the fair market value of ^ its assets after taking into account unrealized
profits and losses on options it has entered into. In the case of an option that
is "in^-the^-money^," as defined in the Commodity Exchange Act (the "CEA")^, the
in^- the^-money amount may be excluded in computing such 5%. (In general a call
option on a future is "in^-the^-money" if the value of the future exceeds the
exercise ("strike") price of the call; a put option on a future is
"in^-the^-money" if the value of the future which is the subject of the put is
exceeded by the strike price of the put.) ^ Each Fund may use futures and
options thereon solely for bona fide hedging or for other non^-speculative
purposes within the meaning and intent of the applicable provisions of the CEA.
<PAGE>
^ Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Instead, the
^ Fund will be required to deposit in ^ its segregated asset account an amount
of cash or qualifying securities (currently U.S. Treasury bills), currently in a
minimum amount of $15,000. This is called "initial margin." Such initial margin
is in the nature of a performance bond or good faith deposit on the contract.
However, since losses on open contracts are required to be reflected in cash in
the form of variation margin payments, ^ a Fund may be required to make
additional payments during the term of the contracts to ^ its broker. Such
payments would be required, for example, where, during the term of an interest
rate futures contract purchased by ^ a Fund, there was a general increase in
interest rates, thereby making ^ such Fund's portfolio securities less valuable.
In all instances involving the purchase of ^ futures contracts by ^ a Fund, an
amount of cash together with such other securities as permitted by applicable
regulatory authorities to be utilized for such purpose, at least equal to the
market value of the futures contracts, will be deposited in a segregated account
with ^ such Fund's custodian to collateralize the position. At any time prior to
the expiration of a futures contract, ^ a Fund may elect to close ^ its position
by taking an opposite position which will operate to terminate ^ its position in
the futures contract. For a more complete discussion of the risks involved in ^
futures and options on ^ futures and other ^ securities, refer to Appendix B
("Description of Futures ^, Options and Forward Contracts").
Where futures are purchased to hedge against a possible increase in the
price of a security before ^ a Fund is able in an orderly fashion to invest in
the security, it is possible that the market may decline instead. If the ^ Fund,
as a result, concluded not to make the planned investment at that time because
of concern as to possible further market decline or for other reasons, the ^
Fund would realize a loss on the futures contract that is not offset by a
reduction in the price of securities purchased.
In addition to the possibility that there may be an imperfect correlation
or no correlation at all between movements in the ^ futures contracts and the
portion of the portfolio being hedged, the price of ^ futures may not correlate
perfectly with movements in the ^ prices due to certain market distortions. All
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between ^ underlying instruments and the
value of ^ the futures contract. Moreover, the deposit requirements in the
futures market are less onerous than margin requirements in the securities
market and may therefore cause increased participation by speculators in the
futures market. Such increased participation may also ^ cause temporary price
distortions. Due to the possibility of price distortion in the futures market
and because of the imperfect correlation between movements in ^ the underlying
instrument and movements in the prices of ^ futures contracts, the value of ^
futures contracts as a hedging device may be reduced.
In addition, if ^ a Fund has insufficient available cash, ^ it may at
times have to sell securities to meet variation margin requirements. Such sales
may have to be effected at a time when it may be disadvantageous to do so.
<PAGE>
Options on Futures Contracts. A Fund may buy and write options on futures
contracts for hedging purposes. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call option on an
individual security. Depending on the pricing of the option compared to either
the price of the futures contract upon which it is based or the price of the
underlying instrument, ownership of the option may or may not be less risky than
ownership of the futures contract or the underlying instrument. As with the
purchase of futures contracts, when a Fund is not fully invested it may buy a
call option on a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the option is below the exercise price, a
Fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in such Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at expiration of the option is higher than the exercise price,
a Fund will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which the Fund is
considering buying. If a call or put option which a Fund has written is
exercised, such Fund will incur a loss which will be reduced by the amount of
the premium it received. Depending on the degree of correlation between changes
in the value of its portfolio securities and changes in the value of the futures
positions, a Fund's losses from existing options on futures may to some extent
be reduced or increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, a Fund may buy a put option on a futures contract to hedge its
portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be reflected fully in the value of the options bought.
Forward Foreign Currency Contracts. The Funds may enter into forward
currency contracts to purchase or sell foreign currencies (i.e., non-U.S.
currencies) ("forward contracts") as a hedge against possible variations in
foreign exchange rates. A forward foreign currency exchange contract is an
agreement between the contracting parties to exchange an amount of currency at
some future time at an agreed upon rate. The rate can be higher or lower than
the spot rate between the currencies that are the subject of the contract. A
forward contract generally has no deposit requirement, and such transactions do
not involve commissions. By entering into a forward contract for the purchase or
sale of the amount of foreign currency invested in a foreign security
transaction, a Fund can hedge against possible variations in the value of the
<PAGE>
dollar versus the subject currency either between the date the foreign security
is purchased or sold and the date on which payment is made or received or during
the time the Fund holds the foreign security. Hedging against a decline in the
value of a currency in the foregoing manner does not eliminate fluctuations in
the prices of portfolio securities or prevent losses if the prices of such
securities decline. Furthermore, such hedging transactions preclude the
opportunity for gain if the value of the hedged currency should rise. The Funds
will not speculate in forward currency contracts. The Funds will not attempt to
hedge all of their non-U.S. portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by their investment
adviser. The Funds will not enter into forward contracts for a term of more than
one year. Forward contracts may, from time to time, be considered illiquid, in
which case they would be subject to the Fund's limitation on investing in
illiquid securities, discussed in the Prospectus.
Real Estate Investment Trusts. Although they are not permitted to invest
in real estate directly, the Funds may invest in real estate investment trusts
("REITs"). A REIT is a trust which sells shares to investors and uses the
proceeds to invest in real estate or interests in real estate.
Investment Restrictions. As described in each Fund's Prospectus, the Trust
and each of the Funds are subject to certain investment restrictions. ^ The
following restrictions are fundamental and may not be changed with respect to a
particular Fund without the prior approval of the holders of a majority, as
defined in the Investment Company Act of 1940 (the "1940 Act"), of the
outstanding voting securities of that Fund. For purposes of the following
limitations, all percentage limitations apply immediately after a purchase or
initial investment. Any subsequent change in a particular percentage resulting
from fluctuations in value does not require elimination of any security from the
Fund.
Under these restrictions, neither the Trust nor any Fund will:
(1) Other than investments by the Funds, including the INVESCO
Intermediate Government Bond Fund, in obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, invest in the securities of issuers conducting
their principal business activities in the same industry
(investments in obligations issued by a foreign government,
including the agencies or instrumentalities of a foreign government,
are considered to be investments in a single industry), if
immediately after such investment the value of a Fund's investments
in such industry would exceed 25% of the value of such Fund's total
assets;
(2) Invest in the securities of any one issuer, other than the United
States Government, if immediately after such investment more than 5%
of the value of a Fund's total assets, taken at market value, would
be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by such Fund.
<PAGE>
(3) Underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the Securities Act of
1933, as amended, in connection with the disposition of a Fund's
portfolio securities.
(4) Invest in companies for the purpose of exercising control or
management.
(5) Issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 33 1/3% of the
value of a Fund's total assets at the time the borrowing is made.
(6) Mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to an extent
not greater than 5% of the value of a Fund's total assets.
(7) ^ Sell short, except the Value Equity and Total Return Funds may
purchase or sell options or futures, or write, purchase or sell
puts and calls.
^(8) Buy on margin, except the Value Equity and Total Return Funds may
purchase or sell options or futures, or write, purchase or sell puts
and calls.
(9) Purchase or sell real estate or interests in real estate. A Fund may
invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which
invest in real estate or interests therein.
(10) ^ Buy or sell commodities ^ contracts (however the Value Equity and
Total Return Funds may purchase securities of companies which invest
in the foregoing). This restriction shall not prevent the Funds from
purchasing or selling options on individual securities, security
indexes, and currencies or financial futures or options on financial
futures, or undertaking forward currency contracts. The Intermediate
Government Bond Fund may enter into interest rate futures contracts
if immediately after such a commitment the sum of the then aggregate
futures market prices of financial instruments aggregate purchase
prices under futures contract purchases would not exceed 30% of the
Intermediate Government Bond Fund's total assets.
(11) Make loans to other persons, provided that a Fund may purchase debt
obligations consistent with its investment objectives and policies
and the INVESCO Value Equity, Intermediate Government Bond, and
Total Return Funds may lend limited amounts (not to exceed 10% of
their total assets) of their portfolio securities to broker-dealers
or other institutional investors.
<PAGE>
(12) Purchase securities of other investment companies except (i) in
connection with a merger, consolidation, acquisition or
reorganization, or (ii) by purchase in the open market of securities
of other investment companies involving only customary brokers'
commissions and only if immediately thereafter (i) no more than 3%
of the voting securities of any one investment company are owned by
such a Fund, (ii) no more than 5% of the value of the total assets
of such a Fund would be invested in any one investment company, and
(iii) no more than 10% of the value of the total assets of such a
Fund would be invested in the securities of such investment
companies. The Trust may invest from time to time a portion of the
INVESCO Value Equity, Intermediate Government Bond, and Total Return
Funds' cash in investment companies to which the Adviser serves as
investment adviser; provided that no management or distribution fee
will be charged by the Adviser with respect to any such assets so
invested and provided further that at no time will more than 3% of
such a Fund's assets be so invested. Should such a Fund purchase
securities of other investment companies, shareholders may incur
additional management and distribution fees.
(13) Invest in securities for which there are legal or contractual
restrictions on resale, except that each of the Funds may invest no
more than 2% of the value of ^ its total assets in such securities;
or invest in securities for which there is no readily available
market, except that each of the Funds may invest no more than 5% of
the value ^ its total assets in such securities.
In applying the industry concentration investment restriction (no. 1
above), the Funds use ^ a modified S&P industry code classification schema which
uses various sources to classify.
In applying restriction (13) above, each Fund also includes illiquid
securities (those which cannot be sold in the ordinary course of business within
seven days at approximately the valuation given to them by the Fund) among the
securities subject to the 5% of total assets limit.
Additional investment restrictions adopted by the Trust on behalf of the
Funds and which may be changed by the Trustees at their discretion provide that
the ^ Fund may not:
^(1) (a) enter into any futures contracts, options on futures, puts and
calls if immediately thereafter the aggregate margin deposits on all
outstanding derivative positions held by each Fund and premiums paid
on outstanding positions, after taking into account unrealized
profits and losses, would exceed 5% of the market value of the total
assets of the Fund, or (b) enter into any derivative positions if
the aggregate net amount of the Fund's commitments under outstanding
derivative positions of the Fund would exceed the market value of
the total assets of the Fund.
<PAGE>
(2) Purchase or sell interests in oil, gas or other mineral leases or
exploration or development programs. All of the Funds, however, may
purchase or sell securities issued by entities which invest in such
interests.
(3) Invest more than 5% of a Fund's total assets in securities of
companies having a record, together with predecessors, of less than
three years of continuous operation.
(4) Purchase or retain the securities of any issuer if any individual
officers and trustees/directors of the Trust, the Adviser, or any
subsidiary thereof owns individually more than 0.5% of the
securities of that issuer and all such officers and
trustees/directors together own more than 5% of the securities of
that issuer.
(5) Engage in arbitrage transactions.
^(6) To the extent a Fund invests in warrants, such a Fund's investment
in warrants, valued at the lower of cost or market, may not exceed
5% of the value of such Fund's net assets. Included within that
amount, but not to exceed 2% of the value of ^ each Fund's net
assets may be warrants which are not listed on the New York or
American Stock Exchanges. Warrants acquired by such a Fund as part
of a unit or attached to securities may be deemed to be without
value.
^(7) Invest more than 25% of the value of such a Fund's total assets in
securities of foreign issuers. Investing in securities issued by
companies whose principal business activities are outside the United
States may involve significant risks not present in domestic
investments.
THE TRUST AND ITS MANAGEMENT
The Trust. The Trust was organized under the laws of Massachusetts on July
15, 1987 as "Financial Series Trust." On July 1, 1993, the Trust changed its
name to "INVESCO Value Trust." In addition, the names INVESCO Intermediate
Government Bond Fund, INVESCO Value Equity Fund and INVESCO Total Return Fund
were adopted as the names of the Intermediate Government Bond Fund, Equity Fund
and Flex Fund series of the Trust, respectively, effective July 1, 1993.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
^("IFG"), is employed as the Trust's investment adviser. ^ IFG was established
in 1932 and also serves as an investment adviser to INVESCO Capital Appreciation
Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds,
Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc.,
INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO
<PAGE>
International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple
Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios,
Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment
Funds, Inc.
The Sub-Adviser. ^ IFG, as investment adviser, has contracted with INVESCO
Capital Management, Inc. ("ICM") to provide investment advisory and research
services to the Trust. ICM, the Trust's investment adviser from inception of the
Trust through 1990, has the primary responsibility for providing portfolio
investment management services to the Funds.
The Distributor. Effective September 30, 1997, INVESCO Distributors, Inc.
("IDI") became the Funds' distributor. IDI, established in 1997, is a registered
broker-dealer that acts as distributor for all retail mutual funds advised by
IFG. Prior to September 30, 1997, IFG served as the Funds' distributor.
IFG, ICM and IDI are ^ indirect wholly-owned ^ subsidiaries of AMVESCAP
PLC, a publicly-traded holding company that, through its subsidiaries, engages
in the business of investment management on an international basis. INVESCO PLC
changed its name to AMVESCO PLC on March 3, 1997, and to AMVESCAP PLC on May 8,
1997 as part of a merger between a direct subsidiary of INVESCO PLC and A I M
Management Group, Inc., that created one of the largest independent investment
management businesses in the world with approximately $177.5 billion in assets
under management. IFG was established in 1932 ^ and, as of August 31, ^ 1997
managed 14 mutual funds, consisting of ^ 46 separate portfolios, on behalf of
over ^ 854,448 shareholders. ^ AMVESCAP PLC's other North American subsidiaries
include the following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered ^ broker-dealer whose primary business is
the distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. ^ of Boston, Massachusetts primarily
manages pension and endowment accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for
providing advisory services in the U.S. real estate markets for ^ AMVESCAP PLC's
clients worldwide. Clients include corporate plans, public pension funds, and
endowment and foundation accounts.
--A I M Advisors, Inc. of Houston, Texas provides investment advisory and
administrative services for retail and institutional mutual funds.
<PAGE>
--A I M Capital Management, Inc. of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-adviser to certain retail
and institutional mutual funds, one Canadian mutual fund and one portfolio of an
open-end registered investment company that is offered to separate accounts of
variable insurance companies.
--A I M Distributors, Inc. and Fund Management Company of Houston, Texas
are registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of ^ AMVESCAP PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Funds' Prospectuses, ^ IFG and ICM permit investment
and other personnel to purchase and sell securities for their own accounts in
accordance with a compliance policy governing personal investing by directors,
officers and employees of ^ IFG, ICM and their North American affiliates. The
policy requires officers, inside directors, investment and other personnel of ^
IFG, ICM and their North American affiliates to pre-clear all transactions in
securities not otherwise exempt under the policy. Requests for trading authority
will be denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the policy or would be deemed to
adversely affect any transaction then known to be under consideration for or to
have been effected on behalf of any client account, including the Funds.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of ^ IFG,
ICM and their North American affiliates to various trading restrictions and
reporting obligations. All reportable transactions are reviewed for compliance
with the policy. The provisions of this policy are adminstered by and subject to
exceptions authorized by ^ IFG or ICM.
Investment Advisory Agreement. ^ IFG serves as investment adviser pursuant
to an investment advisory agreement dated February 28, 1997 with the Trust (the
"Agreement") which was approved by the ^ board of trustees on November 6, 1996
by a vote cast in person by a majority of the trustees of the Trust, including a
majority of the trustees who are not "interested persons" of the Trust or
INVESCO at a meeting called for such purpose. Shareholders of the Funds approved
the Agreement on Janaury 31, 1997 for an initial term expiring February 28,
1999. Thereafter, the Agreement may be continued from year to year as to each
Fund as long as such continuance is specifically approved at least annually by
the board of trustees of the Trust, or by a vote of the holders of a majority,
as defined in the 1940 Act, of the outstanding shares of the Fund. Any such
continuance also must be approved by a majority of the Trust's trustees who are
not parties to the Agreement or interested persons (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such continuance. The Agreement may be terminated at any time without penalty
by either party upon sixty (60) days' written notice and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the rules thereunder.
<PAGE>
The Agreement provides that ^ IFG shall manage the investment portfolios of
the ^ Funds in conformity with the ^ Funds' investment policies (either directly
or by delegation to a sub-adviser, which may be a party affiliated with ^ IFG).
Further, ^ IFG shall perform all administrative, internal accounting (including
computation of net asset value), clerical, statistical, secretarial and all
other services necessary or incidental to the administration of the affairs of
the ^ Funds, excluding, however, those services that are the subject of separate
agreement between the Trust and ^ IFG or any affiliate thereof, including ^
provision of transfer agency, dividend disbursing agency, and registrar
services, and services furnished under an Administrative Services Agreement with
^ IFG discussed below. INVESCO will pay the fee of any sub-adviser. ^ Services
provided include, but are not limited to: supplying the Trust with officers,
clerical staff and other employees, if any, who are necessary in connection with
the Funds' operations; furnishing office space, facilities, equipment and
supplies; providing personnel and facilities required to respond to inquiries
related to shareholder accounts; conducting periodic compliance reviews of the
Funds' operations; preparation and review of required documents, reports and
filings by INVESCO's in-house legal and accounting staff (including the
prospectus, statement of additional information, proxy statements, shareholder
reports, tax returns, reports to the SEC, and other corporate documents of the
Funds), except insofar as the assistance of independent accountants or attorneys
is necessary or desirable; supplying basic telephone service and other
utilities^; and preparing and maintaining certain of the books and records
required to be prepared and maintained by the Funds under the 1940 Act. Expenses
not assumed by INVESCO are borne by the Funds. The responsibility for making
decisions to buy, sell, or hold a particular security rests with ^ IFG, as well
as ICM as the Sub-Adviser, subject to review by the board of trustees. Expenses
not assumed by ^ IFG are borne by the Trust.
^ As full compensation for its advisory services to the Trust, IFG
receives a monthly fee. The fee is based upon a percentage of each Fund's
average net assets, determined daily. With respect to the ^ INVESCO Value Equity
and Total Return Funds, the fee is calculated at the annual rate of: 0.75% on
the first $500 million of the average net assets of each Fund; 0.65% on the next
$500 million of average net assets of each Fund; and 0.50% on average net assets
in excess of $1 billion. With respect to the^ INVESCO Intermediate Government
Bond Fund, the fee is calculated at the annual rate of: 0.60% on the first $500
million of the average net assets of the Fund; 0.50% on the next $500 million of
the average net assets of the Fund; and 0.40% on average net assets in excess of
$1 billion. ^
Sub-Advisory Agreement. ICM serves as sub-adviser to the INVESCO Value
Equity, Intermediate Government Bond and Total Return Funds pursuant to a
sub-advisory agreement ^ dated February 28, 1997 (the "Sub-Agreement") with IFG
which was approved by the ^ board of trustees of the Trust on November 6, 1996,
including a majority of the trustees who are not "interested persons" of the
Trust, IFG or ICM at a meeting called for such purpose. Shareholders of each of
the Funds ^ approved the Sub-Agreement on January 31, 1997 for an initial term
expiring February 28, 1999. ^ The Agreement and Sub-Agreement may be continued
from year to year as to each Fund ^ as long as each such continuance is
specifically approved by the board of trustees of the Trust, or by a vote of the
holders of a majority, as defined in the 1940 Act, of the outstanding shares of
<PAGE>
each of the Funds. Each such continuance also must be approved by a majority of
the trustees who are not parties to the Agreement or Sub-Agreements or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such continuance. The
Agreement or Sub-Agreement may be terminated as to any Fund at any time without
penalty by either party or the Trust upon sixty (60) days' written notice and
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the rules thereunder.
The Sub-Agreement provides that ICM, ^ subject to the supervision of IFG,
shall manage the investment portfolios of the respective Funds^ in conformity
with each Fund's investment policies. These management services include: (a)
managing the investment and reinvestment of all the assets, now or hereafter
acquired, of the Funds, and executing all purchases and sales of portfolio
securities; (b) maintaining a continuous investment program for the Funds,
consistent with (i) each Fund's investment policies as set forth in the
Company's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the 1940 Act, and in any prospectus and/or statement
of additional information of the Company, as from time to time amended and in
use under the 1933 Act, and (ii) the Trust's status as a regulated investment
company under the Internal Revenue Code of 1986, as amended; (c) determining
what securities are to be purchased or sold for each of the Funds, unless
otherwise directed by the directors of the Company or IFG, and executing
transactions accordingly; (d) providing the Funds the benefit of all of the
investment analysis and research, the reviews of current economic conditions and
trends, and the consideration of long-range investment policy now or hereafter
generally available to investment advisory customers of the Sub-Advisers; (e)
determining what portion of each of the Funds should be invested in the various
types of securities authorized for purchase by each Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Trust action and any other rights pertaining to the portfolio securities of each
Fund shall be exercised.
The Sub-Agreement provides that as compensation for its services, ICM
shall receive from IFG, at the end of each month, a fee based on the average
daily value of each Fund's net assets at the following annual rates ^: prior to
January 1, 1998, 0.20% on the INVESCO Value Equity Fund's and INVESCO Total
Return Fund's, and 0.16% on the INVESCO Intermediate Government Bond Fund's,
average net ^ assets on the first $500 million; 0.17% on the INVESCO Value
Equity Fund's and INVESCO Total Return Fund's, and 0.13% on the INVESCO
Intermediate Government Bond Fund's, average net ^ assets on the next $500
million ^; and 0.13% on the INVESCO Value Equity Fund's and INVESCO Total Return
Fund's, and 0.11% on the INVESCO Intermediate Government Bond Fund's, average
net asset value in excess of $1 billion. Effective January 1, 1998, ICM shall
receive a fee based on the following annual rates: 0.25% on the INVESCO Value
Equity Fund's and INVESCO Total Return Fund's, and 0.20% on the INVESCO
Intermediate Government Bond Fund's, average net assets on the first $500
million; 0.2167% on the INVESCO Value Equity Fund's and INVESCO Total Return
Fund's, and 0.1667% on the INVESCO Intermediate Government Bond Fund's, average
net assets on the next $500 million; and 0.1667% on the INVESCO Value Equity
Fund's and INVESCO Total Return Fund's, and 0.1333% on the INVESCO Intermediate
Government Bond Fund's average net assets in excess of $1 billion. The
Sub-Advisory fees are paid by IFG, not the Funds.
<PAGE>
Administrative Services Agreement. ^ IFG, either directly or through
affiliated companies, provides certain administrative, sub-accounting, and
recordkeeping services to the Trust pursuant to an Administrative Services
Agreement dated February ^ 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved ^ by the board of trustees on November 6,
1996 by a vote cast in person by all of the trustees of the Trust, including all
of the trustees who are not "interested persons" of the Trust or ^ IFG at a
meeting called for such purpose. The Administrative Agreement was for an initial
term ^ expiring February 28, 1998, and has been continued by action of the board
of trustees until ^ May 15, 1998. The Administrative Agreement may be continued
from year to year thereafter as long as each such continuance is specifically
approved by the board of trustees of the Trust, including a majority of the
trustees who are not parties to the Administrative Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such continuance. The Administrative
Agreement may be terminated at any time without penalty by ^ IFG on sixty (60)
days' written notice, or by the Trust upon thirty (30) days' written notice, and
terminates automatically in the event of an assignment unless the board of
trustees approves such assignment.
The Administrative Agreement provides that ^ IFG shall provide the
following services to the Funds: required administrative and internal accounting
services, including without limitation, maintaining general ledger and capital
stock accounts, preparing a daily trial balance, calculating net asset value
daily, and providing selected general ledger reports.
As full compensation for services provided under the Administrative
Agreement, the Trust pays a monthly fee to ^ IFG consisting of a base fee of
$10,000 per year per Fund, plus an additional incremental fee computed daily and
paid monthly at an annual rate of 0.015% per year of the average net assets of
each Fund of the Trust. For providing such services, ^ IFG received
administrative services fees in the amount of ^ $295,965 for the fiscal year
ended August 31, ^ 1997.
