PROSPECTUS | September 30, 1999
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YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
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INVESCO TREASURER'S SERIES FUNDS, INC.
(formerly, INVESCO Treasurer's Series Trust)
INVESCO TREASURER'S MONEY MARKET RESERVE FUND
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
TWO NO-LOAD MUTUAL FUNDS DESIGNED FOR INVESTORS SEEKING A HIGH LEVEL OF CURRENT
INCOME, CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF
LIQUIDITY.
TABLE OF CONTENTS
Investment Goals And Strategies...............2
Fund Performance..............................3
Fees And Expenses.............................4
Investment Risks..............................6
Risks Associated With Particular Investments..7
Fund Management...............................8
Portfolio Managers............................8
Potential Rewards.............................9
Share Price...................................9
How To Buy Shares............................10
Your Account Services........................12
How To Sell Shares...........................13
Dividends And Taxes..........................15
Financial Highlights.........................16
[INVESCO ICON]
INVESCO
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] Investment Objectives & Strategies
[ARROW ICON] Potential Investment Risks
[GRAPH ICON] Past Performance & Potential Advantages
[INVESCO ICON] Working With INVESCO
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[KEY ICON] INVESTMENT GOALS AND STRATEGIES
FACTORS COMMON TO BOTH FUNDS
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the
Funds. Together with our affiliated companies, we at INVESCO direct all aspects
of the management and sale of the Funds.
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Funds are money market funds. They invest in "money market" securities,
which are high quality debt securities with a life span or remaining maturity of
397 days or less. The average dollar-weighted maturity of each Fund's portfolio
is 90 days or less.
The Funds are not intended for investors seeking capital appreciation.
While not intended as a complete investment program, either of these Funds may
be a valuable element of your investment portfolio.
INVESTMENT POLICIES APPLICABLE TO BOTH FUNDS
The Funds operate under policies designed to ensure compliance with
specific federal regulations applied to money market funds. These policies
include requirements for:
o maintaining high credit quality of the Funds' investments;
o maintaining a short average portfolio maturity;
o ensuring adequate diversification of both the issuers of the Funds'
investments and the guarantors of those investments, if any; and
o monitoring accurate pricing of the Funds' investments so unfairness
does not result from the use of the amortized cost method to value
those investments.
[ARROW ICON] An investment in either of the Funds is not insured or guaranteed
by the Federal Deposit Insurance Corporation ("FDIC") or any other governmental
agency. Although the Funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in either of the
Funds.
[KEY ICON] INVESCO TREASURER'S MONEY MARKET RESERVE FUND
The Fund invests primarily in short-term securities issued by large
creditworthy corporations, bank and finance companies, and debt securities
issued by the U.S. government. These securities include corporate debt
securities, bank obligations, short-term commercial paper, U.S. government debt,
and repurchase agreements.
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[KEY ICON] INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
The Fund invests primarily in short-term municipal securities issued by
state, county, and city governments. The interest on these securities is
generally exempt from federal income tax, although the interest may be included
in your income if you are subject to the Federal Alternative Minimum Tax. The
interest on these securities may be subject to state and/or local income taxes.
These securities include municipal notes, short-term municipal bonds, and
variable rate debt obligations.
A portion of the Fund's investment portfolio may be invested in short-term
taxable instruments. These may include corporate debt securities, bank
obligations, commercial paper, U.S. government debt, and repurchase agreements.
We seek to manage the Fund so that subtantially all of the income produced is
exempt from federal income tax when paid to you, although we cannot guarantee
this result.
[GRAPH ICON] FUND PERFORMANCE
The bar charts below show each Fund's actual yearly performance for the
years ended December 31 (commonly known as its "total return") over the past
decade. The table below shows average annual returns for various periods ended
December 31, 1998 for each Fund. To obtain a Fund's current 7-day yield
information, please call INVESCO at 1-800-525-8085. The bar charts provide some
indication of the risks of investing in a particular Fund by showing changes in
the year to year performance of each Fund. Remember, past performance does not
indicate how a Fund will perform in the future.
The two charts below contain the following plot points:
<TABLE>
<CAPTION>
TREASURER'S MONEY MARKET RESERVE FUND
ACTUAL ANNUAL TOTAL RETURN(1),(2)
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9.53% 8.39% 6.04% 3.57% 2.92% 4.13% 5.82% 5.30% 5.48% 5.46%
Best Calendar Qtr. 6/89 2.43%
Worst Calendar Qtr. 3/93 0.70%
TREASURER'S TAX-EXEMPT RESERVE FUND
ACTUAL ANNUAL TOTAL RETURN(1),(2)
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
6.53% 6.05% 4.57% 2.88% 2.30% 2.81% 3.90% 3.45% 3.74% 3.49%
Best Calendar Qtr. 6/89 1.70%
Worst Calendar Qtr. 3/93 0.51%
</TABLE>
<PAGE>
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AVERAGE ANNUAL TOTAL RETURN(1)
AS OF 12/31/98
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1 year 5 years 10 years
Treasurer's Money Market Reserve Fund 5.46% 5.24% 5.65%
Treasurer's Tax-Exempt Reserve Fund 3.49% 3.48% 3.96%
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(1)Total return figures include reinvested dividends and include the effect
of each Fund's expenses.
(2)Year-to-date return for Treasurer's Money Market Reserve Fund and Treasurer's
Tax-Exempt Reserve Fund was 2.30% and 1.42%, respectively, as of the calendar
quarter ended June 30, 1999.
FEES AND EXPENSES
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
You pay no fees to purchase Fund shares, to exchange to another INVESCO
fund, or to sell your shares. Accordingly, no fees are paid directly from your
shareholder account. The only Fund costs you pay are annual Fund operating
expenses that are deducted from Fund assets.
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
TREASURER'S MONEY MARKET RESERVE FUND
Management Fees(1)(2) 0.25%
Distribution and Service (12b-1) Fees None
Other Expenses(1) 0.00%
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Total Annual Fund Operating Expenses(1)(2) 0.25%
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TREASURER'S TAX-EXEMPT RESERVE FUND
Management Fees(1)(2) 0.25%
Distribution and Service (12b-1) Fees None
Other Expenses(1) 0.00%
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Total Annual Fund Operating Expenses(1)(2) 0.25%
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(1) Under the Company's investment advisory agreement, the Company's
investment adviser is responsible for the payment of all of the
Company's expenses other than payment of advisory fees, taxes, interest
and brokerage commissions.
(2) Annualized from January 1, 1999 to May 31, 1999, the Funds' current fiscal
year end.
EXAMPLE
This Example is intended to help you compare the cost of investing in the
Funds to the cost of investing in other mutual funds.
The Example assumes that you invested $10,000 in a Fund for the time
periods indicated and then redeemed all of your shares at the end of each
period. The Example also assumes that your investment had a hypothetical 5%
return each year, and assumes that a Fund's expenses remained the same. Although
a Fund's actual costs and performance may be higher or lower, based on these
assumptions your costs would have been:
1 year 3 years 5 years 10 years
Treasurer's Money Market Reserve Fund $26 $80 $141 $318
Treasurer's Tax-Exempt Reserve Fund $25 $80 $141 $318
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[ARROW ICON] INVESTMENT RISKS
BEFORE INVESTING IN A FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including these
Funds, are:
NOT INSURED. Mutual funds are not insured by the FDIC or any other
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its
performance. Investment professionals generally consider money market funds
conservative and safe investments, compared to many other investment
alternatives. However, as with all types of securities investing, investments in
money market funds are not guaranteed, and do present some risk of loss. The
Funds will not reimburse you for any losses.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Funds are designed to be only a part
of your personal investment plan.
YEAR 2000. Many computer systems in use today may not be able to recognize
any date after December 31, 1999. If these systems are not fixed by that date,
it is possible that they could generate erroneous information or fail
altogether. INVESCO has committed substantial resources in an effort to make
sure that its own major computer systems will continue to function on and after
January 1, 2000. Of course, INVESCO cannot fix systems that are beyond its
control. If INVESCO's own systems, or the systems of third parties upon which it
relies, do not perform properly after December 31, 1999, the Funds could be
adversely affected.
In addition, the markets for, or value of, securities in which the Funds
invest may possibly be hurt by computer failures affecting portfolio investments
or trading of securities beginning January 1, 2000. For example, improperly
functioning systems could result in securities trade settlement problems and
liquidity issues, production issues for individual companies and overall
economic uncertainties. Individual issuers may incur increased costs in making
their own systems Year 2000 compliant. The combination of market uncertainty and
increased costs means that there is a possibility that Year 2000 computer issues
may adversely affect the Funds' investments. At this time, it is generally
believed that foreign issuers, particularly those in emerging and other markets,
may be more vulnerable to Year 2000 problems than will be issuers in the U.S.
[ARROW ICON] RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS
You should consider the special factors associated with the policies
discussed below in determiningg the appropriateness of investing in a Fund. See
the Statement of Additional Information for a discussion of additional risk
factors.
INTEREST RATE RISK
Changes in interest rates will change the resale value of debt securites.
When interest rates go up, the market values of previously issued debt
securities generally decline. Also, a Fund's new investments are likely to be in
debt securities paying lower rates than the rest of a Fund's portfolio when
interest rates go down. This reduces the Fund's yield. A weak economy or strong
stock market may cause interest rates to decline.
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CREDIT RISK
The Funds invest in debt instruments, such as notes, bonds and commercial
paper. There is a possibility that the issuers of these instruments will be
unable to meet interest payments or repay principal. Changes in the financial
strength of an issuer may reduce the credit rating of its debt instruments and
may affect their value.
DURATION RISK
Duration is a measure of a debt security's sensitivity to interest rate
changes. Duration of money market securities is usually expressed in terms of
days or months, with longer durations usually more sensitive to interest rate
fluctuations.
OPPORTUNITY RISK
With long-term investment plans, there may be a risk that you are not
taking enough risk, and thus missing the opportunity on other less conservative
but potentially more rewarding investments. The Funds have an investment goal of
current income, not capital appreciation. Therefore the Funds, by themselves,
will not be a suitable investment for people seeking long-term growth for
objectives such as retirement or the funding of a child's college education.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements. It is the
risk that the other party in the transaction will not fulfill its contractual
obligation to complete the transaction with a Fund.
[INVESCO ICON] FUND MANAGEMENT
THE INVESTMENT ADVISER
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT
MANAGEMENT COMPANY THAT MANAGES MORE THAN $296 BILLION IN ASSETS WORLDWIDE.
AMVESCAP IS BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND
SOUTH AMERICA, AND THE FAR EAST.
INVESCO, located at 7800 E. Union Avenue, Denver, Colorado, is the investment
adviser of the Funds. INVESCO was founded in 1932 and manages over $24 billion
for more than 926,831 shareholders of 42 INVESCO mutual funds. INVESCO performs
a wide variety of other services for the Funds, including administrative and
transfer agency functions (the processing of purchases, sales and exchanges of
Fund shares). Prior to June 1, 1999, INVESCO Capital Management, Inc. ("ICM"),
located at 1315 Peachtree Street, N.E., Atlanta, Georgia, was the investment
adviser of the Funds.
A wholly owned subsidiary of INVESCO, INVESCO Distributors, Inc. ("IDI") is
the Funds' distributor and is responsible for the sale of the Funds' shares.
