As filed on April 30, 1999 File No. 033-19862
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ___ _
Post-Effective Amendment No. 21 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 25 X
INVESCO TREASURER'S SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (800) 241-5477
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Clifford J. Alexander, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, D.C. 20036-1800
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Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
X immediately upon filing pursuant to paragraph (b)
__ on May 1, 1999, pursuant to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)(1)
__ on _________, pursuant to paragraph (a)(1)
__ 75 days after filing pursuant to paragraph (a)(2)
__ on _________, pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
__ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Page 1 of 80
Exhibit index is located at page 52
<PAGE>
INVESCO TREASURER'S SERIES TRUST
----------------------------------
CROSS-REFERENCE SHEET
Form N1-A
Item Caption
- ------- -------
Part A Prospectus
1......................... Cover Page; Back Cover Page
2......................... Investment Goals and Strategies; Fund Performance
3......................... Fees and Expenses; Investment Risks
4......................... Investment Goals and Strategies; Investment Risks
5......................... Not Applicable
6......................... Fund Management
7......................... Share Price;How To Buy Shares;Your Account Services;
......................... How To Sell Shares; Taxes
8......................... Distribution Expenses
9......................... Financial Highlights
Part B Statement of Additional Information
10........................ Cover Page; Table of Contents
11........................ The Company
12........................ Investment Policies and Risks; Investment Risks
and Strategies
13........................ Management of the Funds
14........................ Control Persons and Principal Shareholders
15........................ Management of the Funds
16........................ Brokerage Allocation and Other Practices
17........................ Capital Stock
18........................ Contained in Prospectuses
19........................ Tax Consequences of Owning Shares of the Funds
20........................ Not Applicable
21........................ Performance
22........................ Financial Statements
Part C Other Information
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PROSPECTUS | MAY 1, 1999
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YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
- -----------------------------------------------
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.................4
Fund Performance................................5
Fees And Expenses...............................5
Investment Risks................................6
Risks Associated With Particular Investments....7
Fund Management.................................7
The Fund Portfolio Manager......................8
Potential Rewards...............................8
Share Price.....................................8
How To Buy Shares...............................9
Your Account Services..........................10
How To Sell Shares.............................11
Dividends And Taxes............................13
Financial Highlights...........................14
[INVESCO ICON]
INVESCO
An investment in either of the Funds is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government 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 Fund.
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, it has not been 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
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
INVESCO Capital Management, Inc. ("ICM") is the investment adviser for the
Funds. Together with our affiliated companies, we at ICM control all
aspects of the management and sale of the Funds.
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 portfolios is 90 days or less.
The Funds are not intended for investors seeking capital appreciation or
gain. While not intended as a complete investment program, either of these
Funds may be a valuable element of your investment portfolio.
[KEY ICON] TREASURER'S MONEY MARKET RESERVE FUND
Treasurer's Money Market Reserve Fund invests primarily in short-term
securities issued by large creditworthy corporations, bank and finance
companies, and securities issued by the U.S. government. These securities
include corporate debt securities, bank obligations, commercial paper, U.S.
government debt, and repurchase agreements.
[KEY ICON] TREASURER'S TAX-EXEMPT RESERVE FUND
Treasurer's Tax-Exempt Reserve Fund invests at least 80% of its assets 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.
The rest of the Fund's investment portfolio may be invested in short-term
taxable instruments. These may include corporate debt securities, bank
obligations, commercial paper, U.S. government debt, and repurchase
agreements. 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.
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:
* maintaining high credit quality of the Funds' investments;
* maintaining a short average portfolio maturity;
* ensuring adequate diversification of both the issuers of the Funds'
investments and the guarantors of those investments, if any; and
* monitoring accurate pricing of the Funds' investments so unfairness does
not result from the use of the amortized cost method to value those
investments.
<PAGE>
[GRAPH ICON] FUND PERFORMANCE
The bar charts below show each Fund's actual yearly performance 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 the Funds 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.
MONEY MARKET RESERVE FUND TAX-EXEMPT RESERVE FUND
ACTUAL ANNUAL TOTAL RETURN (1) ACTUAL ANNUAL TOTAL RETURN (1)
The bar chart shows the actual yearly The bar chart shows the actual yearly
performance ended December 31. performance ended December 31.
Best Calendar qtr. 6/89 2.43% Best Calendar qtr. 6/89 1.70%
Worst Calendar qtr. 3/93 0.70% Worst Calendar qtr. 3/93 0.51%
AVERAGE ANNUAL TOTAL RETURN(1)
AS OF 12/31/98
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%
(1)Total return figures include reinvested dividends and include the effect
of each Fund's expenses.
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 0.25%
Distribution and Service (12b-1) Fees None
Other Expenses None
----
Total Annual Fund Operating Expenses(1) 0.25%
TREASURER'S TAX-EXEMPT RESERVE FUND
Management Fees 0.25%
Distribution and Service (12b-1)Fees None
Other Expenses None
----
Total Annual Fund Operating Expenses(1) 0.25%
(1) Pursuant to the Trust's investment advisory agreement, the Trust's
investment adviser is responsible for the payment of all of the Trust's
expenses other than payment of advisory fees, taxes, interest, and
brokerage commissions.
<PAGE>
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 $26 $80 $141 $318
[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 Federal Deposit Insurance
Corporation ("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.
<PAGE>
[ARROW ICON] RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS
The major risks of an investment in the Funds are those that affect the
overall yield of a Fund because the Funds are managed to maintain a stable
share price. The primary factor influencing the overall yield of the Funds
is short-term interest rates.
INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates will change
the 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.
CREDIT RISK
The Funds invest in debt instruments, such as notes and bonds. 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 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 such a transaction will not fulfill its
contractual obligation to complete a transaction with a Fund.
[INVESCO] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT
MANAGEMENT COMPANY THAT MANAGES MORE THAN $275 BILLION IN ASSETS WORLDWIDE.
AMVESCAP IS BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH
AND SOUTH AMERICA, AND THE FAR EAST.
THE INVESTMENT ADVISER
ICM, located at 1315 Peachtree Street, N.E., Atlanta, Georgia is the
investment adviser of the Funds. INVESCO Distributors, Inc. ("IDI") is the
Funds' distributor and is responsible for the sale of the Funds' shares.
ICM and IDI are subsidiaries of AMVESCAP PLC. The following table shows the
fees the Funds paid to ICM for its advisory services in the year ended
December 31, 1998:
Advisory Fee as a Percentage of
Average Annual Assets Under Management
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Treasurer's Money Market Reserve Fund 0.25%
Treasurer's Tax-Exempt Reserve Fund 0.25%
<PAGE>
[INVESCO ICON] THE PORTFOLIO MANAGER
George S. Robinson is primarily responsible for the day-to-day management
of the Funds' portfolio holdings.
GEORGE S. ROBINSON has been portfolio manager of the Funds since 1988 and
was formerly (1986 to 1987) Vice President of Citicorp Investment Bank. He
began his investment career in 1965.
[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 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:
* want to earn income at current money market rates
* want to preserve the value of their investment
* do not want to be exposed to a high level of risk
* are seeking federally tax-exempt income (Tax-Exempt Reserve Fund only)
You probably do not want to invest in the Funds if you are:
* primarily seeking long-term growth (although the Fund may serve as the
cash equivalent portion of a balanced investment program).
[INVESCO ICON] SHARE PRICE
THE 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 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 Funds Group, Inc. ("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.
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.
<PAGE>
[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.
We have the following policies governing exchanges:
*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).
*You may make up to four exchanges out of each Fund per year.
*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.
<PAGE>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
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BY CHECK, ACH OR WIRE $100,000; $5,000 Please remember that
Mail checks to: minimum for each if you pay by check,
INVESCO Funds Group, subsequent investment. ACH or wire and your
Inc., funds do not clear,
P.O. Box 173706, you will be
Denver, CO 80217-3706. responsible for any
You may send us a related loss to any
check by overnight Fund or INVESCO. If
courier to you are already an
7800 E. Union Ave. INVESCO funds
Denver, CO 80237 shareholder, the
Or you may purchase Fund may seek
shares by bank wire reimbursement for any
or ACH (call INVESCO loss from your
for instructions). existing account(s).
- ------------------------------------------------------------------------
BY EXCHANGE $100,000 to open a See "Exchange Policy."
Between two INVESCO new account; $5,000
funds. Call to purchase
1-800-525-8085 for additional shares for
prospectuses of an 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 no longer issue share certificates.
You have greater flexibility to conduct transactions without certificates.
If you hold share certificates, you will have to return them to INVESCO in
order to sell or exchange your shares, which will delay your sale.
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.
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.
<PAGE>
Unless you decline the telephone transaction privileges, when you fill out
and sign the new account Application, a Telephone Transaction Authorization
Form, or otherwise 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 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 any 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 trustees 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 trustees of the Funds.
Shareholders receiving such securities are likely to incur brokerage costs
on their subsequent sales of such securities. To date, the Trust has always
paid for redeemed shares in cash.
<PAGE>
METHOD MINIMUM REDEMPTION PLEASE REMEMBER
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BY TELEPHONE Any amount. INVESCO's telephone
Call us toll-free redemption privileges
at 1-800-525-8085. may be modified or
terminated in the
future at INVESCO's
discretion.
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IN WRITING Any amount. The INVESCO no longer
Mail your request to redemption request issues paper
INVESCO Funds Group, must be signed by all certificates for
Inc., P.O. Box registered account shares. If the shares
173706, Denver, CO owners. Payment will you are selling are
80217-3706. You may be mailed to your represented by stock
also send your address as it appears certificates, the
request by overnight on INVESCO's records, certificates must be
courier to 7800 E. or to a bank sent to INVESCO
Union Ave., designated by you in before we can process
Denver, CO 80237 writing. your redemption.