Transfer Agency Agreement. ^ IFG performs transfer agent, dividend
disbursing agent, and registrar services for the Trust pursuant to a Transfer
Agency Agreement dated February 28, 1997, which was approved November 6, 1996 by
the board of trustees of the Trust ^, including a majority of the Trust's
trustees who are not parties to the Transfer Agency Agreement ^ or "interested
persons" of any such party. The Transfer Agency Agreement was for an initial
term expiring February 28, 1998 and has been extended by the board of trustees
until ^ May 15, 1998. Thereafter, the Transfer Agency Agreement may be continued
from year to year as to each Fund as long as such continuance is specifically
approved at least annually by the board of trustees of the Trust, or by a vote
of the holders of a majority of the outstanding shares of each Fund of the
Trust. Any such continuance also must be approved by a majority of the Trust's
trustees who are not parties to the Transfer Agency Agreement or interested
persons (as defined by the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such continuance. The Transfer
Agency Agreement may be terminated at any time without penalty by either party
upon sixty (60) days' written notice.
<PAGE>
The Transfer Agency Agreement provides that the Trust shall pay to ^ IFG an
annual fee of $20.00 per shareholder account or, where applicable, per
participant in an omnibus account ^ with respect to the INVESCO Value Equity and
Total Return Funds, and $26.00 per shareholder account or omnibus account ^ with
respect to INVESCO Intermediate Government Bond Fund. These fees are paid
monthly at the rate of 1/12 of the annual fee and are based upon the number of
shareholder accounts or, where applicable, per participant in an omnibus
account. For the year ended August 31, ^ 1997, the Trust paid ^ IFG transfer
agency fees of ^ $3,193,607.
Set forth below is a table showing the advisory fees, transfer agency fees
and administrative fees paid by each of the Funds for the fiscal years ended
August 31, 1997, 1996^ and 1995 ^.
<TABLE>
<CAPTION>
Fiscal year Fiscal year Fiscal year
ended August 31, 1997 ended August 31, 1996 ended August 31, 1995 ^
Transfer Adminis- Transfer Adminis- Transfer Adminis-
Advisory Agency trative Advisory Agency trative Advisory Agency trative
Portfolio Fees Fees Fees Fees Fees Fees Fees Fees Fees
- --------- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
^
INVESCO Intermediate
Government Bond $268,593 $251,070 $16,715 $235,160 $156,123 $15,879 $214,128 $130,781 $15,353
^ INVESCO Value Equity $2,250,039 $610,115 $55,001 $1,382,049 $282,255 $37,641 $974,578 $168,354 $29,713
INVESCO Total Return $9,140,227 $2,332,422 $224,249 $6,025,905 $953,383 $137,623 $2,824,847 $477,373 $66,616 ^
</TABLE>
Officers and Trustees of the Trust. The overall direction and supervision
of the Trust is the responsibility of the board of trustees, which has the
primary duty of seeing that the Trust's general investment policies and programs
of the Trust are carried out and that the Trust's Funds are properly
administered. The officers of the Trust, all of whom are officers and employees
of, and are paid by, ^ IFG, are responsible for the day-to-day administration of
the Trust. ^ IFG, along with ICM, has the primary responsibility for making
investment decisions on behalf of each of the Funds of the Trust. These
investment decisions are reviewed by the investment committee of ^ IFG.
All of the officers and trustees of the Trust hold comparable positions
with INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund,
Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds,
Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial
<PAGE>
Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market
Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc.,
INVESCO Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and
INVESCO Variable Investment Funds, Inc. In addition, all of the trustees of the
Trust ^, with the exception of Mr. Hesser, are also trustees of INVESCO
Treasurer's Series Trust. Set forth below is information with respect to each of
the Trust's officers and trustees. Unless otherwise indicated, the address of
the trustees and officers is Post Office Box 173706, Denver, Colorado
80217-3706. Their affiliations represent their principal occupations during the
past five years.
CHARLES W. BRADY,*+** Chairman of the Board. Chief Executive Officer and
Director of ^ AMVESCAP PLC, London, England, and of various subsidiaries
thereof. Chairman of the Board of INVESCO ^ Treasurer's Series Trust ^. Address:
1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO
Treasurer's Series Trust. Trustee of ^ INVESCO Global Health Sciences Fund.
Formerly, Chairman of the Executive Committee and Chairman of the Board of
Security Life of Denver Insurance Company, Denver, Colorado; Director of ING
America Life Insurance ^ Company, Urbaine Life Insurance ^ Company and
Midwestern United Life Insurance ^ Company. Address: Security Life Center, 1290
Broadway, Denver, Colorado. Born: January 12, 1928.
^
VICTOR L. ANDREWS,** Trustee. Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance at Georgia State
University, Atlanta, Georgia^; President, Andrews Financial Associates, Inc.
(consulting firm); since October 1984, Director of the Center for the Study of
Regulated Industry at Georgia State University; formerly, member of the
faculties of the Harvard Business School and the Sloan School of Management of
MIT. Dr. Andrews is also a Director of ^ the Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Trustee. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
LAWRENCE H. BUDNER,# Trustee. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
<PAGE>
DANIEL D. CHABRIS,+# Trustee. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19
Kingsbridge Way, Madison, Connecticut. Born: August 1, 1923.
^ WENDY L. GRAMM, Ph.D.,** Trustee. Self-employed (since 1993); Professor
of Economics and Public Administration, University of Texas at Arlington.
Formerly, Chairman, Commodity Futures Trading Commission from 1988 to 1993,
administrator for Information and Regulatory Affairs at the Office of Management
and Budget from 1985 to 1988, Executive Director of the Presidential Task Force
on Regulatory Relief and Director of the Federal Trade Commission's Bureau of
Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange,
Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life
Insurance Company, Kinetic Concepts, Inc., Independant Women's Forum,
International Republic Institute, and the Republican Women's Federal Forum. Dr.
Gramm is also a member of the Board of Visitors, College of Business
Administration, University of Iowa, and a member of the Board of Visitors,
Center for Study of Public Choice, George Mason University. Address: 4201 Yuma
Street, N.W., Washington, D.C. Born: January 10, 1945.
HUBERT L. HARRIS, JR.,* Trustee. Chairman (since ^ 1996) and President
(January 1990 to ^ May 1996) of INVESCO Services, Inc. ^; Chief Executive
Officer of INVESCO Individual Services Group. Member of the Executive Committee
of the Alumni Board of Trustees of Georgia Institute of Technology. Address:
1315 Peachtree Street, ^ NE, Atlanta, Georgia. Born: July 15, 1943.
KENNETH T. KING,^# Trustee. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# ^ Trustee. Retired. Formerly, Vice Chairman of the Board
of Directors of ^ the Citizens and Southern Corporation and Chairman of the
Board and Chief Executive Officer of ^ the Citizens and Southern Georgia ^
Corporation and Citizens and Southern National Bank. Director of Golden Poultry
Co., Inc. Trustee of ^ INVESCO Global Health Sciences Fund and Gables
Residential Trust. Address: 7 Piedmont Center, Suite 100, Atlanta, ^ Georgia.
Born: September 14, 1930.
LARRY SOLL, Ph.D.,** Trustee. Formerly, Chairman of the Board (1987 to
1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President
(1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in
1982. Director of ISD Pharmaceuticals, Inc., Trustee of INVESCO Global Health
Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26,
1942.
<PAGE>
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company
(since 1989) and INVESCO Distributors, Inc. (since 1997); Vice President (May
1989 to April 1995), Secretary and General Counsel of INVESCO Funds Group, Inc.;
formerly, employee of a U.S. regulatory agency, Washington, D.C., (June 1973
through May 1989). Born: September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company ^(since 1988). Senior Vice President
and Treasurer of INVESCO Distributors, Inc. (since 1997). Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. (since 1995) and of INVESCO Distributors, Inc. (since
1997) and Trust Officer of INVESCO Trust Company ^(since July 1995) and formerly
(August 1992 to July 1995), Vice President of INVESCO Funds Group, Inc. and
Trust Officer of INVESCO Trust Company. Formerly, Vice President of 440
Financial Group from June 1990 to August 1992 ^; Assistant Vice President of
Putnam Companies from November 1986 to June 1990. Born: August 21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. (since 1984) and Trust Officer of INVESCO Trust Company. Born: September
14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) and Trust
Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Trust.
+Member of the executive committee of the Trust. On occasion, the
executive committee acts upon the current and ordinary business of the Trust
between meetings of the board of trustees. Except for certain powers which,
under applicable law, may only be exercised by the full board of trustees, the
executive committee may exercise all powers and authority of the board of
trustees in the management of the business of the Trust. All decisions are
subsequently submitted for ratification by the board of trustees.
*These trustees are "interested persons" of the Trust as defined in the ^
Investment Company Act of 1940.
**Member of the management liaison committee of the ^
Company.
As of ^ October 28, 1997, officers and trustees of the Trust, as a group,
beneficially owned less than 1% of the Trust's outstanding shares and less than
1% of any Fund's outstanding shares.
<PAGE>
Director Compensation
The following table sets forth, for the fiscal year ended August 31, ^
1997: the compensation paid by the Trust to its independent trustees for
services rendered in their capacities as trustees of the Trust; the benefits
accrued as Trust expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these trustees upon retirement as a result of their service to the
Trust. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO ^ Distributors, Inc. (including the
Funds), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and ^
INVESCO Global Health Sciences Fund (collectively, the "INVESCO Complex") to
these trustees for services rendered in their capacities as directors or
trustees during the year ended December 31, ^ 1996. As of December 31, ^ 1996,
there were ^ 49 funds in the INVESCO Complex. Dr. Soll became an independent
trustee of the Trust effective May 15, 1997. Dr. Gramm became an independent
trustee of the Trust effective July 29, 1997.
<PAGE>
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Trust Upon Paid To
Trust(1) Expenses(2) Retirement(3) Trustees(1)
Fred A.Deering, ^ $7,694 $2,611 $2,542 $98,850
Vice Chairman of
the Board
Victor L. Andrews ^ 7,662 2,467 2,943 84,350
Bob R. Baker ^ 7,894 2,203 3,944 84,850
Lawrence H. Budner ^ 7,394 2,467 2,943 80,350
Daniel D. Chabris 7,569 2,816 2,092 84,850
A. D. Frazier, Jr.(4) 1,404 0 0 81,500
Wendy L. Gramm 1,617 0 0 0
Kenneth T. King 6,629 2,711 2,306 71,350
John W. McIntyre 7,060 0 0 90,350
Larry Soll 3,045 0 0 17,500
------- ------- ------- --------
Total $57,968 $15,275 $16,770 $693,950
% of Net Assets 0.0026%(5) 0.0007%(5) 0.0045%(6)
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees, and the members of specially approved task forces of the
board of trustees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent trustees.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the trustees.
(3)These figures represent the Trust's share of the estimated annual
benefits payable by the INVESCO Complex (excluding ^ INVESCO Global Health
Sciences Fund which does not participate in any retirement plan) upon the
<PAGE>
trustees' retirement, calculated using the current method of allocating
trustee compensation among the funds in the INVESCO Complex. These estimated
benefits assume retirement at age 72 and that the basic retainer payable to the
trustees will be adjusted periodically for inflation, for increases in the
number of funds in the INVESCO Complex and for other reasons during the period
in which retirement benefits are accrued on behalf of the respective trustees.
This results in lower estimated benefits for trustees who are closer to
retirement and higher estimated benefits for trustees who are further from
retirement. With the exception of Messrs. Frazier and McIntyre and Drs. Soll and
Gramm, each of these trustees has served as a director/trustee of one or more of
the funds in the INVESCO Complex for the minimum five-year period required to be
eligible to participate in the Defined Benefit Deferred Compensation Plan.
^ (4)Effective February 28, 1997, Mr. Frazier resigned as a trustee of the
Trust. Effective November 1, 1996, Mr. Frazier ^ was employed by INVESCO PLC
(the predecessor to AMVESCAP PLC), a company affiliated with IFG and did not
receive any director's fees or other compensation from the ^ Trust or other
funds in the INVESCO Complex for his service as a ^ director/trustee.
^ (5)Total as a percentage of the Trust's net assets as of August 31, ^
1997.
^ (6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, ^ 1996.
Messrs. Brady^ and Harris, as "interested persons" of the Trust and of the
other funds in the INVESCO Complex, receive compensation as officers or
employees of ^ IFG or its affiliated companies and do not receive any trustee's
fees or other compensation from the Trust or other funds in the INVESCO Complex
for their services as trustees.
The boards of directors/trustees of the mutual funds managed by ^ IFG and
INVESCO Treasurer's Series Trust have adopted a Defined Benefit Deferred
Compensation Plan for the non-interested directors and trustees of the funds.
Under this plan, each director or trustee who is not an interested person of the
funds (as defined in the 1940 Act) and who has served for at least five years (a
"qualified director") is entitled to receive, upon retiring from the boards at
the retirement age of 72 (or the retirement age of 73 to 74, if the retirement
date is extended by the boards for one or two years, but less than three years)
continuation of payment for one year (the "first year retirement benefit") of
the annual basic retainer payable by the funds to the qualified trustee at the
time of his retirement (the "basic retainer"). Commencing with any such
trustee's second year of retirement, and commencing with the first year of
retirement of a trustee whose retirement has been extended by the board for
three years, a qualified trustee shall receive quarterly payments at an annual
rate equal to ^ 40% of the basic retainer. These payments will continue for the
remainder of the qualified trustee's life or ten years, whichever is longer (the
"reduced retainer payments"). If a qualified trustee dies or becomes disabled
after age 72 and before age 74 while still a trustee of the funds, the first
year retirement benefit and the reduced retainer payments will be made to him or
to his beneficiary or estate. If a qualified trustee becomes disabled or dies
<PAGE>
either prior to age 72 or during his/her 74th year while still a trustee of the
funds, the trustee will not be entitled to receive the first year retirement
benefit; however, the reduced retainer payments will be made to his beneficiary
or estate. The plan is administered by a committee of three trustees who are
also participants in the plan and one trustee who is not a plan participant. The
cost of the plan will be allocated among the INVESCO^ and Treasurer's Series
Trust funds in a manner determined to be fair and equitable by the committee.
The Trust is not making any payments to trustees under the plan as of the date
of this Statement of Additional Information. The Trust has no stock options or
other pension or retirement plans for management or other personnel and pays no
salary or compensation to any of its officers.
The Trust has an audit committee ^ that is comprised of ^ five of the
trustees who are not interested persons of the Trust. The committee meets
periodically with the Trust's independent accountants and officers to review
accounting principles used by the Trust, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Trust also has a management liaison committee which meets quarterly
with various management personnel of ^ IFG in order (a) to facilitate better
understanding of management and operations of the Trust, and (b) to review legal
and operational matters which have been assigned to the committee by the board
of trustees, in furtherance of the board of trustees' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The shares of each Fund are sold on a continuous basis at the net asset
value per share of the Fund next calculated after receipt of a purchase order in
good form. The net asset value per share ^ of each Fund is computed once each
day that the New York Stock Exchange is open as of the close of regular trading
on that Exchange, but may also be computed at other times. See "How Shares Are
Valued." ^ IDI acts as the Trust's ^ distributor under a distribution agreement
with the Trust under which it receives no compensation and bears all expenses,
including the costs of printing and distribution of prospectuses incident to
direct sales and distribution of Trust shares on a no-load basis.
The Value Equity and Intermediate Bond Funds have adopted a Plan and
Agreement of Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940
Act, which was implemented on November 1, 1997. The Plan was approved on May 16,
1997, at a meeting called for such purpose by a majority of the trustees of the
Trust, including a majority of the trustees who neither are "interested persons"
of the Trust nor have any financial interest in the operation of the Plan
("12b-1 trustees"). The Plan was approved by the shareholders of each of the
Funds on October 28, 1997. The following disclosures relate only to the Value
Equity and Intermediate Bond Funds and do not concern the Total Return Fund. The
Plan provides that these Funds may make monthly payments to IDI of amounts
<PAGE>
computed at an annual rate no greater than 0.25% of each Fund's new sales of
shares, exchanges into the Fund and reinvestments of dividends and capital gain
distributions added after November 1, 1997 to permit it for expenses incurred by
it in connection with the distribution of a Fund's shares to investors. Payment
amounts by a Fund under the Plan, for any month, may only be made to compensate
or pay expenditures incurred during the rolling 12-month period in which that
month falls. For the fiscal year ended August 31, 1997, the Funds had made no
payments to IFG (the predecesor of IDI as distributor of shares of the Funds)
under the 12b-1 plan. As noted in the Prospectuses, one type of expenditure
permitted by the Plan is the payment of compensation to securities companies,
and other financial institutions and organizations, which may include
IDI-affiliated companies, in order to obtain various distribution-related and/or
administrative services for the Funds. Each Fund is authorized by the Plan to
use its assets to finance the payments made to obtain those services. Payments
will be made by IDI to broker-dealers who sell shares of a Fund and may be made
to banks, savings and loan associations and other depository institutions.
Although the Glass-Steagall Act limits the ability of certain banks to act as
underwriters of mutual fund shares, the Funds do not believe that these
limitations would affect the ability of such banks to enter into arrangements
with IDI, but can give no assurance in this regard. However, to the extent it is
determined otherwise in the future, arrangements with banks might have to be
modified or terminated, and, in that case, the size of one or more of the Funds
possibly could decrease to the extent that the banks would no longer invest
customer assets in a particular Fund. Neither the Trust nor its investment
adviser will give any preference to banks or other depository institutions which
enter into such arrangements when selecting investments to be made by each Fund.
The Plan was not implemented until November 1, 1997. Therefore, for the
fiscal year ended August 31, 1997 no 12b-1 amounts were paid by the Value Equity
Fund or Intermediate Government Bond Fund.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Trust's Transfer Agent computer-processable tapes of each Fund's
transactions by customers, serving as the primary source of information to
customers in answering questions concerning each Fund, and assisting in other
customer transactions with each Fund.
The Plan provides that it shall continue in effect with respect to each
Fund for so long as such continuance is approved at least annually by the vote
of the board of trustees cast in person at a meeting called for the purpose of
voting on such continuance. The Plan can also be terminated at any time with
respect to any Fund, without penalty, if a majority of the 12b-1 trustees, or
shareholders of such Fund, vote to terminate the Plan. The Trust may, in its
absolute discretion, suspend, discontinue or limit the offering of its shares of
any Fund at any time. In determining whether any such action should be taken,
the board of trustees intends to consider all relevant factors including,
without limitation, the size of a particular Fund, the investment climate for
any particular Fund, general market conditions, and the volume of sales and
<PAGE>
redemptions of a Fund's shares. The Plan may continue in effect and payments may
be made under the Plan following any such temporary suspension or limitation of
the offering of a Fund's shares; however, neither Fund is contractually
obligated to continue the Plan for any particular period of time. Suspension of
the offering of a Fund's shares would not, of course, affect a shareholder's
ability to redeem his shares. So long as the Plan is in effect, the selection
and nomination of persons to serve as independent trustees of the Trust shall be
committed to the independent trustees then in office at the time of such
selection or nomination. The Plan may not be amended to increase materially the
amount of any Fund's payments thereunder without approval of the shareholders of
that Fund, and all material amendments to the Plan must be approved by the board
of trustees, including a majority of the 12b-1 trustees. Under the agreement
implementing the Plan, IDI or the Funds, the latter by vote of a majority of the
12b-1 trustees, or of the holders of a majority of a Fund's outstanding voting
securities, may terminate such agreement as to that Fund without penalty upon 30
days' written notice to the other party. No further payments will be made by a
Fund under the Plan in the event of its termination as to that Fund.
To the extent that the Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of each Fund's assets in the amounts and for the
purposes set forth therein, notwithstanding the occurrence of an assignment, as
defined by the 1940 Act, and rules thereunder. To the extent it constitutes an
agreement pursuant to a plan, each Fund's obligation to make payments to IDI
shall terminate automatically, in the event of such "assignment," in which case
the Funds may continue to make payments pursuant to the Plan to IDI or another
organization only upon the approval of new arrangements, which may or may not be
with IDI, regarding the use of the amounts authorized to be paid by it under the
Plan, by the trustees, including a majority of the 12b-1 trustees, by a vote
cast in person at a meeting called for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by the Funds are provided to, and reviewed by, the trustees on a
quarterly basis. On an annual basis, the trustees consider the continued
appropriateness of the Plan and the level of compensation provided therein.
The only trustees or interested persons, as that term is defined in Section
2(a)(19) of the 1940 Act, of the Trust who have a direct or indirect financial
interest in the operation of the Plan are the officers and trustees of the Trust
listed herein under the section entitled "The Fund And Its Management--Officers
and Trustees of the Trust" who are also officers either of IDI or companies
affiliated with IDI. The benefits which the Trust believes will be reasonably
likely to flow to it and its shareholders under the Plan include the following:
(1) Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Funds;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of securities of the Funds in
amounts and at times that are disadvantageous for investment
purposes;
<PAGE>
(3) The positive effect which increased Fund assets will have on its
revenues could allow IFG and its affiliated companies:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of each Fund's
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from IFG and its affiliated companies (and support
them in their infancy), and thereby expand the investment
choices available to all shareholders, and
(c) To acquire and retain talented employees who desire to be
associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
fixed expenses over a larger asset base), thereby partially
offsetting the costs of the Plan.
HOW SHARES ARE VALUED
As described in the section of each Fund's Prospectus entitled "How Shares
Can Be Purchased," the net asset value of shares of each Fund of the Trust is
computed once each day that the New York Stock Exchange is open as of the close
of regular trading on that Exchange ^(generally 4:00 p.m., New York time) and
applies to purchase and redemption orders received prior to that time. Net asset
value per share is also computed on any other day on which there is a sufficient
degree of trading in the securities held by a Fund that the current net asset
value per share might be materially affected by changes in the value of the
securities held, but only if on such day the Trust receives a request to
purchase or redeem shares of that Fund. Net asset value per share is not
calculated on days the New York Stock Exchange is closed, such as federal
holidays including New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. ^ The net asset value per share of each Fund is calculated by
dividing the value of all securities held by that Fund and its other assets
(including dividends and interest accrued but not collected), less the Fund's
liabilities (including accrued expenses), by the number of outstanding shares of
that Fund.
Securities traded on national securities exchanges, the NASDAQ National
Market System, the NASDAQ Small Cap market and foreign markets are valued at
their last sale prices on the exchanges or markets where such securities are
<PAGE>
primarily traded. Securities traded in the over-the-counter market for which
last sale prices are not available, and listed securities for which no sales
were reported on a particular date, are valued at their highest closing bid
prices (or, for debt securities, yield equivalents thereof) obtained from one or
more dealers making markets for such securities. If market quotations are not
readily available, securities will be valued at their fair values as determined
in good faith by the Trust's board of trustees or pursuant to procedures adopted
by the board of trustees. The above procedures may include the use of valuations
furnished by a pricing service which employs a matrix to determine valuations
for normal institutional-size trading units of debt securities. Prior to
utilizing a pricing service, the Trust's board of trustees reviews the methods
used by such service to assure itself that securities will be valued at their
fair values. The Trust's board of trustees also periodically monitors the
methods used by such pricing services. Debt securities with remaining maturities
of 60 days or less at the time of purchase are normally valued at amortized
cost.
The ^ value of securities held by ^ each Fund, and other assets used in
computing net asset value, generally ^ is determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Funds' net asset value. However, in the event that the closing price of a
foreign security is not available in time to calculate a Fund's net asset value
on a particular day, the Trust's board of trustees has authorized the use of the
market price for the security obtained from an approved pricing service at an
established time during the day which may be prior to the close of regular
trading in the security. The value of all assets and liabilities initially
expressed in foreign currencies will be converted into U.S. dollars at the spot
rate of such currencies against U.S. dollars provided by an approved pricing
service.
TRUST PERFORMANCE
As discussed in the section of each Fund's Prospectus entitled
"Performance Data," all of the Funds advertise their total return performance.
In addition, the INVESCO Intermediate Government Bond Fund advertises its yield.