INVESCO, ICM and IDI are subsidiaries of AMVESCAP PLC.
The following table shows the fees the Funds paid to ICM for its advisory
services for the period ended May 31, 1999:
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ADVISORY FEE AS A PERCENTAGE OF AVERAGE
ANNUAL NET ASSETS UNDER MANAGEMENT
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Treasurer's Money Market Reserve Fund 0.25%*
Treasurer's Tax-Exempt Reserve Fund 0.25%*
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*Annualized
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[INVESCO ICON] PORTFOLIO MANAGERS
The following individuals are primarily responsible for the day-to-day
management of each Fund's portfolio holdings:
RICHARD R. HINDERLIE is the porfolio manager of Treasurer's Money Market
Reserve Fund and a vice president of INVESCO. Dick received his M.B.A. from
Arizona State University and his B.A. in Economics from Pacific Lutheren
University.
INGEBORG S. COSBY is the portfolio manager of Treasurer's Tax-Exempt
Reserve Fund and a vice president of INVESCO. Inge joined INVESCO in 1985 and
became portfolio manager of the Fund in 1999. Before joining INVESCO, Inge was a
portfolio manager assistant at First Affiliated Securities, Inc.
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUNDS FOR LONG-TERM CAPITAL GROWTH PURPOSES.
The Funds offer shareholders the potential for monthly payment of daily
income, while maintaining a stable share value, at a level of risk lower than
many other types of investments. Yields on short-term securities tend to be
lower than the yields on longer-term fixed-income securities. The Funds seek to
provide higher returns than other money market funds and the money market in
general, but cannot guarantee that performance.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in a Fund is right for you based
upon your own economic situation, the risk level with which you are comfortable
and other factors. In general, the Funds are most suitable for investors who:
o want to earn income at current money market rates.
o want to preserve the value of their investment.
o do not want to be exposed to a high level of risk.
o are seeking federally tax-exempt income (Treasurer's Tax-Exempt Reserve Fund
only).
You probably do not want to invest in the Funds if you are:
o primarily seeking long-term growth (although the Funds may serve as the cash
equivalent portion of a balanced investment program).
[INVESCO ICON] SHARE PRICE
The value of your Fund shares is not likely to change from $1.00, although
this cannot be guaranteed. This value is known as the Net Asset Value per share,
or NAV. INVESCO determines the value of each investment in each Fund's portfolio
each day that the New York Stock Exchange ("NYSE") is open, at the close of
trading on that exchange (normally 4:00 p.m. Eastern time). Therefore, shares of
the Funds are not priced on days when the NYSE is closed, which generally is on
weekends and national holidays in the U.S.
<PAGE>
THE COMBINATION OF THE AMORTIZED COST METHOD OF VALUATION AND THE DAILY
DECLARATION OF DIVIDENDS MEANS THAT EACH FUND'S NET ASSET VALUE IS EXPECTED TO
BE $1.00 PER SHARE, DESPITE CHANGES IN THE MARKET VALUE OF A FUND'S SECURITIES.
The Funds use the amortized cost method for establishing the value of their
investments. The amortized cost method values securities at their cost at the
time of purchase, and then amortizes the discount or premium to maturity. The
Funds declare dividends daily, based upon the interest earned by the Funds'
investments that day. The combination of the amortized cost method of valuation
and the daily declaration of dividends means that each Fund's net asset value is
expected to be $1.00 per share, despite changes in the market value of a Fund's
securities. However, we cannot guarantee that each Fund's net asset value will
be maintained at a constant value of $1.00 per share.
All purchases, sales and exchanges of Fund shares are made by INVESCO at
the NAV next calculated after INVESCO receives proper instructions from you to
purchase, redeem or exchange shares of a Fund. Your instructions must be
received by INVESCO no later than the close of the NYSE to effect transactions
that day. If INVESCO hears from you after that time, your instructions will be
processed on the next day that the NYSE is open.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY 4:00 P.M. EASTERN TIME.
The following chart shows several convenient ways to invest in the Funds.
There is no charge to invest, exchange or redeem shares when you make
transactions directly through INVESCO. However, if you invest in a Fund through
a securities broker, you may be charged a commission or transaction fee for
either purchases or sales of Fund shares. For all new accounts, please send a
completed application form and specify the fund or funds you wish to purchase.
INVESCO reserves the right to increase, reduce or waive each Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of that Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy Fund shares, including
purchases by exchange.
MINIMUM INITIAL INVESTMENT: $100,000, which may be waived in certain cases.
MINIMUM SUBSEQUENT INVESTMENT: $5,000
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
EXCHANGE POLICY. You may exchange your shares in either of the Funds for
those in another INVESCO mutual fund on the basis of their respective NAVs at
the time of the exchange. Before making any exchange, be sure to review the
prospectuses of the funds involved and consider the differences between the
funds. Also, be certain that you qualify to purchase shares in the new fund.
An exchange is the sale of shares from one fund immediately followed by the
purchase of shares in another. Therefore, any gain or loss realized on the
exchange is recognizable for federal income tax purposes (unless, of course, you
or your account qualifies as tax-deferred under the Internal Revenue Code). If
the shares of the fund you are selling have gone up in value since you bought
them, the sale portion of an exchange may result in taxable income to you.
<PAGE>
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly the
same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of each Fund per 12-month period.
o Each Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy, if it is in the best interests of the Fund
and its shareholders. Notice of all such modifications or terminations
that affect all shareholders of the Fund will be given at least 60 days
prior to the effective date of the change, except in unusual instances,
including a suspension of the exchanged security under Section 22(e) of
the Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any
time that sales of the fund into which you wish to exchange are temporarily
stopped.
INTERNET TRANSACTIONS. Investors may open new accounts, exchange and redeem
shares of any INVESCO Fund through the INVESCO Web site. To utilize this
service, you will need a web browser (presently Netscape version 1.2 or higher,
or Internet Explorer version 2.0 or higher) and utilize the INVESCO Web site.
INVESCO will accept Internet purchase instructions only for exchanges or if the
purchase price is paid to INVESCO through debiting your bank account, and any
Internet cash redemptions will be paid only to the same bank account from which
the payment to INVESCO originated. INVESCO imposes a limit of $25,000 on
Internet purchase and redemption transactions. You may also download an
application to open an account from the Web site, complete it by hand, and mail
it to INVESCO, along with a check.
INVESCO employs reasonable procedures to confirm that transactions entered into
over the Internet are genuine. These procedures include the use of alphanumeric
passwords, secure socket layering, encryption and other precautions reasonably
designed to protect the integrity, confidentiality and security of shareholder
information. In order to enter into a transaction on the INVESCO Web site, you
will need an account number, your Social Security Number and an alphanumeric
password. By entering into the user's agreement with INVESCO to open an account
through our Web site, you lose certain rights if someone gives fraudulent or
unauthorized instructions to INVESCO that result in a loss to you. If INVESCO
follows these procedures, neither INVESCO, its affiliates nor any Fund will be
liable for any loss, liability, cost or expense for following instructions
communicated via the Internet that are reasonably believed to be genuine or
that follow INVESCO's security procedures.
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
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BY CHECK, ACH OR WIRE $100,000; $5,000 If you pay by check, ACH or
Mail checks to: minimum for each wire and your funds do
INVESCO Funds Group, subsequent not clear, you will be
Inc., investment. responsible for any
P.O. Box 173706, related loss to any
Denver, CO 80217-3706. Fund or INVESCO. If
You may send us a check you are already an
by overnight courier to: INVESCO funds
7800 E. Union Ave. shareholder, the Fund
Denver, CO 80237 may seek reimbursement
Or you may purchase for any loss from your
shares by bank wire existing account(s).
or ACH (call INVESCO
for instructions).
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METHOD INVESTMENT MINIMUM PLEASE REMEMBER
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BY INTERNET Since the minimum You will need a web browser
Go to the INVESCO initial investment to utilize this service.
Web site at for these Funds Internet transactions are
www.invesco.com exceeds the maximum limited to $25,000.
transaction amount
on Interent
transactions, you may
only use the Internet
for subsequent invest-
ments. There is a
$5,000 minimum for each
subsequent investment.
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BY EXCHANGE $100,000 to open a See "Exchange Policy."
Between two INVESCO new account; $5,000
funds. Call to purchase additional
1-800-525-8085 for shares for an
prospectuses of existing account.
other INVESCO funds.
Exchanges
may be made in writing,
by phone or at our
Web site at
www.invesco.com.
[INVESCO ICON] YOUR ACCOUNT SERVICES
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains your
current Fund holdings. The Funds do not issue share certificates.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you receive a written
statement which consolidates and summarizes account activity and value at the
beginning and end of the period for each of your INVESCO funds.
TRANSACTION CONFIRMATIONS. You receive detailed confirmations of individual
purchases, exchanges and sales. If you choose certain recurring transaction
plans your transactions are confirmed on your quarterly Investment Summaries.
CHECKWRITING. You may redeem shares of a Fund by check. We will provide
personalized checks at no charge within 30 days of your account opening. Checks
may be made payable to any party in any amount of $2,500 or more. Shares of the
Fund will be redeemed to cover payment of the check. INVESCO reserves the right
to institute a charge for this service upon notice to all shareholders. Further
information about this option may be obtained from INVESCO.
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YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, WWW.INVESCO.COM.
TELEPHONE TRANSACTIONS. You may exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account Application.
Unless you decline the telephone transaction privileges, when you fill out and
sign the new account Application, a Telephone Transaction Authorization Form, or
use your telephone transaction privileges, you lose certain rights if someone
gives fraudulent or unauthorized instructions to INVESCO that result in a loss
to you. In general, if INVESCO has followed reasonable procedures, such as
recording telephone instructions and sending written transaction confirmations,
INVESCO is not liable for following telephone instructions that it believes to
be genuine. Therefore, you have the risk of loss due to unauthorized or
fraudulent instructions.
IRAS AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for Individual Retirement Accounts ("IRAs") and many other types of
tax-deferred retirement plans. Please call INVESCO for information and forms to
establish or transfer your existing retirement plan or account.
[INVESCO ICON] HOW TO SELL SHARES
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
The following chart shows several convenient ways to sell your Fund shares.
Shares of the Funds may be sold at any time at the next NAV calculated after
your request to sell in proper form is received by INVESCO.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell.
While INVESCO attempts to process telephone redemptions promptly, there may be
times - particularly in periods of severe economic or market disruption - when
you may experience delays in redeeming shares by phone.
INVESCO usually mails you the proceeds from the sale of fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances - for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 15 days.
Because of the Funds' expense structures, it costs as much to handle a small
account as it does to handle a large one. If the value of your account in a Fund
falls below $50,000 as a result of your actions (for example, sale of your Fund
shares), each Fund reserves the right to sell all of your shares, send the
proceeds of the sale to you and close your account. Before this is done, you
will be notified and given 60 days to increase the value of your account to
$50,000 or more.
It is possible that in the future conditions may exist which would make it
undesirable for a Fund to pay for redeemed shares in cash. In such cases, the
directors of the Funds may authorize payment to be made in portfolio securities
or other property of the applicable Fund. However, we are obligated under the
Investment Company Act of 1940 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 directors of the Funds. Shareholders receiving such securities are
likely to incur brokerage costs on their subsequent sales of such securities. To
date, the Company has always paid for redeemed shares in cash.
