-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QtE8TVrRiel9R7VF9Mv3HTdFZLpzWe9jwaAS0awqGCzG23Dtg3YvgIL7MdtnnQHE m7oZESubZAn5OAJhIkLEkQ== 0000789940-97-000013.txt : 19971031 0000789940-97-000013.hdr.sgml : 19971031 ACCESSION NUMBER: 0000789940-97-000013 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19971030 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESCO VALUE TRUST CENTRAL INDEX KEY: 0000789940 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-03429 FILM NUMBER: 97703709 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-04595 FILM NUMBER: 97703710 BUSINESS ADDRESS: STREET 1: 7800 EAST UNION AVE CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 8005541156 MAIL ADDRESS: STREET 1: P.O. BOX 173706 CITY: DENVER STATE: CO ZIP: 80217-3706 FORMER COMPANY: FORMER CONFORMED NAME: FINANCIAL SERIES TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INVESCO INSTITUTIONAL SERIES TRUST DATE OF NAME CHANGE: 19910117 FORMER COMPANY: FORMER CONFORMED NAME: SHEARWATER EQUITY INC DATE OF NAME CHANGE: 19870810 485APOS 1 File No. 33-3429 As filed on ^ October 30, 1997 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X -- Pre-Effective Amendment No. Post-Effective Amendment No. ^ 21 X -------- -- REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X -- Amendment No. ^ 21 X ------------ -- INVESCO VALUE TRUST (Exact Name of Registrant as Specified in Charter) 7800 E. Union Avenue, Denver, Colorado 80237 (Address of Principal Executive Offices) P.O. Box 173706, Denver, Colorado 80217-3706 (Mailing Address) Registrant's Telephone Number, including Area Code: (303) 930-6300 Glen A. Payne, Esq. 7800 E. Union Avenue Denver, Colorado 80237 (Name and Address of Agent for Service) ------------------- Copies to: Ronald M. Feinman Gordon Altman Butowsky Weitzen Shalov & Wein 114 W. 47th St. New York, New York 10036 ------------------- Approximate Date of Proposed Public Offering: As soon as practicable after this post-effective amendment becomes effective. It is proposed that this filing will become effective (check appropriate box) ___ immediately upon filing pursuant to paragraph (b) ___ ^ on _______________, pursuant to paragraph (b) ___ 60 days after filing pursuant to paragraph (a)(1) X on ^ January 1, 1998, pursuant to paragraph (a)(1) - --- ___ 75 days after filing pursuant to paragraph (a)(2) ___ on (date) pursuant to paragraph (a)(2) of rule 485 If appropriate, check the following box: ___ This post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has previously elected to register an indefinite number of shares of its common stock pursuant to Rule 24f-2 under the Investment Company Act. Registrant's Rule 24f-2 Notice for the fiscal year ended August ^31, 1997, was filed on or about October ^ 24, 1997. Page 1 of 219 Exhibit index is located at page 138 INVESCO VALUE TRUST ------------------------------------ CROSS-REFERENCE SHEET Form N-1A Item Caption - --------- ------- Part A Prospectus 1....................... Cover Page 2....................... Annual Fund Expenses 3....................... Financial Highlights; Performance Data 4....................... Investment Objectives and Policies; The Trust and Its Management 5....................... The Trust and Its Management; Additional Information 5A...................... Not Applicable 6....................... Services Provided by the Trust; Taxes, Dividends and ^ Other Distributions; Additional Information 7....................... How Shares Can Be Purchased; Services Provided by the Trust 8....................... Services Provided by the Trust; How to Redeem Shares 9....................... Not Applicable Part B Statement of Additional Information 10....................... Cover Page 11....................... Table of Contents -i- Form N-1A Item Caption - --------- ------- 12....................... The Trust and Its Management 13....................... Investment Practices; Investment Policies and Restrictions 14....................... The Trust and Its Management 15....................... The Trust and Its Management 16....................... The Trust and Its Management 17....................... Investment Practices; Investment Policies and Restrictions 18....................... Additional Information 19....................... How Shares Can Be Purchased; How Shares Are Valued; Services Provided by the Trust; Tax-Deferred Retirement Plans; How to Redeem Shares 20....................... Dividends, ^ Other Distributions, and Taxes 21....................... How Shares Can Be Purchased 22....................... Performance Data 23....................... Additional Information Part C Other Information Information required to be included in Part C is set forth under the appropriate Item, so numbered, in Part C to this Registration Statement. -ii- PROSPECTUS January 1, ^ 1998 INVESCO VALUE TRUST INVESCO Intermediate Government Bond Fund INVESCO Intermediate Government Bond Fund (the "Fund") seeks to achieve a high total return on investments through capital appreciation and current income by investing primarily in obligations of the U.S. government and its agencies and instrumentalities maturing in three to five years. The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end management investment company consisting of three separate portfolios of investments. This ^ Prospectus relates to shares of INVESCO Intermediate Government Bond Fund. Separate prospectuses are available upon request from INVESCO ^ Distributors, Inc. for the Trust's other two funds, INVESCO Value Equity Fund and INVESCO Total Return Fund. Investors may purchase shares of any or all funds. Additional funds may be offered in the future. This ^ Prospectus provides you with the basic information you should know before investing in the Fund. You should read it and keep it for future reference. A Statement of Additional Information containing further information about the Fund, dated January 1, ^ 1998, has been filed with the Securities and Exchange Commission and is incorporated by reference into this ^ Prospectus. To obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; ^ call 1-800-525-8085; or ^ visit our web site at http://www.invesco.com. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ---------- TABLE OF CONTENTS Page ---- ANNUAL FUND EXPENSES.........................................................6 FINANCIAL HIGHLIGHTS.........................................................8 PERFORMANCE DATA............................................................10 INVESTMENT OBJECTIVE AND POLICIES...........................................11 RISK FACTORS................................................................12 THE TRUST AND ITS MANAGEMENT................................................16 HOW SHARES CAN BE PURCHASED.................................................19 SERVICES PROVIDED BY THE TRUST..............................................22 HOW TO REDEEM SHARES........................................................25 TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS..................................27 ADDITIONAL INFORMATION......................................................28 ANNUAL FUND EXPENSES The Fund is 100% no-load; there are no fees to purchase, exchange or redeem shares^. The Fund, however, is authorized to pay a Rule 12b-1 distribution fee of one quarter of one percent of the Fund's average net assets each year. The 12b-1 fee is assessed on new sales of shares, exchanges into the Fund and reinvestments of dividends and capital gain distributions occurring on or after November 1, 1997. Lower expenses benefit Fund shareholders by increasing the Fund's total return. Shareholder Transaction Expenses Sales load "charge" on purchases None Sales load "charge" on reinvested dividends None Redemption fees None Exchange fees None Annual Fund Operating Expenses (as a percentage of average net assets) Management Fee 0.60% 12b-1 Fees ^[0.25%] Other Expenses (after absorbed ^ expenses)(2) [0.17%] Transfer Agency ^ Fee(3) [0.56%] General Services, Administrative Services, Registration, Postage (after voluntary expense ^ limitation)(2)(4) [-0.39%] Total Fund Operating Expenses (after absorbed ^ expenses)(1)(2)(5) [1.02%] ^(1) Does not include 12b-1 fees as these fees were not charged until November 1, 1997. (2) Certain Fund expenses are being voluntarily absorbed by INVESCO Funds Group, Inc. ^("IFG") to ensure that the Fund's annualized total operating expenses do not exceed 1.00% of the Fund's average net assets. ^ Ratio reflects total expenses less absorbed expenses by IFG, before any expense offset ^ arrangements. In the absence of such voluntary expense limitation, the Fund's "Other Expenses" and "Total Fund Operating Expenses" would have been ^ 0.77% and ^ 1.62%, respectively, based on the Fund's actual expenses for the fiscal year ended August 31, ^ 1997. ^(3) Consists of the transfer agency fee described under "Additional Information - Transfer and Dividend Disbursing Agent." ^(4) Includes, but is not limited to, fees and expenses of trustees, custodian bank, legal counsel and independent accountants, ^ securities pricing ^ services, costs of administrative services furnished under an Administrative Services Agreement, costs of registration of Fund shares under applicable laws, and costs of printing and distributing reports to shareholders. ^(5) It should be noted that the Fund's actual total operating expenses were lower than the figures shown because the Fund's custodian fees ^ were reduced under an expense offset arrangement. However, as a result of an SEC requirement for mutual funds to state their total operating expenses without crediting any such expense offset arrangement, the figures shown above DO NOT reflect these reductions. In comparing expenses for different years, please note that the ratios of Expenses to Average Net Assets shown under "Financial Highlights" DO reflect reductions for periods prior to the fiscal year ended August 31, 1996^ See "The Trust And Its Management." Example A shareholder would pay the following expenses on a $1,000 investment for the periods shown, assuming (1) a 5% annual return and (2) redemption at the end of each time period: 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- ^ $10 $33 $57 $125 The purpose of the foregoing table is to assist investors in understanding the various costs and expenses that an investor in the Fund will bear directly or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust And Its Management.") The above figures for INVESCO Intermediate Government Bond Fund are based on fiscal year-end information. The Fund charges no sales load, redemption fee or exchange fee ^. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is hypothetical and should not be considered a representation of past or future annual returns, which may be greater or less than the assumed amount. Because the Fund pays a distribution fee, investors who own Fund shares for a long period of time may pay more than the economic equivalent of the maximum front-end sales charge permitted for mutual funds by the National Association of Securities Dealers, Inc. FINANCIAL HIGHLIGHTS (For a Fund Share Outstanding Throughout Each Period) The following information for each of the ^ four years ended August 31, ^ 1997, the eight-month fiscal period ended August 31, 1993, and each of the ^ five years ended December 31, 1992, has been audited by Price Waterhouse LLP, independent accountants. Prior years' information was audited by another independent accounting firm. This information should be read in conjunction with the audited financial statements and the report of independent accountants thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is incorporated by reference into the Statement of Additional Information. Both are available without charge by contacting INVESCO ^ Distributors, Inc., at the address or telephone number on the cover of this ^ Prospectus. All per share data has been adjusted to reflect an 80 to 1 stock split which was effected on January 2, 1991.
Period Ended Year Ended August 31 August 31 Year Ended December 31 -------------------------------------------------------------------------------------------------- 1997 1996 1995 1994 1993^^ 1992 1991 1990 1989 1988 1987 PER SHARE DATA Net Asset Value - Beginning of Period $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19 $12.88 -------------------------------------------------------------------------------------------------- INCOME FROM ^ INVESTMENT OPERATIONS Net Investment Income 0.66 0.73 0.73 0.70 0.48 0.90 0.89 1.00 1.03 0.81 0.66 Net Gains or (Losses) on ^ Securities (Both Realized and ^ Unrealized) 0.14 (0.34) 0.48 (0.75) 0.57 (0.16) 0.77 0.05 0.17 (0.28) (0.52) -------------------------------------------------------------------------------------------------- Total from Investment Operations 0.80 0.39 1.21 (0.05) 1.05 0.74 1.66 1.05 1.20 0.53 0.14 -------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income+ 0.66 0.73 0.73 0.70 0.48 0.90 0.90 0.99 1.03 0.82 0.83 Distributions from Capital Gains 0.00 0.00 0.00 0.34 0.00 0.05 0.00 0.00 0.00 0.00 0.00 -------------------------------------------------------------------------------------------------- Total Distributions 0.66 0.73 0.73 1.04 0.48 0.95 0.90 0.99 1.03 0.82 0.83 -------------------------------------------------------------------------------------------------- Net Asset Value - End of Period $12.44 $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19 ================================================================================================== TOTAL RETURN 6.64% 3.12% 10.36% (0.37%) 8.38%* 6.03% 14.16% 9.08% 10.52% 5.48% 1.20% RATIOS Net Assets - End of Period ($000 Omitted) $44,441 $39,949 $37,339 $31,861 $39,384 $29,649 $24,385 $18,380 $19,805 $18,042 $15,049 Ratio of Expenses to Average Net Assets# 1.02%@ 1.15%@ 1.20% 1.07% 0.96%~ 0.97% 0.93% 0.85% 0.85% 0.85% 0.94% Ratio of Net Investment Income to Average Net Assets# 5.32% 5.81% 6.04% 5.58% 5.48%~ 6.38% 7.28% 8.16% 8.45% 7.92% 7.31% Portfolio Turnover Rate 37% 63% 92% 49% 34%* 93% 51% 31% 52% 6% 28%
^^ From January 1, 1993 to August 31, 1993^. + Distributions in excess of net investment income for the year ended August 31, 1994, aggregated less than $0.01 on a per share basis. * Based on operations for the period shown and, accordingly, are not representative of a full year. # Various expenses of the Fund were voluntarily absorbed by IFG for the years ended August 31, 1997 and 1996, and the years ended December 31, 1990, 1989, 1988 and 1987. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 1.37%, 1.24%, 0.96%, 1.00%, 1.08% and 1.30%, respectively, and ratio of net investment income to average net assets would have been 4.97%, 5.72%, 8.05%, 8.30%, 7.69% and 6.95%, respectively. @ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset arrangements. ~ Annualized Further information about the performance of the Fund is contained in the Trust's Annual Report to Shareholders, which may be obtained without charge by writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; or by calling 1-800-525-8085. PERFORMANCE DATA From time to time, the Fund advertises its total return performance. These figures are based upon historical investment results and are not intended to indicate future performance. Total return is computed by calculating the percentage change in value of an investment, assuming reinvestment of all income dividends and capital gain distributions, to the end of a specified period. Cumulative total return reflects actual performance over a stated period of time. Average annual total return is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Thus, a given report of total return performance should not be considered as representative of future performance. The Fund charges no sales load, redemption fee or exchange fee which would affect total return computations. The yield of the Fund is calculated by utilizing the Fund's calculated income, expenses and average outstanding shares for the most recent 30-day or one-month period, dividing it by the month-end net asset value and annualizing the resulting number. Unlike "total return" quotations, quotations of "yield" do not include the effect of capital changes. The Fund charges no sales load, redemption fee or exchange fee. Accordingly, both purchase price and redemption price equal net asset value per share, and no adjustments are made in either yield or total return performance calculations to reflect nonrecurring charges. In conjunction with performance reports and/or analyses of shareholder service for the Fund, comparative data between the Fund's performance or yield for a given period and recognized bond indices and indices of investment results for the same period and/or assessments of the quality of shareholder service may be provided to shareholders. Such indices include indices provided by Dow Jones & Company, Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Lipper Analytical Services, Inc., Lehman Brothers, National Association of Securities Dealers Automated Quotations, Frank Russell Company, Value Line Investment Survey, the American Stock Exchange, Morgan Stanley Capital International, Wilshire Associates, the Financial Times Stock Exchange, the New York Stock Exchange, the Nikkei Stock Average and the Deutcher Aktienindex, all of which are unmanaged market indicators. In addition, rankings, ratings and comparisons of investment performance and/or assessments of the quality of shareholder service appearing in publications such as Money, Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which utilize information compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by other recognized analytical services, may be used in advertising. The Lipper Analytical Services, Inc. mutual fund rankings and comparisons, which may be used by the Fund in performance reports, will be drawn from the "Intermediate U.S. Government Funds" Lipper mutual fund groupings, in addition to the broad-based Lipper general fund grouping. INVESTMENT OBJECTIVE AND POLICIES The Trust consists of three separate portfolios of investments (referred to as the "Funds"), each represented by a different series of the Trust's shares. This ^ Prospectus relates to INVESCO Intermediate Government Bond Fund; separate prospectuses for INVESCO Value Equity Fund and INVESCO Total Return Fund are available. The investment objective of the Fund is to seek a high total return on investment through capital appreciation and current income. Funds having an investment objective of seeking a high total return may be limited in their ability to obtain their objective by the limitations on the types of securities in which they may invest. Therefore, no assurance can be given that the Fund will be able to achieve its investment objective. The Fund invests primarily in obligations of the U.S. government and its agencies and instrumentalities maturing in three to five years. Under normal circumstances, at least 65% of the Fund's total assets will be invested in government obligations consisting of direct obligations of the U.S. government (U.S. Treasury Bills, Notes and Bonds), obligations guaranteed by the U.S. government, such as Government National Mortgage Association obligations, and obligations of U.S. government authorities, agencies and instrumentalities, which are supported only by the assets of the issuer, such as Fannie Mae (formerly, Federal National Mortgage Association), Federal Home Loan ^ Banks, Federal Financing Bank and Federal Farm Credit Bank. The remaining 35% of the Fund's total assets may be invested under normal circumstances in corporate debt obligations which are rated by Moody's Investors Service, Inc. ("Moody's") in its four highest ratings of corporate obligations (Aaa, Aa, A and Baa) or by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") in its four highest ratings of corporate obligations (AAA, AA, A and BBB) or, if not rated, which in the opinion of the Fund's investment adviser or sub-adviser (collectively, "Fund Management") have investment characteristics similar to those described in such ratings. A bond rating of Baa by Moody's indicates that the bond issue is of "medium grade," neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present, but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. A bond rating of BBB by S&P indicates that the bond issue is in the lowest "investment grade" security rating. Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this category than for bonds in the A category, and they may have speculative characteristics. (See Appendix A to the Statement of Additional Information for specific descriptions of these corporate bond rating categories.) The dollar weighted average maturity of the Fund's investments will normally be from three to ten years. (See "Risk Factors" section of this prospectus for an analysis of the risks presented by this Fund's ability to enter into contracts for the future delivery of fixed income securities commonly referred to as "interest rate futures contracts" and its ability to use options to purchase or sell interest rate futures contracts or debt securities and to write covered call options and cash secured puts.) Obligations of certain U.S. government agencies and instrumentalities may not be supported by the full faith and credit of the United States. Some are backed by the right of the issuer to borrow from the U.S. Treasury; others, such as the Federal National Mortgage Association, by discretionary authority of the U.S. government to purchase the agencies' obligations; while still others, such as obligations of the Student Loan Marketing Association, are supported only by the credit of the instrumentality. In the case of securities not backed by the full faith and credit of the United States, the Fund must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitments. The Fund will invest in securities of such instrumentalities only when Fund Management is satisfied that the credit risk with respect to any such instrumentality is minimal. The investment objective of the Fund and its investment policies, ^ where indicated ^, are deemed to be fundamental policies and thus may not be changed without prior approval by the holders of a majority of its outstanding voting securities of the Fund, as defined in the Investment Company Act of 1940 (the "1940 Act"). In addition, the Trust and this Fund are subject to certain investment restrictions which are set forth in the Statement of Additional Information and which may not be altered without approval of the Fund's shareholders. One of those restrictions limits the Fund's borrowing of money to borrowings from banks for temporary or emergency purposes (but not for leveraging or investment) in an amount not exceeding 33 1/3% of the value of the Fund's total assets. RISK FACTORS Investors should consider the special factors associated with the policies discussed below in determining the appropriateness of an investment in the INVESCO Intermediate Government Bond Fund. The Fund's policies regarding investments in foreign securities and foreign currencies are not fundamental and may be changed by vote of the Trust's board of trustees. Interest Rate Risk. The obligations in which the Fund invests are subject to interest rate risk, which means that their values and, therefore, the net asset value of the Fund, can be expected to fall when interest rates rise. The Fund attempts to reduce this risk through diversification, credit analysis and attention to interest rate trends and other factors. Foreign Securities. The Fund may invest up to 25% of its total assets in foreign securities, although it currently does not intend to invest more than 5% of its total assets in foreign securities. Investments in securities of foreign companies and in foreign debt or equity markets involve certain additional risks not associated with investments in domestic companies and markets, including the risks of fluctuations in foreign currency exchange rates and of political or economic instability, the difficulty of predicting international trade patterns, and the possibility of imposition of exchange controls or currency blockage. In addition, there may be less information publicly available about a foreign company than about a domestic company, and there is generally less government regulation of stock exchanges, brokers and listed companies abroad than in the United States. Moreover, with respect to certain foreign countries, there may be a possibility of expropriation or confiscatory taxation. Further, economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. As one way of managing exchange rate risk, the Fund may enter into forward foreign currency exchange contracts (i.e., purchasing or selling foreign currencies at a future date). For additional information regarding forward foreign currency exchange contracts, see the Trust's Statement of Additional Information. Repurchase Agreements. The Fund may engage in repurchase agreements with banks, registered broker-dealers and registered government securities dealers, which are deemed creditworthy by Fund Management under guidelines established by the board of trustees. A repurchase agreement is a transaction in which the Fund purchases a security and simultaneously commits to sell the security to the seller at an agreed upon price and date (usually not more than seven days) after the date of purchase. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or maturity of the purchased security. The Fund's risk is limited to the ability of the seller to pay the agreed upon amount on the delivery date. However, in the event the seller should default, the underlying security constitutes collateral for the seller's obligations to pay. This collateral will be held by the custodian for the Fund's assets. However, in the absence of compelling legal precedents in this area, there can be no assurance that the Trust will be able to maintain its rights to such collateral upon default of the issuer of the repurchase agreement. To the extent that the proceeds from a sale upon a default in the obligation to repurchase are less than the repurchase price, the Fund would suffer a loss. Although the Fund has not adopted any limit on the amount of its total assets that may be invested in repurchase agreements, the Fund intends that at no time will the market value of the Fund's securities subject to repurchase agreements exceed 20% of the total assets of the Fund. Illiquid Securities. The Fund may invest from time to time in securities subject to restrictions on disposition under the Securities Act of 1933 ("restricted securities"), securities without readily available market quotations or illiquid securities (those which cannot be sold in the ordinary course of business within seven days at approximately the valuation given to them by the Fund). However, on the date of purchase, no such investment may increase the Fund's holdings of restricted securities to more than 2% of the value of the Fund's total assets or its holdings of illiquid securities or those without readily available market quotations to more than 5% of the value of the Fund's total assets. The Fund is not required to receive registration rights in connection with the purchase of restricted securities and, in the absence of such rights, marketability and value can be adversely affected because the Fund may be unable to dispose of such securities at the time desired or at a reasonable price. In addition, in order to resell a restricted security, the Fund might have to bear the expense and incur the delays associated with effecting registrations. Interest Rate Futures Contracts and Options. The Fund may enter into interest rate futures contracts for hedging or other non-speculative purposes within the meaning and intent of applicable rules of the Commodity Futures Trading Commission ("CFTC"). Interest rate futures contracts are purchased or sold to attempt to hedge against the effects of interest or exchange rate changes on the Fund's current or intended investments in fixed income securities. In the event that an anticipated decrease in the value of portfolio securities occurs as a result of a general increase in interest rates, the adverse effects of such changes may be offset, in whole or part, by gains on the sale of interest rate futures contracts. Conversely, the increased cost of portfolio securities to be acquired, caused by a general decline in interest rates, may be offset, in whole or part, by gains on interest rate futures contracts purchased by the Fund. The Fund will incur brokerage fees when it purchases and sells interest rate futures contracts, and it will be required to maintain margin deposits. The Fund also may use options to buy or sell interest rate futures contracts or debt securities. Such investment strategies will be used as a hedge and not for speculation. The Fund will not enter into interest rate futures contracts or options to buy and sell such contracts or debt securities if the aggregate initial margin and premiums thereon would exceed 5% of the Fund's total assets. Put and call options on interest rate futures contracts may be traded by the Fund in order to protect against declines in the values of portfolio securities or against increases in the cost of securities to be acquired. Purchases of options on interest rate futures contracts may present less dollar risk in hedging the portfolio of the Fund than the purchase and sale of the underlying interest rate futures contracts, because the potential loss is limited to the amount of the premium plus related transaction costs. The premium paid for such a put or call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise or liquidation of the option, and, unless the price of the underlying interest rate futures contract changes sufficiently, the option may expire without value to the Fund. The writing of such covered options, however, does not present less risk than the trading of interest rate futures contracts and will constitute only a partial hedge, up to the amount of the premium received, and, if an option is exercised, the Fund may suffer a loss on the transaction. The Fund will purchase put or call options on debt securities in anticipation of changes in interest rates or other factors which may adversely affect the value of its portfolio or the prices of debt securities which the Fund anticipates purchasing at a later date. The Fund may be able to offset such adverse effects on its portfolio, in whole or in part, through the options purchased. The premium paid for a put or call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise or liquidation of the option, and, unless the price of the underlying security changes sufficiently, the option may expire without value to the Fund. The Fund may, from time to time, also sell ("write") covered call options or cash secured puts in order to attempt to increase the yield on its portfolio or to protect against declines in the value of its portfolio securities. Such covered call options and cash secured puts will not exceed 25% of the Fund's total assets. By writing a covered call option, the Fund, in return for the premium income realized from the sale of the option, gives up the opportunity to profit from a price increase in the underlying security above the option exercise price, where the price increase occurs while the option is in effect. In addition, the Fund's ability to sell the underlying security will be limited while the option is in effect. By writing a cash secured put, the Fund, which receives the premium, has the obligation during the option period, upon assignment of an exercise notice, to buy the underlying security at a specified price. A put is secured by cash if the Fund maintains at all times cash, Treasury bills or other high grade short-term obligations with a value equal to the option exercise price in a segregated account with its custodian. Although the Fund will enter into interest rate futures contracts and options on debt securities and interest rate futures contracts solely for hedging or other nonspeculative purposes, within the meaning and intent of applicable rules of the CFTC, their use does involve certain risks. For example, a lack of correlation between the value of an instrument underlying an option or interest rate futures contract and the assets being hedged, or unexpected adverse price movements, could render the Fund's hedging strategy unsuccessful and could result in losses. In addition, there can be no assurance that a liquid secondary market will exist for any contract purchased or sold, and the Fund may be required to maintain a position until exercise or expiration, which could result in losses. Further, forward contracts entail particular risks related to conditions affecting the underlying currency. Forward contracts also involve risks arising from the lack of an organized exchange trading environment. Transactions in futures contracts, forward contracts and options are subject to other risks as well. The risks related to transactions in options and futures to be entered into by the Fund are set forth in greater detail in the Statement of Additional Information, which should be reviewed in conjunction with the foregoing discussion. Securities Lending. ^ The Fund may make loans of its portfolio securities (not to exceed 10% of the Fund's total assets) to broker-dealers or other institutional investors under contracts requiring such loans to be callable at any time and to be secured continuously by collateral in cash, cash equivalents, high quality short-term government securities or irrevocable letters of credit maintained on a current basis at an amount at least equal to the market value of the securities loaned, including accrued interest and dividends. The Fund will continue to collect the equivalent of the interest or dividends paid by the issuer on the securities loaned and will also receive either interest (through investment of cash collateral) or a fee (if the collateral is government securities). The Fund may pay finder's and other fees in connection with securities loans. Portfolio Turnover. There are no fixed limitations regarding portfolio turnover for the Fund. Although the Fund does not trade for short-term profits, securities may be sold without regard to the time they have been held in the Fund when, in the opinion of Fund Management, market considerations warrant such action. As a result, while it is anticipated that the Fund's annual portfolio turnover rate generally will not exceed 100%, under certain market conditions the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio turnover would cause the Fund to incur greater brokerage costs than would otherwise be the case. The Fund's portfolio turnover rates are set forth under "Financial Highlights" and, along with the Trust's brokerage allocation policies, are discussed in the Statement of Additional Information. THE TRUST AND ITS MANAGEMENT ^ The Trust is a no-load mutual fund, registered with the Securities and Exchange Commission as an open-end, diversified management investment company. The Trust was organized on July 15, 1987, under the laws of the Commonwealth of Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed its name to "INVESCO Value Trust." The overall supervision of the Trust is the responsibility of its board of trustees. INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver, Colorado, serves as the Trust's investment adviser pursuant to an investment advisory agreement. Under this agreement, ^ IFG provides the Fund with various management services and supervises the Fund's daily business affairs. Specifically, ^ IFG performs all administrative, clerical, statistical, secretarial and all other services necessary or incidental to the administration of the affairs of the Trust, excluding, however, those services that are the subject of a separate agreement between the Trust and ^ IFG or any affiliate thereof. Services provided pursuant to separate agreement include ^ provision of transfer agency, dividend disbursing agency and registrar services, and services furnished under an Administrative Services Agreement with ^ IFG dated as of February ^ 28, 1997. INVESCO Distributors, Inc. ("IDI") provides services relating to the distribution and sale of the Fund's shares. ^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the Trust's investment adviser prior to 1991, for investment sub-advisory and research services on behalf of the Fund. ICM ^ currently manages in excess of ^ $__ billion of assets on behalf of tax-exempt accounts (such as pension and profit-sharing funds for corporations and state and local governments) and investment companies. ICM, subject to the supervision of IFG, is primarily responsible for selecting and managing the Fund's investments. Although the Trust is not a party to the sub-advisory agreement, the agreement has been approved by the shareholders of the Trust. Services provided by ^ IFG and ICM are subject to review by the Trust's board of trustees. IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC is a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of the largest independent investment management businesses in the world. IFG and ICM continued to operate under their existing names. Together, IFG and ICM constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in assets under management. IFG was established in 1932 and, as of August 31, 1997, managed 14 mutual funds, consisting of 46 separate portfolios, with combined assets of approximately $15.9 billion on behalf of over 854,448 shareholders. IDI was established in 1997 and is the distributor for 14 mutual funds consisting of 46 separate portfolios. The following individuals serve as portfolio managers for the Fund and are primarily responsible for the day-to-day management of the Fund's portfolio of securities: James O. Baker Portfolio manager of the Fund since 1993; ^ portfolio manager of INVESCO Capital Management, Inc. (1992 to present); portfolio manager, Willis Investment Counsel (1990 to 1992); broker, Morgan Keegan (1989 to 1990); broker, Drexel Burnham Lambert (1985 to 1990); began investment career in 1977; B.A., Mercer University; Chartered Financial Analyst. Ralph H. Jenkins, Jr. Assistant portfolio manager of the Fund since 1993; ^ vice president (1991 to present) and portfolio manager (1988 to present) of INVESCO Capital Management, Inc.; began investment career in 1969; B.B.C., Auburn University; M.A., University of Alabama; Chartered Financial Analyst; Chartered Investment Counselor. Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly fee at the following annual rates, based on the average net assets of the Fund: 0.60% on the first $500 million of the Fund's average net assets; 0.50% on the next $500 million of the Fund's average net assets; and 0.40% on the average net assets of the Fund in excess of $1 billion. For the fiscal year ended August 31, ^ 1997, the advisory fees paid to ^ IFG amounted to 0.60% of the average net assets of the Fund. Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM, as the Fund's sub-adviser ^, a monthly fee, which is computed at the ^ following annual rates: prior to January 1, 1998, 0.16% on the first $500 million of the Fund's average net assets^, 0.13% on the next $500 million of the Fund's average net assets ^ and 0.11% on the Fund's average net assets in excess of $1 billion and effective January 1, 1998, 0.20% on the first $500 million of the Fund's average net assets, 0.1667% on the next $500 million of the Fund's average net assets, and 0.1333% on the Fund's average net assets in excess of $1 billion. No fee is paid by the Fund to ICM. The Fund bears those Trust expenses which are accrued daily that are incurred on its behalf and, in addition, bears a portion of general Trust expenses, allocated based upon the relative net assets of the three Funds of the Trust. Such expenses are generally deducted from the Fund's total income before dividends are paid. Total expenses of the Fund for the fiscal year ended August 31, ^ 1997, including investment advisory fees (but excluding brokerage commissions), amounted to ^ 1.02% (prior to expense offset arrangements) of the Fund's average net assets. Certain Fund expenses are being absorbed voluntarily by ^ IFG pursuant to a commitment to the Fund in order to ensure that the Fund's total expenses do not exceed 1.00% of the Fund's average net assets. This commitment ^ may be changed following consultation with the ^ Trust's board of trustees. The Trust also has entered into an Administrative Services Agreement (the "Administrative Agreement") with ^ IFG. Pursuant to the Administrative Agreement, ^ IFG performs certain administrative and internal accounting services, including, without limitation, maintaining general ledger and capital stock accounts, preparing a daily trial balance, calculating net asset value daily and providing selected general ledger reports and providing sub- accounting and recordkeeping services for the shareholder accounts maintained by certain retirement and employee benefit plans for the benefit of participants in such plans. For such services, the Fund pays ^ IFG a fee consisting of a base fee of $10,000 per year, plus an additional incremental fee computed at an annual rate not to exceed a maximum of 0.015% per annum of the average net assets of the applicable Fund. The Declaration of Trust pursuant to which the Trust is organized contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each instrument entered into or executed by the Trust. The Declaration of Trust also provides for indemnification out of the Trust's property for any shareholder held personally liable for any Trust obligation. Thus, the risk of a shareholder being personally liable for obligations of the Trust is limited to the unlikely circumstance in which the Trust itself would be unable to meet its obligations. Fund Management places orders for the purchase and sale of portfolio securities with brokers and dealers based upon their evaluation of broker-dealer financial responsibility coupled with broker-dealer ability to effect transactions at the best available prices. The Trust may place orders for portfolio transactions with qualified broker-dealers that recommend the various funds of the Trust to clients, or act as agent in the purchase of fund shares for clients, if Fund Management believes that the quality of the execution of the transaction and level of commission are comparable to those available from other qualified brokerage firms. For further information, see "Investment Practices -- Placement of Portfolio Brokerage" in the Statement of Additional Information. Fund Management permits investment and other personnel to purchase and sell securities for their own accounts, subject to a compliance policy governing personal investing. This policy requires Fund Management's personnel to conduct their personal investment activities in a manner that Fund Management believes is not detrimental to the Fund or Fund Management's other advisory clients. See the Statement of Additional Information for more detailed information. HOW SHARES CAN BE PURCHASED Shares of the Fund are sold on a continuous basis by ^ IDI, as the Fund's ^ distributor, at the net asset value per share next calculated after receipt of a purchase order in good form. No sales charge is imposed upon the sale of shares of the Fund. To purchase shares of the Fund, send a check made payable to INVESCO Funds Group, Inc., together with a completed application form, to: INVESCO FUNDS GROUP, INC. Post Office Box 173706 Denver, Colorado 80217-3706 Purchase orders must specify the Fund in which the investment is to be made. The minimum initial purchase must be at least $1,000, with subsequent investments of not less than $50, except that: (1) those shareholders establishing an EasiVest or direct payroll purchase account, as described below in the ^ section entitled "Services Provided by the Trust," may open an account without making any initial investment if they agree to make regular, minimum purchases of at least $50; (2) those shareholders investing in an Individual Retirement Account ("IRA"), or through omnibus accounts where individual shareholder recordkeeping and sub-accounting are not required, may make initial minimum purchases of $250; (3) Fund Management may permit a lesser amount to be invested in the Fund under a federal income tax-deferred retirement plan (other than an IRA), or under a group investment plan qualifying as a sophisticated investor; and (4) Fund Management reserves the right to increase, reduce or waive the minimum purchase requirements in its sole discretion where it determines such action is in the best interests of the Fund. The minimum initial purchase requirement of $1,000, as described above, does not apply to shareholder account(s) in any of the INVESCO funds opened prior to January 1, 1993, and thus is not a minimum balance requirement for those existing accounts. However, for shareholders already having accounts in any of the INVESCO funds, all initial share purchases in a new fund account, including those made using the exchange privilege, must meet the fund's applicable minimum investment requirement. The purchase of shares in the Fund can be expedited by placing bank wire, overnight courier or telephone orders. For further information, the purchaser may call the Trust's office by using the telephone number on the cover of this ^ Prospectus. Orders sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237. Orders to purchase Fund shares can be placed by telephone. Shares of the Fund will be issued at the net asset value next determined after receipt of telephone instructions. Generally, payments for telephone orders must be received by the Trust within three business days or the transaction may be cancelled. In the event of such cancellation, the purchaser will be held responsible for any loss resulting from a decline in the value of the shares. In order to avoid such losses, purchasers should send payments for telephone purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the Trust for any losses resulting from the cancellation of telephone purchases. If your check does not clear, or if a telephone purchase must be cancelled due to nonpayment, you will be responsible for any related loss the Fund or ^ IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has the option to redeem shares from any identically registered account in the Fund or any other INVESCO fund as reimbursement for any loss incurred. You also may be prohibited or restricted from making future purchases in any of the INVESCO funds. Your order to purchase Fund shares will not begin earning dividends or other distributions until your payment can be converted into available federal funds under regular banking procedures or, if you are acquiring shares in an exchange from another INVESCO fund, the Fund receives the proceeds of the exchange. Checks normally are converted into federal funds (moneys held on deposit within the Federal Reserve System) within two or three business days after they have been received by ^ IFG, although this period may be longer for checks drawn on banks that are not members of the Federal Reserve System. Persons who invest in the Fund through a securities broker may be charged a commission or transaction fee by the broker for the handling of the transaction if the broker so elects. Any investor may deal directly with the Fund in any transaction. In that event, there is no such charge. ^ IFG or IDI may from time to time make payments from its revenues to securities dealers and other financial institutions that provide distribution-related and/or administrative services for the Fund. The Fund reserves the right in its sole discretion to reject any order for purchase of its shares (including purchases by exchange) when, in the judgment of Fund Management, such rejection is in the best interest of the Fund. Net asset value per share is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange ^(generally 4:00 p.m., New York time) and also may be computed on other days under certain circumstances. Net asset value per share for the Fund is calculated by dividing the market value of the Fund's securities plus the value of its other assets (including dividends and interest accrued but not collected), less all liabilities (including accrued expenses), by the number of outstanding shares of the Fund. If market quotations are not readily available, a security will be valued at fair value as determined in good faith by the board of trustees. Debt securities with remaining maturities of 60 days or less at the time of purchase will be valued at amortized cost, absent unusual circumstances, so long as the Trust's board of trustees believes that such value represents fair value. Under certain circumstances, the Fund may offer its shares, in lieu of cash payment, for securities to be purchased by the Fund. Such a transaction can benefit the Fund by allowing it to acquire securities for its portfolio without paying brokerage commissions. For the same reason, the transaction also may be beneficial to the party exchanging the securities. The Fund shall not enter into such transactions, however, unless the securities to be exchanged for Fund shares are readily marketable and not restricted as to transfer either by law or liquidity of the market, comply with the investment policies and objectives of the Fund, are of the type and quality which would normally be purchased for the Fund's portfolio, are acquired for investment and not for resale, have a value which is readily ascertainable as evidenced by a listing on the American Stock Exchange, the New York Stock Exchange or NASDAQ, and are securities which the Fund would otherwise purchase on the open market. The value of Fund shares used to purchase portfolio securities as stated herein will be the net asset value as of the effective time and date of the exchange. The securities to be received by the Fund will be valued in accordance with the same procedure used in valuing the Fund's portfolio securities. Any investor wishing to acquire shares of the Fund in exchange for securities should contact either the president or the secretary of the Trust at the address or telephone number shown on the cover page of this ^ Prospectus. Distribution Expenses. The Fund is authorized under a Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan") to use its assets to finance certain activities relating to the distribution of its shares to investors. Under the Plan, monthly payments may be made by the Fund to IDI to permit IDI, at its discretion, to engage in certain activities, and provide certain services approved by the board of trustees in connection with the distribution of the Fund's shares to investors. These activities and services may include the payment of compensation (including incentive compensation and/or continuing compensation based on the amount of customer assets maintained in the Fund) to securities dealers and other financial institutions and organizations, which may include IDI-affiliated companies, to obtain various distribution-related and/or administrative services for the Fund. Such services may include, among other things, processing new shareholder account applications, preparing and transmitting to the Fund's transfer agent computer-processable tapes of all transactions by customers, and serving as the primary source of information to customers in answering questions concerning the Fund and their transactions with the Fund. In addition, other permissible activities and services include advertising, the preparation, printing and distribution of sales literature, printing and distribution of prospectuses to prospective investors, and such other services and promotional activities for the Fund as may from time to time be agreed upon by the Trust and the board of trustees, including public relations efforts and marketing programs to communicate with investors and prospective investors. These services and activities may be conducted by the staff of IDI or its affiliates or by third parties. Under the Plan, the Trust's payments to IDI on behalf of the Fund are limited to an amount computed at an annual rate of 0.25% of the Fund's new sales of shares, exchanges into the Fund and reinvestments of dividends and capital gain distributions added after November 1, 1997. IDI is not entitled to payment for overhead expenses under the Plan, but may be paid for all or a portion of the compensation paid for salaries and other employee benefits for the personnel of IFG or IDI whose primary responsibilities involve marketing shares of the INVESCO Mutual Funds, including the Fund. Payment amounts by the Fund under the Plan, for any month, may be made to compensate IDI for permissible activities engaged in and services provided by IDI during the rolling 12-month period in which that month falls. Therefore, any obligations incurred by IDI in excess of the limitations described above will not be paid by the Fund under the Plan, and will be borne by IDI. In addition, IDI and its affiliates may from time to time make additional payments from its revenues to securities dealers and other financial institutions that provide distribution-related and/or administrative services for the Fund. No further payments will be made by the Fund under the Plan in the event of its termination. Also, any payments made by the Fund may not be used to finance directly the distribution of shares of any other Fund of the Trust or other mutual fund advised by IFG. Payments made by the Fund under the Plan for compensation of marketing personnel, as noted above, are based on an allocation formula designed to ensure that all such payments are appropriate. IDI will bear any distribution- and service-related expenses in excess of the amounts which are compensated pursuant to the Plan. The Plan also authorizes any financing of distribution which may result from IDI's use of its own resources, including profits from investment advisory fees received from the Fund, provided that such fees are legitimate and not excessive. For more information see see "How Shares Can Be Purchased" in the Statement of Additional Information. SERVICES PROVIDED BY THE TRUST Shareholder Accounts. ^ IFG maintains a share account that reflects the current holdings of each shareholder. A separate account will be maintained for a shareholder for each fund in which the shareholder invests. As a business trust, the Trust does not issue share certificates. Each shareholder is sent a detailed confirmation of each transaction in shares of the Trust. Shareholders whose only transactions are through the EasiVest, direct payroll purchase, automatic monthly exchange or periodic withdrawal programs, or are reinvestments of dividends or capital gains in the same or another fund, will receive confirmations of those transactions on their quarterly statements. These programs are discussed below. For information regarding a shareholder's account and transactions, the shareholder may call ^ IFG by using the telephone number on the cover of this ^ Prospectus. Reinvestment of Distributions. Dividends and other distributions are automatically reinvested in additional shares of the Fund at the net asset value per share of the Fund in effect on the ex-dividend date. A shareholder may, however, elect to reinvest dividends and other distributions in certain of the other no-load mutual funds advised by IFG and distributed by ^ IDI, or to receive payment of all dividends and other distributions in excess of $10.00 by check by giving written notice to ^ IFG at least two weeks prior to the record date on which the change is to take effect. Further information concerning these options can be obtained by contacting ^ IFG. Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to shareholders who own or purchase shares of any mutual funds advised by ^ IFG having a total value of $10,000 or more; provided, however, that at the time the Plan is established, the shareholder owns shares having a value of at least $5,000 in the fund from which the withdrawals will be made. Under the Periodic Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly payments of any amount selected (minimum payment of $100) to the party designated by the shareholder. Notice of all changes concerning the Periodic Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next scheduled check. Further information regarding the Periodic Withdrawal Plan and its requirements and tax consequences can be obtained by contacting ^ IFG. Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any other fund of the Trust, as well as for shares of any of the following other no-load mutual funds, which are also advised ^ by IFG, on the basis of their respective net asset values at the time of the exchange: INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc. and INVESCO Tax- Free Income Funds, Inc. An exchange involves the redemption of shares in the Fund and investment of the redemption proceeds in shares of another fund of the Trust or in shares of one of the funds listed above. Exchanges will be made at the net asset value per share next determined after receipt of an exchange request in proper order. Any gain or loss realized on such an exchange is recognizable for federal income tax purposes by the shareholder. Exchange requests may be made either by telephone or by written request to ^ IFG, using the telephone number or address on the cover of this ^ Prospectus. Exchanges made by telephone must be in the amount of at least $250, if the exchange is being made into an existing account of one of the INVESCO funds. All exchanges that establish a new account must meet the fund's applicable minimum initial investment requirements. Written exchange requests into an existing account have no minimum requirements other than the fund's applicable minimum subsequent investment requirements. The ^ option to exchange Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing the new account Application or a Telephone Transaction Authorization Form or otherwise utilizing the telephone exchange ^ option, the investor has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that exchange transactions are genuine. These may include recording telephone instructions and providing written confirmations of exchange transactions. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow these or other reasonable procedures, the Fund may be liable. In order to prevent abuse of this ^ policy to the disadvantage of other shareholders, the Fund reserves the right to terminate the exchange ^ option of any shareholder who requests more than four exchanges in a year. The Fund will determine whether to do so based on a consideration of both the number of exchanges any particular shareholder or group of shareholders has requested and the time period over which those exchange requests have been made, together with the level of expense to the Fund which will result from effecting additional exchange requests. The exchange ^ policy also may be modified or terminated at any time. Except for those limited instances where redemptions of the exchanged security are suspended under Section 22(e) of the 1940 Act, or where sales of the fund into which the shareholder is exchanging are temporarily stopped, notice of all such modifications or termination of the exchange ^ policy will be given at least 60 days prior to the date of termination or the effective date of the modification. Before making an exchange, the shareholder should review the prospectuses of the funds involved and consider their differences^. Shareholders interested in exercising the exchange ^ option may contact ^ IFG for information concerning their particular exchanges. Automatic Monthly Exchange. Shareholders who have accounts in any one or more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar amount of their fund shares to be automatically exchanged for shares of any other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis, subject to the Fund's minimum initial investment or subsequent investment requirements. This automatic exchange program can be changed by the shareholder at any time by notifying ^ IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. EasiVest. For shareholders who want to maintain a schedule of monthly investments, EasiVest uses various methods to draw a preauthorized amount from the shareholder's bank account to purchase Fund shares. This automatic investment program can be changed by the shareholder at any time by ^ notifying IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. Direct Payroll Purchase. Shareholders may elect to have their employers make automatic purchases of Fund shares for them by deducting a specified amount from their regular paychecks. This automatic investment program can be modified or terminated at any time by the shareholder by notifying the employer. Further information regarding this service can be obtained by contacting ^ IFG. Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified employee pension plans and corporate retirement plans. In addition, shares can be used to fund tax qualified plans established under Section 403(b) of the Internal Revenue Code by educational institutions, including public school systems and private schools, and certain kinds of non-profit organizations, which provide deferred compensation arrangements for their employees. Prototype forms for the establishment of these various plans, including, where applicable, disclosure statements required by the Internal Revenue Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG, is qualified to serve as trustee or custodian under these plans and provides the required services at competitive rates. Retirement plans (other than IRAs) receive monthly statements reflecting all transactions in their Fund accounts. IRAs receive the confirmations and quarterly statements described under "Shareholder Accounts." For complete information, including prototype forms and service charges, call ^ IDI at the telephone number listed on the cover of this prospectus or send a written request to: Retirement Services, INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706. HOW TO REDEEM SHARES Shares of the Fund may be redeemed at any time at their current net asset value next determined after a request in proper form is received at the Trust's office. (See "How Shares Can Be Purchased.") Net asset value per share of the Fund at the time of the redemption may be more or less than the price originally paid to purchase shares. In order to redeem shares, a written redemption request signed by each registered owner of the account may be submitted to ^ IFG at the address noted above. Redemption requests sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the name of a corporation, additional documentation may be necessary. Call or write for specifics. If payment for the redeemed shares is to be made to someone other than the registered owner(s), the signature(s) must be guaranteed by a financial institution which qualifies as an eligible guarantor institution. Redemption procedures with respect to accounts registered in the names of broker-dealers may differ from those applicable to other shareholders. Be careful to specify the account from which the redemption is to be made. Shareholders have a separate account for each fund in which they invest. Payment of redemption proceeds will be mailed within seven days following receipt of the required documents. However, payment may be postponed under unusual circumstances, such as when normal trading is not taking place on the New York Stock Exchange or when an emergency as defined by the Securities and Exchange Commission exists. If the shares to be redeemed were purchased by check and that check has not yet cleared, payment will be made promptly upon clearance of the purchase check (which ^ will take up to 15 days). If a shareholder participates in EasiVest, the Fund's automatic monthly investment program, and redeems all of the shares in ^ a Fund account, ^ IFG will terminate any further EasiVest purchases unless otherwise instructed by the shareholder. Because of the high relative costs of handling small accounts, should the value of any shareholder's account fall below $250 as a result of shareholder action, the Trust reserves the right to effect the involuntary redemption of all shares in such account, in which case the account would be liquidated and the proceeds forwarded to the shareholder. Prior to any such redemption, a shareholder will be notified and given 60 days to increase the value of the account to $250 or more. Fund shareholders (other than shareholders holding Fund shares in accounts of IRA plans) may request expedited redemption of shares having a minimum value of $250 (or redemption of all shares if their value is less than $250), held in accounts maintained in their name by telephoning redemption instructions to ^ IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO Trust Company-sponsored federal income tax-deferred retirement plans, the term "shareholders" is defined to mean plan trustees that file a written request to be able to redeem Fund shares by telephone. Unless Fund Management permits a larger redemption request to be placed by telephone, a shareholder may not place a redemption request by telephone in excess of $25,000. The redemption proceeds, at the shareholder's option, either will be mailed to the address listed for the shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank which the shareholder has designated to receive the proceeds of telephone redemptions. The Fund charges no fee for effecting such telephone redemptions. ^ The telephone redemption ^ policy may be modified or terminated in the future at the discretion of Fund Management. Shareholders should understand that while the Fund will attempt to process all telephone redemption requests on an expedited basis, there may be times, particularly in periods of severe economic or market disruption, when (a) they may encounter difficulty in placing a telephone redemption request, and (b) processing telephone redemptions will require up to seven days following receipt of the redemption request, or additional time because of the unusual circumstances set forth above. The privilege of redeeming Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing a new account Application or a Telephone Transaction Authorization Form or otherwise utilizing telephone redemption privileges, the shareholder has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that telephone instructions are genuine. These may include recording telephone instructions and providing written confirmation of transactions initiated by telephone. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow its established procedures, the Fund may be liable. TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS Taxes. The Fund intends to distribute to shareholders ^ all of its net investment income, net capital gains and net gains from foreign currency transactions, if any, in order to continue to qualify for tax treatment as a regulated investment company. Thus, the Fund does not expect to pay any federal income or excise taxes. Unless shareholders are exempt from income taxes, they must include all dividends and ^ other distributions in taxable income for federal, state and local income tax purposes. Dividends and other distributions are taxable whether they are received in cash or automatically ^ reinvested in shares of the Fund or another fund in the INVESCO group. Net realized capital gains of the Fund are classified as short-term and long-term gains depending upon how long the Fund held the security that gave rise to the gains. Short-term capital gains are included in income from dividends and interest as ordinary income and are taxed at the taxpayer's marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in August 1997, changed the taxation of long-term capital gains by applying different capital gains rates depending on the taxpayer's holding period and marginal rate of federal income tax. Long-term gains realized on the sale of securities held for more than one year but not for more than 18 months are taxable at a rate of 28%. This category of long-term gains is often referred to as "mid-term" gains but is technically termed "28% rate gains". Long-term gains realized on the sale of securities held for more than 18 months are taxable at a rate of 20%. The Tax Act, however, does not address the application of these rules to distributions of net capital gain (excess of long-term capital gain over short-term capital losses) by a regulated investment company, including whether such distributions may be treated by its shareholders in accordance with the Fund's holding period for the assets it sold that generated the gain. The application of the new capital gain rules must be determined by further legislation or future regulations that are not available as this Prospectus is being prepared. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax advisers as to the effect of the Tax Act on distributions by the Fund of net capital gain. Shareholders also may realize capital gains or losses when they sell their Fund shares at more or less than the price originally paid. Capital gain on shares held for more than one year will be long-term capital gain, in which event it will be subject to federal income tax at the rates indicated above. The Fund may be subject to ^ withholding of foreign taxes on dividends or interest ^ received on foreign securities. Foreign taxes withheld will be treated as an expense of the Fund ^. ^ Individuals and certain other non-corporate shareholders may be subject to backup withholding of 31% on dividends, capital gain and other distributions and redemption proceeds. Unless ^ you are subject to backup withholding for other reasons, ^ you can avoid backup withholding on ^ your Fund account by ensuring that ^ we have a correct, certified tax identification number. We encourage you to consult a tax adviser with respect to these matters. For further information see "Dividends, Other Distributions and Taxes" in the Statement of Additional Information. Dividends and Other ^ Distributions. The Fund earns ordinary or net investment income in the form of ^ interest on its investments. ^ Dividends paid by the Fund will be based solely on the income earned by it. The Fund's policy is to distribute substantially all of this income, less Fund expenses, to shareholders. Dividends from net investment income are declared daily and paid monthly^ at the discretion of the ^ Trust's Board of Trustees. Dividends are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. In addition, the Fund realizes capital gains and losses when it sells securities for more or less than it paid. If total gains on sales exceed total losses (including losses carried forward from previous years), the Fund has a net realized capital gain. Net realized capital gains, if any, together with gains, if any, realized on foreign currency transactions, are distributed to shareholders at least annually, usually in December. Capital ^ gain distributions are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. ^ ADDITIONAL INFORMATION Voting Rights. All shares of the Trust's funds have equal voting rights. When shareholders are entitled to vote upon a matter, each shareholder is entitled to one vote for each share owned and a corresponding fractional vote for each fractional share owned. Voting with respect to certain matters, such as ratification of independent accountants and the election of trustees, will be by all funds of the Trust voting together. In other cases, such as voting upon the investment advisory contract for the individual funds, voting is on a fund-by-fund basis. To the extent permitted by law, when not all funds are affected by a matter to be voted upon, only shareholders of the fund or funds affected by the matter will be entitled to vote thereon. The Trust is not generally required, and does not expect, to hold regular annual meetings of shareholders. However, the board of trustees will call such special meetings of shareholders for the purpose, among other reasons, of voting the question of removal of a trustee or trustees when requested to do so in writing by the holders of 10% or more of the outstanding shares of the Trust or as may be required by applicable law or the Trust's Declaration of Trust, and the Trust will assist shareholders in communicating with other shareholders as required by the 1940 Act. Trustees may be removed by action of the holders of two-thirds of the outstanding shares of the Trust. Shareholder Inquiries. All inquiries regarding the Fund should be directed to the Trust at the telephone number or mailing address set forth on the cover page of this prospectus. Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement which provides that the Fund will pay an annual fee of $26.00 per shareholder account or where applicable, per participant in an omnibus account ^. The transfer agency fee is not charged to each shareholder's or participant's account but is an expense of the Fund to be paid from the Fund's assets. Registered broker-dealers, third party administrators of tax-qualified retirement plans and other entities, including affiliates of ^ IFG, may provide sub-transfer agency services to the Fund which reduce or eliminate the need for identical services to be provided on behalf of the Fund by ^ IFG. In such cases, ^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping fee out of the transfer agency fee which is paid to ^ IFG by the Fund. INVESCO VALUE TRUST INVESCO Intermediate Government Bond Fund PROSPECTUS January 1, ^ 1998 INVESCO Distributors, Inc., Distributor Post Office Box 173706 Denver, Colorado 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com ^ In Denver, visit one of our convenient Investor Centers: Cherry Creek 155-B Fillmore Street Denver Tech Center 7800 East Union Avenue Lobby Level In addition, all documents filed by the Trust with the Securities and Exchange Commission can be located on a web site maintained by the Commission at http://www.sec.gov. PROSPECTUS January 1, ^ 1998 INVESCO VALUE TRUST INVESCO Value Equity Fund INVESCO Value Equity Fund (the "Fund") seeks to achieve a high total return on investment through capital appreciation and current income by investing substantially all of its assets in common stocks and, to a lesser degree, securities convertible into common stock. Such securities generally will be issued by companies that are listed on a national securities exchange and which usually pay regular dividends. This Fund's investments may consist in part of securities which may be deemed to be speculative. (See "Investment Objective and Policies.") The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end management investment company consisting of three separate portfolios of investments. This ^ Prospectus relates to shares of INVESCO Value Equity Fund. Separate prospectuses are available upon request from INVESCO ^ Distributors, Inc. for the Trust's other two funds, INVESCO Intermediate Government Bond Fund and INVESCO Total Return Fund. Investors may purchase shares of any or all funds. Additional funds may be offered in the future. This ^ Prospectus provides you with the basic information you should know before investing in the Fund. You should read it and keep it for future reference. A Statement of Additional Information containing further information about the Fund, dated January 1, ^ 1998, has been filed with the Securities and Exchange Commission and is incorporated by reference into this ^ Prospectus. To obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; ^ call 1-800-525-8085; or ^ visit our web site at http://www.invesco.com. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ---------- TABLE OF CONTENTS Page ---- ANNUAL FUND EXPENSES 33 FINANCIAL HIGHLIGHTS 35 PERFORMANCE DATA 37 INVESTMENT OBJECTIVE AND POLICIES 37 RISK FACTORS 38 THE TRUST AND ITS MANAGEMENT 42 HOW SHARES CAN BE PURCHASED 45 SERVICES PROVIDED BY THE TRUST 48 HOW TO REDEEM SHARES 51 TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS 52 ADDITIONAL INFORMATION 54 ANNUAL FUND EXPENSES The Fund is 100% no-load; there are no fees to purchase, exchange or redeem shares^. The Fund, however, is authorized to pay a Rule 12b-1 distribution fee of one quarter of one percent of the Fund's average net assets each year. The 12b-1 fee is assessed on new sales of shares, exchanges into the Fund and reinvestments of dividends and capital gain distributions occuring on or after November 1, 1997. Lower expenses benefit Fund shareholders by increasing the Fund's total return. Shareholder Transaction Expenses Sales load "charge" on purchases None Sales load "charge" on reinvested dividends None Redemption fees None Exchange fees None Annual Fund Operating Expenses (as a percentage of average net assets) Management Fee 0.75% 12b-1 Fees ^[0.25%] Other Expenses ^[0.29] Transfer Agency ^ Fee(2) [0.20%] General Services, Administrative Services, Registration, ^ Postage(3) [0.09%] Total Fund Operating ^ Expenses(1)(4) [1.29%] ^(1) Does not include 12b-1 fees as these fees were not charged until November 1, 1997. (2) Consists of the transfer agency fee described under "Additional Information - Transfer and Dividend Disbursing Agent." ^(3) Includes, but is not limited to, fees and expenses of trustees, custodian bank, legal counsel and independent accountants, ^ securities pricing ^ services, costs of administrative services furnished under an Administrative Services Agreement, costs of registration of Fund shares under applicable laws, and costs of printing and distributing reports to shareholders. ^(4) It should be noted that the Fund's actual total operating expenses were lower than the figures shown because the Fund's custodian fees and ^ transfer agent fees were reduced under ^ expense offset ^ arrangements. However, as a result of an SEC requirement for mutual funds to state their total operating expenses without crediting any such expense offset arrangement, the figures shown above DO NOT reflect these reductions. In comparing expenses for different years, please note that the ratios of Expenses to Average Net Assets shown under "Financial Highlights" DO reflect reductions for periods prior to the fiscal year ended August 31, 1996. See "The Trust And Its Management." Example A shareholder would pay the following expenses on a $1,000 investment for the periods shown, assuming (1) a 5% annual return and (2) redemption at the end of each time period: 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- ^ $11 $33 $58 $128 The purpose of the foregoing table is to assist investors in understanding the various costs and expenses that an investor in the Fund will bear directly or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust and Its Management.") The above figures for INVESCO Value Equity Fund are based on fiscal year-end information. The Fund charges no sales load, redemption fee or exchange fee ^. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is hypothetical and should not be considered a representation of past or future annual returns, which may be greater or less than the assumed amount. Because the Fund pays a distribution fee, investors who own Fund shares for a long period of time may pay more than the economic equivalent of the maximum front-end sales charge permitted for mutual funds by the National Association of Securities Dealers, Inc. FINANCIAL HIGHLIGHTS (For a Fund Share Outstanding Throughout Each Period) The following information for each of the ^ four years ended August 31, ^ 1997, the eight-month fiscal period ended August 31, 1993, and each of the ^ five years ended December 31, 1992, has been audited by Price Waterhouse LLP, independent accountants. Prior years' information was audited by another independent accounting firm. This information should be read in conjunction with the audited financial statements and the report of independent accountants thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is incorporated by reference into the Statement of Additional Information. Both are available without charge by contacting INVESCO ^ Distributors, Inc., at the address or telephone number on the cover of this ^ Prospectus. All per share data has been adjusted to reflect an 80 to 1 stock split which was effected on January 2, 1991.