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BY CHECK $2,500 minimum per Personalized checks
check. are available from
INVESCO without charge
upon request. Checks may
be payable to any party.
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BY EXCHANGE Any amount. See "Exchange Policy."
Between two INVESCO
funds. Call
1-800-525-8085 for
prospectuses of
other INVESCO funds.
Exchanges may be made
in writing or 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 PARTY Any amount. All registered
Mail your request to account owners must
INVESCO Funds Group, Inc., sign the request,
P.O. Box 173706 with signature
Denver, CO 80217-3706. guarantees from an
eligible guarantor
financial
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 the 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 the 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. During the
fiscal year ended December 31, 1998, 91.80% 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 the
Funds 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
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by PricewaterhouseCoopers LLP,
independent accountants. This information should be read in conjunction
with the audited financial statements and the Report of Independent
Accountants thereon appearing in the Company's 1998 Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information. Both are available without charge by contacting IDI
at the address or telephone number on the back cover of this Prospectus.
The Annual Report also contains information about the Funds' performance.
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
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
- ------------------------------------------------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED
AND DISTRIBUTED TO SHAREHOLDERS 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
============================================================================================
TOTAL RETURN 5.46% 5.48% 5.30% 5.82% 4.13%
RATIOS
Net Assets - End of Period ($000 Omitted) $34,236 $67,146 $113,281 $141,885 $93,131
Ratio of Expenses to Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income to
Average Net Assets 5.35% 5.32% 5.17% 5.71% 4.02%
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
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
- ------------------------------------------------------------------------------------------
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED
AND DISTRIBUTED TO SHAREHOLDERS 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
============================================================================================
TOTAL RETURN 3.49% 3.74% 3.45% 3.90% 2.81%
RATIOS
Net Assets - End of Period ($000 Omitted) $36,707 $22,084 $23,386 $21,928 $19,716
Ratio of Expenses to Average Net Assets 0.25% 0.25% 0.25% 0.25% 0.25%
Ratio of Net Investment Income to
Average Net Assets 3.38% 3.68% 3.40% 3.86% 2.69%
</TABLE>
<PAGE>
MAY 1, 1999
INVESCO TREASURER'S SERIES TRUST
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 May 1, 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 and 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, annual report, semiannual
report or SAI, 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.
To reach PAL(R), your 24-hour Personal Account Line, call: 1-800-424-8085.
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
811-5460
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
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
May 1, 1999
- ------------------------------------------------------------------------------
A Prospectus for Treasurer's Money Market Reserve and Treasurer's Tax-Exempt
Reserve Funds dated May 1, 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 Trust . . . . . . . . . . . . . . . . . . . . . . 19
Investments, Policies and Risks . . . . . . . . . . .19
Investment Restrictions and Strategies . . . . . . . .23
Management of the Funds . . . . . . . . . . . . . . .25
Other Service Providers . . . . . . . . . . . . . . . 38
Brokerage Allocation and Other Practices . . . . . . .38
Capital Stock . . . . . . . . . . . . . . . . . . . . 39
Tax Consequences of Owning Shares of the Fund . . . . 40
Performance . . . . . . . . . . . . . . . . . . . . .41
Financial Statements . . . . . . . . . . . . . . . . .42
Appendix A . . . . . . . . . . . . . . . . . . . . . .43
<PAGE>
THE TRUST
The Trust was organized under the laws of the Commonwealth of Massachusetts as a
Massachusetts business trust on January 27, 1988.
The Trust is an open-end, diversified, no-load management investment company
currently consisting of two portfolios of investments: Treasurer's Money Market
Reserve Fund and 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 each
portfolio 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 the
Adviser, pursuant to procedures approved by the board of trustees, 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.
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 the Adviser: 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 S&P and Moody's, in one of the two highest
rating categories (AAA or AA by S&P or Aaa or Aa by Moody's), or where the
obligation is rated only by S&P or Moody's, and not by any other NRSRO, such
obligation is rated AAA or AA by S&P, or Aaa or Aa by Moody's. The 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 trustees. 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 trustees. From time to time, on
a temporary basis for defensive purposes, the Fund may hold cash.
Commercial paper acquired by the Fund must be rated by at least two NRSROs,
generally S&P and Moody's, in the highest rating category (A-1 by S&P or P-1 by
Moody's), or, where the obligation is rated by only S&P or Moody's and not by
any other NRSRO, such obligation is rated A-1 or P-1. Money market instruments
purchased by the Fund which are not rated by any NRSRO must be determined by the
Adviser to be of equivalent credit quality to the rated securities in which the
Fund may invest. In the Adviser's opinion, obligations that are not rated are
not necessarily of lower quality than those which are rated; however, they may
be less marketable and typically may provide higher yields. The Fund invests in
unrated securities only when such an investment is in accordance with the Fund's
investment objective of achieving a high level of current income and when such
investment will not impair the Fund's ability to comply with requests for
redemptions.
<PAGE>
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 trustees. Investments in foreign securities
involve special considerations. There is generally less publicly available
information about foreign issuers since many foreign countries do not have the
same disclosure and reporting requirements as are imposed by the U.S. securities
laws. Moreover, foreign issuers are generally not bound by uniform accounting
and auditing and financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Such investments may also
entail the risks of possible imposition of dividend withholding or confiscatory
taxes, possible currency blockage or transfer restrictions, expropriation,
nationalization or other adverse political or economic developments, and the
difficulty of enforcing obligations in other countries.
The 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.
<PAGE>
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.
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 the Adviser
determines, in an analysis similar to that performed by Moody's or S&P in rating
similar securities and issuers, that the security is comparable to that eligible
for investment by the Fund.
GUARANTEES -- In order to enhance the liquidity, stability or quality of a
municipal obligation, 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.
The Fund may not invest more than five percent of its net assets in securities
subject to conditional demand features from, or securities directly issued by,
the same institution. Rule 5b-2 of the Investment Company Act of 1940, which
describes the treatment of guarantees in determining whether a mutual fund has a
diversified portfolio of investments, provides that a Guarantee of a security
issued by a guarantor is not a security issued by such guarantor provided that
the value of all securities issued or guaranteed by the guarantor, and owned by
a fund, does not exceed 10% of the total assets of the fund. Investments in
securities with the same guarantor which exceed 10% of a fund's total assets are
included for purposes of Rule 5b-2 diversification. In considering whether an
obligation meets the Fund's quality standards, the Fund may look to the
creditworthiness of the party permitting the valuation of the underlying
obligation. These guidelines only apply immediately after the acquisition of a
security.
<PAGE>
Guarantees acquired by the Fund will have the following features: (1) they will
be in writing and will be physically held by the Fund's custodian; (2) the
Fund's rights to exercise them will be unconditional and unqualified; (3) they
will be entered into only with sellers which in the Adviser's opinion present a
minimal risk of default; (4) although Guarantees will not be transferable,
municipal obligations purchased subject to such rights may be sold to a third
party at any time, even though the right is outstanding; and (5) their exercise
price will be (i) the Fund's acquisition cost (excluding the cost, if any, of
the Guarantee) of the municipal obligations which are subject to the right
(excluding any accrued interest which the Fund paid on their acquisition), less
any amortized market premium or plus any amortized market or original issue
discount during the period the Fund owned the securities, plus (ii) all interest
accrued on the securities since the last interest payment date.
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 the 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 trustees 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
Capital Management, Inc. ("ICM") as investment adviser of the Funds, will
monitor the creditworthiness of such entities in accordance with procedures
adopted and monitored by the board of trustees. The Funds will enter into
repurchase agreements whenever, in the opinion of ICM, 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.
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 total 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.
<PAGE>
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 Trust 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 government securities.
PORTFOLIO SECURITIES LOANS -- The Trust, on behalf of each of the Funds, may
lend limited amounts of its portfolio securities (not to exceed 20% of a Fund's
total assets) to broker-dealers or other institutional investors. 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 the Adviser to be of good standing and will not be made unless,
in the judgment of the Adviser, the consideration to be earned from such loans
would justify the risk. The Adviser will evaluate the creditworthiness of such
borrowers in accordance with procedures adopted and monitored by the board of
trustees. It is expected that the Trust, on behalf of the applicable Fund, will
use the cash portions of loan collateral to invest in short-term income
producing securities for the Fund's account and that the Trust may share some of
the income from these investments with the borrower. See "Portfolio Securities
Loans" at Appendix A to this SAI.
INVESTMENT RESTRICTIONS AND STRATEGIES
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 portfolio of a Fund.