<PAGE>
METHOD REDEMPTI0N MINIMUM PLEASE REMEMBER
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BY TELEPHONE Any amount. INVESCO'S telephone
Call us toll-free at redemption privileges may
1-800-525-8085. be modified or terminated
in the future at INVESCO's
discretion.
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IN WRITING Any amount. The redemption
Mail your request to request must be
INVESCO Funds Group, signed by all
Inc., P.O. Box registered account
173706, Denver, CO owners. Payment will
80217-3706. You may be mailed to your
also send your address as it appears
request by overnight on INVESCO's records,
courier to 7800 E. or to a bank
Union Ave., designated by you in
Denver, CO 80237 writing.
- --------------------------------------------------------------------------------
BY CHECK $2,500 minimum per Personalized checks
check. are available from INVESCO
at no charge within 30 days
of your account opening upon
request. Checks may be
payable to any party.
- --------------------------------------------------------------------------------
BY INTERNET None You will need a Web browser
Go to the INVESCO to utilize this service.
Web site at Internet transactions are
www.invesco.com limited to $25,000.
- --------------------------------------------------------------------------------
BY EXCHANGE Any amount. See "Exchange Policy."
Between two INVESCO When opening a new
funds. Call account, investment
1-800-525-8085 for minimums apply.
prospectuses of other
INVESCO funds.
Exchanges may be made
by phone or at our Web
site at www.invesco.com.
You may also establish
an automatic monthly
exchange service
between two INVESCO
funds; call us for
further details and
the correct form.
- --------------------------------------------------------------------------------
PAYMENT TO THIRD Any amount. All registered
PARTY account owners must
Mail your request to sign the request,
INVESCO with signature
Funds Group, Inc., guarantees from an
P.O. Box eligible guarantor
173706, Denver, CO financial
80217-3706. institution, such as
a commercial bank or a
recognized national or
regional securities firm.
<PAGE>
[INVESCO ICON] DIVIDENDS AND TAXES
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER. WE WILL PROVIDE YOU WITH DETAILED INFORMATION
EVERY YEAR ABOUT YOUR DIVIDENDS.
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Funds.
Each Fund earns ordinary or investment income from interest on its investments.
The Funds expect to distribute substantially all of this investment income, less
Fund expenses, to shareholders. You will ordinarily earn income on each day you
are invested in one of the Funds, and that income is paid by the Fund to you
once a month. Dividends are automatically reinvested in additional shares of a
Fund at the net asset value on the monthly dividend distribution date, unless
you request that dividends be paid in cash.
Unless you are (or your account is) exempt from income taxes, you must include
all dividends paid to you by Treasurer's Money Market Reserve Fund in your
taxable income for federal, state and local income tax purposes. Dividends and
other distributions usually are taxable whether you receive them in cash or
automatically reinvest them in shares of the distributing Fund or other INVESCO
funds.
Substantially all of the dividends that you receive from Treasurer's Tax-Exempt
Reserve Fund are expected to be exempt from federal income taxes, but there is
no assurance that this will be the case. For the period ended May 31, 1999,
93.31% of the dividends declared by this Fund were exempt from federal income
taxes. There is no assurance that this will be the case in future years.
Dividends that you receive from Treasurer's Tax-Exempt Reserve Fund may be
subject to state and local taxes, or to the Federal Alternative Minimum Tax.
If you have not provided INVESCO with complete, correct tax information, the
Funds are required by law to withhold 31% of your distributions and any money
that you receive from the sale of shares of the Funds as a backup withholding
tax.
Each year, INVESCO will provide you with information about any Fund dividends,
and the tax status of your dividends, that is required for you to complete your
yearly tax filings.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand a Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in a Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants whose report, along with the
financial statements, is included in INVESCO Treasurer's Series Funds, Inc.'s
1999 Annual Report to Shareholders, which is incorporated by reference into the
Statement of Additional Information. The Report is available without charge by
contacting IDI at the address or telephone number on the back cover of this
Prospectus.
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED DECEMBER 31
--------------------------------------------------------------------
MAY 31, 1999(1) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
TREASURER'S MONEY MARKET
RESERVE FUND
PER SHARE DATA
Net Asset Value --
Beginning of Period $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 0.02 0.05 0.05 0.05 0.06 0.04
=================================================================================================
Net Asset Value-End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=================================================================================================
TOTAL RETURN 1.90(2) 5.46% 5.48% 5.30% 5.82% 4.13%
RATIOS
Net Assets -- End of Period
($000 Omitted) $52,396 $34,236 $67,146 $113,281 $141,885 $93,131
Ratio of Expenses to Average
Net Assets 0.25%(3) 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income to
Average Net Assets 4.78%(3) 5.35% 5.32% 5.17% 5.71% 4.02%
</TABLE>
(1) From January 1, 1999 to May 31, 1999, the Fund's current fiscal
year end.
(2) Based on operations for the period shown and, accordingly, is
not representative of a full year.
(3) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD
ENDED YEAR ENDED DECEMBER 31
---------------------------------------------------------------
MAY 31,
1999(1) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
TREASURER'S TAX-EXEMPT
RESERVE FUND
PER SHARE DATA
Net Asset Value --
Beginning of Period $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 0.01 0.03 0.04 0.03 0.04 0.03
=================================================================================================
Net Asset Value -- End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=================================================================================================
TOTAL RETURN 1.16%(2) 3.49% 3.74% 3.45% 3.90% 2.81%
RATIOS
Net Assets -- End of Period
($000 Omitted) $30,374 $36,707 $22,084 $23,386 $21,928 $19,716
Ratio of Expenses to Average
Net Assets 0.25%(3) 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income
to Average Net Assets 2.92%(3) 3.38% 3.68% 3.40% 3.86% 2.69%
</TABLE>
(1) From January 1, 1999 to May 31, 1999, the Fund's current fiscal
year end.
(2) Based on operations for the period shown and accordingly,
is not representative of a full year.
(3) Annualized
<PAGE>
SEPTEMBER 30, 1999
INVESCO TREASURER'S SERIES FUNDS, INC.
INVESCO TREASURER'S MONEY MARKET RESERVE FUND
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
You may obtain additional information about the Funds from several sources:
FINANCIAL REPORTS. Although this Prospectus describes the Funds' anticipated
investments and operations, the Funds also prepare annual and semiannual reports
that detail the Funds' actual investments at the report date. These reports
include discussion of each Fund's recent performance, as well as market and
general economic trends affecting each Fund's performance. The annual report
also includes the report of the Funds' independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI, dated September 30, 1999, is a
supplement to this Prospectus and has detailed information about the Funds and
their investment policies and practices. A current SAI for the Funds is on file
with the Securities and Exchange Commission and is incorporated in this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The current Prospectus, SAI, annual or semiannual report may be
accessed through the SEC Web site at www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800-525-8085. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. Information on the Public Reference Section
can be obtained by calling 1-800-SEC-0330. The SEC file numbers for the Funds
are 811-5460 and 033-19862.
811-5460
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INVESCO Treasurer's Series Funds, Inc.
(formerly, INVESCO Treasurer's Series Trust)
INVESCO Treasurer's Money Market Reserve Fund
INVESCO Treasurer's Tax-Exempt Reserve Fund
Address: Mailing Address:
7800 E. Union Ave., Denver, CO 80237 P.O. Box 173706, Denver, CO 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
September 30, 1999
- --------------------------------------------------------------------------------
A Prospectus for INVESCO Treasurer's Money Market Reserve and INVESCO
Treasurer's Tax-Exempt Reserve Funds dated September 30, 1999 provides the basic
information you should know before investing in a Fund. This Statement of
Additional Information ("SAI") is incorporated by reference into the Funds'
Prospectus; in other words, this SAI is legally part of the Funds' Prospectus.
Although this SAI is not a prospectus, it contains information in addition to
that set forth in the Prospectus. It is intended to provide additional
information regarding the activities and operations of the Funds and should be
read in conjunction with the Prospectus.
You may obtain, without charge, copies of the current Prospectus of the Funds,
SAI and current annual and semiannual reports by writing to INVESCO
Distributors, Inc., P.O. Box 173706, Denver, CO 80217-3706 , or by calling
1-800-525-8085.
<PAGE>
Table of Contents
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investments, Policies and Risks . . . . . . . . . . . . . . . . . . . . . 3
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 8
Management of the Funds . . . . . . . . . . . . . . . . . . . . . . . . . 11
Other Service Providers . . . . . . . . . . . . . . . . . . . . . . . . . 28
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . 28
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Tax Consequences of Owning Shares of a Fund . . . . . . . . . . . . . . . 30
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
<PAGE>
THE COMPANY
The Company was incorporated as INVESCO Treasurer's Series Funds, Inc. on March
17, 1999, under the laws of Maryland. On May 28, 1999, the Company assumed all
of the assets and liabilities of INVESCO Treasurer's Series Trust, which was
organized under the laws of the Commonwealth of Massachusetts as a Massachusetts
business trust on January 27, 1988.
The Company is an open-end, diversified, no-load management investment company
currently consisting of two portfolios of investments: INVESCO Treasurer's Money
Market Reserve Fund and INVESCO Treasurer's Tax-Exempt Reserve Fund (the
"Funds"). Additional funds may be offered in the future.
"Open-end" means that each Fund issues an indefinite number of shares which it
continuously offers to redeem at net asset value per share ("NAV"). A
"management" investment company actively buys and sells securities for the
portfolio of each Fund at the direction of a professional manager. Open-end
management investment companies (or one or more series of such companies, such
as the Funds) are commonly referred to as mutual funds. The Funds do not charge
sales fees to purchase their shares.
INVESTMENTS, POLICIES AND RISKS
The principal investments and policies of the Funds are discussed in the
Prospectus of the Funds. The investment objective of each of the Funds is to
achieve as high a level of current income as is consistent with the preservation
of capital, the maintenance of liquidity, and investing in high quality
instruments. Each Fund's assets are invested in securities having maturities of
397 days or less, and the dollar-weighted average maturity of the portfolio will
not exceed 90 days. The Funds buy only securities determined by INVESCO Funds
Group, Inc. ("INVESCO"), advisor to the Funds, pursuant to procedures approved
by the board of directors, to be of high quality with minimal credit risk and to
be eligible for investment by the Funds under applicable U.S. Securities and
Exchange Commission ("SEC") rules. 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
Treasurer's Money Market Reserve Fund attempts to achieve its objective by
investing in debt securities, including short-term money market instruments
issued or guaranteed by the U.S. government or its agencies or
instrumentalities, obligations of financial institutions, which may include
demand features (such as the following instruments determined to be readily
marketable by INVESCO: certificates of deposit, time deposits and bankers'
acceptances of domestic and foreign banks, and funding agreements issued by
domestic insurance companies), corporate debt securities other than commercial
paper, and loan participation agreements. Corporate debt securities acquired by
the Fund must be rated by at least two nationally recognized statistical rating
organizations ("NRSROs"), generally Standard & Poor's ("S&P") and Moody's
Investor 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 Fund limits purchases of instruments
issued by banks to those instruments which are rated in one of the two highest
categories by an NRSRO, and which are issued by banks which have total assets in
excess of $4 billion and meet other criteria established by the board of
directors. The 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 directors. From time to time, on a temporary basis
for defensive purposes, the Fund may hold cash.