^ The average annual total return ^ as of August 31, 1997 for shares of each of
the following Funds for the periods listed below were as follows:
<PAGE>
Life of
Portfolio 1 Year 5 Years Portfolio
- --------- ------ ------- ---------
^ INVESCO Intermediate
Government Bond Fund ^ 6.64% 5.65% 7.54%(1)
INVESCO Value Equity Fund 32.04% 17.60% 12.74%(1)
INVESCO Total Return Fund ^ 27.01% 15.38% 13.68%(2)
- -----------------
(1) 136 months (11.33 years)
(2) 120 months (10.00 years)
Average annual total return performance for each ^ Fund reflects the
deduction of a proportional share of Trust expenses allocated to the Fund for
the periods indicated. In each case, average annual total return 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)exponent = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period and Fund
indicated.
The yield of the INVESCO Intermediate Government Bond Fund for the 30 days
ended August 31, ^ 1997, was ^4.86%. This yield was computed by dividing the net
investment income per share earned during the period as calculated according to
a prescribed formula by the net asset value per share on August 31, ^ 1997.
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.
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
Funds. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
<PAGE>
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
SERVICES PROVIDED BY THE TRUST
Periodic Withdrawal Plan. As described in the section of each Fund's
Prospectus entitled "Services Provided by the Trust," the Trust offers a
Periodic Withdrawal Plan. All dividends and distributions on shares owned by
shareholders participating in this Plan are reinvested in additional shares.
Since withdrawal payments represent the proceeds from sales of shares, the
amount of shareholders' investments in the Trust will be reduced to the extent
that withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
<PAGE>
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such a Plan do not represent income or a
return on investment.
^ Participation in the Periodic Withdrawal Plan may be terminated at any
time by sending a written request to ^ IFG. Upon termination, all future
dividends and capital gain distributions will be reinvested in additional shares
unless a shareholder requests otherwise.
Exchange ^ Policy. As discussed in the section of each Fund's Prospectus
entitled "Services Provided by the Trust," the Trust offers shareholders the ^
ability to exchange shares of any Fund of the Trust for shares of certain other
mutual funds advised by ^ IFG. Exchange requests may be made either by telephone
or by written request to ^ IFG using the telephone number or address on the
cover of this Statement of Additional Information. Exchanges made by telephone
must be in an amount of at least $250, if the exchange is being made into an
existing account of one of the INVESCO funds. All exchanges that establish a new
account must meet the fund's applicable initial minimum investment requirements.
Written exchange requests into an existing account have no minimum requirements
other than the fund's applicable minimum subsequent investment requirements. Any
gain or loss realized on such an exchange is recognized for federal income tax
purposes. This privilege is not an option or right to purchase securities, but
is a revocable privilege permitted under the present policies of each of the
funds and is not available in any state or other jurisdiction where the shares
of the mutual fund into which transfer is to be made are not qualified for sale,
or when the net asset value of the shares presented for exchange is less than
the minimum dollar purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of each Fund's Prospectus entitled "Services
Provided by the Trust," shares of the Trust may be purchased as the investment
medium for various tax-deferred retirement plans. Persons who request
information regarding these plans from ^ IFG will be provided with prototype
documents and other supporting information regarding the type of plan requested.
Each of these plans involves a long-term commitment of assets and is subject to
possible regulatory penalties for excess contributions, premature distributions
or for insufficient distributions after age 70-1/2. The legal and tax
implications may vary according to the circumstances of the individual investor.
Therefore, the investor is urged to consult with an attorney or tax adviser
prior to the establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
each Fund's Prospectus entitled "How ^ To Redeem Shares." The right of
<PAGE>
redemption may be suspended and payment postponed when: (a) the New York Stock
Exchange is closed for other than customary weekends and holidays; (b) trading
on that exchange is restricted; (c) an emergency exists as a result of which
disposal by the Trust of securities owned by it is not reasonably practicable,
or it is not reasonably practicable for the Trust fairly to determine the value
of its net assets; or (d) the Securities and Exchange Commission ("SEC") by
order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Trust's investment adviser, make it undesirable for a Fund to pay
for redeemed shares in cash. In such cases, the Trust's investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Trust ^ is obligated ^ under the 1940 Act to redeem for cash
all shares of a Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the applicable Fund's net assets if that is less)
in any 90-day period. Securities delivered in payment of redemptions are
selected entirely by the Trust's investment adviser based on what is in the best
interests of the Trust and its shareholders, and are valued at the value
assigned to them in computing the Fund's net asset value per share. Shareholders
receiving such securities are likely to incur brokerage costs on their
subsequent sales of the securities.
DIVIDENDS, ^ OTHER DISTRIBUTIONS AND TAXES
^ Each Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended^ (the "Code"). Each Fund so qualified ^ for the
^ taxable year ended August 31, ^ 1997, and intends to continue to qualify
during its current ^ taxable year. As a result, because each Fund intends to
distribute all of its income and recognized gains, it is anticipated that the ^
Funds will pay no federal income or excise taxes and will be accorded conduit or
^"pass through^" treatment for federal income tax purposes.
Dividends paid by the Funds from net investment income as well as
distributions of net realized short^-term capital gains and net realized gains
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
each Fund sends shareholders information regarding the amount and character of
dividends paid in the year^.
Distributions by the Funds of net capital ^ gain (the excess of net
long-term capital gain over net short-term capital loss) are, for federal income
tax purposes, taxable to the shareholder as long^-term capital gains regardless
^ how long a shareholder has held shares of ^ a Fund. The Taxpayer Relief Act of
1997 (the "Tax Act"), enacted in August 1997, changed the taxation of long-term
capital gains by applying different capital gains rates depending on the
taxpayer's holding period and marginal rate of federal income tax. Long-term
<PAGE>
gains realized on the sale of securities held for more than one year but not for
more than 18 months are taxable at a rate of 28%. This category of long-term
gains is often referred to as "mid-term" gains but is technically termed "28%
rate gains". Long-term gains realized on the sale of securities held for more
than 18 months are taxable at a rate of 20%. The Tax Act, however, does not
address the application of these rules to distributions of net capital gain
(excess of long-term capital gain over short-term capital losses) by a regulated
investment company, including whether such distributions may be treated by its
shareholders in accordance with the Fund's holding period for the assets it sold
that generated the gain. The application of the new capital gain rules must be
determined by further legislation or future regulations that are not available
as this Prospectus is being prepared. At the end of each year, information
regarding the tax status of dividends and other distributions is provided to
shareholders. Shareholders should consult their tax advisers as to the effect of
the Tax Act on distributions by the Funds of net capital gain.
All dividends and other distributions are regarded as taxable to the
investor, regardless whether ^ such dividends and distributions are reinvested
in additional shares of a Fund. The net asset value of Fund shares reflects
accrued net investment income and undistributed realized capital and foreign
currency gains; therefore, when a distribution is made, the net asset value is
reduced by the amount of the distribution. If the net asset value of ^ Fund
shares ^ were reduced below a ^ shareholder's cost as a result of a
distribution, such distribution would be taxable to the shareholder although a
portion would be, in effect, a return of invested capital. ^ However, the net
asset value per share will be reduced by the amount of the distribution, which
would reduce any gain ^ or increase any loss^ for tax purposes ^ on any
subsequent redemption of shares by the shareholder.
IFG^ may provide Fund shareholders with information concerning the average
cost basis of their shares in order to help them prepare their tax returns. This
information is intended as a convenience to shareholders^ and will not be
reported to the Internal Revenue Service (the ^"IRS"). The IRS permits the use
of several methods to determine the cost basis of mutual fund shares. The cost
basis information provided by ^ IFG will be computed using the single^-category
average cost method, although neither ^ IFG nor the ^ Fund recommends any
particular method of determining cost basis. Other methods may result in
different tax consequences. If a shareholder has reported gains or losses ^ with
respect to shares of the Fund in past years, the shareholder must continue to
use the cost basis method previously used^ unless the shareholder applies to the
IRS for permission to change ^ the method.
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as a long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
Each Fund will be subject to a ^ non-deductible 4% excise tax to the
extent it fails to distribute by the end of any calendar year substantially all
of ^ it ordinary income for that year and net capital ^ gains for the one-year
period ending on October 31 of that year, plus certain other amounts.
<PAGE>
Dividends and interest received by each Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not ^ imposes taxes on capital gains in
respect of investments by foreign investors. ^ Foreign taxes withheld will be
treated as an expense of the Fund.
^ Each Fund may invest in the stock of ^"passive foreign investment
companies^" (PFICs). A PFIC is a foreign corporation (other than a controlled
foreign corporation) that, in general, meets either of the following tests: (1)
at least 75% of its gross income is passive or (2) an average of at least 50% of
its assets produce, or are held for the production of, passive income. Under
certain circumstances, a Fund will be subject to federal income tax on a portion
of any ^"excess distribution^" received on the stock of a PFIC or of any gain on
disposition of the stock (collectively ^"PFIC income"), plus interest thereon,
even if the Fund distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the ^ Fund's
investment company taxable income and, accordingly, will not be taxable to ^ the
Fund to the extent that income is distributed to its shareholders.
Each Fund may elect to "mark-to-market" its stock in any PFIC.
Marking-to-market, in this context, means including in ordinary income for each
taxable year the excess, if any, of the fair market value of the PFIC stock over
the Fund's adjusted tax basis therein as of the end of that year. Once the
election has been made, a Fund also will be allowed to deduct from ordinary
income the excess, if any, of its adjusted basis in PFIC stock over the fair
market value thereof as of the end of the year, but only to the extent of any
net mark-to-market gains with respect to that PFIC stock included by the Fund
for prior taxable years. The Fund's adjusted tax basis in each PFIC's stock with
respect to which it makes this election will be adjusted to reflect the amounts
of income included and deductions taken under the election.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time ^
the Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of the ^ Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and ^ other
distributions generally will be subject to applicable state and local taxes.
Qualification as a regulated investment company under the ^ Code for federal
income tax purposes does not entail government supervision of management or
investment policies.
<PAGE>
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for any of the Trust's Funds. Brokerage costs to the Trust are
commensurate with the rate of portfolio activity. Portfolio turnover rates for
the fiscal years ended August 31, 1997, 1996 and 1995, were as follows:
Fund 1997 1996 1995
- ---- ---- ---- ----
^ INVESCO Intermediate
Government Bond 37% 63% 92%
INVESCO Value Equity 37% 27% 34%
INVESCO Total Return 4% 10% 30%
In computing the portfolio turnover rate, all investments with maturities
or expiration dates at the time of acquisition of one year or less are excluded.
Subject to this exclusion, the turnover rate is calculated by dividing (A) the
lesser of purchases or sales of portfolio securities for the fiscal year by (B)
the monthly average of the value of portfolio securities owned by the Fund
during the fiscal year.
Placement of Portfolio Brokerage. ^ IFG, as the Funds' investment adviser,
and ICM, as sub-adviser of the Funds under the direct supervision of ^ IFG,
place orders for the purchase and sale of securities with brokers and dealers
based upon ^ IFG's or ICM's evaluation of the broker-dealers' financial
responsibility subject to the broker-dealers' ability to effect transactions at
the best available prices. ^ IFG or ICM evaluates the overall reasonableness of
brokerage commissions paid by reviewing the quality of executions obtained on
the Trust's portfolio transactions, viewed in terms of the size of transactions,
prevailing market conditions in the security purchased or sold, and general
economic and market conditions. In seeking to ensure that the commissions
charged the Trust are consistent with prevailing and reasonable commissions, ^
IFG or ICM also endeavors to monitor brokerage industry practices with regard to
the commissions charged by broker/dealers on transactions effected for other
comparable institutional investors. While ^ IFG or ICM seeks reasonably
competitive rates, the Trust does not necessarily pay the lowest commission or
spread available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, ^ IFG or ICM may select brokers that provide research
services to effect such transactions. Research services consist of statistical
and analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to Fund Management in
making informed investment decisions. Research services prepared and furnished
by brokers through which the Funds effect securities transactions may be used by
^ IFG or ICM in servicing all of their respective accounts and not all such
services may be used by ^ IFG or ICM in connection with the Funds.
<PAGE>
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, ^ IFG or ICM, consistent with the standard
of seeking to obtain the best execution on portfolio transactions, may place
orders with such brokers for the execution of Trust transactions on which the
commissions are in excess of those which other brokers might have charged for
effecting the same transactions.
Fund transactions may be effected through qualified ^ broker-dealers who
recommend the Trust to their clients, or who act as agent in the purchase of the
Trust's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Trust's adviser or sub-adviser may consider the sale of Trust shares by a broker
or dealer in selecting among qualified ^ broker-dealers.
^ Certain financial institutions (including brokers who may sell shares of
the Funds, or affiliates of such brokers) are paid a fee (the ^"Services Fee")
for recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the Funds through no transaction fee
programs ("NTF Programs") offered by the ^ financial institution or its
affiliate broker (an "NTF Program Sponsor"). The Services Fee is based on the
average daily value of the investments in each Fund made ^ in the name of such
NTF Program Sponsor and held in omnibus accounts maintained on behalf of
investors participating in the NTF Program. ^ With respect to certain NTF
Programs, the trustees of the Trust have authorized ^ the Intermediate
Government Bond and Value Equity Funds to apply dollars generated from the
Trust's Plan and Agreement of Distribution pursuant to Rule 12b-1 under the 1940
Act (the "Plan") to pay the entire Services Fee, subject to the maximum Rule
12b-1 fee permitted by the Plan. With respect to other NTF Programs, the Trust's
trustees have authorized all Funds to pay transfer agency fees to ^ IFG based on
the number of investors who have beneficial interests in ^ the NTF Program
Sponsor's omnibus accounts in ^ the Funds. IFG, in turn, pays these transfer
agency fees to the ^ NTF Program Sponsor as a sub- transfer agency or
recordkeeping fee in payment of all or a portion of the ^ Services Fee. In the
event that the sub-transfer agency or recordkeeping fee is insufficient to pay
all of the Services Fee with respect to these NTF Programs, the trustees of the
Trust have ^ authorized the Trust to apply dollars generated from the Plan to
pay the remainder of the Services Fee, subject to the maximum Rule 12b-1 fee
permitted by the Plan. IDI itself pays the portion of each Fund's Services Fee,
if any, that exceeds the sum of the sub- transfer agency or recordkeeping fee
and Rule 12b-1 fee. The Trust's trustees have further authorized IFG to place a
portion of each Fund's brokerage transactions with certain ^ NTF Program
Sponsors or their affiliated brokers, if IFG reasonably believes that, in
effecting the Fund's transactions in portfolio securities, the broker is able to
provide the best execution of orders at the most favorable prices. A portion of
the commissions earned by such a broker from executing portfolio transactions on
behalf of ^ the Funds may be credited by the ^ NTF Program Sponsor against its
Services Fee. Such credit shall be applied first against any sub- transfer
agency or recordkeeping fee payable with respect to ^ the Funds, and second
against any Rule 12b-1 fees used to pay a portion of the Services Fee, on a
basis which has resulted from negotiations between ^ IFG or IDI and the NTF
Program Sponsor. Thus, the Funds pay sub-transfer agency or recordkeeping fees
<PAGE>
to the ^ NTF Program Sponsor in payment of the ^ Services Fee only to the extent
that such fees are not offset by ^ a Fund's credits. In the event that the
transfer agency fee paid by ^ the Funds to ^ IFG with respect to investors who
have beneficial interests in a particular ^ NTF Program Sponsor's omnibus
accounts in ^ a Fund exceeds the ^ Services Fee applicable to ^ the Fund, after
application of credits, IFG may carry forward the excess ^ and apply it to
future ^ Services Fees payable to that ^ NTF Program Sponsor with respect to ^ a
Fund. The amount of excess transfer agency fees carried forward will be reviewed
for possible adjustment by ^ IFG prior to each fiscal year-end of the ^ Funds.
The Trust's board of trustees has also authorized the Intermediate Government
Bond and Value Equity Funds to pay to IDI the full Rule 12b-1 fees contemplated
by the Plan to compensate IDI for expenses incurred by IDI in engaging in the
activities and providing the services on behalf of the Funds contemplated by the
Plan, subject to the maximum Rule 12b-1 fee permitted by the Plan,
notwithstanding that credits have been applied to reduce the portion of the
12b-1 fee that would have been used to compensate IDI for payments to such NTF
Program Sponsor absent such credits.
The aggregate dollar amount of brokerage commissions paid by the
Intermediate Government Bond, Value Equity and Total Return Funds for the fiscal
years ended August 31, 1997 ^ were ^ $0, ^ $470,619 and 484,776, respectively.
For the fiscal year ended August 31, ^ 1997 brokers providing research services
received ^ $0 in commissions on portfolio transactions effected for each Fund.
Neither the Trust, ^ IFG, nor ICM paid any compensation to brokers for the sale
of shares of the Trust during the fiscal year ended August 31, ^ 1997.
At August 31, ^ 1997, the Funds held securities of their regular brokers
or dealers, or their parents, as follows:
Value of
Securities at
Fund Broker or Dealer August 31, ^ 1997
- ---- ---------------- -----------------
INVESCO Value Equity ^ Salomon Inc. $2,455,000
^ Fund
INVESCO Intermediate State Street Bank ^ 1,724,000
Government Bond Fund & ^ Trust
INVESCO Total Return State Street Bank ^ 76,624,000
^ Fund & Trust
^ Bankamerica Corp. 4,018,000
Neither IFG nor ICM receive any brokerage commissions on portfolio
transactions effected on behalf of the Trust, and there is no affiliation
between ^ IFG, ICM, or any person affiliated with ^ IFG, ICM, or the Trust and
any broker or dealer that executes transactions for the Trust.
<PAGE>
ADDITIONAL INFORMATION
Shares of Beneficial Interest. As a Massachusetts Business Trust, the Trust
has an unlimited number of authorized shares of beneficial interest. The board
of trustees has the authority to designate additional series of beneficial
shares for any new fund of the Trust without seeking the approval of
shareholders and may classify and reclassify any unissued shares.
Shares of each series represent the interests of the shareholders of such
series in a particular portfolio of investments of the Trust. Each series of the
Trust's shares is preferred over all other series in respect of the assets
specifically allocated to that series, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that series. The assets of each series are segregated on
the books of account and are charged with the liabilities of that series and
with a share of the Trust's general liabilities. The board of trustees
determines those assets and liabilities deemed to be general assets or
liabilities of the Trust, and these items are allocated among series in
proportion to the relative net assets of each series. In the unlikely event that
a liability allocable to one series exceeds the assets belonging to the series,
all or a portion of such liability may have to be borne by the holders of shares
of the Trust's other series.
All shares, regardless of series, have equal voting rights. Voting with
respect to certain matters, such as ratification of independent accountants or
election of trustees, will be by all series of the Trust. When not all series
are affected by a matter to be voted upon, such as approval of an investment
advisory contract or changes in a Fund's investment policies, only shareholders
of the series affected by the matter may be entitled to vote. Trust shares have
noncumulative voting rights, which means that the holders of a majority of the
shares voting for the election of trustees can elect 100% of the trustees if
they choose to do so. In such event, the holders of the remaining shares voting
for the election of trustees will not be able to elect any person or persons to
the board of trustees. After they have been elected by shareholders, the
trustees will continue to serve until their successors are elected and have
qualified or they are removed from office, in either case by a shareholder vote,
or until death, resignation, or retirement. Trustees may appoint their own
successors, provided that always at least a majority of the trustees have been
elected by the Trust's shareholders. As a Massachusetts Business Trust, it is
the intention of the Trust not to hold annual meetings of shareholders. The
trustees will call annual or special meetings of shareholders for action by
shareholder vote as may be required by the 1940 Act or the Trust's Declaration
of Trust, or at their discretion.
Principal Shareholders. As of ^ October 1, 1997, the following entities
held more than 5% of the Trust's and each Fund's outstanding equity securities.
<PAGE>
Name and Address Percent
of Beneficial Owner Number of Shares of Class
- ------------------- ---------------- --------
INVESCO Value Equity Fund
Charles Schwab & Co. Inc. 883,034.0180 7.035
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
INVESCO Trust Co. Trustee ^ 778,782.2710 6.204
HNTB Corporation Retirement &
Savings Plan
c/o Joan Watanabie
1201 Walnut, Suite 700
Kansas City, MO 64106
^ INVESCO Intermediate Government Bond Fund
^ INVESCO Trust Co. Trustee 647,864.6020 18.131
^ Arch Mineral Corporation
^ Employee Thrift Plan 01/4/93
City Place One, Suite 300
St. Louis, MO 63141
Charles Schwab & Co. Inc. ^ 566,714.0400 15.860
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Northern Trust Co. Trustee 476,618.2680 13.339
Ericsson Cap & Savings Plan
Attn: Myra Baldwin-Larkins
801 S. Canal, Flr. C-35
Chicago, IL 60607
Donaldson Lufkin & Jenrette 240,690.7000 6.736
Securities Corp.
Mutual Funds, 5th Flr.
P.O. Box 2052
Jersey City, NJ 07303
<PAGE>
INVESCO Total Return ^ Fund
Charles Schwab & Co. Inc. ^ 11,746,116.5820 17.430
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
^
Connecticut General Life Ins. ^ 9,368,961.0740 13.903
c/o Liz Pezda M-110
P.O. Box 2975
Hartford, CT 06104
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the Trust.
The independent accountants are responsible for auditing the financial
statements of the Trust.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as the custodian of the cash and investment
securities of the Trust. The bank is responsible for, among other things,
receipt and delivery of the Funds' investment securities in accordance with
procedures and conditions specified in the custody agreement. Under its contract
with the Trust, the custodian is authorized to establish separate accounts in
foreign ^ countries and to cause foreign securities owned by the Trust 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. ^ IFG, 7800 E. Union Avenue, Denver, Colorado 80237, acts
as registrar, dividend disbursing agent, and transfer agent for the Trust
pursuant to the Transfer Agency Agreement described in "The Trust and Its
Management." Such services include the issuance, cancellation and transfer of
shares of the Trust, and the maintenance of records regarding the ownership of
such shares.
Reports to Shareholders. The Trust's fiscal year ends on August 31. The
Trust distributes reports at least semiannually to its shareholders. Financial
statements regarding the Trust, audited by the independent accountants, are sent
to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Trust. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Trust.
<PAGE>
Financial Statements. The Trust's audited financial statements and the
notes thereto for the year ended August 31, ^ 1997, and the report of Price
Waterhouse LLP with respect to such financial statements are incorporated herein
by reference from the Trust's Annual Report to Shareholders for the fiscal year
ended August 31, ^ 1997.
Prospectuses. The Trust will furnish, without charge, a copy of the
Prospectus for any Fund upon request. Such requests should be made to the Trust
at the mailing address or telephone number set forth on the first page of this
Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the
Prospectuses do not contain all of the information set forth in the Registration
Statement the Trust has filed with the SEC. The complete Registration Statement
may be obtained from the SEC upon payment of the fee prescribed by the rules and
regulations of the SEC.
Declaration of Trust Provisions. The Declaration of Trust establishing the
Trust dated July 9, 1987, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability; nor shall resort be had to their
private property for the satisfaction of any obligation or claim of the Trust,
but the "Trust Property" only shall be liable.
<PAGE>
APPENDIX A
Bond Ratings. Description of ^ Moody's and S&P's four highest bond rating
categories:
Moody's ^ Corporate Bond Ratings:
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 edged." 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 risk appear somewhat larger than in Aaa securities.
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.
^ S&P's Corporate Bond Ratings:
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 - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
<PAGE>
BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
<PAGE>
APPENDIX B
DESCRIPTION OF FUTURES ^, OPTIONS AND FORWARD CONTRACTS
Options on Securities
An option on a security provides the purchaser, or "holder," with the
right, but not the obligation, to purchase, in the case of a "call" option, or
sell, in the case of a "put" option, the security or securities underlying the
option, for a fixed exercise price up to a stated expiration date. The holder
pays a non^- refundable purchase price for the option, known as the "premium."
The maximum amount of risk the purchaser of the option assumes is equal to the
premium plus related transaction costs, although the entire amount may be lost.
The risk of the seller, or "writer," however, is potentially unlimited, unless
the option is "covered," which is generally accomplished through the writer's
ownership of the underlying security, in the case of a call option, or the
writer's segregation of an amount of cash or securities equal to the exercise
price, in the case of a put option. If the writer's obligation is not so
covered, it is subject to the risk of the full change in value of the underlying
security from the time the option is written until exercise.
Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security, in the case of a call option, or to deliver
the security in return for the purchase price, in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
Options on securities are traded on national securities exchanges, such as
the Chicago Board of Options Exchange and the New York Stock Exchange, which are
regulated by the Securities and Exchange Commission. The Options Clearing
Corporation guarantees the performance of each party to an exchange^-traded
option, by in effect taking the opposite side of each such option. A holder or
writer may engage in transactions in exchange^-traded options on securities and
options on indices of securities only through a registered broker/dealer which
is a member of the exchange on which the option is traded.