The following restrictions are fundamental policies and may not be changed
with respect to the Funds without the approval of a majority of the outstanding
voting securities of a Fund, as defined in the 1940 Act. Each of the
aforementioned Funds, unless otherwise indicated, may not:
<PAGE>
(1) invest in the securities of issuers (excluding (i) municipal
obligations for the Tax-Exempt Fund only, (ii) bankers' acceptances, time
deposits and certificates of deposit of domestic branches of U.S. banks and, as
to the Money Fund only, U.S. branches of foreign banks and foreign branches of
U.S. banks, provided that the U.S. branches are subject to sufficient regulation
by government bodies that they can be considered U.S. banks, and the obligations
of the foreign branches qualify as unconditional obligations of the U.S. parent,
and (iii) U.S. government obligations) conducting their principal business
activity in the same industry, if immediately after such investment the value of
a Fund's investments in such industry would represent 25% or more of the value
of such Fund's total assets. It should be noted that from time to time, the
Tax-Exempt Fund may invest more than 25% of the value of its total assets in
industrial development bonds which, although issued by industrial development
authorities, may be backed only by the assets and revenues of the
non-governmental users. The Tax-Exempt Fund may invest more than 25% of the
value of its total assets in municipal obligations which are related in such a
way that an economic, business or political development or change affecting one
such security also would affect the other securities; for example, securities
the interest upon which is paid from revenues of similar types of projects, or
securities whose issuers are located in the same state;
(2) as to 100% of the assets of each of the Funds, invest in the
securities of any one issuer, other than U.S. government obligations, if
immediately after such investment more than 5% of the value of a Fund's total
assets, taken at market value, would be invested in such issuer;
(3) underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the Securities Act of 1933, as
amended, in connection with the disposition of a Fund's portfolio securities;
(4) invest in companies for the purpose of exercising control or
management;
(5) issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes not in excess of 10%
of the value of a Fund's net assets (not including the amount borrowed) at the
time the money is borrowed. The Funds are permitted to borrow money only for the
purpose of meeting redemption requests which might otherwise require the
untimely disposition of securities. Borrowing is allowed as long as the cost of
borrowing is less than the income which would be lost should securities be sold
to meet the redemption requests. While in a borrowed position (including reverse
repurchase agreements), the Funds may not make purchases of securities. The
Funds may enter into reverse repurchase agreements only for the purpose of
obtaining funds necessary for meeting redemption requests;
(6) mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to secure funds borrowed
and then only to an extent not greater than 10% of the value of the applicable
Fund's total assets;
(7) make short sales of securities or maintain a short position;
(8) purchase securities on margin, except that a Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities;
(9) purchase or sell real estate or interests in real estate;
(10)purchase or sell commodities or commodity contracts;
(11)make loans to other persons, provided that a Fund may purchase debt
obligations consistent with its investment objectives and policies, may lend
limited amounts (not to exceed 20% of its total assets) of its portfolio
securities to broker-dealers or other institutional investors, and may enter
into repurchase agreements;
<PAGE>
(12)purchase securities of other investment companies except (i) in
connection with a merger, consolidation, acquisition or reorganization, or (ii)
by purchase in the open market of securities of open-end investment companies
involving only customary brokers' commissions and only if immediately thereafter
(i) no more than 3% of the voting securities of any one investment company are
owned by a Fund, (ii) no more than 5% of the value of the total assets of a Fund
would be invested in any one investment company, and (iii) no more than 10% of
the value of the total assets of a Fund would be invested in the securities of
such investment companies. Subject to these conditions, the Funds intend to
invest only in no-load money market funds not advised by the Adviser or any
company affiliated with the adviser which meet the requirements of Rule 2a-7 and
which do not incur any distribution expenses. Investors in the Funds should note
that such no-load money market funds will pay an advisory fee and incur other
operational expenses;
(13)enter into repurchase agreements if more than 10% of the applicable
Fund's net assets will be invested in repurchase agreements and in participation
interests without demand features, time deposits having a stated maturity
greater than seven days, securities having legal or contractual restrictions on
resale, securities for which there is no readily available market, or in other
illiquid securities. The term "illiquid securities" includes any security which
cannot be disposed of promptly and in the ordinary course of business without
taking a reduced price. A security is considered illiquid if a Fund cannot
receive the amount at which it values the instrument within seven days.
Additional investment restrictions adopted by the Trust on behalf of each
of the Funds, which may be changed by the trustees at their discretion, provide
that the Funds will not:
(a)write, purchase or sell puts, calls, straddles, spreads or combinations
thereof. However, in order to enhance the liquidity of a municipal obligation,
the Tax-Exempt Fund may acquire Guarantees;
(b)purchase or sell interests in oil, gas or other mineral leases or
exploration or development programs. A Fund, however, may purchase or sell
securities issued by entities which invest in such interests;
(c)invest more than 5% of a Fund's total assets in securities of companies
having a record, together with predecessors, of less than three years of
continuous operation;
(d)purchase or sell warrants;
(e)purchase or retain the securities of any issuer if any individual
officers and trustees/directors of the Trust, the Adviser, or any subsidiary
thereof owns individually more than 0.5% of the securities of that issuer and if
all such officers and trustees/directors together own more than 5% of the
securities of that issuer;
(f)engage in arbitrage transactions.
MANAGEMENT OF THE FUNDS
THE INVESTMENT ADVISER
INVESCO Capital Management, Inc., a Delaware corporation ("ICM") located at
1360 Peachtree Street, N.E., Suite 100, Atlanta, Georgia, is the Trust's
investment adviser. ICM also has an advisory office in Coral Gables, Florida and
a marketing and client service office in San Francisco. ICM is the sole
shareholder of INVESCO Services, Inc., a registered broker-dealer. ICM was
founded in 1986 and serves as investment adviser to:
INVESCO Value Trust
INVESCO Variable Total Return Fund
Target Portfolio Trust Large Capitalization Value Portfolio
The Chaconia Growth and Income Fund
<PAGE>
ICM manages institutional investment portfolios, consisting primarily of
discretionary employee benefit plans for corporations and state and local
governments, and endowment funds. As of December 31, 1998, ICM managed 28 mutual
funds having combined assets of $6.6 billion.
ICM is an indirect, wholly-owned subsidiary of AMVESCAP PLC, a
publicly-traded holding company. Through its subsidiaries, AMVESCAP PLC engages
in the business of investment management on an international basis. AMVESCAP PLC
is one of the largest independent investment management businesses in the world
with approximately $275 billion in assets under management on December 31, 1998.
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, through
INVESCO, complete transfer agency function: correspondence, sub-accounting,
telephone, communications and processing of distributions.
INVESCO Funds Group, Inc., Denver, Colorado, serves as an investment
adviser to INVESCO Bond Funds, Inc., INVESCO Combination Stock & Bond Funds,
Inc., INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds,
Inc., INVESCO Growth Funds, Inc., INVESCO Industrial Income Funds, Inc.,
INVESCO International Funds, Inc., INVESCO Money Market funds, Inc., INVESCO
Sector Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Stock Funds,
Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value Trust and INVESCO
Variable Investment Funds, Inc.
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 also offers the opportunity for its clients to
invest both directly and indirectly through partnerships in primarily
private investments or privately negotiated transactions. 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.
INVESCO NY specializes in the fundamental research investment approach, with
the help of quantitative tools.
A I M Advisors, Inc., Houston, Texas, provides investment advisory and
administrative services for retail and institutional mutual funds.
<PAGE>
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
ICM serves as investment adviser to the Funds under an investment advisory
agreement dated February 28, 1997 (the "Agreement") with the Trust, which was
last approved by the board of trustees for a term expiring May 15, 1999. The
board vote was cast in person, at a meeting called for this purpose, by a
majority of the trustees of the Trust, including a majority of the trustees who
are not "interested persons" of the Trust or ICM ("Independent Trustees").
Shareholders of each Fund approved the Agreement on January 31, 1997.
The Agreement may be continued from year to year if each such continuance is
specifically approved at least annually by the board of trustees of the Trust,
or by a vote of the holders of a majority, as defined in the 1940 Act, of the
outstanding shares of each Fund. Any continuance also must be approved by a
majority of the Trust's Independent Trustees, cast in person at a meeting called
for the purpose of voting on such continuance. The Agreement may be terminated
at any time without penalty by either party upon sixty (60) days' written notice
and terminates automatically in the event of an assignment to the extent
required by the 1940 Act and the rules thereunder.
The Agreement requires that ICM manage the investment portfolio of each Fund in
a way that conforms with each Fund's investment policies. ICM may directly
manage a Fund itself, or may hire a sub-adviser, which may be an affiliate of
ICM, to do so. Specifically, ICM 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 Trust's 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 Trust'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 trustees of the Trust, 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 the 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.
<PAGE>
ICM and INVESCO Funds Group, Inc. ("INVESCO"), as adviser and administrator of
the Funds, respectively, perform 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 Trust with officers, clerical staff and other employees
o furnishing office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related to
shareholder accounts
o conducting periodic compliance reviews of the Funds' operations;
preparation and review of required documents, reports and filings by
INVESCO's in-house legal and accounting staff or in conjunction with
independent attorneys and accountants (including 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 ICM are borne by the Funds. As compensation for its
advisory services to the Trust, ICM receives a monthly fee from each Fund. The
fee is calculated at the average rate of 0.25% of each Fund's average net
assets.
During the fiscal years ended December 31, 1998, 1997 and 1996, the Funds paid
ICM advisory fees in the dollar amounts shown below.
1998 1997 1996
---- ---- ----
Treasurer's Money $141,183 $256,934 $337,832
Market Reserve Fund
Treasurer's Tax-Exempt $79,720 $49,547 $58,191
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 dated February 28, 1997. The
Administrative Services Agreement was approved on November 6, 1996, at a meeting
called for that purpose, by a vote cast in person by all of the trustees of the
Trust, including a majority of the Independent Trustees of the Trust.
The Administrative Services Agreement was for an initial term expiring in one
year and has been extended by action of the board of trustees through May 15,
1999. The Administrative Services Agreement may be continued from year to year
as long as each such continuance is specifically approved by the board of
trustees of the Trust, including a majority of the Trust's Independent Trustees.
The Administrative Services Agreement may be terminated at any time without
penalty by INVESCO on sixty (60) days' written notice, or by the Funds upon
thirty (30) days' written notice, and ends automatically in the event of an
assignment unless the Trust's board of trustees, including a majority of the
Trust's Independent Trustees, approves such assignment.
<PAGE>
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.