Period Ended Year Ended August 31 August 31 Year Ended December 31 -------------------------------------------------------------------------------------------------- 1997 1996 1995 1994 1993^^ 1992 1991 1990 1989 1988 1987 PER SHARE DATA Net Asset Value - Beginning of Period $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40 $12.75 -------------------------------------------------------------------------------------------------- INCOME FROM ^ INVESTMENT OPERATIONS Net Investment Income 0.35 0.35 0.39 0.36 0.24 0.36 0.40 0.44 0.48 0.37 0.40 Net Gains ^(or Losses) on ^ Securities (Both Realized and Unrealized) 6.62 3.09 2.58 1.20 0.88 0.45 4.54 (1.33) 2.42 1.62 0.39 -------------------------------------------------------------------------------------------------- Total from Investment Operations 6.97 3.44 2.97 1.56 1.12 0.81 4.94 (0.89) 2.90 1.99 0.79 -------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income 0.35 0.35 0.39 0.31 0.24 0.34 0.40 0.47 0.49 0.36 0.50 In Excess of Net Investment Income 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Distributions from Capital Gains 0.56 0.38 1.17 0.88 0.00 0.13 1.85 0.06 0.83 0.31 0.64 -------------------------------------------------------------------------------------------------- Total Distributions 0.91 0.73 1.56 1.23 0.24 0.47 2.25 0.53 1.32 0.67 1.14 -------------------------------------------------------------------------------------------------- Net Asset Value - End of Period $28.30 $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40 ================================================================================================== TOTAL RETURN 32.04% 17.77% 17.84% 9.09% 6.65%* ^ 4.98% 35.84% (5.80%) 21.34% 16.89% 5.98% RATIOS Net Assets - End of Period^ ($000 Omitted) $369,766 $200,046 $153,171 $111,850 $81,914 $78,609 $39,741 $29,825 $36,592 $27,434 $14,933 Ratio of Expenses to ^ Average Net Assets# 1.04%@ 1.01%@ 0.97% 1.01% 1.00%~ 0.91% 0.98% 1.00% 1.00% 1.00% 1.00% Ratio of Net Investment ^ Income to Average Net Assets# 1.35% 1.64% 2.17% 1.80% 2.07%~ 2.19% 2.39% 3.00% 3.29% 3.48% 2.95% Portfolio Turnover Rate 37% 27% 34% 53% 35%* 37% 64% 23% 30% 16% 20% Average Commission Rate Paid^^ $0.0538 $0.0589 - - - - - - - -
^^ From January 1, 1993 to August 31, 1993^. * Based on operations for the period shown and, accordingly, are not representative of a full year. # Various expenses of the Fund were voluntarily absorbed by IFG for the years ended December 31, 1990, 1989, 1988 and 1987. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 1.04%, 1.09%, 1.19% and 1.42% respectively, and ratio of net investment income to average net assets would have been 2.96%, 3.20%, 3.29% and 2.53%, respectively. @ Ratio is based on Total Expenses of the Fund, which is before any expense offset arrangements. ~ Annualized ^^ The average commission rate paid is the total brokerage commissions paid on applicable purchases and sales of securities for the period divided by the total number of related shares purchased or sold^ which is required to be disclosed effective for fiscal years beginning September 1, 1995 and thereafter. Further information about the performance of the Fund is contained in the Trust's Annual Report to Shareholders, which may be obtained without charge by writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; or by calling 1-800-525-8085. PERFORMANCE DATA From time to time, the Fund advertises its total return performance. These figures are based upon historical investment results and are not intended to indicate future performance. Total return is computed by calculating the percentage change in value of an investment, assuming reinvestment of all income dividends and capital gain distributions, to the end of a specified period. Cumulative total return reflects actual performance over a stated period of time. Average annual total return is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Thus, a given report of total return performance should not be considered as representative of future performance. The Fund charges no sales load, redemption fee or exchange fee which would affect total return computations. In conjunction with performance reports and/or analyses of shareholder service for the Fund, comparative data between the Fund's performance for a given period and recognized bond indices and indices of investment results for the same period and/or assessments of the quality of shareholder service may be provided to shareholders. Such indices include indices provided by Dow Jones & Company, Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Lipper Analytical Services, Inc., Lehman Brothers, National Association of Securities Dealers Automated Quotations, Frank Russell Company, Value Line Investment Survey, the American Stock Exchange, Morgan Stanley Capital International, Wilshire Associates, the Financial Times Stock Exchange, the New York Stock Exchange, the Nikkei Stock Average and the Deutcher Aktienindex, all of which are unmanaged market indicators. In addition, rankings, ratings and comparisons of investment performance and/or assessments of the quality of shareholder service appearing in publications such as Money, Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which utilize information compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by other recognized analytical services, may be used in advertising. The Lipper Analytical Services, Inc. mutual fund rankings and comparisons, which may be used by the Fund in performance reports, will be drawn from the "Growth and Income Funds" Lipper mutual fund groupings, in addition to the broad-based Lipper general fund grouping. INVESTMENT OBJECTIVE AND POLICIES The Trust consists of three separate portfolios of investments (referred to as the "Funds"), each represented by a different series of the Trust's shares. This ^ Prospectus relates to INVESCO Value Equity Fund; separate prospectuses for INVESCO Intermediate Government Bond Fund and INVESCO Total Return Fund are available. The investment objective of the Fund is to seek a high total return on investment through capital appreciation and current income. Funds having an investment objective of seeking a high total return may be limited in their ability to obtain their objective by the limitations on the types of securities in which they may invest. Therefore, no assurance can be given that the Fund will be able to achieve its investment objective. Substantially all of the Fund's assets will be invested in common stocks and, to a lesser extent, securities convertible into common stocks (collectively, "equity securities"). Such securities generally will be issued by companies which are listed on a national securities exchange, such as the New York Stock Exchange, and which usually pay regular dividends, although the Fund also may invest in securities traded on regional stock exchanges or on the over-the-counter market. During normal market conditions, at least 65% of the Fund's investments will consist of equity securities. The Trust has not established any minimum investment standards such as an issuer's asset level, earnings history, type of industry, dividend payment history, etc. with respect to the Fund's investments in common stocks, although in selecting common stocks for the Fund, the investment adviser and sub-adviser (collectively, "Fund Management") generally apply an investment discipline which seeks to achieve a yield higher than the overall equity market. Therefore, because smaller companies may be subject to more significant losses as well as have the potential for more substantial growth than larger, more established companies, investors in the Fund should consider that the Fund's investments may consist in part of securities which may be deemed to be speculative. When market or economic conditions indicate, in the judgment of Fund Management, that a defensive investment stance should be assumed, all or part of the assets of the Fund may be invested temporarily in other securities consisting of high quality (rated AA or above by Standard & Poor's or Aa by Moody's Investors Service, Inc.) corporate preferred stocks, bonds, debentures or other evidences of indebtedness, and in obligations issued or guaranteed by the United States or any instrumentality thereof, or held in cash. The investment objective of the Fund and its investment policies, ^ where indicated ^, are fundamental policies and thus may not be changed without prior approval by the holders of a majority of the outstanding voting securities of the Fund, as defined in the Investment Company Act of 1940 (the "1940 Act"). In addition, the Trust and this Fund are subject to certain investment restrictions which are set forth in the Statement of Additional Information and which may not be altered without approval of the Fund's shareholders. One of those restrictions limits the Fund's borrowing of money to borrowings from banks for temporary or emergency purposes (but not for leveraging or investment) in an amount not exceeding 33 1/3% of the value of the Fund's total assets. RISK FACTORS Investors should consider the special factors associated with the policies discussed below in determining the appropriateness of an investment in the INVESCO Value Equity Fund. The Fund's policies regarding investments in foreign securities and foreign currencies are not fundamental and may be changed by vote of the Trust's board of trustees. Foreign Securities. The Fund may invest up to 25% of its total assets in foreign equity or debt securities. Investments in securities of foreign companies and in foreign markets involve certain additional risks not associated with investments in domestic companies and markets, including the risks of fluctuations in foreign currency exchange rates and of political or economic instability, the difficulty of predicting international trade patterns and the possibility of imposition of exchange controls or currency blockage. In addition, there may be less information publicly available about a foreign company than about a domestic company, and there is generally less government regulation of stock exchanges, brokers and listed companies abroad than in the United States. Moreover, with respect to certain foreign countries, there may be a possibility of expropriation or confiscatory taxation. Further, economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Forward Foreign Currency Contracts. The Fund may enter into contracts to purchase or sell foreign currencies at a future date ("forward contracts") as a hedge against fluctuations in foreign exchange rates pending the settlement of transactions in foreign securities or during the time the Fund holds foreign securities. A forward contract is an agreement between contracting parties to exchange an amount of currency at some future time at an agreed upon rate. Although the Fund has not adopted any limitations on its ability to use forward contracts as a hedge against fluctuations in foreign exchange rates, it does not attempt to hedge all of its foreign investment positions and will enter into forward contracts only to the extent, if any, deemed appropriate by Fund Management. The Fund will not enter into a forward contract for a term of more than one year or for purposes of speculation. Investors should be aware that hedging against a decline in the value of a currency in the foregoing manner does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Furthermore, such hedging transactions may preclude the opportunity for gain if the value of the hedged currency should rise. No predictions can be made with respect to whether the total of such transactions will result in a better or a worse position than had the Fund not entered into any forward contracts. Forward contracts may from time to time be considered illiquid, in which case they would be subject to the Fund's limitation on investing in illiquid securities, discussed below. For additional information regarding forward foreign currency contracts, see the Trust's Statement of Additional Information. Repurchase Agreements. The Fund may engage in repurchase agreements with banks, registered broker-dealers and registered government securities dealers which are deemed creditworthy by Fund Management, under guidelines established by the board of trustees. A repurchase agreement is a transaction in which the Fund purchases a security and simultaneously commits to sell the security to the seller at an agreed upon price and date (usually not more than seven days) after the date of purchase. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or maturity of the purchased security. The Fund's risk is limited to the ability of the seller to pay the agreed upon amount on the delivery date. However, in the event the seller should default, the underlying security constitutes collateral for the seller's obligations to pay. This collateral will be held by the custodian for the Fund's assets. However, in the absence of compelling legal precedents in this area, there can be no assurance that the Fund will be able to maintain its rights to such collateral upon default of the issuer of the repurchase agreement. To the extent that the proceeds from a sale upon a default in the obligation to repurchase are less than the repurchase price, the Fund would suffer a loss. Although the Fund has not adopted any limit on the amount of its total assets that may be invested in repurchase agreements, the Fund intends that at no time will the market value of its securities subject to repurchase agreements exceed 20% of the total assets of the Fund. Illiquid Securities. The Fund may invest from time to time in securities subject to restrictions on disposition under the Securities Act of 1933 ("restricted securities"), securities without readily available market quotations or illiquid securities (those which cannot be sold in the ordinary course of business within seven days at approximately the valuation given to them by the Fund). However, on the date of purchase, no such investment may increase the Fund's holdings of restricted securities to more than 2% of the value of the Fund's total assets or its holdings of illiquid securities or those without readily available market quotations to more than 5% of the Fund's total assets. The Fund is not required to receive registration rights in connection with the purchase of restricted securities and, in the absence of such rights, marketability and value can be adversely affected because the Fund may be unable to dispose of such securities at the time desired or at a reasonable price. In addition, in order to resell a restricted security, the Fund might have to bear the expense and incur the delays associated with effecting registration. Futures and Options. A futures contract is an agreement to buy or sell a specific amount of a financial instrument or commodity at a particular price on a particular date. The Fund will use futures contracts only to hedge against price changes in the value of its current or intended investments in securities. In the event that an anticipated decrease in the value of portfolio securities occurs as a result of a general decrease in prices, the adverse effects of such changes may be offset, at least in part, by gains on the sale of futures contracts. Conversely, the increased cost of portfolio securities to be acquired, caused by a general increase in prices, may be offset, at least in part, by gains on futures contracts purchased by the Fund. Brokerage fees are paid to trade futures contracts, and the Fund is required to maintain margin deposits. Put and call options on futures contracts or securities may be traded by the Fund in order to protect against declines in the value of portfolio securities or against increases in the cost of securities to be acquired. The purchaser of an option purchases the right to effect a transaction in the underlying future or security at a specified price (the "strike price") before a specified date (the "expiration date"). In exchange for the right, the purchaser pays a "premium" to the seller, which represents the price of the right to buy or to sell the underlying instrument. In exchange for the premium, the seller of the option becomes obligated to effect a transaction in the underlying future or security, at the strike price, at any time prior to the expiration date, should the buyer choose to exercise the option. A call option contract grants the purchaser the right to buy the underlying future or security, at the strike price, before the expiration date. A put option contract grants the purchaser the right to sell the underlying future or security, at the strike price, before the expiration date. Purchases of options on futures contracts may present less dollar risk in hedging the Fund's portfolio than the purchase and sale of the underlying futures contracts, since the potential loss is limited to the amount of the premium plus related transaction costs. The premium paid for such a put or call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise or liquidation of the option, and, unless the price of the underlying futures contract or security changes sufficiently, the option may expire without value to the Fund. Although the Fund will enter into futures contracts and options on futures contracts and securities solely for hedging or other nonspeculative purposes, their use does involve certain risks. For example, a lack of correlation between the value of an instrument underlying an option or futures contract and the assets being hedged, or unexpected adverse price movements, could render a Fund's hedging strategy unsuccessful and could result in losses. In addition, there can be no assurance that a liquid secondary market will exist for any contract purchased or sold, and the Fund may be required to maintain a position until exercise or expiration, which could result in losses. Transactions in futures contracts and options are subject to other risks as well, which are set forth in greater detail in the Statement of Additional Information and Appendix B therein. Securities Lending. ^ The Fund may make loans of its portfolio securities (not to exceed 10% of the Fund's total assets) to broker-dealers or other institutional investors under contracts requiring such loans to be callable at any time and to be secured continuously by collateral in cash, cash equivalents, high quality short-term government securities or irrevocable letters of credit maintained on a current basis at an amount at least equal to the market value of the securities loaned, including accrued interest and dividends. The Fund will continue to collect the equivalent of the interest or dividends paid by the issuer on the securities loaned and will also receive either interest (through investment of cash collateral) or a fee (if the collateral is government securities). The Fund may pay finder's and other fees in connection with securities loans. Portfolio Turnover. There are no fixed limitations regarding portfolio turnover for the Fund. Although the Fund does not trade for short-term profits, securities may be sold without regard to the time they have been held in the Fund when, in the opinion of Fund Management, market considerations warrant such action. As a result, while it is anticipated that the Fund's annual portfolio turnover rate generally will not exceed 100%, under certain market conditions the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio turnover would cause the Fund to incur greater brokerage costs than would otherwise be the case. The Fund's portfolio turnover rates are set forth under "Financial Highlights" and, along with the Trust's brokerage allocation policies, are discussed in the Statement of Additional Information. THE TRUST AND ITS MANAGEMENT ^ The Trust is a no-load mutual fund, registered with the Securities and Exchange Commission as an open-end, diversified management investment company. The Trust was organized on July 15, 1987, under the laws of the Commonwealth of Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed its name to "INVESCO Value Trust." The overall supervision of the Trust is the responsibility of its board of trustees. INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver, Colorado, serves as the Trust's investment adviser pursuant to an investment advisory agreement. Under this agreement, ^ IFG provides the Fund with various management services and supervises the Fund's daily business affairs. Specifically, ^ IFG performs all administrative, clerical, statistical, secretarial and all other services necessary or incidental to the administration of the affairs of the Trust excluding, however, those services that are the subject of a separate agreement between the Trust and ^ IFG or any affiliate thereof. Services provided pursuant to separate agreement include the ^ provision of transfer agency, dividend disbursing agency and registrar services, and services furnished under an Administrative Services Agreement with ^ IFG dated as of February ^ 28, 1997. INVESCO Distributors, Inc. ("IDI") provides services relating to the distribution and sale of the Fund's shares. ^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the Trust's investment adviser prior to 1991, for investment sub-advisory and research services on behalf of the Fund. ICM ^ currently manages in excess of ^ $__ billion of assets on behalf of tax-exempt accounts (such as pension and profit-sharing funds for corporations and state and local governments) and investment companies. ICM, subject to the supervision of IFG, is primarily responsible for selecting and managing the Fund's investments. Although the Trust is not a party to the sub-advisory agreement, the agreement has been approved by the shareholders of the Trust. Services provided by ^ IFG and ICM are subject to review by the Trust's board of trustees. IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC is a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of the largest independent investment management businesses in the world. IFG and ICM continued to operate under their existing names. Together, IFG and ICM constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in assets under management. IFG was established in 1932 and, as of August 31, 1997, managed 14 mutual funds, consisting of 46 separate portfolios, with combined assets of approximately $15.9 billion on behalf of over 854,448 shareholders. IDI was established in 1997 and is the distributor for 14 mutual funds consisting of 46 separate portfolios. The following individuals serve as portfolio managers for the Fund and are primarily responsible for the day-to-day management of the Fund's portfolio of securities: Michael C. Harhai Portfolio manager of the Fund since 1993; ^ portfolio manager for INVESCO Capital Management, Inc. (1993 to present); senior vice president and manager, Sovran Capital Management Corp. (1992 to 1993); senior vice president and portfolio manager, C&S/Sovran Capital Management (1991 to 1992); senior vice president and portfolio manager, Citizens & Southern Investment Advisors, Inc. (1984 to 1991); began investment career in 1972; B.A., University of South Florida; M.B.A., University of Central Florida; Chartered Financial Analyst; trustee, Atlanta Society of Financial Analysts. Terrence Irrgang Assistant portfolio manager of the Fund since 1993; ^ portfolio manager for INVESCO Capital Management, Inc. (1992 to present); consultant, Towers, Perrin & Forster & Crosby (1988 to 1992); began investment career in 1981; B.A., Gettysburg College; M.B.A., Temple University; Chartered Financial Analyst. Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly fee at the following annual rates based on the average net assets of the Fund: 0.75% on the first $500 million of the Fund's average net assets; 0.65% on the next $500 million of the Fund's average net assets; and 0.50% on the average net assets of the Fund in excess of $1 billion. ^ For the fiscal year ended August 31, ^ 1997, the advisory fees paid to ^ IFG amounted to 0.75% of the average net assets of the Fund. Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM, as the Fund's sub-adviser ^, a monthly fee which is computed at the ^ following annual rates: prior to January 1, 1998, 0.20% on the first $500 million of the Fund's average net assets^, 0.17% on the next $500 million of the Fund's average net assets ^ and 0.13% on the Fund's average net assets in excess of $1 billion and effective January 1, 1998, 0.25% on the first $500 million of the Fund's average net assets, 0.2167% on the next $500 million of the Fund's average net assets and 0.1667% on the Fund's average net assets in excess of $1 billion. No fee is paid by the Fund to ICM. The Fund bears those Trust expenses which are accrued daily that are incurred on its behalf and, in addition, bears a portion of general Trust expenses allocated based upon the relative net assets of the three Funds of the Trust. Such expenses are generally deducted from the Fund's total income before dividends are paid. Total expenses of the Fund, including investment advisory fees (but excluding brokerage commissions), as a percentage of its average net assets for the fiscal year ended August 31, ^ 1997, were ^ 1.04%. The Trust also has entered into an Administrative Services Agreement (the "Administrative Agreement") with ^ IFG. Pursuant to the Administrative Agreement, ^ IFG performs certain administrative and internal accounting services, including without limitation, maintaining general ledger and capital stock accounts, preparing a daily trial balance, calculating net asset value daily and providing selected general ledger reports and providing sub- accounting and recordkeeping services for shareholder accounts maintained by certain retirement and employee benefit plans for the benefit of participants in such plans. For such services, the Fund pays ^ IFG a fee consisting of a base fee of $10,000 per year, plus an additional incremental fee computed at an annual rate not to exceed a maximum of 0.015% per annum of the average net assets of the Fund. The Declaration of Trust pursuant to which the Trust is organized contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each instrument entered into or executed by the Trust. The Declaration of Trust also provides for indemnification out of the Trust's property for any shareholder held personally liable for any Trust obligation. Thus, the risk of a shareholder being personally liable for obligations of the Trust is limited to the unlikely circumstance in which the Trust itself would be unable to meet its obligations. ^ Fund Management places orders for the purchase and sale of portfolio securities with brokers and dealers based upon ^ Fund Management's evaluation of broker-dealer financial responsibility coupled with broker-dealer ability to effect transactions at the best available prices. The Trust may place orders for portfolio transactions with qualified broker-dealers that recommend the various funds of the Trust to clients, or act as agent in the purchase of fund shares for clients, if Fund Management believes that the quality of the execution of the transaction and level of commission are comparable to those available from other qualified brokerage firms. For further information, see "Investment Practices -- Placement of Portfolio Brokerage" in the Statement of Additional Information. Fund Management permits investment and other personnel to purchase and sell securities for their own accounts, subject to a compliance policy governing personal investing. This policy requires Fund Management's personnel to conduct their personal investment activities in a manner that Fund Management believes is not detrimental to the Fund or Fund Management's other advisory clients. See the Statement of Additional Information for more detailed information. HOW SHARES CAN BE PURCHASED Shares of the Fund are sold on a continuous basis by ^ IDI, as the Fund's ^ distributor, at the net asset value per share next calculated after receipt of a purchase order in good form. No sales charge is imposed upon the sale of shares of the Fund. To purchase shares of the Fund, send a check made payable to INVESCO Funds Group, Inc., together with a completed application form, to: INVESCO FUNDS GROUP, INC. Post Office Box 173706 Denver, Colorado 80217-3706 Purchase orders must specify the Fund in which the investment is to be made. The minimum initial purchase must be at least $1,000, with subsequent investments of not less than $50, except that: (1) those shareholders establishing an EasiVest or direct payroll purchase account, as described below in the ^ section entitled "Services Provided by the Trust," may open an account without making any initial investment if they agree to make regular, minimum purchases of at least $50; (2) those shareholders investing in an Individual Retirement Account ("IRA"), or through omnibus accounts where individual shareholder recordkeeping and sub-accounting are not required, may make initial minimum purchases of $250; (3) Fund Management may permit a lesser amount to be invested in the Fund under a federal income tax-deferred retirement plan (other than an IRA), or under a group investment plan qualifying as a sophisticated investor; and (4) Fund Management reserves the right to increase, reduce or waive the minimum purchase requirements in its sole discretion where it determines such action is in the best interests of the Fund. The minimum initial purchase requirement of $1,000, as described above, does not apply to shareholder account(s) in any of the INVESCO funds opened prior to January 1, 1993, and thus is not a minimum balance requirement for those existing accounts. However, for shareholders already having accounts in any of the INVESCO funds, all initial share purchases in a new fund account, including those made using the exchange privilege, must meet the fund's applicable minimum investment requirement. The purchase of shares in the Fund can be expedited by placing bank wire, overnight courier or telephone orders. For further information, the purchaser may call the Trust's office by using the telephone number on the cover of this ^ Prospectus. Orders sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237. Orders to purchase Fund shares can be placed by telephone. Shares of the Fund will be issued at the net asset value next determined after receipt of telephone instructions. Generally, payments for telephone orders must be received by the Trust within three business days or the transaction may be cancelled. In the event of such cancellation, the purchaser will be held responsible for any loss resulting from a decline in the value of the shares. In order to avoid such losses, purchasers should send payments for telephone purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the Trust for any losses resulting from the cancellation of telephone purchases. If your check does not clear, or if a telephone purchase must be cancelled due to nonpayment, you will be responsible for any related loss the Fund or ^ IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has the option to redeem shares from any identically registered account in the Fund or any other INVESCO fund as reimbursement for any loss incurred. You also may be prohibited or restricted from making future purchases in any of the INVESCO funds. Persons who invest in the Fund through a securities broker may be charged a commission or transaction fee by the broker for the handling of the transaction if the broker so elects. Any investor may deal directly with the Fund in any transaction. In that event, there is no such charge. ^ IFG or IDI may from time to time make payments from its revenues to securities dealers and other financial institutions that provide distribution-related and/or administrative services for the Fund. The Fund reserves the right in its sole discretion to reject any order for purchase of its shares (including purchases by exchange) when, in the judgment of Fund Management, such rejection is in the best interest of the Fund. Net asset value per share is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange ^(generally 4:00 p.m., New York time) and also may be computed on other days under certain circumstances. Net asset value per share for the Fund is calculated by dividing the market value of the Fund's securities plus the value of its other assets (including dividends and interest accrued but not collected), less all liabilities (including accrued expenses), by the number of outstanding shares of the Fund. If market quotations are not readily available, a security will be valued at fair value as determined in good faith by the board of trustees. Debt securities with remaining maturities of 60 days or less at the time of purchase will be valued at amortized cost, absent unusual circumstances, so long as the Trust's board of trustees believes that such value represents fair value. Under certain circumstances, the Fund may offer its shares, in lieu of cash payment, for securities to be purchased by the Fund. Such a transaction can benefit the Fund by allowing it to acquire securities for its portfolio without paying brokerage commissions. For the same reason, the transaction also may be beneficial to the party exchanging the securities. The Fund shall not enter into such transactions, however, unless the securities to be exchanged for Fund shares are readily marketable and not restricted as to transfer either by law or liquidity of the market, comply with the investment policies and objectives of the Fund, are of the type and quality which would normally be purchased for the Fund's portfolio, are acquired for investment and not for resale, have a value which is readily ascertainable as evidenced by a listing on the American Stock Exchange, the New York Stock Exchange or NASDAQ, and are securities which the Fund would otherwise purchase on the open market. The value of Fund shares used to purchase portfolio securities as stated herein will be the net asset value as of the effective time and date of the exchange. The securities to be received by the Fund will be valued in accordance with the same procedure used in valuing the Fund's portfolio securities. Any investor wishing to acquire shares of the Fund in exchange for securities should contact either the president or the secretary of the Trust at the address or telephone number shown on the cover page of this ^ Prospectus. Distribution Expenses. The Fund is authorized under a Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan") to use its assets to finance certain activities relating to the distribution of its shares to investors. Under the Plan, monthly payments may be made by the Fund to IDI to permit IDI, at its discretion, to engage in certain activities, and provide certain services approved by the board of trustees in connection with the distribution of the Fund's shares to investors. These activities and services may include the payment of compensation (including incentive compensation and/or continuing compensation based on the amount of customer assets maintained in the Fund) to securities dealers and other financial institutions and organizations, which may include IDI-affiliated companies, to obtain various distribution-related and/or administrative services for the Fund. Such services may include, among other things, processing new shareholder account applications, preparing and transmitting to the Fund's transfer agent computer-processable tapes of all transactions by customers, and serving as the primary source of information to customers in answering questions concerning the Fund and their transactions with the Fund. In addition, other permissible activities and services include advertising, the preparation, printing and distribution of sales literature, printing and distribution of prospectuses to prospective investors, and such other services and promotional activities for the Fund as may from time to time be agreed upon by the Trust and the board of trustees, including public relations efforts and marketing programs to communicate with investors and prospective investors. These services and activities may be conducted by the staff of IFG or its affiliates or by third parties. Under the Plan, the Trust's payments to IDI on behalf of the Fund are limited to an amount computed at an annual rate of 0.25% of the Fund's new sales of shares, exchanges into the Fund and reinvestments of dividends and capital gain distributions added after November 1, 1997. IDI is not entitled to payment for overhead expenses under the Plan, but may be paid for all or a portion of the compensation paid for salaries and other employee benefits for the personnel of IFG or IDI whose primary responsibilities involve marketing shares of the INVESCO Mutual Funds, including the Fund. Payment amounts by the Fund under the Plan, for any month, may be made to compensate IDI for permissible activities engaged in and services provided by IDI during the rolling 12-month period in which that month falls. Therefore, any obligations incurred by IDI in excess of the limitations described above will not be paid by the Fund under the Plan, and will be borne by IDI. In addition, IDI and its affiliates may from time to time make additional payments from its revenues to securities dealers, financial advisers and financial institutions that provide distribution- related and/or administrative services for the Fund. No further payments will be made by the Fund under the Plan in the event of its termination. Also, any payments made by the Fund may not be used to finance directly the distribution of shares of any other Fund of the Trust or other mutual fund advised by IFG. Payments made by the Fund under the Plan for compensation of marketing personnel, as noted above, are based on an allocation formula designed to ensure that all such payments are appropriate. IDI will bear any distribution- and service-related expenses in excess of the amounts which are compensated pursuant to the Plan. The Plan also authorizes any financing of distribution which may result from IDI's use of its own resources, including profits from investment advisory fees received from the Fund, provided that such fees are legitimate and not excessive. For more information see see "How Shares Can Be Purchased" in the Statement of Additional information. SERVICES PROVIDED BY THE TRUST Shareholder Accounts. ^ IFG maintains a share account that reflects the current holdings of each shareholder. A separate account will be maintained for a shareholder for each fund in which the shareholder invests. As a business trust, the Trust does not issue share certificates. Each shareholder is sent a detailed confirmation of each transaction in shares of the Trust. Shareholders whose only transactions are through the EasiVest, direct payroll purchase, automatic monthly exchange or periodic withdrawal programs, or are reinvestments of dividends or capital gains in the same or another fund, will receive confirmations of those transactions on their quarterly statements. These programs are discussed below. For information regarding a shareholder's account and transactions, the shareholder may call ^ IFG by using the telephone number on the cover of this ^ Prospectus. Reinvestment of Distributions. Dividends and other distributions are automatically reinvested in additional shares of the Fund at the net asset value per share of the Fund in effect on the ex-dividend date. A shareholder may, however, elect to reinvest dividends and other distributions in certain of the other no-load mutual funds advised by IFG and distributed by ^ IDI, or to receive payment of all dividends and other distributions in excess of $10.00 by check by giving written notice to ^ IFG at least two weeks prior to the record date on which the change is to take effect. Further information concerning these options can be obtained by contacting ^ IFG. Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to shareholders who own or purchase shares of any mutual funds advised by ^ IFG having a total value of $10,000 or more; provided, however, that at the time the Plan is established, the shareholder owns shares having a value of at least $5,000 in the fund from which the withdrawals will be made. Under the Periodic Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly payments of any amount selected (minimum payment of $100) to the party designated by the shareholder. Notice of all changes concerning the Periodic Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next scheduled check. Further information regarding the Periodic Withdrawal Plan and its requirements and tax consequences can be obtained by contacting ^ IFG. Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any other fund of the Trust, as well as for shares of any of the following other no-load mutual funds, which are also advised ^ by IFG, on the basis of their respective net asset values at the time of the exchange: INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc. and INVESCO Tax- Free Income Funds, Inc. An exchange involves the redemption of shares in the Fund and investment of the redemption proceeds in shares of another fund of the Trust or in shares of one of the funds listed above. Exchanges will be made at the net asset value per share next determined after receipt of an exchange request in proper order. Any gain or loss realized on such an exchange is recognizable for federal income tax purposes by the shareholder. Exchange requests may be made either by telephone or by written request to ^ IFG, using the telephone number or address on the cover of this ^ Prospectus. Exchanges made by telephone must be in the amount of at least $250, if the exchange is being made into an existing account of one of the INVESCO funds. All exchanges that establish a new account must meet the fund's applicable minimum initial investment requirements. Written exchange requests into an existing account have no minimum requirements other than the fund's applicable minimum subsequent investment requirements. The ^ option to exchange Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing the new account Application or a Telephone Transaction Authorization Form or otherwise utilizing the telephone exchange ^ option, the investor has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that exchange transactions are genuine. These may include recording telephone instructions and providing written confirmations of exchange transactions. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow these or other reasonable procedures, the Fund may be liable. In order to prevent abuse of this ^ policy to the disadvantage of other shareholders, the Fund reserves the right to terminate the exchange ^ option of any shareholder who requests more than four exchanges in a year. The Fund will determine whether to do so based on a consideration of both the number of exchanges any particular shareholder or group of shareholders has requested and the time period over which those exchange requests have been made, together with the level of expense to the Fund which will result from effecting additional exchange requests. The exchange ^ policy also may be modified or terminated at any time. Except for those limited instances where redemptions of the exchanged security are suspended under Section 22(e) of the 1940 Act, or where sales of the fund into which the shareholder is exchanging are temporarily stopped, notice of all such modifications or termination of the exchange ^ policy will be given at least 60 days prior to the date of termination or the effective date of the modification. Before making an exchange, the shareholder should review the prospectuses of the funds involved and consider their differences^. Shareholders interested in exercising the exchange ^ option may contact ^ IFG for information concerning their particular exchanges. Automatic Monthly Exchange. Shareholders who have accounts in any one or more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar amount of their fund shares to be automatically exchanged for shares of any other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis, subject to the Fund's minimum initial investment or subsequent investment requirements. This automatic exchange program can be changed by the shareholder at any time by notifying ^ IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. EasiVest. For shareholders who want to maintain a schedule of monthly investments, EasiVest uses various methods to draw a preauthorized amount from the shareholder's bank account to purchase Fund shares. This automatic investment program can be changed by the shareholder at any time by ^ notifying IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. Direct Payroll Purchase. Shareholders may elect to have their employers make automatic purchases of Fund shares for them by deducting a specified amount from their regular paychecks. This automatic investment program can be modified or terminated at any time by the shareholder by notifying the employer. Further information regarding this service can be obtained by contacting ^ IFG. Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified employee pension plans and corporate retirement plans. In addition, shares can be used to fund tax qualified plans established under Section 403(b) of the Internal Revenue Code by educational institutions, including public school systems and private schools, and certain kinds of non-profit organizations, which provide deferred compensation arrangements for their employees. Prototype forms for the establishment of these various plans, including, where applicable, disclosure statements required by the Internal Revenue Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG, is qualified to serve as trustee or custodian under these plans and provides the required services at competitive rates. Retirement plans (other than IRAs) receive monthly statements reflecting all transactions in their Fund accounts. IRAs receive the confirmations and quarterly statements described under "Shareholder Accounts." For complete information, including prototype forms and service charges, call ^ IDI at the telephone number listed on the cover of this ^ Prospectus or send a written request to: Retirement Services, INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706. HOW TO REDEEM SHARES Shares of the Fund may be redeemed at any time at their current net asset value next determined after a request in proper form is received at the Trust's office. (See "How Shares Can Be Purchased.") Net asset value per share of the Fund at the time of the redemption may be more or less than the price originally paid to purchase shares. In order to redeem shares, a written redemption request signed by each registered owner of the account may be submitted to ^ IFG at the address noted above. Redemption requests sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the name of a corporation, additional documentation may be necessary. Call or write for specifics. If payment for the redeemed shares is to be made to someone other than the registered owner(s), the signature(s) must be guaranteed by a financial institution which qualifies as an eligible guarantor institution. Redemption procedures with respect to accounts registered in the names of broker-dealers may differ from those applicable to other shareholders. Be careful to specify the account from which the redemption is to be made. Shareholders have a separate account for each fund in which they invest. Payment of redemption proceeds will be mailed within seven days following receipt of the required documents. However, payment may be postponed under unusual circumstances, such as when normal trading is not taking place on the New York Stock Exchange or when an emergency as defined by the Securities and Exchange Commission exists. If the shares to be redeemed were purchased by check and that check has not yet cleared, payment will be made promptly upon clearance of the purchase check (which ^ will take up to 15 days). If a shareholder participates in EasiVest, the Fund's automatic monthly investment program, and redeems all of the shares in ^ a Fund account, ^ IFG will terminate any further EasiVest purchases unless otherwise instructed by the shareholder. Because of the high relative costs of handling small accounts, should the value of any shareholder's account fall below $250 as a result of shareholder action, the Trust reserves the right to effect the involuntary redemption of all shares in such account, in which case the account would be liquidated and the proceeds forwarded to the shareholder. Prior to any such redemption, a shareholder will be notified and given 60 days to increase the value of the account to $250 or more. Fund shareholders (other than shareholders holding Fund shares in accounts of IRA plans) may request expedited redemption of shares having a minimum value of $250 (or redemption of all shares if their value is less than $250) held in accounts maintained in their name by telephoning redemption instructions to ^ IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO Trust Company sponsored federal income tax-deferred retirement plans, the term "shareholders" is defined to mean plan trustees that file a written request to be able to redeem Fund shares by telephone. Unless Fund Management permits a larger redemption request to be placed by telephone, a shareholder may not place a redemption request by telephone in excess of $25,000. The redemption proceeds, at the shareholder's option, either will be mailed to the address listed for the shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank which the shareholder has designated to receive the proceeds of telephone redemptions. The Fund charges no fee for effecting such telephone redemptions. ^ The telephone redemption ^ policy may be modified or terminated in the future at the discretion of Fund Management. Shareholders should understand that while the Fund will attempt to process all telephone redemption requests on an expedited basis, there may be times, particularly in periods of severe economic or market disruption, when (a) they may encounter difficulty in placing a telephone redemption request, and (b) processing telephone redemptions will require up to seven days following receipt of the redemption request, or additional time because of the unusual circumstances set forth above. The privilege of redeeming Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing a new account Application or a Telephone Transaction Authorization Form or otherwise utilizing telephone redemption privileges, the shareholder has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that telephone instructions are genuine. These may include recording telephone instructions and providing written confirmation of transactions inititated by telephone. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow these or other reasonable procedures, the Fund may be liable. TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS Taxes. The Fund intends to distribute to shareholders ^ all of its net investment income, net capital gains and net gains from foreign currency transactions, if any, in order to continue to qualify for tax treatment as a regulated investment company. Thus, the Fund does not expect to pay any federal income or excise taxes. Unless shareholders are exempt from income taxes, they must include all dividends and ^ other distributions in taxable income for federal, state and local income tax purposes. Dividends and other distributions are taxable whether they are received in cash or automatically ^ reinvested in shares of the Fund or another fund in the INVESCO group. Net realized capital gains of the Fund are classified as short-term and long-term gains depending upon how long the Fund held the security that gave rise to the gains. Short-term capital gains are included in income from dividends and interest as ordinary income and are taxed at the taxpayer's marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in August 1997, changed the taxation of long-term capital gains by applying different capital gains rates depending on the taxpayer's holding period and marginal rate of federal income tax. Long-term gains realized on the sale of securities held for more than one year but not for more than 18 months are taxable at a rate of 28%. This category of long-term gains is often referred to as "mid-term" gains but is technically termed "28% rate gains". Long-term gains realized on the sale of securities held for more than 18 months are taxable at a rate of 20%. The Tax Act, however, does not address the application of these rules to distributions of net capital gain (excess of long-term capital gain over short-term capital losses) by a regulated investment company, including whether such distributions may be treated by its shareholders in accordance with the Fund's holding period for the assets it sold that generated the gain. The application of the new capital gain rules must be determined by further legislation or future regulations that are not available as this Prospectus is being prepared. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax advisers as to the effect of the Tax Act on distributions by the Fund of net capital gain. Shareholders also may realize capital gains or losses when they sell their Fund shares at more or less than the price originally paid. Capital gain on shares held for more than one year will be long-term capital gain, in which event it will be subject to federal income tax at the rates indicated above. The Fund may be subject to ^ withholding of foreign taxes on dividends or interest ^ received on foreign securities. Foreign taxes withheld will be treated as an expense of the Fund ^. ^ Individuals and certain other non-corporate shareholders may be subject to backup withholding of 31% on dividends, capital gain and other distributions and redemption proceeds. Unless ^ you are subject to backup withholding for other reasons, ^ you can avoid backup withholding on ^ your Fund account by ensuring that ^ we have a correct, certified tax identification number. We encourage you to consult a tax adviser with respect to these matters. For further information see "Dividends, Other Distributions and Taxes" in the Statement of Additional Information. Dividends and Other ^ Distributions. The Fund earns ordinary or net investment income in the form of dividends and interest on its investments. ^ Dividends paid by the Fund will be based solely on the income earned by it. The Fund's policy is to distribute substantially all of this income, less Fund expenses, to shareholders. Dividends from net investment income are paid on a quarterly basis, at the end of November, February, May and August, at the discretion of the ^ Trust's Board of Trustees. Dividends are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. In addition, the Fund realizes capital gains and losses when it sells securities for more or less than it paid. If total gains on sales exceed total losses (including losses carried forward from previous years), the Fund has a net realized capital gain. Net realized capital gains, if any, together with gains, if any, realized on foreign currency transactions, are distributed to shareholders at least annually, usually in December. Capital gain distributions are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. Dividends and other ^ distributions are paid to ^ holders of shares on the record date of ^ distribution regardless of how long the Fund shares have been held by the shareholder. The ^ Fund's share price will then drop on the ex-dividend date by the amount of the distribution ^. If a shareholder purchases shares immediately prior to the distribution, the shareholder will, in effect, have ^"bought" the distribution by paying the full purchase price, a portion of which is then returned in the form of a taxable distribution. ^ ADDITIONAL INFORMATION Voting Rights. All shares of the Trust's funds have equal voting rights. When shareholders are entitled to vote upon a matter, each shareholder is entitled to one vote for each share owned and a corresponding fractional vote for each fractional share owned. Voting with respect to certain matters, such as ratification of independent accountants and the election of trustees, will be by all funds of the Trust voting together. In other cases, such as voting upon the investment advisory contract for the individual funds, voting is on a fund-by-fund basis. To the extent permitted by law, when not all funds are affected by a matter to be voted upon, only shareholders of the fund or funds affected by the matter will be entitled to vote thereon. The Trust is not generally required, and does not expect, to hold regular annual meetings of shareholders. However, the board of trustees will call such special meetings of shareholders for the purpose, among other reasons, of voting the question of removal of a trustee or trustees when requested to do so in writing by the holders of 10% or more of the outstanding shares of the Trust or as may be required by applicable law or the Trust's Declaration of Trust. The Trust will assist shareholders in communicating with other shareholders as required by the 1940 Act. Trustees may be removed by action of the holders of two-thirds of the outstanding shares of the Trust. Shareholder Inquiries. All inquiries regarding the Fund should be directed to the Trust at the telephone number or mailing address set forth on the cover page of this prospectus. Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement which provides that the Fund will pay an annual fee of $20.00 per shareholder account or, where applicable, per participant in an omnibus account ^. The transfer agency fee is not charged to each shareholder's or participant's account but is an expense of the Fund to be paid from the Fund's assets. Registered broker-dealers, third party administrators of tax-qualified retirement plans and other entities, including affiliates of ^ IFG, may provide sub-transfer agency services to the Fund which reduce or eliminate the need for identical services to be provided on behalf of the Fund by ^ IFG. In such cases, ^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping fee out of the transfer agency fee which is paid to ^ IFG by the Fund. INVESCO VALUE TRUST INVESCO Value Equity Fund PROSPECTUS January 1, ^ 1998 INVESCO Distributors, Inc., Distributor Post Office Box 173706 Denver, Colorado 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com ^ In Denver, visit one of our convenient Investor Centers: Cherry Creek 155-B Fillmore Street Denver Tech Center 7800 East Union Avenue Lobby Level In addition, all documents filed by the Trust with the Securities and Exchange Commission can be located on a web site maintained by the Commission at http://www.sec.gov. PROSPECTUS January 1, ^ 1998 INVESCO VALUE TRUST INVESCO Total Return Fund INVESCO Total Return Fund (the "Fund") seeks to achieve a high total return on investment through capital appreciation and current income by investing in a combination of equity securities (consisting of common stocks and, to a lesser degree, securities convertible into common stock) and fixed income securities. The equity securities purchased by the Fund generally will be issued by companies which are listed on a national securities exchange and which usually pay regular dividends. This Fund seeks reasonably consistent total returns over a variety of market cycles. The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end management investment company consisting of three separate portfolios of investments. This ^ Prospectus relates to shares of INVESCO Total Return Fund. Separate prospectuses are available upon request from INVESCO ^ Distributors, Inc. for the Trust's other two funds, INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund. Investors may purchase shares of any or all funds. Additional funds may be offered in the future. This ^ Prospectus provides you with the basic information you should know before investing in the Fund. You should read it and keep it for future reference. A Statement of Additional Information containing further information about the Fund, dated January 1, 1997, has been filed with the Securities and Exchange Commission and is incorporated by reference into this prospectus. To obtain a free copy, write to INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; or call 1-800-525-8085; or ^ visit our web site at: http://www.invesco.com. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ---------- TABLE OF CONTENTS Page ---- ANNUAL FUND EXPENSES 59 FINANCIAL HIGHLIGHTS 61 PERFORMANCE DATA 64 INVESTMENT OBJECTIVE AND POLICIES 64 RISK FACTORS 67 THE TRUST AND ITS MANAGEMENT 70 HOW SHARES CAN BE PURCHASED 73 SERVICES PROVIDED BY THE TRUST 75 HOW TO REDEEM SHARES 78 TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS 80 ADDITIONAL INFORMATION 81 ANNUAL FUND EXPENSES The Fund is 100% no-load; there are no fees to purchase, exchange or redeem shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses benefit Fund shareholders by increasing the Fund's total return. Shareholder Transaction Expenses Sales load "charge" on purchases None Sales load "charge" on reinvested dividends None Redemption fees None Exchange fees None Annual Fund Operating Expenses (as a percentage of average net assets) Management Fee ^ 0.64% 12b-1 Fees None Other Expenses ^ 0.22% Transfer Agency Fee(1) ^ 0.16% General Services, Administrative Services, Registration, Postage(2) ^ 0.06% Total Fund Operating Expenses(3) ^ 0.86% (1) Consists of the transfer agency fee described under "Additional Information - Transfer and Dividend Disbursing Agent." (2) Includes, but is not limited to, fees and expenses of trustees, custodian bank, legal counsel and independent accountants, a securities pricing service, costs of administrative services furnished under an Administrative Services Agreement, costs of registration of Fund shares under applicable laws, and costs of printing and distributing reports to shareholders. (3) It should be noted that the Fund's actual total operating expenses were lower than the figures shown because the Fund's custodian fees and pricing expenses were reduced under ^ expense offset ^ arrangements. However, as a result of an SEC requirement for mutual funds to state their total operating expenses without crediting any such expense offset arrangement, the figures shown above do not reflect these reductions. In comparing expenses for different years, please note that the ratios of Expenses to Average Net Assets shown under "Financial Highlights" do reflect reductions for periods prior to the fiscal year ended August 31, 1996. See "The Trust And Its Management." Example A shareholder would pay the following expenses on a $1,000 investment for the periods shown, assuming (1) a 5% annual return and (2) redemption at the end of each time period: 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $9 ^ $28 $48 $106 The purpose of the foregoing table is to assist investors in understanding the various costs and expenses that an investor in the Fund will bear directly or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust And Its Management.") The above figures for INVESCO Total Return Fund are based on fiscal year-end information. The Fund charges no sales load, redemption fee or exchange fee and bears no distribution expenses. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is hypothetical and should not be considered a representation of past or future annual returns, which may be greater or less than the assumed amount. FINANCIAL HIGHLIGHTS (For a Fund Share Outstanding Throughout Each Period) The following information for each of the ^ four years ended August 31, ^ 1997, the eight-month fiscal period ended August 31, 1993, and each of the ^ five years ended December 31, 1992, has been audited by Price Waterhouse LLP, independent accountants. Prior years' information was audited by another independent accounting firm. This information should be read in conjunction with the audited financial statements and the report of independent accountants thereon appearing in the Trust's ^ 1997 Annual Report to Shareholders which is incorporated by reference into the Statement of Additional Information. Both are available without charge by contacting INVESCO ^ Distributors, Inc., at the address or telephone number on the cover of this ^ Prospectus. All per share data has been adjusted to reflect an 80 to 1 stock split which was effected on January 2, 1991.
Period Period Ended Ended Year Ended August 31 August 31 Year Ended December 31 December 31 ------------------------------------------------------------------------------------------------------ 1997 1996 1995 1994 1993^ 1992 1991 1990 1989 1988 1987^ PER SHARE DATA Net Asset Value - Beginning of Period $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56 $12.50 ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT ^ OPERATIONS Net Investment Income 0.77 0.73 0.72 0.69 0.40 0.66 0.71 0.74 0.79 0.39 0.22 Net Gains or (Losses) on Securities (Both Realized and ^ Unrealized) 5.26 1.78 2.46 0.60 1.09 0.93 2.78 (0.80) 1.74 0.93 0.00 ------------------------------------------------------------------------------------------------------ Total from Investment Operations 6.03 2.51 3.18 1.29 1.49 1.59 3.49 (0.06) 2.53 1.32 0.22 ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS Dividends from Net Investment Income 0.77 0.73 0.72 0.60 0.40 0.65 0.72 0.75 0.78 0.40 0.16 In Excess of Net Investment Income+ 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Distributions from Capital^ Gains 0.09 0.13 0.05 0.17 0.00 0.19 0.55 0.06 0.13 0.02 0.00 In Excess of Capital Gains 0.00 0.00 0.00 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------ Total ^ Distributions 0.86 0.86 0.77 1.02 0.40 0.84 1.27 0.81 0.91 0.42 0.16 ------------------------------------------------------------------------------------------------------ Net Asset Value - End of Period $27.77 $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56 ========================================================================================================= TOTAL RETURN 27.01% ^ 12.06% 17.54% 7.22% 8.72%* 9.84% 24.96% (0.35%) 19.13% 11.53% 1.72%^ RATIOS Net Assets - End of Period ($000 Omitted) $1,845,594 $1,032,151 $563,468 $292,765 $220,224 $137,196 $82,219 $54,874 $44,957 $28,432 $219 Ratio of Expenses to ^ Average Net Assets# 0.86%@ 0.89%@ 0.95% 0.96% 0.93%~ 0.88% 0.92% 1.00% 1.00% 1.00% 0.81%^ Ratio of Net Investment Income to Average Net Assets# 3.11% 3.44% 3.97% 3.31% 3.51%~ 4.06% 4.62% 5.22% 5.46% 5.56% 6.44%^ Portfolio Turnover Rate 4% 10% 30% 12% 19%* 13% 49% 24% 28% 13% 0%^ Average Comission Rate Paid^^ $0.0520 $0.0539 - - - - - - - - -
^ From January 1, 1993 to August 31, 1993^. > From September 22, 1987, commencement of investment operations, to December 31, 1987. + Distributions in excess of net investment income for the year ended August ^ 31,1995, aggregated less than $0.01 on a per share basis. * Based on operations for the period shown and, accordingly, are not representative of a full year. # Various expenses of the Fund were voluntarily absorbed by IFG for the years ended December 31, 1989, 1988 and the period ended December 31, 1987. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 1.05%, 1.21% and 2.00%, respectively, and ratio of net investment income to average net assets would have been 5.41%, 5.35% and 5.25%, respectively. @ Ratio is based on Total Expenses of the Fund, which is before any expense offset arrangements. ~ Annualized ^^ The average commission rate paid is the total brokerage commissions paid on applicable purchases and sales of securities for the period divided by the total number of related shares purchased or sold which is required to be disclosed for fiscal years beginning September 1, 1995 and thereafter. Further information about the performance of the Fund is contained in the Trust's Annual Report to Shareholders, which may be obtained without charge by writing INVESCO ^ Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; or by calling 1-800-525-8085. PERFORMANCE DATA From time to time, the Fund advertises its total return performance. These figures are based upon historical investment results and are not intended to indicate future performance. Total return is computed by calculating the percentage change in value of an investment, assuming reinvestment of all income dividends and capital gain distributions, to the end of a specified period. Cumulative total return reflects actual performance over a stated period of time. Average annual total return is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Thus, a given report of total return performance should not be considered as representative of future performance. The Fund charges no sales load, redemption fee or exchange fee which would affect total return computations. In conjunction with performance reports and/or analyses of shareholder service for the Fund, comparative data between the Fund's performance for a given period and recognized bond indices and indices of investment results for the same period and/or assessments of the quality of shareholder service may be provided to shareholders. Such indices include indices provided by Dow Jones & Company, Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), Lipper Analytical Services, Inc., Lehman Brothers, National Association of Securities Dealers Automated Quotations, Frank Russell Company, Value Line Investment Survey, the American Stock Exchange, Morgan Stanley Capital International, Wilshire Associates, the Financial Times Stock Exchange, the New York Stock Exchange, the Nikkei Stock Average and the Deutcher Aktienindex, all of which are unmanaged market indicators. In addition, rankings, ratings and comparisons of investment performance and/or assessments of the quality of shareholder service appearing in publications such as Money, Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which utilize information compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by other recognized analytical services, may be used in advertising. The Lipper Analytical Services, Inc. mutual fund rankings and comparisons, which may be used by the Fund in performance reports, will be drawn from the "Flexible Portfolio Funds" Lipper mutual fund groupings, in addition to the broad-based Lipper general fund grouping. INVESTMENT OBJECTIVE AND POLICIES The Trust consists of three separate portfolios of investments (referred to as the "Funds"), each represented by a different class of the Trust's shares. This ^ Prospectus relates to INVESCO Total Return Fund; separate prospectuses for INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund are available. The investment objective of the Fund is to seek a high total return on investment through capital appreciation and current income. Funds having an investment objective of seeking a high total return may be limited in their ability to ^ attain their objective by the limitations on the types of securities in which they may invest. Therefore, no assurance can be given that the Fund will be able to achieve its investment objective. The Fund intends to accomplish its ^ objective by investing in a combination of equity securities and fixed income securities. The equity securities to be acquired by the Fund will consist of common stocks and, to a lesser extent, securities convertible into common stocks. Such securities generally will be issued by companies which are listed on a national securities exchange, such as the New York Stock Exchange, and which usually pay regular dividends, although the Fund also may invest in securities traded on regional stock exchanges or on the over-the-counter market. The Trust has not established any minimum investment standards, such as an issuer's asset level, earnings history, type of industry, dividend payment history, etc. with respect to the Fund's investments in common stocks, although in selecting common stocks for the Fund, the investment adviser and sub-adviser (collectively, "Fund Management") generally apply an investment discipline which seeks to achieve a yield higher than the overall equity market. Therefore, because smaller companies may be subject to more significant losses, as well as have the potential for more substantial growth, than larger, more established companies, investors in the Fund should consider that the Fund's investments may consist in part of securities which may be deemed to be speculative. The income securities to be acquired by the Fund primarily will include obligations of the U.S. government and its agencies. These U.S. government obligations consist of direct obligations of the U.S. government (U.S. Treasury Bills, Notes and Bonds), obligations guaranteed by the U.S. government, such as Government National Mortgage Association obligations, and obligations of U.S. government authorities, agencies and instrumentalities, which are supported only by the assets of the issuer, such as the Federal National Mortgage Association, Federal Home Loan Bank, Federal Financing Bank and Federal Farm Credit Bank. The Fund also may invest in corporate debt obligations which are rated by Moody's Investors Service, Inc. ("Moody's") in its four highest ratings of corporate obligations (Aaa, Aa, A and Baa) or by ^ S&P in its four highest ratings of corporate obligations (AAA, AA, A and BBB) or, if not rated, which in Fund Management's opinion have investment characteristics similar to those described in such ratings. A bond rating of Baa by Moody's indicates that the bond issue is of "medium grade," neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present, but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. A bond rating of BBB by S&P indicates that the bond issue is in the lowest "investment grade" security rating. Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this category than for bonds in the A category, and they may have speculative characteristics. (See Appendix A to the Statement of Additional Information for specific descriptions of these corporate bond rating categories.) Although there is no limitation on the maturity of the Fund's investment in income securities, the dollar weighted average maturity of such investments normally will be from 3 to 15 years. Obligations of certain U.S. government agencies and instrumentalities may not be supported by the full faith and credit of the United States. Some are backed by the right of the issuer to borrow from the U.S. Treasury; others, such as the Federal National Mortgage Association, by discretionary authority of the U.S. government to purchase the agencies' obligations; while still others, such as the Student Loan Marketing Association, are supported only by the credit of the instrumentality. In the case of securities not backed by the full faith and credit of the United States, the Fund must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitments. The Fund will invest in securities of such instrumentalities only when Fund Management is satisfied that the credit risk with respect to any such instrumentality is minimal. Typically, the Fund will maintain a minimum investment in equities of 30% of total assets, and a 30% minimum will be invested in fixed and variable income securities. The remaining 40% of the portfolio will vary in asset allocation according to Fund Management's assessment of business, economic and market conditions. The analytical process associated with making allocation decisions is based upon a combination of demonstrated historic financial results, current prices for stocks and the current yield to maturity available in the market for bonds. The premium return available from one category relative to the other determines the actual asset deployment. Fund Management's asset allocation process is systematic and is based on current information rather than forecasted change. The Fund seeks reasonably consistent returns over a variety of market cycles. (See "Risk Factors" section of this ^ Prospectus for an analysis of the risks presented by this Fund's ability to enter into contracts for the future delivery of fixed income securities commonly referred to as "interest rate futures contracts," and its ability to use options to purchase or sell interest rate futures contracts or debt securities and to write covered call options and cash secured puts.) The investment objective of the Fund and its investment policies, except where indicated to the contrary, are deemed to be fundamental policies and thus may not be changed without prior approval by the holders of a majority of the outstanding voting securities of the Fund, as defined in the 1940 Act. In addition, the Trust and this Fund are subject to certain investment restrictions which are set forth in the Statement of Additional Information and which may not be altered without approval of the Fund's shareholders. One of those restrictions limits the Fund's borrowing of money to borrowings from banks for temporary or emergency purposes (but not for leveraging or investment) in an amount not exceeding 33 1/3% of the value of the Fund's total assets. RISK FACTORS Investors should consider the special factors associated with the policies discussed below in determining the appropriateness of an investment in the INVESCO Total Return Fund. The Fund's policies regarding investments in foreign securities and foreign currencies are not fundamental and may be changed by vote of the Trust's board of trustees. Foreign Securities. The Fund may invest up to 25% of its total assets in foreign equity or debt securities. Investments in securities of foreign companies and in foreign markets involve certain additional risks not associated with investments in domestic companies and markets, including the risks of fluctuations in foreign currency exchange rates and of political or economic instability, the difficulty of predicting international trade patterns, and the possibility of imposition of exchange controls or currency blockage. In addition, there may be less information publicly available about a foreign company than about a domestic company, and there is generally less government regulation of stock exchanges, brokers and listed companies abroad than in the United States. Moreover, with respect to certain foreign countries, there may be a possibility of expropriation or confiscatory taxation. Further, economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Forward Foreign Currency Contracts. The Fund may enter into contracts to purchase or sell foreign currencies at a future date ("forward contracts") as a hedge against fluctuations in foreign exchange rates pending the settlement of transactions in foreign securities or during the time the Fund holds foreign securities. A forward contract is an agreement between contracting parties to exchange an amount of currency at some future time at an agreed upon rate. Although the Fund has not adopted any limitations on its ability to use forward contracts as a hedge against fluctuations in foreign exchange rates, it does not attempt to hedge all of its foreign investment positions and will enter into forward contracts only to the extent, if any, deemed appropriate by Fund Management. The Fund will not enter into a forward contract for a term of more than one year or for purposes of speculation. Investors should be aware that hedging against a decline in the value of a currency in the foregoing manner does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Furthermore, such hedging transactions may preclude the opportunity for gain if the value of the hedged currency should rise. No predictions can be made with respect to whether the total of such transactions will result in a better or a worse position than had the Fund not entered into any forward contracts. Forward contracts may, from time to time, be considered illiquid, in which case they would be subject to the Fund's limitation on investing in illiquid securities, discussed below. For additional information regarding foreign securities, see the Trust's Statement of Additional Information. Repurchase Agreements. The Fund may engage in repurchase agreements with banks, registered broker-dealers, and registered government securities dealers which are deemed creditworthy by Fund Management under guidelines established by the board of trustees. A repurchase agreement is a transaction in which the Fund purchases a security and simultaneously commits to sell the security to the seller at an agreed upon price and date (usually not more than seven days) after the date of purchase. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or maturity of the purchased security. The Fund's risk is limited to the ability of the seller to pay the agreed upon amount on the delivery date. However, in the event the seller should default, the underlying security constitutes collateral for the seller's obligations to pay. This collateral will be held by the custodian for the Fund's assets. However, in the absence of compelling legal precedents in this area, there can be no assurance that the Fund will be able to maintain its rights to such collateral upon default of the issuer of the repurchase agreement. To the extent that the proceeds from a sale upon a default in the obligation to repurchase are less than the repurchase price, the Fund would suffer a loss. Although the Fund has not adopted any limit on the amount of its total assets that may be invested in repurchase agreements, the Fund intends that at no time will the market value of its securities subject to repurchase agreements exceed 20% of the total assets of the Fund. Illiquid Securities. The Fund may invest from time to time in securities subject to restrictions on disposition under the Securities Act of 1933 ("restricted securities"), securities without readily available market quotations or illiquid securities (those which cannot be sold in the ordinary course of business within seven days at approximately the valuation given to them by the Fund). However, on the date of purchase, no such investment may increase the Fund's holdings of restricted securities to more than 2% of the value of the Fund's total assets or its holdings of illiquid securities or those without readily available market quotations to more than 5% of the value of the Fund's total assets. The Fund is not required to receive registration rights in connection with the purchase of restricted securities and, in the absence of such rights, marketability and value can be adversely affected because the Fund may be unable to dispose of such securities at the time desired or at a reasonable price. In addition, in order to resell a restricted security, the Fund might have to bear the expense and incur the delays associated with effecting registrations. ^ Futures and Options. A futures contract is an agreement to buy or sell a specific amount of a financial instrument or commodity at a particular price on a particular date. The Fund will use futures contracts only to hedge against price changes in the value of its current or intended investments in ^ securities. In the event that an anticipated decrease in the value of portfolio securities occurs as a result of a general ^ decrease in prices, the adverse effects of such changes may be offset, ^ at least in part, by gains on the sale of ^ futures contracts. Conversely, the increased cost of portfolio securities to be acquired, caused by a general ^ increase in prices, may be offset, ^ at least in part, by gains on ^ futures contracts purchased by the Fund. ^ Brokerage fees are paid to trade futures contracts, and ^ the Fund is required to maintain margin deposits. ^ Put and call options on ^ futures contracts or securities may be traded by the Fund in order to protect against declines in the ^ value of portfolio securities or against increases in the cost of securities to be acquired. The purchaser of an option purchases the right to effect a transaction in the underlying future or security at a specified price (the "strike price") before a specified date (the "expiration date"). In exchange for the right, the purchaser pays a "premium" to the seller, which represents the price of the right to buy or to sell the underlying instrument. In exchange for the premium, the seller of the option becomes obligated to effect a transaction in the underlying future or security, at the strike price, at any time prior to the expiration date, should the buyer choose to exercise the option. A call option contract grants the purchaser the right to buy the underlying future or security, at the strike price, before the expiration date. A put option contract grants the purchaser the right to sell the underlying future or security, at the strike price, before the expiration date. Purchases of options on ^ futures contracts may present less dollar risk in hedging the Fund's portfolio ^ than the purchase and sale of the underlying ^ futures contracts, ^ since the potential loss is limited to the amount of the premium plus related transaction costs. The premium paid for such a put or call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise or liquidation of the option, and, unless the price of the underlying futures contract or ^ security changes sufficiently, the option may expire without value to the Fund. ^ Although the Fund will enter into ^ futures contracts and options on ^ futures contracts and securities solely for hedging or other nonspeculative purposes, within the meaning and intent of applicable rules of the CFTC, their use does involve certain risks. For example, a lack of correlation between the value of an instrument underlying an option or ^ futures contract and the assets being hedged, or unexpected adverse price movements, could render the Fund's hedging strategy unsuccessful and could result in losses. In addition, there can be no assurance that a liquid secondary market will exist for any contract purchased or sold, and the Fund may be required to maintain a position until exercise or expiration, which could result in losses. ^ Transactions in futures ^ contracts and options are subject to other risks as well, which^ are set forth in greater detail in the Statement of Additional Information^ and Appendix B therein. Securities Lending. ^ The Fund may make loans of its portfolio securities (not to exceed 10% of the Fund's total assets) to broker-dealers or other institutional investors under contracts requiring such loans to be callable at any time and to be secured continuously by collateral in cash, cash equivalents, high quality short-term government securities or irrevocable letters of credit maintained on a current basis at an amount at least equal to the market value of the securities loaned, including accrued interest and dividends. The Fund will continue to collect the equivalent of the interest or dividends paid by the issuer on the securities loaned and will also receive either interest (through investment of cash collateral) or a fee (if the collateral is government securities). The Fund may pay finder's and other fees in connection with securities loans. Portfolio Turnover. There are no fixed limitations regarding portfolio turnover for the Fund. Although the Fund does not trade for short-term profits, securities may be sold without regard to the time they have been held in the Fund when, in the opinion of Fund Management, market considerations warrant such action. As a result, while it is anticipated that the Fund's annual portfolio turnover rate generally will not exceed 100%, under certain market conditions the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio turnover would cause the Fund to incur greater brokerage costs than would otherwise be the case. The Fund's portfolio turnover rates are set forth under "Financial Highlights" and, along with the Trust's brokerage allocation policies, are discussed in the Statement of Additional Information. THE TRUST AND ITS MANAGEMENT ^ The Trust is a no-load mutual fund, registered with the Securities and Exchange Commission as an open-end, diversified management investment company. The Trust was organized on July 15, 1987, under the laws of the Commonwealth of Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed its name to "INVESCO Value Trust." The overall supervision of the Trust is the responsibility of its board of trustees. INVESCO Funds Group, Inc. ^("IFG"), 7800 E. Union Avenue, Denver, Colorado, serves as the Trust's investment adviser pursuant to an investment advisory agreement. Under this agreement, ^ IFG provides the Fund with various management services and supervises the Fund's daily business affairs. Specifically, ^ IFG performs all administrative, clerical, statistical, secretarial and all other services necessary or incidental to the administration of the affairs of the Trust, excluding, however, those services that are the subject of a separate agreement between the Trust and ^ IFG or any affiliate thereof. Services provided pursuant to separate agreement include the distribution and sale of Trust shares and provision of transfer agency, dividend disbursing agency and registrar services, and services furnished under an Administrative Services Agreement with ^ IFG dated as of February ^ 28, 1997. INVESCO Distributors, Inc. ("IDI") provides services relating to the distribution and sale of the Fund's shares. ^ IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the Trust's investment adviser prior to 1991, for investment sub-advisory and research services on behalf of the Fund. ICM ^ currently manages in excess of ^ $__ billion of assets on behalf of tax-exempt accounts (such as pension and profit-sharing funds for corporations and state and local governments) and investment companies. ICM, subject to the supervision of IFG, is primarily responsible for selecting and managing the Fund's investments. Although the Trust is not a party to the sub-advisory agreement, the agreement has been approved by the shareholders of the Trust. Services provided by ^ IFG and ICM are subject to review by the Trust's board of trustees. IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC is a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management, Inc. that created one of the largest independent investment management businesses in the world. IFG and ICM continued to operate under their existing names. Together, IFG and ICM constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in assets under management. IFG was established in 1932 and, as of August 31, 1997, managed 14 mutual funds, consisting of 46 separate portfolios, with combined assets of approximately 15.9 billion on behalf of more than 854,448 shareholders. IDI was established in 1997 and is the distributor for 14 mutual funds consisting of 46 separate portfolios. The following individuals serve as portfolio managers for the Fund and are primarily responsible for the day-to-day management of the Fund's portfolio of securities: Edward C. Mitchell, Jr., C.F.A. Portfolio manager of the Fund since 1987; ^ president (1992 to present), vice president (1979 to 1991) and director (1979 to present) of INVESCO Capital Management, Inc.; began investment career in 1969; B.A., University of Virginia; M.B.A., University of Colorado; Chartered Financial Analyst; Chartered Investment Counselor. David S. Griffin Assistant portfolio manager of the Fund since 1993; ^ portfolio manager for INVESCO Capital Management, Inc. (1991 to present); mutual fund sales representative, INVESCO Services, Inc. (1986 to 1991); began investment career in 1982; B.A., Ohio Wesleyan University; M.B.A., William and Mary; Chartered Financial Analyst. Under the investment advisory agreement, the ^ Fund pays ^ IFG a monthly fee at the following annual rates, based on the average net assets of the Fund: 0.75% on the first $500 million of the Fund's average net assets; 0.65% on the next $500 million of the Fund's average net assets; and 0.50% on the average net assets of the Fund in excess of $1 billion. ^ For the fiscal year ended August 31, ^ 1997, the advisory fees paid to ^ IFG amounted to ^ 0.64% of the average net assets of the Fund. Out of its advisory fee which it receives from the Fund, ^ IFG pays ICM, as the Fund's sub-adviser ^, a monthly fee, which is computed at the ^ following annual rates: prior to January 1, 1998, 0.20% on the first $500 million of the Fund's average net assets^, 0.17% on the next $500 million of the Fund's average net assets ^ and 0.13% on the Fund's average net assets in excess of $1 billion and effective January 1, 1998, 0.25% on the first $500 million of the Fund's average net assets, 0.2167% on the second $500 million of the Fund's average net assets and 0.1667% on the Fund's average net assets in excess of $1 billion. No fee is paid by the Fund to ICM. The Fund bears those Trust expenses which are accrued daily that are incurred on its behalf and, in addition, bears a portion of general Trust expenses, allocated based upon the relative net assets of the three Funds of the Trust. Such expenses are generally deducted from the Fund's total income before dividends are paid. Total expenses of the Fund, including investment advisory fees (but excluding brokerage commissions), as a percentage of its average net assets for the fiscal year ended August 31, ^ 1997, were ^ 0.86%. The Trust also has entered into an Administrative Services Agreement (the "Administrative Agreement") with ^ IFG. Pursuant to the Administrative Agreement, INVESCO performs certain administrative and internal accounting services, including without limitation, maintaining general ledger and capital stock accounts, preparing a daily trial balance, calculating net asset value daily and providing selected general ledger reports and providing sub- accounting and recordkeeping services for shareholder accounts maintained by certain retirement and employee benefit plans for the benefit of participants in such plans. For such services, the Fund pays INVESCO a fee consisting of a base fee of $10,000 per year, plus an additional incremental fee computed at an annual rate not to exceed a maximum of 0.015% per annum of the average net assets of the ^ Fund. The Declaration of Trust pursuant to which the Trust is organized contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each instrument entered into or executed by the Trust. The Declaration of Trust also provides for indemnification out of the Trust's property for any shareholder held personally liable for any Trust obligation. Thus, the risk of a shareholder being personally liable for obligations of the Trust is limited to the unlikely circumstance in which the Trust itself would be unable to meet its obligations. Fund Management places orders for the purchase and sale of portfolio securities with brokers and dealers based upon ^ Fund Management's evaluation of broker-dealer financial responsibility coupled with broker-dealer ability to effect transactions at the best available prices. The ^ Fund may place orders for portfolio transactions with qualified broker-dealers that recommend the ^ Fund or sell shares of the ^ Fund to clients, or act as agent in the purchase of fund shares for clients, if Fund Management believes that the quality of the execution of the transaction and level of commission are comparable to those available from other qualified brokerage firms. For further information, see "Investment Practices -- Placement of Portfolio Brokerage" in the Statement of Additional Information. Fund Management permits investment and other personnel to purchase and sell securities for their own accounts, subject to a compliance policy governing personal investing. This policy requires Fund Management's personnel to conduct their personal investment activities in a manner that Fund Management believes is not detrimental to the Fund or Fund Management's other advisory clients. See the Statement of Additional Information for more detailed information. HOW SHARES CAN BE PURCHASED Shares of the Fund are sold on a continuous basis by ^ IFG, as the Fund's ^ distributor, at the net asset value per share next calculated after receipt of a purchase order in good form. No sales charge is imposed upon the sale of shares of the Fund. To purchase shares of the Fund, send a check made payable to INVESCO Funds Group, Inc., together with a completed application form, to: INVESCO FUNDS GROUP, INC. Post Office Box 173706 Denver, Colorado 80217-3706 Purchase orders must specify the Fund in which the investment is to be made. The minimum initial purchase must be at least $1,000, with subsequent investments of not less than $50, except that: (1) those shareholders establishing an EasiVest or direct payroll purchase account, as described below in the ^ section entitled "Services Provided by the Fund," may open an account without making any initial investment if they agree to make regular, minimum purchases of at least $50; (2) those shareholders investing in an Individual Retirement Account ("IRA"), or through omnibus accounts where individual shareholder recordkeeping and sub-accounting are not required, may make initial minimum purchases of $250; (3) Fund Management may permit a lesser amount to be invested in the Fund under a federal income tax-deferred retirement plan (other than an IRA), or under a group investment plan qualifying as a sophisticated investor; and (4) Fund Management reserves the right to increase, reduce or waive the minimum purchase requirements in its sole discretion where it determines such action is in the best interests of the Fund. The minimum initial purchase requirement of $1,000, as described above, does not apply to shareholder account(s) in any of the INVESCO funds opened prior to January 1, 1993, and thus is not a minimum balance requirement for those existing accounts. However, for shareholders already having accounts in any of the INVESCO funds, all initial share purchases in a new fund account, including those made using the exchange privilege, must meet the fund's applicable minimum investment requirement. The purchase of shares in the Fund can be expedited by placing bank wire, overnight courier or telephone orders. For further information, the purchaser may call the Trust's office by using the telephone number on the cover of this ^ Prospectus. Orders sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237. Orders to purchase Fund shares can be placed by telephone. Shares of the Fund will be issued at the net asset value next determined after receipt of telephone instructions. Generally, payments for telephone orders must be received by the Trust within three business days or the transaction may be cancelled. In the event of such cancellation, the purchaser will be held responsible for any loss resulting from a decline in the value of the shares. In order to avoid such losses, purchasers should send payments for telephone purchases by overnight courier or bank wire. ^ IFG has agreed to indemnify the Trust for any losses resulting from the cancellation of telephone purchases. If your check does not clear, or if a telephone purchase must be cancelled due to nonpayment, you will be responsible for any related loss the Fund or ^ IFG incurs. If you are already a shareholder in the INVESCO funds, the Fund has the option to redeem shares from any identically registered account in the Fund or any other INVESCO fund as reimbursement for any loss incurred. You also may be prohibited or restricted from making future purchases in any of the INVESCO funds. Persons who invest in the Fund through a securities broker may be charged a commission or transaction fee by the broker for the handling of the transaction if the broker so elects. Any investor may deal directly with the Fund in any transaction. In that event, there is no such charge. ^ IFG or IDI may from time to time make payments from its revenues to securities dealers and other financial institutions that provide distribution-related and/or administrative services for the Fund. The Fund reserves the right in its sole discretion to reject any order for purchase of its shares (including purchases by exchange) when, in the judgment of Fund Management, such rejection is in the best interest of the Fund. Net asset value per share is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange ^(generally 4:00 p.m., New York time) and also may be computed on other days under certain circumstances. Net asset value per share for the Fund is calculated by dividing the market value of the Fund's securities plus the value of its other assets (including dividends and interest accrued but not collected), less all liabilities (including accrued expenses), by the number of outstanding shares of the Fund. If market quotations are not readily available, a security will be valued at fair value as determined in good faith by the board of trustees. Debt securities with remaining maturities of 60 days or less at the time of purchase will be valued at amortized cost, absent unusual circumstances, so long as the Trust's board of trustees believes that such value represents fair value. Under certain circumstances, the Fund may offer its shares, in lieu of cash payment, for securities to be purchased by the Fund. Such a transaction can benefit the Fund by allowing it to acquire securities for its portfolio without paying brokerage commissions. For the same reason, the transaction also may be beneficial to the party exchanging the securities. The Fund shall not enter into such transactions, however, unless the securities to be exchanged for Fund shares are readily marketable and not restricted as to transfer either by law or liquidity of the market, comply with the investment policies and objectives of the Fund, are of the type and quality which would normally be purchased for the Fund's portfolio, are acquired for investment and not for resale, have a value which is readily ascertainable as evidenced by a listing on the American Stock Exchange, the New York Stock Exchange or NASDAQ, and are securities which the Fund would otherwise purchase on the open market. The value of Fund shares used to purchase portfolio securities as stated herein will be the net asset value as of the effective time and date of the exchange. The securities to be received by the Fund will be valued in accordance with the same procedure used in valuing the Fund's portfolio securities. Any investor wishing to acquire shares of the Fund in exchange for securities should contact either the president or the secretary of the Trust at the address or telephone number shown on the cover page of this ^ Prospectus. SERVICES PROVIDED BY THE TRUST Shareholder Accounts. ^ IFG maintains a share account that reflects the current holdings of each shareholder. A separate account will be maintained for a shareholder for each Fund in which the shareholder invests. As a business trust, the Trust does not issue share certificates. Each shareholder is sent a detailed confirmation of each transaction in shares of the Trust. Shareholders whose only transactions are through the EasiVest, direct payroll purchase, automatic monthly exchange or periodic withdrawal programs, or are reinvestments of dividends or capital gains in the same or another fund, will receive confirmations of those transactions on their quarterly statements. These programs are discussed below. For information regarding a shareholder's account and transactions, the shareholder may call ^ IFG by using the telephone number on the cover of this ^ Prospectus. Reinvestment of Distributions. Dividends and other distributions are automatically reinvested in additional shares of the Fund at the net asset value per share of the Fund in effect on the ex-dividend date. A shareholder may, however, elect to reinvest dividends and other distributions in certain of the other no-load mutual funds advised by IFG and distributed by ^ IDI, or to receive payment of all dividends and other distributions in excess of $10.00 by check by giving written notice to ^ IFG at least two weeks prior to the record date on which the change is to take effect. Further information concerning these options can be obtained by contacting ^ IFG. Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to shareholders who own or purchase shares of any mutual funds advised by ^ IFG having a total value of $10,000 or more; provided, however, that at the time the Plan is established, the shareholder owns shares having a value of at least $5,000 in the fund from which the withdrawals will be made. Under the Periodic Withdrawal Plan, ^ IFG, as agent, will make specified monthly or quarterly payments of any amount selected (minimum payment of $100) to the party designated by the shareholder. Notice of all changes concerning the Periodic Withdrawal Plan must be received by ^ IFG at least two weeks prior to the next scheduled check. Further information regarding the Periodic Withdrawal Plan and its requirements and tax consequences can be obtained by contacting ^ IFG. Exchange ^ Policy. Shares of the Fund may be exchanged for shares of any other fund of the Trust, as well as for shares of any of the following other no-load mutual funds, which are also advised and distributed by INVESCO, on the basis of their respective net asset values at the time of the exchange: INVESCO ^ Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc., INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc. and INVESCO Tax-Free Income Funds, Inc. An exchange involves the redemption of shares in the Fund and investment of the redemption proceeds in shares of another fund of the Trust or in shares of one of the funds listed above. Exchanges will be made at the net asset value per share next determined after receipt of an exchange request in proper order. Any gain or loss realized on such an exchange is recognizable for federal income tax purposes by the shareholder. Exchange requests may be made either by telephone or by written request to ^ IFG, using the telephone number or address on the cover of this ^ Prospectus. Exchanges made by telephone must be in the amount of at least $250 if the exchange is being made into an existing account of one of the INVESCO funds. All exchanges that establish a new account must meet the fund's applicable minimum initial investment requirements. Written exchange requests into an existing account have no minimum requirements other than the fund's applicable minimum subsequent investment requirements. The ^ option to exchange Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing the new account Application or a Telephone Transaction Authorization Form or otherwise utilizing the telephone exchange ^, the investor has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that exchange transactions are genuine. These may include recording telephone instructions and providing written confirmations of exchange transactions. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow these or other reasonable procedures, the Fund may be liable. In order to prevent abuse of this ^ policy to the disadvantage of other shareholders, the Fund reserves the right to terminate the exchange ^ option of any shareholder who requests more than four exchanges in a year. The Fund will determine whether to do so based on a consideration of both the number of exchanges any particular shareholder or group of shareholders has requested and the time period over which those exchange requests have been made, together with the level of expense to the Fund which will result from effecting additional exchange requests. The exchange ^ policy also may be modified or terminated at any time. Except for those limited instances where redemptions of the exchanged security are suspended under Section 22(e) of the 1940 Act, or where sales of the fund into which the shareholder is exchanging are temporarily stopped, notice of all such modifications or termination of the exchange privilege will be given at least 60 days prior to the date of termination or the effective date of the modification. Before making an exchange, the shareholder should review the prospectuses of the funds involved and consider their differences^. Shareholders interested in exercising the exchange ^ option may contact ^ IFG for information concerning their particular exchanges. Automatic Monthly Exchange. Shareholders who have accounts in any one or more of the mutual funds distributed by ^ IDI may arrange for a fixed dollar amount of their fund shares to be automatically exchanged for shares of any other INVESCO mutual fund listed under "Exchange ^ Policy" on a monthly basis, subject to the Fund's minimum initial investment or subsequent investment requirements. This automatic exchange program can be changed by the shareholder at any time by notifying ^ IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. EasiVest. For shareholders who want to maintain a schedule of monthly investments, EasiVest uses various methods to draw a preauthorized amount from the shareholder's bank account to purchase Fund shares. This automatic investment program can be changed by the shareholder at any time by ^ notifying IFG at least two weeks prior to the date the change is to be made. Further information regarding this service can be obtained by contacting ^ IFG. Direct Payroll Purchase. Shareholders may elect to have their employers make automatic purchases of Fund shares for them by deducting a specified amount from their regular paychecks. This automatic investment program can be modified or terminated at any time by the shareholder by notifying the employer. Further information regarding this service can be obtained by contacting ^ IFG. Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for self-employed individual retirement plans, IRAs, SIMPLE IRAs, simplified employee pension plans and corporate retirement plans. In addition, shares can be used to fund tax qualified plans established under Section 403(b) of the Internal Revenue Code by educational institutions, including public school systems and private schools, and certain kinds of non-profit organizations, which provide deferred compensation arrangements for their employees. Prototype forms for the establishment of these various plans including, where applicable, disclosure statements required by the Internal Revenue Service, are available from ^ IFG. INVESCO Trust Company, a subsidiary of ^ IFG, is qualified to serve as trustee or custodian under these plans and provides the required services at competitive rates. Retirement plans (other than IRAs) receive monthly statements reflecting all transactions in their Fund accounts. IRAs receive the confirmations and quarterly statements described under "Shareholder Accounts." For complete information, including prototype forms and service charges, call ^ IDI at the telephone number listed on the cover of this prospectus or send a written request to: Retirement Services, INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706. HOW TO REDEEM SHARES Shares of the Fund may be redeemed at any time at their current net asset value next determined after a request in proper form is received at the Trust's office. Redemption requests sent by overnight courier, including Express Mail, should be sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. (See "How Shares Can Be Purchased.") Net asset value per share of the Fund at the time of the redemption may be more or less than the price originally paid to purchase shares. In order to redeem shares, a written redemption request signed by each registered owner of the account may be submitted to ^ IFG at the address noted above. If shares are held in the name of a corporation, additional documentation may be necessary. Call or write for ^ specific information. If payment for the redeemed shares is to be made to someone other than the registered owner(s), the signature(s) must be guaranteed by a financial institution which qualifies as an eligible guarantor institution. Redemption procedures with respect to accounts registered in the names of broker-dealers may differ from those applicable to other shareholders. Be careful to specify the account from which the redemption is to be made. Shareholders have a separate account for each fund in which they invest. Payment of redemption proceeds will be mailed within seven days following receipt of the required documents. However, payment may be postponed under unusual circumstances, such as when normal trading is not taking place on the New York Stock Exchange or when an emergency as defined by the Securities and Exchange Commission exists. If the shares to be redeemed were purchased by check and that check has not yet cleared, payment will be made promptly upon clearance of the purchase check (which ^ will take up to 15 days). If a shareholder participates in EasiVest, the Fund's automatic monthly investment program, and redeems all of the shares in ^ a Fund account, ^ IFG will terminate any ^ EasiVest purchases unless otherwise instructed by the shareholder. Because of the high relative costs of handling small accounts, should the value of any shareholder's account fall below $250 as a result of shareholder action, the Trust reserves the right to effect the involuntary redemption of all shares in such account, in which case the account would be liquidated and the proceeds forwarded to the shareholder. Prior to any such redemption, a shareholder will be notified and given 60 days to increase the value of the account to $250 or more. Fund shareholders (other than shareholders holding Fund shares in accounts of IRA plans) may request expedited redemption of shares having a minimum value of $250 (or redemption of all shares if their value is less than $250) held in accounts maintained in their name by telephoning redemption instructions to ^ IFG, using the telephone number on the cover of this ^ Prospectus. For INVESCO Trust Company sponsored federal income tax-deferred retirement plans, the term "shareholders" is defined to mean plan trustees that file a written request to be able to redeem Fund shares by telephone. Unless ^ IFG permits a larger redemption request to be placed by telephone, a shareholder may not place a redemption request by telephone in excess of $25,000. The redemption proceeds, at the shareholder's option, either will be mailed to the address listed for the shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank which the shareholder has designated to receive the proceeds of telephone redemptions. The Fund charges no fee for effecting such telephone redemptions. ^ The telephone redemption ^ policy may be modified or terminated in the future at the discretion of Fund Management. Shareholders should understand that while the Fund will attempt to process all telephone redemption requests on an expedited basis, there may be times, particularly in periods of severe economic or market disruption, when (a) they may encounter difficulty in placing a telephone redemption request, and (b) processing telephone redemptions will require up to seven days following receipt of the redemption request, or additional time because of the unusual circumstances set forth above. The privilege of redeeming Fund shares by telephone is available to shareholders automatically unless expressly declined. By signing a new account Application or a Telephone Transaction Authorization Form or otherwise utilizing telephone redemption privileges, the shareholder has agreed that the Fund will not be liable for following instructions communicated by telephone that it reasonably believes to be genuine. The Fund employs procedures, which it believes are reasonable, designed to confirm that telephone instructions are genuine. These may include recording telephone instructions and providing written confirmations of transactions initiated by telephone. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions; provided, however, that if the Fund fails to follow these or other reasonable procedures, the Fund may be liable. TAXES, DIVIDENDS AND ^ OTHER DISTRIBUTIONS Taxes. The Fund intends to distribute to shareholders ^ all of its net investment income, net capital gains and net gains from foreign currency transactions, if any, in order to continue to qualify for tax treatment as a regulated investment company. Thus, the Fund does not expect to pay any federal income or excise taxes. Unless shareholders are exempt from income taxes, they must include all dividends and ^ other distributions in taxable income for federal, state and local income tax purposes. Dividends and other distributions are taxable whether they are received in cash or automatically ^ reinvested in shares of the Fund or another fund in the INVESCO group. Net realized capital gains of the Fund are classified as short-term and long-term gains depending upon how long the Fund held the security that gave rise to the gains. Short-term capital gains are included in income from dividends and interest as ordinary income and are taxed at the taxpayer's marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in August 1997, changed the taxation of long-term capital gains by applying different capital gains rates depending on the taxpayer's holding period and marginal rate of federal income tax. Long-term gains realized on the sale of securities held for more than one year but not for more than 18 months are taxable at a rate of 28%. This category of long-term gains is often referred to as "mid-term" gains but is technically termed "28% rate gains". Long-term gains realized on the sale of securities held for more than 18 months are taxable at a rate of 20%. The Tax Act, however, does not address the application of these rules to distributions of net capital gain (excess of long-term capital gain over short-term capital losses) by a regulated investment company, including whether such distributions may be treated by its shareholders in accordance with the Fund's holding period for the assets it sold that generated the gain. The application of the new capital gain rules must be determined by further legislation or future regulations that are not available as this Prospectus is being prepared. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax advisers as to the effect of the Tax Act on distributions by the Fund of net capital gain. Shareholders also may realize capital gains or losses when they sell their Fund shares at more or less than the price originally paid. Capital gain on shares held for more than one year will be long-term capital gain, in which event it will be subject to federal income tax at the rates indicated above. The Fund may be subject to ^ withholding of foreign taxes on dividends or interest ^ received on foreign securities. Foreign taxes withheld will be treated as an expense of the Fund ^. ^ Individuals and certain other non-corporate shareholders may be subject to backup withholding of 31% on dividends, capital gain and other distributions and redemption proceeds. Unless ^ you are subject to backup withholding for other reasons, ^ you can avoid backup withholding on ^ your Fund account by ensuring that ^ we have a correct, certified tax identification number. We encourage you to consult a tax adviser with respect to these matters. For further information see "Dividends, Other Distributions and Taxes" in the Statement of Additional Information. Dividends and Other ^ Distributions. The Fund earns ordinary or net investment income in the form of dividends and interest on its investments. ^ Dividends paid by the Fund will be based solely on the income earned by it. The Fund's policy is to distribute substantially all of this income, less Fund expenses, to shareholders. Dividends from net investment income are paid on a quarterly basis, at the end of November, February, May and August, at the discretion of the ^ Trust's Board of Trustees. Dividends are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. In addition, the Fund realizes capital gains and losses when it sells securities for more or less than it paid. If total gains on sales exceed total losses (including losses carried forward from previous years), the Fund has a net realized capital gain. Net realized capital gains, if any, together with gains, if any, realized on foreign currency transactions, are distributed to shareholders at least annually, usually in December. Capital gain distributions are automatically reinvested in additional shares of the Fund at the net asset value on the ex-dividend date unless otherwise requested. Dividends and other ^ distributions are paid to ^ holders of shares on the record date of ^ distribution regardless of how long the Fund shares have been held by the shareholder. The ^ Fund's share price will then drop on the ex-dividend date by the amount of the distribution ^. If a shareholder purchases shares immediately prior to the distribution, the shareholder will, in effect, have ^"bought" the distribution by paying the full purchase price, a portion of which is then returned in the form of a taxable distribution. ^ ADDITIONAL INFORMATION Voting Rights. All shares of the Trust's funds have equal voting rights. When shareholders are entitled to vote upon a matter, each shareholder is entitled to one vote for each share owned and a corresponding fractional vote for each fractional share owned. Voting with respect to certain matters, such as ratification of independent accountants and the election of trustees, will be by all funds of the Trust voting together. In other cases, such as voting upon the investment advisory contract for the individual funds, voting is on a fund-by-fund basis. To the extent permitted by law, when not all funds are affected by a matter to be voted upon, only shareholders of the fund or funds affected by the matter will be entitled to vote thereon. The Trust is not generally required and does not expect, to hold regular annual meetings of shareholders. However, the board of trustees will call such special meetings of shareholders for the purpose, among other reasons, of voting the question of removal of a trustee or trustees when requested to do so in writing by the holders of 10% or more of the outstanding shares of the Trust or as may be required by applicable law or the Trust's Declaration of Trust. The Trust will assist shareholders in communicating with other shareholders as required by the 1940 Act. Trustees may be removed by action of the holders of two-thirds of the outstanding shares of the Trust. Shareholder Inquiries. All inquiries regarding the Fund should be directed to the Trust at the telephone number or mailing address set forth on the cover page of this ^ Prospectus. Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement which provides that the Fund will pay an annual fee of $20.00 per shareholder account or, where applicable, per participant in an omnibus account ^. The transfer agency fee is not charged to each shareholder's or participant's account but is an expense of the Fund to be paid from the Fund's assets. Registered broker-dealers, third party administrators of tax-qualified retirement plans and other entities, including affiliates of ^ IFG, may provide sub-transfer agency services to the Fund which reduce or eliminate the need for identical services to be provided on behalf of the Fund by ^ IFG. In such cases, ^ IFG may pay the third party an annual sub-transfer agency or ^ recordkeeping fee out of the transfer agency fee which is paid to ^ IFG by the Fund. INVESCO VALUE TRUST INVESCO Total Return Fund PROSPECTUS January 1, ^ 1998 INVESCO Distributors, Inc., Distributor Post Office Box 173706 Denver, Colorado 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com ^ In Denver, visit one of our convenient Investor Centers: Cherry Creek 155-B Fillmore Street Denver Tech Center 7800 East Union Avenue Lobby Level In addition, all documents filed by the Trust with the Securities and Exchange Commission can be located on a web site maintained by the Commission at http://www.sec.gov. STATEMENT OF ADDITIONAL INFORMATION January 1, ^ 1998 INVESCO VALUE TRUST Address: Mailing Address: 7800 E. Union Avenue Post Office Box 173706 Denver, Colorado 80237 Denver, Colorado 80217-3706 Telephone: In continental U.S., 1-800/525-8085 INVESCO VALUE TRUST (the "Trust"), is an open-end management investment company organized in series form in which all of the Funds seek to provide investors with a high total return on investment through capital appreciation and current income. Each of the Trust's three individual funds (collectively, the "Funds") has separate investment policies. Investors may purchase shares of any or all Funds. The following Funds are available: INVESCO VALUE EQUITY Fund INVESCO INTERMEDIATE GOVERNMENT BOND Fund INVESCO TOTAL RETURN Fund Additional Funds may be offered in the future. Prospectuses for the Funds dated January 1, ^ 1998, which provide the basic information you should know before investing in a Fund, may be obtained without charge from INVESCO ^ Distributors, Inc., Post Office Box 173706, Denver, Colorado 80217-3706. This Statement of Additional Information is not a ^ prospectus but contains information in addition to and more detailed than that set forth in each Prospectus. It is intended to provide additional information regarding the activities and operations of the Trust and should be read in conjunction with the Prospectus. Investment Adviser ^: INVESCO FUNDS GROUP, INC. Distributor: INVESCO ^ DISTRIBUTORS, INC. TABLE OF CONTENTS Page ---- INVESTMENT POLICIES AND RESTRICTIONS 86 THE TRUST AND ITS MANAGEMENT 92 HOW SHARES CAN BE PURCHASED 105 HOW SHARES ARE VALUED 108 TRUST PERFORMANCE 109 SERVICES PROVIDED BY THE TRUST 111 TAX-DEFERRED RETIREMENT PLANS 112 HOW TO REDEEM SHARES 112 DIVIDENDS, ^ OTHER DISTRIBUTIONS AND TAXES 113 INVESTMENT PRACTICES 116 ADDITIONAL INFORMATION 119 APPENDIX A 123 APPENDIX B 125 INVESTMENT POLICIES AND RESTRICTIONS Reference is made to the section entitled "Investment Objectives And Policies" in the Prospectuses for a discussion of the investment objectives and policies of the Funds. In addition, set forth below is further information relating to the INVESCO Value Equity, Intermediate Government Bond and Total Return Funds. Loans of Portfolio Securities. As described in the section entitled "Risk Factors" in the Prospectuses, all of the Funds may lend their portfolio securities to brokers, dealers, and other financial institutions, provided that such loans are callable at any time by the Funds and are at all times secured by collateral held by the Funds' custodian consisting of cash or securities issued or guaranteed by the United States Government or its agencies, or any combination thereof, equal to at least the market value, determined daily, of the loaned securities. The advantage of such loans is that such a Fund continues to earn income on the loaned securities, while at the same time receiving interest from the borrower of the securities. Loans will be made only to firms deemed by the adviser or sub-adviser (collectively, "Fund Management"), under procedures established by the Trust's Board of Trustees, to be creditworthy and when the amount of interest to be received justifies the inherent risks. A loan may be terminated by the borrower on one business day's notice, or by such Fund at any time. If at any time the borrower fails to maintain the required amount of collateral (at least 100% of the market value of the borrowed securities), the Fund will require the deposit of additional collateral not later than the business day following the day on which a collateral deficiency occurs or the collateral appears inadequate. If the deficiency is not remedied by the end of that period, such Fund will use the collateral to replace the securities while holding the borrower liable for any excess of replacement cost over collateral. Upon termination of the loan, the borrower is required to return the securities to such Fund. Any gain or loss during the loan period would inure to such Fund. ^ Futures and Options on ^ Futures. As described in the Funds' Prospectuses, each Fund may enter into futures contracts, and purchase and sell ("write") options to buy or sell ^ futures contracts ^. The Funds will comply with and adhere to all limitations in the manner and extent to which ^ it effects transactions in futures and options on such futures currently imposed by the rules and policy guidelines of the Commodity Futures Trading Commission ("CFTC") as conditions for exemption of a mutual fund, or investment advisers thereto, from registration as a commodity pool operator. ^ No Fund will, as to any positions, whether long, short or a combination thereof, enter into futures and options thereon for which the aggregate initial margins and premiums exceed 5% of the fair market value of ^ its assets after taking into account unrealized profits and losses on options it has entered into. In the case of an option that is "in^-the^-money^," as defined in the Commodity Exchange Act (the "CEA")^, the in^- the^-money amount may be excluded in computing such 5%. (In general a call option on a future is "in^-the^-money" if the value of the future exceeds the exercise ("strike") price of the call; a put option on a future is "in^-the^-money" if the value of the future which is the subject of the put is exceeded by the strike price of the put.) ^ Each Fund may use futures and options thereon solely for bona fide hedging or for other non^-speculative purposes within the meaning and intent of the applicable provisions of the CEA. ^ Unlike when a Fund purchases or sells a security, no price is paid or received by a Fund upon the purchase or sale of a futures contract. Instead, the ^ Fund will be required to deposit in ^ its segregated asset account an amount of cash or qualifying securities (currently U.S. Treasury bills), currently in a minimum amount of $15,000. This is called "initial margin." Such initial margin is in the nature of a performance bond or good faith deposit on the contract. However, since losses on open contracts are required to be reflected in cash in the form of variation margin payments, ^ a Fund may be required to make additional payments during the term of the contracts to ^ its broker. Such payments would be required, for example, where, during the term of an interest rate futures contract purchased by ^ a Fund, there was a general increase in interest rates, thereby making ^ such Fund's portfolio securities less valuable. In all instances involving the purchase of ^ futures contracts by ^ a Fund, an amount of cash together with such other securities as permitted by applicable regulatory authorities to be utilized for such purpose, at least equal to the market value of the futures contracts, will be deposited in a segregated account with ^ such Fund's custodian to collateralize the position. At any time prior to the expiration of a futures contract, ^ a Fund may elect to close ^ its position by taking an opposite position which will operate to terminate ^ its position in the futures contract. For a more complete discussion of the risks involved in ^ futures and options on ^ futures and other ^ securities, refer to Appendix B ("Description of Futures ^, Options and Forward Contracts"). Where futures are purchased to hedge against a possible increase in the price of a security before ^ a Fund is able in an orderly fashion to invest in the security, it is possible that the market may decline instead. If the ^ Fund, as a result, concluded not to make the planned investment at that time because of concern as to possible further market decline or for other reasons, the ^ Fund would realize a loss on the futures contract that is not offset by a reduction in the price of securities purchased. In addition to the possibility that there may be an imperfect correlation or no correlation at all between movements in the ^ futures contracts and the portion of the portfolio being hedged, the price of ^ futures may not correlate perfectly with movements in the ^ prices due to certain market distortions. All participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between ^ underlying instruments and the value of ^ the futures contract. Moreover, the deposit requirements in the futures market are less onerous than margin requirements in the securities market and may therefore cause increased participation by speculators in the futures market. Such increased participation may also ^ cause temporary price distortions. Due to the possibility of price distortion in the futures market and because of the imperfect correlation between movements in ^ the underlying instrument and movements in the prices of ^ futures contracts, the value of ^ futures contracts as a hedging device may be reduced. In addition, if ^ a Fund has insufficient available cash, ^ it may at times have to sell securities to meet variation margin requirements. Such sales may have to be effected at a time when it may be disadvantageous to do so. Options on Futures Contracts. A Fund may buy and write options on futures contracts for hedging purposes. The purchase of a call option on a futures contract is similar in some respects to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the price of the futures contract upon which it is based or the price of the underlying instrument, ownership of the option may or may not be less risky than ownership of the futures contract or the underlying instrument. As with the purchase of futures contracts, when a Fund is not fully invested it may buy a call option on a futures contract to hedge against a market advance. The writing of a call option on a futures contract constitutes a partial hedge against declining prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the futures price at the expiration of the option is below the exercise price, a Fund will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in such Fund's portfolio holdings. The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the futures price at expiration of the option is higher than the exercise price, a Fund will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which the Fund is considering buying. If a call or put option which a Fund has written is exercised, such Fund will incur a loss which will be reduced by the amount of the premium it received. Depending on the degree of correlation between changes in the value of its portfolio securities and changes in the value of the futures positions, a Fund's losses from existing options on futures may to some extent be reduced or increased by changes in the value of portfolio securities. The purchase of a put option on a futures contract is similar in some respects to the purchase of protective put options on portfolio securities. For example, a Fund may buy a put option on a futures contract to hedge its portfolio against the risk of falling prices. The amount of risk a Fund assumes when it buys an option on a futures contract is the premium paid for the option plus related transaction costs. In addition to the correlation risks discussed above, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be reflected fully in the value of the options bought. Forward Foreign Currency Contracts. The Funds may enter into forward currency contracts to purchase or sell foreign currencies (i.e., non-U.S. currencies) ("forward contracts") as a hedge against possible variations in foreign exchange rates. A forward foreign currency exchange contract is an agreement between the contracting parties to exchange an amount of currency at some future time at an agreed upon rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. A forward contract generally has no deposit requirement, and such transactions do not involve commissions. By entering into a forward contract for the purchase or sale of the amount of foreign currency invested in a foreign security transaction, a Fund can hedge against possible variations in the value of the dollar versus the subject currency either between the date the foreign security is purchased or sold and the date on which payment is made or received or during the time the Fund holds the foreign security. Hedging against a decline in the value of a currency in the foregoing manner does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Furthermore, such hedging transactions preclude the opportunity for gain if the value of the hedged currency should rise. The Funds will not speculate in forward currency contracts. The Funds will not attempt to hedge all of their non-U.S. portfolio positions and will enter into such transactions only to the extent, if any, deemed appropriate by their investment adviser. The Funds will not enter into forward contracts for a term of more than one year. Forward contracts may, from time to time, be considered illiquid, in which case they would be subject to the Fund's limitation on investing in illiquid securities, discussed in the Prospectus. Real Estate Investment Trusts. Although they are not permitted to invest in real estate directly, the Funds may invest in real estate investment trusts ("REITs"). A REIT is a trust which sells shares to investors and uses the proceeds to invest in real estate or interests in real estate. Investment Restrictions. As described in each Fund's Prospectus, the Trust and each of the Funds are subject to certain investment restrictions. ^ The following restrictions are fundamental and may not be changed with respect to a particular Fund without the prior approval of the holders of a majority, as defined in the Investment Company Act of 1940 (the "1940 Act"), of the outstanding voting securities of that Fund. For purposes of the following limitations, all percentage limitations apply immediately after a purchase or initial investment. Any subsequent change in a particular percentage resulting from fluctuations in value does not require elimination of any security from the Fund. Under these restrictions, neither the Trust nor any Fund will: (1) Other than investments by the Funds, including the INVESCO Intermediate Government Bond Fund, in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, invest in the securities of issuers conducting their principal business activities in the same industry (investments in obligations issued by a foreign government, including the agencies or instrumentalities of a foreign government, are considered to be investments in a single industry), if immediately after such investment the value of a Fund's investments in such industry would exceed 25% of the value of such Fund's total assets; (2) Invest in the securities of any one issuer, other than the United States Government, if immediately after such investment more than 5% of the value of a Fund's total assets, taken at market value, would be invested in such issuer or more than 10% of such issuer's outstanding voting securities would be owned by such Fund. (3) Underwrite securities of other issuers, except insofar as it may technically be deemed an "underwriter" under the Securities Act of 1933, as amended, in connection with the disposition of a Fund's portfolio securities. (4) Invest in companies for the purpose of exercising control or management. (5) Issue any class of senior securities or borrow money, except borrowings from banks for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of the value of a Fund's total assets at the time the borrowing is made. (6) Mortgage, pledge, hypothecate or in any manner transfer as security for indebtedness any securities owned or held except to an extent not greater than 5% of the value of a Fund's total assets. (7) ^ Sell short, except the Value Equity and Total Return Funds may purchase or sell options or futures, or write, purchase or sell puts and calls. ^(8) Buy on margin, except the Value Equity and Total Return Funds may purchase or sell options or futures, or write, purchase or sell puts and calls. (9) Purchase or sell real estate or interests in real estate. A Fund may invest in securities secured by real estate or interests therein or issued by companies, including real estate investment trusts, which invest in real estate or interests therein. (10) ^ Buy or sell commodities ^ contracts (however the Value Equity and Total Return Funds may purchase securities of companies which invest in the foregoing). This restriction shall not prevent the Funds from purchasing or selling options on individual securities, security indexes, and currencies or financial futures or options on financial futures, or undertaking forward currency contracts. The Intermediate Government Bond Fund may enter into interest rate futures contracts if immediately after such a commitment the sum of the then aggregate futures market prices of financial instruments aggregate purchase prices under futures contract purchases would not exceed 30% of the Intermediate Government Bond Fund's total assets. (11) Make loans to other persons, provided that a Fund may purchase debt obligations consistent with its investment objectives and policies and the INVESCO Value Equity, Intermediate Government Bond, and Total Return Funds may lend limited amounts (not to exceed 10% of their total assets) of their portfolio securities to broker-dealers or other institutional investors. (12) Purchase securities of other investment companies except (i) in connection with a merger, consolidation, acquisition or reorganization, or (ii) by purchase in the open market of securities of other investment companies involving only customary brokers' commissions and only if immediately thereafter (i) no more than 3% of the voting securities of any one investment company are owned by such a Fund, (ii) no more than 5% of the value of the total assets of such a Fund would be invested in any one investment company, and (iii) no more than 10% of the value of the total assets of such a Fund would be invested in the securities of such investment companies. The Trust may invest from time to time a portion of the INVESCO Value Equity, Intermediate Government Bond, and Total Return Funds' cash in investment companies to which the Adviser serves as investment adviser; provided that no management or distribution fee will be charged by the Adviser with respect to any such assets so invested and provided further that at no time will more than 3% of such a Fund's assets be so invested. Should such a Fund purchase securities of other investment companies, shareholders may incur additional management and distribution fees. (13) Invest in securities for which there are legal or contractual restrictions on resale, except that each of the Funds may invest no more than 2% of the value of ^ its total assets in such securities; or invest in securities for which there is no readily available market, except that each of the Funds may invest no more than 5% of the value ^ its total assets in such securities. In applying the industry concentration investment restriction (no. 1 above), the Funds use ^ a modified S&P industry code classification schema which uses various sources to classify. In applying restriction (13) above, each Fund also includes illiquid securities (those which cannot be sold in the ordinary course of business within seven days at approximately the valuation given to them by the Fund) among the securities subject to the 5% of total assets limit. Additional investment restrictions adopted by the Trust on behalf of the Funds and which may be changed by the Trustees at their discretion provide that the ^ Fund may not: ^(1) (a) enter into any futures contracts, options on futures, puts and calls if immediately thereafter the aggregate margin deposits on all outstanding derivative positions held by each Fund and premiums paid on outstanding positions, after taking into account unrealized profits and losses, would exceed 5% of the market value of the total assets of the Fund, or (b) enter into any derivative positions if the aggregate net amount of the Fund's commitments under outstanding derivative positions of the Fund would exceed the market value of the total assets of the Fund. (2) Purchase or sell interests in oil, gas or other mineral leases or exploration or development programs. All of the Funds, however, may purchase or sell securities issued by entities which invest in such interests. (3) Invest more than 5% of a Fund's total assets in securities of companies having a record, together with predecessors, of less than three years of continuous operation. (4) Purchase or retain the securities of any issuer if any individual officers and trustees/directors of the Trust, the Adviser, or any subsidiary thereof owns individually more than 0.5% of the securities of that issuer and all such officers and trustees/directors together own more than 5% of the securities of that issuer. (5) Engage in arbitrage transactions. ^(6) To the extent a Fund invests in warrants, such a Fund's investment in warrants, valued at the lower of cost or market, may not exceed 5% of the value of such Fund's net assets. Included within that amount, but not to exceed 2% of the value of ^ each Fund's net assets may be warrants which are not listed on the New York or American Stock Exchanges. Warrants acquired by such a Fund as part of a unit or attached to securities may be deemed to be without value. ^(7) Invest more than 25% of the value of such a Fund's total assets in securities of foreign issuers. Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. THE TRUST AND ITS MANAGEMENT The Trust. The Trust was organized under the laws of Massachusetts on July 15, 1987 as "Financial Series Trust." On July 1, 1993, the Trust changed its name to "INVESCO Value Trust." In addition, the names INVESCO Intermediate Government Bond Fund, INVESCO Value Equity Fund and INVESCO Total Return Fund were adopted as the names of the Intermediate Government Bond Fund, Equity Fund and Flex Fund series of the Trust, respectively, effective July 1, 1993. The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation ^("IFG"), is employed as the Trust's investment adviser. ^ IFG was established in 1932 and also serves as an investment adviser to INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment Funds, Inc. The Sub-Adviser. ^ IFG, as investment adviser, has contracted with INVESCO Capital Management, Inc. ("ICM") to provide investment advisory and research services to the Trust. ICM, the Trust's investment adviser from inception of the Trust through 1990, has the primary responsibility for providing portfolio investment management services to the Funds. The Distributor. Effective September 30, 1997, INVESCO Distributors, Inc. ("IDI") became the Funds' distributor. IDI, established in 1997, is a registered broker-dealer that acts as distributor for all retail mutual funds advised by IFG. Prior to September 30, 1997, IFG served as the Funds' distributor. IFG, ICM and IDI are ^ indirect wholly-owned ^ subsidiaries of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997, and to AMVESCAP PLC on May 8, 1997 as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management Group, Inc., that created one of the largest independent investment management businesses in the world with approximately $177.5 billion in assets under management. IFG was established in 1932 ^ and, as of August 31, ^ 1997 managed 14 mutual funds, consisting of ^ 46 separate portfolios, on behalf of over ^ 854,448 shareholders. ^ AMVESCAP PLC's other North American subsidiaries include the following: --INVESCO Capital Management, Inc. of Atlanta, Georgia manages institutional investment portfolios, consisting primarily of discretionary employee benefit plans for corporations and state and local governments, and endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of INVESCO Services, Inc., a registered ^ broker-dealer whose primary business is the distribution of shares of two registered investment companies. --INVESCO Management & Research, Inc. ^ of Boston, Massachusetts primarily manages pension and endowment accounts. --PRIMCO Capital Management, Inc. of Louisville, Kentucky specializes in managing stable return investments, principally on behalf of Section 401(k) retirement plans. --INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for providing advisory services in the U.S. real estate markets for ^ AMVESCAP PLC's clients worldwide. Clients include corporate plans, public pension funds, and endowment and foundation accounts. --A I M Advisors, Inc. of Houston, Texas provides investment advisory and administrative services for retail and institutional mutual funds. --A I M Capital Management, Inc. of Houston, Texas provides investment advisory services to individuals, corporations, pension plans and other private investment advisory accounts and also serves as a sub-adviser to certain retail and institutional mutual funds, one Canadian mutual fund and one portfolio of an open-end registered investment company that is offered to separate accounts of variable insurance companies. --A I M Distributors, Inc. and Fund Management Company of Houston, Texas are registered broker-dealers that act as the principal underwriters for retail and institutional mutual funds. The corporate headquarters of ^ AMVESCAP PLC are located at 11 Devonshire Square, London, EC2M 4YR, England. As indicated in the Funds' Prospectuses, ^ IFG and ICM permit investment and other personnel to purchase and sell securities for their own accounts in accordance with a compliance policy governing personal investing by directors, officers and employees of ^ IFG, ICM and their North American affiliates. The policy requires officers, inside directors, investment and other personnel of ^ IFG, ICM and their North American affiliates to pre-clear all transactions in securities not otherwise exempt under the policy. Requests for trading authority will be denied when, among other reasons, the proposed personal transaction would be contrary to the provisions of the policy or would be deemed to adversely affect any transaction then known to be under consideration for or to have been effected on behalf of any client account, including the Funds. In addition to the pre-clearance requirement described above, the policy subjects officers, inside directors, investment and other personnel of ^ IFG, ICM and their North American affiliates to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with the policy. The provisions of this policy are adminstered by and subject to exceptions authorized by ^ IFG or ICM. Investment Advisory Agreement. ^ IFG serves as investment adviser pursuant to an investment advisory agreement dated February 28, 1997 with the Trust (the "Agreement") which was approved by the ^ board of trustees on November 6, 1996 by a vote cast in person by a majority of the trustees of the Trust, including a majority of the trustees who are not "interested persons" of the Trust or INVESCO at a meeting called for such purpose. Shareholders of the Funds approved the Agreement on Janaury 31, 1997 for an initial term expiring February 28, 1999. Thereafter, the Agreement may be continued from year to year as to each Fund as long as such continuance is specifically approved at least annually by the board of trustees of the Trust, or by a vote of the holders of a majority, as defined in the 1940 Act, of the outstanding shares of the Fund. Any such continuance also must be approved by a majority of the Trust's trustees who are not parties to the Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Agreement may be terminated at any time without penalty by either party upon sixty (60) days' written notice and terminates automatically in the event of an assignment to the extent required by the 1940 Act and the rules thereunder. The Agreement provides that ^ IFG shall manage the investment portfolios of the ^ Funds in conformity with the ^ Funds' investment policies (either directly or by delegation to a sub-adviser, which may be a party affiliated with ^ IFG). Further, ^ IFG shall perform all administrative, internal accounting (including computation of net asset value), clerical, statistical, secretarial and all other services necessary or incidental to the administration of the affairs of the ^ Funds, excluding, however, those services that are the subject of separate agreement between the Trust and ^ IFG or any affiliate thereof, including ^ provision of transfer agency, dividend disbursing agency, and registrar services, and services furnished under an Administrative Services Agreement with ^ IFG discussed below. INVESCO will pay the fee of any sub-adviser. ^ Services provided include, but are not limited to: supplying the Trust with officers, clerical staff and other employees, if any, who are necessary in connection with the Funds' operations; furnishing office space, facilities, equipment and supplies; providing personnel and facilities required to respond to inquiries related to shareholder accounts; conducting periodic compliance reviews of the Funds' operations; preparation and review of required documents, reports and filings by INVESCO's in-house legal and accounting staff (including the prospectus, statement of additional information, proxy statements, shareholder reports, tax returns, reports to the SEC, and other corporate documents of the Funds), except insofar as the assistance of independent accountants or attorneys is necessary or desirable; supplying basic telephone service and other utilities^; and preparing and maintaining certain of the books and records required to be prepared and maintained by the Funds under the 1940 Act. Expenses not assumed by INVESCO are borne by the Funds. The responsibility for making decisions to buy, sell, or hold a particular security rests with ^ IFG, as well as ICM as the Sub-Adviser, subject to review by the board of trustees. Expenses not assumed by ^ IFG are borne by the Trust. ^ As full compensation for its advisory services to the Trust, IFG receives a monthly fee. The fee is based upon a percentage of each Fund's average net assets, determined daily. With respect to the ^ INVESCO Value Equity and Total Return Funds, the fee is calculated at the annual rate of: 0.75% on the first $500 million of the average net assets of each Fund; 0.65% on the next $500 million of average net assets of each Fund; and 0.50% on average net assets in excess of $1 billion. With respect to the^ INVESCO Intermediate Government Bond Fund, the fee is calculated at the annual rate of: 0.60% on the first $500 million of the average net assets of the Fund; 0.50% on the next $500 million of the average net assets of the Fund; and 0.40% on average net assets in excess of $1 billion. ^ Sub-Advisory Agreement. ICM serves as sub-adviser to the INVESCO Value Equity, Intermediate Government Bond and Total Return Funds pursuant to a sub-advisory agreement ^ dated February 28, 1997 (the "Sub-Agreement") with IFG which was approved by the ^ board of trustees of the Trust on November 6, 1996, including a majority of the trustees who are not "interested persons" of the Trust, IFG or ICM at a meeting called for such purpose. Shareholders of each of the Funds ^ approved the Sub-Agreement on January 31, 1997 for an initial term expiring February 28, 1999. ^ The Agreement and Sub-Agreement may be continued from year to year as to each Fund ^ as long as each such continuance is specifically approved by the board of trustees of the Trust, or by a vote of the holders of a majority, as defined in the 1940 Act, of the outstanding shares of each of the Funds. Each such continuance also must be approved by a majority of the trustees who are not parties to the Agreement or Sub-Agreements or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Agreement or Sub-Agreement may be terminated as to any Fund at any time without penalty by either party or the Trust upon sixty (60) days' written notice and terminates automatically in the event of an assignment to the extent required by the 1940 Act and the rules thereunder. The Sub-Agreement provides that ICM, ^ subject to the supervision of IFG, shall manage the investment portfolios of the respective Funds^ in conformity with each Fund's investment policies. These management services include: (a) managing the investment and reinvestment of all the assets, now or hereafter acquired, of the Funds, and executing all purchases and sales of portfolio securities; (b) maintaining a continuous investment program for the Funds, consistent with (i) each Fund's investment policies as set forth in the Company's Articles of Incorporation, Bylaws, and Registration Statement, as from time to time amended, under the 1940 Act, and in any prospectus and/or statement of additional information of the Company, as from time to time amended and in use under the 1933 Act, and (ii) the Trust's status as a regulated investment company under the Internal Revenue Code of 1986, as amended; (c) determining what securities are to be purchased or sold for each of the Funds, unless otherwise directed by the directors of the Company or IFG, and executing transactions accordingly; (d) providing the Funds the benefit of all of the investment analysis and research, the reviews of current economic conditions and trends, and the consideration of long-range investment policy now or hereafter generally available to investment advisory customers of the Sub-Advisers; (e) determining what portion of each of the Funds should be invested in the various types of securities authorized for purchase by each Fund; and (f) making recommendations as to the manner in which voting rights, rights to consent to Trust action and any other rights pertaining to the portfolio securities of each Fund shall be exercised. The Sub-Agreement provides that as compensation for its services, ICM shall receive from IFG, at the end of each month, a fee based on the average daily value of each Fund's net assets at the following annual rates ^: prior to January 1, 1998, 0.20% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.16% on the INVESCO Intermediate Government Bond Fund's, average net ^ assets on the first $500 million; 0.17% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.13% on the INVESCO Intermediate Government Bond Fund's, average net ^ assets on the next $500 million ^; and 0.13% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.11% on the INVESCO Intermediate Government Bond Fund's, average net asset value in excess of $1 billion. Effective January 1, 1998, ICM shall receive a fee based on the following annual rates: 0.25% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.20% on the INVESCO Intermediate Government Bond Fund's, average net assets on the first $500 million; 0.2167% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.1667% on the INVESCO Intermediate Government Bond Fund's, average net assets on the next $500 million; and 0.1667% on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.1333% on the INVESCO Intermediate Government Bond Fund's average net assets in excess of $1 billion. The Sub-Advisory fees are paid by IFG, not the Funds. Administrative Services Agreement. ^ IFG, either directly or through affiliated companies, provides certain administrative, sub-accounting, and recordkeeping services to the Trust pursuant to an Administrative Services Agreement dated February ^ 28, 1997 (the "Administrative Agreement"). The Administrative Agreement was approved ^ by the board of trustees on November 6, 1996 by a vote cast in person by all of the trustees of the Trust, including all of the trustees who are not "interested persons" of the Trust or ^ IFG at a meeting called for such purpose. The Administrative Agreement was for an initial term ^ expiring February 28, 1998, and has been continued by action of the board of trustees until ^ May 15, 1998. The Administrative Agreement may be continued from year to year thereafter as long as each such continuance is specifically approved by the board of trustees of the Trust, including a majority of the trustees who are not parties to the Administrative Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Administrative Agreement may be terminated at any time without penalty by ^ IFG on sixty (60) days' written notice, or by the Trust upon thirty (30) days' written notice, and terminates automatically in the event of an assignment unless the board of trustees approves such assignment. The Administrative Agreement provides that ^ IFG shall provide the following services to the Funds: required administrative and internal accounting services, including without limitation, maintaining general ledger and capital stock accounts, preparing a daily trial balance, calculating net asset value daily, and providing selected general ledger reports. As full compensation for services provided under the Administrative Agreement, the Trust pays a monthly fee to ^ IFG consisting of a base fee of $10,000 per year per Fund, plus an additional incremental fee computed daily and paid monthly at an annual rate of 0.015% per year of the average net assets of each Fund of the Trust. For providing such services, ^ IFG received administrative services fees in the amount of ^ $295,965 for the fiscal year ended August 31, ^ 1997. Transfer Agency Agreement. ^ IFG performs transfer agent, dividend disbursing agent, and registrar services for the Trust pursuant to a Transfer Agency Agreement dated February 28, 1997, which was approved November 6, 1996 by the board of trustees of the Trust ^, including a majority of the Trust's trustees who are not parties to the Transfer Agency Agreement ^ or "interested persons" of any such party. The Transfer Agency Agreement was for an initial term expiring February 28, 1998 and has been extended by the board of trustees until ^ May 15, 1998. Thereafter, the Transfer Agency Agreement may be continued from year to year as to each Fund as long as such continuance is specifically approved at least annually by the board of trustees of the Trust, or by a vote of the holders of a majority of the outstanding shares of each Fund of the Trust. Any such continuance also must be approved by a majority of the Trust's trustees who are not parties to the Transfer Agency Agreement or interested persons (as defined by the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Transfer Agency Agreement may be terminated at any time without penalty by either party upon sixty (60) days' written notice. The Transfer Agency Agreement provides that the Trust shall pay to ^ IFG an annual fee of $20.00 per shareholder account or, where applicable, per participant in an omnibus account ^ with respect to the INVESCO Value Equity and Total Return Funds, and $26.00 per shareholder account or omnibus account ^ with respect to INVESCO Intermediate Government Bond Fund. These fees are paid monthly at the rate of 1/12 of the annual fee and are based upon the number of shareholder accounts or, where applicable, per participant in an omnibus account. For the year ended August 31, ^ 1997, the Trust paid ^ IFG transfer agency fees of ^ $3,193,607. Set forth below is a table showing the advisory fees, transfer agency fees and administrative fees paid by each of the Funds for the fiscal years ended August 31, 1997, 1996^ and 1995 ^.