An option position in an exchange^-traded option may be closed out only on
an exchange which provides a secondary market for an option of the same series.
Although the ^ Fund will generally purchase or write only those options for
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an exchange will exist for any particular option at
any particular time. In such event it might not be possible to effect closing
<PAGE>
transactions in a particular option with the result that ^ the Fund would have
to exercise the option in order to realize any profit. This would result in ^
the Fund's incurring brokerage commissions upon the disposition of underlying
securities acquired through the exercise of a call option or upon the purchase
of underlying securities upon the exercise of a put option. If ^ the Fund as
covered call option ^ writer is unable to effect a closing purchase transaction
in a secondary market, ^ unless the Fund is required to deliver the securities
pursuant to the assignment of an exercise notice, it will not be able to sell
the underlying security until the option expires.
Reasons for the potential absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient trading interest
in certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or a clearing corporation may not at all times be adequate to
handle current trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or particular class or series of options) in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange which had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at a particular time, render certain of the facilities of any of the
clearing corporations inadequate and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders. However, the Options Clearing Corporation, based on forecasts
provided by the U.S. exchanges, believes that its facilities are adequate to
handle the volume of reasonably anticipated options transactions, and such
exchanges have advised such clearing corporation that they believe their
facilities will also be adequate to handle reasonably anticipated volume.
In addition, options on securities may be traded over^-the^- counter
through financial institutions dealing in such options as well as the underlying
instruments. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with ^ a Fund.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between ^ a Fund and the transacting dealer, without the
intermediation of a third party such as the OCC. If the transacting dealer fails
to make or take delivery of the securities underlying an option it has written,
in accordance with the terms of that option as written, ^ the Fund would lose
the premium paid for the option as well as any anticipated benefit of the
transaction. ^ A Fund will engage in OTC option transactions only with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York.
<PAGE>
^ Futures Contracts
A Futures Contract is a bilateral agreement providing for the purchase and
sale of a specified type and amount of a financial instrument or foreign
currency, or for the making and acceptance of a cash settlement, at a stated
time in the future, for a fixed price. By its terms, a Futures Contract provides
for a specified settlement date on which, in the case of the majority of
interest rate and foreign currency futures contracts, the fixed income
securities or currency underlying the contract are delivered by the seller and
paid for by the purchaser, or on which, in the case of stock index futures
contracts and certain interest rate and foreign currency futures contracts, the
difference between the price at which the contract was entered into and the
contract's closing value is settled between the purchaser and seller in cash.
Futures Contracts differ from options in that they are bilateral agreements,
with both the purchaser and the seller equally obligated to complete the
transaction. In addition, Futures Contracts call for settlement only on the
expiration date, and cannot be "exercised" at any other time during their term.
The purchase or sale of a Futures Contract also differs from the purchase
or sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalent, which varies
but may be as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin." Subsequent payments to and from the broker,
referred to as "variation margin," are made on a daily basis as the value of the
index or instrument underlying the Futures Contract fluctuates, making positions
in the Futures Contract more or less valuable, a process known as "marking to
the market."
A Futures Contract may be purchased or sold only on an exchange, known as
a "contract market," designated by the Commodity Futures Trading Commission for
the trading of such contract, and only through a registered futures commission
merchant which is a member of such contract market. A commission must be paid on
each completed purchase and sale transaction. The contract market clearing house
guarantees the performance of each party to a Futures Contract, by in effect
taking the opposite side of such Contract. At any time prior to the expiration
of a Futures Contract, a trader may elect to close out its position by taking an
opposite position on the contract market on which the position was entered into,
subject to the availability of a secondary market, which will operate to
terminate the initial position. At that time, a final determination of variation
margin is made and any loss experienced by the trader is required to be paid to
the contract market clearing house while any profit due to the trader must be
delivered to it.
Interest rate futures contracts currently are traded on a variety of fixed
income securities, including long^-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association modified pass^-through mortgage^-backed
securities, U.S. Treasury Bills, bank certificates of deposit and commercial
paper. In addition, interest rate futures contracts include contracts on indices
of municipal securities. Foreign currency futures contracts currently are traded
on the British pound, Canadian dollar, Japanese yen, Swiss franc, German mark
and on Eurodollar deposits.
<PAGE>
Options on ^ Futures Contracts
An Option on a Futures Contract provides the holder with the right to
enter into a "long" position in the underlying Futures Contract, in the case of
a call option, or a "short" position in the underlying Futures Contract, in the
case of a put option, at a fixed exercise price to a stated expiration date.
Upon exercise of the option by the holder, the contract market clearing house
establishes a corresponding short position for the writer of the option, in the
case of a call option, or a corresponding long position, in the case of a put
option. In the event that an option is exercised, the parties will be subject to
all the risks associated with the trading of Futures Contracts, such as payment
of variation margin deposits. In addition, the writer of an Option on a Futures
Contract, unlike the holder, is subject to initial and variation margin
requirements on the option position.
A position in an Option on a Futures Contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.
An option, whether based on a Futures Contract, a stock index or a
security, becomes worthless to the holder when it expires. Upon exercise of an
option, the exchange or contract market clearing house assigns exercise notices
on a random basis to those of its members which have written options of the same
series and with the same expiration date. A brokerage firm receiving such
notices then assigns them on a random basis to those of its customers which have
written options of the same series and expiration date. A writer therefore has
no control over whether an option will be exercised against it, nor over the
time of such exercise.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in Prospectuses (Part A):
Financial Highlights for the ^ four 8
years ended August 31, ^ 1997, the 35
eight-month period ended August 31, 61
1993, and each of the six years in
the period ended December 31, 1992,
for ^ the INVESCO Value Equity ^.
Intermediate Government Bond ^ and
Total Return Funds.
Page in
Statement
of Addi-
tional In-
formation
----------
(2) The following audited financial
statements of the INVESCO Value Equity
Fund, the INVESCO Intermediate
Government Bond Fund and the INVESCO
Total Return Fund and the notes thereto
for the fiscal year ended August 31, ^
1997, and the report of Price Waterhouse
LLP with respect to such financial
statements, are incorporated in the
Statement of Additional Information by
reference from the Company's Annual
Report to Shareholders for the fiscal
year ended August 31, ^ 1997: Statement
of Investment Securities as of August
31, ^ 1997; Statement of Assets and
Liabilities as of August 31, ^ 1997;
Statement of Operations for the year
ended August 31, ^ 1997; Statement of
Changes in Net Assets for the two years
ended August 31, ^ 1997; Financial
Highlights for the ^ four years ended
August 31, ^ 1997, the eight-month
fiscal period ended August 31, 1993, and
the ^ year ended December 31, 1992.
<PAGE>
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as all
information has been presented in the
financial statements.
(b) Exhibits:
(1) (a) Declaration of Trust (amended) as of
December 31, ^ 1990.(1)
(b) Amendment to Declaration of Trust
effective July 1, ^ 1993.(4)
(2) Bylaws, as amended as of January 22, ^
1992.(3)
(3) Not applicable.
(4) Not applicable.
(5) (a) Investment Advisory Agreement
between Registrant and ^ INVESCO Funds
Group, ^ Inc. dated as of February 28,
1997.
^(b) Sub-Advisory Agreement between ^
INVESCO Funds Group, ^ Inc. and INVESCO
Capital Management, Inc., dated as of ^
February 28, 1997.
(6) (a) General Distribution Agreement
between Registrant and INVESCO Funds
Group, Inc., dated as of ^ February 28,
1997.
(b) General Distribution Agreement
between Registrant and INVESCO
Distributors, Inc. dated September 30,
1997.
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and ^
Trustees.
(8) Custody Agreement between INVESCO Value
Trust and State Street Bank and Trust ^
Company.(6)
<PAGE>
(a) Amendment to this Custodian Contract
dated October 25, ^ 1995.(6)
(b) Data Access Service Addendum dated
May 19, 1997.
(9) (a) Transfer Agency Agreement between
Registrant and INVESCO Funds Group, Inc.
dated as of February 28, 1997. ^
(b) Administrative Services Agreement
between Registrant and ^ INVESCO Funds
Group, Inc. dated ^ February 28 1997.
(c) The Financial Funds Shareholder
Application for Purchase of Mutual ^
Funds.(2)
(10) 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 ^ to be
filed in Post-Effective Amendment in
December 1997.
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the
establishment of retirement plans as
follows: Non-standardized Profit
Sharing Plan; Non-standardized Money
Purchase Pension Plan; Standardized
Profit Sharing Plan Adoption Agreement;
Standardized Money Purchase Pension
Plan; Non-standardized 401(k) Plan
Adoption Agreement; Standardized 401(k)
Paired Profit Sharing Plan; Standardized
Simplified Profit Sharing Plan;
Standardized Simplified Money Purchase
Plan; Defined Contribution Master Plan &
Trust Agreement; and Financial 403(b)
Retirement Plan.(5)
<PAGE>
(15) ^ Plan and Agreement of Distribution
adopted pursuant to 12b-1 under the
Investment Company Act of 1940 dated
October 28, 1997.
(16) Schedule for computation of performance
data.(1)
(17) (a) Financial Data Schedule for the
period ended August 31, ^ 1997 for
INVESCO Value Equity Fund.
(b) Financial Data Schedule for the
period ended August 31, ^ 1997 for
INVESCO Intermediate Government Bond
Fund.
(c) Financial Data Schedule for the
period ended August 31, ^ 1997 for
INVESCO Total Return Fund.
(18) Not Applicable.
(1)Previously filed with Post-Effective Amendment No. 11 to this
Registration Statement on April 27, 1988 and incorporated by reference herein.
(2)Previously filed with Post-Effective Amendment No. ^ 13 to this
Registration Statement on ^ September 20, 1991 and incorporated by reference
herein.
(3)Previously^ filed with Post-Effective Amendment No. ^ 15 to this
Registration Statement on ^ February 25, 1993 and incorporated by reference
herein.
^ (4)Previously filed with Post-Effective Amendment No. 17 to this
Registration Statement on October 29, 1993 and incorporated by reference herein.
^ (5)Previously filed with Post-Effective Amendment No. 18 to this
Registration Statement on October 18, 1994 and incorporated by reference herein.
^ (6)Previously filed on EDGAR with Post-Effective Amendment No. 19 to this
Registration Statement on December 15, 1995 and incorporated by reference
herein.
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common control with
Registrant.
<PAGE>
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class ^ September 30, ^ 1997
-------------- ----------------------
Beneficial Interest
INVESCO Value Equity Fund ^ 10,554
INVESCO Intermediate Government
Bond Fund ^ 1,774
INVESCO Total Return Fund ^ 17,576
Item 27. Indemnification
Indemnification provisions for officers and directors of Registrant
are set forth in Article Seven of the Bylaws and Article V of the Articles of
Restatement of the Declaration of Trust, and are hereby incorporated by
reference. See Item 24(b)(1) and (2) above. Under these Articles, officers and
trustees will be indemnified to the fullest extent permitted by 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, the trustees and officers of the Trust cannot be protected against
liability to the Trust 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 Trust also maintains liability
insurance policies covering its trustees and officers.
Item 28. Business and Other Connections of Investment Adviser
See "The Trust and Its Management" in the Prospectuses and Statement
of Additional Information for information regarding the business of the
investment adviser and sub-adviser. For information as to the business,
profession, vocation or employment of a substantial nature of each of the
officers and directors of INVESCO Funds Group, Inc., and INVESCO Capital
Management, Inc., reference is made to the Schedule Ds to the Form ADVs filed
under the Investment Advisers Act of 1940 by these companies, which schedules
are herein incorporated by reference.
Item 29. Principal Underwriters
(a) INVESCO Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, Inc.
^ INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
<PAGE>
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
^ William J. Galvin, Jr. Senior Vice Assistant
7800 E. Union Avenue President Secretary
Denver, CO 80237
^ Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President & Chief Fin'l
Denver, CO 80237 Treasurer Officer, and
Chief Acctg.
Off.
Dan J. Hesser Chairman of President,
7800 E. Union Avenue the Board, CEO & Dir.
Denver, CO 80237 President ,
Chief Executive
Officer, &
Director
Gregory E. Hyde Vice President
7800 E. Union Avenue
Denver, CO 80237
Charles P. Mayer 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
^
Judy P. Wiese Vice President Asst. Treas.
^ 7800 E. Union Avenue
Denver, CO 80237
<PAGE>
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant hereby undertakes that the board of trustees
will call such meetings of shareholders of all the Funds, for
action by shareholder vote, including acting on the question
of removal of a trustee or trustees, as may be requested in
writing by the holders of at least 10% of the outstanding
shares of a Fund or as may be required by applicable law or
the Trust's Declaration of Trust, and to assist in
communicating with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
(b) The Registrant shall furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it ^ has duly
caused this post-effective amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, County of Denver,
and State of Colorado, on the ^30th day of ^ October, 1997.
Attest: INVESCO Value Trust
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------------ ------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this ^30th day of ^
October, 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ ------------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Trustee
Trustee (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ ------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Trustee
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ ------------------------------------
Victor L. Andrews, ^ Trustee Fred A. Deering, ^ Trustee
/s/ Bob R. Baker /s/ ^ Larry Soll
- ------------------------------------ ------------------------------------
Bob R. Baker, ^ Trustee Larry Soll, Trustee
/s/ Hubert L. Harris, Jr. /s/ Kenneth T. King^
- ------------------------------------ ------------------------------------
Hubert L. Harris, Jr., ^ Trustee Kenneth T. King, ^ Trustee
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------------------ ------------------------------------
Charles W. Brady, ^ Trustee John W. McIntyre, ^ Trustee
/s/ Wendy L. Gramm
- ------------------------------------
Wendy L. Gramm, Trustee
By* By* /s/ Glen A. Payne
--------------------------------- ------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
April 12, 1990, May 12, 1990, May 27, 1992, October 18, 1994 ^, December 14,
1995 and December 24, 1996.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
^ 5(a) 139
^ 5(b) 146
^ 6(a) 153
6(b) 162
7 171
8(b) 177
9(a) 191
9(b) 205
11 209
15 210
17(a) 215
17(b) 216
17(c) 217
EX99.POA SOLL 218
EX99.POA GRAMM ^ 219
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Atlanta, Georgia,
by and between INVESCO FUNDS GROUP, INC. ("INVESCO"), a Delaware corporation,
and INVESCO Value Trust, an unincorporated business trust under the laws of the
Commonwealth of Massachusetts (the "Trust").
WITNESSETH:
WHEREAS, the Trust is an unincorporated business trust under the laws of the
Commonwealth of Massachusetts; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end management
investment company and has one class of shares (the "Shares"), which is divided
into two or more series, each representing an interest in a separate portfolio
of investments (such series initially being the INVESCO Value Equity Fund,
INVESCO Total Return Fund, and INVESCO Intermediate Government Bond Fund
(collectively, the "Funds")); and
WHEREAS, the Trust desires that INVESCO manage its investment operations and
INVESCO desires to manage said operations;
NOW, THEREFORE, in consideration of these premises and of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as follows:
1. Investment Management Services. INVESCO hereby agrees to manage the
investment operations of the Funds in the Trust, subject to the supervision of
the Trust's trustees (the "Trustees"). Unless performance of these services is
the subject of a separate Administrative Service Agreement between the Trust and
INVESCO or an affiliate thereof, INVESCO agrees to perform, or arrange for the
performance of, the following specific services for the Trust and each Fund:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, by the Trust and by each Fund of the Trust;
(b) to maintain a continuous investment program for the Trust and each Fund
of the Trust, consistent with (i) the Fund's and Trust's investment policies
as set forth in the Trust's Declaration of Trust, By-laws, Registration
Statement, as from time to time amended, under the Investment Company Act of
1940, as amended (the "1940 Act"), and in any prospectus and/or statement of
additional information of the Trust or of any Series of the Trust, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Trust's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Trust
and for each Fund, unless otherwise directed by the Trustees of the Trust,
and to execute transactions accordingly;
(d) to provide to the Trust and to each Fund the benefit of all of the
investment analyses and research, the reviews of current economic conditions
and trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of INVESCO;
<PAGE>
(e) to determine what portion of each of the Trust's Funds should be
invested in common stocks, preferred stocks, Government obligations,
commercial paper, certificates of deposit, bankers' acceptances, variable
amount notes, corporate debt obligations, and any other authorized
securities;
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Trust action and any other rights pertaining to each Fund's
portfolio securities shall be exercised; and
(g) to calculate the net asset value of each of the Funds of the Trust, as
applicable, as required by the 1940 Act, subject to such procedures as may be
established from time to time by the Trust's Trustees, based upon the
information provided to INVESCO or by the custodian, co-custodian or
sub-custodian of the Trust's assets (the "Custodian") or such other source as
designated by the Trustees from time to time.
With respect to execution of transactions for the Trust and for each Fund,
INVESCO shall place, or arrange for the placement of, all orders for the
purchase or sale of portfolio securities with brokers or dealers selected by
INVESCO. In connection with the selection of such brokers or dealers and the
placing of such orders, INVESCO is directed at all times to obtain for the Trust
and for each Fund the most favorable execution and price; after fulfilling this
primary requirement of obtaining the most favorable execution and price, INVESCO
is hereby expressly authorized to consider as secondary factor in selecting
brokers or dealers with which such orders may be placed whether such firms
furnish statistical, research and other information or services to INVESCO.
Receipt by INVESCO of any such statistical or other information and services
should not be deemed to give rise to any requirement for adjustment of the
advisory fee payable pursuant to paragraph 3 hereof. INVESCO may follow a policy
of considering sales of shares of the Funds of the Trust as a factor in the
selection of broker/dealers to execute portfolio transactions, subject to the
requirements of best execution discussed above.
INVESCO shall for all purposes herein provided be deemed to be an independent
contractor.
2. Allocation of Costs and Expenses. INVESCO shall reimburse the Trust monthly
for any salaries paid by the Trust to officers, Trustees and full-time employees
of the Trust who also are officers, general partners or employees of INVESCO or
its affiliates. Unless such services are the subject of a separate
Administrative Service Agreement between the Trust and INVESCO or an affiliate
thereof, at the Trust's request, INVESCO will furnish to the Trust, at the
expense of INVESCO, such competent executive, statistical, administrative,
internal accounting and clerical services as may be required in the judgment
of the Trustees of the Trust. These services will include, among other things,
the maintenance (but not preparation) of the Trust's and Fund's, as applicable,
accounts and records, and the preparation (apart from legal and accounting
costs) of all requisite corporate documents such as tax returns and reports to
the Securities and Exchange Commission and Trust shareholders. INVESCO also will
furnish, at INVESCO's expense, such office space, equipment and facilities as
may be reasonably requested by the Trust from time to time.
<PAGE>
Except to the extent expressly assumed by INVESCO herein and except to the
extent required by law to be paid by INVESCO, the Trust shall pay all cost and
expenses in connection with its operations and organization. Without limiting
the generality of the foregoing, such costs and expenses payable by the Trust
include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Trust or any Fund in connection with securities
transactions to which the Trust or any Fund is a party or in connection with
securities owned by the Trust or any Fund;
(b) the fees, charges and expenses of any independent public accountants,
custodian, depository, dividend disbursing agent, dividend reinvestment
agent, transfer agent, registrar, independent pricing services and legal
counsel for the Trust or for any Fund;
(c) the interest on indebtedness, if any, incurred by the Trust or any
Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Trust or any Fund to
federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration and
qualification of the Trust and its shares under laws administered by the
Securities and Exchange Commission or under other applicable regulatory
requirements, including the preparation and printing of prospectuses and
statements of additional information;
(f) the compensation and expenses of its Trustees;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices, prospectuses,
statements of additional information and other communications to the Trust's
shareholders, as well as all expenses of shareholders' meetings and Trustees'
meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Trust's Declaration of Trust, including its
initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial registration
and qualification of its securities under the laws of any state and the
approval of the Trust's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Trust;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interest of the Trust;
<PAGE>
(l) extraordinary expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Trust or any Fund;
(m) premiums for the fidelity bond maintained by the Trust pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder; and
(n) association and institute dues.
3. Compensation of INVESCO. For the services to be rendered and the charges
and expenses to be assumed by INVESCO hereunder, the Trust shall pay to INVESCO
an advisory fee which will be computed on a daily basis and paid as of the last
day of each month, using for each daily calculation the most recently determined
net asset value of each Fund of the Trust, as determined by valuations made in
accordance with the Trust's procedures for calculating each Fund's net asset
value. On an annual basis, the advisory fee applicable to each of the Funds
shall be as follows:
(a) INVESCO Value Equity Fund: 0.75% of the average net asset value of net
assets up to $500 million; 0.65% of the average net asset value for net
assets in excess of $500 million but not more than $1 billion; and 0.50% of
the average net asset value for net assets in excess of $1 billion;
(b) INVESCO Total Return Fund: 0.75% of the average net asset value of net
assets up to $500 million; 0.65% of the average net asset value for net
assets in excess of $500 million but not more than $1 billion; and 0.50% of
the average net asset value for net assets in excess of $1 billion; and
(c) INVESCO Intermediate Government Bond Fund: 0.60% of the average net
asset value of net assets up to $500 million; 0.50% of the average net asset
value of net assets in excess of $500 million but not more than $1 billion;
and 0.40% of the average net asset value of net assets in excess of $1
billion.
However, no such fee shall be paid to INVESCO with respect to any assets of
the Trust or of any Fund which may be invested in any other investment company
for which INVESCO serves as investment adviser. The fee provided for hereunder
shall be prorated in any month in which this Agreement is not in effect for the
entire month.
If, in any given year, the sum of the Fund's expenses exceeds the most
restrictive state imposed annual expense limitation, INVESCO will be required to
reimburse such Fund for such excess expenses promptly. Interest, taxes and
extraordinary items such as litigation costs are not deemed expenses for
purposes of this paragraph and shall be borne by the Trust or particular Fund in
any event. Expenditures, including costs incurred in connection with the
purchase or sale of portfolio securities, which are capitalized in accordance
with generally accepted accounting principles applicable to investment
companies, are accounted for as capital items and shall not be deemed to be
expenses for purposes of this paragraph.
<PAGE>
4. Avoidance of Inconsistent Positions and Compliance with Laws. In connection
with purchase or sales of securities for the investment portfolio of the Trust
or of any of the Funds, neither INVESCO nor its officers or employees will act
as a principal or agent for any party other than the Trust or applicable Fund or
receive any commissions. INVESCO will comply with all applicable laws in acting
hereunder including, without limitation, the 1940 Act; the Investment Advisers
Act of 1940, as amended; and all rules and regulations duly promulgated under
the foregoing.
5. Duration and Termination. This Agreement shall become effective as of the
date it is approved by a majority of the outstanding voting securities of each
applicable Fund of the Trust, and unless sooner terminated as hereinafter
provided, shall remain in force for an initial term ending two years from the
date of execution, and from year to year thereafter, but only as long as such
continuance is specifically approved at least annually (i) by a vote of a
majority of the outstanding voting securities of each applicable Fund of the
Trust or by the Trustees of the Trust, and (ii) by a majority of the Trustees of
the Trust who are not interested persons of INVESCO or the Trust by votes cast
in person at a meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by the Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of the Trust or of the applicable
Fund, as the case may be, or by INVESCO. This Agreement shall immediately
terminate in the event of its assignment, unless an order is issued by the
Securities and Exchange Commission conditionally or unconditionally exempting
such assignment from the provisions of Section 15(a) of the 1940 Act, in which
event this Agreement shall remain in full force and effect subject to the terms
and provisions of said order. In interpreting the provisions of this paragraph
5, the definitions contained in Section 2(a) of the 1940 Act and the applicable
rules under the 1940 Act (particularly the definitions of "interested person,"
"assignment" and "vote of a majority of the outstanding voting securities")
shall be applied.
INVESCO agrees to furnish to the Trustees of the Trust such information on an
annual basis as may reasonably be necessary to evaluate the terms of this
Agreement.
Termination of this Agreement shall not affect the right of INVESCO to receive
payments on any unpaid balance of the compensation described in paragraph 3
earned prior to such termination.