<PAGE>
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 Fund which are not rated by any NRSRO must be determined by
INVESCO to be of equivalent credit quality to the rated securities in which the
Fund may invest. In INVESCO's opinion, obligations that are not rated are not
necessarily of lower quality than those which are rated; however, they may be
less marketable and typically may provide higher yields. The 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.
LOAN PARTICIPATION INTERESTS -- Treasurer's Money Market Reserve 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 Fund will purchase only loan participation interests issued by
companies whose commercial paper is currently rated in the highest rating
category by at least two NRSROs, generally S&P and Moody's (A-1 by S&P or P-1 by
Moody's), or where such instrument is rated only by S&P or Moody's and not by
any other NRSRO, such instrument is rated A-1 or P-1. Such loan participation
interests will only be purchased from banks which meet the criteria for banks
discussed above and registered broker-dealers or registered government
securities dealers which have outstanding 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
Fund will attempt to ensure that there is a readily available market for all of
the loan participation interests in which it invests. The Fund's investments in
loan participation interests for which there is not a readily available market
are considered to be investments in illiquid securities.
CERTIFICATES OF DEPOSIT IN FOREIGN BANKS AND U.S. BRANCHES OF FOREIGN BANKS --
Treasurer's Money Reserve 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 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 directors. Investments in foreign
securities involve special considerations. There is generally less publicly
available information about foreign issuers since many foreign countries do not
have the same disclosure and reporting requirements as are imposed by 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.
<PAGE>
The 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. 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.
INSURANCE FUNDING AGREEMENTS -- The 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.
INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
Treasurer's Tax-Exempt Reserve Fund will attempt to achieve its objective by
investing in short-term debt securities the interest on which is exempt from
federal taxation, including 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.
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 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.
<PAGE>
Municipal bonds purchased by the Fund must be rated by at least two NRSROs -
generally S&P and Moody's - in the highest rating category (AAA or AA by S&P or
Aaa or Aa by Moody's), or by one NRSRO if such obligations are rated by only one
NRSRO. Municipal notes or municipal commercial paper must be rated in the
highest rating category by at least two NRSROs, or where the note or paper is
rated only by one NRSRO, in the highest rating category by that NRSRO. If a
security is unrated, the Fund may invest in such security if INVESCO determines,
in an analysis similar to that performed by Moody's or S&P in rating similar
securities and issuers, that the security is comparable to that eligible for
investment by the Fund.
GUARANTEES -- The 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 Fund. These rights may be referred to as demand
features, guarantees or puts, depending on their characteristics (collectively
referred to as "Guarantees"), and may involve letters of credit or other credit
support arrangements supplied by domestic or foreign banks supporting the other
party's ability to purchase the obligation from the Fund. The Fund will acquire
Guarantees solely to facilitate portfolio liquidity and does not intend to
exercise them for trading purposes. In considering whether an obligation meets
the 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 Guarantee will not affect the valuation of the underlying
obligation which will continue to be valued in accordance with the amortized
cost method of valuation.
TEMPORARY DEFENSIVE POSITION -- From time to time, on a temporary basis for
defensive purposes, the Fund may also hold 100 % of its assets in cash or invest
in taxable short term investments ("taxable investments"), including obligations
of the U.S. government, its agencies or instrumentalities; commercial paper
limited to obligations which are rated by at least two NRSROs - generally S&P
and Moody's - in the highest rating category (A-1 by S&P and P-1 by Moody's), or
by one NRSRO if such obligations are rated by only one NRSRO; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic banks
meeting the criteria described in the discussion above in the "Investment
Objectives and Policies" of Treasurer's Money Market Reserve Fund; time
deposits; and repurchase agreements with respect to any of the foregoing with
registered broker-dealers, registered government securities dealers or banks.
OTHER POLICIES RELEVANT TO THE FUNDS
The Funds may enter into repurchase agreements and reverse repurchase
agreements. (See Appendix A to this SAI for a discussion of these agreements and
the risks involved with such transactions.) The Funds will enter into repurchase
agreements and reverse repurchase agreements only with (i) banks which have
total assets in excess of $4 billion and meet other criteria established by the
board of directors and (ii) with registered broker-dealers or registered
government securities dealers which have outstanding 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. INVESCO
will monitor the creditworthiness of such entities in accordance with procedures
adopted and monitored by the board of directors. The Funds will enter into
repurchase agreements whenever, in the opinion of INVESCO, such transactions
would be advantageous to the Funds. Repurchase agreements afford an opportunity
for the Funds to earn a return on temporarily available cash. The Funds will
enter into reverse repurchase agreements only for the purpose of obtaining funds
necessary for meeting redemption requests of shareholders. Interest earned by
the Funds on repurchase agreements would not be tax-exempt, and thus would
constitute taxable income.
<PAGE>
ILLIQUID SECURITIES -- Securities which do not trade on stock exchanges or in
the over the counter market, or have restrictions on when and how they may be
sold, are generally considered to be "illiquid." An illiquid security is one
that a Fund may have difficulty -- or may even be legally precluded from --
selling at any particular time. The Funds may invest in illiquid securities,
including restricted securities and other investments which are not readily
marketable. A Fund will not purchase any such security if the purchase would
cause the Fund to invest more than 10% of its net assets, measured at the time
of purchase, in illiquid securities. Repurchase agreements maturing in more than
seven days are considered illiquid for purposes of this restriction.
The principal risk of investing in illiquid securities is that a Fund may be
unable to dispose of them at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, a Fund might have to bear
the expense and incur the delays associated with registering the securities with
the SEC and obtaining listing on a securities exchange or in the over the
counter market.
WHEN-ISSUED/DELAYED DELIVERY -- Ordinarily, the Funds buy and sell securities on
an ordinary settlement basis. That means that the buy or sell order is sent, and
a Fund actually takes delivery or gives up physical possession of the security
on the "settlement date," which is three business days later. However, the Funds
also may purchase and sell securities on a when-issued or delayed delivery
basis.
When-issued or delayed delivery transactions occur when securities are purchased
or sold by a Fund and payment and delivery take place at an agreed-upon time in
the future. The Funds may engage in this practice in an effort to secure an
advantageous price and yield. However, the yield on a comparable security
available when delivery actually takes place may vary from the yield on the
security at the time the when-issued or delayed delivery transaction was entered
into. When a Fund engages in when-issued and delayed delivery transactions, it
relies on the seller or buyer to consummate the sale at the future date. If the
seller or buyer fails to act as promised, that failure may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. No payment or delivery is made by a Fund until it receives
delivery or payment from the other party to the transaction. However,
fluctuation in the value of the security from the time of commitment until
delivery could adversely affect a Fund.
DIVERSIFICATION -- The Company is a diversified investment company under the
Investment Company Act of 1940 ("the 1940 Act"). Except as otherwise provided by
Section 5 of the 1940 Act and Rule 2a-7 promulgated under the 1940 Act, no more
than 5% of the value of each Fund's total assets can be invested in the
securities of any one issuer. This 5% issuer diversification restriction does
not apply to cash, cash items, or U.S. government securities.
<PAGE>
PORTFOLIO SECURITIES LOANS -- The Company, on behalf of each of the Funds, may
lend limited amounts of its portfolio securities (not to exceed 33 1/3% of a
Fund's total assets). Because there could be delays in recovery of loaned
securities or even a loss of rights in collateral should the borrower fail
financially, loans will be made only to firms deemed by INVESCO to be of good
standing and will not be made unless, in the judgment of INVESCO, the
consideration to be earned from such loans would justify the risk. INVESCO will
evaluate the creditworthiness of such borrowers in accordance with procedures
adopted and monitored by the board of directors. It is expected that the
Company, on behalf of the applicable Fund, will use the cash portions of loan
collateral to invest in short-term income producing securities for the Fund's
account and that the Company may share some of the income from these investments
with the borrower. See "Portfolio Securities Loans" at Appendix A to this SAI.
INVESTMENT RESTRICTIONS
The Funds operate under certain investment restrictions. For purposes of the
following restrictions, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
resulting from fluctuations in value does not require elimination of any
security from a Fund.
The following restrictions are fundamental policies and may not be changed with
respect to a Fund without prior approval of a majority of the outstanding voting
securities of that Fund, as defined in the 1940 Act.
Each Fund, unless otherwise indicated, may not:
1. purchase the securities of any issuer (other than securities issued
or guraranteed by the U.S. government or any of its agencies or
instrumentalities, municipal securities or securities issued or
guaranteed by domestic banks, including U.S. branches of foreign banks
and foreign branches of U.S. banks) if, as a result, more than 25% of
the Fund's total assets would be invested in the securities of companies
whose principal business activities are in the same industry;
2. except to the extent permitted under Rule 2a-7 of the 1940 Act, or
any successor rule thereto, purchase the securities of any issuer (other
than securities issued or guaranteed by the U.S. government or any of
its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (i) more than 5% of the Fund's total assets
would be invested in the securities of that issuer, or (ii) the Fund
would hold more than 10% of the outstanding voting securities of that
issuer;
3. underwrite securities of other issuers, except insofar as it may be
deemed to be an underwriter under the Securities Act of 1933, as
amended, in connection with the disposition of the Fund's portfolio
securities;
<PAGE>
4. borrow money, except that the Fund may borrow money in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed)
less liabilities (other than borrowings);
5. issue senior securities, except as permitted under the 1940 Act;
6. lend any security or make any loan if, as a result, more than 33 1/3%
of its total assets would be lent to other parties, but this limitation
does not apply to the purchase of debt securities or to repurchase
agreements;
7. purchase or sell physical commodities; however, this policy shall not
prevent the Fund from purchasing and selling foreign currency, futures
contracts, options, forward contracts, swaps, caps, floors, collars and
other financial instruments; or
8. purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the Fund
from investing in securities or other instruments backed by real estate
or securities of companies engaged in the real estate business).
9. Each Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by INVESCO or an
affiliate or a successor thereof, with substantially the same
fundamental investment objective, policies and limitations as the Fund.
In addition, each Fund has the following non-fundamental policies, which may be
changed without shareholder approval:
A. The Fund may not sell securities short (unless it owns or has the right
to obtain securities equivalent in kind and amount to the securities sold
short) or purchase securities on margin, except that (i) this policy does
not prevent the Fund from entering into short positions in foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments, (ii) the Fund may obtain
such short-term credits as are necessary for the clearance of
transactions, and (iii) the Fund may make margin payments in connection
with futures contracts, options, forward contracts, swaps, caps, floors,
collars and other financial instruments.
B. The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or an
affiliate or a successor thereof for temporary or emergency purposes (not
for leveraging or investing) or by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements will be treated
as borrowings for purposes of fundamental limitation (4)).
C. The Fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
<PAGE>
D. The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.
E. With respect to fundamental limitation (1), domestic and foreign
banking will be considered to be different industries.
In addition, with respect to a Fund that may invest in municipal obligations,
the following non-fundamental policy applies, which may be changed without
shareholder approval:
Each state (including the District of Columbia and Puerto Rico), territory
and possession of the United States, each political subdivision, agency,
instrumentality and authority thereof, and each multi-state agency of
which a state is a member is a separate "issuer." When the assets and
revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and
the security is backed only by assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the
case of an Industrial Development Bond or Private Activity Bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then that non-governmental user would be deemed to be the sole
issuer.