The Administrative Services Agreement provides that each Fund pay INVESCO an
annual base fee per Fund of $10,000 plus an additional incremental fee computed
daily and paid monthly by each Fund, at an annual rate of 0.015% of the average
net assets of each Fund. The Funds themselves paid no administrative services
fees to INVESCO; those expenses were absorbed and paid by ICM pursuant to its
Advisory Agreement with the Trust.
TRANSFER AGENCY AGREEMENT
INVESCO also performs transfer agent, dividend disbursing agent, and registrar
services for the Funds pursuant to a Transfer Agency Agreement dated February
28, 1997, which was approved by the board of trustees of the Trust on November
6, 1996 for an initial term expiring in one year, and has been extended by
action of the board of trustees through May 15, 1999. The Transfer Agency
Agreement may be continued from year to year as long as such continuance is
specifically approved at least annually by the board of trustees of the Trust,
including a majority of the Trust's Independent Trustees or a vote of a majority
of the outstanding voting securities of the Funds. The Transfer Agency Agreement
may be terminated at any time without penalty by either party upon sixty (60)
days' written notice and terminates automatically in the event of assignment.
The Transfer Agency Agreement provides that each Fund pay INVESCO an annual fee
of $50.00 per shareholder account, with a minimum fee of $5,000 per Fund. This
fee is paid monthly at the rate of 1/12 of the annual fee and is based upon the
actual number of shareholder accounts in a Fund at any time during each month.
The Funds themselves paid no transfer agency fees to INVESCO; those expenses
were absorbed and paid by ICM pursuant to its Advisory Agreement with the Trust.
TRUSTEES AND OFFICERS OF THE TRUST
The overall direction and supervision of the Trust come from the board of
trustees. The board of trustees 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 trustees has an audit committee comprised of four of the trustees
who are not affiliated with INVESCO (the "Independent Trustees"). The committee
meets quarterly with the Trust's independent accountants and officers to review
accounting principles used by the Trust, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Trust 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 Trust, and to review legal and operational
matters which have been assigned to the committee by the board of trustees, in
furtherance of the board of trustees' overall duty of supervision.
The Trust 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 the Funds' adviser with respect
to brokerage transactions. It reports on these matters to the Trust's board of
trustees.
The Trust 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 the Funds' adviser to ensure that
the use of such instruments follows the policies on such instruments adopted by
the Trust's board of trustees. It reports on these matters to the Trust's board
of trustees.
<PAGE>
The officers of the Trust, all of whom are officers and employees of INVESCO,
are responsible for the day-to-day administration of the Trust and the Funds.
The officers of the Trust receive no direct compensation from the Trust for
their services as officers. The investment adviser for the Funds has the primary
responsibility for making investment decisions on behalf of the Funds.
All of the officers and trustees of the Trust hold comparable positions with the
following funds, which, with the Trust, 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 Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Funds, Inc. (formerly, INVESCO Growth Fund, Inc.)
INVESCO Industrial Income Fund, 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 Trust
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
The table below provides information about each of the Trust's trustees and
officers. Unless otherwise indicated, the address of the trustees and officers
is P.O. Box 173706, Denver, CO 80217-3706 . Their affiliations represent their
principal occupations.
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Trust During Past Five Years
Charles W. Brady *+ 1315 Director and Chairman of the Board
Peachtree St., N.E. Chairman of the Board of INVESCO Global
Atlanta, Georgia Health Sciences Fund;
Age: 63 Chief Executive Officer
and Director of AMVESCAP
PLC, London, England and
various subsidiaries of
AMVESCAP PLC.
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.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Trust During Past Five Years
Mark H. Williamson *+ President, Chief President, Chief Execu-
7800 E. Union Avenue Executive Officer tive Officer and
Denver, Colorado and Director Director of INVESCO
Age: 47 Distributors, Inc.;
President, Chief Executive
Officer and Director of
INVESCO Funds Group, Inc.;
President and Chief
Operating Officer of
INVESCO Global Health
Sciences Fund; formerly,
Chairman and Chief
Executive Officer of
NationsBanc Advisors,
Inc.; formerly, Chairman
of NationsBanc Invest-
ments, Inc.
Victor L. Andrews, Ph.D. Director Professor Emeritus,
**! Chairman Emeritus and
34 Seawatch Drive Chairman of the CFO
Savannah, Georgia Roundtable of the
Age: 68 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: 68 President and Senior
Trust Officer of
InterFirst Bank,
Dallas, Texas.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Trust During Past Five Years
Wendy L. Gramm**! 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, Inde-
pendent Women's Forum,
International Republic
Institute, and the Republi
can 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.
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.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Trust During Past Five Years
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.
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>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Trust During Past Five Years
Ronald L. Grooms Treasurer Senior Vice President
7800 E.Union Avenue and Treasurer of
Denver, Colorado INVESCO Funds Group,
Age: 52 Inc.; Senior Vice
President and Treasurer
of INVESCO Distributors,
Inc.; Treasurer, Principal
Financial and Accounting
Officer, INVESCO Global
Health Sciences Fund;
formerly, Senior Vice
President and Treasurer of
INVESCO Trust Company
(1988 to 1998).
# Member of the audit committee of the Trust.
+ Member of the executive committee of the Trust. On occasion, the
executive committee acts upon the current and ordinary business of the
Trust between meetings of the board of trustees. Except for certain powers
which, under applicable law, may only be exercised by the full board of
trustees, the executive committee may exercise all powers and authority
of the board of trustees in the management of the business of the Trust. All
decisions are subsequently submitted for ratification by the board of trustees.
* These trustees are "interested persons" of the Trust as
defined in the 1940 Act.
** Member of the management liaison committee of the Trust.
@ Member of the soft dollar brokerage committee of the Trust.
! Member of the derivatives committee of the Trust.
The following table shows the compensation paid by the Trust to its Independent
Trustees for services rendered in their capacities as trustees of the Trust; the
benefits accrued as Trust expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these trustees upon retirement as a result of their service to the
Trust, all for the fiscal year ended December 31, 1998.
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 trustees for services rendered in their capacities
as trustees or directors during the year ended December 31, 1998. As of December
31, 1998, there were 16 funds in the INVESCO Complex.
<PAGE>
- -------------------------------------------------------------------------------
Name of Person Aggregate Benefits Estimated Total Compensa-
and Position Compensation Accrued As Annual Benefits tion From
From Trust(1) Part of Trust Upon INVESCO Com-
Expenses(2) Retirement(3) plex Paid To
Trustees
- -------------------------------------------------------------------------------
Fred A. $2,172 $227 $153 $103,700
Deering, Vice
Chairman of
the Board
- -------------------------------------------------------------------------------
Victor L. Andrews 2,149 217 169 80,350
- -------------------------------------------------------------------------------
Bob R. Baker 2,166 194 226 84,000
- -------------------------------------------------------------------------------
Lawrence H. 2,144 217 169 79,350
Budner
- -------------------------------------------------------------------------------
Daniel D. 1,622 222 139 70,000
Chabris(4)
- -------------------------------------------------------------------------------
Wendy Gramm 2,143 0 0 79,000
- -------------------------------------------------------------------------------
Kenneth T. King 2,133 231 139 77,050
- -------------------------------------------------------------------------------
John W. McIntyre 2,144 0 0 98,500
- -------------------------------------------------------------------------------
Larry Soll 2,138 0 0 96,000
- -------------------------------------------------------------------------------
Total 18,811 1,308 995 767,950
- -------------------------------------------------------------------------------
% of Net Assets 0.0249%(5) 0.0017%(5) 0.0035%(6)
- -------------------------------------------------------------------------------
(1) The vice chairman of the board, the chairmen of the Funds' committees who
are Independent Trustees, and the members of the Funds' committees who are
Independent Trustees, each receive compensation for serving in such capacities
in addition to the compensation paid to all Independent Trustees.
(2) Represents estimated benefits accrued with respect to the Defined Benefit
Deferred Compensation Plan discussed below, and not compensation deferred at the
election of the trustees.
(3) These amounts represent the Trust's share of the estimated annual benefits
payable by the INVESCO Funds upon the trustees' retirement, calculated using the
current method of allocating trustee compensation among the INVESCO Funds. These
estimated benefits assume retirement at age 72 and further asume that the basic
retainer payable to the trustees 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 trustees. This results in lower estimated benefits for trustees who
are closer to retirement and higher estimated benefits for trustees who are
further from retirement. With the exception of Drs. Soll and Gramm, each of
these trustees has served as a director/trustee 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 trustee of the Trust on September 30, 1998.
(5) Totals as a percentage of the Trust's net assets as of December 31, 1998.
(6) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1998.
<PAGE>
Messrs. Brady and Williamson, as "interested persons" of the Trust and the other
INVESCO Funds, receive compensation as officers or employees of INVESCO or its
affiliated companies, and do not receive any trustee's fees or other
compensation from the Trust or the other funds in the INVESCO Funds for their
service as trustees.
The boards of directors/trustees of the mutual funds in the INVESCO Funds have
adopted a Defined Benefit Deferred Compensation Plan (the "Plan") for the
Independent Directors and Trustees of the funds. Under this Plan, each director
or trustee who is not an interested person of the funds (as defined in Section
2(a)(19) of the 1940 Act) and who has served for at least five years (a
"Qualified Trustee") is entitled to receive, upon termination of service as a
trustee (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 Trustee at the time of his/her
retirement (the "Basic Benefit"). Commencing with any such trustee's second year
of retirement, and commencing with the first year of retirement of a trustee
whose retirement has been extended by the board for three years, a Qualified
Trustee shall receive quarterly payments at an annual rate equal to 50% of the
Basic Benefit. These payments will continue for the remainder of the Qualified
Trustee's life or ten years, whichever is longer (the "Reduced Benefit
Payments"). If a Qualified Trusteee dies or becomes disabled after age 72 and
before age 74 while still a trustee 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 Trustee becomes disabled or dies either
prior to age 72 or during his/her 74th year while still a trustee of the funds,
the trustee will not be entitled to receive the First Year Retirement Benefit;
however, the Reduced Benefit Payments will be made to his/her beneficiary or
estate. The Plan is administered by a committee of three trustees who are also
participants in the Plan and one director/trustee who is not a Plan participant.