6. Non-Exclusive Services. INVESCO shall, during the term of this Agreement,
be entitled to render investment advisory services to others, including, without
limitation, other investment companies with similar objectives to those of the
Trust or any Fund of the Trust. INVESCO may, when it deems such to be advisable,
aggregate orders for its other customers together with any securities of the
same type to be sold or purchased for the Trust or any Fund in order to obtain
best execution and lower brokerage commissions. In such event, INVESCO shall
allocate the shares so purchased or sold, as well as the expenses incurred in
the transaction, in the manner it considers to be most equitable and consistent
with its fiduciary obligation to the Trust, any applicable Fund and INVESCO's
other customers.
<PAGE>
7. Liability. INVESCO shall have no liability to the Trust or any Fund or to
the Trust's shareholders or creditors, for any error of judgment, mistake of
law, or for any loss arising out of any investment, nor for any other act or
omission, in the performance of its obligations to the Trust or any applicable
Funds not involving willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties hereunder.
8. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Amendments Hereof. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Trust and INVESCO, and no material amendment of this Agreement shall be
effective unless approved by the vote of a majority of the outstanding voting
securities of any Fund as to which such amendment is applicable; provided,
however, that this paragraph shall not prevent any immaterial amendment(s) to
this Agreement, which amendment(s) may be made without shareholder approval, if
such amendment(s) are made with the approval of (1) the Trustees and (2) a
majority of the Trustees of the Trust who are not interested persons of INVESCO
or the Trust.
Severability. Each provision of this Agreement is intended to be severable. If
any provision of this Agreement shall be held illegal or made invalid by a court
decision, statute, rule or otherwise, such illegality or invalidity shall not
affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
Application of Colorado Law. This Agreement and the application and
interpretation hereof shall be governed exclusively by the laws of the State of
Colorado.
9. Trustee and Shareholder Liability.
INVESCO EXPRESSLY AGREES THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, OR IN LAW, THAT IT WILL LOOK SOLELY TO THE ASSETS OF THE TRUST FOR ANY
OBLIGATIONS OF THE TRUST HEREUNDER AND NOTHING HEREIN SHALL BE CONSTRUED TO
CREATE ANY PERSONAL LIABILITY OF ANY TRUSTEE OR ANY SHAREHOLDER OF THE TRUST.
INVESCO EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE
INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO
<PAGE>
VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER,
OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL
LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE
SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE
AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE
DECLARATION) ONLY SHALL BE LIABLE.
IN WITNESS WHEREOF, INVESCO and the Trust each has caused this Agreement to be
duly executed on its behalf by an officer thereunto duly authorized, the day and
year first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
---------------------
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ------------------
Secretary
INVESCO VALUE TRUST
By: /s/ Dan J. Hesser
---------------------
President
ATTEST:
/s/ Glen A. Payne
- -----------------
Secretary
SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO CAPITAL
MANAGEMENT, INC. ("ICM"), a Delaware corporation.
WITNESSETH:
WHEREAS, INVESCO VALUE TRUST (the "Trust") is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") and has one class of shares (the "Shares"), which is
divided into two or more series (the "Series"), each representing an interest in
a separate portfolio of investments (the "Funds"); and
WHEREAS, the Shares of the Trust have, in fact, been divided into separate
Series, three such Series being the INVESCO Value Equity Fund (the "Equity
Fund"), the INVESCO Intermediate Government Bond Fund (the "Bond Fund"), and the
INVESCO Total Return Fund (the "Return Fund"), all such Series having separate
portfolios of investments; and
WHEREAS, INVESCO and ICM are engaged principally in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with the
Trust (the "INVESCO Investment Advisory Agreement"), pursuant to which INVESCO
is required to provide investment advisory services to the Trust and the Funds
of the Trust; and
WHEREAS, ICM is willing to provide investment advisory services to the Adviser
in connection with the Trust's operations on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, INVESCO and ICM hereby agree as follows:
ARTICLE I
DUTIES OF ICM
INVESCO hereby employs ICM to act as investment adviser to the Adviser and to
furnish, or arrange for affiliates of ICM to furnish, the investment advisory
services described below, subject to the broad supervision of INVESCO and the
Trust, for the period and on the terms and conditions set forth in this
Agreement. ICM hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such services and
to assume the obligations herein set forth for the compensation provided for
herein. ICM and its affiliates shall for all purposes herein be deemed to be
independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or any Fund in
any way or otherwise be deemed an agent of the Trust or any Fund of the Trust.
<PAGE>
ICM hereby agrees to manage the investment operations of the Equity Fund, Bond
Fund, and Return Fund, subject to the supervision of the Trust's trustees (the
"Trustees") and INVESCO. Specifically, ICM agrees to perform the following
services for the Trust, INVESCO, and the Equity Fund, Bond Fund, and Return
Fund:
(a) to manage the investment and reinvestment of all assets, now or
hereafter acquired, by the Equity Fund, Bond Fund, and Return Fund;
(b) to maintain a continuous investment program for the Equity Fund, Bond
Fund, and Return Fund, consistent with (i) the three Funds' and Trust's
investment policies as set forth in the Trust's Declaration of Trust, Bylaws,
Registration Statement, as from time to time amended, under the Investment
Company Act of 1940, as amended (the "1940 Act"), and in any prospectus
and/or statement of additional information of the Trust or of the three
Funds, as from time to time amended and in use under the Securities Act of
1933, as amended, and (ii) the Trust's status as a regulated investment
company under the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Equity
Fund, Bond Fund, and Return Fund, unless otherwise directed by the Trustees
of the Trust or INVESCO, and to execute transactions accordingly;
(d) to provide to the Trust and the Equity Fund, Bond Fund, and Return Fund
the benefit of all of the investment analysis and research, the reviews of
current economic conditions and trends, and the consideration of long-range
investment policy now or hereafter generally available to investment advisory
customers of ICM;
(e) to determine what portion of the Equity Fund, Bond Fund, and Return
Fund should be invested in the common stocks, preferred stocks, Government
obligations, commercial paper, certificates of deposit, bankers' acceptances,
variable amount notes, corporate debt obligations, and any other authorized
securities; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Trust and/or Equity Fund, Bond Fund, and Return Fund action and
any other rights pertaining to the three Funds' portfolio securities shall be
exercised.
With respect to execution of transactions for the Trust and for the Equity
Fund, Bond Fund, and Return Fund, ICM shall place orders for the purchase or
sale of portfolio securities with brokers or dealers selected by ICM. In
connection with the selection of such brokers or dealers and the placing of
such orders, ICM is directed at all times to obtain for the three Funds,
the most favorable execution and price; after fulfilling this primary
requirement of obtaining the most favorable execution and price, ICM is hereby
expressly authorized to consider as a secondary factor in selecting brokers or
dealers with which such orders may be placed whether such firms furnish
<PAGE>
statistical, research and other information or services to ICM. Receipt by ICM
of any such statistical or other information and services should not be deemed
to give rise to any requirement for abatement of the advisory fee payable
pursuant to paragraph 3 hereof. ICM may follow a policy of considering sales
of shares of the Trust as a factor in the selection of broker-dealers to execute
portfolio transactions, subject to the requirements of best execution discussed
above.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
ICM assumes and shall pay for maintaining the staff and personnel necessary to
perform its obligations under this Agreement, and shall also, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement.
Except to the extent expressly assumed by ICM herein and except to the extent
required by law to be paid by ICM, INVESCO and/or the Trust shall pay all costs
and expenses in connection with its respective operations. Without limiting the
generality of the foregoing, such costs and expenses payable by INVESCO or the
Trust, as applicable, include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Trust or any Fund in connection with securities
transactions to which INVESCO, the Trust or any Fund is a party or in
connection with securities owned by INVESCO, the Trust or any Fund;
(b) the fees, charges and expenses of any independent public accountants,
custodian, depository, dividend disbursing agent, dividend reinvestment
agent, transfer agent, registrar, independent pricing services, and legal
counsel for INVESCO, the Trust or for any Fund;
(c) the interest on indebtedness, if any, incurred by INVESCO, the Trust or
any Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by INVESCO, the Trust or any Fund
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration and
qualification of the Trust and of its shares under laws administered by the
Securities and Exchange Commission or under other applicable regulatory
requirements, including the preparation and printing of prospectuses and
statements of additional information;
(f) the compensation and expenses of the Trustees of the Trust;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices, prospectuses,
statements of additional information and other communications to the Trust's
shareholders, as well as all expenses of shareholders' meetings and Trustees'
meetings;
<PAGE>
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Trust's Declaration of Trust, including its
initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial registration
and qualification of its securities under the laws of any state and the
approval of the Trust's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Trust;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interests of the Trust;
(l) extraordinary expenses, including fees and disbursements of counsel, in
connection with litigation by or against INVESCO, the Trust or any Fund;
(m) premiums for the fidelity bond maintained by the Trust pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder; and
(n) association and institute dues.
ARTICLE III
COMPENSATION OF ICM
For the services rendered, the facilities furnished and expenses assumed by
ICM, INVESCO shall pay to ICM an annual fee, computed on a daily basis and paid
on a monthly basis, using for each daily calculation the most recently
determined net asset value of the Equity Fund, Bond Fund, and Return Fund, as
determined by valuation made in accordance with the three Funds' procedures for
calculating their net asset value as described in the Prospectus and/or
Statement of Additional Information. On an annual basis, the advisory fee to ICM
shall be as follows: 0.20% of the Equity Fund's and Return Fund's, and 0.16% of
the Bond Fund's, average net asset value up to $500 million; 0.17% of the Equity
Fund's and Return Fund's, and 0.13% of the Bond Fund's, average net asset value
in excess of $500 million but not more than $1 billion; and 0.13% of the Equity
Fund's and Return Fund's, and 0.11% of the Bond Fund's, average net asset value
in excess of $1 billion. During any period when the determination of a Fund's
net asset value is suspended by the Trustees of the Trust, the net asset value
of a share of that Fund as of the last business day prior to such suspension
shall, for the purpose of this Article III, be deemed to be the net asset value
at the close of each succeeding business day until it is again determined.
ARTICLE IV
LIMITATION OF LIABILITY OF ICM
ICM shall not be liable for any error of judgment, mistake of law or for any
loss arising out of any investment or for any act or omission in the performance
of sub-advisory services rendered with respect to the Trust or, in particular,
<PAGE>
the Equity Fund, Bond Fund, and Return Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, ICM shall include any affiliates of ICM performing services
contemplated hereby and directors, officers, partners and employees of ICM and
such affiliates.
ARTICLE V
ACTIVITIES OF ICM
The services of ICM to the Trust are not to be deemed to be exclusive, ICM and
any person controlled by or under common control with ICM (for purposes of this
Article V referred to as "affiliates") being free to render services to others.
It is understood that trustees, officers, employees and shareholders of the
Trust are or may become interested in ICM and its affiliates, as directors,
officers, employees and shareholders or otherwise and that directors, officers,
partners, employees and shareholders of ICM and its affiliates are or may become
interested in the Trust as trustees, officers and employees, and that ICM,
INVESCO, and the trustees, officers, employees and shareholders of INVESCO and
its affiliates may become interested in the Trust as a shareholder or otherwise.
ARTICLE VI
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH THE LAWS
In connection with purchases or sales of securities for the investment portfolio
of the Trust or of the Equity Fund, Bond Fund, and Return Fund, neither ICM nor
any of its directors, officers, partners or employees will act as a principal or
agent for any party other than the Trust or the three Funds, as applicable, or
receive any commissions. ICM will comply with all applicable laws in acting
hereunder including, without limitation, the 1940 Act; the Investment Advisers
Act of 1940, as amended; and all rules and regulations duly promulgated under
the foregoing.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Equity Fund, Bond Fund, and
Return Fund, and shall remain in force for an initial term of two years from the
date of execution, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by (i) the trustees of
the Trust, or by the vote of a majority of the outstanding voting securities of
the Equity Fund, Bond Fund, and Return Fund, and (ii) a majority of those
trustees who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
<PAGE>
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Trustees of the Trust or by vote of the majority of the
outstanding voting securities of the Equity Fund, Bond Fund, and Return Fund, or
by ICM, on sixty days' written notice to the applicable party(ies). This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the INVESCO Investment Advisory Agreement.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by ICM and
INVESCO, and no material amendment of this Agreement shall be effective until
approved by the vote of a majority of the outstanding voting securities of any
Fund as to which such amendment is applicable; provided, however, that this
paragraph shall not prevent any immaterial amendment(s) to this Agreement, which
amendment(s) are made with the approval of (1) the Trustees and (2) a majority
of the Trustees of the Trust who are not interested persons of INVESCO, ICM or
the Trust.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities,"
"assignments," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
PERSONAL LIABILITY
ICM EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE
INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO
<PAGE>
VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER,
OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL
LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE
SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE
AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE
DECLARATION) ONLY SHALL BE LIABLE.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Dan J. Hesser
----------------------------
President
ATTEST:
/s/ Glen A. Payne
- -----------------
Secretary
INVESCO CAPITAL MANAGEMENT, INC.
By: /s/ Frank M. Bishop
----------------------------
President
ATTEST:
/s/ Glen A. Payne
- -----------------
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997 between INVESCO
VALUE TRUST, a Massachusetts business trust (the "Fund"), and INVESCO FUNDS
GROUP, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares") which is
divided into three series, and which may be divided into additional series (the
"Series"), each representing a beneficial interest in a separate portfolio of
investments, and it is in the interest of the Fund to offer the Shares for sale
continuously; and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for
the distribution of Shares of each Series in
jurisdictions wherein such Shares legally may be
offered for sale; provided, however, that the Fund in
its absolute discretion may (a) issue or sell Shares of
each Series directly to purchasers, or (b) issue or
sell Shares of a particular Series to the shareholders
of any other Series or to the shareholders of any other
investment company, for which the Underwriter or any
affiliate thereof shall act as exclusive distributor,
who wish to exchange all or a portion of their
investment in Shares of such Series or in shares of such other
investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable. The Fund reserves
the right to reject any subscription in whole or in part for any
reason.
2. The Underwriter hereby agrees to serve as agent for the
distribution of the Shares and agrees that it will use
its best efforts with reasonable promptness to sell
such part of the authorized Shares remaining unissued
as from time to time shall be effectively registered
under the Securities Act of 1933, as amended (the "1933
Act"), at such prices and on such terms as hereinafter
<PAGE>
set forth, all subject to applicable federal and state
securities laws and regulations. Nothing herein shall
be construed to prohibit the Underwriter from engaging
in other related or unrelated businesses.
3. In addition to serving as the Fund's agent in the
distribution of the Shares, the Underwriter shall also
provide to the holders of the Shares certain
maintenance, support or similar services ("Shareholder
Services"). Such services shall include, without
limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in
considering whether to change dividend options and
helping to effectuate such changes, arranging for bank
wires, and providing such other services as the Fund
may reasonably request from time to time. It is
expressly understood that the Underwriter or the Fund
may enter into one or more agreements with third
parties pursuant to which such third parties may
provide the Shareholder Services provided for in this
paragraph. Nothing herein shall be construed to impose
upon the Underwriter any duty or expense in connection
with the services of any registrar, transfer agent or
custodian appointed by the Fund, the computation of the
asset value or offering price of Shares, the
preparation and distribution of notices of meetings,
proxy soliciting material, annual and periodic reports,
dividends and dividend notices, or any other
responsibility of the Fund.
4. Except as otherwise specifically provided for in this
Agreement, the Underwriter shall sell the Shares
directly to purchasers, or through qualified
broker-dealers or others, in such manner, not
inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the
1933 Act (the "Registration Statement") and related
Prospectus (the "Prospectus") and Statement of
Additional Information ("SAI") of the Fund as the
Underwriter may determine from time to time; provided
that no broker-dealer or other person shall be
appointed or authorized to act as agent of the Fund
without the prior consent of the directors (the
"Directors") of the Fund. The Underwriter will require
each broker-dealer to conform to the provisions hereof
and of the Registration Statement (and related
Prospectus and SAI) at the time in effect under the
1933 Act with respect to the public offering price of
the Shares of any Series. The Fund will have no
obligation to pay any commissions or other remuneration
to such broker-dealers.
<PAGE>
5. The Shares of each Series offered for sale or sold by
the Underwriter shall be offered or sold at the net
asset value per share determined in accordance with the
then current Prospectus and/or SAI relating to the sale
of the Shares of the appropriate Series except as
departure from such prices shall be permitted by the
then current Prospectus and/or SAI of the Fund, in
accordance with applicable rules and regulations of the
Securities and Exchange Commission. The price the Fund
shall receive for the Shares of each Series purchased
from the Fund shall be the net asset value per share of
such Share, determined in accordance with the
Prospectus and/or SAI applicable to the sale of the
Shares of such Series.
6. Except as may be otherwise agreed to by the Fund, the
Underwriter shall be responsible for issuing and delivering such
confirmations of sales made by it pursuant to this Agreement as may
be required; provided, however, that the Underwriter or the Fund may
utilize the services of other persons or entities believed by it to
be competent to perform such functions. Shares shall be registered
on the transfer books of the Fund in such names and denominations as
the Underwriter may specify.
7. The Fund will execute any and all documents and furnish
any and all information which may be reasonably
necessary in connection with the qualification of the
Shares for sale (including the qualification of the
Fund as a broker-dealer where necessary or advisable)
in such states as the Underwriter may reasonably
request (it being understood that the Fund shall not be
required without its consent to comply with any
requirement which in the opinion of the Directors of
the Fund is unduly burdensome). The Underwriter, at
its own expense, will effect all qualifications of
itself as broker or dealer, or otherwise, under all
applicable state or Federal laws required in order that
the Shares may be sold in such states or jurisdictions
as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter
from time to time the most recent form of the
Prospectus and/or SAI of the Fund and/or of each Series
of the Fund. The Fund authorizes the Underwriter to
use the Prospectus and/or SAI, in the forms furnished
to the Underwriter from time to time, in connection
with the sale of the Shares of the Fund and/or of each
Series of the Fund. The Fund will furnish to the
Underwriter from time to time such information with
<PAGE>
respect to the Fund, each Series, and the Shares as the
Underwriter may reasonably request for use in
connection with the sale of the Shares. The
Underwriter agrees that it will not use or distribute
or authorize the use, distribution or dissemination by
broker-dealers or others in connection with the sale of
the Shares any statements, other than those contained in a current
Prospectus and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under
Federal and state securities laws and regulations, and that it will
promptly furnish the Fund with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the
Fund, may cause the redemption or repurchase of the
Shares at such prices and upon such terms and
conditions as shall be specified in a then current
Prospectus and/or SAI. In selling, redeeming or
repurchasing the Shares for the account of the Fund,
the Underwriter will in all respects conform to the
requirements of all state and federal laws and the
Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale,
redemption or repurchase, as the case may be. The
Underwriter will observe and be bound by all the
provisions of the Articles of Incorporation or Bylaws
of the Fund and of any provisions in the Registration
Statement, Prospectus and SAI, as such may be amended
or supplemented from time to time, notice of which
shall have been given to the Underwriter, which at the
time in any way require, limit, restrict or prohibit or
otherwise regulate any action on the part of the
Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any attorney fees
incurred in connection therewith) which the Underwriter, its
officers and directors or any such controlling person, may
incur under the federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration
Statement or any related Prospectus and/or SAI or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
<PAGE>
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against whom
such action is brought within ten (10) days after the summons or
other first legal process shall have been served upon the
Underwriter, its officers or directors or any such controlling
person. The failure to notify the Fund of any such action shall
not relieve the Fund from any liability which it may have to the
person against whom such action is brought by reason of any such
alleged untrue statement or omission otherwise than on account
of the indemnity agreement contained in this paragraph. The
Fund shall be entitled to assume the defense of any suit brought
to enforce such claim, demand, or liability, but in such case
the defense shall be conducted by counsel chosen by the Fund and
approved by the Underwriter, which approval shall not be
unreasonably withheld. If the Fund elects to assume the
defense of any such suit and retain counsel approved by the
Underwriter, the defendant or defendants in such suit shall
bear the fees and expenses of an additional counsel obtained
by any of them. Should the Fund elect not to assume the
defense of any such suit, or should the Underwriter not
approve of counsel chosen by the Fund, the Fund will reimburse
the Underwriter, its officers and directors or the controlling
person or persons named as defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel
retained by the Underwriter or them. In addition, the
Underwriter shall have the right to employ counsel to
represent it, its officers and directors and any such
controlling person who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by
the Underwriter against the Fund hereunder if in the
reasonable judgment of the Underwriter it is advisable for the
<PAGE>
Underwriter, its officers and directors or such controlling
person to be represented by separate counsel, in which event
the reasonable fees and expenses of such separate counsel
shall be borne by the Fund. This indemnity agreement and the
Fund's representations and warranties in this Agreement shall
remain operative and in full force and effect and shall survive
the delivery of any of the Shares as provided in this
Agreement. This indemnity agreement shall inure exclusively to
the benefit of the Underwriter and its successors, the
Underwriter's officers and directors and their respective
estates and any such controlling person and their successors and
estates. The Fund shall promptly notify the Underwriter of the
commencement of any litigation or proceeding against it in
connection with the issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Fund, its Directors and any person who controls the Fund
within the meaning of the 1933 Act, from and against any and all
claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or
liabilities and any attorney fees incurred in connection
therewith) which the Fund, its Directors or any such controlling
person may incur under the Federal securities laws, the common
law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its Directors or such controlling
person resulting from such claims or demands shall arise out of
or be based upon (a) any alleged untrue statement of a material
fact contained in information furnished in writing by the
Underwriter to the Fund specifically for use in the Registration
Statement or any related Prospectus and/or SAI or shall arise
out of or be based upon any alleged omission to state a material
fact in connection with such information required to be stated
in the Registration Statement or the related Prospectus and/or
SAI or necessary to make such information not misleading and (b)
any alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the Fund
in writing.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence or reckless disregard of the duties involved
in the conduct of his office.
<PAGE>
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado,
and sent to the Underwriter by the person against whom such
action is brought, within ten (10) days after the summons or
other first legal process shall have been served upon the
Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not
relieve the Underwriter from any liability which it may have
to the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Underwriter and approved by the Fund,
which approval shall not be unreasonably withheld. If the
Underwriter elects to assume the defense of any such suit and
retain counsel approved by the Fund, the defendant or defendants
in such suit shall bear the fees and expenses of an additional
counsel obtained by any of them. Should the Underwriter elect
not to assume the defense of any such suit, or should the Fund
not approve of counsel chosen by the Underwriter, the
Underwriter will reimburse the Fund, its Directors or the
controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any
counsel retained by the Fund or them. In addition, the Fund
shall have the right to employ counsel to represent it, its
Directors and any such controlling person who may be subject to
liability arising out of any claim in respect of which indemnity
may be sought by the Fund against the Underwriter hereunder if
in the reasonable judgment of the Fund it is advisable for the
Fund, its Directors or such controlling person to be represented
by separate counsel, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the
Underwriter. This indemnity agreement and the Underwriter's
representations and warranties in this Agreement shall remain
operative and in full force and effect and shall survive the
delivery of any of the Shares as provided in this Agreement.
This indemnity agreement shall inure exclusively to the benefit
of the Fund and its successors, the Fund's Directors and their
respective estates and any such controlling person and their
successors and estates. The Underwriter shall promptly notify
the Fund of the commencement of any litigation or proceeding
against it in connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses
(including the fees and disbursements of its own
counsel) of any registration of the Shares under the 1933 Act, as
amended, (b) expenses incident to the issuance of the Shares, and
(c) expenses (including the fees and disbursements of its own
counsel) incurred in connection with the preparation, printing and
<PAGE>
distribution of the Fund's Prospectuses, SAIs, and periodic and
other reports sent to holders of the Shares in their capacity as
such. The Underwriter shall prepare and provide necessary copies of
all sales literature subject to the Fund's approval thereof.
13. This Agreement shall become effective as of the date it
is approved by a majority vote of the Directors of the
Fund, as well as a majority vote of the Directors who
are not "interested persons" (as defined in the
Investment Company Act) of the Fund, and shall
continue in effect for an initial term expiring
February 28, 1998, and from year to year thereafter,
but only so long as such continuance is specifically
approved at least annually (a)(i) by a vote of the
Directors of the Fund or (ii) by a vote of a majority
of the outstanding voting securities of the Fund, and
(b) by a vote of a majority of the Directors of the
Fund who are not "interested persons," as defined in
the Investment Company Act, of the Fund cast in person
at a meeting for the purpose of voting on this
Agreement.
