PROSPECTUS
May 1, 1997
INVESCO TREASURER'S SERIES TRUST
INVESCO TREASURER'S MONEY MARKET RESERVE FUND
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
7800 East Union Avenue
Denver, Colorado 80237
Telephone: 404/892-0896
800/241-5477
INVESCO Treasurer's Series Trust (the "Trust") is an open-end management
investment company presently consisting of four separate funds, each of which
represents a separate portfolio of investments. This Prospectus relates to the
INVESCO Treasurer's Money Market Reserve Fund and INVESCO Treasurer's Tax-Exempt
Reserve Fund (the "Funds"), two portfolios that are designed especially for
treasurers and financial officers of corporations, financial institutions, and
fiduciary accounts. This Prospectus describes the operations of each of the
Funds, and is used to make a public offering of shares of beneficial interest of
both Funds.
The investment objective of each of the Funds is to achieve as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. EACH OF THE FUNDS HAS SEPARATE INVESTMENT POLICIES.
EACH FUND'S SHARES ARE OFFERED AT NET ASSET VALUE, WHICH IS EXPECTED, BUT CANNOT
BE ASSURED, TO BE MAINTAINED AT A CONSTANT $1.00 PER SHARE. SHARES OF THE FUNDS
ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
INVESCO CAPITAL MANAGEMENT, INC.
Investment Adviser
INVESCO SERVICES, INC.
Distributor
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
This Prospectus is designed to set forth concisely the information that you
should know before investing in either of the Funds. A Statement of Additional
Information (dated May 1, 1997) for the Funds has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. This Statement
is available without charge from INVESCO Services, Inc., 1315 Peachtree Street,
N.E., Atlanta, Georgia 30309, telephone number 1-800-241-5477, outside of
Georgia; inside Georgia, 1-404-892-0896.
<PAGE>
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 FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUNDS ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
PROSPECTUS
May 1, 1997
TABLE OF CONTENTS Page
SUMMARY.................................................................... 3
ANNUAL FUND EXPENSES....................................................... 6
FINANCIAL HIGHLIGHTS....................................................... 7
THE TRUST.................................................................. 9
INVESTMENT OBJECTIVES AND POLICIES......................................... 9
Money Market Reserve Fund............................................ 9
Tax-Exempt Reserve Fund.............................................. 9
OTHER POLICIES RELEVANT TO THE FUNDS....................................... 10
INVESTMENT RESTRICTIONS.................................................... 12
THE INVESTMENT ADVISER..................................................... 14
THE DISTRIBUTOR............................................................ 15
COMPUTATION OF NET ASSET VALUE............................................. 15
CAPITALIZATION............................................................. 15
DISTRIBUTIONS AND TAX INFORMATION.......................................... 16
Distributions........................................................ 16
Federal Taxes........................................................ 16
Automatic Dividend Reinvestment Plan................................. 16
HOW TO BUY FUND SHARES..................................................... 17
Purchase by Wire..................................................... 17
Exchange Privilege................................................... 18
Purchase by Telephone Orders......................................... 18
REDEMPTION OF SHARES....................................................... 18
Redemption by Check.................................................. 19
Redemption by Telephone.............................................. 19
General.............................................................. 19
SHAREHOLDER REPORTS........................................................ 20
<PAGE>
MISCELLANEOUS.............................................................. 20
LEGAL OPINIONS............................................................. 21
APPENDIX A................................................................. 21
<PAGE>
SUMMARY
The Trust:
The Trust is a no-load open-end, diversified management investment company
that was organized under the laws of the Commonwealth of Massachusetts,
presently consisting of four separate funds, each of which represents a separate
portfolio of investments. This Prospectus relates to the INVESCO Treasurer's
Money Market Reserve Fund (the "Money Fund") and the INVESCO Treasurer's
Tax-Exempt Reserve Fund (the "Tax-Exempt Fund") (collectively, the "Funds"), two
of the portfolios that are designed especially for the treasurers and financial
officers of corporations, financial institutions and fiduciary accounts. This
Prospectus describes the operations of the Money Fund and the Tax-Exempt Fund.
Each of the Funds has separate investment policies.^ The securities offered by
this Prospectus consist of shares of beneficial interests of both Funds. Certain
of the terms used in this Prospectus are defined in Appendix A.
Investment Objectives:
The investment objective of each of the Funds is to achieve as high a
level of current income as is consistent with the preservation of capital, the
maintenance of liquidity, and investing in high quality instruments. A summary
of how each Fund intends to accomplish its objective follows:
INVESCO Treasurer's Money Market Reserve Fund -- This Fund will attempt to
achieve its objective by investing in short-term money market instruments,
consisting of those issued or guaranteed by the U.S. government or its agencies
or instrumentalities, obligations of financial institutions (such as the
following instruments determined to be readily marketable by the Investment
Adviser: certificates of deposit, time deposits and bankers' acceptances of
domestic and foreign banks, and funding agreements issued by domestic insurance
companies) which may include demand features, commercial paper, corporate debt
obligations other than commercial paper and loan participation agreements.
Corporate debt securities acquired by the Money Fund must be rated by at least
two nationally recognized statistical rating organizations ("NRSROs"), generally
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") and Moody's Investors Services, Inc. ("Moody's"), in one of the two
highest rating categories (AAA or AA by S&P or Aaa or Aa by Moody's), or where
the obligation is rated only by S&P or Moody's, and not by any other NRSRO, such
obligation is rated AAA or AA by S&P or Aaa or Aa by Moody's. The Money Fund
will limit purchases of instruments issued by banks to those instruments issued
by a bank that meets the criteria discussed in the section of this Prospectus
entitled "Investment Objectives and Policies." The Money Fund limits investment
in foreign bank obligations to U.S. dollar denominated obligations of foreign
banks that have assets of at least $10 billion and have branches or agencies in
the U.S.
<PAGE>
Commercial paper acquired by the Money Fund must be rated by at least two
NRSROs, generally S&P and Moody's, in the highest rating category (A-1 by S&P or
P-1 by Moody's), or, where the obligation is rated only by S&P or Moody's, and
not by any other NRSRO, such obligation is rated A-1 or P-1. Money market
instruments purchased by the Money Fund that are not rated must be determined by
the Adviser to be of equivalent credit quality to the rated securities in which
the Money Fund may invest. In the Adviser's opinion, obligations that are not
rated are not necessarily of lower quality than those that are rated but may be
less marketable and typically may provide higher yields. The Fund will invest in
such securities only when such investment is in accordance with the Fund's
investment objective of achieving a high level of current income and when such
investment will not impair the Fund's ability to comply with requests for
redemptions.
INVESCO Treasurer's Tax-Exempt Reserve Fund -- This Fund will attempt to
achieve its objective by investing in the following instruments: short-term
municipal obligations consisting of tax anticipation notes, revenue anticipation
notes and bond anticipation notes; short-term municipal bonds; tax-exempt
commercial paper; and variable rate demand notes. Under normal market
conditions, this Fund will invest at least 80% of its net assets in municipal
obligations that pay interest free from federal income tax.
Municipal obligations other than municipal notes or commercial paper will
be purchased by the Tax-Exempt Fund only if backed by the full faith and credit
of the United States, or if they meet the rating requirements set forth below.
Municipal bonds must be rated by at least two NRSROs - generally S&P and Moody's
- - in one of the two highest rating categories (AAA or AA by S&P or Aaa or Aa by
Moody's), or where the bond is rated only by one NRSRO - generally S&P or
Moody's - in the single NRSRO's two highest rating categories (AAA or AA by S&P,
or Aaa or Aa by Moody's). Municipal notes or municipal commercial paper must be
rated in the highest rating category by at least two NRSROs, or where the notes
or paper is rated only by one NRSRO, in the highest rating category by that
NRSRO. If a security is unrated, the Fund may invest in such security if the
Adviser determines, in an analysis similar to that performed by Moody's or S&P
in rating similar securities and issuers, that the security is comparable to
securities eligible for investment by the Fund.
In order to enhance the liquidity, stability or quality of a municipal
obligation, the Tax-Exempt Fund may acquire a right to sell an obligation to
another party at a guaranteed price approximating par value, either on demand or
at specified intervals. The right to sell may form part of the obligation or be
acquired separately by the Tax-Exempt Fund. These rights may be referred to as
demand features, standby commitments or puts, depending on their characteristics
(collectively referred to as
<PAGE>
"Standby Commitments"), and may involve letters of credit or other credit
support arrangements supplied by domestic or foreign banks supporting the other
party's ability to repurchase the obligation from the Tax-Exempt Fund.
In fulfillment of their investment objectives, and as part of their
investment strategy, both Funds may enter into repurchase agreements and invest
in bank participation interests and "when issued" securities. Both Funds may
also enter into reverse repurchase agreements, but only for the purpose of
obtaining funds for meeting redemption requests of shareholders. Both Funds may
also hold cash for temporary defensive purposes. (See "Investment Objectives and
Policies.")
Certain of the investments by the Funds may be considered "illiquid
securities." Each of the Funds has adopted an investment policy that prohibits
it from having more than 10% of its total assets invested in illiquid securities
(including restricted securities, repurchase agreements maturing in more than
seven days, time deposits without demand features having a stated maturity
greater than seven days, and funding agreements and participation interests
without demand features or for which there is not a readily available market).
Investment Adviser:
INVESCO Capital Management, Inc., a Delaware corporation and the Trust's
investment adviser (the "Adviser"), acts as investment adviser to other
investment companies and furnishes investment counseling services to private and
institutional clients. As to each Fund, the Trust pays the Adviser an advisory
fee, accrued daily and paid monthly, equal to, on an annual basis, 0.25% of the
Fund's average daily net asset value.
Principal Underwriter and Distributor:
INVESCO Services, Inc. (the "Distributor") serves as the principal
underwriter and distributor of shares of the Trust. Currently, the Distri-
butor also furnishes distribution and investment advisory services to one
other investment company consisting of six portfolios.
Purchases:
Each Fund's shares are offered at net asset value, which is expected to be
maintained at a constant $1.00 per share. There is no assurance, however, that a
Fund will be able to maintain a net asset value of $1.00 per share. The minimum
initial purchase of shares required by the Trust is $1,000,000. In determining
the minimum required, subscribers will be given credit for amounts which they
have invested in either of the Funds. Shares must be purchased by good funds (as
defined under "How to Buy Fund Shares"). The Trust reserves the right to reduce
or to waive the minimum purchase requirements in certain cases. Subsequent
<PAGE>
investments in any of the Funds may be made in amounts of $100,000 or more
at any time. Shares may be purchased through the Distributor, acting as agent
for the Trust. Purchase orders may also be placed through member firms of the
National Association of Securities Dealers, Inc. ("NASD"), who may charge a
reasonable handling fee. Such handling fees can be avoided by investing directly
with the Trust. There are no charges imposed by the Trust or the Distributor on
purchases of Trust shares. (See "How to Buy Fund Shares.")
Redemptions:
The amount paid upon redemption will be the net asset value per share next
determined after the redemption request is received in proper form. If a
redemption request is received by 11:30 a.m. (New York time) on a normal
business day, proceeds will normally be wired that day, if requested by the
shareholder, but no dividend will be earned on the redeemed shares on that day.
Proceeds on redemption requests received after 11:30 a.m. (New York time) will
be sent the next business day when net asset value is determined and will earn
any dividends paid on the redeemed shares up to but not including the day on
which such shares are redeemed. There is no charge imposed in connection with
the redemption of shares. The Trust has the right to redeem shareholder accounts
that fall below a minimum level ($500,000 or less) as a result of redemptions of
shares. (See "Redemption of Shares.")
Dividends:
The Trust intends to declare dividends daily. All dividends paid to a
shareholder will be reinvested automatically in additional Fund shares pursuant
to the Trust's Automatic Dividend Reinvestment Plan unless the shareholder
specifically elects to receive declared dividends in cash. (See "Automatic
Dividend Reinvestment Plan.")
<PAGE>
ANNUAL FUND EXPENSES
Money Fund and Tax-Exempt Fund
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Operating Expenses of the Money
and Tax-Exempt Funds (as a percentage of
average net assets)
for the year ended December 31, 1996.
Tax-Exempt
Money Fund Fund
Investment Management Fees and Total
Operating Expenses* 0.25% 0.25%
12b-1 Fee None None
*Pursuant to the Trust's investment advisory agreement, the Trust's investment
adviser is responsible for the payment of all of the Trust's expenses other than
payment of advisory fees, taxes, interest, and brokerage commissions.
Examples:
- ----------
Money Fund
A shareholder would pay the following expenses on a $1000 investment for
the periods shown, assuming a 5% annual return, and redemption at the end of
each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$3 $8 $14 $32
Tax-Exempt Fund
A shareholder would pay the following expenses on a $1000 investment for
the periods shown, assuming a 5% annual return, and redemption at the end of
each time period:
<PAGE>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$3 $8 $14 $32
The purpose of the foregoing tables is to assist investors in
understanding the various costs and expenses that an investor in the Funds will
bear directly or indirectly. For a more detailed description of the investment
management fees, see "The Investment Adviser" section of this ^ Prospectus.
The Examples set forth above assume reinvestment of all dividends and
distributions. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE MORE 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.