The cost of the Plan will be allocated among the INVESCO Funds in a manner
determined to be fair and equitable by the committee. The Company began making
payments under the Plan to Mr. Chabris as of October 1, 1998. 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.
The Independent Trustees 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 trustees of certain of the INVESCO
Funds. Certain of the deferred amounts have been invested in the shares of all
of the INVESCO Funds. Each Independent Trustee is, therefore, an indirect owner
of shares of all of the INVESCO Funds, in addition to any Fund shares the
Independent Trustees may own either directly or beneficially.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDER
As of March 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:
<PAGE>
Treasurer's Money Market Reserve Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================
- ----------------------------------------------------------------------------
Teamsters Local Union 918 Record 17.03%
Welfare Fund
2137-2147 Utica Avenue
Brooklyn, NY 11234-3827
- ----------------------------------------------------------------------------
INVESCO Capital Management, Record 9.28%
Inc.
Attn: Natalie Wilson
1315 Peachtree St., N.E.
Suite 300
Atlanta, GA 30309-3503
- ----------------------------------------------------------------------------
GA Amateur Athletics FDN Inc. Record 9.15
c/o Robert F. McCullough,
INVESCO
1315 Peachtree St., N.E.
Suite 500
Atlanta, GA 30309-3503
- ----------------------------------------------------------------------------
WSU Endowment Association Record 8.12%
1845 Fairmount
wichita, KS 67260-0001
- ----------------------------------------------------------------------------
Bank of New York Record 6.07%
Sheet Metal Workers
Health Plan A Trust
Acct #5618177-000
700 S. Flower, Suite 200
Los Angeles, CA 90017-4104
- ----------------------------------------------------------------------------
Georgia Branch Associated Record 5.22%
General Contractors of
America
P.O. Box 492349
- ----------------------------------------------------------------------------
Treasurer's Tax-Exempt Reserve Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================
Alice H. Richards Beneficial 12.98%
P. O. Box 400
Carrollton, GA 30117-0400
- ----------------------------------------------------------------------------
Stephen A. Dana Beneficial 12.23%
1315 Peachtree St., N.E.
Suite 300
Atlanta, GA 30309-3503
- ----------------------------------------------------------------------------
Willis M. Everett III Beneficial 10.74%
Cottage 89
P.O. Box 30832
Sea Island, GA 31561-0832
- ----------------------------------------------------------------------------
J B Fuqua Record 9.99%
c/o Fuqua Capital Corporation
1201 W. Peachtree St., N.W.
Suite 5000
Atlanta, GA 30309-3467
- ----------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================
Thomas L. Shields Jr. Beneficial 8.67%
1750 W. Sussex
Atlanta, GA 30306-3013
- ----------------------------------------------------------------------------
J Rex Fuqua Beneficial 8.39%
Suite 5000
1201 W. Peachtree St., N.W.
Atlanta, GA 30309-3467
- ----------------------------------------------------------------------------
Realan Capital Corporation Beneficial 7.88%
1201 W. Peachtree St., N.E.
Suite 5000
Atlanta, GA 30309-3467
- ----------------------------------------------------------------------------
Hubert L. Harris, Jr. Beneficial 5.31%
4606 Polo Lane
Atlanta, GA 30339-5346
- ----------------------------------------------------------------------------
As of April 12, 1999, officers and trustees of the Trust, as a group,
beneficially owned less than 2% of any Fund's outstanding shares.
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 Trust. 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 Trust. 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 Trust. The custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories.
TRANSFER AGENT
INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado is the Trust'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 Trust. The firm of Moye,
Giles, O'Keefe, Vermeire & Gorrell, 1225 17th Street, Suite 2900, Denver,
Colorado, acts as special counsel to the Trust.
BROKERAGE ALLOCATION AND OTHER PRACTICES
As the investment adviser to the Funds, ICM 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.
<PAGE>
Consistent with the standard of seeking to obtain favorable execution on
portfolio transactions, ICM may select brokers that provide research services to
ICM and the Trust, as well as other accounts managed by ICM. 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 ICM in making informed investment decisions. Research services prepared and
furnished by brokers through which a Fund effects securities transactions may be
used by ICM in servicing all of its accounts and not all such services may be
used by ICM in connection with a particular Fund. Conversely, a Fund receives
benefits of research acquired through the brokerage transactions of other
clients of ICM.
Because the securities that the Funds invest in are generally traded on a
principal basis, it is unusual for a Fund to pay any brokerage commissions. The
Funds paid no brokerage commissions for the fiscal years ended December 31,
1998, 1997 and 1996. For the fiscal year ended December 31, 1998, brokers
providing research services received $0 in commissions on portfolio transactions
effected for the Funds. The aggregate dollar amount of such portfolio
transactions was $0. Commissions totaling $0 were allocated to certain brokers
in recognition of their sales of shares of the Funds on portfolio transactions
of the Funds effected during the fiscal year ended December 31, 1998.
At December 31, 1998, each Fund held debt securities of its regular brokers or
dealers, or their parents, as follows:
- -------------------------------------------------------------------------------
Fund Broker or Dealer Value of Securities
at December 31, 1998
===============================================================================
Treasurer's Money Market Reserve United Missouri Bank $3,742,034.95
- -------------------------------------------------------------------------------
Treasurer's Tax-Exempt Reserve United Missouri Bank $1,564,176.71
- -------------------------------------------------------------------------------
Neither ICM nor any affiliate of ICM receives any brokerage commissions on
portfolio transactions effected on behalf of the Funds, and there is no
affiliation between ICM or any person affiliated with ICM or the Funds and any
broker or dealer that executes transactions for the Funds.
CAPITAL STOCK
The Trust is authorized to issue an unlimited number of shares of common stock
with no par value.
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
trustees has the authority to designate additional classes of common stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.
Shares have no preemptive rights and are freely transferable on the books of
each Fund.
All shares of the Trust have equal voting rights based on one vote for each
share owned. The Trust 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 Trust or
as may be required by applicable law or the Trust's Declaration of Trust, the
board of trustees will call special meetings of shareholders.
Trustees may be removed by action of the holders of a majority of the
outstanding shares of the Trust. The Funds will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
Fund shares have noncumulative voting rights, which means that the holders of a
majority of the shares of the Trust voting for the election of trustees of the
Trust can elect 100% of the trustees if they choose to do so. If that occurs,
the holders of the remaining shares voting for the election of trustees will not
be able to elect any person or persons to the board of trustees. Trustees may be
removed by action of the holders of a majority of the outstanding shares of the
Trust.
<PAGE>
TAX CONSEQUENCES OF OWNING SHARES OF THE 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 in the fiscal year ended December 31, 1998, 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.
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 December 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.
<PAGE>
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 Trust'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 December 31, 1998
the Money Reserve Fund's current and effective yields were 5.42% and 5.57%,
respectively; the Tax-Exempt Reserve Fund's current and effective yields were
3.86% and 3.94%, respectively.
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 December 31, 1998 was:
Name of Fund 1 Year 5 Year 10 Year
- ------------ ------ ------ -------
Treasurer's Money Market Reserve Fund 5.46% 5.24% 5.65%
Treasurer's Tax-Exempt Reserve Fund 3.49% 3.48% 3.96%
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.
<PAGE>
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 Trust, 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,
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 groupings for the 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 Trust Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund
Performance Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
The Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
FINANCIAL STATEMENTS
The financial statements for the Trust for the fiscal year ended December 31,
1998 are incorporated herein by reference from the Trust's Annual Report to
Shareholders dated December 31, 1998.
<PAGE>
APPENDIX A
Some of the terms used in theStatement 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 Trust, on behalf of each of the Funds, may
lend limited amounts of its portfolio securities (not to exceed 20% of a
particular Fund's total assets) to broker-dealers or other institutional
investors. Management of the Trust understands that it is the current view of
the staff of the SEC that the Funds are permitted to engage in loan transactions
only if the following conditions are met: (1) the applicable Fund must receive
100% collateral in the form of cash or cash equivalents, e.g., U.S. Treasury
bills or notes, from the borrower; (2) the borrower must increase the collateral
whenever the market value of the securities (determined on a daily basis) rises
above the level of the collateral; (3) the Trust must be able to terminate the
loan after notice; (4) the applicable Fund must receive reasonable interest on
the loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest or other distributions on the securities loaned and any
increase in market value; (5) the applicable Fund may pay only reasonable
custodian fees in connection with the loan; (6) voting rights on the securities
loaned may pass to the borrower; however, if a material event affecting the
investment occurs, the Trust must be able to terminate the loan and vote proxies
or enter into an alternative arrangement with the borrower to enable the Trust
to vote proxies. Excluding items (1) and (2), these practices may be amended
from time to time as regulatory provisions permit.
REPURCHASE AGREEMENTS: A repurchase agreement is a transaction in which a
Fund purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. A Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. In the opinion of
management this risk is not material; if the seller defaults, the underlying
security constitutes collateral for the seller's obligations to pay. This
collateral will be held by the custodian for the Trust's assets. However, in the
absence of compelling legal precedents in this area, there can be no assurance
that the Trust will be able to maintain its rights to such collateral upon
default of the issuer of the repurchase agreement. To the extent that the
proceeds from a sale upon a default in the obligation to repurchase are less
than the repurchase price, the particular Fund would suffer a loss.