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at least
60 days' prior written notice of such termination specifying the
date fixed therefor. In particular, this Agreement may be terminated
at any time, without payment of any penalty, by vote of a majority
of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for in
this Agreement or otherwise, the Fund may terminate this Agreement
at any time immediately upon the Underwriter's failure to fulfill
any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to
the contrary herein, or in any applicable law, it will look solely
to the assets of the Fund for any obligations of the Fund hereunder
and nothing herein shall be construed to create any personal
liability on the part of any Director or any shareholder of the
Fund.
15. This Agreement shall automatically terminate in the
event of its assignment. In interpreting the
provisions of this Section 15, the definition of
"assignment" contained in the Investment Company Act
shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
<PAGE>
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Fund and the Underwriter and, if applicable, approved in the
manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be
held illegal or made invalid by a court decision,
statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation
hereof shall be governed exclusively by the laws of the
State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO VALUE TRUST
ATTEST:
By: /s/ Dan J. Hesser
-----------------------
/s/ Glen A. Payne Dan J. Hesser
- ------------------------ President
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Ronald L. Grooms
/s/ Glen A. Payne ----------------------
- ------------------------ Ronald L. Grooms
Glen A. Payne Senior Vice President
Secretary
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of September, 1997 between INVESCO
VALUE TRUST, a Massachusetts business trust (the "Fund"), and INVESCO
DISTRIBUTORS, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares") which is
divided into three series, and which may be divided into additional series (the
"Series"), each representing a beneficial interest in a separate portfolio of
investments, and it is in the interest of the Fund to offer the Shares for sale
continuously; and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for
the distribution of Shares of each Series in
jurisdictions wherein such Shares legally may be
offered for sale; provided, however, that the Fund in
its absolute discretion may (a) issue or sell Shares of
each Series directly to purchasers, or (b) issue or
sell Shares of a particular Series to the shareholders
of any other Series or to the shareholders of any other
investment company, for which the Underwriter or any
affiliate thereof shall act as exclusive distributor,
who wish to exchange all or a portion of their
investment in Shares of such Series or in shares of such other
investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable. The Fund reserves
the right to reject any subscription in whole or in part for any
reason.
2. The Underwriter hereby agrees to serve as agent for the
distribution of the Shares and agrees that it will use
its best efforts with reasonable promptness to sell
such part of the authorized Shares remaining unissued
as from time to time shall be effectively registered
under the Securities Act of 1933, as amended (the "1933
Act"), at such prices and on such terms as hereinafter
<PAGE>
set forth, all subject to applicable federal and state
securities laws and regulations. Nothing herein shall
be construed to prohibit the Underwriter from engaging
in other related or unrelated businesses.
3. In addition to serving as the Fund's agent in the
distribution of the Shares, the Underwriter shall also
provide to the holders of the Shares certain
maintenance, support or similar services ("Shareholder
Services"). Such services shall include, without
limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in
considering whether to change dividend options and
helping to effectuate such changes, arranging for bank
wires, and providing such other services as the Fund
may reasonably request from time to time. It is
expressly understood that the Underwriter or the Fund
may enter into one or more agreements with third
parties pursuant to which such third parties may
provide the Shareholder Services provided for in this
paragraph. Nothing herein shall be construed to impose
upon the Underwriter any duty or expense in connection
with the services of any registrar, transfer agent or
custodian appointed by the Fund, the computation of the
asset value or offering price of Shares, the
preparation and distribution of notices of meetings,
proxy soliciting material, annual and periodic reports,
dividends and dividend notices, or any other
responsibility of the Fund.
4. Except as otherwise specifically provided for in this
Agreement, the Underwriter shall sell the Shares
directly to purchasers, or through qualified
broker-dealers or others, in such manner, not
inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the
1933 Act (the "Registration Statement") and related
Prospectus (the "Prospectus") and Statement of
Additional Information ("SAI") of the Fund as the
Underwriter may determine from time to time; provided
that no broker-dealer or other person shall be
appointed or authorized to act as agent of the Fund
without the prior consent of the directors (the
"Directors") of the Fund. The Underwriter will require
each broker-dealer to conform to the provisions hereof
and of the Registration Statement (and related
Prospectus and SAI) at the time in effect under the
1933 Act with respect to the public offering price of
the Shares of any Series. The Fund will have no
obligation to pay any commissions or other remuneration
to such broker-dealers.
<PAGE>
5. The Shares of each Series offered for sale or sold by
the Underwriter shall be offered or sold at the net
asset value per share determined in accordance with the
then current Prospectus and/or SAI relating to the sale
of the Shares of the appropriate Series except as
departure from such prices shall be permitted by the
then current Prospectus and/or SAI of the Fund, in
accordance with applicable rules and regulations of the
Securities and Exchange Commission. The price the Fund
shall receive for the Shares of each Series purchased
from the Fund shall be the net asset value per share of
such Share, determined in accordance with the
Prospectus and/or SAI applicable to the sale of the
Shares of such Series.
6. Except as may be otherwise agreed to by the Fund, the Underwriter
shall be responsible for issuing and delivering such confirmations
of sales made by it pursuant to this Agreement as may be required;
provided, however, that the Underwriter or the Fund may utilize the
services of other persons or entities believed by it to be competent
to perform such functions. Shares shall be registered on the
transfer books of the Fund in such names and denominations as the
Underwriter may specify.
7. The Fund will execute any and all documents and furnish
any and all information which may be reasonably
necessary in connection with the qualification of the
Shares for sale (including the qualification of the
Fund as a broker-dealer where necessary or advisable)
in such states as the Underwriter may reasonably
request (it being understood that the Fund shall not be
required without its consent to comply with any
requirement which in the opinion of the Directors of
the Fund is unduly burdensome). The Underwriter, at
its own expense, will effect all qualifications of
itself as broker or dealer, or otherwise, under all
applicable state or Federal laws required in order that
the Shares may be sold in such states or jurisdictions
as the Fund may reasonably request.
8. The Fund shall prepare and furnish to the Underwriter
from time to time the most recent form of the
Prospectus and/or SAI of the Fund and/or of each Series
of the Fund. The Fund authorizes the Underwriter to
use the Prospectus and/or SAI, in the forms furnished
to the Underwriter from time to time, in connection
with the sale of the Shares of the Fund and/or of each
Series of the Fund. The Fund will furnish to the
Underwriter from time to time such information with
respect to the Fund, each Series, and the Shares as the
<PAGE>
Underwriter may reasonably request for use in
connection with the sale of the Shares. The
Underwriter agrees that it will not use or distribute
or authorize the use, distribution or dissemination by
broker-dealers or others in connection with the sale of
the Shares any statements, other than those contained in a current
Prospectus and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under
Federal and state securities laws and regulations, and that it will
promptly furnish the Fund with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or
others to make any short sales of the Shares of the Fund or
otherwise make any sales of the Shares unless such sales are made in
accordance with a then current Prospectus and/or SAI relating to the
sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the
Fund, may cause the redemption or repurchase of the
Shares at such prices and upon such terms and
conditions as shall be specified in a then current
Prospectus and/or SAI. In selling, redeeming or repurchasing the
Shares for the account of the Fund, the Underwriter will in all
respects conform to the requirements of all state and federal laws
and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale, redemption or
repurchase, as the case may be. The Underwriter will observe and be
bound by all the provisions of the Articles of Incorporation or
Bylaws of the Fund and of any provisions in the Registration
Statement, Prospectus and SAI, as such may be amended or
supplemented from time to time, notice of which shall have been
given to the Underwriter, which at the time in any way require,
limit, restrict or prohibit or otherwise regulate any action on the
part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the
Underwriter, its officers and directors and any person who
controls the Underwriter within the meaning of the 1933 Act,
from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending
such claims, demands or liabilities and any attorney fees
incurred in connection therewith) which the Underwriter, its
officers and directors or any such controlling person, may
incur under the federal securities laws, the common law or
otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration
Statement or any related Prospectus and/or SAI or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
<PAGE>
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Underwriter
or any person who is an officer, director or controlling
person of the Underwriter, shall not inure to the benefit of
the Underwriter or officer, director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
the Underwriter against any liability to the Fund, the
Directors or the Fund's shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement.
This indemnity agreement is expressly conditioned upon the
Fund's being notified of any action brought against the
Underwriter, its officers or directors or any such controlling
person, which notification shall be given by letter or by
telegram addressed to the Fund at its principal address in
Denver, Colorado and sent to the Fund by the person against whom
such action is brought within ten (10) days after the summons
or other first legal process shall have been served upon the
Underwriter, its officers or directors or any such controlling
person. The failure to notify the Fund of any such action shall
not relieve the Fund from any liability which it may have to the
person against whom such action is brought by reason of any such
alleged untrue statement or omission otherwise than on account
of the indemnity agreement contained in this paragraph. The Fund
shall be entitled to assume the defense of any suit brought to
enforce such claim, demand, or liability, but in such case the
defense shall be conducted by counsel chosen by the Fund and
approved by the Underwriter, which approval shall not be
unreasonably withheld. If the Fund elects to assume the
defense of any such suit and retain counsel approved by the
Underwriter, the defendant or defendants in such suit shall
bear the fees and expenses of an additional counsel obtained
by any of them. Should the Fund elect not to assume the
defense of any such suit, or should the Underwriter not
approve of counsel chosen by the Fund, the Fund will reimburse
the Underwriter, its officers and directors or the controlling
person or persons named as defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel
retained by the Underwriter or them. In addition, the
Underwriter shall have the right to employ counsel to
represent it, its officers and directors and any such
controlling person who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by
the Underwriter against the Fund hereunder if in the
<PAGE>
reasonable judgment of the Underwriter it is advisable for the
Underwriter, its officers and directors or such controlling
person to be represented by separate counsel, in which event
the reasonable fees and expenses of such separate counsel
shall be borne by the Fund. This indemnity agreement and the
Fund's representations and warranties in this Agreement shall
remain operative and in full force and effect and shall survive
the delivery of any of the Shares as provided in this Agreement.
This indemnity agreement shall inure exclusively to the benefit
of the Underwriter and its successors, the Underwriter's
officers and directors and their respective estates and any such
controlling person and their successors and estates. The Fund
shall promptly notify the Underwriter of the commencement of
any litigation or proceeding against it in connection with the
issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and
hold harmless the Fund, its Directors and any
person who controls the Fund within the meaning of
the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the
cost of investigating or defending such claims,
demands or liabilities and any attorney fees
incurred in connection therewith) which the Fund,
its Directors or any such controlling person may
incur under the Federal securities laws, the
common law or otherwise, but only to the extent
that such liability or expense incurred by the
Fund, its Directors or such controlling person
resulting from such claims or demands shall arise
out of or be based upon (a) any alleged untrue
statement of a material fact contained in
information furnished in writing by the
Underwriter to the Fund specifically for use in
the Registration Statement or any related
Prospectus and/or SAI or shall arise out of or be
based upon any alleged omission to state a
material fact in connection with such information
required to be stated in the Registration
Statement or the related Prospectus and/or SAI or
necessary to make such information not misleading
and (b) any alleged act or omission on the
Underwriter's part as the Fund's agent that has
not been expressly authorized by the Fund in
writing.
Notwithstanding the foregoing, this indemnity agreement, to
the extent that it might require indemnity of the Fund or any
Director or controlling person of the Fund, shall not inure to
the benefit of the Fund or Director or controlling person
thereof unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy
<PAGE>
as expressed in the federal securities laws and in no event
shall anything contained herein be so construed as to protect
any Director of the Fund against any liability to the Fund or
the Fund's shareholders to which the Director would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence or reckless disregard of the duties involved
in the conduct of his office.
This indemnity agreement is expressly conditioned upon the
Underwriter's being notified of any action brought against the
Fund, its Directors or any such controlling person, which
notification shall be given by letter or telegram addressed to
the Underwriter at its principal office in Denver, Colorado,
and sent to the Underwriter by the person against whom such
action is brought, within ten (10) days after the summons or
other first legal process shall have been served upon the
Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not
relieve the Underwriter from any liability which it may have
to the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the
defense of any suit brought to enforce such claim, demand, or
liability, but in such case the defense shall be conducted by
counsel chosen by the Underwriter and approved by the Fund,
which approval shall not be unreasonably withheld. If the
Underwriter elects to assume the defense of any such suit and
retain counsel approved by the Fund, the defendant or defendants
in such suit shall bear the fees and expenses of an additional
counsel obtained by any of them. Should the Underwriter elect
not to assume the defense of any such suit, or should the Fund
not approve of counsel chosen by the Underwriter, the
Underwriter will reimburse the Fund, its Directors or the
controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any
counsel retained by the Fund or them. In addition, the Fund
shall have the right to employ counsel to represent it, its
Directors and any such controlling person who may be subject to
liability arising out of any claim in respect of which indemnity
may be sought by the Fund against the Underwriter hereunder if
in the reasonable judgment of the Fund it is advisable for the
Fund, its Directors or such controlling person to be represented
by separate counsel, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the
Underwriter. This indemnity agreement and the Underwriter's
representations and warranties in this Agreement shall remain
operative and in full force and effect and shall survive the
delivery of any of the Shares as provided in this Agreement.
This indemnity agreement shall inure exclusively to the benefit
of the Fund and its successors, the Fund's Directors and their
<PAGE>
respective estates and any such controlling person and their
successors and estates. The Underwriter shall promptly notify
the Fund of the commencement of any litigation or proceeding
against it in connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses
(including the fees and disbursements of its own
counsel) of any registration of the Shares under the 1933 Act, as
amended, (b) expenses incident to the issuance of the Shares, and
(c) expenses (including the fees and disbursements of its own
counsel) incurred in connection with the preparation, printing and
distribution of the Fund's Prospectuses, SAIs, and periodic and
other reports sent to holders of the Shares in their capacity as
such. The Underwriter shall prepare and provide necessary copies of
all sales literature subject to the Fund's approval thereof.
13. This Agreement shall become effective as of the date it
is approved by a majority vote of the Directors of the
Fund, as well as a majority vote of the Directors who
are not "interested persons" (as defined in the
Investment Company Act) of the Fund, and shall
continue in effect for an initial term expiring
September, 1998, and from year to year thereafter, but
only so long as such continuance is specifically
approved at least annually (a)(i) by a vote of the
Directors of the Fund or (ii) by a vote of a majority
of the outstanding voting securities of the Fund, and
(b) by a vote of a majority of the Directors of the
Fund who are not "interested persons," as defined in
the Investment Company Act, of the Fund cast in person
at a meeting for the purpose of voting on this
Agreement.
Either party hereto may terminate this Agreement on any date,
without the payment of a penalty, by giving the other party at least
60 days' prior written notice of such termination specifying the
date fixed therefor. In particular, this Agreement may be terminated
at any time, without payment of any penalty, by vote of a majority
of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not
more than 60 days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided for in
this Agreement or otherwise, the Fund may terminate this Agreement
at any time immediately upon the Underwriter's failure to fulfill
any of the obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to
the contrary herein, or in any applicable law, it will look solely
to the assets of the Fund for any obligations of the Fund hereunder
and nothing herein shall be construed to create any personal
liability on the part of any Director or any shareholder of the
Fund.
<PAGE>
15. This Agreement shall automatically terminate in the
event of its assignment. In interpreting the
provisions of this Section 15, the definition of
"assignment" contained in the Investment Company Act
shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the Fund and the Underwriter and, if applicable, approved in the
manner required by the Investment Company Act.
18. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be
held illegal or made invalid by a court decision,
statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation
hereof shall be governed exclusively by the laws of the
State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO VALUE TRUST
ATTEST:
By: /s/ Dan J. Hesser
/s/ Glen A. Payne ------------------------
- ----------------- Dan J. Hesser
Secretary President
INVESCO DISTRIBUTORS, INC.
ATTEST:
By: Ronald L. Grooms
/s/ Glen A. Payne -----------------------
- ----------------- Ronald L. Grooms
Secretary Senior Vice President
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
The registered, open-end management investment companies referred to on
Schedule A as the Schedule may hereafter be revised by the addition and deletion
of investment companies (the "Funds") have adopted this Defined Benefit Deferred
Compensation Plan ("Plan") for the benefit of those directors and trustees of
the Funds who are not interested directors or trustees thereof as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent
Directors").
1. Eligibility
Each Independent Director who has served as such ("Eligible Service") on
the boards of any of the Funds and their predecessor and successor entities, if
any, or as an Independent Director of the now-defunct investment management
company known as FG Series for an aggregate of at least five years at the time
of his Service Termination Date (as defined in paragraph 2) will be entitled to
receive benefits under the Plan. An Independent Director's period of Eligible
Service commences on the date of election to the board of directors or trustees
of any one or more of the Funds ("Board"). Hereafter, references in this Plan to
Independent Directors shall be deemed to include only those Directors who have
met the Eligible Service requirement for Plan participation.
2. Service Termination and Service Termination Date
a. Service Termination. Service Termination means termination of service
(other than by disability or death) of an Independent Director which results
from the Director's having reached his Service Termination Date.
b. Service Termination Date. An Independent Director's Service Termination
Date is normally the last day of the calendar quarter in which such Director's
seventy-second birthday occurs. A majority of the Board of a Fund may annually
extend a Director's Service Termination Date for a maximum period of three
years, through the date not later than the last day of the calendar quarter in
which such Director's seventy-fifth birthday occurs.
As used in this Plan unless otherwise stipulated, Service Termination Date
shall mean an Independent Director's normal Service Termination Date, or the
Director's extended Service Termination Date, whichever may be applicable to the
Independent Director.
3. Defined Payments and Benefit
a. Payments. If an Independent Director's Service Termination Date occurs
on a date not later than the last day of the calendar quarter in which such
Director's seventy-fourth birthday occurs, the Independent Director will receive
four quarterly payments during the first twelve months subsequent to his Service
Termination Date (the "First Year Retirement Payments"), with each payment to be
equal to 25 percent of the annual basic retainer payable by each Fund to the
Independent Director on his Service Termination Date (excluding any fees
relating to attending meetings or chairing committees).
<PAGE>
b. Benefit. Commencing with the first anniversary of the Service
Termination Date of any Independent Director who has received the First Year
Retirement Payments, and commencing as of the Service Termination Date of an
Independent Director whose Service Termination Date is subsequent to the date of
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurred, the Independent Director will receive, for the remainder of
his life, a benefit (the "Benefit"), payable quarterly, with each quarterly
payment to be equal to 10 percent of the annual basic retainer payable by each
Fund to the Independent Director on his Service Termination Date (excluding any
fees relating to attending meetings or chairing committees).
c. Death Provisions. If an Independent Director's service as a Director is
terminated because of his death subsequent to the last day of the calendar
quarter in which such Director's seventy-second birthday occurred and prior to
the last day of the calendar quarter in which such Director's seventy-fourth
birthday occurs, the designated beneficiary of the Independent Director shall
receive the First Year Retirement Payments and shall, commencing with the
quarter following the quarter in which the last First Year Retirement Payment is
made, receive the Benefit for a period of ten years, with quarterly payments to
be made to the designated beneficiary.
If an Independent Director's service as a Director is terminated because
of his death prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
designated beneficiary of the Independent Director shall receive the Benefit for
a period of ten years, with quarterly payments to be made to the designated
beneficiary commencing in the first quarter following the Director's death.
d. Disability Provisions. If an Independent Director's service as a
Director is terminated because of his disability subsequent to the last day of
the calendar quarter in which such Director's seventy-second birthday occurred
and prior to the last day of the calendar quarter in which such Director's
seventy-fourth birthday occurs, the Independent Director shall receive the First
Year Retirement Payments and shall, commencing with the quarter following the
quarter in which the last First Year Retirement Payment is made, receive the
Benefit for the remainder of his life, with quarterly payments to be made to the
disabled Independent Director. If the disabled Independent Director should die
before the First Year Retirement Payments are completed and before forty
quarterly Benefit payments are made, such payments will continue to be made to
the Independent Director's designated beneficiary until the aggregate of the
First Year Retirement Payments and forty quarterly Benefit payments have been
made to the disabled Independent Director and the Director's designated
beneficiary.
If an Independent Director's service as a Director is terminated because
of his disability prior to the last day of the calendar quarter in which such
Director's seventy-second birthday occurs or subsequent to the last day of the
calendar quarter in which such Director's seventy-fourth birthday occurred, the
Independent Director shall receive the Benefit for the remainder of his life,
with quarterly payments to be made to the disabled Independent Director
commencing in the first quarter following the Director's termination for
<PAGE>
disability. If the disabled Independent Director should die before forty
quarterly payments are made, payments will continue to be made to the
Independent Director's designated beneficiary until the aggregate of forty
quarterly payments has been made to the disabled Independent Director and the
Director's designated beneficiary.
e. Death of Independent Director and Beneficiary. If the Independent
Director and his designated beneficiary should die before the First Year
Retirement Payments and/or a total of forty quarterly Benefit payments are made,
the remaining value of the Independent Director's First Year Retirement Payments
and/or Benefit shall be determined as of the date of the death of the
Independent Director's designated beneficiary and shall be paid to the estate of
the designated beneficiary in one lump sum or in periodic payments, with the
determinations with respect to the value of the First Year Retirement Payments
and/or Benefit and the method and frequency of payment to be made by the
Committee (as defined in paragraph 8.a.) in its sole discretion.
4. Designated Beneficiary
The beneficiary referred to in paragraph 3 may be designated or changed by
the Independent Director without the consent of any prior beneficiary on a form
provided by the Committee (as defined in paragraph 8.a.) and delivered to the
Committee before the Independent Director's death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive the
Independent Director, the value or remaining value of the Independent Director's
First Year Retirement Payments and/or Benefit shall be determined as of the date
of the death of the Independent Director by the Committee and shall be paid as
promptly as possible in one lump sum to the Independent Director's estate.
5. Disability
An Independent Director shall be deemed to have become disabled for the
purposes of paragraph 3 if the Committee shall find on the basis of medical
evidence satisfactory to it that the Independent Director is disabled, mentally
or physically, as a result of an accident or illness, so as to be prevented from
performing each of the duties which are incumbent upon an Independent Director
in fulfilling his responsibilities as such.
6. Time of Payment
The First Year Retirement Payments and/or the Benefit for each year will
be paid in quarterly installments that are as nearly equal as possible.
7. Payment of First Year Retirement Payments and/or Benefit:
Allocation of Costs
Each Fund is responsible for the payment of the amount of the First Year
Retirement Payments and/or Benefit applicable to the Fund, as well as its
proportionate share of all expenses of administration of the Plan, including
without limitation all accounting and legal fees and expenses and fees and
expenses of any Actuary. The obligations of each Fund to pay such First Year
Retirement Payments and/or Benefit and expenses will not be secured or funded in
<PAGE>
any manner, and such obligations will not have any preference over the lawful
claims of each Fund's creditors and shareholders. To the extent that the First
Year Retirement Payments and/or Benefit is paid by more than one Fund, such
costs and expenses will be allocated among such Funds in a manner that is
determined by the Committee to be fair and equitable under the circumstances. To
the extent that one or more of such Funds consist of one or more separate
portfolios, such costs and expenses allocated to any such Fund will thereafter
be allocated among such portfolios by the Board of the Fund in a manner that is
determined by such Board to be fair and equitable under the circumstances.
8. Administration
a. The Committee. Any question involving entitlement to payments under or
the administration of the Plan will be referred to a four-person committee (the
"Committee") composed of three Independent Directors designated by all of the
Independent Directors of the Funds and one director of the Funds who is not an
Independent Director, designated by the non-Independent Directors. Except as
otherwise provided herein, the Committee will make all interpretations and
determinations necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive. Committee
members will be elected annually.
b. Powers of the Committee. The Committee will represent and act on behalf
of the Funds in respect of the Plan and, subject to the other provisions of the
Plan, the Committee may adopt, amend or repeal bylaws or other regulations
relating to the administration of the Plan, the conduct of the Committee's
affairs, its rights or powers, or the rights or powers of its members. The
Committee will report to the Independent Directors and to the Boards of the
Funds from time to time on its activities in respect of the Plan. The Committee
or persons designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
9. Miscellaneous Provisions
a. Rights Not Assignable. Other than as is specifically provided in
paragraph 3, the right to receive any payment under the Plan is not transferable
or assignable, and nothing in the Plan shall create any benefit, cause of
action, right of sale, transfer, assignment, pledge, encumbrance, or other such
right in any heirs or the estate of any Independent Director.
b. Amendment, etc. The Committee, with the concurrence of the Board of any
Fund, may as to the specific Fund at any time amend or terminate the Plan or
waive any provision of the Plan; provided, however, that subject to the
limitations imposed by paragraph 7, no amendment, termination or waiver will
impair the rights of an Independent Director to receive the payments which would
have been made to such Independent Director had there been no such amendment,
termination, or waiver.
c. No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board of any Fund to nominate any Independent Director for
reelection.