FINANCIAL HIGHLIGHTS
The following selected per share data and ratios for the eight years ended
December 31, 1996, have been audited by Price Waterhouse LLP, independent
accountants. Prior period 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 1996 Annual Report to Shareholders which is incorporated by
reference into the Statement of Additional Information. Both are available
without charge by writing INVESCO Services, Inc. at 1315 Peachtree Street, N.E.,
Atlanta, Georgia; or by calling 1-800-241-5477.
<PAGE>
INVESCO Treasurer's Series Trust
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
Treasurer's Money Market Reserve Fund
<CAPTION> Period
Ended
December
Year Ended December 31 31
---------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988^
<S> <S> <S> <S> <S> <S> <S> <S> <S> <S>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
Net Investment Income Earned
and Distributed to
Shareholders 0.05 0.06 0.04 0.03 0.04 0.06 0.08 0.09 0.03
Net Asset Value
End of Period ^ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==============================================================================================
TOTAL RETURN 5.30% 5.82% 4.13% 2.92% 3.57% 6.04% 8.39% 9.53% 4.37%*
RATIOS
Net Assets - End of Period
($000 Omitted) $113,281 $141,885 $93,131 $102,822 $117,711 $173,138 $278,236 $176,917 $64,416
Ratio of Expenses to
Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.22% 0.20%~
Ratio of Net Investment
Income to Average
Net Assets 5.17% 5.71% 4.02% 2.88% 3.54% 5.97% 8.08% 9.03% 8.27%~
^ From April 27, 1988, commencement of operations, to December 31, 1988.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
~ Annualized
</TABLE>
<PAGE>
INVESCO Treasurer's Series Trust
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
Treasurer's Tax-Exempt Reserve Fund
<CAPTION> Period
Ended
December
Year Ended December 31 31
------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 ^
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
Net Investment Income
Earned and Distributed
to Shareholders 0.03 0.04 0.03 0.02 0.03 0.05 0.06 0.07 0.02
Net Asset Value -
End of Period ^ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=================================================================================================
TOTAL RETURN 3.45% 3.90% 2.81% 2.30% 2.88% 4.57% 6.05% 6.53% 2.98%*
RATIOS
Net Assets - End of Period
($000 Omitted) $23,386 $21,928 $19,716 $27,261 $60,717 $78,552 $61,981 $67,806 $86,163
Ratio of Expenses to
Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.21% 0.20%~
Ratio of Net Investment
Income to Average
Net Assets 3.40% 3.86% 2.69% 2.28% 2.84% 4.48% 5.90% 6.33% 5.72%~
^ From April 27, 1988, commencement of operations, to December 31, 1988.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
~ Annualized
</TABLE>
<PAGE>
THE TRUST
The Trust is a no-load, open-end, diversified management investment
company. The Trust's address is 7800 East Union Avenue, Denver, Colorado 80237.
The Trust was organized on January 27, 1988, under the laws of the Commonwealth
of Massachusetts as a Massachusetts business trust. The Trust has one class of
shares that may be divided into different series, each representing an interest
in a separate portfolio of investments. Presently, the Trust has four separate
portfolios of investments. This Prospectus describes the INVESCO Treasurer's
Money Market Reserve Fund ("Money Fund") and the INVESCO Treasurer's Tax-Exempt
Reserve Fund ("Tax-Exempt Fund") (collectively, the "Funds").
From time to time the Funds advertise their respective "yield" and
"effective yield." The "yields" shown are based on historical earnings and are
not intended to indicate future performance. Annualized net yields for the seven
days ended December 31, 1996 for the Money Fund and the Tax-Exempt Fund were
5.55% and 4.02%, respectively. The yield of a Fund refers to the net income
generated by the investment in the Fund over a seven-day period (which period
will be stated in the advertisement). This income is then annualized. That is,
the amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment.
Average portfolio maturities for the Money Fund and Tax-Exempt Fund were 8
days and 5 days, respectively, at December 31, 1996.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each of the Funds is to achieve as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. Each Fund's assets are invested in securities
having maturities of 397 days or less, and the dollar weighted average maturity
of the portfolio will not exceed 90 days. The Funds buy only securities
determined by the Adviser, pursuant to procedures approved by the ^ board of ^
trustees, to be of high quality with minimal credit risk and that are eligible
for investment by the Funds under applicable U.S. Securities and Exchange
Commission ("SEC") rules. See Appendix A for descriptions of the investment
instruments referred to below, as well as discussions of the degrees of risk
involved in purchasing these instruments.
INVESCO Treasurer's Money Market Reserve Fund -- The Money Fund attempts
to achieve its objective by investing in money market instruments, consisting
of: short-term money market instruments issued or guaranteed by the U.S.
government or its agencies or
<PAGE>
instrumentalities, obligations of financial institutions (such as the following
instruments determined to be readily marketable by the Investment Adviser:
certificates of deposit, time deposits and bankers' acceptances of domestic and
foreign banks, and funding agreements issued by domestic insurance companies)
which may include demand features, corporate debt securities, other than
commercial paper and loan participation agreements. Corporate debt securities
acquired by the Money Fund must be rated by at least two NRSROs - generally S&P
and Moody's - in one of the two highest rating categories (AAA or AA by S&P or
Aaa or Aa by Moody's), or where the obligation is rated only by S&P or Moody's,
and not by any other NRSRO, such obligation is rated AAA or AA by S&P, or Aaa or
Aa by Moody's. The Money Fund limits purchases of instruments issued by banks to
those instruments which are rated in one of the two highest categories by a
nationally recognized statistical rating organization, and which are issued by
banks which have total assets in excess of $4 billion and meet other criteria
established by the board of trustees. The Money Fund limits investments in
foreign bank obligations to U.S. dollar denominated obligations of foreign banks
which have assets of at least $10 billion, have branches or agencies in the
U.S., and meet other criteria established by the board of trustees. From time to
time, on a temporary basis for defensive purposes, the Money Fund may hold cash.
Commercial paper acquired by the Fund must be rated by at least two
NRSROs, generally S&P and Moody's, in the highest rating category (A-1 by S&P or
P-1 by Moody's), or, where the obligation is rated by only S&P or Moody's and
not by any other NRSRO, such obligation is rated A-1 or P-1. Money market
instruments purchased by the Money Fund which are not rated by any NRSRO must be
determined by the Adviser to be of equivalent credit quality to the rated
securities in which the Money Fund may invest. In the Adviser's opinion,
obligations that are not rated are not necessarily of lower quality than those
which are rated; however, they may be less marketable and typically may provide
higher yields. The Fund invests in unrated securities only when such an
investment is in accordance with the Fund's investment objective of achieving a
high level of current income and when such investment will not impair the Fund's
ability to comply with requests for redemptions.
INVESCO Treasurer's Tax-Exempt Reserve Fund -- The Tax-Exempt Fund will
attempt to achieve its objective by investing in short-term instruments the
interest on which is exempt from federal taxation, consisting of: short-term
municipal obligations, such as tax anticipation notes, revenue anticipation
notes and bond anticipation notes; tax-exempt commercial paper; and variable
rate demand notes. It is the intention of this Fund to qualify to pay
exempt-interest dividends for federal tax purposes. There can be no assurance
that this Fund will qualify each year to pay exempt-interest dividends.
<PAGE>
It is a fundamental policy of the Fund that, under normal market
conditions, it will have at least 80% of its net assets invested in municipal
obligations that, based on the opinion of counsel to the issuer, pay interest
free from federal income tax. It is the Tax-Exempt Fund's present intention (but
not a fundamental policy) to invest its assets so that substantially all of its
annual income will be tax-exempt. This Fund may invest in municipal obligations
whose interest income may be specially treated as a tax preference item under
the alternative minimum tax ("AMT"). Securities that generate income that is a
tax preference item may not be counted towards the 80% tax exempt threshold
described above. Tax-exempt income may result in an indirect tax preference item
for corporations, which may subject an investor to liability under the AMT
depending on its particular situation. This Fund, however, will not invest more
than 20% of its net assets in obligations the interest from which gives rise to
a preference item for the purpose of the AMT and in other investments subject to
^ federal income tax. Distributions from this Fund may be subject to state and
local taxes.
Municipal bonds purchased by the Tax-Exempt Fund must be rated by at least
two NRSROs - generally S&P and Moody's - in the highest rating category (AAA or
AA by S&P or Aaa or Aa by Moody's), or by one NRSRO if such obligations are
rated by only one NRSRO. Municipal notes or municipal commercial paper must be
rated in the highest rating category by at least two NRSROs, or where the note
or paper is rated only by one NRSRO, in the highest rating category by that
NRSRO. If a security is unrated, the Fund may invest in such security if the
Adviser determines, in an analysis similar to that performed by Moody's or S&P
in rating similar securities and issuers, that the security is comparable to
that eligible for investment by the Fund.
In order to enhance the liquidity, stability or quality of a municipal
obligation, the Tax-Exempt Fund may acquire a right to sell an obligation to
another party at a guaranteed price approximating par value, either on demand or
at specified intervals. The right to sell may form part of the obligation or be
acquired separately by the Tax-Exempt Fund. These rights may be referred to as
demand features, standby commitments or puts, depending on their characteristics
(collectively referred to as "Standby Commitments"), and may involve letters of
credit or other credit support arrangements supplied by domestic or foreign
banks supporting the other party's ability to purchase the obligation from the
Tax-Exempt Fund. The Tax-Exempt Fund will acquire these rights solely to
facilitate portfolio liquidity and does not intend to exercise such rights for
trading purposes. In considering whether an obligation meets the Tax-Exempt
Fund's quality standards, the Fund may look to the creditworthiness of the party
providing the right to sell or to the quality of the obligation itself. The
acquisition of a Standby Commitment will not affect the valuation of the
underlying obligation which will continue to be valued in accordance with the
<PAGE>
amortized cost method of valuation(see the "Computation of Net Asset Value"
section of this prospectus). For additional information concerning these rights,
see Statement of Additional Information under "Investment Objectives and
Policies."
From time to time, on a temporary basis for defensive purposes, the
Tax-Exempt Fund may also hold 100 percent of its assets in cash or invest in
taxable short term investments ("taxable investments") consisting of:
obligations of the U.S. ^ government, its agencies or instrumentalities;
commercial paper limited to obligations which are rated by at least two NRSROs
generally S&P and Moody's - in the highest rating category (A-1 by S&P and P-1
by Moody's), or by one NRSRO if such obligations are rated by only one NRSRO;
certificates of deposit of U.S. domestic banks, including foreign branches of
domestic banks meeting the criteria described in the discussion of the Money
Fund; time deposits; and repurchase agreements with respect to any of the
foregoing with registered broker-dealers, registered government securities
dealers or banks meeting the criteria described in the discussion of the Money
Fund.
OTHER POLICIES RELEVANT TO THE FUNDS
The Trust, on behalf of each of the Funds, may enter into repurchase
agreements and reverse repurchase agreements. (See Appendix A to this Prospectus
for a discussion of these agreements and the risks involved with such
transactions.) The Funds will enter into repurchase agreements and reverse
repurchase agreements only with banks which meet the criteria for banks
discussed above and with registered broker-dealers or registered government
securities dealers which have outstanding either commercial paper or other debt
obligations rated in the highest rating category by at least two NRSROs or by
one NRSRO if such obligations are rated by only one NRSRO. The Adviser will
monitor the creditworthiness of such entities in accordance with procedures
adopted and monitored by the board of trustees. The Funds will enter into
repurchase agreements whenever, in the opinion of the Adviser, such transactions
would be advantageous to the Funds. Repurchase agreements afford an opportunity
for the Funds to earn a return on temporarily available cash. The Funds will
enter into reverse repurchase agreements only for the purpose of obtaining funds
necessary for meeting redemption requests of shareholders. Interest earned by
the Funds on repurchase agreements would not be tax-exempt, and thus would
constitute taxable income.
The Money Fund may purchase loan participation interests in all or part of
specific holdings of corporate debt obligations. The issuer of such debt
obligations is also the issuer of the loan participation interests into which
the obligations have been apportioned. The Money Fund will purchase only loan
participation interests issued by companies whose commercial paper is currently
rated, as determined by the investment adviser, in the highest rating category
by at least two NRSROs, generally S&P and Moody's (A-1 by S&P or P-1 by
<PAGE>
Moody's), or where such instrument is rated only by S&P or Moody's and not
by any other NRSRO, such instrument is rated A-1 or P-1. Such loan participation
interests will only be purchased from banks which meet the criteria for banks
discussed above and registered broker-dealers or registered government
securities dealers which have outstanding either commercial paper or other
short-term debt obligations rated in the highest rating category by at least two
NRSROs or by one NRSRO if such obligation is rated by only one NRSRO. Such banks
and security dealers are not guarantors of the debt obligations represented by
the loan participation interests, and therefore are not responsible for
satisfying such debt obligations in the event of default. Additionally, such
banks and securities dealers act merely as facilitators, with regard to
repayment by the issuer, with no authority to direct or control repayment. The
Money Fund will attempt to ensure that there is a readily available market for
all of the loan participation interests in which it invests. The Money Fund's
investments in loan participation interests for which there is not a readily
available market are considered to be investments in illiquid securities.