REVENUE ANTICIPATION NOTES are issued in expectation of receipt of other
kinds of revenue, such as federal revenues available under the Federal Revenue
Sharing Program.
REVERSE REPURCHASE AGREEMENTS 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
Trust will enter into reverse repurchase agreements solely for the purpose of
obtaining funds necessary for meeting redemption requests. The proceeds received
from a reverse repurchase agreement will not be used to purchase securities for
investment purposes.
SHORT-TERM DISCOUNT NOTES (tax-exempt commercial paper) are promissory
notes issued by municipalities to supplement their cash flow. The ratings A-1
and P-1 are the highest commercial paper ratings assigned by S&P and Moody's,
respectively.
TAX ANTICIPATION NOTES are to finance working capital needs of
municipalities and are issued in anticipation of various seasonal tax revenues,
to be payable from these specific future taxes.
TIME DEPOSITS are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Funds will not benefit from insurance from the
Federal Deposit Insurance Corporation.
U.S. GOVERNMENT SECURITIES are debt securities (including bills, notes,
and bonds) issued by the U.S. Treasury or issued by an agency or instrumentality
of the U.S. government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
Fannie Mae, Ginnie Mae (also known as Government National Mortgage Association),
<PAGE>
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.
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.
<PAGE>
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.
S&P ratings for short-term notes are as follows:
SP-1 -- Very strong capacity to pay principal and interest.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
A debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
RATINGS OF COMMERCIAL PAPER
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS. Among the factors
considered by Moody's Investors Services, Inc. in assigning commercial paper
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
the risks which may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4) liquidity; (5)
amount and quality of long-term debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative differences in strength and
weakness in respect to these criteria would establish a rating of one of three
classifications; P-1 (Highest Quality), P-2 (Higher Quality) or P-3 (High
Quality).
DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS. An S&P commercial paper
rating is a current assessment of the likelihood of timely payment of debt
having an original maturity of no more than 365 days. Ratings are graded into
four categories, ranging from "A" for the highest quality obligations to "D" for
the lowest. The "A" categories are as follows:
A -- Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 -- This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
A-3 -- Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
(a) (i) Declaration of Trust of Registrant.(4)
(b) Bylaws as of July 21, 1993.(2)
(c) Not applicable.
(d) (i) Investment Advisory Agreement between Registrant and
INVESCO Capital Management Inc. dated February 28,1997.(2)
(e) (i) General Distribution Agreement between Registrant and
INVESCO Services, Inc. dated February 28, 1997.(2)
(ii) General Distribution Agreement between Registrant and
INVESCO Funds Group, Inc. dated May 15, 1997.(3)
(iii) General Distribution Agreement between Registrant and
INVESCO Distributors, Inc. dated September 30, 1997.(3)
(f) (i) Defined Benefit Deferred Compensation Plan for Non-
Interested Directors and Trustees.(2)
(ii) Amended Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and Trustees.(5)
(g) (i)Custody Agreement between Trust and United Missouri
Bank of Kansas City, N.A. dated August 31, 1989.(4)
(ii) Form of Custody Agreement between Trust and State
Street Bank & Trust dated ______________, 1999.
(h) (i) Transfer Agency Agreement between Registrant and
INVESCO Funds Group, Inc. dated February 28, 1997.(2)
(ii) Indemnification Agreement between INVESCO Capital
Management, L.P. and each of the Trustees of the Registrant.(2)
(iii) Administrative Services Agreement between
Registrant and INVESCO Funds Group, Inc. dated February 28,
1997.(2)
(i) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, be legally issued, fully paid and non-assessable.(4)
(j) Consent of Independent Accountants.
(k) Not applicable.
(l) Not applicable.
(m) Not Applicable.
(n) (i) Financial Data Schedule for the year ended December 31,
1998 for the Treasurer's Money Market Reserve Fund.
(ii) Financial Data Schedule for the year ended December 31,
1998 for the Treasurer's Tax-Exempt Reserve Fund.
(o) Not applicable.
<PAGE>
(1) Previously filed on EDGAR with Post-Effective Amendment No. 16 to the
Registration Statement on April 23, 1996, and incorporated by reference
herein.
(2) Previously filed on EDGAR with Post-Effective Amendment No. 17 to the
Registration Statement on April 25, 1997, and incorporated by reference
herein.
(3) Previously filed on EDGAR with Post-Effective Amendment No. 18 to the
Registration Statement on February 27, 1998, and incorporated by reference
herein.
(4) Previously filed on EDGAR with Post-Effective Amendment No. 19 to the
Registration Statement on April 30, 1998, and incorporated by reference
herein.
(5) Previously filed on EDGAR with Post-Effective Amendment No. 20 to the
Registration Statement on March 1, 1999, and incorporated by reference
herein.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
No person is presently controlled by or under common control with the Fund.
ITEM 25. INDEMNIFICATION
Indemnification provisions for officers, directors and employees of Registrant
are set forth in Article X of the Amended Bylaws and Article Seventh (3) of the
Articles of Restatement of the Articles of Incorporation, and are hereby
incorporated by reference. See Item 24(b)(1) and (2) above. Under these
Articles, directors and officers will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
Fund directors and officers cannot be protected against liability to the Fund or
its shareholders to which they would be subject because of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties of their office.
The Fund also maintains liability insurance policies covering its directors and
officers.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "The Fund and Its Management" in the Fund's Prospectus and in the Statement
of Additional Information for information regarding the business of the
investment adviser, ICM.
Following are the names and principal occupations of each director and officer
of the investment adviser, ICM.
- --------------------------------------------------------------------------------
Name Position with Principal Occupation and
Adviser Company Affiliation
- --------------------------------------------------------------------------------
Edward C Mitchell, Jr. Chairman Chairman, Director
INVESCO Capital Management, Int.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Frank M. Bishop Chairman and Chairman, President and CEO
Officer INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Terrence J. Miller Officer & Deputy President and Director
Director INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Timothy J. Culler Officer & Chief Investment Officer/Vice
Director President/ Director
INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
A. D. Frazier Director Director
INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Stephen A. Dana Director & Director and Vice President
Officer INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- -------------------------------------------------------------------------------
Thomas W. Norwood Director & Director and Vice President
Officer INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Donald B. Sallee Director & Director and Vice President
Officer INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Thomas L. Shields Director & Director and Vice President
Officer INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Luis A. Aguilar Officer Executive Vice President and
Asst. Sec.
INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
David A. Hartley Officer Chief Financial Officer/Treasurer
INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
Julie A. Skaggs Officer General Counsel/Vice
President/Secretary
INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Atlanta, GA 30309
- --------------------------------------------------------------------------------
ITEM 27. a) PRINCIPAL UNDERWRITERS
INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter the Trust
- ------------------ ------------ --------------
William J. Galvin, Jr. Sr. Vice
7800 E. Union Avenue President &
Denver, CO 80237 Assistant Secretary
Ronald L. Grooms Sr. Vice Treasurer,
7800 E. Union Avenue President, Chief Fin'l
Denver, CO 80237 Treasurer and Officer, and
Director Chief Acctg. Off.
Richard W. Healey Sr. Vice
7800 E. Union Avenue President and
Denver, CO 80237 Director
Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Timothy J. Miller Director
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel
Judy P. Wiese Vice President
7800 E. Union Avenue & Assistant
Denver, CO 80237 Treasurer
Mark H. Williamson Chairman of the Board, President,
7800 E. Union Avenue President & Chief CEO & Director
Denver, CO 80237 Executive Officer
c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------
Mark H. Williamson
7800 E. Union Avenue
Denver, CO 80237
ITEM 29. MANAGEMENT SERVICES
-------------------
Not applicable.
ITEM 30. UNDERTAKINGS
------------
Not applicable.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund has duly caused this post-effective amendment to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, County of Denver, and State of Colorado, on the 30th day of
April, 1999.