Following is a chart outlining some of the limitations pursuant to
non-fundamental investment policies set by the board of directors. These
non-fundamental policies may be changed by the board of directors without
shareholder approval:
- --------------------------------------------------------------------------------
INVESTMENT MONEY MARKET RESERVE TAX-EXEMPT RESERVE
- --------------------------------------------------------------------------------
DEBT SECURITIES
Corporate Debt No Limit
- --------------------------------------------------------------------------------
U.S. Government No Limit Up to 20%, including
Obligations private activity
bonds and other
taxable
- --------------------------------------------------------------------------------
Municipal Obligations At least 80%
- --------------------------------------------------------------------------------
Private Activity Bonds Up to 20%, including
and taxable securities U.S. government
obligations
- --------------------------------------------------------------------------------
TEMPORARY TAXABLE Up to 100% for
defensive purposes
- --------------------------------------------------------------------------------
WHEN-ISSUED SECURITIES 10% Limit 10% Limit
- --------------------------------------------------------------------------------
<PAGE>
MANAGEMENT OF THE FUNDS
THE INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the Company's
investment adviser. INVESCO was founded in 1932 and serves as investment adviser
to:
INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc. (formerly, INVESCO
Flexible Funds, Inc.)
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Treasurer's Series Funds, Inc. (formerly, INVESCO Treasurer's
Series Trust)
INVESCO Variable Investment Funds, Inc.
As of August 31, 1999, INVESCO managed 42 mutual funds having combined assets of
$24 billion on behalf of more than 926,831 shareholders.
Prior to June 1, 1999, INVESCO Capital Management, Inc. ("ICM") was
investment adviser to the Funds.
INVESCO and ICM are indirect, wholly-owned subsidiaries of AMVESCAP PLC, a
publicly-traded holding company. Through its subsidiaries, AMVESCAP PLC engages
in the business of investment management on an international basis. AMVESCAP PLC
is one of the largest independent investment management businesses in the world
with approximately $296 billion in assets under management on June 30, 1999.
AMVESCAP PLC's North American subsidiaries include:
INVESCO Retirement and Benefit Services, Inc. ("IRBS"), Atlanta, Georgia,
develops and provides domestic and international defined contribution
retirement plan services to plan sponsors, institutional retirement plan
sponsors, institutional plan providers and foreign governments.
INVESCO Retirement Plan Services ("IRPS"), Atlanta, Georgia, a division of
IRBS, provides recordkeeping and investment selection services to defined
contribution plan sponsors of plans with between $2 million and $200 million
in assets. Additionally, IRPS provides investment consulting services to
institutions seeking to provide retirement plan products and services.
Institutional Trust Company doing business as INVESCO Trust Company
("ITC"), Denver, Colorado, a division of IRBS, provides retirement account
custodian and/or trust services for individual retirement accounts ("IRAs")
and other retirement plan accounts. This includes services such as
recordkeeping, tax reporting and compliance. ITC acts as trustee or
custodian to these plans. ITC accepts contributions and provides complete
transfer agency function: correspondence, sub-accounting, telephone,
communications and processing of distributions.
<PAGE>
INVESCO Capital Management, Inc., Atlanta, Georgia, manages institutional
investment portfolios, consisting primarily of discretionary employee
benefit plans for corporations, state and local governments and endowment
funds.
INVESCO Management & Research, Inc., Boston, Massachusetts, primarily
manages pension and endowment accounts.
PRIMCO Capital Management, Inc., Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
INVESCO Realty Advisors, Inc., Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for AMVESCAP PLC's clients
worldwide. Clients include corporate pension plans and public pension funds
as well as endowment and foundation accounts.
INVESCO (NY), Inc., New York, is an investment adviser for separately
managed accounts, such as corporate and municipal pension plans,
Taft-Hartley Plans, insurance companies, charitable institutions and private
individuals. INVESCO NY further serves as investment adviser to several
closed-end investment companies, and as sub-adviser with respect to certain
commingled employee benefit trusts.
A I M Advisors, Inc., Houston, Texas, provides investment advisory and
administrative services for retail and institutional mutual funds.
A I M Capital Management, Inc., Houston, Texas, provides investment
advisory services to individuals, corporations, pension plans and other
private investment advisory accounts and also serves as sub-adviser to
certain retail and institutional mutual funds, one Canadian mutual fund and
one portfolio of an open-end registered investment company that is offered
to separate accounts of variable insurance companies.
A I M Distributors, Inc. and Fund Management Trust, Houston, Texas are
registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire Square,
London, EC2M4YR, England.
THE INVESTMENT ADVISORY AGREEMENT
INVESCO serves as investment adviser to the Funds under an investment advisory
agreement dated June 1, 1999 (the "Agreement") with the Company.
<PAGE>
The Agreement requires that INVESCO manage the investment portfolio of each Fund
in a way that conforms with each Fund's investment policies. INVESCO may
directly manage a Fund itself, or may hire a sub-adviser, which may be an
affiliate of INVESCO, to do so. Specifically, INVESCO is responsible for:
o managing the investment and reinvestment of all the assets of the
Funds, and executing all purchases and sales of portfolio securities;
o maintaining a continuous investment program for the Funds, consistent with
(i) each Fund's investment policies as set forth in the Company's Articles
of Incorporation, Bylaws and Registration Statement, as from time to time
amended, under the 1940 Act, and in any prospectus and/or statement of
additional information of the Funds, as from time to time amended and in
use under the 1933 Act, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended;
o determining what securities are to be purchased or sold for the Funds,
unless otherwise directed by the directors of the Company, and executing
transactions accordingly;
o providing the Funds the benefit of all of the investment analysis and
research, the reviews of current economic conditions and trends, and the
consideration of a long-range investment policy now or hereafter generally
available to the investment advisory customers of the adviser or any
sub-adviser;
o determining what portion of each Fund's assets should be invested in the
various types of securities authorized for purchase by a Fund; and
o making recommendations as to the manner in which voting rights, rights to
consent to Fund action and any other rights pertaining to a Fund's
portfolio securities shall be exercised.
INVESCO performs all of the following services for the Funds:
o administrative
o internal accounting (including computation of net asset value)
o clerical and statistical
o secretarial
o all other services necessary or incidental to the administration of
the affairs of the Funds
o supplying the Company with officers, clerical staff and other employees
o furnishing office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related to
shareholder accounts
<PAGE>
o conducting periodic compliance reviews of the Funds' operations;
preparation and review of required documents, reports and filings by
INVESCO's in-house legal and accounting staff or in conjunction with
independent attorneys and accountants (including the prospectus, statement
of additional information, proxy statements, shareholder reports, tax
returns, reports to the SEC, and other corporate documents of the Funds)
o supplying basic telephone service and other utilities
o preparing and maintaining certain of the books and records required to be
prepared and maintained by the Funds under the 1940 Act.
Expenses not assumed by INVESCO (or ICM prior to June 1, 1999) are borne by the
Funds. As compensation for its advisory services to the Company, INVESCO
receives a monthly fee from each Fund. The fee is calculated at the annual rate
of 0.25% of each Fund's average net assets.
During the period January 1, 1999 through May 31, 1999 and the fiscal years
ended December 31, 1998 and 1997, the Funds paid ICM advisory fees in the dollar
amounts shown below.
May 31 December 31
1999 1998 1997
---- ---- ----
Treasurer's Money $44,330 $141,183 $256,934
Market Reserve Fund
Treasurer's Tax-Exempt $36,935 $ 79,720 $ 49,547
Reserve Fund
ADMINISTRATIVE SERVICES AGREEMENT
INVESCO, either directly or through affiliated companies, provides certain
administrative, sub-accounting, and recordkeeping services to the Funds pursuant
to an Administrative Services Agreement.
The Administrative Services Agreement requires INVESCO to provide the following
services to the Funds:
o such sub-accounting and recordkeeping services and functions as are
reasonably necessary for the operation of the Funds; and
o such sub-accounting, recordkeeping, and administrative services and
functions, which may be provided by affiliates of INVESCO, as are
reasonably necessary for the operation of Fund shareholder accounts
maintained by certain retirement plans and employee benefit plans for the
benefit of participants in such plans.
INVESCO, pursuant to the terms of the Advisory Agreement, will not charge the
Funds any fees under this Administrative Services Agreement. However, this
commitment may be changed following consultation with the board of directors.
The Funds themselves paid no administrative services fees to INVESCO; those
expenses were paid by ICM pursuant to its Advisory Agreement with the Company.
<PAGE>
TRANSFER AGENCY AGREEMENT
INVESCO also performs transfer agent, dividend disbursing agent, and registrar
services for the Funds pursuant to a Transfer Agency Agreement.
The Transfer Agency Agreement provides that INVESCO, pursuant to the terms of
the Advisory Agreement, will not charge the Funds any fees under this Transfer
Agency Agreement. However, this commitment may be changed following consultation
with the board of directors. The Funds themselves paid no transfer agency fees
to INVESCO; those expenses were paid by ICM pursuant to its Advisory Agreement
with the Company.
DIRECTORS AND OFFICERS OF THE COMPANY
The overall direction and supervision of the Company come from the board of
directors. The board of directors is responsible for making sure that the Funds'
general investment policies and programs are carried out and that the Funds are
properly administered.
The board of directors has an audit committee comprised of four of the directors
who are not affiliated with INVESCO (the "Independent Directors"). The committee
meets quarterly with the Company's independent accountants and officers to
review accounting principles used by the Company, the adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters.
The Company has a management liaison committee which meets quarterly with
various management personnel of INVESCO in order to facilitate better
understanding of management and operations of the Company, and to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
The Company has a soft dollar brokerage committee. The committee meets
periodically to review soft dollar and other brokerage transactions by the
Funds, and to review policies and procedures of INVESCO with respect to
brokerage transactions. It reports on these matters to the Company's board of
directors.
The Company has a derivatives committee. The committee meets periodically to
review derivatives investments made by the Funds. It monitors derivatives usage
by the Funds and the procedures utilized by INVESCO to ensure that the use of
such instruments follows the policies on such instruments adopted by the
Company's board of directors. It reports on these matters to the Company's board
of directors.
The officers of the Company, all of whom are officers and employees of INVESCO,
are responsible for the day-to-day administration of the Company and the Funds.
The officers of the Company receive no direct compensation from the Company or
the Funds for their services as officers. The investment adviser for the Funds
has the primary responsibility for making investment decisions on behalf of the
Funds. These investment decisions are reviewed by the investment committee of
INVESCO.
<PAGE>
All of the officers and directors of the Company hold comparable positions with
the following funds, which, with the Company, are collectively referred to as
the "INVESCO Funds":
INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc. (formerly, INVESCO
Flexible Funds, Inc.)
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Treasurer's Series Funds, Inc. (formerly, INVESCO Treasurer's
Series Company)
INVESCO Variable Investment Funds, Inc.
The table below provides information about each of the Company's directors and
officers. Their affiliations represent their principal occupations.
Name, Address, and Age Position(s) Held With Principal Occupations(s)
Company During Past Five Years
Charles W. Brady *+ Director and Chairman Chairman of the Board of
1315 Peachtree St., N.E. of the Board INVESCO Global Health
Atlanta, Georgia Sciences Fund; Chief
Age: 64 Executive Officer and
Director of AMVESCAP
PLC, London, England and
various subsidiaries of
AMVESCAP PLC.