Each Fund has adopted an investment policy that prohibits the Fund from
having more than 10% of its total assets invested in illiquid securities
(including restricted securities, repurchase agreements maturing in more than
seven days, time deposits without demand features having a stated maturity
greater than seven days, and participation interests and funding agreements
without demand features, for which there is not a readily available market).
The Money Fund, but not the Tax-Exempt Fund, may maintain time deposits in
and invest in U.S. dollar denominated certificates of deposit issued by foreign
banks and foreign branches of U.S. banks. The Money Fund limits investments in
foreign bank obligations to U.S. dollar denominated obligations of foreign banks
which have more than $10 billion in assets, have branches or agencies in the
U.S., and meet other criteria established by the board of trustees. Investments
in foreign securities involve special considerations. There is generally less
publicly available information about foreign issuers since many foreign
countries do not have the same disclosure and reporting requirements as are
imposed by the U.S. securities laws. Moreover, foreign issuers are generally not
bound by uniform accounting and auditing and financial reporting requirements
and standards of practice comparable to those applicable to domestic issuers.
Such investments may also entail the risks of possible imposition of dividend
withholding or confiscatory taxes, possible currency blockage or transfer
restrictions, expropriation, nationalization or other adverse political or
economic developments, and the difficulty of enforcing obligations in other
countries.
The Money Fund may also invest in bankers' acceptances, time deposits and
certificates of deposit of U.S. branches of foreign banks and foreign branches
of U.S. banks. Investments in instruments of U.S. branches of foreign banks will
be made only with branches that are subject to the same regulations as U.S.
<PAGE>
banks. Investments in instruments issued by a foreign branch of
a U.S. bank will be made only if the investment risk associated
with such investment is the same as that involving an investment in
instruments issued by the U.S. parent, with the U.S. parent
unconditionally liable in the event that the foreign branch fails
to pay on the investment for any reason.
Each Fund may purchase securities on a "when-issued" basis, with payment
and delivery to be made at a later date, generally within one month, but in no
event later than 45 days. The price and yield are normally fixed on the date of
the purchase commitment, and the value of the security is thereafter reflected
in the applicable Fund's net asset value computations. During the period between
purchase and settlement, no payment is made by the Fund and no interest accrues
to the Fund. At the time of settlement, the market value of the security may be
more or less than the purchase price. Each Fund will maintain, at all times, a
segregated account holding cash or liquid debt securities in an amount equal to
the aggregate amount due on settlement date for all "when-issued" transactions.
Any securities in such segregated account will be marked to market on a daily
basis. Such segregated securities either will mature or, if necessary, be sold
on or before the settlement date. A Fund will not invest more than 10% of its
total assets in "when issued" securities.
The Money Fund may also invest in funding agreements issued by domestic
insurance companies. Such funding agreements will only be purchased from
insurance companies which have outstanding an issue of long-term debt securities
rated AAA or AA by S&P, or Aaa or Aa by Moody's. In all cases, the Fund will
attempt to obtain the right to demand payment, on not more than seven days'
notice, for all or any part of the amount subject to the funding agreement, plus
accrued interest. The Fund intends to execute its right to demand payment only
as needed to provide liquidity to meet redemptions, or to maintain a high
quality investment portfolio. The Fund's investments in funding agreements that
do not have this demand feature, or for which there is not a readily available
market, are considered to be investments in illiquid securities.
Diversification. Since the Trust is a diversified investment company under
the Investment Company Act of 1940, it must have at least 75% of the value of
the total assets of each Fund represented by a combination of cash and cash
items, government securities, securities of other investment companies and other
securities which represent, in the case of any one issuer, no more than 5% of
the value of each Fund's total assets. The Trust may not change from a
diversified to a non-diversified investment company without the approval of a
majority of each affected Fund's outstanding voting securities, with "majority"
defined as described under the "Investment Restrictions" section of this ^
Prospectus.
Portfolio Securities Loans. The Trust, on behalf of each of
the Funds, may lend limited amounts of its portfolio securities
(not to exceed 20% of a Fund's total assets) to broker-dealers or
<PAGE>
other institutional investors. While there may be delays in recovery of loaned
securities or even a loss of rights in collateral should the borrower fail
financially, loans will be made only to firms deemed by the Adviser to be of
good standing and will not be made unless, in the judgment of the Adviser, the
consideration to be earned from such loans would justify the risk. The Adviser
will evaluate the creditworthiness of such borrowers in accordance with
procedures adopted and monitored by the board of trustees. It is expected that
the Trust, on behalf of the applicable Fund, will use the cash portions of loan
collateral to invest in short-term income producing securities for the Fund's
account and that the Trust may share some of the income from these investments
with the borrower. See "Portfolio Securities Loans" at Appendix A to this ^
Prospectus.
For an additional discussion of each Fund's fundamental investment
policies, see the "Investment Restrictions" section of this Prospectus.
General. No assurance is or can be given that any Fund will accomplish its
investment objective, as there is some degree of uncertainty in every
investment. An increase in interest rates will generally reduce the value of
portfolio investments in the Funds, and a decline in interest rates will
generally increase the value of each Fund's portfolio investments.
INVESTMENT RESTRICTIONS
The Trust, on behalf of each of the Funds, has adopted the following
investment restrictions, all of which are fundamental policies and may not be
changed without the approval of the holders of a majority of the Trust's
outstanding voting securities, or if the policy relates only to a specific Fund,
that Fund's outstanding voting securities (which in this Prospectus means, as to
the Trust or each Fund (as applicable), the vote of the lesser of (i) 67% or
more of the voting securities present at a meeting, if the holders of more than
50% of the outstanding voting securities are present or represented by proxy, or
(ii) more than 50% of the outstanding voting securities). The Trust, on behalf
of each of the Funds, may not:
(1) Invest in the securities of issuers (excluding (i) municipal
obligations for the Tax-Exempt Fund only, (ii) bankers'
acceptances, time deposits and certificates of deposit of
domestic branches of U.S. banks and, as to the Money Fund
only, U.S. branches of foreign banks and foreign branches of
U.S. banks, provided that the U.S. branches are subject to
sufficient regulation by government bodies that they can be
considered U.S. banks, and the obligations of the foreign
branches qualify as unconditional obligations of the U.S.
parent, and (iii) U.S. ^ government obligations) conducting
their principal business activity in the same industry, if
immediately after such investment the value of a Fund's
investments in such industry would represent 25% or more of the value of
<PAGE>
such Fund's total assets. It should be noted that from time to time,
the Tax-Exempt Fund may invest more than 25% of the value of its total
assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. The Tax-Exempt Fund may invest
more than 25% of the value of its total assets in municipal obligations
which are related in such a way that an economic, business or political
development or change affecting one such security also would affect the
other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects, or securities whose issuers
are located in the same state.
(2) As to 75% of the assets of the Tax-Exempt Fund, and 100% of the assets of
the Money Reserve Fund, invest in the securities of any one issuer, other
than U.S. ^ government obligations, 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.
(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
in excess of 10% of the value of a Fund's net assets (not
including the amount borrowed) at the time the money is
borrowed. The Funds are permitted to borrow money only for
the purpose of meeting redemption requests which might
otherwise require the untimely disposition of securities.
Borrowing is allowed as long as the cost of borrowing is less
than the income which would be lost should securities be sold
to meet the redemption requests. While in a borrowed position
(including reverse repurchase agreements), the Funds may not
make purchases of securities. The Funds may enter into
reverse repurchase agreements only for the purpose of
obtaining funds necessary for meeting redemption requests.
(6) Mortgage, pledge, hypothecate or in any manner transfer as security for
indebtedness any securities owned or held except to secure funds borrowed
and then only to an extent not greater than 10% of the value of the
applicable Fund's total assets.
(7) Make short sales of securities or maintain a short position.
(8) Purchase securities on margin, except that a Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.
<PAGE>
(9) Purchase or sell real estate or interests in real estate.
(10) Purchase or sell commodities or commodity contracts.
(11) Make loans to other persons, provided that a Fund may purchase debt
obligations consistent with its investment objectives and policies, may
lend limited amounts (not to exceed 20% of its total assets) of its
portfolio securities to broker-dealers or other institutional investors,
and may enter into repurchase agreements.
(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 open-end 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 a Fund, (ii) no more than
5% of the value of the total assets of a Fund would be
invested in any one investment company, and (iii) no more than
10% of the value of the total assets of a Fund would be
invested in the securities of such investment companies.
Subject to these conditions, the Funds intend to invest only
in no-load money market funds not advised by the Adviser or
any company affiliated with the adviser which meet the
requirements of Rule 2a-7 and which do not incur any
distribution expenses. Investors in the Funds should note
that such no-load money market funds will pay an advisory fee
and incur other operational expenses.
(13) Enter into repurchase agreements if more than 10% of the
applicable Fund's net assets will be invested in repurchase
agreements and in participation interests without demand
features, time deposits having a stated maturity greater than
seven days, securities having legal or contractual
restrictions on resale, securities for which there is no
readily available market, or in other illiquid securities.
The term "illiquid securities" includes any security which
cannot be disposed of promptly and in the ordinary course of
business without taking a reduced price. A security is
considered illiquid if a Fund cannot receive the amount at
which it values the instrument within seven days.
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 Trust, on behalf of each of the Funds, may not:
(1) Write, purchase or sell puts, calls, straddles, spreads or
combinations thereof. However, in order to enhance the
liquidity of a municipal obligation, the Tax-Exempt Fund may
<PAGE>
acquire Standby Commitments. See the "Investment Objectives and
Policies" section of this ^ Prospectus.
(2) Purchase or sell interests in oil, gas or other mineral leases or
exploration or development programs. A Fund, 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 sell warrants.
(5) 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 if all such officers and trustees/directors together own more than 5%
of the securities of that issuer.
(6) Engage in arbitrage transactions.
THE INVESTMENT ADVISER
The investment adviser to the Trust is INVESCO Capital Management, Inc., a
Delaware corporation (sometimes referred to as the "Adviser"), having its
principal office at 1315 Peachtree Street, N.E., Atlanta, Georgia 30309. The
Adviser is an indirect subsidiary of AMVESCO PLC. AMVESCO 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 as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., thus creating one of
the largest independent investment management businesses in the world. Subject
to obtaining shareholder approval at its regular Annual Shareholder Meeting, the
board of directors of AMVESCO PLC has concluded that the corporate name should
be changed to AMVESCAP PLC effective May 8, 1997. INVESCO Capital Management,
Inc. will continue to operate under its existing name. AMVESCO PLC has
approximately $165 billion in assets under management. The Adviser also has an
advisory office in Coral Gables, Florida and a marketing and client service
office in San Francisco.
The Adviser is the sponsor and will provide general investment advice and
portfolio management to the Trust and the Funds. The Adviser currently manages
in excess of $40 billion of assets for its customers, and it believes it has one
of the nation's largest discretionary portfolios of tax-exempt accounts (such as
pension and profit-sharing funds for corporations and state and local
governments). In addition, the Adviser furnishes investment advice to the
following other investment companies: INVESCO Value Trust, INVESCO Variable
<PAGE>
Investment Funds, Inc.-Total Return Portfolio, TheTarget Portfolio
Trust-Large Capitalization Value Portfolio, The Chaconia Growth and Income Fund
and INVESCO Advisor Funds, Inc. The Adviser furnishes investment advice to a
total of 10 investment companies, consisting of 45 different portfolios. Certain
customers of the Adviser may have similar investment objectives to those of
particular mutual funds. Portfolios are supervised by investment managers who
utilize the Adviser's facilities for investment research and analysis, review of
current economic conditions and trends, and consideration of long-range
investment policy matters.
Under its Investment Advisory Agreement (the "Agreement") with the Trust,
the Adviser, subject to the supervision of the Trustees of the Trust, and in
conformance with each Fund's stated policies, is to manage the investment
operations and portfolios of the Funds. In this regard, it is the responsibility
of the Adviser not only to make investment decisions for the Funds, but also to
place the purchase and sale orders for the portfolio transactions of the Funds.
(See Statement of Additional Information under "Brokerage and Portfolio
Transactions.") The Adviser is also responsible for furnishing to the Trust, at
the Adviser's expense, the services of persons believed to be competent to
perform all executive and other administrative functions required by the Trust
to conduct its business effectively, as well as the offices, equipment and other
facilities necessary for its operations. Such functions include the maintenance
of the Trust's accounts and records, and the preparation of all requisite
corporate documents such as tax returns and reports to the SEC and shareholders.
Under the Agreement, the Adviser is responsible for the payment of all of
the Funds' expenses, other than payment of advisory fees, taxes, interest and
brokerage commissions. Such expenses include, without limitation, organizational
expenses, compensation of officers, trustees and employees, legal and auditing
expenses, the fees and expenses of the Trust's custodian and transfer agent, and
the expenses of printing and mailing reports and notices to Trust shareholders.
For the services to be rendered and the expenses to be assumed by the Adviser
under the Agreement, the Trust will pay to the Adviser an advisory fee which
will be computed daily and paid as of the last day of each month on the basis of
each Fund's daily net asset value, using for each daily calculation the most
recently determined net asset value of the Funds. (See "Computation of Net Asset
Value.") On an annual basis, the advisory fee paid by each Fund, accrued daily
and paid monthly, is equal to 0.25% of the Fund's average daily net asset value.