<PAGE>
d. Consulting. Subsequent to his Service Termination Date, an Independent
Director may render such services for any Fund, for such compensation, as may be
agreed upon from time to time by such Independent Director and the Board of the
Fund which desires to procure such services.
e. Effectiveness. The Plan will be effective for all Independent Directors
who have Service Termination Dates occurring on and after October 20, 1993.
Periods of Eligible Service shall include periods commencing prior and
subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will
become effective as to that Fund on the date when the Committee determines that
any regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained.
Adopted October 20, 1993. Amended October 19, 1994.
Amended May 1, 1996, effective July 1, 1996.
<PAGE>
SCHEDULE A
TO
DEFINED BENEFIT DEFERRED COMPENSATION PLAN
FOR NON-INTERESTED DIRECTORS AND TRUSTEES
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
The INVESCO Advisor Funds, Inc.
INVESCO Treasurer's Series Trust
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between each Fund listed on Appendix A, (individually a
"Customer" and collectively, the "Customers") and State Street Bank and Trust
Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
each Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Customers;
WHEREAS, State Street has developed and utilizes proprietary accounting and
other systems, including State Street's proprietary Multicurrency HORIZON(R)
Accounting System, in its role as custodian of each Customer, and maintains
certain Customer- related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Customer with access to State Street's
Multicurrency HORIZON(R) Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Customer, or certain third parties approved by State
Street that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Customer and
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Customer to originate
electronic instructions to State Street on behalf of each Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
<PAGE>
c. Additional Services. State Street may from time to time agree to make
available to a Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, a Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, each Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems- level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of a Customer or the Investment Advisor or
Independent Auditor located in Denver, Colorado ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Customer agree
that each will engage or retain the services of trained personnel to enable both
State Street and the Customer to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. Each Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
<PAGE>
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Customer's access to services performed by the System or
to Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, a
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
g. Security Procedures. Each Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. Each Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of the
System and the Data Access Services by the Customer and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Customer and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Customer's or the Investment Advisor's business.
<PAGE>
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to each Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Customer agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder. Each Customer further acknowledges that State Street
shall not be required to provide the Investment Advisor or the Investment
Auditor with access to the System unless it has first received from the
Investment Advisor of the Investment Auditor an undertaking with respect to
State Street's Proprietary Information in the form of Attachment C and/or
Attachment C-1 to this Agreement. Each Customer shall use all commercially
reasonable efforts to assist State Street in identifying and preventing any
unauthorized use, copying or disclosure of the Proprietary Information or any
portions thereof or any of the logic, formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and each Customer will, at its expense, co-
operate with State Street in seeking injunctive or other equitable relief in the
name of the Customer or State Street against any such person.
c. Injunctive Relief. Each Customer acknowledges that the disclosure of
any Proprietary Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing irreparable
injury to State Street inadequately compensable in damages at law. In addition,
State Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall
survive the termination of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. Each Customer agrees
any liability of State Street to the Customer or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
<PAGE>
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither State Street or a Customer shall be liable for
any costs or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including without
limitation, cessation of services hereunder or any damages resulting therefrom
to the other party, or the Customer as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
Each Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor or the Independent Auditor of the Customer and (ii) any loss
resulting from incorrect Client Originated Electronic Financial Instructions.
State Street shall be entitled to rely on the validity and authenticity of
Client Originated Electronic Financial Instructions without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
<PAGE>
reason of the transactions contemplated by this Agreement, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by each Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. Each Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely acquisition
and maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services at
the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this
Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date of
its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i)
for any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
<PAGE>
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of the Agreement by giving the other
party written notice of termination. In the event the Customer shall cease doing
business, shall become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Agreement and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Customer.
Termination of this Agreement with respect to any given Customer shall in no way
affect the continued validity of this Agreement with respect to any other
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Agreement for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Agreement for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Customer terminates this Agreement or
the Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by State Street and the Customer.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations
of each Customer and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Agreement is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
or any right hereunder shall be deemed to be a continuing waiver.
<PAGE>
d. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, unlawful, or unenforce able, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
IN WITNESS WHEREOF, each of the undersigned Funds severally has
caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Donald E. Logue
---------------------------
Title: Executive Vice President
---------------------------
Date: ___________________________
EACH FUND LISTED ON APPENDIX A
By: /s/ Glen A. Payne
--------------------------
Title: Secretary
--------------------------
Date: May 19, 1997
--------------------------
<PAGE>
APPENDIX A
INVESCO FUNDS
INVESCO Diversified Funds, Inc.
INVESCO Small Company Value Fund
INVESCO Dynamics Fund, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Small Company Growth Fund
INVESCO Worldwide Emerging Markets Fund
INVESCO Growth Fund, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO High Yield Fund
INVESCO Select Income Fund
INVESCO Short-Term Bond Fund
INVESCO U.S. Government Bond Fund
INVESCO Industrial Income Fund, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO European Fund
INVESCO International Growth Fund
INVESCO Pacific Basin Fund
INVESCO Money Market Funds, Inc.
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
INVESCO U.S. Government Money Fund
INVESCO Multiple Asset Funds, Inc.
INVESCO Balanced Fund
INVESCO Multi-Asset Allocation Fund
<PAGE>
INVESCO Specialty Funds, Inc.
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Realty Fund
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
INVESCO Strategic Portfolios, Inc.
Energy Portfolio
Environmental Services Portfolio
Financial Services Portfolio
Gold Portfolio
Health Sciences Portfolio
Leisure Portfolio
Technology Portfolio
Utilities Portfolio
INVESCO Tax-Free Income Funds, Inc.
INVESCO Tax-Free Intermediate Bond Fund
INVESCO Tax-Free Long-Term Bond Fund
INVESCO Treasurer's Series Trust
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Prime Reserve Fund
INVESCO Treasurer's Special Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
INVESCO Value Trust
INVESCO Intermediate Government Bond Fund
INVESCO Total Return Fund
INVESCO Value Equity Fund
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Dynamics Portfolio
INVESCO VIF-Health Sciences Portfolio
INVESCO VIF-High Yield Portfolio
INVESCO VIF-Industrial Income Portfolio
INVESCO VIF-Small Company Growth Portfolio
INVESCO VIF-Technology Portfolio
INVESCO VIF-Total Return Portfolio
INVESCO VIF-Utilities Portfolio
INVESCO VIF-Growth Portfolio*
*Effective May 1, 1997.
<PAGE>
ATTACHMENT A
Multicurrency HORIZON(R) Accounting System
System Product Description
I. The Multicurrency HORIZON(R) Accounting System is designed to provide
lot level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest(R) GlobalQuest(R) is designed to provide customer access to
the following information maintained on The Multicurrency HORIZON(R) Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund receivables; 5) daily priced positions; 6) open
trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.
III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the
ability to (i) generate reports using information maintained on the
Multicurrency HORIZON(R) Accounting System which may be viewed or printed at the
customer's location; (ii) extract and download data from the Multicurrency
HORIZON(R) Accounting System; and (iii) access previous day and historical data.
The following information which may be accessed for these purposes: 1) holdings;
2) holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general
ledger and 7) cash.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to each of the Funds (individually a, "Customer" ,
collectively, the "Customers") it will have access to State Street Bank and
Trust Company's ("State Street") Multicurrency HORIZON Accounting System and
other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
By: /s/ Glen A. Payne
---------------------
Title: Secretary
---------------------
Date: May 19, 1997
---------------------
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's HORIZON(R) Help Desk and Customer Assistance Center between the hours
of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of
obtaining answers to questions about the use of the System, or to report
apparent problems with the System. From time to time, the Customer shall provide
to State Street a list of persons, not to exceed five in number, who shall be
permitted to contact State Street for assistance (such persons being referred to
as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to assist
the Customer in using the System and the Data Access Services. The total amount
of technical support provided by State Street shall not exceed 10 resource days
per year. State Street shall provide such additional technical support as is
expressly set forth in the fee schedule in effect from time to time between the
parties (the "Fee Schedule"). Technical support, including during installation
and testing, is subject to the fees and other terms set forth in the Fee
Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to support
the Customer's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 28th day of February, 1997, between INVESCO
VALUE TRUST, a Massachusetts business trust, having its principal office and
place of business at 7800 East Union Avenue, Denver, Colorado 80237 (hereinafter
referred to as the "Fund") and INVESCO FUNDS GROUP, INC., a Delaware
corporation, having its principal place of business at 7800 East Union Avenue,
Denver, Colorado 80237 (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, Treasurer, or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund
as indicated in a certification as may be received by the
Transfer Agent from time to time;
(b) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent, which is actually
received by the Transfer Agent and signed on behalf of the
Fund by any two officers thereof;
(c) "Commission" shall have the meaning given it in the 1940 Act;
(d) "Custodian" refers to the custodian of all of the securities
and other moneys owned by the Fund;
(e) "Oral Instructions" shall mean verbal instructions actually
received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person;
(f) "Prospectus" shall mean the currently effective prospectus
relating to the Fund's Shares registered under the Securities
Act of 1933;
(g) "Shares" refers to the shares of beneficial interest of the
Fund;
(h) "Shareholder" means a record owner of Shares;
(i) "Written Instructions" shall mean a written communication
actually received by the Transfer Agent where the receiver is
able to verify with a reasonable degree of certainty the
authenticity of the sender of such communication; and
<PAGE>
(j) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time.
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it has an effective
registration statement on SEC Form TA-1 and, accordingly, has duly
registered as a transfer agent as provided in Section 17A(c) of the
Securities Exchange Act of 1934.
3. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent for all of the
Shares of the Fund authorized as of the date hereof, and the
Transfer Agent accepts such appointment and agrees to perform the
duties herein set forth. If the Trustees of the Fund hereafter
reclassify the Shares, by the creation of one or more additional
series or otherwise, the Transfer Agent agrees that it will act as
transfer agent for the Shares so reclassified on the terms set forth
herein.
4. Compensation.
(a) The Fund will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the
fees set forth in the Fee Schedule annexed hereto and
incorporated herein.
(b) The parties hereto will agree upon the compensation for acting
as transfer agent for any series of Shares hereafter
designated and established at the time that the Transfer Agent
commences serving as such for said series, and such agreement
shall be reflected in a Fee Schedule for that series, dated
and signed by an authorized officer of each party hereto, to
be attached to this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time
to time by attaching to this Agreement a revised Fee Schedule,
dated and signed by an authorized officer of each party
hereto, and a certified copy of the resolution of the Trustees
of the Fund authorizing such revised Fee Schedule.
(d) The Transfer Agent will bill the Fund as soon as practicable
after the end of each calendar month, and said billings will
be detailed in accordance with the Fee Schedule for the Fund.
The Fund will promptly pay to the Transfer Agent the amount of
such billing.
5. Documents. In connection with the appointment of the Transfer Agent,
the Fund shall, on or before the date this Agreement goes into
effect, file with the Transfer Agent the following documents:
(a) A certified copy of the Declaration of Trust of the Fund,
including all amendments thereto, as then in effect;
<PAGE>
(b) A certified copy of the Bylaws of the Fund, as then in effect;
(c) Certified copies of the resolutions of the Trustees
authorizing this Agreement and designating Authorized Persons
to give instructions to the Transfer Agent;
(d) A specimen of the certificate for Shares of the Fund in the
form approved by the Trustees, with a certificate of the
Secretary of the Fund as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the Fund with the name,
address and tax identification number of each Shareholder, and
the number of Shares held by each, certificate numbers and
denominations (if any certificates have been issued), lists of
any accounts against which stops have been placed, together
with the reasons for said stops, and the number of Shares
redeemed by the Fund;
(g) Copies of all agreements then in effect between the Fund and
any agent with respect to the issuance, sale, or cancellation
of Shares; and
(h) An opinion of counsel for the Fund with respect to the
validity of the Shares.
6. Further Documentation. The Fund will also furnish from time to time
the following documents:
(a) Each resolution of the Trustees authorizing the original issue
of Shares;
(b) Each Registration Statement filed with the Commission, and
amendments and orders with respect thereto, in effect with
respect to the sale of Shares of the Fund;
(c) A certified copy of each amendment to the Declaration of Trust
and the Bylaws of the Fund;
(d) Certified copies of each resolution of the Trustees
designating Authorized Persons to give instructions to the
Transfer Agent;
(e) Certificates as to any change in any officer, trustee, or
Authorized Person of the Fund;
(f) Specimens of all new certificates for Shares accompanied by
the Fund's resolutions of the Trustees approving such forms;
and
<PAGE>
(g) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for the Transfer Agent in
the proper performance of its duties.
7. Certificates for Shares and Records Pertaining Thereto.
(a) At the expense of the Fund, the Transfer Agent shall maintain
an adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such share
certificates shall be properly signed by facsimile. The Fund
agrees that, notwithstanding the death, resignation, or
removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent may continue to
countersign certificates which bear such signatures until
otherwise directed by the Fund.
(b) The Transfer Agent agrees to prepare, issue and mail
certificates as requested by the Shareholders for Shares of
the Fund in accordance with the instructions of the Fund and
to confirm such issuance to the Shareholder and the Fund or
its designee.
(c) The Fund hereby authorizes the Transfer Agent to issue
replacement share certificates in lieu of certificates which
have been lost, stolen or destroyed, without any further
action by the Trustees or any officer of the Fund, upon
receipt by the Transfer Agent of properly executed affidavits
or lost certificate bonds, in form satisfactory to the
Transfer Agent, with the Fund and the Transfer Agent as
obligees under any such bond.
(d) The Transfer Agent shall also maintain a record of each
certificate issued, the number of Shares represented thereby
and the holder of record. The Transfer Agent shall further
maintain a stop transfer record on lost and/or replaced
certificates.
(e) The Transfer Agent may establish such additional rules and
regulations governing the transfer or registration of
certificates for Shares as it may deem advisable and
consistent with such rules and regulations generally adopted
by transfer agents.
8. Sale of Fund Shares.
(a) Whenever the Fund or its authorized agent shall sell or cause
to be sold any Shares, the Fund or its authorized agent shall
provide or cause to be provided to the Transfer Agent
information including: (i) the number of Shares sold, trade
date, and price; (ii) the amount of money to be delivered to
the Custodian for the sale of such Shares; (iii) in the case
of a new account, a new account application or sufficient
information to establish an account.
<PAGE>
(b) The Transfer Agent will, upon receipt by it of a check or
other payment identified by it as an investment in Shares of
the Fund and drawn or endorsed to the Transfer Agent as agent
for, or identified as being for the account of, the Fund,
promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the
investment. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related
account adjustments.
(c) Upon receipt of the notification required under paragraph (a)
hereof and the notification from the Custodian that such money
has been received by it, the Transfer Agent shall issue to the
purchaser or his authorized agent such Shares as he is
entitled to receive, based on the appropriate net asset value
of the Fund's Shares, determined in accordance with applicable
federal law or regulation, as described in the Prospectus for
the Fund. In issuing Shares to a purchaser or his authorized
agent, the Transfer Agent shall be entitled to rely upon the
latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent
concerning the delivery of such Shares.
(d) The Transfer Agent shall not be required to issue any Shares
of the Fund where it has received Written Instructions from
the Fund or written notification from any appropriate federal
or state authority that the sale of the Shares of the Fund
has been suspended or discontinued, and the Transfer Agent
shall be entitled to rely upon such Written Instructions or
written notification.
(e) Upon the issuance of any Shares of the Fund in accordance with
the foregoing provision of this Article, the Transfer Agent
shall not be responsible for the payment of any original issue
or other taxes required to be paid by the Fund in connection
with such issuance.
9. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer
Agent will: (i) give prompt notice of such return to the Fund or its
designee; (ii) place a stop transfer order against all Shares issued
or held on deposit as a result of such check or order; (iii) in the
case of any Shareholder who has obtained redemption checks, place a
stop payment order on the checking account on which such checks are
issued; and (iv) take such other steps as the Transfer Agent may, in
its discretion, deem appropriate or as the Fund or its designee may
instruct.
10. Redemptions.
(a) Redemptions By Mail or In Person. Shares of the Fund will be
redeemed upon receipt by the Transfer Agent of: (i) a written
request for redemption, signed by each registered owner
exactly as the Shares are registered; (ii) certificates
<PAGE>
properly endorsed for any Shares for which certificates have
been issued; (iii) signature guarantees to the extent required
by the Transfer Agent as described in the Prospectus for the
Fund; and (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors,
administrators, trustees and guardians.
(b) Wire Orders or Telephone Redemptions. The Transfer Agent will,
consistent with procedures which may be established by the
Fund from time to time for redemption by wire or telephone,
upon receipt of such a wire order or telephone redemption
request, redeem Shares and transmit the proceeds of such
redemption to the redeeming Shareholder as directed. All wire
or telephone redemptions will be subject to such additional
requirements as may be described in the Prospectus for the
Fund. Both the Fund and the Transfer Agent reserve the right
to modify or terminate the procedures for wire order or
telephone redemptions at any time.
(c) Processing Redemptions. Upon receipt of all necessary
information and documentation relating to a redemption, the
Transfer Agent will issue to the Custodian an advice setting
forth the number of Shares of the Fund received by the
Transfer Agent for redemption and that such shares are valid
and in good form for redemption. The Transfer Agent shall,
upon receipt of the moneys paid to it by the Custodian for
the redemption of Shares, pay such moneys to the Shareholder,
his authorized agent or legal representative.
11. Transfers and Exchanges. The Transfer Agent is authorized to review
and process transfers of Shares of the Fund and to the extent, if
any, permitted in the Prospectus for the Fund, exchanges between the
Fund and other mutual funds advised by INVESCO Funds Group, Inc., on
the records of the Fund maintained by the Transfer Agent. If Shares
to be transferred are represented by outstanding certificates, the
Transfer Agent will, upon surrender to it of the certificates in
proper form for transfer, and upon cancellation thereof, countersign
and issue new certificates for a like number of Shares and deliver
the same. If the Shares to be transferred are not represented by
outstanding certificates, the Transfer Agent will, upon an order
therefor by or on behalf of the registered holder thereof in proper
form, credit the same to the transferee on its books. If Shares are
to be exchanged for Shares of another mutual fund, the Transfer
Agent will process such exchange in the same manner as a redemption
and sale of Shares, except that it may in its discretion waive
requirements for information and documentation.
12. Right to Seek Assurances. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers
or redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is no
<PAGE>
basis for any claims adverse to such transfer or redemption. The
Transfer Agent may, in effecting transfers, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, which in the opinion of legal counsel for the
Fund or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of
the Fund, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in reliance upon such laws or opinions of
counsel to the Fund or of its own counsel.
13. Distributions.
(a) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall
furnish to the Transfer Agent a resolution of the Trustees of
the Fund certified by the Secretary authorizing the
declaration of dividends and authorizing the Transfer Agent to
rely on Oral Instructions or a Certificate specifying the date
of the declaration of such dividend or distribution, the date
of payment thereof, the record date as of which Shareholders
entitled to payment shall be determined, the amount payable
per share to Shareholders of record as of that date, and the
total amount payable to the Transfer Agent on the payment
date.
(b) The Transfer Agent will, on or before the payable date of any
dividend or distribution, notify the Custodian of the
estimated amount of cash required to pay said dividend or
distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall
instruct the Custodian to place in a dividend disbursing
account funds equal to the cash amount to be paid out. The
Transfer Agent, in accordance with Shareholder instructions,
will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the
account of, Fund Shareholders, and maintain and safeguard all
underlying records.
(c) The Transfer Agent will replace lost checks upon receipt of
properly executed affidavits and maintain stop payment orders
against replaced checks.
(d) The Transfer Agent will maintain all records necessary to
reflect the crediting of dividends which are reinvested in
Shares of the Fund.
(e) The Transfer Agent shall not be liable for any improper
payments made in accordance with the resolution of the
Trustees of the Fund.
<PAGE>
(f) If the Transfer Agent shall not receive from the Custodian
sufficient cash to make payment to all Shareholders of the
Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is
provided to the Transfer Agent.
14. Other Duties. In addition to the duties expressly provided for
herein, the Transfer Agent shall perform such other duties and
functions as are set forth in the Fee Schedules(s) hereto from time
to time.
15. Taxes. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividends
and capital gain distributions with the proper federal, state and
local authorities as are required by law to be filed by the Fund and
shall withhold such sums as are required to be withheld by
applicable law.
16. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
investor's account the following: (i) names, addresses, tax
identifying numbers and assigned account numbers; (ii) numbers
of Shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date
and price of all transactions on a Shareholder's account; (iv)
any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings in the
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a
Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; and
(viii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by
this Agreement.
(b) Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act. Such records may be inspected by the
Fund at reasonable times. The Transfer Agent may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the
Transfer Agent's files, records and documents created and
maintained by the Transfer Agent in performance of its
services or for its protection. At the end of the six-year
retention period, such records and documents will either be
turned over to the Fund, or destroyed in accordance with the
Fund's authorization.
<PAGE>
17. Shareholder Relations.
(a) The Transfer Agent will investigate all Shareholder inquiries
related to Shareholder accounts and respond promptly to
correspondence from Shareholders.
(b) The Transfer Agent will address and mail all communications to
Shareholders or their nominees, including proxy material and
periodic reports to Shareholders.
(c) In connection with special and annual meetings of
Shareholders, the Transfer Agent will prepare Shareholder
lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies
voted prior to meetings, and certify to the Secretary of the
Fund Shares to be voted at meetings.
18. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent shall be protected in acting upon any paper
or document believed by it to be genuine and to have been
signed by an Authorized Person and shall not be held to have
any notice of any change of authority of any person until
receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates which
it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper
countersignature of the Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized
Person of the Fund for Written Instructions, and, at the
expense of the Fund, may seek advice from legal counsel for
the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any action
taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or with the opinion
of such counsel. In addition, the Transfer Agent, its
officers, agents or employees, shall accept instructions or
requests given to them by any person representing or acting
on behalf of the Fund only if said representative is known by
the Transfer Agent, its officers, agents or employees, to be
an Authorized Person. The Transfer Agent shall have no duty or
obligation to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it upon the
request or direction of Authorized Persons of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for: (i)
the legality of the issue or sale of any Shares of the Fund,
or the sufficiency of the amount to be received therefor; (ii)
<PAGE>
the legality of the redemption of any Shares of the Fund, or
the propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares of the Fund in payment
of any stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this Agreement,
employ agents or attorneys in fact, and shall not be liable
for any loss arising out of or in connection with its actions
under this Agreement so long as it acts in good faith and with
due diligence, and is not negligent or guilty of any willful
misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Transfer Agent
may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by the Transfer
Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any
duly Authorized Person, upon the Oral Instructions or Written
Instructions of an Authorized Person of the Fund or upon the
opinion of legal counsel for the Fund or its own counsel; or
(ii) any action taken or omitted to be taken by the Transfer
Agent in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of
the same even though the same may thereafter have been
altered, changed, amended or repealed. However,
indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its directors, officers,
employees or agents in cases of its own gross negligence,
willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the trustees, officers, employees, agents and Shareholders of the
Fund, and the officers, directors, employees, agents and
shareholders of the Fund's investment adviser, INVESCO Funds Group,
Inc. (the "Adviser"), are or may be interested in the Transfer
Agent as directors, officers, employees, agents, shareholders, or
otherwise, and that the directors, officers, employees, agents or
shareholders of the Transfer Agent may be interested in the Fund as
trustees, officers, employees, agents, shareholders, or otherwise,
or in the Adviser as officers, directors, employees, agents,
shareholders or otherwise.