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupations(s)
Company During Past Five Years
Fred A. Deering +# Director and Vice Trustee of INVESCO Global
Security Life Center Chairman of the Board Health Sciences Fund;
1290 Broadway formerly, Chairman of the
Denver, Colorado Executive Committee and
Age: 71 Chairman of the Board of
Security Life of Denver
Insurance Company;
Director of ING American
Holdings Company and First
ING Life Insurance Company
of New York.
Mark H. Williamson *+ President, Chief President, Chief Executive
7800 E. Union Avenue Executive Officer Officer and Director of
Denver, Colorado and Director INVESCO Funds Group,
Age: 48 Inc.; President, Chief
Executive Officer and
Director of INVESCO Distr-
ibutors, Inc.; President,
Chief Operating Officer
and Trustee of INVESCO
Global Health Sciences
Fund; formerly, Chairman
and Chief Executive
Officer of NationsBanc
Advisors, Inc.; formerly,
Chairman of NationsBanc
Investments, Inc.
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupations(s)
Company During Past Five Years
Victor L. Andrews, Ph.D. Director Professor Emeritus,
**! Chairman Emeritus and
34 Seawatch Drive Chairman of the CFO
Savannah, Georgia Roundtable of the
Age: 69 Department of Finance of
Georgia State University;
President, Andrews Finan-
cial Associates, Inc.(con-
sulting firm); formerly,
member of the faculties of
the Harvard Business
School and the Sloan
School of Management of
MIT; Director of The
Sheffield Funds, Inc.
Bob R. Baker +** Director President and Chief
AMC Cancer Research Executive Officer of
Center AMC Cancer Research
1600 Pierce Street Center, Denver,
Denver, Colorado Colorado, since January
Age: 62 1989; until mid-December
1988, Vice Chairman of the
Board of First Columbia
Financial Corporation,
Englewood, Colorado;
formerly, Chairman of the
Board and Chief Executive
Officer of First Columbia
Financial Corporation.
Lawrence H. Budner # @ Director Trust Consultant;
7608 Glen Albens Circle prior to June 30,
Dallas, Texas 1987, Senior Vice
Age: 69 President and Senior
Trust Officer of
InterFirst Bank,
Dallas, Texas.
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupations(s)
Company During Past Five Years
Wendy L. Gramm, Ph.D.**! Director Self-employed (since
4201 Yuma Street, N.W. 1993); Professor of
Washington, DC Economics and Public
Age: 54 Administration,
University of Texas at
Arlington; for merly,
Chairman, Commodity
Futures Trading
Commission; Administrator
for Information and
Regulatory Affairs at the
Office of Management and
Budget; Executive Direc-
tor of the Presidential
Task Force on Regulatory
Relief; and Director of
the Federal Trade Commis-
sion's Bureau of Econom-
ics; also, Director of
Chicago Mercantile
Exchange, Enron Corpora-
tion, IBP, Inc., State
Farm Insurance Company,
Independent Women's
Forum, International
Republic Institute, and
the Republican Women's
Federal Forum. Also,
Member of Board of
Visitors, College of
Business Administration,
University of Iowa, and
Member of Board of
Visitors, Center for Study
of Public Choice, George
Mason University.
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupations(s)
Company During Past Five Years
Kenneth T. King +#@ Director Retired. Formerly,
4080 North Circulo Chairman of the Board
Manzanillo of The Capitol Life
Tucson, Arizona Insurance Company,
Age: 73 Providence Washington
Insurance Company and
Director of numerous U.S.
subsidiaries thereof;
formerly, Chairman of the
Board of The Providence
Capitol Companies in the
United Kingdom and
Guernsey; Chairman of the
Board of the Symbion
Corporation until 1987.
John W. McIntyre + #@ Director Retired. Formerly,
7 Piedmont Center Vice Chairman of the
Suite 100 Board of Directors of
Atlanta, Georgia the Citizens and
Age: 68 Southern Corporation and
Chairman of the Board and
Chief Executive Officer
of the Citizens and
Southern Georgia Corp. and
the Citizens and Southern
National Bank; Trustee of
INVESCO Global Health
Sciences Fund, Gables
Residential Trust,
Employee's Retirement
System of GA, Emory
University and J.M. Tull
Charitable Foundation;
Director of Kaiser Foun-
dation Health Plans of
Georgia, Inc.
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupation(s)
Company During Past Five Years
Larry Soll, Ph.D.!** Director Retired. Formerly,
345 Poorman Road Chairman of the Board
Boulder, Colorado (1987 to 1994), Chief
Age: 57 Executive Officer (1982 to
1989 and 1993 to 1994) and
President (1982 to 1989)
of Synergen Inc.; Director
of Synergen since
incorporation in 1982;
Director of Isis
Pharmaceuticals, Inc.;
Trustee of INVESCO Global
Health Sciences Fund.
Glen A. Payne Secretary Senior Vice President,
7800 E. Union Avenue General Counsel and
Denver, Colorado Secretary of INVESCO
Age: 51 Funds Group, Inc.; Senior
Vice President, Secretary
and General Counsel of
INVESCO Distributors,
Inc.; Secretary, INVESCO
Global Health Sciences
Fund; formerly, General
Counsel of INVESCO Trust
Company (1989 to 1998);
formerly, employee of a
U.S. regulatory agency,
Washington, D.C. (1973 to
1989).
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupation(s)
Company During Past Five Years
Ronald L. Grooms Chief Accounting Senior Vice President,
7800 E. Union Avenue Officer, Chief Treasurer and Director of
Denver, Colorado Financial Officer and INVESCO Funds Group,
Age: 52 Treasurer Inc.; Senior Vice
President, Treasurer and
Director of INVESCO Dis-
tributors, Inc.;
Treasurer, Principal
Financial and
Accounting Officer of
INVESCO Global Health
Sciences Fund;
formerly, Senior Vice
President and
Treasurer of INVESCO
Trust Company (1988 to
1998).
William J. Galvin, Jr. Assistant Secretary Senior Vice President and
7800 E. Union Avenue Assistant Secretary
Denver, Colorado of INVESCO Funds
Age: 42 Group, Inc.; Senior
Vice President of
INVESCO Distributors,
Inc.; formerly, Trust
Officer of INVESCO
Trust Company.
Pamela J. Piro Assistant Treasurer Vice President and
7800 E. Union Avenue Assistant Treasurer of
Denver, Colorado INVESCO Funds Group,
Age: 39 Inc.; Vice President and
Assistant Treasurer
of INVESCO Distributors,
Inc.; formerly,
Assistant Vice
President (1996 to
1997), Director -
Portfolio Accounting
(1994 to 1996),
Portfolio Accounting
Manager (1993 to 1994)
and Assistant
Accounting Manager
(1990 to 1993).
<PAGE>
Name, Address, and Age Position(s) Held With Principal Occupation(s)
Company During Past Five Years
Alan I. Watson Assistant Secretary Vice President of
7800 E. Union Avenue INVESCO Funds Group,
Denver, Colorado Inc.; formerly, Trust
Age: 57 Officer of INVESCO
Judy P. Wiese Assistant Secretary Vice President and
7800 E. Union Avenue Assistant Secretary of
Denver, Colorado INVESCO Funds Group,
Age: 51 Inc.; Assistant Secretary
of INVESCO Distributors,
Inc.; formerly, Trust
Officer of INVESCO
Trust Company.
# Member of the audit committee of the Company.
+ Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
* These directors are "interested persons" of the Company as defined
in the 1940 Act.
** Member of the management liaison committee of the Company.
@ Member of the soft dollar brokerage committee of the Company.
! Member of the derivatives committee of the Company.
The following table shows the compensation paid by the Company to its
Independent Directors for services rendered in their capacities as directors of
the Company; the benefits accrued as Company expenses with respect to the
Defined Benefit Deferred Compensation Plan discussed below; and the estimated
annual benefits to be received by these directors upon retirement as a result of
their service to the Company, all for the period ended May 31, 1999.
<PAGE>
In addition, the table sets forth the total compensation paid by all of the
INVESCO Funds and INVESCO Global Health Sciences Fund (collectively, the
"INVESCO Complex") to these directors or trustees for services rendered in their
capacities as directors or trustees during the year ended December 31, 1998. As
of December 31, 1998, there were 53 funds in the INVESCO Complex.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Name of Person Aggregate Compen- Benefits Accrued Estimated Annual Total Compensa-
and Position sation From As Part of Company Benefits Upon tion From
Company(1) Expenses(2) Retirement(3) INVESCO Complex
Paid To Directors
and Trustees
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred A. Deering, $1,062 227 153 $103,700
Vice Chairman of
the Board
- ---------------------------------------------------------------------------------------------------------
Victor L. Andrews $1,053 217 169 80,350
- ---------------------------------------------------------------------------------------------------------
Bob R. Baker 1,053 194 226 84,000
- ---------------------------------------------------------------------------------------------------------
Lawrence H. Budner 1,052 217 169 79,350
- ---------------------------------------------------------------------------------------------------------
Daniel D. Chabris(4) 0 222 139 70,000
- ---------------------------------------------------------------------------------------------------------
Wendy Gramm 1,050 0 0 79,000
- ---------------------------------------------------------------------------------------------------------
Kenneth T. King 1,060 231 139 77,050
- ---------------------------------------------------------------------------------------------------------
John W. McIntyre 1,065 0 0 98,500
- ---------------------------------------------------------------------------------------------------------
Larry Soll 1,050 0 0 96,000
- ---------------------------------------------------------------------------------------------------------
Total 8,445 1,308 995 767,950
- ---------------------------------------------------------------------------------------------------------
% of Net Assets 0.0094%(5) 0.0015%(5) 0.0035%(6)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) The vice chairman of the board, the chairmen of the Funds' committees who
are Independent Directors, and the members of the Funds' committees who are
Independent Directors each receive compensation for serving in such capacities
in addition to the compensation paid to all Independent Directors.
(2) Represents estimated benefits accrued with respect to the Defined Benefit
Deferred Compensation Plan discussed below, and not compensation deferred at the
election of the directors.
<PAGE>
(3) These amounts represent the Company's share of the estimated annual benefits
payable by the INVESCO Funds upon the directors' retirement, calculated using
the current method of allocating director compensation among the INVESCO Funds.
These estimated benefits assume retirement at age 72 and further asume that the
basic retainer payable to the directors will be adjusted periodically for
inflation, for increases in the number of funds in the INVESCO Funds, and for
other reasons during the period in which retirement benefits are accrued on
behalf of the respective directors. This results in lower estimated benefits for
directors who are closer to retirement and higher estimated benefits for
directors who are further from retirement. With the exception of Drs. Soll and
Gramm, each of these directors has served as a director of one or more of the
funds in the INVESCO Funds for the minimum five-year period required to be
eligible to participate in the Defined Benefit Deferred Compensation Plan.
Although Mr. McIntyre became eligible to participate in the Defined Benefit
Deferred Compensation Plan as of November 1, 1998, he will not be included in
the calculation of retirement benefits until November 1, 1999.
(4) Mr. Chabris retired as a director of the Company on September 30, 1998.
(5) Totals as a percentage of the Company's net assets as of May 31, 1999.
(6) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1998.
Messrs. Brady and Williamson, as "interested persons" of the Company and the
other INVESCO Funds, receive compensation as officers or employees of INVESCO or
its affiliated companies, and do not receive any director's fees or other
compensation from the Company or the other funds in the INVESCO Funds for their
service as directors.