For additional information concerning the Agreement, see Statement of Additional
Information under "The Advisory Agreement."
The following individual serves as portfolio manager for the Funds and is
primarily responsible for the day-to-day management of the ^ Funds' portfolios:
<PAGE>
Money Market Reserve Fund and
Tax-Exempt Reserve Fund
George S. Robinson Portfolio manager of the Money
Market Reserve Fund and Tax-Exempt
Reserve Fund since 1988; formerly
(1986 to 1987) Vice President of
Citicorp Investment Bank; began
investment career in 1965.
The Adviser 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 investment and other personnel to
conduct their personal investment activities in a manner that the Adviser
believes is not detrimental to the Funds or the Adviser's other advisory
clients. See "The Advisory Agreement" section of the Statement of Additional
Information for more detailed information.
THE DISTRIBUTOR
INVESCO Services, Inc., the Trust's distributor (the "Distributor"), a
Georgia corporation, is the principal underwriter and distributor of the shares
of the Funds under a Distribution Agreement dated as of February 28, 1997. All
of the Distributor's outstanding shares of voting stock are owned by the
Adviser. The Distributor is also the sponsor of, investment adviser to and the
principal underwriter for one other investment company consisting of six
portfolios. The Distributor acts as agent upon the receipt of orders from
investors. The Distributor's principal office is located at 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309.
<PAGE>
COMPUTATION OF NET ASSET VALUE
The net asset value per share of each of the Funds is determined daily as
of 11:30 a.m. (New York time) on each day that the New York Stock Exchange is
open for trading and at such other times and/or on such other days as there is
sufficient trading in the portfolio securities of the Fund such that its net
asset value might be affected materially. Net asset value per share is
determined by adding the value of all assets of each Fund, deducting its actual
and accrued liabilities, and dividing by the number of shares outstanding.
Each Fund seeks to maintain a constant net asset value of $1.00 per share
by utilizing the amortized cost method of valuing portfolio securities. There
can be no assurance that the Funds will be able to maintain a net asset value of
$1.00 per share. Under the amortized cost method of valuation, securities are
valued at cost on the date of purchase. Thereafter, the value of the security is
increased or decreased incrementally each day so that at maturity any purchase
discount or premium is fully amortized and the value of the security is equal to
its principal. As a result of minor shifts in the market value of a Fund's
portfolio securities, the amortized cost method may result in periods during
which the amortized cost value of the securities may be higher or lower than
their market value. This would result in the yield on a shareholder's investment
being higher or lower than that which would be recognized if the net asset value
of a Fund's portfolio was not constant and was permitted to fluctuate with the
market value of its portfolio securities. It is believed that any such
differences will normally be minimal.
CAPITALIZATION
There are no conversion or preemptive rights in connection with any shares
of the Funds, nor are there cumulative voting rights with respect to the shares
of any such Fund. Each issued and outstanding share of each Fund is entitled to
participate equally in dividends and distributions declared by such Fund, and
upon liquidation or dissolution, in the net assets of such Fund remaining after
satisfaction of outstanding liabilities. The Trust's Declaration of Trust
provides that the obligations and liabilities of a particular Fund are
restricted to the assets of that Fund and do not extend to the assets of the
Trust generally.
All issued and outstanding shares of each Fund will be fully paid and
nonassessable and redeemable at net asset value per share. The issuance of
certificates representing shares of the Trust is at the discretion of the ^
trustees.
<PAGE>
DISTRIBUTIONS AND TAX INFORMATION
Distributions
The net income and net realized capital gains, if any, of each of the
Funds are declared daily. A Fund's dividends will be reinvested monthly in
additional shares (or fractions thereof) of the Fund pursuant to the Fund's
Automatic Dividend Reinvestment Plan. Such reinvestment will take place on the
last business day of each month. Each shareholder may elect to terminate his
participation in such plan and to receive his distributions in cash.
Shareholders who redeem all of their shares at any time during the month will be
paid all dividends accrued through the date of redemption. Shareholders who
redeem less than all of their shares will be paid the proceeds of the redemption
in cash, and dividends with respect to the redeemed shares will be reinvested in
additional shares (unless the shareholder has elected not to participate in this
plan or has elected to terminate his participation in the plan). (See "Automatic
Dividend Reinvestment Plan.")
Federal Taxes
Each Fund intends to continue to qualify for the special tax treatment
afforded regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If a Fund qualifies for treatment
as a regulated investment company, it will not be subject to federal income
taxes to the extent that it distributes its ordinary (taxable) income and net
realized capital gains.
It is intended that the Tax-Exempt Fund will qualify to pay
exempt-interest dividends pursuant to Section 852(b)(5) of the Code, and
shareholders will be notified in writing of any dividend, or portion thereof,
which represents an exempt-interest dividend. Exempt-interest dividends are
excludable from the gross income of a shareholder for federal income tax
purposes, but may be subject to state and local taxes.
With respect to a shareholder that is exempt from federal income taxation
under Section 401(a) or 501(a) of the Code, (which will derive no benefit from
the tax-free nature of the exempt interest dividends paid by the Tax-Exempt
Fund), the distributions made by the Money Fund will not constitute unrelated
business taxable income (i.e., taxable income derived by a tax-exempt entity
from any unrelated trade or business regularly carried on by it) and thus will
not be taxable.
With respect to a shareholder that is not exempt from federal income
taxation, all distributions from a Fund, (except for distributions of
exempt-interest dividends by the Tax-Exempt Fund or return of capital
distributions), whether received in cash or in additional shares of the Fund,
will be taxable as a dividend and must be reported by the shareholder on its
federal income tax
<PAGE>
return. Shareholders of the Trust are advised to consult their
own tax advisers with respect to these matters.
Distributions of exempt-interest dividends derived from interest on
certain private activity and industrial development bonds are treated as tax
preference items and may subject shareholders to, or increase their liability
under, the AMT. In addition, corporate shareholders may have to include exempt-
interest dividends when calculating their alternative minimum taxable income
("AMTI").
A corporation's AMTI is increased by 75% of the amount by which its
"adjusted current earnings" (which includes adjustments for items such as
tax-exempt interest) exceeds the amount of its AMTI calculated without regard to
such adjustments.
Information concerning the status of a Fund's distributions for federal
income tax purposes will be mailed to shareholders annually. Such distributions
may be subject to state and local taxes.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code presently in effect, and is qualified in its entirety by
reference thereto. The Code and the Regulations thereunder are subject to change
by legislative or administrative action. For further discussion of the tax
consequences of becoming a shareholder of the Trust, see the "Tax Information"
section of the Statement of Additional Information. Shareholders should consult
with their tax advisors concerning the tax consequences of an investment in the
Funds.
Automatic Dividend Reinvestment Plan
For the convenience of the shareholders and to permit shareholders to
increase their shareholdings in the Funds in which they have invested, the
Fund's transfer agent, INVESCO Funds Group, Inc., ("INVESCO"), is automatically
appointed by the investors to receive all dividends of the respective Funds and
to reinvest them on their payment dates in shares (or fractions thereof) of the
Fund at the net asset value per share next determined after reinvestment.
Shareholders may, however, elect not to participate or to terminate their
participation at any time without penalty in the Automatic Dividend Reinvestment
Plan by notifying INVESCO in writing at the time of investment (for new
investments), or at least 15 days prior to the desired date of termination (for
existing participants). Shareholders may rejoin the plan by notifying the Fund's
transfer agent in writing at least 15 days prior to the payment date on which
such shareholder wishes to rejoin the plan.
Upon termination of a shareholder's participation in the
Automatic Dividend Reinvestment Plan, a check for the market value
<PAGE>
of any fractional interest will, at the request of the
shareholder, be sent to the shareholder. All costs of the
Automatic Dividend Reinvestment Plan, including those of
registration under applicable securities laws, if any, will be
borne by the Adviser.
HOW TO BUY FUND SHARES
Shares of the Funds are sold at the net asset value per share next
determined after the receipt of the investor's purchase order and payment in
"good funds," as described below. No sales charge is imposed upon the purchase
of shares.
The minimum initial purchase of shares required by the Trust is
$1,000,000. Subscribers will be given credit for amounts that they have invested
in any of the Funds. Subsequent purchases may be made in amounts of $100,000 or
more. The ^ trustees, acting through the Distributor, reserve the right to
reduce or to waive the minimum purchase requirements in certain cases -- such as
investments involving investors which are affiliated with one another (such as
separate employee benefit plans sponsored by the same employer or separate
companies under common control, for example a parent company and its
subsidiaries or two or more subsidiaries of the same parent company) or where
additional investments are expected to be made on a regular basis in amounts
sufficient to meet the minimum requirement within a reasonable period of time
after the initial investment. The ^ trustees, acting through the Distributor,
also reserve the right to reject any subscription in whole or in part for any
reason at the time that the subscription is first received. The Trust offers its
shares on a continuous basis; however, the Trust may terminate the continuous
offering of its shares at any time in the discretion of the ^ trustees.
Following receipt by the transfer agent, INVESCO (sometimes referred to as
the "Transfer Agent"), of a proper purchase order and good funds ("good funds"
means cashier's, certified, personal or federal funds check or wire transfer, as
described below), the investor will be credited with the number of full and
fractional shares of the stated Fund purchased with the subscription amount.
Checks must be made payable to INVESCO Treasurer's Series Trust, and must
include the name of the desired Fund. Purchase orders^ for shares of the Funds
should be forwarded to INVESCO Treasurer's Series Trust, P.O. Box 173710,
Denver, Colorado 80217-3710. 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. A confirmation
of the investment will be mailed to the investor.
Additional purchase applications are available from the Distributor.
Investors may call INVESCO Services, Inc., for assistance in completing the
required application and any other authorization forms. The toll free telephone
number (except for Georgia) is 1-800-241-5477. In Georgia, call 404-892-0896.
<PAGE>
Investors may also arrange to acquire shares through broker-dealers other
than the Distributor. Such broker-dealers, who must be members of the NASD, may
charge investors a reasonable handling fee. The services to be provided and the
applicable fees are established by each broker-dealer acting independently from
the Trust. Such broker-dealers have the responsibility of promptly transferring
investors' purchase orders and funds to the Transfer Agent and custodian,
respectively. Shares acquired through such broker-dealers will be purchased at
the applicable Fund's net asset value per share next determined after the
receipt by the Fund's transfer agent of a proper purchase order and good funds.
Neither the Distributor nor the Trust receives any part of such handling fees
when charged and such handling fees can be avoided by investing directly with
the Trust through the Distributor.
Purchase by Wire
Investors may purchase shares of the Funds by transmitting Federal funds
by bank wire to United Missouri Bank of Kansas City, N.A., ABA Routing
#1010-0069-5, Wire text: credit to account 9870287056, FBO INVESCO Funds for
further credit to (Fund name, account # and $ amount), Treasurer's Money Market
Reserve Fund UMB #740115001, or Treasurer's Tax-Exempt Reserve Fund UMB
#740116009. Instructions for new accounts should specify INVESCO Treasurer's
Series Trust, the name of the desired Fund and should include the name, address
and IRS identification number, if applicable, of each person in whose name the
shares are to be registered. Existing shareholders only need to specify INVESCO
Treasurer's Series Trust, the name of the desired Fund and the appropriate
account number. The required purchase application or additional shares purchase
application should be forwarded to the Distributor (INVESCO Services, Inc.).
Federal funds transmitted by bank wire to the United Missouri Bank of Kansas
City, N.A., and received prior to 11:30 a.m. (New York time), become available
to the Trust and are invested that day. Federal funds transmitted by bank wire
and received after 11:30 a.m. (New York time) will be available to and deemed
received and invested by the Trust on the next business day. The Trust is not
responsible for delays in any wire transmission.
Exchange Privilege
Shareholders in either of the Funds may exchange shares of their
respective Fund for shares of the other Fund. There is no charge for such
exchanges. Investors should consider the difference in the investment objectives
and portfolio compositions of the Funds, and should be aware that the exchange
privilege may only be available in those states where exchanges may legally be
made, which will require that the shares being acquired are registered for sale
in the shareholder's state of residence.
An exchange request may be given in writing or by telephone to the
Transfer Agent, and must comply with the requirements for a redemption.
<PAGE>
(See "Redemption of Shares.") If the exchange request is in proper order,
the exchange will be based on the respective net asset values of the shares
involved which is next determined after the request is received. The exchange of
shares of one of the Funds for shares of another Fund is treated for federal
income tax purposes as a sale of the shares given in exchange and an investor
(other than a tax-exempt investor) may, therefore, realize a taxable gain or
loss. The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the New Account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, 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 Trust employs procedures, which it believes are
reasonable, designed to confirm that exchange instructions 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 Trust fails to follow these or other reasonable procedures,
the Trust may be liable. The Trust reserves the right to modify or terminate the
exchange privilege at any time.
Purchase by Telephone Orders
The purchase of shares of the Funds can be expedited by placing telephone
orders, subject to the minimum share purchase requirements currently in effect.