INVESCO Treasurer's Series Trust
/s/ Mark H. Williamson
----------------------------------
/s/ Mark H. Williamson /s/ Lawrence H. Budner
- ------------------------------- -----------------------------
Mark H. Williamson, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ John W. Mcintyre
- ------------------------------- -----------------------------
Ronald L. Grooms, Treasurer John W. McIntyre, Director
(Chief Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------- -----------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ Larry Soll
- ------------------------------- -----------------------------
Bob R. Baker, Director Larry Soll, Director
/s/ Charles W. Brady /s/ Kenneth T. King
- ------------------------------- -----------------------------
Charles W. Brady, Director Kenneth T. King, Director
/s/ Wendy L. Gramm
- -------------------------------
Wendy L. Gramm, Director
By*_____________________________ By* /s/ Glen A. Payne
-------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
July 20, 1989, January 9, 1990, May 22, 1992, September 1, 1993, December 1,
1993, December 21, 1995, December 30, 1996 and December 24, 1997.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
g(ii) 53
j 78
n(i) 79
n(ii) 80
FORM OF
CUSTODIAN CONTRACT
Between
INVESCO TREASURER'S SERIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It............ 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States........... 2
2.1 Holding Securities......................................... 2
2.2 Delivery of Securities..................................... 2
2.3 Registration of Securities................................. 5
2.4 Bank Accounts.............................................. 6
2.5 Availability of Federal Funds.............................. 6
2.6 Collection of Income....................................... 6
2.7 Payment of Fund Monies..................................... 7
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased.................................................. 9
2.9 Appointment of Agents...................................... 9
2.10 Deposit of Fund Assets in Securities System................ 9
2.10A Fund Assets Held in the Custodian's Direct Paper System.... 11
2.11 Segregated Account......................................... 12
2.12 Ownership Certificates for Tax Purposes.................... 13
2.13 Proxies.................................................... 13
2.14 Communications Relating to Portfolio Securities............ 13
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States....................... 13
3.1 Appointment of Foreign Sub-Custodians...................... 13
3.2 Assets to be Held.......................................... 14
3.3 Foreign Securities Depositories............................ 14
3.4 Agreements with Foreign Banking Institutions............... 14
3.5 Access of Independent Accountants of the Fund.............. 15
3.6 Reports by Custodian....................................... 15
3.7 Transactions in Foreign Custody Account.................... 15
3.8 Liability of Foreign Sub-Custodians........................ 16
3.9 Liability of Custodian..................................... 16
3.10 Reimbursement for Advances................................. 17
3.11 Monitoring Responsibilities................................ 17
3.12 Branches of U.S. Banks..................................... 17
3.13 Tax Law.................................................... 18
4. Payments for Sales or Repurchase or Redemptions of
Shares of the Fund............................................... 18
5. Proper Instructions.............................................. 19
6. Actions Permitted Without Express Authority...................... 19
7. Evidence of Authority............................................ 20
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income................ 20
<PAGE>
9. Records.......................................................... 20
10. Opinion of Fund's Independent Accountants........................ 21
11. Reports to Fund by Independent Public Accountants................ 21
12. Compensation of Custodian........................................ 21
13. Responsibility of Custodian...................................... 21
14. Effective Period, Termination and Amendment...................... 23
15. Successor Custodian.............................................. 24
16. Interpretive and Additional Provisions........................... 25
17. Additional Funds................................................. 25
18. Massachusetts Law to Apply....................................... 25
19. Shareholder Communications....................................... 25
<PAGE>
CUSTODIAN CONTRACT
This Contract between INVESCO Treasurer's Series Trust, a business
trust organized and existing under the laws of Massachusetts, having its
principal place of business at 7800 East Union Avenue, Denver, Colorado 80237
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in two series, INVESCO
Treasurer's Money Market Reserve Fund and INVESCO Treasurer's Tax-Exempt Reserve
Fund (such series together with all other series subsequently established by
the Fund and made subject to this Contract in accordance with paragraph 17,
being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund representing interests in the Portfolios, ("Shares") as may be issued
or sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, to be held by it in
the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
<PAGE>
Treasury, collectively referred to herein as "Securities System" and (b)
commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book
entry system account ("Direct Paper System Account") only upon receipt of
Proper Instructions from the Fund on behalf of the applicable Portfolio,
which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article l; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
<PAGE>
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions from the Fund on behalf
of the applicable Portfolio, a certified copy of a resolution
of the Board of Directors or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the
Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
<PAGE>
2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the
name of the Portfolio or in the name of any nominee of the Fund on
behalf of the Portfolio or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Portfolio, unless the
Fund has authorized in writing the appointment of a nominee to be
used in common with other registered investment companies having the
same investment adviser as the Portfolio, or in the name or nominee
name of any agent appointed pursuant to Section 2.9 or in the name
or nominee name of any sub-custodian appointed pursuant to Article
1. All securities accepted by the Custodian on behalf of the
Portfolio under the terms of this Contract shall be in "street name"
or other good delivery form. If, however, the Fund directs the
Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due the
Fund on such securities and to notify the Fund on a best efforts
basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange
offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the Portfolio,
other than cash maintained by the Portfolio in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the
Board of Directors of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by
the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the
Fund on behalf of each applicable Portfolio and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions from the
Fund on behalf of a Portfolio, make federal funds available to such
Portfolio as of specified times agreed upon from time to time by the
Fund and the Custodian in the amount of checks received in payment
for Shares of such Portfolio which are deposited into the
Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held
hereunder to which each Portfolio shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on
a timely basis all income and other payments with respect to bearer
<PAGE>
domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to such Portfolio's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other
income items requiring presentation as and when they become due and
shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions
of Section 2.2 (10) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the
Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from
the Fund on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of a Portfolio in the following cases
only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery
of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
<PAGE>
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Directors or of the Executive Committee of the Fund signed by
an officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be
made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be
made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific
written instructions from the Fund on behalf of such Portfolio to so
pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a custodian, as its agent to
carry out such of the provisions of this Article 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934,
which acts as a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions: 1) The Custodian may keep
securities of the Portfolio in a Securities System provided that
such securities are represented in an account ("Account") of the
Custodian in the Securities System which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a Securities System shall
identify by book-entry those securities belonging to the
Portfolio;
<PAGE>
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon (i)
receipt of advice from the Securities System that payment for
such securities has been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the
Portfolio. Copies of all advices from the Securities System of
transfers of securities for the account of the Portfolio shall
identify the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio in the form of a written advice or notice and
shall furnish to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's transactions in
the Securities System for the account of the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of
the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against
the Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if and to
the extent that the Portfolio has not been made whole for any
such loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to the
following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
an account ("Account") of the custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise
for customers;
<PAGE>
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for
the account of the Portfolio;
5) The Custodian shall furnish the Fund or behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the account of
the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained
in an account by the Custodian pursuant to Section 2.10 hereof, (i)
in accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or
the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by
the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the purposes of
compliance by the Portfolio with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release
or releases of the Securities and Exchange Commission relating to
the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in
the case of clause (iv), upon receipt of, in addition to Proper
Instructions from the Fund on behalf of the applicable Portfolio, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
<PAGE>
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held
by it and in connection with transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are
registered otherwise than in the name of the Portfolio or a nominee
of the Portfolio, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to
the Portfolio such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.14 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to
the Fund for each Portfolio all written information (including,
without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund on
behalf of the Portfolio and the maturity of futures contracts
purchased or sold by the Portfolio) received by the Custodian from
issuers of the securities being held for the Portfolio. With respect
to tender or exchange offers, the Custodian shall transmit promptly
to the Portfolio all written information received by the Custodian
from issuers of the securities whose tender or exchange is sought
and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the custodian at least, three business days
prior to the date on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes
and instructs the Custodian to employ as sub-custodians for the
Portfolio's securities and other assets maintained outside the
United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper Instructions", as defined
in Section 5 of this Contract, together with a certified resolution
of the Fund's Board of Directors, the Custodian and the Fund may
agree to amend Schedule A hereto from time to time to designate
additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more such sub-custodians for maintaining
custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign sub-custodians
to: (a) "foreign securities", as defined in paragraph (c)(l) of Rule
17f-5 under the Investment Company Act of 1940, and (b) cash and
cash equivalent in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Portfolio's
foreign securities transactions. The Custodian shall identify on its
books as belonging to the Fund, the foreign securities of the Fund
held by each foreign sub-custodian.
<PAGE>
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the
Portfolios shall be maintained in foreign securities depositories
only through arrangements implemented by the foreign banking
institutions serving as sub-custodians pursuant to the terms hereof.
Where possible, such arrangements shall include entry into
agreements containing the provisions set forth in Section 3.4
hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set
forth in Exhibit 1 hereto and shall provide that: (a) the assets of
each Portfolio will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking
institution or its creditors or agent, except a claim of payment for
their safe custody or administration; (b) beneficial ownership for
the assets of each Portfolio will be freely transferable without the
payment of money or value other than for custody or administration;
(c) adequate records will be maintained identifying the assets as
belonging to each applicable Portfolio; (d) officers of or auditors
employed by, or other representatives of the Custodian, including to
the extent permitted under applicable law the independent public
accountants for the Fund, will be given access to the books and
records of the foreign banking institution relating to its actions
under its agreement with the Custodian; and (e) assets of the
Portfolios held by the foreign sub-custodian will be subject only to
the instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the
books and records of any foreign banking institution employed as a
foreign sub-custodian insofar as such books and records relate to
the performance of such foreign banking institution under its
agreement with the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other
assets and advices or notifications of any transfers of securities
to or from each custodial account maintained by a foreign banking
institution for the Custodian on behalf of each applicable Portfolio
indicating, as to securities acquired for a Portfolio, the identity
of the entity having physical possession of such securities.
3.7 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.7, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, mutatis mutandis
to the foreign securities of the Fund held outside the United States
by foreign sub-custodians. (b) Notwithstanding any provision of this
Contract to the contrary, settlement and payment for securities
received for the account of each applicable Portfolio and delivery
of securities maintained for the account of each applicable
Portfolio may be effected in accordance with the customary
established securities trading or securities processing practices
<PAGE>
and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer. (c) Securities maintained in the custody of a
foreign sub-custodian may be maintained in the name of such entity's
nominee to the same extent as set forth in Section 2.3 of this
Contract, and the Fund agrees to hold any such nominee harmless from
any liability as a holder of record of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a
foreign sub-custodian shall require the institution to exercise
reasonable care in the performance of its duties and to indemnify,
and hold harmless, the Custodian and each Fund from and against any
loss, damage, cost, expense, liability or claim arising out of or in
connection with the institution's performance of such obligations.
At the election of the Fund, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claims against a
foreign banking institution as a consequence of any such loss,
damage, cost, expense, liability or claim if and to the extent that
the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts
or omissions of a foreign banking institution to the same extent as
set forth with respect to sub-custodians generally in this Contract
and, regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as contemplated by paragraph 3.12 hereof, the
Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where
the sub-custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this paragraph 3.9, in
delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd.
not caused by political risk) due to Acts of God, nuclear incident
or other losses under circumstances where the Custodian and State
Street London Ltd. have exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian
or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Contract, except such as may arise from its or
its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account of
the applicable Portfolio shall be security therefore and should the
Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolios
assets to the extent necessary to obtain reimbursement.