The boards of directors of the mutual funds in the INVESCO Funds have adopted a
Defined Benefit Deferred Compensation Plan (the "Plan") for the Independent
Directors of the funds. Under this Plan, each director who is not an interested
person of the funds (as defined in Section 2(a)(19) of the 1940 Act) and who has
served for at least five years (a "Qualified Director") is entitled to receive,
upon termination of service as a director (normally, at the retirement age of 72
or the retirement age of 73 or 74, if the retirement date is extended by the
boards for one or two years, but less than three years), continuation of payment
for one year (the "First Year Retirement Benefit") of the annual basic retainer
and annualized board meeting fees payable by the funds to the Qualified Director
at the time of his/her retirement (the "Basic Benefit"). Commencing with any
such director's second year of retirement, 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 50% of the Basic Benefit. These payments will continue for the
remainder of the Qualified Director's life or ten years, whichever is longer
(the "Reduced Benefit Payments"). If a Qualified Director dies or becomes
disabled after age 72 and before age 74 while still a director of the funds, the
First Year Retirement Benefit and Reduced Benefit Payments will be made to
him/her or to his/her beneficiary or estate. If a Qualified Director becomes
disabled or dies either prior to age 72 or during his/her 74th year while still
a director of the funds, the director will not be entitled to receive the First
Year Retirement Benefit; however, the Reduced Benefit Payments will be made to
his/her beneficiary or estate. The Plan is administered by a committee of three
directors who are also participants in the Plan and one director who is not a
<PAGE>
Plan participant. The cost of the Plan will be allocated among the INVESCO Funds
in a manner determined to be fair and equitable by the committee. The Company
began making payments under the Plan to Mr. Chabris as of October 1, 1998. The
Company has no stock options or other pension or retirement plans for management
or other personnel and pays no salary or compensation to any of its officers. A
similar plan has been adopted by INVESCO Global Health Sciences Fund's board of
trustees. All trustees of INVESCO Global Health Sciences Fund are also directors
of the INVESCO Funds.
The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of certain of the INVESCO
Funds. Certain of the deferred amounts have been invested in the shares of all
INVESCO Funds, except Funds offered by INVESCO Variable Investment Funds, Inc.
in which the directors are legally precluded from investing. Each Independent
Director may, therefore, be deemed to have an indirect interest in shares of
each such INVESCO Fund, in addition to any INVESCO Fund shares the Independent
Directors may own either directly or beneficially.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of August 31, 1999, the following persons owned more than 5% of the
outstanding shares of the Funds indicated below. This level of share ownership
constitutes a "principal shareholder" relationship with a Fund under the 1940
Act. Shares that are owned "of record" are held in the name of the person
indicated. Shares that are owned "beneficially" are held in another name, but
the owner has the full economic benefit of ownership of those shares:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
=============================================================================================
<S> <C> <C>
Teamsters Local Union 918 Record 5.33%
Welfare Fund
2137-2147 Utica Avenue
Brooklyn, NY 11234-3827
- ---------------------------------------------------------------------------------------------
Treasurer's Tax-Exempt Reserve Fund
- ---------------------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
=============================================================================================
J Rex Fuqua Beneficial 11.14%
c/o Fuqua Capital Corporation
Suite 5000
1201 W. Peachtree St., N.W.
Atlanta, GA 30309-3467
- ---------------------------------------------------------------------------------------------
<PAGE>
- ---------------------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
=============================================================================================
Alice H. Richards Beneficial 8.87%
P. O. Box 400
Carrollton, GA 30117-0400
- ---------------------------------------------------------------------------------------------
Fuqua Holdings LP Record 8.04%
1201 West Peachtree St., N.W.
Atlanta, GA 30309-3449
- ---------------------------------------------------------------------------------------------
Fuqua Family Fund LLP Beneficial 7.57%
Attn John Wright
Suite 5000
1201 W. Peachtree St., N.W.
Atlanta, GA 30309-3467
- ---------------------------------------------------------------------------------------------
Stephen A. Dana Beneficial 6.84%
1315 Peachtree St., N.E.
Suite 300
Atlanta, GA 30309-3503
- ---------------------------------------------------------------------------------------------
Willis M. Everett III Beneficial 6.47%
Cottage 89
P.O. Box 30832
Sea Island, GA 31561-0832
- ---------------------------------------------------------------------------------------------
Realan Foundation Inc. Record 6.31%
Regular Account
Suite 5000
1201 W. Peachtree St., N.W.
Atlanta, GA 30309-3467
- ---------------------------------------------------------------------------------------------
</TABLE>
As of September 14, 1999, officers and directors of the Company, as a group,
beneficially owned less than 1% of any Fund's outstanding shares.
<PAGE>
DISTRIBUTOR
INVESCO Distributors, Inc. ("IDI"), a wholly-owned subsidiary of INVESCO,
is the distributor of the Funds.
OTHER SERVICE PROVIDERS
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500, Denver,
Colorado, are the independent accountants of the Company. The independent
accountants are responsible for auditing the financial statements of the Funds.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, is the
custodian of the cash and investment securities of the Company. The custodian is
also responsible for, among other things, receipt and delivery of each Fund's
investment securities in accordance with procedures and conditions specified in
the custody agreement with the Company. The custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories. Prior to May 1, 1999, United Missouri Bank was
custodian of the Company.
TRANSFER AGENT
INVESCO, 7800 E. Union Avenue, Denver, Colorado, is the Company's transfer
agent, registrar, and dividend disbursing agent. Services provided by INVESCO
include the issuance, cancellation and transfer of shares of the Funds, and the
maintenance of records regarding the ownership of such shares.
LEGAL COUNSEL
The firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., 2nd
Floor, Washington, D.C., is legal counsel for the Company. The firm of Moye,
Giles, O'Keefe, Vermeire & Gorrell LLP, 1225 17th Street, Suite 2900, Denver,
Colorado, acts as special counsel to the Company.
BROKERAGE ALLOCATION AND OTHER PRACTICES
As the investment adviser to the Funds, INVESCO places orders for the purchase
and sale of securities with broker-dealers based upon an evaluation of the
financial responsibility of the broker-dealers and the ability of the
broker-dealers to effect transactions at the best available prices.
Consistent with the standard of seeking to obtain favorable execution on
portfolio transactions, INVESCO may select brokers that provide research
services to INVESCO and the Company, as well as other INVESCO mutual funds and
other accounts managed by INVESCO. Research services include statistical and
analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to INVESCO in making
informed investment decisions. Research services prepared and furnished by
brokers through which a Fund effects securities transactions may be used by
INVESCO in servicing all of its accounts and not all such services may be used
by INVESCO in connection with a particular Fund. Conversely, a Fund receives
benefits of research acquired through the brokerage transactions of other
clients of INVESCO.
<PAGE>
Because the securities that the Funds invest in are generally traded on a
principal basis, it is unusual for a Fund to pay any brokerage commissions. The
Funds paid no brokerage commissions for the period January 1, 1999 through May
31, 1999 and for the fiscal years ended December 31, 1998 and 1997. For the
period ended May 31, 1999, brokers providing research services received $0 in
commissions on portfolio transactions effected for the Funds. The aggregate
dollar amount of such portfolio transactions was $0. Commissions totaling $0
were allocated to certain brokers in recognition of their sales of shares of the
Funds on portfolio transactions of the Funds effected during the period ended
May 31, 1999.
At May 31, 1999, each Fund held debt securities of its regular brokers or
dealers, or their parents, as follows:
- --------------------------------------------------------------------------------
Fund Broker or Dealer Value of Securities
at May 31, 1999
================================================================================
Treasurer's Money Market Reserve None $0
- --------------------------------------------------------------------------------
Treasurer's Tax-Exempt Reserve None $0
- --------------------------------------------------------------------------------
Neither INVESCO nor any affiliate of INVESCO receives any brokerage commissions
on portfolio transactions effected on behalf of the Funds, and there is no
affiliation between INVESCO or any person affiliated with INVESCO or the Funds
and any broker or dealer that executes transactions for the Funds.
CAPITAL STOCK
The Company is authorized to issue up to two billion shares of common stock with
a par value of $0.01 per share. As of August 31, 1999, the following shares of
each Fund were outstanding:
Treasurer's Money Market Reserve Fund 123,508,912
Treasurer's Tax-Exempt Reserve Fund 52,933,949
All shares of each Fund are of one class with equal rights as to voting,
dividends and liquidation. All shares issued and outstanding are, and all shares
offered hereby when issued will be, fully paid and nonassessable. The board of
directors has the authority to designate additional classes of common stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.
Shares have no preemptive rights and are freely transferable on the books of
each Fund.
<PAGE>
All shares of the Company have equal voting rights based on one vote for each
share owned. The Company is not generally required and does not expect to hold
regular annual meetings of shareholders. However, when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company. The Funds will assist shareholders in
communicating with other shareholders as required by the 1940 Act.
Fund shares have noncumulative voting rights, which means that the holders of a
majority of the shares of the Company voting for the election of directors of
the Company can elect 100% of the directors if they choose to do so. If that
occurs, the holders of the remaining shares voting for the election of directors
will not be able to elect any person or persons to the board of directors.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company.
TAX CONSEQUENCES OF OWNING SHARES OF A FUND
Each Fund intends to continue to conduct its business and satisfy the applicable
diversification of assets, distribution and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. Each Fund qualified as a regulated investment
company and intends to continue to qualify during its current fiscal year. It is
the policy of each Fund to distribute all investment company taxable income. As
a result of this policy and the Funds' qualifications as regulated investment
companies, it is anticipated that neither of the Funds will pay federal income
or excise taxes and that the Funds will be accorded conduit or "pass through"
treatment for federal income tax purposes. Therefore, any taxes that a Fund
would ordinarily owe are paid by its shareholders on a pro-rata basis. If a Fund
does not distribute all of its net investment income, it will be subject to
income and excise tax on the amount that is not distributed. If a Fund does not
qualify as a regulated investment company, it will be subject to corporate tax
on its net investment income at the corporate tax rates.
Treasurer's Tax-Exempt Reserve Fund intends to qualify to pay "exempt-interest
dividends" to its shareholders. The Fund will qualify if at least 50% of its
total assets are invested in municipal securities at the end of each quarter of
the Fund's fiscal year. The exempt interest portion of the monthly income
dividend may be based on the ratio of that Fund's tax-exempt income to taxable
income for the entire fiscal year. The ratio is calculated and reported to
shareholders at the end of each fiscal year of the Fund. The tax-exempt portion
of any particular dividend may be based on the tax-exempt portion of all
distributions for the year, rather than on the tax-exempt portion of that
particular dividend. A corporation includes exempt-interest dividends in
calculating its alternative minimum taxable income in situations where the
adjusted current earnings of the corporation exceed its alternative minimum
taxable income.
<PAGE>
Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by private activity bonds or
industrial development bonds should consult their tax advisers before purchasing
shares of the Tax-Exempt Fund because, for users of certain of these facilities,
the interest on such bonds is not exempt from federal income tax. For these
purposes, the term "substantial user" is defined generally to include a
"non-exempt person" who regularly uses in trade or business a part of a facility
financed from the proceeds of such bonds.