Shares purchased through telephone orders will be issued at the next determined
net asset value after receipt of an investor's telephone instructions. Since the
Funds currently determine their net asset values at 11:30 a.m. (New York time)
each normal business day, investors placing telephone orders for Fund shares
that are received prior to that time will have shares purchased for their
account as of that day. Investors placing telephone orders that are received
after that time will have Fund shares purchased for their accounts as of the
next business day. All payments for telephone orders must be received by the
Funds' custodian, the United Missouri Bank of Kansas City, N.A., in "federal
funds" (defined as a federal funds check or wire transfer in proper form) by the
close of business on the business day that shares are purchased for the
investor's account or the order will be cancelled. In the event of such
cancellation, the purchaser will be held responsible for any decline in the
value of the shares. INVESCO Services, Inc. has agreed to indemnify the Funds
for any losses resulting from such cancellations.
REDEMPTION OF SHARES
A shareholder wishing to redeem all or any portion of his shares may do so
by giving notice of redemption directly to or through any registered securities
dealer to the Distributor or to the Transfer Agent, in the manner set forth
<PAGE>
below. The redemption price is the net asset value per share next
determined after the initial receipt by either the registered securities dealer,
the Distributor or the Transfer Agent of proper notice of redemption. (See "How
to Buy Fund Shares.") Each Fund seeks to maintain a constant net asset value of
$1.00 per share (see "Computation of Net Asset Value"). Securities dealers have
the responsibility of promptly transmitting such redemption notices to the
Distributor or the Transfer Agent. Such securities dealers will only assist
investors in redeeming their shares from the Funds, since no securities dealer
is authorized to repurchase such shares on behalf of the Funds.
If a shareholder holds certificates for the shares to be redeemed, these
must simultaneously be surrendered, properly endorsed with signature(s)
guaranteed by a member firm of a domestic stock exchange, a U.S. commercial
bank, a foreign correspondent of a U.S. commercial bank, or a trust company, and
the certificates must be forwarded to INVESCO Treasurer's Series Trust, P.O. Box
173710, Denver, Colorado 80217-3710. 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., 7800 E. Union Avenue, Denver, Colorado
80237. The signature on any request for redemption of shares not represented by
certificates, or on any stock power in lieu thereof, must be similarly
guaranteed. In each case, the signature or signatures must correspond to the
name or names in which the account is registered. The signature guarantee is to
prevent fraud and is for the protection of the investor as a shareholder.
Shareholders should be advised that if notice of redemption is received
without information thereon sufficient to determine the applicable Fund or the
value or number of shares involved, no redemption will be effected until such
information becomes available.
If a redemption request is received by 11:30 a.m. (New York time),
proceeds will normally be wired that day, if requested by the shareholder, but
no dividend will be earned on the redeemed shares on that day. Proceeds of
redemption requests received after 11:30 a.m. (New York time) will be based on
the net asset value next determined (which is 11:30 a.m. of the next day that
net asset value per share is determined), will normally be sent on the day such
net asset value per share is determined, but in any event within 7 days, and
will not earn a dividend for that day. Although each Fund attempts to maintain a
constant net asset value per share of $1.00, the value of shares of a Fund on
redemption may be more or less than the shareholder's cost, depending upon the
value of the Fund's assets at the time.
Redemption by Check
Shareholders in the Funds may redeem shares by check in an amount not less
than $100,000. At the shareholder's request, the Fund's custodian will provide
<PAGE>
the shareholder with checks drawn on the account maintained for that
purpose on behalf of the Funds by the custodian. These checks can be made
payable to the order of any person and the payee of the check may cash or
deposit the check in the same manner as any check drawn on a bank. When such a
check is presented for payment, the applicable Fund will redeem a sufficient
number of full and fractional shares in the shareholder's account to cover the
amount of the check. Shareholders earn dividends on the amounts being redeemed
by check until such time as such check clears the bank. If the amount of the
check is greater than the value of the shares held in the shareholder's account,
the check will be returned, and the shareholder may be subject to extra charges
(presently estimated to be approximately $15.00 per returned check). The Funds
and the custodian each reserves the right at any time to suspend the procedure
permitting redemption by check.
Redemption by Telephone
Shareholders of the Fund may elect to redeem shares of the Fund by
telephone. Such redemptions are effected by calling the Distributor at
404-892-0896 in Georgia or 800-241-5477, outside of Georgia. The proceeds from a
redemption by telephone will promptly be forwarded according to the
shareholder's instructions. In electing to use the telephone redemption, the
investor authorizes the Distributor to act on telephone instructions from any
person representing himself to be the investor, and whom the Distributor
reasonably believes to be genuine. The Distributor's and Transfer Agent's
records of such instructions are binding. By signing the new account
Application, a Telephone Transaction Authorization Form, or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Funds, INVESCO,
and their affiliates will not be liable for following instructions communicated
by telephone that they reasonably believe to be genuine. The Funds employ
procedures, which they believe 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
a Fund fails to follow these or other reasonable procedures, the Fund may be
liable. The proceeds of shares redeemed by telephone must be in an amount not
less than $100,000. Investors should be aware that a telephone redemption may be
difficult to implement during periods of drastic economic or market changes.
Should redeeming shareholders be unable to implement a telephone redemption
during such periods, or at any other time, they may give appropriate notice of
redemption to the distributor by mail. The Trust reserves the right to modify or
terminate the telephone redemption privilege at any time.
General
Under the Investment Company Act of 1940, the date of payment for redeemed
shares may be postponed, or the Trust's obligation to redeem its shares may be
<PAGE>
suspended (1) for any period during which trading on the New York Stock
Exchange is restricted (as determined by the SEC), (2) for any period during
which an emergency exists (as determined by the SEC) which makes it
impracticable for the Trust to dispose of its securities or to determine the
value of a Fund's net assets, or (3) for such other periods as the SEC may, by
order, permit for the protection of shareholders.
If the ^ trustees determine that it is in the best interest of a Fund, a
Fund has the right to redeem upon prior written notice, at the then current net
asset value per share, all shareholder accounts which have dropped below a
minimum level ($500,000 or less) as a result of redemption of such Fund's shares
(but not as a result of any reduction in market value of such shares). An
investor will have 60 days to increase the shares in his account to the minimum
level in order to avoid any such involuntary redemption.
SHAREHOLDER REPORTS
The Trust will issue to each of a Fund's shareholders semiannual and
annual reports containing the Fund's financial statements, including selected
per share data and ratios and a schedule of each Fund's portfolio securities.
The federal income tax status of shareholder distributions will also be
reported to shareholders after the end of each year.
Shareholders having any questions concerning the Trust or any of the Funds
may call the Distributor. Outside of Georgia, the toll-free telephone number is
1-800-241-5477. In Georgia, the telephone number is 404-892-0896.
MISCELLANEOUS
As a Massachusetts business trust, the Trust is not required to hold
annual shareholder meetings. However, special meetings of shareholders for
action by shareholder vote may be called for purposes such as electing or
removing trustees, changing fundamental policies, approving an advisory contract
or as may be requested in writing by the holders of at least 10% of the
outstanding shares of the Fund or as may be required by applicable law or the
Trust's Declaration of Trust. Additionally, the Trust will assist shareholders
in communicating with other shareholders as required by the Investment Company
Act of 1940. Each Trust shareholder receives one vote for each share owned.
United Missouri Bank of Kansas City, N.A. is the custodian of the
portfolio securities and cash of the Funds. The custodian may use the services
of foreign sub-custodians. Such foreign sub-custodians will be selected in
accordance with the provisions of Rule 17f-5 (or any successor rule) promulgated
under the 1940 Act.
<PAGE>
The Transfer Agent will maintain each shareholder's account, as to each
Fund, and furnish the shareholder with written information concerning all
transactions in the account, including information needed for tax records. The
Trust has the right to appoint a successor Transfer Agent. INVESCO also serves
as the Dividend Disbursement and Reinvestment Agent and Redemption Agent of the
Funds. INVESCO does not perform any investment management functions for the
Trust, but performs certain administrative services on its behalf pursuant to an
Administrative Service Agreement (see information below). The Adviser pays the
Transfer Agent an annual fee of $50.00 per shareholder account, per Fund, with a
minimum annual fee of $5,000 per Fund. For the fiscal years ended December 31,
1996, 1995, and 1994, the Trust's Funds paid no transfer agency fees to INVESCO,
as those expenses were absorbed and paid by the Adviser, pursuant to its
Advisory Agreement with the Trust. The principal address of INVESCO is 7800 East
Union Avenue, Denver, Colorado 80237.
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 as a partner for obligations of the Trust is limited to
the unlikely circumstance in which the Trust itself would be unable to meet its
obligations.
The Trust has entered into an Administrative Services Agreement (the
"Administrative Agreement"), dated as of February 28, 1997, with INVESCO, which
was approved by the Trust's ^ board of ^ trustees, including all of the
independent trustees, on November 6, 1996. Pursuant to the Administrative
Agreement, INVESCO will perform 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. For such services, the
Adviser pays INVESCO a fee consisting of a base fee of $10,000 per year, per
Fund, plus an additional incremental fee per Fund computed at an annual rate of
0.015% per annum of the net asset value of the applicable Fund. For the fiscal
year ended December 31, 1996, the Funds paid no administrative services fees to
INVESCO, as those expenses were absorbed and paid by the Adviser, pursuant to
its Advisory Agreement with the Trust.
This Prospectus omits certain information contained in the registration
statement which the Trust has filed with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act of 1940, and
reference is made to that registration statement and to the exhibits thereto for
further information with respect to the Trust and the shares offered
<PAGE>
hereby. Copies of such registration statement, including
exhibits, may be obtained from the Commission's principal office at
Washington, D.C., upon payment of the fee prescribed by the
Commission.
LEGAL OPINIONS
The legality of the securities offered by this Prospectus will be passed
upon for the Trust by Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue NW,
Washington, D.C. 20036.
APPENDIX A
Some of the terms used in the Prospectus and Statement of Additional
Information are described below.
Bank obligations include certificates of deposit which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually from 14 days to one
year) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation of a
bank to pay a draft which has been drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face amount
of the instrument upon maturity.
Bond Anticipation Notes normally are issued to provide interim financing
until long-term financing can be arranged. The long-term bonds then provide the
money for the repayment of the Notes.
Bonds: Municipal Bonds may be issued to raise money for various public
purposes -- like constructing public facilities and making loans to public
institutions. Certain types of municipal bonds, such as certain project notes,
are backed by the full faith and credit of the United States. Certain types of
municipal bonds are issued to obtain funding for privately operated facilities.
The two principal classifications of municipal bonds are "general obligation"
and "revenue" bonds. General obligation bonds are backed by the taxing power of
the issuing municipality and are considered the safest type of municipal bond.
Issuers of general obligation bonds include states, counties, cities, towns and
regional districts. The proceeds of these obligations are used to fund a wide
range of public projects including the construction or improvement of schools,
highways and roads, water and sewer systems and a variety of other public
purposes. The basic security of general obligation bonds is the issuer's pledge
of its faith, credit, and taxing power for the payment of principal and
interest. Revenue bonds are backed by the net revenues derived from a particular
facility or group of facilities of a municipality or, in some cases, from the
proceeds of a special excise or other specific revenue source. Although the
principal security behind these bonds varies widely, many provide additional
security in the form of a debt service reserve fund whose monies may also be
used to make principal and interest payments on the issuer's obligations.
Industrial development revenue bonds are a specific type of revenue bond backed
by the credit and security of a private user and therefore investments in these
bonds have more potential risk. Although nominally issued by municipal
authorities, industrial development revenue bonds are generally not secured by
the taxing power of the municipality but are secured by the revenues of the
authority derived from payments by the industrial user.
<PAGE>
Commercial paper consists of short-term (usually one to 180 days)
unsecured promissory notes issued by corporations in order to finance their
current operations.
Corporate debt obligations are bonds and notes issued by corporations and
other business organizations, including business trusts, in order to finance
their long-term credit needs.
Money Market refers to the marketplace composed of the financial
institutions which handle the purchase and sale of liquid, short-term,
high-grade debt instruments. The money market is not a single entity, but
consists of numerous separate markets, each of which deals in a different type
of short-term debt instrument. These include U.S. government securities,
commercial paper, certificates of deposit and bankers' acceptances, which are
generally referred to as money market instruments.
Portfolio Securities Loans: The Trust, on behalf of each of the Funds, may
lend limited amounts of its portfolio securities (not to exceed 20% of a
particular Fund's total assets) to broker-dealers or other institutional
investors. Management of the Trust understands that it is the current view of
the staff of the SEC that the Funds are permitted to engage in loan transactions
only if the following conditions are met: (1) the applicable Fund must receive
100% collateral in the form of cash or cash equivalents, e.g., U.S. Treasury
bills or notes, from the borrower; (2) the borrower must increase the collateral
whenever the market value of the securities (determined on a daily basis) rises
above the level of the collateral; (3) the Trust must be able to terminate the
loan after notice; (4) the applicable Fund must receive reasonable interest on
the loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest or other distributions on the securities loaned and any
increase in market value; (5) the applicable Fund may pay only reasonable
custodian fees in connection with the loan; (6) voting rights on the securities
loaned may pass to the borrower; however, if a material event affecting the
investment occurs, the Trust must be able to terminate the loan and vote proxies
or enter into an alternative arrangement with the borrower to enable the Trust
to vote proxies. Excluding items (1) and (2), these practices may be amended
from time to time as regulatory provisions permit.