<PAGE>
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the
foreign sub-custodians employed by the Custodian. Such information
shall be similar in kind and scope to that furnished to the Fund in
connection with the initial approval of this Contract. In addition,
the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial
condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not
the subject of an exemptive order from the Securities and Exchange
Commission is notified by such foreign sub-custodian that there
appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the equivalent
thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of
the portfolios assets are maintained in a foreign branch of a
banking institution which is a "bank" as defined by Section 2(a)(5)
of the Investment Company Act of 1940 meeting the qualification set
forth in Section 26(a) of said Act. The appointment of any such
branch as a sub-custodian shall be governed by paragraph 1 of this
Contract. (b) Cash held for each Portfolio of the Fund in the United
Kingdom shall be maintained in an interest bearing account
established for the Fund with the Custodian's London branch, which
account shall be subject to the direction of the Custodian, State
Street London Ltd. or both.
3.13 Tax Law. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of the United
States of America or any state or political subdivision thereof. It
shall be the responsibility of the Fund to notify the Custodian of
the obligations imposed on the Fund or the Custodian as custodian of
the Fund by the tax law of jurisdictions other than those mentioned
in the above sentence, including responsibility for withholding and
other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility
of the Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for
exemption or refund under the tax law of jurisdictions for which the
Fund has provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
<PAGE>
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian. 5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.11. 6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise directed
by the Board of Directors of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the custodian of written notice to the contrary. 8. Duties of
Custodian with Respect to the Books of Account and Calculation of Net Asset
Value and Net Income
<PAGE>
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, if directed in writing to do so
by the Fund on behalf of the Portfolio, shall itself keep such books of account
and/or compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Portfolio as described in the
Fund's currently effective prospectus related to such Portfolio and shall advise
the Fund and the Transfer Agent daily of the total amounts of such net income
and, if instructed in writing by an officer of the Fund to do so, shall advise
the Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share and the
daily income of each Portfolio shall be made at the time or times described from
time to time in the Fund's currently effective prospectus related to such
Portfolio. 9. Records
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the Investment Company Act
of 1940, with particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the Fund and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by each Portfolio and held by the Custodian and shall, when requested to
do so by the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations. 10.
Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-lA, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund on
behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
<PAGE>
including any future commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of Counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody of any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) for
the benefit of a Portfolio including the purchase or sale of foreign exchange or
of contracts for foreign exchange or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time held
for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
14. Effective Period. Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities System by such Portfolio and
<PAGE>
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Directors has reviewed the use by such Portfolio of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not with respect to
a Portfolio act under Section 2.10A hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, that the Fund
shall not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Articles of Incorporation,
and further provided, that the Fund on behalf of one or more of the Portfolios
may at any time by action of its Board of Directors (i) substitute another bank
or trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Directors of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
<PAGE>
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Articles of Incorporation of the Fund.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract. 17. Additional
Funds
In the event that the Fund establishes one or more series of Shares in
addition to INVESCO Worldwide Capital Goods Fund and INVESCO Worldwide
Communications Fund with respect to which it desires to have the Custodian
render services as custodian under the terms hereof, it shall so notify the
Custodian in writing, and if the Custodian agrees in writing to provide such
services, such series of Shares shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Shareholder Communications
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [X] The Custodian is not authorized to release the Fund's name,
address, and share positions
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 2nd day of May, 1994.
ATTEST INVESCO TREASURER'S SERIES TRUST
By:
- -------------------- ------------------------
Glen A. Payne Mark H.Williamson
ATTEST STATE STREET BANK AND TRUST COMPANY
By:
- --------------------- -------------------------------
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of INVESCO Specialty
Funds, Inc. for use as sub-custodians for the Fund's securities and other
assets:
Foreign
Country Subcustodian Bank Applicable Depository
Argentina Citibank, N.A. Caja de Valores S.A.
Australia Westpac Banking Austraclear Limited
Corporation Reserve Bank
Information and
Transfer System
(RITS)
Austria GiroCredit Bank Oesterreichische
Aktiengesellschaft Kontrollbank AG
der Sparkassen
Bangladesh Standard Chartered Bank None
Belgium Generale Bank Caisse
Interprofessionnelle
de Depots et de
Virements de Titres
S.A. (CIK)
Banque Nationale de
Belgique
Brazil Citibank, N.A. Bolsa de Valores de
Sao Paulo (Bovespa)
Banco Central do
Brasil, Systema
Especial de
Liquidacao e
Custodian (SELIC)
Canada Canada Trustco The Canadian
Mortgage Company Depository for
Securities Limited
(CDS)
Chile Citibank, N.A. None
China The Hongkong and Shanghai Shanghai Securities
Banking Corporation Limited Central Clearing and
Registration
Corporation (SSCCRC)
<PAGE>
Shenzhen Securities
Registrars Co., Ltd.
and its designated
agent banks
Colombia Cititrust Colombia S.A. None
Sociedad Fiduciaria
Cyprus Barclays Bank PLC None
Denmark Den Danske Bank Vaerdipapircentralen
The Danish Securities
Center (VP)
Finland Kansallis-Osake-Pankki The Central Share
Register of Finland
France Banque Paribas Societe
Interprofessionnelle
pour la Compensation
des Valeurs
Mobilieres (SICOVAM)
Banque de France,
Saturne System
Germany Berliner Handels-und The Deutscher
Frankfurter Bank Kassenverein AG
Greece National Bank of Greece The Central
S.A. Depository
(Apothetirio Titlon
A.E.)
Hong Kong Standard Chartered Bank The Central Clearing
and Settlement System
(CCASS)
Hungary Citibank Budapest Rt. None
India The Hongkong and Shanghai None
Banking Corporation Limited
Indonesia Standard Chartered Bank None
Ireland Bank of Ireland None
The Central Bank of
Ireland, The Gilt
Settlement Office
(GSO)
<PAGE>
Israel Bank Hapoalim B.M. The Clearing House of
the Tel Aviv Stock
Exchange
Italy Morgan Guaranty Trust Monte Titoli, S.p.A.
Company
Banca d'Italia
Japan Sumitomo Trust & None
Banking Co., Ltd.
Bank of Japan Net
System
Korea Bank of Seoul None
Malaysia Standard Chartered Bank None
Mexico Citibank, N.A. S.D. INDEVAL, S.A. de
C.V. (Instituto para
el Deposito de
Valores)
Banco de Mexico
Netherlands MeesPierson N.V. Netherlands Centraal
Instituut voor Giraal
Effectenverkeer B.V.
(NECIGEF)
New Zealand ANZ Banking Group None
(New Zealand) Limited
The Reserve Bank of
New Zealand,
Austraclear NZ
Norway Christiania Bank og Verdipapirsentralen-
Kreditkasse The Norwegian
Registry of
Securities (VPS)
Pakistan Deutsche Bank AG None
Peru Citibank, N.A. Caja de Valores
(CAVAL)
Philippines Standard Chartered Bank None
Portugal Banco Comercial Portugues Central de Valores
Mobiliarios (Central)
Singapore The Development Bank of The Central
Singapore Ltd. Depository (Ptc)
Limited (CDP)
<PAGE>
Spain Banco Santander, S.A. Servicio de
Compensacion y
Liquidacion de
Valores (SCLV)
Banco de Espana,
Anotaciones en Cuenta
Sri Lanka The Hongkong and Shanghai The Central
Banking Corporation Limited Depository System
(Pvt) Limited
Sweden Skandinaviska Enskilda Vardepapperscentralen
Banken The Swedish
Securities Register
Center (VPC)
Switzerland Union Bank of Schweizerische
Switzerland Effekten-Giro AG
(SEGA)
Taiwan Central Trust of China The Taiwan Securities
Central Depository
Company, Ltd. (TSCD)
Thailand Standard Chartered Bank The Share Depository
Center (SDC)
Turkey Citibank, N.A. None
United Kingdom State Street Bank and None
Trust Company
The Bank of England,
The Central Gilts
Office (CGO); The
Central Moneymarkets
Office (CMO)
Uruguay Citibank, N.A. None
Venezuela Citibank, N.A. None
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 21 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated January 29, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of INVESCO Treasurer's Series Trust which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" in the Statement of Additional
Information.
/s/ PricewaterhouseCoopers LLP
- ---------------------------------------
PricewaterhouseCoopers LLP
Denver, Colorado
April 26, 1999
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,153,478
<OTHER-INCOME> 0
<EXPENSES-NET> 141,183
<NET-INVESTMENT-INCOME> 3,012,295
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
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<DISTRIBUTIONS-OF-INCOME> 3,012,295
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 484,696,941
<NUMBER-OF-SHARES-REDEEMED> 520,584,938
<SHARES-REINVESTED> 2,978,475
<NET-CHANGE-IN-ASSETS> (32,909,522)
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<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 141,183
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 141,183
<AVERAGE-NET-ASSETS> 56,338,043
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
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<NAME> INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 42,084,177
<INVESTMENTS-AT-VALUE> 42,084,177
<RECEIVABLES> 153,515
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 41,999
<TOTAL-ASSETS> 42,279,691
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<NUMBER-OF-SHARES-SOLD> 72,911,901
<NUMBER-OF-SHARES-REDEEMED> 59,361,188
<SHARES-REINVESTED> 1,072,533
<NET-CHANGE-IN-ASSETS> 14,623,246
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