<PAGE>
21. Term.
(a) This Agreement shall become effective on February 28, 1997
after approval by vote of a majority (as defined in the 1940
Act) of the Fund's Trustees, including a majority of the
Trustees who are not interested persons of the Fund (as
defined in the 1940 Act), and shall continue in effect for an
initial term expiring February 28, 1998 and from year to year
thereafter, so long as such continuance is specifically
approved at least annually both: (i) by either the Trustees or
the vote of a majority of the outstanding voting securities of
the Fund; and (ii) by a vote of the majority of the Trustees
who are not interested persons of the Fund (as defined in the
1940 Act) cast in person at a meeting called for the purpose
of voting upon such approval.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the
date of such termination, which shall not be less than 60 days
after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a
resolution of the Trustees, certified by the Secretary,
electing to terminate this Agreement and designating a
successor transfer agent.
22. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with
the formality of this Agreement, and (i) authorized or approved by
the resolution of the Trustees, including a majority of the Trustees
of the Fund who are not interested persons of the Fund as defined in
the 1940 Act, or (ii) authorized and approved by such other
procedures as may be permitted or required by the 1940 Act.
23. Subcontracting. The Fund agrees that the Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided
hereunder; provided, however, that the transfer agent will be liable
to the Fund for any loss arising out of or in connection with the
actions of any subcontractor, if the subcontractor fails to act
in good faith and with due diligence or is negligent or guilty of
any willful misconduct.
24. Miscellaneous.
(a) Any notice and other instrument in writing, authorized or
required by this Agreement to be given to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to
that party and mailed or delivered to it at its office set
forth below or at such other place as it may from time to time
designate in writing.
<PAGE>
To the Fund:
INVESCO Value Trust
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Dan J. Hesser, President
To the Transfer Agent:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Attention: Ronald L. Grooms, Senior Vice President
(b) This Agreement shall not be assignable and in the event of its
assignment (in the sense contemplated by the 1940 Act), it
shall automatically terminate.
(c) This Agreement shall be construed in accordance with the laws
of the State of Colorado.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
INVESCO VALUE TRUST
By: /s/ Dan J. Hesser
---------------------
Dan J. Hesser,
President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------
Ronald L. Grooms,
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
<PAGE>
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated February 28, 1997,
between INVESCO Value Trust (the "Fund") and INVESCO Funds Group, Inc. as
Transfer Agent (the "Agreement").
The following fee schedule shall apply to the INVESCO Intermediate
Government Bond Fund, a series of the Fund:
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $26.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $26.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
The following fee schedule shall apply to the INVESCO Value Equity Fund
and INVESCO Total Return Fund, two series of the Fund:
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $20.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund, $20.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement
<PAGE>
Effective this 28th day of February, 1997.
INVESCO VALUE TRUST
By: /s/ Dan J. Hesser
------------------
Dan J. Hesser,
President
ATTEST:
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
--------------------
Ronald L. Grooms,
ATTEST: Senior Vice President
/s/ Glen A. Payne
- ------------------------
Glen A. Payne, Secretary
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 28th day of February, 1997, in Denver, Colorado,
by and between INVESCO VALUE TRUST, a Massachusetts business trust (the "Fund"),
and INVESCO FUNDS GROUP, INC., a Delaware corporation (hereinafter referred to
as "INVESCO").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"), and is authorized to issue shares representing
beneficial interests in the following separate portfolios of investments: (1)
INVESCO Intermediate Government Bond Fund, 2) INVESCO Total Return Fund, and (3)
INVESCO Value Equity Fund (the "Portfolios"); and
WHEREAS, INVESCO is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, sub-accounting
and recordkeeping services to certain investment companies, including the Fund;
and
WHEREAS, the Fund desires to retain INVESCO to render certain
administrative, sub-accounting and recordkeeping services (the "Services") in
the manner and on the terms and conditions hereinafter set forth; and
WHEREAS, INVESCO desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and INVESCO agree as follows:
1. The Fund hereby retains INVESCO to provide, or, upon receipt of written
approval of the Fund arrange for other companies, including affiliates of
INVESCO, to provide to the Portfolios: A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Portfolios. Such services shall include, but shall not be limited to,
preparation and maintenance of the following required books, records and other
documents: (1) journals containing daily itemized records of all purchases and
sales, and receipts and deliveries of securities and all receipts and
disbursements of cash and all other debits and credits, in the form required by
Rule 31a-1(b)(1) under the Act; (2) general and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income and expense accounts, in the form
required by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities record
or ledger reflecting separately for each portfolio security as of trade date all
"long" and "short" positions carried by the Portfolios for the account of the
Portfolios, if any, and showing the location of all securities long and the
off-setting position to all securities short, in the form required by Rule
31a-1(b)(3) under the Act; (4) a record of all portfolio purchases or sales, in
the form required by Rule 31a-1(b)(6) under the Act; (5) a record of all puts,
calls, spreads, straddles and all other options, if any, in which the Portfolios
have any direct or indirect interest or which the Portfolios have granted or
guaranteed, in the form required by Rule 31a-1(b)(7) under the Act; (6) a record
of the proof of money balances in all ledger accounts maintained pursuant to
this Agreement, in the form required by Rule 31a- 1(b)(8) under the Act; and (7)
price make-up sheets and such records as are necessary to reflect the
<PAGE>
determination of the Portfolios' net asset value. The foregoing books and
records shall be maintained and preserved by INVESCO in accordance with and for
the time periods specified by applicable rules and regulations, including Rule
31a-2 under the Act. All such books and records shall be the property of the
Fund and, upon request therefor, INVESCO shall surrender to the Fund such of the
books and records so requested; and B) such sub-accounting, recordkeeping and
administrative services and functions, which shall be furnished by a
wholly-owned subsidiary of INVESCO, as are reasonably necessary for the
operation of Portfolio shareholder accounts maintained by certain retirement
plans and employee benefit plans for the benefit of participants in such plans.
Such services and functions shall include, but shall not be limited to: (1)
establishing new retirement plan participant accounts; (2) receipt and posting
of weekly, bi-weekly and monthly retirement plan contributions; (3) allocation
of contributions to each participant's individual Portfolio account; (4)
maintenance of separate account balances for each source of retirement plan
money (i.e., Company, Employee, Voluntary, Rollover) invested in the Portfolios;
(5) purchase, sale, exchange or transfer of monies in the retirement plan as
directed by the relevant party; (6) distribution of monies for participant
loans, hardships, terminations, death or disability payments; (7) distribution
of periodic payments for retired participants; (8) posting of distributions of
interest, dividends and long-term capital gains to participants by the
Portfolios; (9) production of monthly, quarterly and/or annual statements of all
Portfolio activity for the relevant parties; (10) processing of participant
maintenance information for investment election changes, address changes,
beneficiary changes and Qualified Domestic Relations Orders; (11) responding to
telephone and written inquiries concerning Portfolio investments, retirement
plan provisions and compliance issues; (12) performing discrimination testing
and counseling employers on cure options on failed tests; (13) preparation of
1099R and W2P participant IRS tax forms; (14) preparation of, or assisting in
the preparation of, 5500 Series tax forms, Summary Plan Descriptions and
Determination Letters; and (15) reviewing legislative and IRS changes to keep
the retirement plan in compliance with applicable law.
2. INVESCO shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from time
to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, such staff and personnel shall be deemed to include officers of
INVESCO and persons employed or otherwise retained by INVESCO to provide or
assist in providing the Services to the Portfolios.
3. INVESCO shall, at its own expense, provide such office space, facilities
and equipment (including, but not limited to, computer equipment, communication
lines and supplies) and such clerical help and other services as shall be
necessary to provide the Services to the Portfolios. In addition, INVESCO may
arrange on behalf of the Fund to obtain pricing information regarding the
Portfolios' investment securities from such company or companies as are approved
by a majority of the Fund's board of directors; and, if necessary, the Fund
shall be financially responsible to such company or companies for the reasonable
cost of providing such pricing information.
<PAGE>
4. The Fund will, from time to time, furnish or otherwise make available
to INVESCO such information relating to the business and affairs of the
Portfolios as INVESCO may reasonably require in order to discharge its duties
and obligations hereunder.
5. For the services rendered, facilities furnished, and expenses assumed
by INVESCO under this Agreement, the Fund shall pay to INVESCO a $10,000 per
year per Portfolio base fee, plus an additional fee, computed on a daily basis
and paid on a monthly basis. For purposes of each daily calculation of this
additional fee, the most recently determined net asset value of each Portfolio,
as determined by a valuation made in accordance with the Fund's procedure for
calculating each Portfolio's net asset value as described in the Portfolios'
Prospectus and/or Statement of Additional Information, shall be used. The
additional fee to INVESCO under this Agreement shall be computed at the annual
rate of 0.015% of each Portfolio's daily net assets as so determined. During any
period when the determination of a Portfolio's net asset value is suspended by
the directors of the Fund, the net asset value of a share of that Portfolio as
of the last business day prior to such suspension shall, for the purpose of this
Paragraph 5, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
6. INVESCO will permit representatives of the Fund including the Fund's
independent auditors to have reasonable access to the personnel and records of
INVESCO in order to enable such representatives to monitor the quality of
services being provided and the level of fees due INVESCO pursuant to this
Agreement. In addition, INVESCO shall promptly deliver to the board of directors
of the Fund such information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination regarding
continuation of this Agreement and the payments contemplated to be made
hereunder.
7. This Agreement shall remain in effect until no later than February 28,
1998 and from year to year thereafter provided such continuance is approved at
least annually by the vote of a majority of the directors of the Fund who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; and further provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days written notice to INVESCO; (b) the Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Act and the Rules thereunder) unless the Board of Directors of the Fund approves
such assignment; and (c) INVESCO may terminate this Agreement without payment of
penalty on sixty days written notice to the Fund. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed postage
pre-paid, to the other party at the principal office of such party.
8. This Agreement shall be construed in accordance with the laws of the
State of Colorado and the applicable provisions of the Act. To the extent the
applicable law of the State of Colorado or any of the provisions herein conflict
with the applicable provisions of the Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
INVESCO VALUE TRUST
By: /s/ Dan J. Hesser
----------------------
ATTEST: Dan J. Hesser
President
/s/ Glen A. Payne
- -----------------
Glen A. Payne
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
----------------------
ATTEST: Ronald L. Grooms
Senior Vice President
/s/ Glen A. Payne
- -----------------
Glen A. Payne
Secretary
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 21 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated October 8, 1997, relating to the financial
statements and financial highlights appearing in the August 31, 1997 Annual
Report to Shareholders of INVESCO Value Trust, which is also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the heading "Financial Highlights" in the Prospectuses and under the
headings "Independent Accountants" and "Financial Statements" in the Statement
of Additional Information.
/s/ Price Waterhouse LLP
- -------------------------
Price Waterhouse LLP
Denver, Colorado
October 28, 1997
PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1
PLAN AND AGREEMENT made as of 28th day of October, 1997, by and between
INVESCO VALUE TRUST, a Massachusetts business trust (hereinafter called the
"Company"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation ("INVESCO").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of its shares of
INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund in
accordance with this Plan and Agreement of Distribution pursuant to Rule 12b-1
under the Act (the "Plan and Agreement"); and
WHEREAS, INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the board
of directors of the Company, including a majority of the directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan and Agreement (the
"Disinterested Directors") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance with the requirements of Rule 12b-1 under the Act, and provide and
agree as follows:
1. The Plan is defined as those provisions of this document by which
the Company adopts a Plan pursuant to Rule 12b-1 under the Act and
authorizes payments as described herein. The Agreement is defined as
those provisions of this document by which the Company retains
INVESCO to provide distribution services beyond those required by
the General Distribution Agreement between the parties, as are
described herein. The Company may retain the Plan notwithstanding
termination of the Agreement. Termination of the Plan will
automatically terminate the Agreement. The Company is hereby
authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's shares.
2. Subject to the supervision of the board of directors, the Company
hereby retains INVESCO to promote the distribution of shares of the
Company by providing services and engaging in activities beyond
those specifically required by the Distribution Agreement between
the Company and INVESCO and to provide related services. The
activities and services to be provided by INVESCO hereunder shall
include one or more of the following: (a) the payment of
compensation (including trail commissions and incentive
compensation) to securities dealers, financial institutions and
other organizations, which may include INVESCO-affiliated companies,
that render distribution and administrative services in connection
<PAGE>
with the distribution of the Company's shares; (b) the printing and
distribution of reports and prospectuses for the use of potential
investors in the Company; (c) the preparing and distributing of
sales literature; (d) the providing of advertising and engaging in
other promotional activities, including direct mail solicitation,
and television, radio, newspaper and other media advertisements; and
(e) the providing of such other services and activities as may from
time to time be agreed upon by the Company. Such reports and
prospectuses, sales literature, advertising and promotional
activities and other services and activities may be prepared and/or
conducted either by INVESCO's own staff, the staff of
INVESCO-affiliated companies, or third parties.
3. INVESCO hereby undertakes to use its best efforts to promote sales
of shares of the Company to investors by engaging in those
activities specified in paragraph (2) above as may be necessary and
as it from time to time believes will best further sales of such
shares.
4. The Company is hereby authorized to expend, out of its assets, on a
monthly basis, and shall pay INVESCO to such extent, to enable
INVESCO at its discretion to engage over a rolling twelve-month
period (or the rolling twenty-four month period specified below)
in the activities and provide the services specified in paragraph
(2) above, an amount computed at an annual rate of .25 of 1% of the
average daily net assets of the Company during the month. INVESCO
shall not be entitled hereunder to payment for overhead expenses
(overhead expenses defined as customary overhead not including the
costs of INVESCO's personnel whose primary responsibilities involve
marketing of the INVESCO Funds). Payments by the Company hereunder,
for any month, may be used to compensate INVESCO for: (a) activities
engaged in and services provided by INVESCO during the rolling
twelve-month period in which that month falls, or (b) to the extent
permitted by applicable law, for any month during the first
twenty-four months following the Company's commencement of
operations, activities engaged in and services provided by INVESCO
during the rolling twenty-four month period in which that month
falls, and any obligations incurred by INVESCO in excess of the
limitation described above shall not be paid for out of Fund assets.
The Company shall not be authorized to expend, for any month, a
greater percentage of its assets to pay INVESCO for activities
engaged in and services provided by INVESCO during the rolling
twenty-four month period referred to above than it would otherwise
be authorized to expend out of its assets to pay INVESCO for
activities engaged in and services provided by INVESCO during the
rolling twelve-month period referred to above, and the Company shall
not be authorized to expend, for any month, a greater percentage of
its assets to pay INVESCO for activities engaged in and services
provided by INVESCO pursuant to the Plan and Agreement than it would
otherwise have been authorized to expend out of its assets to
reimburse INVESCO for expenditures incurred by INVESCO pursuant to
the Plan and Agreement as it existed prior to February 5, 1997. No
payments will be made by the Company hereunder after the date of
termination of the Plan and Agreement.
<PAGE>
5. To the extent that obligations incurred by INVESCO out of its own
resources to finance any activity primarily intended to result in
the sale of shares of the Company, pursuant to this Plan and
Agreement or otherwise, may be deemed to constitute the indirect use
of Company assets, such indirect use of Company assets is hereby
authorized in addition to, and not in lieu of, any other payments
authorized under this Plan and Agreement.
6. The Treasurer of INVESCO shall provide to the board of directors of
the Company, at least quarterly, a written report of all moneys
spent by INVESCO on the activities and services specified in
paragraph (2) above pursuant to the Plan and Agreement. Each such
report shall itemize the activities engaged in and services provided
by INVESCO to a Fund as authorized by the penultimate sentence of
paragraph (4) above. Upon request, but no less frequently than
annually, INVESCO shall provide to the board of directors of the
Company such information as may reasonably be required for it to
review the continuing appropriateness of the Plan and Agreement.
7. This Plan and Agreement shall each become effective immediately upon
approval by a vote of a majority of the outstanding voting
securities of the Company as defined in the Act, and shall continue
in effect until October 28, 1998 unless terminated as provided
below. Thereafter, the Plan and Agreement shall continue in effect
from year to year, provided that the continuance of each is approved
at least annually by a vote of the board of directors of the
Company, including a majority of the Disinterested Directors, cast
in person at a meeting called for the purpose of voting on such
continuance. The Plan may be terminated at any time, without
penalty, by the vote of a majority of the Disinterested Directors or
by the vote of a majority of the outstanding voting securities of
the Company. INVESCO, or the Company, by vote of a majority of the
Disinterested Directors or of the holders of a majority of the
outstanding voting securities of the Company, may terminate the
Agreement under this Plan, without penalty, upon 30 days' written
notice to the other party. In the event that neither INVESCO nor
any affiliate of INVESCO serves the Company as investment adviser,
the agreement with INVESCO pursuant to this Plan shall terminate at
such time. The board of directors may determine to approve a
continuance of the Plan, but not a continuance of the Agreement,
hereunder.
8. So long as the Plan remains in effect, the selection and nomination
of persons to serve as directors of the Company who are not
"interested persons" of the Company shall be committed to the
discretion of the directors then in office who are not "interested
persons" of the Company. However, nothing contained herein shall
prevent the participation of other persons in the selection and
nomination process, provided that a final decision on any such
selection or nomination is within the discretion of, and approved
by, a majority of the directors of the Company then in office who
are not "interested persons" of the Company.
<PAGE>
9. This Plan may not be amended to increase the amount to be spent by
the Company hereunder without approval of a majority of the
outstanding voting securities of the Company. All material
amendments to the Plan and to the Agreement must be approved by the
vote of the board of directors of the Company, including a majority
of the Disinterested Directors, cast in person at a meeting called
for the purpose of voting on such amendment.
10. To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall
remain in effect as such, so as to authorize the use by the Company
of its assets in the amounts and for the purposes set forth herein,
notwithstanding the occurrence of an "assignment," as defined by the
Act and the rules thereunder. To the extent it constitutes an
agreement with INVESCO pursuant to a plan, it shall terminate
automatically in the event of such "assignment." Upon a termination
of the agreement with INVESCO, the Company may continue to make
payments pursuant to the Plan only upon the approval of a new
agreement under this Plan and Agreement, which may or may not be
with INVESCO, or the adoption of other arrangements regarding the
use of the amounts authorized to be paid by the Funds hereunder, by
the Company's board of directors in accordance with the procedures
set forth in paragraph 7 above.
11. The Company shall preserve copies of this Plan and Agreement and all
reports made pursuant to paragraph 6 hereof, together with minutes
of all board of directors meetings at which the adoption, amendment
or continuance of the Plan were considered (describing the factors
considered and the basis for decision), for a period of not less
than six years from the date of this Plan and Agreement, or any
such reports or minutes, as the case may be, the first two years in
an easily accessible place.
12. This Plan and Agreement shall be construed in accordance with the
laws of the State of Colorado and applicable provisions of the Act.
To the extent the applicable laws of the State of Colorado, or any
provisions herein, conflict with the applicable provisions of the
Act, the latter shall control.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan and Agreement on the 28th day of October, 1997.
INVESCO VALUE TRUST
By: /s/ Dan J. Hesser
------------------------
Dan J. Hesser, President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
INVESCO DISTRIBUTORS, INC.
By: /s/ Ronald L. Grooms
-----------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> VALUE EQUITY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 266169020
<INVESTMENTS-AT-VALUE> 368386557
<RECEIVABLES> 1991455
<ASSETS-OTHER> 44838
<OTHER-ITEMS-ASSETS> 448905
<TOTAL-ASSETS> 370871755
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1106135
<TOTAL-LIABILITIES> 1106135
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 249058417
<SHARES-COMMON-STOCK> 13063984
<SHARES-COMMON-PRIOR> 8994532
<ACCUMULATED-NII-CURRENT> 17483
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18472183
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 102217537
<NET-ASSETS> 369765620
<DIVIDEND-INCOME> 6243692
<INTEREST-INCOME> 931093
<OTHER-INCOME> (50896)
<EXPENSES-NET> 3077733
<NET-INVESTMENT-INCOME> 4046156
<REALIZED-GAINS-CURRENT> 20055067
<APPREC-INCREASE-CURRENT> 57254344
<NET-CHANGE-FROM-OPS> 77309411
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4071368
<DISTRIBUTIONS-OF-GAINS> 5507949
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20198347
<NUMBER-OF-SHARES-REDEEMED> 16506962
<SHARES-REINVESTED> 378067
<NET-CHANGE-IN-ASSETS> 169719962
<ACCUMULATED-NII-PRIOR> 42661
<ACCUMULATED-GAINS-PRIOR> 3925099
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2250039
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3111846
<AVERAGE-NET-ASSETS> 295775389
<PER-SHARE-NAV-BEGIN> 22.24
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 6.62
<PER-SHARE-DIVIDEND> 0.35
<PER-SHARE-DISTRIBUTIONS> 0.56
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 28.30
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> INTERMEDIATE GOVERNMENT BOND FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 44417906
<INVESTMENTS-AT-VALUE> 44725120
<RECEIVABLES> 570892
<ASSETS-OTHER> 18270
<OTHER-ITEMS-ASSETS> 3581
<TOTAL-ASSETS> 45317863
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 877195
<TOTAL-LIABILITIES> 877195
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44705750
<SHARES-COMMON-STOCK> 3572904
<SHARES-COMMON-PRIOR> 3246858
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (572296)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 307214
<NET-ASSETS> 44440668
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2833739
<OTHER-INCOME> 0
<EXPENSES-NET> 448444
<NET-INVESTMENT-INCOME> 2385295
<REALIZED-GAINS-CURRENT> 126618
<APPREC-INCREASE-CURRENT> 348594
<NET-CHANGE-FROM-OPS> 475212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2385295
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2132651
<NUMBER-OF-SHARES-REDEEMED> 1985434
<SHARES-REINVESTED> 178829
<NET-CHANGE-IN-ASSETS> 4492164
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (503430)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 268593
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 615314
<AVERAGE-NET-ASSETS> 44686922
<PER-SHARE-NAV-BEGIN> 12.30
<PER-SHARE-NII> 0.66
<PER-SHARE-GAIN-APPREC> 0.14
<PER-SHARE-DIVIDEND> 0.66
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.44
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 1436182395
<INVESTMENTS-AT-VALUE> 1833030425
<RECEIVABLES> 17234822
<ASSETS-OTHER> 122756
<OTHER-ITEMS-ASSETS> 479725
<TOTAL-ASSETS> 1850867728
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5273623
<TOTAL-LIABILITIES> 5273623
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1430960585
<SHARES-COMMON-STOCK> 66466489
<SHARES-COMMON-PRIOR> 45674707
<ACCUMULATED-NII-CURRENT> 106017
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 17679473
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 396848030
<NET-ASSETS> 1845594105
<DIVIDEND-INCOME> 23898737
<INTEREST-INCOME> 33302056
<OTHER-INCOME> (548396)
<EXPENSES-NET> 12155818
<NET-INVESTMENT-INCOME> 44496579
<REALIZED-GAINS-CURRENT> 20361309
<APPREC-INCREASE-CURRENT> 269713544
<NET-CHANGE-FROM-OPS> 290074853
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 44405999
<DISTRIBUTIONS-OF-GAINS> 4314901
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39163785
<NUMBER-OF-SHARES-REDEEMED> 20216862
<SHARES-REINVESTED> 1844859
<NET-CHANGE-IN-ASSETS> 813442947
<ACCUMULATED-NII-PRIOR> 11343
<ACCUMULATED-GAINS-PRIOR> 3552441
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9140227
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12323091
<AVERAGE-NET-ASSETS> 1418260790
<PER-SHARE-NAV-BEGIN> 22.60
<PER-SHARE-NII> 0.77
<PER-SHARE-GAIN-APPREC> 5.26
<PER-SHARE-DIVIDEND> 0.77
<PER-SHARE-DISTRIBUTIONS> 0.09
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 27.77
<EXPENSE-RATIO> 1
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 4th day of June, 1997.
/s/ Larry Soll
-------------------------
Larry Soll
STATE OF WASHINGTON )
)
COUNTY OF SAN JUAN )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Larry Soll, as a
director or trustee of each of the above-described entities, this 4th day
of June, 1997.
Mary Paulette Weaver
--------------------
Notary Public
My Commission Expires: 1-27-99
-------
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 25th day of August, 1997.
/s/ Wendy L. Gramm
------------------------------------------
Wendy L. Gramm
STATE OF District of )
Columbia )
COUNTY OF )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Wendy L.
Gramm, as a director or trustee of each of the above-described entities, this
25th day of August, 1997.
/s/ Margaret Foster
------------------------------------------
Notary Public
My Commission Expires: Feb. 14, 2000
-------------