Repurchase Agreements: A repurchase agreement is a transaction in which a
Fund purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. A Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. In the opinion of
management this risk is not material; if the seller defaults, the underlying
security constitutes collateral for the seller's obligations to
<PAGE>
pay. This collateral will be held by the custodian for the Trust'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 particular Fund would suffer a loss.
Revenue Anticipation Notes are issued in expectation of receipt of other
kinds of revenue, such as federal revenues available under the Federal Revenue
Sharing Program.
Reverse Repurchase Agreements: Transactions where a Fund temporarily
transfers possession of a portfolio security to another party, such as a bank or
broker-dealer, in return for cash, and agrees to buy the security back at a
future date and price. The use of reverse repurchase agreements will create
leverage, which is speculative. Reverse repurchase agreements are borrowings
subject to the Funds' investment restrictions applicable to that activity. The
Trust will enter into reverse repurchase agreements solely for the purpose of
obtaining funds necessary for meeting redemption requests. The proceeds received
from a reverse repurchase agreement will not be used to purchase securities for
investment purposes.
Short-Term Discount Notes (tax-exempt commercial paper) are promissory
notes issued by municipalities to supplement their cash flow. The ratings A-1
and P-1 are the highest commercial paper ratings assigned by S&P and Moody's,
respectively.
Tax Anticipation Notes are to finance working capital needs of
municipalities and are issued in anticipation of various seasonal tax revenues,
to be payable from these specific future taxes.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Funds will not benefit from insurance from the
Federal Deposit Insurance Corporation.
U.S. government securities are debt securities (including bills, notes,
and bonds) issued by the U.S. Treasury or issued by an agency or instrumentality
of the U.S. ^ government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
the Fannie Mae, Government National Mortgage Association, the Federal Farm
Credit Bank, and the Federal Home Loan Bank. Although all obligations of
agencies, authorities and instrumentalities are not direct obligations of the
U.S. Treasury, payment of the interest and principal on these obligations may be
backed directly or indirectly by the U.S. government. This support can range
from the backing of the full faith and credit of the United States to U.S.
Treasury guarantees, or to the backing solely of the issuing
<PAGE>
instrumentality itself. In the case of securities not backed by the full faith
and credit of the United States, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the United States itself in the event the
agency or instrumentality does not meet its commitments.
Ratings of Municipal and Corporate Debt Obligations
The four highest ratings of Moody's and S&P's for municipal and corporate
debt obligations are Aaa, Aa, A and Baa and AAA, AA, A and BBB, respectively.
Moody's. The characteristics of these debt obligations rated
by Moody's are generally as follows:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to the Aa rating classification. The modifier 1
indicates a ranking for the security in the higher end of this rating
category; the modifier 2 indicates a mid- range ranking; and the modifier
3 indicates a ranking in the lower end of this rating category.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in
the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
<PAGE>
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG"). This distinction is in
recognition of the difference between short-term credit and long-term credit. A
short-term rating may also be assigned on an issue having a demand feature. Such
ratings are designated as VMIG. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon demand rather than fixed maturity dates and
payment relying on external liquidity.
MIG 1/VMIG 1 -- Notes and loans bearing this designation are of the best
quality, enjoying strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the
market for refinancing, or both.
MIG 2/VMIG 2 -- Notes and loans bearing this designation are of high
quality, with margins of protection ample although not so large as in the
preceding group.
S&P. The characteristics of these debt obligations rated by S&P are
generally as follows:
AAA -- This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA -- Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from AAA issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
S&P ratings for short-term notes are as follows:
SP-1 -- Very strong capacity to pay principal and interest.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
<PAGE>
A debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
Ratings of Commercial Paper
Description of Moody's commercial paper ratings. Among the factors
considered by Moody's Investors Services, Inc. in assigning commercial paper
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
the risks which may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4) liquidity; (5)
amount and quality of long-term debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative differences in strength and
weakness in respect to these criteria would establish a rating of one of three
classifications; P-1 (Highest Quality), P-2 (Higher Quality) or P-3 (High
Quality).
Description of S&P's commercial paper ratings. An S&P commercial paper
rating is a current assessment of the likelihood of timely payment of debt
having an original maturity of no more than 365 days. Ratings are graded into
four categories, ranging from "A" for the highest quality obligations to "D" for
the lowest.
The "A" categories are as follows:
A -- Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2, and 3 to indicate the relative degree of
safety.
A-1 -- This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong.
A-2 -- Capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as high as
for issues designated A-1.
A-3 -- Issues carrying this designation have a satisfactory capacity
for timely payment. They are, however, somewhat more vulnerable to
the adverse effects of changes in circumstances than obligations
carrying the higher designations.
<PAGE>
Investment Adviser
INVESCO Capital Management, Inc.
Distributor
INVESCO Services, Inc.
Transfer Agent
INVESCO Funds Group, Inc.
Custodian
United Missouri Bank of Kansas City, N.A.
Independent Accountants
Price Waterhouse LLP
Denver, Colorado
<PAGE>
PROSPECTUS
INVESCO TREASURER'S SERIES TRUST
INVESCO TREASURER'S MONEY MARKET RESERVE FUND
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
May 1, 1997
<PAGE>
INVESCO TREASURER'S SERIES TRUST
INVESCO TREASURER'S MONEY MARKET RESERVE FUND
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
7800 East Union Avenue
Denver, Colorado 80237
Telephone: 404/892-0896
800/241-5477
INVESCO Treasurer's Series Trust (the "Trust") is an open-end management
investment company presently consisting of four separate funds, each of which
represents a separate portfolio of investments. This Statement of Additional
Information relates to the INVESCO Treasurer's Money Market Reserve Fund and
INVESCO Treasurer's Tax-Exempt Reserve Fund (the "Funds"), two portfolios which
are designed especially for treasurers and financial officers of corporations,
financial institutions and fiduciary accounts. This Statement of Additional
Information describes the operations of each of the Funds. Each of the Funds has
separate investment objectives and investment policies.
INVESCO CAPITAL MANAGEMENT, INC.
Investment Adviser
INVESCO SERVICES, INC.
Distributor
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus but should be read
in conjunction with the Funds' current Prospectus (dated May 1, 1997). Please
retain this Statement of Additional Information for future reference. The
Prospectus is available from INVESCO Services, Inc., 1315 Peachtree Street,
N.E., Atlanta, Georgia 30309.
May 1, 1997
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVES AND POLICIES......................................... 3
OFFICERS AND TRUSTEES...................................................... 4
THE ADVISORY AGREEMENT..................................................... 10
THE DISTRIBUTOR............................................................ 13
TAX INFORMATION............................................................ 14
BROKERAGE AND PORTFOLIO TRANSACTIONS....................................... 15
CALCULATION OF YIELD....................................................... 17
MISCELLANEOUS.............................................................. 18
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INVESTMENT OBJECTIVES AND POLICIES
Reference is made to "Investment Objectives and Policies" in the
Prospectus for a discussion of the investment objectives and policies of the
Funds. In addition, set forth below is certain further information relating to
the Tax-Exempt Fund.
Tax-Exempt Fund
In order to enhance the liquidity, stability or quality of a municipal
obligation, the Tax-Exempt Fund may acquire a right to sell the obligation to
another party at a guaranteed price approximating par value, either on demand or
at specified intervals. The right to sell may form part of the obligation or be
acquired separately by the Tax-Exempt Fund. These rights may be referred to as
demand features, standby commitments or puts, depending on their characteristics
(collectively referred to as "Standby Commitments"), and may involve letters of
credit or other credit support arrangements supplied by domestic or foreign
banks supporting the other party's ability to purchase the obligation from the
Tax-Exempt Fund. In considering whether an obligation meets the Tax-Exempt
Fund's quality standards, the Fund may look to the creditworthiness of the party
providing the right to sell or to the quality of the obligation itself.
These transactions improve portfolio liquidity by making available
same-day settlements on sales of portfolio securities. The Tax-Exempt Fund may
engage in such transactions subject to any limitations contained in the rules
under the Investment Company Act of 1940. A Standby Commitment is a right
acquired by the Fund, when it purchases a municipal obligation from a broker,
dealer or other financial institution ("seller"), to sell up to the same
principal amount of such securities back to the seller, at the Fund's option, at
a specified price. The exercise by the Tax-Exempt Fund of a Standby Commitment
is subject to the ability of the other party to fulfill its contractual
commitment.
Standby Commitments acquired by the Tax-Exempt Fund will have the
following features: (1) they will be in writing and will be physically held by
the Fund's custodian; (2) the Fund's rights to exercise them will be
unconditional and unqualified; (3) they will be entered into only with sellers
which in the Adviser's opinion present a minimal risk of default; (4) although
Standby Commitments will not be transferable, municipal obligations purchased
subject to such commitments may be sold to a third party at any time, even
though the commitment is outstanding; and (5) their exercise price will be (i)
the Fund's acquisition cost (excluding the cost, if any, of the Standby
Commitment) of the municipal obligations which are subject to the commitment
(excluding any accrued interest which the Fund paid on their acquisition), less
any amortized market premium or plus any amortized market or original issue
discount during the period the Fund owned the securities, plus (ii) all interest
accrued on the securities since the last interest payment date.
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The Trust, on behalf of the Tax-Exempt Fund, expects that Standby
Commitments generally will be available without the payment of any direct or
indirect consideration. However, if necessary or advisable, the Tax-Exempt Fund
will pay for Standby Commitments, either separately in cash or by paying a
higher price for portfolio securities which are acquired subject to the
commitments.
It is difficult to evaluate the likelihood of use or the potential benefit
of a Standby Commitment. Therefore, it is expected that the Trustees of the
Trust will determine that Standby Commitments ordinarily have a "fair value" of
zero, regardless of whether any direct or indirect consideration was paid. When
the Tax-Exempt Fund has paid for a Standby Commitment, its cost will be
reflected as unrealized depreciation for the period during which the commitment
is held.
Management of the Trust understands that the Internal Revenue Service (the
"Service") has issued a favorable revenue ruling to the effect that, under
specified circumstances, a registered investment company will be the owner of
tax-exempt municipal obligations acquired subject to a put option. The Service
has also issued private letter rulings to certain taxpayers (which do not serve
as precedent for other taxpayers) to the effect that tax-exempt interest
received by a regulated investment company with respect to such obligations will
be tax-exempt in the hands of such company and may be distributed to
shareholders as exempt-interest dividends. The Service has subsequently
announced that it will not ordinarily issue advance ruling letters as to the
identity of the true owner of property in cases involving the sale of securities
or participation interests therein if the purchaser has the right to cause the
security, or the participation interest therein, to be purchased by either the
seller or a third party. The Tax-Exempt Fund intends to take the position that
it is the owner of any municipal obligations acquired subject to a Standby
Commitment and that tax-exempt interest earned with respect to such municipal
obligations will be tax-exempt in its hands. There is no assurance that Standby
Commitments will be available to the Fund nor has the Fund assumed that such
commitments would continue to be available under all market conditions.
OFFICERS AND TRUSTEES
Listed below are the Trustees and executive officers of the Trust,
together with their principal occupations during the past five years. Each
person whose name and title is followed by an asterisk is an "interested person"
of the Trust within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act").
CHARLES W. BRADY,*+ Chairman of the Board of Trustees. Chief
Executive Officer and Director of AMVESCO PLC, London, England, and
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of various subsidiaries thereof. Chairman of the Board of the
INVESCO Advisor Funds, Inc. Address: 1315 Peachtree Street, N.E.
Atlanta, Georgia 30309. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board of Trustees.
Vice Chairman of the INVESCO Advisor Funds, Inc. Formerly,
Chairman of the Executive Committee and Chairman of the Board of
Security Life of Denver Insurance Company, Denver, Colorado and
former Midwestern United Life Insurance Company. Director of ING
American Holdings Company and First ING Life Insurance Company of
New York. Address: Security Life Center, 1290 Broadway, Denver,
Colorado 80203. 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); formerly,
member of the faculties of the Harvard Business School and the
Sloan School of Management of MIT; Director of the INVESCO Advisor
Funds, Inc. 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 30303-3083. 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.
Director of the INVESCO Advisor Funds, Inc. Address: 1775 Sherman
Street, #1000, Denver, Colorado 80203. 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. Director of the INVESCO Advisor
Funds, Inc. Address: 7608 Glen Albens Circle, Dallas, Texas
75225. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Trustee. Financial Consultant;
Assistant Treasurer of Colt Industries Inc., New York, New York,
from 1966 to 1988. Director of the INVESCO Advisor Funds, Inc.
Address: 15 Sterling Road, Armonk, New York 10504. Born: August
1, 1923.
HUBERT L. HARRIS, JR.,* Trustee. Chairman (since May 1996)
and President (January 1990 to April 1996) of INVESCO Services,
Inc. Director of AMVESCO PLC and Chief Executive Officer of
INVESCO Individual Services Group. Chairman of the Board of The
Global Health Sciences Fund. Member of the Executive Committee of
the Alumni Board of Trustees of Georgia Institute of Technology.