The Funds' investment objectives and policies, including their policy of
attempting to maintain a net asset value of $1.00 per share, make it unlikely
that any capital gains will be paid to investors. However, the Fund cannot
guarantee that such a net asset value will be maintained. Accordingly, a
shareholder may realize a capital gain or loss upon redemption of shares of a
Fund. Capital gain or loss on shares held for one year or less is classified as
short-term capital gain or loss while capital gain or loss on shares held for
more than one year is classified as long-term capital gain or loss. Any loss
realized on the redemption of fund shares held for six months or less is
nondeductible to the extent of any exempt-interest dividends paid with respect
to such shares. Each Fund will be subject to a nondeductible 4% excise tax to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and its net capital gains for the
one-year period ending on October 31 of that year, plus certain other amounts.
You should consult your own tax adviser regarding specific questions as to
federal, state and local taxes. Dividends will generally be subject to
applicable state and local taxes. Qualification as a regulated investment
company under the Internal Revenue Code of 1986, as amended, for income tax
purposes does not entail government supervision of management or investment
policies.
PERFORMANCE
To keep shareholders and potential investors informed, INVESCO will occasionally
advertise the Funds' total returns for one-, five-, and ten-year periods (or
since inception). Total return figures show the rate of return on a $10,000
investment in a Fund, assuming reinvestment of all dividends for the periods
cited.
Cumulative total return shows the actual rate of return on an investment for the
period cited; average annual total return represents the average annual
percentage change in the value of an investment. Both cumulative and average
annual total returns tend to "smooth out" fluctuations in a Fund's investment
results, because they do not show the interim variations in performance over the
periods cited. More information about the Funds' recent and historical
performance is contained in the Company's Annual Report to Shareholders. You can
get a free copy by calling or writing to INVESCO using the phone number or
address on the back cover of the Funds' prospectus.
We may also advertise a Fund's "yield" and "effective yield." Both yield figures
are based on historical earnings and are not intended to indicate future
performance. The "yield" of a Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
the advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. For the seven days ended May 31, 1999,
Treasurer's Money Market Reserve Fund's current and effective yields were 4.71%
and 4.83%, respectively; the INVESCO Tax-Exempt Reserve Fund's current and
effective yields were 3.12% and 3.17%, respectively.
<PAGE>
When we quote mutual fund rankings published by Lipper Inc., we may compare a
Fund to others in its appropriate Lipper category, as well as the broad-based
Lipper general fund groupings. These rankings allow you to compare a Fund to its
peers. Other independent financial media also produce performance- or
service-related comparisons, which you may see in our promotional materials.
Performance figures are based on historical earnings and are not intended to
suggest future performance.
Average annual total return performance for the one-, five-, and ten-year
periods ended May 31, 1999 was:
Name of Fund 1 Year* 5 Year 10 Year
- ------------ ------- ------ -------
Treasurer's Money Market Reserve Fund 1.90% 5.35% 5.43%
Treasurer's Tax-Exempt Reserve Fund 1.16% 3.52% 3.80%
*From January 1, 1999 to May 31, 1999.
Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV
where: P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were determined
by solving the above formula for "T" for each time period indicated.
In conjunction with performance reports, comparative data between a Fund's
performance for a given period and other types of investment vehicles, including
certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder services
for a Fund, comparative data between that Fund's performance for a given period
and recognized indices of investment results for the same period, and/or
assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper, Inc., Lehman Brothers, National Association of
Securities Dealers Automated Quotations, Frank Russell Company, Value Line
Investment Survey, the American Stock Exchange, Morgan Stanley Capital
International, Wilshire Associates, the Financial Times Stock Exchange, the New
York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex, all of
which are unmanaged market indicators. In addition, rankings, ratings, and
comparisons of investment performance and/or assessments of the quality of
shareholder service made by independent sources may be used in advertisements,
<PAGE>
sales literature or shareholder reports, including reprints of, or selections
from, editorials or articles about the Fund. These sources utilize information
compiled (i) internally; (ii) by Lipper Inc.; or (iii) by other recognized
analytical services. The Lipper Inc. mutual fund rankings and comparisons which
may be used by the Fund in performance reports will be drawn from the tax-exempt
mutual fund groupings for Treasurer's Tax-Exempt Reserve Fund and the money
market mutual fund grouping for Treasurer's Money Market Reserve Fund, in
addition to the broad-based Lipper general fund groupings:
Sources for Fund performance information and articles about the Funds include,
but are not limited to, the following:
AMERICAN ASSOCIATION OF INDIVIDUAL INVESTORS' JOURNAL
BANXQUOTE
BARRON'S
BUSINESS WEEK
CDA INVESTMENT TECHNOLOGIES
CNBC
CNN
CONSUMER DIGEST
FINANCIAL TIMES
FINANCIAL WORLD
FORBES
FORTUNE
IBBOTSON ASSOCIATES, INC.
INSTITUTIONAL INVESTOR
INVESTMENT COMPANY DATA, INC.
INVESTOR'S BUSINESS DAILY
KIPLINGER'S PERSONAL FINANCE
LIPPER INC.'S MUTUAL FUND PERFORMANCE ANALYSIS
MONEY
MORNINGSTAR
MUTUAL FUND FORECASTER
NO-LOAD ANALYST
NO-LOAD FUND X
PERSONAL INVESTOR
SMART MONEY
THE NEW YORK TIMES
THE NO-LOAD FUND INVESTOR
<PAGE>
U.S. NEWS AND WORLD REPORT
UNITED MUTUAL FUND SELECTOR
USA TODAY
THE WALL STREET JOURNAL
WIESENBERGER INVESTMENT COMPANIES SERVICES
WORKING WOMAN
WORTH
FINANCIAL STATEMENTS
The financial statements for the Company for the period ended May 31, 1999 are
incorporated herein by reference from the Company's Annual Report to
Shareholders dated May 31, 1999.
<PAGE>
APPENDIX A
Some of the terms used in the Statement of Additional Information are
described below.
BANK OBLIGATIONS include certificates of deposit which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually from 14 days to one
year) at a stated interest rate.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation of a
bank to pay a draft which has been drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face amount
of the instrument upon maturity.
BOND ANTICIPATION notes normally are issued to provide interim financing
until long-term financing can be arranged. The long-term bonds then provide the
money for the repayment of the Notes.
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.
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.
<PAGE>
PORTFOLIO SECURITIES LOANS: The Company, on behalf of each of the Funds,
may lend limited amounts of its portfolio securities (not to exceed 33 1/3% of a
particular Fund's total assets). Management of the Company understands that it
is the current view of the staff of the SEC that the Funds are permitted to
engage in loan transactions only if the following conditions are met: (1) the
applicable Fund must receive 100% collateral in the form of cash or cash
equivalents, e.g., U.S. Treasury bills or notes, from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities (determined on a daily basis) rises above the level of the
collateral; (3) the Company must be able to terminate the loan after notice; (4)
the applicable Fund must receive reasonable interest on the loan or a flat fee
from the borrower, as well as amounts equivalent to any dividends, interest or
other distributions on the securities loaned and any increase in market value;
(5) the applicable Fund may pay only reasonable custodian fees in connection
with the loan; (6) voting rights on the securities loaned may pass to the
borrower; however, if a material event affecting the investment occurs, the
Company must be able to terminate the loan and vote proxies or enter into an
alternative arrangement with the borrower to enable the Company to vote proxies.
Excluding items (1) and (2), these practices may be amended from time to time as
regulatory provisions permit.
REPURCHASE AGREEMENTS: A repurchase agreement is a transaction in which a
Fund purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. A Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. In the opinion of
management this risk is not material; if the seller defaults, the underlying
security constitutes collateral for the seller's obligations to pay. This
collateral will be held by the custodian for the Company's assets. However, in
the absence of compelling legal precedents in this area, there can be no
assurance that the Company will be able to maintain its rights to such
collateral upon default of the issuer of the repurchase agreement. To the extent
that the proceeds from a sale upon a default in the obligation to repurchase are
less than the repurchase price, the particular Fund would suffer a loss.
REVENUE ANTICIPATION NOTES are issued in expectation of receipt of other
kinds of revenue, such as federal revenues available under the Federal Revenue
Sharing Program.
REVERSE REPURCHASE AGREEMENTS are transactions where a Fund temporarily
transfers possession of a portfolio security to another party, such as a bank or
broker-dealer, in return for cash, and agrees to buy the security back at a
future date and price. The use of reverse repurchase agreements will create
leverage, which is speculative. Reverse repurchase agreements are borrowings
subject to the Funds' investment restrictions applicable to that activity. The
Company will enter into reverse repurchase agreements solely for the purpose of
obtaining funds necessary for meeting redemption requests. The proceeds received
from a reverse repurchase agreement will not be used to purchase securities for
investment purposes.
<PAGE>
SHORT-TERM DISCOUNT NOTES (tax-exempt commercial paper) are promissory
notes issued by municipalities to supplement their cash flow. The ratings A-1
and P-1 are the highest commercial paper ratings assigned by S&P and Moody's,
respectively.
TAX ANTICIPATION NOTES are to finance working capital needs of
municipalities and are issued in anticipation of various seasonal tax revenues,
to be payable from these specific future taxes.
TIME DEPOSITS are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Funds will not benefit from insurance from the
Federal Deposit Insurance Corporation.
U.S. GOVERNMENT SECURITIES are debt securities (including bills, notes,
and bonds) issued by the U.S. Treasury or issued by an agency or instrumentality
of the U.S. government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
Fannie Mae, Ginnie Mae (also known as Government National Mortgage Association),
the Federal Farm Credit Bank, and the Federal Home Loan Banks. Although all
obligations of agencies, authorities and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on these
obligations may be backed directly or indirectly by the U.S. government. This
support can range from the backing of the full faith and credit of the United
States to U.S. Treasury guarantees, or to the backing solely of the issuing
instrumentality itself. In the case of securities not backed by the full faith
and credit of the United States, 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 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.
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A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG"). This distinction is in
recognition of the difference between short-term credit and long-term credit. A
short-term rating may also be assigned on an issue having a demand feature. Such
ratings are designated as VMIG. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon demand rather than fixed maturity dates and
payment relying on external liquidity.
MIG 1/VMIG 1 -- Notes and loans bearing this designation are of the best
quality, enjoying strong protection from established cash flows of funds for
their servicing or from established and broad-based access to the market for
refinancing, or both.
MIG 2/VMIG 2 -- Notes and loans bearing this designation are of high
quality, with margins of protection ample although not so large as in the
preceding group.
S& P'S RATING SERVICES. The characteristics of these debt obligations rated by
S&P are generally as follows:
AAA -- This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA -- Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
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S&P ratings for short-term notes are as follows:
SP-1 -- Very strong capacity to pay principal and interest.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
A debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
RATINGS OF COMMERCIAL PAPER
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS. Among the factors
considered by Moody's Investors Services, Inc. in assigning commercial paper
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
the risks which may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4) liquidity; (5)
amount and quality of long-term debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative differences in strength and
weakness in respect to these criteria would establish a rating of one of three
classifications; P-1 (Highest Quality), P-2 (Higher Quality) or P-3 (High
Quality).
DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS. An S&P commercial paper
rating is a current assessment of the likelihood of timely payment of debt
having an original maturity of no more than 365 days. Ratings are graded into
four categories, ranging from "A" for the highest quality obligations to "D" for
the lowest. The "A" categories are as follows:
A -- Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 -- This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
A-3 -- Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