Address: 1315 Peachtree Street, N.E., Atlanta, Georgia. Born: July
15, 1943.
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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. Director of the INVESCO Advisor Funds, Inc. Address: 4080
North Circulo Manzanillo, Tucson, Arizona 85715. 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 Corp. and Citizens and
Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential
Trust. Director of the INVESCO Advisor Funds, Inc. Address: 7
Piedmont Center, Suite 100, Atlanta, GA. Born: September 14, 1930.
GEORGE S. ROBINSON, JR.,+ President and Chief Accounting and
Financial Officer. President of the Trust since its inception.
Since January 1, 1987, Mr. Robinson has been an employee of the
Adviser and of the Distributor. From August 1986 through December
1987 he was a Vice President of Citicorp Investment Bank. For more
than five years prior to that time, Mr. Robinson served in various
capacities in the securities industry including that of Investment
Officer of Colonial Life and Accident Insurance Company. Address:
1315 Peachtree Street, N.E., Atlanta, Georgia 30309. Born: July
26, 1943.
TONY D. GREEN, Secretary and Treasurer. Mr. Green has served
as Treasurer and Secretary since June 1995. He also serves as
Secretary and Treasurer of INVESCO Advisor Funds, Inc. since 1996
and Senior Vice President of INVESCO Services, Inc. since 1993.
Formerly, Principal for Mutual Funds Operations at D. Jones & Co.
Address: 1355 Peachtree Street, N.E., Atlanta, Georgia 30309.
Born: March 1, 1947.
Messrs. Brady and Deering are Chairman and Vice Chairman of the Board,
respectively, and Messrs. Andrews, Baker, Budner, Chabris, King and McIntyre are
directors or trustees of the following investment companies: INVESCO Advisor
Funds, Inc., 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, and INVESCO Variable
Investment Funds, Inc.
+Member of the executive committee of the Trust. On occasion,
the executive committee acts upon the current and ordinary business
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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.
#Member of the audit committee of the Trust.
*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 Trust.
The Adviser on behalf of the Funds has agreed to pay each of the
disinterested Trustees a regular annual fee of $1,000 per year per Fund plus a
pro-rata share of the remainder of the retainer, plus the Funds' pro-rata share
of a $6,000 quarterly meeting fee for attending regular quarterly Trustees'
meetings. During the fiscal year ended December 31, 1996, the Funds paid no
trustees' fees, as this expense was absorbed and paid by the Adviser pursuant to
its Advisory Agreement with the Trust.
Trustee Compensation
The following table sets forth, for the fiscal year ended December 31,
1996: the compensation paid by the Trust to its eight 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 Funds Group, Inc., INVESCO Advisor
Funds, Inc., the Trust, and The Global Health Sciences Fund (collectively, the
"INVESCO Complex") (49 funds in total) to these directors for services rendered
in their capacities as directors or trustees during the year ended December 31,
1996.
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Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued Annual INVESCO
Name of Compensa- As Part Benefits Complex
Person, tion From of Trust Upon Re- Paid To
Position Trust(1) Expenses(2) tirement(3) Directors(1)
Fred A.Deering, $ 2,470 $322 $314 $98,850
Vice Chairman of
the Board
Victor L. Andrews 2,432 304 363 84,350
Bob R. Baker 2,437 272 486 84,850
Lawrence H. Budner 2,387 304 363 80,350
Daniel D. Chabris 2,437 347 258 84,850
A. D. Frazier Jr.(4) 2,295 0 0 81,500
Kenneth T. King 2,282 334 284 71,350
John W. McIntyre 2,376 0 0 90,350
------ ------ ----- --------
Total $19,116(5) $1,833 $2,068 $676,450
% of Net Assets 0.0140%(5) 0.0014%(5) .0044%(6)
(1)The vice chairman of the board, the chairmen of the audit, manage-
ment liaison and compensation committees, and the members of the executive
and valuation committees each receive compensation for serving in such
capacities in addition to the compensation paid to all independent trustees.
(2)Represents estimated benefits accrued with respect to the Defined
Benefit Deferred Compensation Plan discussed below, and not compensation
deferred at the election of the trustees.
(3)These figures represent the Trust's share of the estimated annual
benefits payable by the INVESCO Complex (excluding The Global Health Sciences
Fund, which does not participate in any retirement plan) upon the trustee's
retirement, calculated using the current method of allocating director/trustee
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72, or the extended retirement date referred to
hereinafter, and that the basic retainer payable to the directors will be
adjusted periodically for inflation, for increases in the number of funds in the
INVESCO Complex, and for other reasons during the period in which retirement
benefits are accrued on behalf of the respective directors/trustees. This
results in lower estimated benefits for directors/trustees who are closer to
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retirement and higher estimated benefits for directors/trustees who are
further from retirement. With the exception of Messrs. Frazier and McIntyre,
each of these directors/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)Mr. Frazier resigned as a Trustee of the Trust effective February 4,
1997. Effective November 1, 1996, Mr. Frazier was employed by AMVESCO PLC, a
company affiliated with INVESCO. Because it was possible that Mr. Frazier would
be employed with AMVESCO PLC, he was deemed to be an "interested person" of the
Trust and of the other funds in the INVESCO Complex effective May 1, 1996.
Effective November 1, 1996, Mr. Frazier ceased to receive any trustee's fees or
other compensation from the Trust or other funds in the INVESCO Complex for his
service as a director.
(5)Total as a percentage of the Trust's net assets as of December 31, 1996.
(6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1996.
Messrs. Bishop and Brady, as "interested persons" of the Trust and of the
other funds in the INVESCO Complex, receive compensation as officers or
employees of INVESCO or its affiliated companies, and do not receive any
trustee's fees or other compensation from the Trust or the other funds in the
INVESCO Complex for their service as directors.
The boards of directors/trustees of the mutual funds managed by INVESCO
Funds Group, Inc., INVESCO Advisor Funds, Inc. and the Trust 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 Investment Company Act of 1940) and who
has served for at least five years (a "qualified director") is entitled to
receive, upon retiring from the boards at the mandatory retirement age of 72 (or
the retirement age of 73 to 74, if the retirement date is extended by the board
for one or two years, but less than three years), continuation of payments for
one year (the "first year retirement benefit") of the annual basic retainer
payable by the funds to the qualified director at the time of his retirement or
disability (the "basic retainer"). Commencing with any such director's second
year of retirement, and commencing with the first year of retirement of a
director whose retirement has been extended by the board for three years, a
qualified director shall receive quarterly payments at an annual rate equal to
40% of the basic retainer. These payments will continue for the remainder of the
qualified director's life or ten years, whichever is longer (the "reduced
retainer payments"). If a qualified director dies or becomes disabled after age
72 and before age 74 while still a director of the funds, the first year
retirement benefit and the reduced retainer payments will be made to him or to
his beneficiary
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or estate. If a qualified director becomes disabled or dies either prior to age
72 or during his 74th year while still a director of the funds, the director
will not be entitled to receive the first year retirement benefit; however, the
reduced retainer payments will be made to his beneficiary or estate. The plan is
administered by a committee of three directors who are also participants in the
plan and one director who is not a plan participant. The cost of the plan will
be allocated among the INVESCO, INVESCO Advisor and Treasurer's Series funds in
a manner determined to be fair and equitable by the committee. The Trust is not
making any payments to directors 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 which is comprised of four 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 the Adviser 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.
THE ADVISORY AGREEMENT
The investment adviser to the Trust is INVESCO Capital Management, Inc., a
Delaware corporation ("ICM" or the "Adviser"), which has its principal office at
1315 Peachtree Street, N.E., Suite 300, Atlanta, Georgia 30309. The Adviser also
has an advisory office in Coral Gables, Florida and a marketing and client
service office in San Francisco, California.
ICM is an indirect, wholly-owned subsidiary of AMVESCO 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 as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., thus creating one of
the largest independent investment management businesses in the world with
approximately $165 billion in assets under management. Subject to obtaining
shareholder approval at its regular Annual Shareholder Meeting, the board of
directors of AMVESCO PLC has concluded that the corporate name should be changed
to AMVESCAP PLC effective May 8, 1997. AMVESCO PLC's other North American
subsidiaries include the following:
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--INVESCO Funds Group, Inc. of Denver, Colorado, serves as an investment
adviser to INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Emerginq 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, and INVESCO Variable
Investment Funds, Inc. INVESCO Funds Group, Inc. is the sole shareholder of
INVESCO Trust Company, whose primary business is to provide investment advisory
and research services.
--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. (formerly Gardner and
Preston Moss, 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 of Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for AMVESCO PLC's clients
worldwide. Clients include corporate plans, public pension funds as well as
endowment and foundation accounts.
--A I M Advisors, Inc. of Houston, Texas provides investment
advisory and administrative services for retail and institutional
mutual funds.
--A I M Capital Management, Inc. of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-advisor 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 AMVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
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As indicated in the Prospectus, ICM permits 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 ICM and its North American affiliates. The policy requires
officers, inside directors, investment and other personnel of ICM and its North
American affiliates to pre-clear all transactions in securities not otherwise
exempt under the policy. Requests for trading authority will be denied if, 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 ICM and
its North American affiliates to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The provisions of this policy are administered by and subject to
exceptions authorized by ICM.
Under its Investment Advisory Agreement dated as of February 28, 1997 (the
"Agreement") with the Trust, the Adviser will, subject to the supervision of the
Trustees and in conformance with the stated policies of the Trust and of the
Funds, manage the investment operations and portfolios of the Funds. In this
regard, it will be the responsibility of the Adviser not only to make investment
decisions for the Funds, but also to place the purchase and sale orders for the
portfolio transactions of the Funds. (See "Brokerage and Portfolio
Transactions.") The Adviser is also responsible for furnishing to the Trust, at
the Adviser's expense, the services of persons believed to be competent to
perform all executive and other administrative functions required by the Trust
to conduct its business effectively, as well as the offices, equipment and other
facilities necessary for its operations. Such functions include the maintenance
of the Trust's accounts and records, and the preparation of all requisite
corporate documents such as tax returns and reports to the SEC and shareholders.
Under the Agreement, the Adviser is responsible for the payment of all of
the Funds' expenses, other than payment of advisory fees, taxes, interest and
brokerage commissions, if any. The expenses to be borne by the Adviser include,
without limitation, organizational expenses, compensation of its officers and
employees and expenses of its trustees, legal and auditing expenses, the fees
and expenses of the Funds' custodian and transfer agent, and the expenses of
printing and mailing reports and notices to shareholders. For the services to be
rendered and the expenses to be assumed by the Adviser under the Agreement, the
Trust will pay to the Adviser an advisory fee which will be computed daily and
paid as of the last day of each month on the basis of each Fund's daily net
asset value, using for each daily
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calculation the most recently determined net asset value of the Funds. (See
"Computation of Net Asset Value.") On an annual basis, the advisory fee paid by
each Fund is equal to 0.25% of the Fund's average net asset value.
The Agreement was approved by the shareholders of each Fund on January 31,
1997. The Agreement will continue in effect from year to year provided such
continuance is specifically approved at least annually (i) by the vote of a
majority of each Fund's outstanding voting securities (as defined in the first
paragraph under "Investment Restrictions" in the Prospectus) or by the Trustees
of the Trust and (ii) by the vote of a majority of the Trustees of the Trust who
are not "interested persons" (as such term is defined by the 1940 Act) of the
Trust or the Adviser. The Agreement is terminable on 60 days' written notice by
either party thereto and will terminate automatically if assigned.
The investment advisory services of the Adviser to the Trust are not
exclusive and the Adviser is free to render investment advisory services to
others, including other investment companies.
For the fiscal year ended December 31, 1996, the Trust paid the Adviser an
advisory fee of $396,023, of which $337,832 was allocated to the Money Fund and
$58,191 was allocated to the Tax- Exempt Fund, representing 0.25% of the Fund's
average net assets. For the fiscal year ended December 31, 1995, the Trust paid
the Adviser an advisory fee of $393,030, of which $339,497 was allocated to the
Money Fund, and $53,533 was allocated to the Tax- Exempt Fund, representing
0.25% of the Fund's average net assets. For the fiscal year ended December 31,
1994, the Trust paid the Adviser an advisory fee of $338,683, of which $280,355
was allocated to the Money Fund, and $58,328 was allocated to the Tax-Exempt
Fund, representing 0.25% of each of the Fund's net assets.
THE DISTRIBUTOR
INVESCO Services, Inc., the Distributor, is the principal underwriter of
the Trust under a Distribution Agreement dated as of February 28, 1997. All of
the Distributor's outstanding shares of voting stock are owned by the Adviser.
The Distributor's principal office is located at 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309.
TAX INFORMATION
Federal Taxes
Each Fund is treated as a separate entity for federal income tax purposes.
In order to continue to qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code as amended (the "Code"), a Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of taxable net
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investment income and net short-term capital gain) plus, in the case of the
Tax-Exempt Fund, its net interest income excludable from gross income under
section 103(a) of the Code, and must meet several additional requirements. With
respect to each Fund, these requirements include the following: (1) the Fund
must derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of securities, or other income derived with respect to its
business of investing in securities; (2) the Fund must derive less than 30% of
its gross income each taxable year from the sale or other disposition of
securities held for less than three months; (3) at the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities, securities of
other RICs and other securities, with these other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. government securities (or the securities of other
RICs) of any one issuer.
The Tax-Exempt Fund intends to continue to qualify to pay exempt-interest
dividends under section 852(b)(5) of the Code. In order to qualify to pay
exempt-interest dividends in any taxable year, at the close of each quarter of
such taxable year, at least 50% of the value of the total assets of the Fund
must be invested in state, municipal and other obligations the interest on which
is exempt under section 103(a) of the Code. No assurance can be given that the
Tax-Exempt Fund will qualify to pay exempt-interest dividends each year. For
each year that this Fund is qualified to pay exempt-interest dividends, it will
designate any dividends, or portion thereof, being paid as exempt-interest
dividends in a written notice to its shareholders. The proportion of each
dividend that will be designated as an exempt-interest dividend will be the same
as the proportion of the income from tax-exempt obligations (net of certain
disallowed deductions), in the taxable year bears to the dividends paid in the
taxable year. Accordingly, with respect to any particular dividend, the portion
designated as an exempt-interest dividend may be substantially different than
the portion of the Tax-Exempt Fund's income that is income from tax-exempt
obligations (net of certain disallowed deductions) for the period covered by
such dividend. The notice will be mailed approximately thirty (30) days, but no
later than sixty (60) days, after the close of the Tax-Exempt Fund's tax year.
Dividends designated as exempt-interest dividends are excludable from the gross
income of the shareholder under Section 103(a) of the Code.
Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by private activity bonds ("PABs")
or industrial development bonds ("IDBs") should consult their tax advisers
before purchasing shares of the Tax-Exempt Fund because, for users of certain of
these facilities, the interest on such bonds is not exempt from federal income
tax.
<PAGE>
For these purposes, the term "substantial user" is defined generally to include
a "non-exempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of PABs or IDBs.
If the Tax-Exempt Fund invests in any instruments that generate taxable
income, under the circumstances described in the Prospectus, distributions of
the interest earned thereon will be taxable to its shareholders as ordinary
income to the extent of its earnings and profits. Moreover, if that Fund
realizes capital gain as a result of market transactions, any distribution of
that gain will be taxable to its shareholders.
Since the Trust expects, but cannot guarantee, to maintain a constant
$1.00 per share net asset value, upon the redemption of shares of a Fund held by
a non-tax-exempt investor, such investor may realize a capital gain or loss
equal to the difference between the redemption price received by the investor
and the adjusted basis of the shares redeemed. Such capital gain or loss,
generally, will constitute short-term capital gain or loss if the redeemed Fund
shares were held for one year or less, and long-term capital gain or loss if the
redeemed Fund shares were held for more than one year. Any short-term capital
loss realized upon the redemption of shares of the Tax-Exempt Fund within six
months from the date of their purchase will be disallowed to the extent of any
exempt-interest dividends received during such six month period, although the
period may be reduced under Treasury Regulations to be issued.
Each Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary (taxable) income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
BROKERAGE AND PORTFOLIO TRANSACTIONS
The Adviser will arrange for the placement of orders and the execution of
portfolio transactions for each of the Funds. Portfolio securities will be
purchased or sold to parties acting as either principal or agent. Most of the
securities acquired by the Funds normally will be purchased directly from the
issuer or from an underwriter acting as principal. Other purchases will be
placed with those dealers, acting as agents, whom the Adviser believes will
provide the best execution of the transaction at prices most favorable to the
Funds. Usually no brokerage commissions (as such) are paid by the Funds for such
agency transactions, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to the underwriters
of newly-issued securities normally include a concession paid by the issuer to
the underwriter. Purchases of after-market securities from dealers normally are
executed at a price between bid and asked prices.
<PAGE>
Subject to the primary consideration of best execution at prices most
favorable to the Funds, the Adviser may in the allocation of such investment
transaction business consider the general research and investment information
and other services provided by dealers, although it has adopted no formula for
such allocation. These research and investment information services make
available to the Adviser for its analysis and consideration as investment
adviser to the Funds and its other accounts, the views and information of
individuals and research staffs of many securities firms. Although such
information may be a useful supplement to the Adviser's own investment
information, the value of such research and services is not expected to reduce
materially the expenses of the Adviser in the performance of its services under
the Investment Advisory Agreement and will not reduce the advisory fee payable
to the Adviser by the Funds.
The Adviser may follow a policy of considering sales of shares of the
Trust as a factor in the selection of dealers to execute portfolio transactions,
subject to the primary objective of best execution discussed above.
On occasions when the Adviser deems the purchase or sale of a security to
be in the best interest of the Funds as well as other customers, the Adviser, to
the extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold for such parties in order to obtain best
execution and lower brokerage commissions. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner it considers to be most
equitable and consistent with its fiduciary obligations to all such customers,
including the Funds. In some cases the aggregation of securities to be sold or
purchased could have a detrimental effect on the price of the security insofar
as each Fund is concerned. However, in other cases, the ability of a Fund to
participate in volume transactions will be beneficial to such Fund.
No brokerage commissions on purchases and sales of the Funds' securities
were incurred for the fiscal years ended December 31, 1996, 1995 or 1994.
At December 31, 1996, the Trust's Funds held securities of its regular
brokers or dealers, or their parents, as follows:
Value of
Securities at
Fund Broker or Dealer December 31, 1996
- --------------- -------------------------- ------------------
Money Market United Missouri Bank $ 331,745.65
Reserve Fund Money Market Fiduciary
Tax Exempt Societe Generale Securities $1,000,000.00
Reserve Fund
<PAGE>
CALCULATION OF YIELD
From time to time a Fund may advertise its "yield" and "effective yield."
BOTH YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO
INDICATE FUTURE PERFORMANCE. The "yield" of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period
will be stated in the advertisement). This income is then "annualized." That is,
the amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment.
Each Fund normally computes its yield by determining for a seven-day base
period the net change, exclusive of capital changes, for a hypothetical
pre-existing account having a balance of one share at the beginning of the base
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, multiplying the
result by (365/7), with the resulting yield figure carried to at least the
nearest hundredth of one percent. Each Fund may also compute a standardized
effective yield. This is computed by compounding the base period return, which
is done by adding one to the base period return, raising the sum to a power
equal to 365 divided by seven and subtracting one from the result. The yield
paid by the Funds will result in payment of taxable interest to the Fund
shareholders. At December 31, 1996 the Money Reserve Fund's current and
effective yields were 5.40% and 5.55%, respectively; the Tax-Exempt Reserve
Fund's current and effective yields were 3.95% and 4.02%, respectively.
MISCELLANEOUS
Principal Shareholders
As of April 1, 1997, the following entities were known by the Money Fund
to be record and beneficial owners of five percent or more of the outstanding
shares of that Fund.
Name and Address of Percent
Beneficial Owner Number of Shares of Class
- -------------------------- ------------------ ----------
Fruehauf Trailer Corp. 81,484,979.8300 47.174
P.O. Box 44913
Attn: Ms. Geraldine Tigner
Indianapolis, IN 46244
<PAGE>
INVESCO Retirement Trust 29,394,459.0800 17.017
GIC Fund
P.O. Box 2040
Denver, CO 80201
INVESCO Capital Management, Inc. 9,863,752.9200 5.710
1315 Peachtree St. NE, Suite 300
Atlanta, GA 30309
As of April 1, 1997, the following entities were known by the Tax-Exempt
Fund to be record and beneficial shareholders of five percent or more of the
outstanding shares of that Fund.
Name and Address of Percent
Beneficial Owner Number of Shares of Class
- ------------------------ ---------------- ----------
Charles E. Sward 3,340,132.8600 17.660
1837 Cedar Canyon Drive
Atlanta, GA 30345
Alice H. Richards 2,697,218.4500 14.261
P.O. Box 400
Carrollton, GA 30117
Thomas L. Shields, Jr. 2,338,451.6200 12.628
1750 W. Sussex
Atlanta, GA 30306
J. Rex Fuqua 1,380,962.3800 7.301
c/o Fuqua Capital Corp.
1201 W. Peachtree St. NE
Atlanta, GA 30309
<PAGE>
Nationsbank of TX, Cust. 1,052,397.3200 5.564
FBO John Morgan
Attn: SAS
P.O. Box 831575
Dallas, TX 75283
As of April 9, 1997, officers and trustees of the Trust, as a group,
beneficially owned less than 1% of the Funds' outstanding shares and less than
1% of any portfolio's outstanding shares.
Net Asset Value
The net asset value per share of each of the Funds is determined daily as
of 11:30 a.m. (New York time), after declaration of the dividend, on each day
that the New York Stock Exchange is open for trading and at such other times
and/or on such other days as there is sufficient trading in the portfolio
securities of the Fund that might materially affect its net asset value. Net
asset value per share is determined by adding the value of all assets of the
Fund, deducting its actual and accrued liabilities, and dividing by the number
of shares outstanding.
Each Fund seeks to maintain a constant net asset value of $1.00 per share.
There can be no assurance that the Funds will be able to maintain a net asset
value of $1.00 per share. In order to accomplish this goal, each Fund intends to
utilize the amortized cost method of valuing portfolio securities. By using this
method, each Fund seeks to maintain a constant net asset value of $1.00 per
share despite minor shifts in the market value of its portfolio securities.
Under the amortized cost method of valuation, securities are valued at cost on
the date of purchase. Thereafter, the value of the security is increased or
decreased incrementally each day so that at maturity any purchase discount or
premium is fully amortized and the value of the security is equal to its
principal. The amortized cost method may result in periods during which the
amortized cost value of the securities may be higher or lower than their market
value, and the yield on a shareholder's investment may be higher or lower than
that which would be recognized if the net asset value of a Fund's portfolio was
not constant and was permitted to fluctuate with the market value of the
portfolio securities. It is believed that any such differences will normally be
minimal. During periods of declining interest rates, the quoted yield on shares
of each Fund may tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio instruments. Thus, if
the use of amortized cost by a Fund resulted in a lower aggregate net asset
value on a particular day, a prospective investor in the Fund would be able to
obtain a somewhat higher yield if he or she purchased shares of the Fund on that
day, than would result from investment in a fund utilizing solely market values.
The converse would apply in a period of rising interest rates.
<PAGE>
The Trustees of the Trust have undertaken to establish procedures
reasonably designed, taking into account current market conditions and each
Fund's investment objectives, to stabilize, to the extent possible, each Fund's
price per share, as computed for the purposes of sales and redemptions, at
$1.00. Such procedures include review of each Fund's portfolio holdings by the
Adviser or its agent, at such intervals as it deems appropriate, to determine
whether the Fund's net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share based on
amortized cost. If any deviation between the Fund's net asset value based upon
available market quotations or market equivalents and that based upon amortized
cost exceeds 0.5%, the Trustees will promptly consider what action, if any, is
appropriate. The action may include, as appropriate, the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
the applicable Fund's average portfolio maturity; withholding dividends;
reducing the number of shares outstanding; or utilizing a net asset value per
share determined by using available market quotations.
The net asset value per share of the Funds will normally not be calculated
on days that the New York Stock Exchange is closed. These days include New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day.
Redemption of Shares
It is possible that in the future, conditions may exist which would, in
the opinion of the Trustees of the Trust, make it undesirable for a Fund to pay
for redeemed shares in cash. In such cases, the Trustees may authorize payment
to be made in portfolio securities or other property of the applicable Fund.
However, the Trust has obligated itself under the 1940 Act to redeem for cash
all shares of a Fund presented for redemption by any one shareholder 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 valued at fair
market value as determined in good faith by the Trustees. Shareholders receiving
such securities are likely to incur brokerage costs on their subsequent sales of
such securities.
The Custodian
United Missouri Bank of Kansas City, N.A., 928 Grand Avenue, Kansas City,
Missouri 64106, is the custodian of the portfolio securities and cash of the
Funds and maintains certain records on behalf of the Trust and the Funds.
Subject to the Trust's prior approval, the custodian may use the services of
subcustodians for the assets of one or more of the Funds.
<PAGE>
Independent Accountants
Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, serves as
the Trust's independent accountants, providing services which include the audit
of the Trust's annual financial statements, and the preparation of tax returns
filed on behalf of the Trust.
The audited financial statements and the notes thereto as of and for the
year ending December 31, 1996, and the report of Price Waterhouse LLP with
respect to such financial statements, are incorporated by reference from the
Trust's Annual Report to Shareholders for the fiscal year ended December 31,
1996.
Declaration of Trust Provisions
The Declaration of Trust establishing the Trust dated January 27, 1988, 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 Treasurer's Series 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.
As a Massachusetts business trust, the Trust is not required to hold
annual shareholder meetings. However, special meetings may be called for
purposes such as electing or removing trustees, changing fundamental policies or
approving an advisory contract. Pursuant to the Declaration, the holders of at
least 10% of the outstanding shares of a Fund may require the Trust to hold a
special meeting of shareholders for any purpose. The Declaration further
provides that any Trustee of the Trust may be removed, with or without cause, at
any meeting of the shareholders of the Trust by a vote of two-thirds of the
outstanding shares of the Trust.