Fiscal year Fiscal year Fiscal year ended August 31, 1997 ended August 31, 1996 ended August 31, 1995 ^ Transfer Adminis- Transfer Adminis- Transfer Adminis- Advisory Agency trative Advisory Agency trative Advisory Agency trative Portfolio Fees Fees Fees Fees Fees Fees Fees Fees Fees - --------- ------------------------------------------------------------------------------------------------- ^ INVESCO Intermediate Government Bond $268,593 $251,070 $16,715 $235,160 $156,123 $15,879 $214,128 $130,781 $15,353 ^ INVESCO Value Equity $2,250,039 $610,115 $55,001 $1,382,049 $282,255 $37,641 $974,578 $168,354 $29,713 INVESCO Total Return $9,140,227 $2,332,422 $224,249 $6,025,905 $953,383 $137,623 $2,824,847 $477,373 $66,616 ^
Officers and Trustees of the Trust. The overall direction and supervision of the Trust is the responsibility of the board of trustees, which has the primary duty of seeing that the Trust's general investment policies and programs of the Trust are carried out and that the Trust's Funds are properly administered. The officers of the Trust, all of whom are officers and employees of, and are paid by, ^ IFG, are responsible for the day-to-day administration of the Trust. ^ IFG, along with ICM, has the primary responsibility for making investment decisions on behalf of each of the Funds of the Trust. These investment decisions are reviewed by the investment committee of ^ IFG. All of the officers and trustees of the Trust hold comparable positions with INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds, Inc.^, INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment Funds, Inc. In addition, all of the trustees of the Trust ^, with the exception of Mr. Hesser, are also trustees of INVESCO Treasurer's Series Trust. Set forth below is information with respect to each of the Trust's officers and trustees. Unless otherwise indicated, the address of the trustees and officers is Post Office Box 173706, Denver, Colorado 80217-3706. Their affiliations represent their principal occupations during the past five years. CHARLES W. BRADY,*+** Chairman of the Board. Chief Executive Officer and Director of ^ AMVESCAP PLC, London, England, and of various subsidiaries thereof. Chairman of the Board of INVESCO ^ Treasurer's Series Trust ^. Address: 1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935. FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of ^ INVESCO Treasurer's Series Trust. Trustee of ^ INVESCO Global Health Sciences Fund. Formerly, Chairman of the Executive Committee and Chairman of the Board of Security Life of Denver Insurance Company, Denver, Colorado; Director of ING America Life Insurance ^ Company, Urbaine Life Insurance ^ Company and Midwestern United Life Insurance ^ Company. Address: Security Life Center, 1290 Broadway, Denver, Colorado. Born: January 12, 1928. ^ VICTOR L. ANDREWS,** Trustee. Professor Emeritus, Chairman Emeritus and Chairman of the CFO Roundtable of the Department of Finance at Georgia State University, Atlanta, Georgia^; President, Andrews Financial Associates, Inc. (consulting firm); since October 1984, Director of the Center for the Study of Regulated Industry at Georgia State University; formerly, member of the faculties of the Harvard Business School and the Sloan School of Management of MIT. Dr. Andrews is also a Director of ^ the Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta, Georgia. Born: June 23, 1930. BOB R. BAKER,+** Trustee. President and Chief Executive Officer of AMC Cancer Research Center, Denver, Colorado, since January 1989; until mid-December 1988, Vice Chairman of the Board of First Columbia Financial Corporation (a financial institution), Englewood, Colorado. Formerly, Chairman of the Board and Chief Executive Officer of First Columbia Financial Corporation. Address: 1775 Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936. LAWRENCE H. BUDNER,# Trustee. Trust Consultant; prior to June 30, 1987, Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas, Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930. DANIEL D. CHABRIS,+# Trustee. Financial Consultant; Assistant Treasurer of Colt Industries Inc., New York, New York, from 1966 to 1988. Address: ^ 19 Kingsbridge Way, Madison, Connecticut. Born: August 1, 1923. ^ WENDY L. GRAMM, Ph.D.,** Trustee. Self-employed (since 1993); Professor of Economics and Public Administration, University of Texas at Arlington. Formerly, Chairman, Commodity Futures Trading Commission from 1988 to 1993, administrator for Information and Regulatory Affairs at the Office of Management and Budget from 1985 to 1988, Executive Director of the Presidential Task Force on Regulatory Relief and Director of the Federal Trade Commission's Bureau of Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange, Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life Insurance Company, Kinetic Concepts, Inc., Independant Women's Forum, International Republic Institute, and the Republican Women's Federal Forum. Dr. Gramm is also a member of the Board of Visitors, College of Business Administration, University of Iowa, and a member of the Board of Visitors, Center for Study of Public Choice, George Mason University. Address: 4201 Yuma Street, N.W., Washington, D.C. Born: January 10, 1945. HUBERT L. HARRIS, JR.,* Trustee. Chairman (since ^ 1996) and President (January 1990 to ^ May 1996) of INVESCO Services, Inc. ^; Chief Executive Officer of INVESCO Individual Services Group. Member of the Executive Committee of the Alumni Board of Trustees of Georgia Institute of Technology. Address: 1315 Peachtree Street, ^ NE, Atlanta, Georgia. Born: July 15, 1943. KENNETH T. KING,^# Trustee. Formerly, Chairman of the Board of The Capitol Life Insurance Company, Providence Washington Insurance Company, and Director of numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the Board of the Symbion Corporation (a high technology company) until 1987. Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16, 1925. JOHN W. MCINTYRE,# ^ Trustee. Retired. Formerly, Vice Chairman of the Board of Directors of ^ the Citizens and Southern Corporation and Chairman of the Board and Chief Executive Officer of ^ the Citizens and Southern Georgia ^ Corporation and Citizens and Southern National Bank. Director of Golden Poultry Co., Inc. Trustee of ^ INVESCO Global Health Sciences Fund and Gables Residential Trust. Address: 7 Piedmont Center, Suite 100, Atlanta, ^ Georgia. Born: September 14, 1930. LARRY SOLL, Ph.D.,** Trustee. Formerly, Chairman of the Board (1987 to 1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President (1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in 1982. Director of ISD Pharmaceuticals, Inc., Trustee of INVESCO Global Health Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26, 1942. GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company (since 1989) and INVESCO Distributors, Inc. (since 1997); Vice President (May 1989 to April 1995), Secretary and General Counsel of INVESCO Funds Group, Inc.; formerly, employee of a U.S. regulatory agency, Washington, D.C., (June 1973 through May 1989). Born: September 25, 1947. RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO Funds Group, Inc. and INVESCO Trust Company ^(since 1988). Senior Vice President and Treasurer of INVESCO Distributors, Inc. (since 1997). Born: October 1, 1946. WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of INVESCO Funds Group, Inc. (since 1995) and of INVESCO Distributors, Inc. (since 1997) and Trust Officer of INVESCO Trust Company ^(since July 1995) and formerly (August 1992 to July 1995), Vice President of INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company. Formerly, Vice President of 440 Financial Group from June 1990 to August 1992 ^; Assistant Vice President of Putnam Companies from November 1986 to June 1990. Born: August 21, 1956. ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group, Inc. (since 1984) and Trust Officer of INVESCO Trust Company. Born: September 14, 1941. JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group, Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) and Trust Officer of INVESCO Trust Company. Born: February 3, 1948. #Member of the audit committee of the Trust. +Member of the executive committee of the Trust. On occasion, the executive committee acts upon the current and ordinary business of the Trust between meetings of the board of trustees. Except for certain powers which, under applicable law, may only be exercised by the full board of trustees, the executive committee may exercise all powers and authority of the board of trustees in the management of the business of the Trust. All decisions are subsequently submitted for ratification by the board of trustees. *These trustees are "interested persons" of the Trust as defined in the ^ Investment Company Act of 1940. **Member of the management liaison committee of the ^ Company. As of ^ October 28, 1997, officers and trustees of the Trust, as a group, beneficially owned less than 1% of the Trust's outstanding shares and less than 1% of any Fund's outstanding shares. Director Compensation The following table sets forth, for the fiscal year ended August 31, ^ 1997: the compensation paid by the Trust to its independent trustees for services rendered in their capacities as trustees of the Trust; the benefits accrued as Trust expenses with respect to the Defined Benefit Deferred Compensation Plan discussed below; and the estimated annual benefits to be received by these trustees upon retirement as a result of their service to the Trust. In addition, the table sets forth the total compensation paid by all of the mutual funds distributed by INVESCO ^ Distributors, Inc. (including the Funds), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and ^ INVESCO Global Health Sciences Fund (collectively, the "INVESCO Complex") to these trustees for services rendered in their capacities as directors or trustees during the year ended December 31, ^ 1996. As of December 31, ^ 1996, there were ^ 49 funds in the INVESCO Complex. Dr. Soll became an independent trustee of the Trust effective May 15, 1997. Dr. Gramm became an independent trustee of the Trust effective July 29, 1997. Total Compensa- Benefits Estimated tion From Aggregate Accrued As Annual INVESCO Compensa- Part of Benefits Complex tion From Trust Upon Paid To Trust(1) Expenses(2) Retirement(3) Trustees(1) Fred A.Deering, ^ $7,694 $2,611 $2,542 $98,850 Vice Chairman of the Board Victor L. Andrews ^ 7,662 2,467 2,943 84,350 Bob R. Baker ^ 7,894 2,203 3,944 84,850 Lawrence H. Budner ^ 7,394 2,467 2,943 80,350 Daniel D. Chabris 7,569 2,816 2,092 84,850 A. D. Frazier, Jr.(4) 1,404 0 0 81,500 Wendy L. Gramm 1,617 0 0 0 Kenneth T. King 6,629 2,711 2,306 71,350 John W. McIntyre 7,060 0 0 90,350 Larry Soll 3,045 0 0 17,500 ------- ------- ------- -------- Total $57,968 $15,275 $16,770 $693,950 % of Net Assets 0.0026%(5) 0.0007%(5) 0.0045%(6) (1)The vice chairman of the board, the chairmen of the audit, management liaison and compensation committees, and the members of the executive and valuation committees, and the members of specially approved task forces of the board of trustees each receive compensation for serving in such capacities in addition to the compensation paid to all independent trustees. (2)Represents benefits accrued with respect to the Defined Benefit Deferred Compensation Plan discussed below, and not compensation deferred at the election of the trustees. (3)These figures represent the Trust's share of the estimated annual benefits payable by the INVESCO Complex (excluding ^ INVESCO Global Health Sciences Fund which does not participate in any retirement plan) upon the trustees' retirement, calculated using the current method of allocating trustee compensation among the funds in the INVESCO Complex. These estimated benefits assume retirement at age 72 and that the basic retainer payable to the trustees will be adjusted periodically for inflation, for increases in the number of funds in the INVESCO Complex and for other reasons during the period in which retirement benefits are accrued on behalf of the respective trustees. This results in lower estimated benefits for trustees who are closer to retirement and higher estimated benefits for trustees who are further from retirement. With the exception of Messrs. Frazier and McIntyre and Drs. Soll and Gramm, each of these trustees has served as a director/trustee of one or more of the funds in the INVESCO Complex for the minimum five-year period required to be eligible to participate in the Defined Benefit Deferred Compensation Plan. ^ (4)Effective February 28, 1997, Mr. Frazier resigned as a trustee of the Trust. Effective November 1, 1996, Mr. Frazier ^ was employed by INVESCO PLC (the predecessor to AMVESCAP PLC), a company affiliated with IFG and did not receive any director's fees or other compensation from the ^ Trust or other funds in the INVESCO Complex for his service as a ^ director/trustee. ^ (5)Total as a percentage of the Trust's net assets as of August 31, ^ 1997. ^ (6)Total as a percentage of the net assets of the INVESCO Complex as of December 31, ^ 1996. Messrs. Brady^ and Harris, as "interested persons" of the Trust and of the other funds in the INVESCO Complex, receive compensation as officers or employees of ^ IFG or its affiliated companies and do not receive any trustee's fees or other compensation from the Trust or other funds in the INVESCO Complex for their services as trustees. The boards of directors/trustees of the mutual funds managed by ^ IFG and INVESCO Treasurer's Series Trust have adopted a Defined Benefit Deferred Compensation Plan for the non-interested directors and trustees of the funds. Under this plan, each director or trustee who is not an interested person of the funds (as defined in the 1940 Act) and who has served for at least five years (a "qualified director") is entitled to receive, upon retiring from the boards at the retirement age of 72 (or the retirement age of 73 to 74, if the retirement date is extended by the boards for one or two years, but less than three years) continuation of payment for one year (the "first year retirement benefit") of the annual basic retainer payable by the funds to the qualified trustee at the time of his retirement (the "basic retainer"). Commencing with any such trustee's second year of retirement, and commencing with the first year of retirement of a trustee whose retirement has been extended by the board for three years, a qualified trustee shall receive quarterly payments at an annual rate equal to ^ 40% of the basic retainer. These payments will continue for the remainder of the qualified trustee's life or ten years, whichever is longer (the "reduced retainer payments"). If a qualified trustee dies or becomes disabled after age 72 and before age 74 while still a trustee of the funds, the first year retirement benefit and the reduced retainer payments will be made to him or to his beneficiary or estate. If a qualified trustee becomes disabled or dies either prior to age 72 or during his/her 74th year while still a trustee of the funds, the trustee will not be entitled to receive the first year retirement benefit; however, the reduced retainer payments will be made to his beneficiary or estate. The plan is administered by a committee of three trustees who are also participants in the plan and one trustee who is not a plan participant. The cost of the plan will be allocated among the INVESCO^ and Treasurer's Series Trust funds in a manner determined to be fair and equitable by the committee. The Trust is not making any payments to trustees under the plan as of the date of this Statement of Additional Information. The Trust has no stock options or other pension or retirement plans for management or other personnel and pays no salary or compensation to any of its officers. The Trust has an audit committee ^ that is comprised of ^ five of the trustees who are not interested persons of the Trust. The committee meets periodically with the Trust's independent accountants and officers to review accounting principles used by the Trust, the adequacy of internal controls, the responsibilities and fees of the independent accountants, and other matters. The Trust also has a management liaison committee which meets quarterly with various management personnel of ^ IFG in order (a) to facilitate better understanding of management and operations of the Trust, and (b) to review legal and operational matters which have been assigned to the committee by the board of trustees, in furtherance of the board of trustees' overall duty of supervision. HOW SHARES CAN BE PURCHASED The shares of each Fund are sold on a continuous basis at the net asset value per share of the Fund next calculated after receipt of a purchase order in good form. The net asset value per share ^ of each Fund is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange, but may also be computed at other times. See "How Shares Are Valued." ^ IDI acts as the Trust's ^ distributor under a distribution agreement with the Trust under which it receives no compensation and bears all expenses, including the costs of printing and distribution of prospectuses incident to direct sales and distribution of Trust shares on a no-load basis. The Value Equity and Intermediate Bond Funds have adopted a Plan and Agreement of Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, which was implemented on November 1, 1997. The Plan was approved on May 16, 1997, at a meeting called for such purpose by a majority of the trustees of the Trust, including a majority of the trustees who neither are "interested persons" of the Trust nor have any financial interest in the operation of the Plan ("12b-1 trustees"). The Plan was approved by the shareholders of each of the Funds on October 28, 1997. The following disclosures relate only to the Value Equity and Intermediate Bond Funds and do not concern the Total Return Fund. The Plan provides that these Funds may make monthly payments to IDI of amounts computed at an annual rate no greater than 0.25% of each Fund's new sales of shares, exchanges into the Fund and reinvestments of dividends and capital gain distributions added after November 1, 1997 to permit it for expenses incurred by it in connection with the distribution of a Fund's shares to investors. Payment amounts by a Fund under the Plan, for any month, may only be made to compensate or pay expenditures incurred during the rolling 12-month period in which that month falls. For the fiscal year ended August 31, 1997, the Funds had made no payments to IFG (the predecesor of IDI as distributor of shares of the Funds) under the 12b-1 plan. As noted in the Prospectuses, one type of expenditure permitted by the Plan is the payment of compensation to securities companies, and other financial institutions and organizations, which may include IDI-affiliated companies, in order to obtain various distribution-related and/or administrative services for the Funds. Each Fund is authorized by the Plan to use its assets to finance the payments made to obtain those services. Payments will be made by IDI to broker-dealers who sell shares of a Fund and may be made to banks, savings and loan associations and other depository institutions. Although the Glass-Steagall Act limits the ability of certain banks to act as underwriters of mutual fund shares, the Funds do not believe that these limitations would affect the ability of such banks to enter into arrangements with IDI, but can give no assurance in this regard. However, to the extent it is determined otherwise in the future, arrangements with banks might have to be modified or terminated, and, in that case, the size of one or more of the Funds possibly could decrease to the extent that the banks would no longer invest customer assets in a particular Fund. Neither the Trust nor its investment adviser will give any preference to banks or other depository institutions which enter into such arrangements when selecting investments to be made by each Fund. The Plan was not implemented until November 1, 1997. Therefore, for the fiscal year ended August 31, 1997 no 12b-1 amounts were paid by the Value Equity Fund or Intermediate Government Bond Fund. The nature and scope of services which are provided by securities dealers and other organizations may vary by dealer but include, among other things, processing new stockholder account applications, preparing and transmitting to the Trust's Transfer Agent computer-processable tapes of each Fund's transactions by customers, serving as the primary source of information to customers in answering questions concerning each Fund, and assisting in other customer transactions with each Fund. The Plan provides that it shall continue in effect with respect to each Fund for so long as such continuance is approved at least annually by the vote of the board of trustees cast in person at a meeting called for the purpose of voting on such continuance. The Plan can also be terminated at any time with respect to any Fund, without penalty, if a majority of the 12b-1 trustees, or shareholders of such Fund, vote to terminate the Plan. The Trust may, in its absolute discretion, suspend, discontinue or limit the offering of its shares of any Fund at any time. In determining whether any such action should be taken, the board of trustees intends to consider all relevant factors including, without limitation, the size of a particular Fund, the investment climate for any particular Fund, general market conditions, and the volume of sales and redemptions of a Fund's shares. The Plan may continue in effect and payments may be made under the Plan following any such temporary suspension or limitation of the offering of a Fund's shares; however, neither Fund is contractually obligated to continue the Plan for any particular period of time. Suspension of the offering of a Fund's shares would not, of course, affect a shareholder's ability to redeem his shares. So long as the Plan is in effect, the selection and nomination of persons to serve as independent trustees of the Trust shall be committed to the independent trustees then in office at the time of such selection or nomination. The Plan may not be amended to increase materially the amount of any Fund's payments thereunder without approval of the shareholders of that Fund, and all material amendments to the Plan must be approved by the board of trustees, including a majority of the 12b-1 trustees. Under the agreement implementing the Plan, IDI or the Funds, the latter by vote of a majority of the 12b-1 trustees, or of the holders of a majority of a Fund's outstanding voting securities, may terminate such agreement as to that Fund without penalty upon 30 days' written notice to the other party. No further payments will be made by a Fund under the Plan in the event of its termination as to that Fund. To the extent that the Plan constitutes a plan of distribution adopted pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so as to authorize the use of each Fund's assets in the amounts and for the purposes set forth therein, notwithstanding the occurrence of an assignment, as defined by the 1940 Act, and rules thereunder. To the extent it constitutes an agreement pursuant to a plan, each Fund's obligation to make payments to IDI shall terminate automatically, in the event of such "assignment," in which case the Funds may continue to make payments pursuant to the Plan to IDI or another organization only upon the approval of new arrangements, which may or may not be with IDI, regarding the use of the amounts authorized to be paid by it under the Plan, by the trustees, including a majority of the 12b-1 trustees, by a vote cast in person at a meeting called for such purpose. Information regarding the services rendered under the Plan and the amounts paid therefor by the Funds are provided to, and reviewed by, the trustees on a quarterly basis. On an annual basis, the trustees consider the continued appropriateness of the Plan and the level of compensation provided therein. The only trustees or interested persons, as that term is defined in Section 2(a)(19) of the 1940 Act, of the Trust who have a direct or indirect financial interest in the operation of the Plan are the officers and trustees of the Trust listed herein under the section entitled "The Fund And Its Management--Officers and Trustees of the Trust" who are also officers either of IDI or companies affiliated with IDI. The benefits which the Trust believes will be reasonably likely to flow to it and its shareholders under the Plan include the following: (1) Enhanced marketing efforts, if successful, should result in an increase in net assets through the sale of additional shares and afford greater resources with which to pursue the investment objectives of the Funds; (2) The sale of additional shares reduces the likelihood that redemption of shares will require the liquidation of securities of the Funds in amounts and at times that are disadvantageous for investment purposes; (3) The positive effect which increased Fund assets will have on its revenues could allow IFG and its affiliated companies: (a) To have greater resources to make the financial commitments necessary to improve the quality and level of each Fund's shareholder services (in both systems and personnel), (b) To increase the number and type of mutual funds available to investors from IFG and its affiliated companies (and support them in their infancy), and thereby expand the investment choices available to all shareholders, and (c) To acquire and retain talented employees who desire to be associated with a growing organization; and (4) Increased Fund assets may result in reducing each investor's share of certain expenses through economies of scale (e.g. exceeding established breakpoints in the advisory fee schedule and allocating fixed expenses over a larger asset base), thereby partially offsetting the costs of the Plan. HOW SHARES ARE VALUED As described in the section of each Fund's Prospectus entitled "How Shares Can Be Purchased," the net asset value of shares of each Fund of the Trust is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange ^(generally 4:00 p.m., New York time) and applies to purchase and redemption orders received prior to that time. Net asset value per share is also computed on any other day on which there is a sufficient degree of trading in the securities held by a Fund that the current net asset value per share might be materially affected by changes in the value of the securities held, but only if on such day the Trust receives a request to purchase or redeem shares of that Fund. Net asset value per share is not calculated on days the New York Stock Exchange is closed, such as federal holidays including New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. ^ The net asset value per share of each Fund is calculated by dividing the value of all securities held by that Fund and its other assets (including dividends and interest accrued but not collected), less the Fund's liabilities (including accrued expenses), by the number of outstanding shares of that Fund. Securities traded on national securities exchanges, the NASDAQ National Market System, the NASDAQ Small Cap market and foreign markets are valued at their last sale prices on the exchanges or markets where such securities are primarily traded. Securities traded in the over-the-counter market for which last sale prices are not available, and listed securities for which no sales were reported on a particular date, are valued at their highest closing bid prices (or, for debt securities, yield equivalents thereof) obtained from one or more dealers making markets for such securities. If market quotations are not readily available, securities will be valued at their fair values as determined in good faith by the Trust's board of trustees or pursuant to procedures adopted by the board of trustees. The above procedures may include the use of valuations furnished by a pricing service which employs a matrix to determine valuations for normal institutional-size trading units of debt securities. Prior to utilizing a pricing service, the Trust's board of trustees reviews the methods used by such service to assure itself that securities will be valued at their fair values. The Trust's board of trustees also periodically monitors the methods used by such pricing services. Debt securities with remaining maturities of 60 days or less at the time of purchase are normally valued at amortized cost. The ^ value of securities held by ^ each Fund, and other assets used in computing net asset value, generally ^ is determined as of the time regular trading in such securities or assets is completed each day. Since regular trading in most foreign securities markets is completed simultaneously with, or prior to, the close of regular trading on the New York Stock Exchange, closing prices for foreign securities usually are available for purposes of computing the Funds' net asset value. However, in the event that the closing price of a foreign security is not available in time to calculate a Fund's net asset value on a particular day, the Trust's board of trustees has authorized the use of the market price for the security obtained from an approved pricing service at an established time during the day which may be prior to the close of regular trading in the security. The value of all assets and liabilities initially expressed in foreign currencies will be converted into U.S. dollars at the spot rate of such currencies against U.S. dollars provided by an approved pricing service. TRUST PERFORMANCE As discussed in the section of each Fund's Prospectus entitled "Performance Data," all of the Funds advertise their total return performance. In addition, the INVESCO Intermediate Government Bond Fund advertises its yield. ^ The average annual total return ^ as of August 31, 1997 for shares of each of the following Funds for the periods listed below were as follows: Life of Portfolio 1 Year 5 Years Portfolio - --------- ------ ------- --------- ^ INVESCO Intermediate Government Bond Fund ^ 6.64% 5.65% 7.54%(1) INVESCO Value Equity Fund 32.04% 17.60% 12.74%(1) INVESCO Total Return Fund ^ 27.01% 15.38% 13.68%(2) - ----------------- (1) 136 months (11.33 years) (2) 120 months (10.00 years) Average annual total return performance for each ^ Fund reflects the deduction of a proportional share of Trust expenses allocated to the Fund for the periods indicated. In each case, average annual total return was computed by finding the average annual compounded rates of return that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1 + T)exponent = ERV where: P = initial payment of $1000 T = average annual total return n = number of years ERV = ending redeemable value of initial payment The average annual total return performance figures shown above were determined by solving the above formula for "T" for each time period and Fund indicated. The yield of the INVESCO Intermediate Government Bond Fund for the 30 days ended August 31, ^ 1997, was ^4.86%. This yield was computed by dividing the net investment income per share earned during the period as calculated according to a prescribed formula by the net asset value per share on August 31, ^ 1997. In conjunction with performance reports, comparative data between a Fund's performance for a given period and other types of investment vehicles, including certificates of deposit, may be provided to prospective investors and shareholders. From time to time, evaluations of performance made by independent sources may also be used in advertisements, sales literature or shareholder reports, including reprints of, or selections from, editorials or articles about the Funds. Sources for Fund performance information and articles about the Funds include, but are not limited to, the following: American Association of Individual Investors' Journal Banxquote Barron's Business Week CDA Investment Technologies CNBC CNN Consumer Digest Financial Times Financial World Forbes Fortune Ibbotson Associates, Inc. Institutional Investor Investment Company Data, Inc. Investor's Business Daily Kiplinger's Personal Finance Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis Money Morningstar Mutual Fund Forecaster No-Load Analyst No-Load Fund X Personal Investor Smart Money The New York Times The No-Load Fund Investor U.S. News and World Report United Mutual Fund Selector USA Today Wall Street Journal Wiesenberger Investment Companies Services Working Woman Worth SERVICES PROVIDED BY THE TRUST Periodic Withdrawal Plan. As described in the section of each Fund's Prospectus entitled "Services Provided by the Trust," the Trust offers a Periodic Withdrawal Plan. All dividends and distributions on shares owned by shareholders participating in this Plan are reinvested in additional shares. Since withdrawal payments represent the proceeds from sales of shares, the amount of shareholders' investments in the Trust will be reduced to the extent that withdrawal payments exceed dividends and other distributions paid and reinvested. Any gain or loss on such redemptions must be reported for tax purposes. In each case, shares will be redeemed at the close of business on or about the 20th day of each month preceding payment and payments will be mailed within five business days thereafter. The Periodic Withdrawal Plan involves the use of principal and is not a guaranteed annuity. Payments under such a Plan do not represent income or a return on investment. ^ Participation in the Periodic Withdrawal Plan may be terminated at any time by sending a written request to ^ IFG. Upon termination, all future dividends and capital gain distributions will be reinvested in additional shares unless a shareholder requests otherwise. Exchange ^ Policy. As discussed in the section of each Fund's Prospectus entitled "Services Provided by the Trust," the Trust offers shareholders the ^ ability to exchange shares of any Fund of the Trust for shares of certain other mutual funds advised by ^ IFG. Exchange requests may be made either by telephone or by written request to ^ IFG using the telephone number or address on the cover of this Statement of Additional Information. Exchanges made by telephone must be in an amount of at least $250, if the exchange is being made into an existing account of one of the INVESCO funds. All exchanges that establish a new account must meet the fund's applicable initial minimum investment requirements. Written exchange requests into an existing account have no minimum requirements other than the fund's applicable minimum subsequent investment requirements. Any gain or loss realized on such an exchange is recognized for federal income tax purposes. This privilege is not an option or right to purchase securities, but is a revocable privilege permitted under the present policies of each of the funds and is not available in any state or other jurisdiction where the shares of the mutual fund into which transfer is to be made are not qualified for sale, or when the net asset value of the shares presented for exchange is less than the minimum dollar purchase required by the appropriate prospectus. TAX-DEFERRED RETIREMENT PLANS As described in the section of each Fund's Prospectus entitled "Services Provided by the Trust," shares of the Trust may be purchased as the investment medium for various tax-deferred retirement plans. Persons who request information regarding these plans from ^ IFG will be provided with prototype documents and other supporting information regarding the type of plan requested. Each of these plans involves a long-term commitment of assets and is subject to possible regulatory penalties for excess contributions, premature distributions or for insufficient distributions after age 70-1/2. The legal and tax implications may vary according to the circumstances of the individual investor. Therefore, the investor is urged to consult with an attorney or tax adviser prior to the establishment of such a plan. HOW TO REDEEM SHARES Normally, payments for shares redeemed will be mailed within seven (7) days following receipt of the required documents as described in the section of each Fund's Prospectus entitled "How ^ To Redeem Shares." The right of redemption may be suspended and payment postponed when: (a) the New York Stock Exchange is closed for other than customary weekends and holidays; (b) trading on that exchange is restricted; (c) an emergency exists as a result of which disposal by the Trust of securities owned by it is not reasonably practicable, or it is not reasonably practicable for the Trust fairly to determine the value of its net assets; or (d) the Securities and Exchange Commission ("SEC") by order so permits. It is possible that in the future conditions may exist which would, in the opinion of the Trust's investment adviser, make it undesirable for a Fund to pay for redeemed shares in cash. In such cases, the Trust's investment adviser may authorize payment to be made in portfolio securities or other property of the Fund. However, the Trust ^ is obligated ^ under the 1940 Act to redeem for cash all shares of a Fund presented for redemption by any one shareholder having a value up to $250,000 (or 1% of the applicable Fund's net assets if that is less) in any 90-day period. Securities delivered in payment of redemptions are selected entirely by the Trust's investment adviser based on what is in the best interests of the Trust and its shareholders, and are valued at the value assigned to them in computing the Fund's net asset value per share. Shareholders receiving such securities are likely to incur brokerage costs on their subsequent sales of the securities. DIVIDENDS, ^ OTHER DISTRIBUTIONS AND TAXES ^ Each Fund intends to continue to conduct its business and satisfy the applicable diversification of assets and source of income requirements to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended^ (the "Code"). Each Fund so qualified ^ for the ^ taxable year ended August 31, ^ 1997, and intends to continue to qualify during its current ^ taxable year. As a result, because each Fund intends to distribute all of its income and recognized gains, it is anticipated that the ^ Funds will pay no federal income or excise taxes and will be accorded conduit or ^"pass through^" treatment for federal income tax purposes. Dividends paid by the Funds from net investment income as well as distributions of net realized short^-term capital gains and net realized gains from certain foreign currency transactions are, for federal income tax purposes, taxable as ordinary income to shareholders. After the end of each calendar year, each Fund sends shareholders information regarding the amount and character of dividends paid in the year^. Distributions by the Funds of net capital ^ gain (the excess of net long-term capital gain over net short-term capital loss) are, for federal income tax purposes, taxable to the shareholder as long^-term capital gains regardless ^ how long a shareholder has held shares of ^ a Fund. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in August 1997, changed the taxation of long-term capital gains by applying different capital gains rates depending on the taxpayer's holding period and marginal rate of federal income tax. Long-term gains realized on the sale of securities held for more than one year but not for more than 18 months are taxable at a rate of 28%. This category of long-term gains is often referred to as "mid-term" gains but is technically termed "28% rate gains". Long-term gains realized on the sale of securities held for more than 18 months are taxable at a rate of 20%. The Tax Act, however, does not address the application of these rules to distributions of net capital gain (excess of long-term capital gain over short-term capital losses) by a regulated investment company, including whether such distributions may be treated by its shareholders in accordance with the Fund's holding period for the assets it sold that generated the gain. The application of the new capital gain rules must be determined by further legislation or future regulations that are not available as this Prospectus is being prepared. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax advisers as to the effect of the Tax Act on distributions by the Funds of net capital gain. All dividends and other distributions are regarded as taxable to the investor, regardless whether ^ such dividends and distributions are reinvested in additional shares of a Fund. The net asset value of Fund shares reflects accrued net investment income and undistributed realized capital and foreign currency gains; therefore, when a distribution is made, the net asset value is reduced by the amount of the distribution. If the net asset value of ^ Fund shares ^ were reduced below a ^ shareholder's cost as a result of a distribution, such distribution would be taxable to the shareholder although a portion would be, in effect, a return of invested capital. ^ However, the net asset value per share will be reduced by the amount of the distribution, which would reduce any gain ^ or increase any loss^ for tax purposes ^ on any subsequent redemption of shares by the shareholder. IFG^ may provide Fund shareholders with information concerning the average cost basis of their shares in order to help them prepare their tax returns. This information is intended as a convenience to shareholders^ and will not be reported to the Internal Revenue Service (the ^"IRS"). The IRS permits the use of several methods to determine the cost basis of mutual fund shares. The cost basis information provided by ^ IFG will be computed using the single^-category average cost method, although neither ^ IFG nor the ^ Fund recommends any particular method of determining cost basis. Other methods may result in different tax consequences. If a shareholder has reported gains or losses ^ with respect to shares of the Fund in past years, the shareholder must continue to use the cost basis method previously used^ unless the shareholder applies to the IRS for permission to change ^ the method. If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as a long-term, instead of short-term, capital loss to the extent of any capital gain distributions received on those shares. Each Fund will be subject to a ^ non-deductible 4% excise tax to the extent it fails to distribute by the end of any calendar year substantially all of ^ it ordinary income for that year and net capital ^ gains for the one-year period ending on October 31 of that year, plus certain other amounts. Dividends and interest received by each Fund may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield on its securities. Tax conventions between certain countries and the United States may reduce or eliminate these foreign taxes, however, and many foreign countries do not ^ imposes taxes on capital gains in respect of investments by foreign investors. ^ Foreign taxes withheld will be treated as an expense of the Fund. ^ Each Fund may invest in the stock of ^"passive foreign investment companies^" (PFICs). A PFIC is a foreign corporation (other than a controlled foreign corporation) that, in general, meets either of the following tests: (1) at least 75% of its gross income is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. Under certain circumstances, a Fund will be subject to federal income tax on a portion of any ^"excess distribution^" received on the stock of a PFIC or of any gain on disposition of the stock (collectively ^"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the ^ Fund's investment company taxable income and, accordingly, will not be taxable to ^ the Fund to the extent that income is distributed to its shareholders. Each Fund may elect to "mark-to-market" its stock in any PFIC. Marking-to-market, in this context, means including in ordinary income for each taxable year the excess, if any, of the fair market value of the PFIC stock over the Fund's adjusted tax basis therein as of the end of that year. Once the election has been made, a Fund also will be allowed to deduct from ordinary income the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the end of the year, but only to the extent of any net mark-to-market gains with respect to that PFIC stock included by the Fund for prior taxable years. The Fund's adjusted tax basis in each PFIC's stock with respect to which it makes this election will be adjusted to reflect the amounts of income included and deductions taken under the election. Gains or losses (1) from the disposition of foreign currencies, (2) from the disposition of debt securities denominated in foreign currency that are attributable to fluctuations in the value of the foreign currency between the date of acquisition of each security and the date of disposition, and (3) that are attributable to fluctuations in exchange rates that occur between the time ^ the Fund accrues interest, dividends or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects the receivables or pays the liabilities, generally will be treated as ordinary income or loss. These gains or losses may increase or decrease the amount of the ^ Fund's investment company taxable income to be distributed to its shareholders. Shareholders should consult their own tax advisers regarding specific questions as to federal, state and local taxes. Dividends and ^ other distributions generally will be subject to applicable state and local taxes. Qualification as a regulated investment company under the ^ Code for federal income tax purposes does not entail government supervision of management or investment policies. INVESTMENT PRACTICES Portfolio Turnover. There are no fixed limitations regarding portfolio turnover for any of the Trust's Funds. Brokerage costs to the Trust are commensurate with the rate of portfolio activity. Portfolio turnover rates for the fiscal years ended August 31, 1997, 1996 and 1995, were as follows: Fund 1997 1996 1995 - ---- ---- ---- ---- ^ INVESCO Intermediate Government Bond 37% 63% 92% INVESCO Value Equity 37% 27% 34% INVESCO Total Return 4% 10% 30% In computing the portfolio turnover rate, all investments with maturities or expiration dates at the time of acquisition of one year or less are excluded. Subject to this exclusion, the turnover rate is calculated by dividing (A) the lesser of purchases or sales of portfolio securities for the fiscal year by (B) the monthly average of the value of portfolio securities owned by the Fund during the fiscal year. Placement of Portfolio Brokerage. ^ IFG, as the Funds' investment adviser, and ICM, as sub-adviser of the Funds under the direct supervision of ^ IFG, place orders for the purchase and sale of securities with brokers and dealers based upon ^ IFG's or ICM's evaluation of the broker-dealers' financial responsibility subject to the broker-dealers' ability to effect transactions at the best available prices. ^ IFG or ICM evaluates the overall reasonableness of brokerage commissions paid by reviewing the quality of executions obtained on the Trust's portfolio transactions, viewed in terms of the size of transactions, prevailing market conditions in the security purchased or sold, and general economic and market conditions. In seeking to ensure that the commissions charged the Trust are consistent with prevailing and reasonable commissions, ^ IFG or ICM also endeavors to monitor brokerage industry practices with regard to the commissions charged by broker/dealers on transactions effected for other comparable institutional investors. While ^ IFG or ICM seeks reasonably competitive rates, the Trust does not necessarily pay the lowest commission or spread available. Consistent with the standard of seeking to obtain the best execution on portfolio transactions, ^ IFG or ICM may select brokers that provide research services to effect such transactions. Research services consist of statistical and analytical reports relating to issuers, industries, securities and economic factors and trends, which may be of assistance or value to Fund Management in making informed investment decisions. Research services prepared and furnished by brokers through which the Funds effect securities transactions may be used by ^ IFG or ICM in servicing all of their respective accounts and not all such services may be used by ^ IFG or ICM in connection with the Funds. In recognition of the value of the above-described brokerage and research services provided by certain brokers, ^ IFG or ICM, consistent with the standard of seeking to obtain the best execution on portfolio transactions, may place orders with such brokers for the execution of Trust transactions on which the commissions are in excess of those which other brokers might have charged for effecting the same transactions. Fund transactions may be effected through qualified ^ broker-dealers who recommend the Trust to their clients, or who act as agent in the purchase of the Trust's shares for their clients. When a number of brokers and dealers can provide comparable best price and execution on a particular transaction, the Trust's adviser or sub-adviser may consider the sale of Trust shares by a broker or dealer in selecting among qualified ^ broker-dealers. ^ Certain financial institutions (including brokers who may sell shares of the Funds, or affiliates of such brokers) are paid a fee (the ^"Services Fee") for recordkeeping, shareholder communications and other services provided by the brokers to investors purchasing shares of the Funds through no transaction fee programs ("NTF Programs") offered by the ^ financial institution or its affiliate broker (an "NTF Program Sponsor"). The Services Fee is based on the average daily value of the investments in each Fund made ^ in the name of such NTF Program Sponsor and held in omnibus accounts maintained on behalf of investors participating in the NTF Program. ^ With respect to certain NTF Programs, the trustees of the Trust have authorized ^ the Intermediate Government Bond and Value Equity Funds to apply dollars generated from the Trust's Plan and Agreement of Distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") to pay the entire Services Fee, subject to the maximum Rule 12b-1 fee permitted by the Plan. With respect to other NTF Programs, the Trust's trustees have authorized all Funds to pay transfer agency fees to ^ IFG based on the number of investors who have beneficial interests in ^ the NTF Program Sponsor's omnibus accounts in ^ the Funds. IFG, in turn, pays these transfer agency fees to the ^ NTF Program Sponsor as a sub- transfer agency or recordkeeping fee in payment of all or a portion of the ^ Services Fee. In the event that the sub-transfer agency or recordkeeping fee is insufficient to pay all of the Services Fee with respect to these NTF Programs, the trustees of the Trust have ^ authorized the Trust to apply dollars generated from the Plan to pay the remainder of the Services Fee, subject to the maximum Rule 12b-1 fee permitted by the Plan. IDI itself pays the portion of each Fund's Services Fee, if any, that exceeds the sum of the sub- transfer agency or recordkeeping fee and Rule 12b-1 fee. The Trust's trustees have further authorized IFG to place a portion of each Fund's brokerage transactions with certain ^ NTF Program Sponsors or their affiliated brokers, if IFG reasonably believes that, in effecting the Fund's transactions in portfolio securities, the broker is able to provide the best execution of orders at the most favorable prices. A portion of the commissions earned by such a broker from executing portfolio transactions on behalf of ^ the Funds may be credited by the ^ NTF Program Sponsor against its Services Fee. Such credit shall be applied first against any sub- transfer agency or recordkeeping fee payable with respect to ^ the Funds, and second against any Rule 12b-1 fees used to pay a portion of the Services Fee, on a basis which has resulted from negotiations between ^ IFG or IDI and the NTF Program Sponsor. Thus, the Funds pay sub-transfer agency or recordkeeping fees to the ^ NTF Program Sponsor in payment of the ^ Services Fee only to the extent that such fees are not offset by ^ a Fund's credits. In the event that the transfer agency fee paid by ^ the Funds to ^ IFG with respect to investors who have beneficial interests in a particular ^ NTF Program Sponsor's omnibus accounts in ^ a Fund exceeds the ^ Services Fee applicable to ^ the Fund, after application of credits, IFG may carry forward the excess ^ and apply it to future ^ Services Fees payable to that ^ NTF Program Sponsor with respect to ^ a Fund. The amount of excess transfer agency fees carried forward will be reviewed for possible adjustment by ^ IFG prior to each fiscal year-end of the ^ Funds. The Trust's board of trustees has also authorized the Intermediate Government Bond and Value Equity Funds to pay to IDI the full Rule 12b-1 fees contemplated by the Plan to compensate IDI for expenses incurred by IDI in engaging in the activities and providing the services on behalf of the Funds contemplated by the Plan, subject to the maximum Rule 12b-1 fee permitted by the Plan, notwithstanding that credits have been applied to reduce the portion of the 12b-1 fee that would have been used to compensate IDI for payments to such NTF Program Sponsor absent such credits. The aggregate dollar amount of brokerage commissions paid by the Intermediate Government Bond, Value Equity and Total Return Funds for the fiscal years ended August 31, 1997 ^ were ^ $0, ^ $470,619 and 484,776, respectively. For the fiscal year ended August 31, ^ 1997 brokers providing research services received ^ $0 in commissions on portfolio transactions effected for each Fund. Neither the Trust, ^ IFG, nor ICM paid any compensation to brokers for the sale of shares of the Trust during the fiscal year ended August 31, ^ 1997. At August 31, ^ 1997, the Funds held securities of their regular brokers or dealers, or their parents, as follows: Value of Securities at Fund Broker or Dealer August 31, ^ 1997 - ---- ---------------- ----------------- INVESCO Value Equity ^ Salomon Inc. $2,455,000 ^ Fund INVESCO Intermediate State Street Bank ^ 1,724,000 Government Bond Fund & ^ Trust INVESCO Total Return State Street Bank ^ 76,624,000 ^ Fund & Trust ^ Bankamerica Corp. 4,018,000 Neither IFG nor ICM receive any brokerage commissions on portfolio transactions effected on behalf of the Trust, and there is no affiliation between ^ IFG, ICM, or any person affiliated with ^ IFG, ICM, or the Trust and any broker or dealer that executes transactions for the Trust. ADDITIONAL INFORMATION Shares of Beneficial Interest. As a Massachusetts Business Trust, the Trust has an unlimited number of authorized shares of beneficial interest. The board of trustees has the authority to designate additional series of beneficial shares for any new fund of the Trust without seeking the approval of shareholders and may classify and reclassify any unissued shares. Shares of each series represent the interests of the shareholders of such series in a particular portfolio of investments of the Trust. Each series of the Trust's shares is preferred over all other series in respect of the assets specifically allocated to that series, and all income, earnings, profits and proceeds from such assets, subject only to the rights of creditors, are allocated to shares of that series. The assets of each series are segregated on the books of account and are charged with the liabilities of that series and with a share of the Trust's general liabilities. The board of trustees determines those assets and liabilities deemed to be general assets or liabilities of the Trust, and these items are allocated among series in proportion to the relative net assets of each series. In the unlikely event that a liability allocable to one series exceeds the assets belonging to the series, all or a portion of such liability may have to be borne by the holders of shares of the Trust's other series. All shares, regardless of series, have equal voting rights. Voting with respect to certain matters, such as ratification of independent accountants or election of trustees, will be by all series of the Trust. When not all series are affected by a matter to be voted upon, such as approval of an investment advisory contract or changes in a Fund's investment policies, only shareholders of the series affected by the matter may be entitled to vote. Trust shares have noncumulative voting rights, which means that the holders of a majority of the shares voting for the election of trustees can elect 100% of the trustees if they choose to do so. In such event, the holders of the remaining shares voting for the election of trustees will not be able to elect any person or persons to the board of trustees. After they have been elected by shareholders, the trustees will continue to serve until their successors are elected and have qualified or they are removed from office, in either case by a shareholder vote, or until death, resignation, or retirement. Trustees may appoint their own successors, provided that always at least a majority of the trustees have been elected by the Trust's shareholders. As a Massachusetts Business Trust, it is the intention of the Trust not to hold annual meetings of shareholders. The trustees will call annual or special meetings of shareholders for action by shareholder vote as may be required by the 1940 Act or the Trust's Declaration of Trust, or at their discretion. Principal Shareholders. As of ^ October 1, 1997, the following entities held more than 5% of the Trust's and each Fund's outstanding equity securities. Name and Address Percent of Beneficial Owner Number of Shares of Class - ------------------- ---------------- -------- INVESCO Value Equity Fund Charles Schwab & Co. Inc. 883,034.0180 7.035 Special Custody Acct. for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 INVESCO Trust Co. Trustee ^ 778,782.2710 6.204 HNTB Corporation Retirement & Savings Plan c/o Joan Watanabie 1201 Walnut, Suite 700 Kansas City, MO 64106 ^ INVESCO Intermediate Government Bond Fund ^ INVESCO Trust Co. Trustee 647,864.6020 18.131 ^ Arch Mineral Corporation ^ Employee Thrift Plan 01/4/93 City Place One, Suite 300 St. Louis, MO 63141 Charles Schwab & Co. Inc. ^ 566,714.0400 15.860 Special Custody Acct. for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 Northern Trust Co. Trustee 476,618.2680 13.339 Ericsson Cap & Savings Plan Attn: Myra Baldwin-Larkins 801 S. Canal, Flr. C-35 Chicago, IL 60607 Donaldson Lufkin & Jenrette 240,690.7000 6.736 Securities Corp. Mutual Funds, 5th Flr. P.O. Box 2052 Jersey City, NJ 07303 INVESCO Total Return ^ Fund Charles Schwab & Co. Inc. ^ 11,746,116.5820 17.430 Special Custody Acct. for the Exclusive Benefit of Customers Attn: Mutual Funds 101 Montgomery St. San Francisco, CA 94104 ^ Connecticut General Life Ins. ^ 9,368,961.0740 13.903 c/o Liz Pezda M-110 P.O. Box 2975 Hartford, CT 06104 Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, has been selected as the independent accountants of the Trust. The independent accountants are responsible for auditing the financial statements of the Trust. Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, has been designated as the custodian of the cash and investment securities of the Trust. The bank is responsible for, among other things, receipt and delivery of the Funds' investment securities in accordance with procedures and conditions specified in the custody agreement. Under its contract with the Trust, the custodian is authorized to establish separate accounts in foreign ^ countries and to cause foreign securities owned by the Trust to be held outside the United States in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and securities depositories. Transfer Agent. ^ IFG, 7800 E. Union Avenue, Denver, Colorado 80237, acts as registrar, dividend disbursing agent, and transfer agent for the Trust pursuant to the Transfer Agency Agreement described in "The Trust and Its Management." Such services include the issuance, cancellation and transfer of shares of the Trust, and the maintenance of records regarding the ownership of such shares. Reports to Shareholders. The Trust's fiscal year ends on August 31. The Trust distributes reports at least semiannually to its shareholders. Financial statements regarding the Trust, audited by the independent accountants, are sent to shareholders annually. Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is legal counsel for the Trust. The firm of Moye, Giles, O'Keefe, Vermeire & Gorrell, Denver, Colorado, acts as special counsel to the Trust. Financial Statements. The Trust's audited financial statements and the notes thereto for the year ended August 31, ^ 1997, and the report of Price Waterhouse LLP with respect to such financial statements are incorporated herein by reference from the Trust's Annual Report to Shareholders for the fiscal year ended August 31, ^ 1997. Prospectuses. The Trust will furnish, without charge, a copy of the Prospectus for any Fund upon request. Such requests should be made to the Trust at the mailing address or telephone number set forth on the first page of this Statement of Additional Information. Registration Statement. This Statement of Additional Information and the Prospectuses do not contain all of the information set forth in the Registration Statement the Trust has filed with the SEC. The complete Registration Statement may be obtained from the SEC upon payment of the fee prescribed by the rules and regulations of the SEC. Declaration of Trust Provisions. The Declaration of Trust establishing the Trust dated July 9, 1987, a copy of which, together with all amendments thereto (the "Declaration"), is on file in the office of the Secretary of the Commonwealth of Massachusetts, provides that the name of the Trust refers to the Trustees under the Declaration collectively as Trustees, but not as individuals or personally; and no Trustee, shareholder, officer, employee or agent of the Trust shall be held to any personal liability; nor shall resort be had to their private property for the satisfaction of any obligation or claim of the Trust, but the "Trust Property" only shall be liable. APPENDIX A Bond Ratings. Description of ^ Moody's and S&P's four highest bond rating categories: Moody's ^ Corporate Bond Ratings: Aaa - Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long term risk appear somewhat larger than in Aaa securities. A - Bonds which are rated A possess many favorable investment attributes, and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa - Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. ^ S&P's Corporate Bond Ratings: AAA - This is the highest rating assigned by Standard & Poor's to a debt obligation and indicates an extremely strong capacity to pay principal and interest. AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay principal and interest is very strong, and in the majority of instances they differ from AAA issues only in small degree. A - Bonds rated A have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB - Bonds rated BBB are regarded as having an adequate capability to pay principal and interest. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this category than for bonds in higher rated categories. APPENDIX B DESCRIPTION OF FUTURES ^, OPTIONS AND FORWARD CONTRACTS Options on Securities An option on a security provides the purchaser, or "holder," with the right, but not the obligation, to purchase, in the case of a "call" option, or sell, in the case of a "put" option, the security or securities underlying the option, for a fixed exercise price up to a stated expiration date. The holder pays a non^- refundable purchase price for the option, known as the "premium." The maximum amount of risk the purchaser of the option assumes is equal to the premium plus related transaction costs, although the entire amount may be lost. The risk of the seller, or "writer," however, is potentially unlimited, unless the option is "covered," which is generally accomplished through the writer's ownership of the underlying security, in the case of a call option, or the writer's segregation of an amount of cash or securities equal to the exercise price, in the case of a put option. If the writer's obligation is not so covered, it is subject to the risk of the full change in value of the underlying security from the time the option is written until exercise. Upon exercise of the option, the holder is required to pay the purchase price of the underlying security, in the case of a call option, or to deliver the security in return for the purchase price, in the case of a put option. Conversely, the writer is required to deliver the security, in the case of a call option, or to purchase the security, in the case of a put option. Options on securities which have been purchased or written may be closed out prior to exercise or expiration by entering into an offsetting transaction on the exchange on which the initial position was established, subject to the availability of a liquid secondary market. Options on securities are traded on national securities exchanges, such as the Chicago Board of Options Exchange and the New York Stock Exchange, which are regulated by the Securities and Exchange Commission. The Options Clearing Corporation guarantees the performance of each party to an exchange^-traded option, by in effect taking the opposite side of each such option. A holder or writer may engage in transactions in exchange^-traded options on securities and options on indices of securities only through a registered broker/dealer which is a member of the exchange on which the option is traded. An option position in an exchange^-traded option may be closed out only on an exchange which provides a secondary market for an option of the same series. Although the ^ Fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option at any particular time. In such event it might not be possible to effect closing transactions in a particular option with the result that ^ the Fund would have to exercise the option in order to realize any profit. This would result in ^ the Fund's incurring brokerage commissions upon the disposition of underlying securities acquired through the exercise of a call option or upon the purchase of underlying securities upon the exercise of a put option. If ^ the Fund as covered call option ^ writer is unable to effect a closing purchase transaction in a secondary market, ^ unless the Fund is required to deliver the securities pursuant to the assignment of an exercise notice, it will not be able to sell the underlying security until the option expires. Reasons for the potential absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or particular class or series of options) in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on that exchange which had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at a particular time, render certain of the facilities of any of the clearing corporations inadequate and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers' orders. However, the Options Clearing Corporation, based on forecasts provided by the U.S. exchanges, believes that its facilities are adequate to handle the volume of reasonably anticipated options transactions, and such exchanges have advised such clearing corporation that they believe their facilities will also be adequate to handle reasonably anticipated volume. In addition, options on securities may be traded over^-the^- counter through financial institutions dealing in such options as well as the underlying instruments. OTC options are purchased from or sold (written) to dealers or financial institutions which have entered into direct agreements with ^ a Fund. With OTC options, such variables as expiration date, exercise price and premium will be agreed upon between ^ a Fund and the transacting dealer, without the intermediation of a third party such as the OCC. If the transacting dealer fails to make or take delivery of the securities underlying an option it has written, in accordance with the terms of that option as written, ^ the Fund would lose the premium paid for the option as well as any anticipated benefit of the transaction. ^ A Fund will engage in OTC option transactions only with primary U.S. Government securities dealers recognized by the Federal Reserve Bank of New York. ^ Futures Contracts A Futures Contract is a bilateral agreement providing for the purchase and sale of a specified type and amount of a financial instrument or foreign currency, or for the making and acceptance of a cash settlement, at a stated time in the future, for a fixed price. By its terms, a Futures Contract provides for a specified settlement date on which, in the case of the majority of interest rate and foreign currency futures contracts, the fixed income securities or currency underlying the contract are delivered by the seller and paid for by the purchaser, or on which, in the case of stock index futures contracts and certain interest rate and foreign currency futures contracts, the difference between the price at which the contract was entered into and the contract's closing value is settled between the purchaser and seller in cash. Futures Contracts differ from options in that they are bilateral agreements, with both the purchaser and the seller equally obligated to complete the transaction. In addition, Futures Contracts call for settlement only on the expiration date, and cannot be "exercised" at any other time during their term. The purchase or sale of a Futures Contract also differs from the purchase or sale of a security or the purchase of an option in that no purchase price is paid or received. Instead, an amount of cash or cash equivalent, which varies but may be as low as 5% or less of the value of the contract, must be deposited with the broker as "initial margin." Subsequent payments to and from the broker, referred to as "variation margin," are made on a daily basis as the value of the index or instrument underlying the Futures Contract fluctuates, making positions in the Futures Contract more or less valuable, a process known as "marking to the market." A Futures Contract may be purchased or sold only on an exchange, known as a "contract market," designated by the Commodity Futures Trading Commission for the trading of such contract, and only through a registered futures commission merchant which is a member of such contract market. A commission must be paid on each completed purchase and sale transaction. The contract market clearing house guarantees the performance of each party to a Futures Contract, by in effect taking the opposite side of such Contract. At any time prior to the expiration of a Futures Contract, a trader may elect to close out its position by taking an opposite position on the contract market on which the position was entered into, subject to the availability of a secondary market, which will operate to terminate the initial position. At that time, a final determination of variation margin is made and any loss experienced by the trader is required to be paid to the contract market clearing house while any profit due to the trader must be delivered to it. Interest rate futures contracts currently are traded on a variety of fixed income securities, including long^-term U.S. Treasury Bonds, Treasury Notes, Government National Mortgage Association modified pass^-through mortgage^-backed securities, U.S. Treasury Bills, bank certificates of deposit and commercial paper. In addition, interest rate futures contracts include contracts on indices of municipal securities. Foreign currency futures contracts currently are traded on the British pound, Canadian dollar, Japanese yen, Swiss franc, German mark and on Eurodollar deposits. Options on ^ Futures Contracts An Option on a Futures Contract provides the holder with the right to enter into a "long" position in the underlying Futures Contract, in the case of a call option, or a "short" position in the underlying Futures Contract, in the case of a put option, at a fixed exercise price to a stated expiration date. Upon exercise of the option by the holder, the contract market clearing house establishes a corresponding short position for the writer of the option, in the case of a call option, or a corresponding long position, in the case of a put option. In the event that an option is exercised, the parties will be subject to all the risks associated with the trading of Futures Contracts, such as payment of variation margin deposits. In addition, the writer of an Option on a Futures Contract, unlike the holder, is subject to initial and variation margin requirements on the option position. A position in an Option on a Futures Contract may be terminated by the purchaser or seller prior to expiration by effecting a closing purchase or sale transaction, subject to the availability of a liquid secondary market, which is the purchase or sale of an option of the same series (i.e., the same exercise price and expiration date) as the option previously purchased or sold. The difference between the premiums paid and received represents the trader's profit or loss on the transaction. An option, whether based on a Futures Contract, a stock index or a security, becomes worthless to the holder when it expires. Upon exercise of an option, the exchange or contract market clearing house assigns exercise notices on a random basis to those of its members which have written options of the same series and with the same expiration date. A brokerage firm receiving such notices then assigns them on a random basis to those of its customers which have written options of the same series and expiration date. A writer therefore has no control over whether an option will be exercised against it, nor over the time of such exercise. PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements: Page in Prospectus ---------- (1) Financial statements and schedules included in Prospectuses (Part A): Financial Highlights for the ^ four 8 years ended August 31, ^ 1997, the 35 eight-month period ended August 31, 61 1993, and each of the six years in the period ended December 31, 1992, for ^ the INVESCO Value Equity ^. Intermediate Government Bond ^ and Total Return Funds. Page in Statement of Addi- tional In- formation ---------- (2) The following audited financial statements of the INVESCO Value Equity Fund, the INVESCO Intermediate Government Bond Fund and the INVESCO Total Return Fund and the notes thereto for the fiscal year ended August 31, ^ 1997, and the report of Price Waterhouse LLP with respect to such financial statements, are incorporated in the Statement of Additional Information by reference from the Company's Annual Report to Shareholders for the fiscal year ended August 31, ^ 1997: Statement of Investment Securities as of August 31, ^ 1997; Statement of Assets and Liabilities as of August 31, ^ 1997; Statement of Operations for the year ended August 31, ^ 1997; Statement of Changes in Net Assets for the two years ended August 31, ^ 1997; Financial Highlights for the ^ four years ended August 31, ^ 1997, the eight-month fiscal period ended August 31, 1993, and the ^ year ended December 31, 1992. (3) Financial statements and schedules included in Part C: None: Schedules have been omitted as all information has been presented in the financial statements. (b) Exhibits: (1) (a) Declaration of Trust (amended) as of December 31, ^ 1990.(1) (b) Amendment to Declaration of Trust effective July 1, ^ 1993.(4) (2) Bylaws, as amended as of January 22, ^ 1992.(3) (3) Not applicable. (4) Not applicable. (5) (a) Investment Advisory Agreement between Registrant and ^ INVESCO Funds Group, ^ Inc. dated as of February 28, 1997. ^(b) Sub-Advisory Agreement between ^ INVESCO Funds Group, ^ Inc. and INVESCO Capital Management, Inc., dated as of ^ February 28, 1997. (6) (a) General Distribution Agreement between Registrant and INVESCO Funds Group, Inc., dated as of ^ February 28, 1997. (b) General Distribution Agreement between Registrant and INVESCO Distributors, Inc. dated September 30, 1997. (7) Defined Benefit Deferred Compensation Plan for Non-Interested Directors and ^ Trustees. (8) Custody Agreement between INVESCO Value Trust and State Street Bank and Trust ^ Company.(6) (a) Amendment to this Custodian Contract dated October 25, ^ 1995.(6) (b) Data Access Service Addendum dated May 19, 1997. (9) (a) Transfer Agency Agreement between Registrant and INVESCO Funds Group, Inc. dated as of February 28, 1997. ^ (b) Administrative Services Agreement between Registrant and ^ INVESCO Funds Group, Inc. dated ^ February 28 1997. (c) The Financial Funds Shareholder Application for Purchase of Mutual ^ Funds.(2) (10) Opinion and consent of counsel as to the legality of the securities being registered, indicating whether they will, when sold, be legally issued, fully paid and non-assessable ^ to be filed in Post-Effective Amendment in December 1997. (11) Consent of Independent Accountants. (12) Not applicable. (13) Not applicable. (14) Copies of model plans used in the establishment of retirement plans as follows: Non-standardized Profit Sharing Plan; Non-standardized Money Purchase Pension Plan; Standardized Profit Sharing Plan Adoption Agreement; Standardized Money Purchase Pension Plan; Non-standardized 401(k) Plan Adoption Agreement; Standardized 401(k) Paired Profit Sharing Plan; Standardized Simplified Profit Sharing Plan; Standardized Simplified Money Purchase Plan; Defined Contribution Master Plan & Trust Agreement; and Financial 403(b) Retirement Plan.(5) (15) ^ Plan and Agreement of Distribution adopted pursuant to 12b-1 under the Investment Company Act of 1940 dated October 28, 1997. (16) Schedule for computation of performance data.(1) (17) (a) Financial Data Schedule for the period ended August 31, ^ 1997 for INVESCO Value Equity Fund. (b) Financial Data Schedule for the period ended August 31, ^ 1997 for INVESCO Intermediate Government Bond Fund. (c) Financial Data Schedule for the period ended August 31, ^ 1997 for INVESCO Total Return Fund. (18) Not Applicable. (1)Previously filed with Post-Effective Amendment No. 11 to this Registration Statement on April 27, 1988 and incorporated by reference herein. (2)Previously filed with Post-Effective Amendment No. ^ 13 to this Registration Statement on ^ September 20, 1991 and incorporated by reference herein. (3)Previously^ filed with Post-Effective Amendment No. ^ 15 to this Registration Statement on ^ February 25, 1993 and incorporated by reference herein. ^ (4)Previously filed with Post-Effective Amendment No. 17 to this Registration Statement on October 29, 1993 and incorporated by reference herein. ^ (5)Previously filed with Post-Effective Amendment No. 18 to this Registration Statement on October 18, 1994 and incorporated by reference herein. ^ (6)Previously filed on EDGAR with Post-Effective Amendment No. 19 to this Registration Statement on December 15, 1995 and incorporated by reference herein. Item 25. Persons Controlled by or Under Common Control with Registrant No person is presently controlled by or under common control with Registrant. Item 26. Number of Holders of Securities Number of Record Holders as of Title of Class ^ September 30, ^ 1997 -------------- ---------------------- Beneficial Interest INVESCO Value Equity Fund ^ 10,554 INVESCO Intermediate Government Bond Fund ^ 1,774 INVESCO Total Return Fund ^ 17,576 Item 27. Indemnification Indemnification provisions for officers and directors of Registrant are set forth in Article Seven of the Bylaws and Article V of the Articles of Restatement of the Declaration of Trust, and are hereby incorporated by reference. See Item 24(b)(1) and (2) above. Under these Articles, officers and trustees will be indemnified to the fullest extent permitted by law, subject only to such limitations as may be required by the Investment Company Act of 1940, as amended, and the rules thereunder. Under the Investment Company Act of 1940, the trustees and officers of the Trust cannot be protected against liability to the Trust or its shareholders to which they would be subject because of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties of their office. The Trust also maintains liability insurance policies covering its trustees and officers. Item 28. Business and Other Connections of Investment Adviser See "The Trust and Its Management" in the Prospectuses and Statement of Additional Information for information regarding the business of the investment adviser and sub-adviser. For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and directors of INVESCO Funds Group, Inc., and INVESCO Capital Management, Inc., reference is made to the Schedule Ds to the Form ADVs filed under the Investment Advisers Act of 1940 by these companies, which schedules are herein incorporated by reference. Item 29. Principal Underwriters (a) INVESCO Capital Appreciation Funds, Inc. INVESCO Diversified Funds, Inc. ^ INVESCO Emerging Opportunity Funds, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO Strategic Portfolios, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Variable Investment Funds, Inc. (b) Positions and Positions and Name and Principal Offices with Offices with Business Address Underwriter Registrant - ------------------ ------------- ------------- ^ William J. Galvin, Jr. Senior Vice Assistant 7800 E. Union Avenue President Secretary Denver, CO 80237 ^ Ronald L. Grooms Senior Vice Treasurer, 7800 E. Union Avenue President & Chief Fin'l Denver, CO 80237 Treasurer Officer, and Chief Acctg. Off. Dan J. Hesser Chairman of President, 7800 E. Union Avenue the Board, CEO & Dir. Denver, CO 80237 President , Chief Executive Officer, & Director Gregory E. Hyde Vice President 7800 E. Union Avenue Denver, CO 80237 Charles P. Mayer Director ^ 7800 E. Union Avenue Denver, CO 80237 Glen A. Payne Senior Vice Secretary 7800 E. Union Avenue President, ^ Denver, CO 80237 Secretary & ^ General Counsel ^ Judy P. Wiese Vice President Asst. Treas. ^ 7800 E. Union Avenue Denver, CO 80237 (c) Not applicable. Item 30. Location of Accounts and Records Dan J. Hesser 7800 E. Union Avenue Denver, CO 80237 Item 31. Management Services Not applicable. Item 32. Undertakings (a) The Registrant hereby undertakes that the board of trustees will call such meetings of shareholders of all the Funds, for action by shareholder vote, including acting on the question of removal of a trustee or trustees, as may be requested in writing by the holders of at least 10% of the outstanding shares of a Fund or as may be required by applicable law or the Trust's Declaration of Trust, and to assist in communicating with other shareholders as required by Section 16(c) of the Investment Company Act of 1940. (b) The Registrant shall furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the registrant certifies that it ^ has duly caused this post-effective amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, County of Denver, and State of Colorado, on the ^30th day of ^ October, 1997. Attest: INVESCO Value Trust /s/ Glen A. Payne /s/ Dan J. Hesser - ------------------------------------ ------------------------------------ Glen A. Payne, Secretary Dan J. Hesser, President Pursuant to the requirements of the Securities Act of 1933, this post-effective amendment to Registrant's Registration Statement has been signed by the following persons in the capacities indicated on this ^30th day of ^ October, 1997. /s/ Dan J. Hesser /s/ Lawrence H. Budner - ------------------------------------ ------------------------------------ Dan J. Hesser, President & Lawrence H. Budner, Trustee Trustee (Chief Executive Officer) /s/ Ronald L. Grooms /s/ Daniel D. Chabris - ------------------------------------ ------------------------------------ Ronald L. Grooms, Treasurer Daniel D. Chabris, Trustee (Chief Financial and Accounting Officer) /s/ Victor L. Andrews /s/ Fred A. Deering - ------------------------------------ ------------------------------------ Victor L. Andrews, ^ Trustee Fred A. Deering, ^ Trustee /s/ Bob R. Baker /s/ ^ Larry Soll - ------------------------------------ ------------------------------------ Bob R. Baker, ^ Trustee Larry Soll, Trustee /s/ Hubert L. Harris, Jr. /s/ Kenneth T. King^ - ------------------------------------ ------------------------------------ Hubert L. Harris, Jr., ^ Trustee Kenneth T. King, ^ Trustee /s/ Charles W. Brady /s/ John W. McIntyre - ------------------------------------ ------------------------------------ Charles W. Brady, ^ Trustee John W. McIntyre, ^ Trustee /s/ Wendy L. Gramm - ------------------------------------ Wendy L. Gramm, Trustee By* By* /s/ Glen A. Payne --------------------------------- ------------------------------ Edward F. O'Keefe Glen A. Payne Attorney in Fact Attorney in Fact * Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne, and each of them, to execute this post-effective amendment to the Registration Statement of the Registrant on behalf of the above-named directors and officers of the Registrant have been filed with the Securities and Exchange Commission on April 12, 1990, May 12, 1990, May 27, 1992, October 18, 1994 ^, December 14, 1995 and December 24, 1996. Exhibit Index Page in Exhibit Number Registration Statement - -------------- ---------------------- ^ 5(a) 139 ^ 5(b) 146 ^ 6(a) 153 6(b) 162 7 171 8(b) 177 9(a) 191 9(b) 205 11 209 15 210 17(a) 215 17(b) 216 17(c) 217 EX99.POA SOLL 218 EX99.POA GRAMM ^ 219 EX-99.5AINVADVAG 2 INVESTMENT ADVISORY AGREEMENT THIS AGREEMENT is made this 28th day of February, 1997, in Atlanta, Georgia, by and between INVESCO FUNDS GROUP, INC. ("INVESCO"), a Delaware corporation, and INVESCO Value Trust, an unincorporated business trust under the laws of the Commonwealth of Massachusetts (the "Trust"). WITNESSETH: WHEREAS, the Trust is an unincorporated business trust under the laws of the Commonwealth of Massachusetts; and WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as a diversified, open-end management investment company and has one class of shares (the "Shares"), which is divided into two or more series, each representing an interest in a separate portfolio of investments (such series initially being the INVESCO Value Equity Fund, INVESCO Total Return Fund, and INVESCO Intermediate Government Bond Fund (collectively, the "Funds")); and WHEREAS, the Trust desires that INVESCO manage its investment operations and INVESCO desires to manage said operations; NOW, THEREFORE, in consideration of these premises and of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows: 1. Investment Management Services. INVESCO hereby agrees to manage the investment operations of the Funds in the Trust, subject to the supervision of the Trust's trustees (the "Trustees"). Unless performance of these services is the subject of a separate Administrative Service Agreement between the Trust and INVESCO or an affiliate thereof, INVESCO agrees to perform, or arrange for the performance of, the following specific services for the Trust and each Fund: (a) to manage the investment and reinvestment of all the assets, now or hereafter acquired, by the Trust and by each Fund of the Trust; (b) to maintain a continuous investment program for the Trust and each Fund of the Trust, consistent with (i) the Fund's and Trust's investment policies as set forth in the Trust's Declaration of Trust, By-laws, Registration Statement, as from time to time amended, under the Investment Company Act of 1940, as amended (the "1940 Act"), and in any prospectus and/or statement of additional information of the Trust or of any Series of the Trust, as from time to time amended and in use under the Securities Act of 1933, as amended, and (ii) the Trust's status as a regulated investment company under the Internal Revenue Code of 1986, as amended; (c) to determine what securities are to be purchased or sold for the Trust and for each Fund, unless otherwise directed by the Trustees of the Trust, and to execute transactions accordingly; (d) to provide to the Trust and to each Fund the benefit of all of the investment analyses and research, the reviews of current economic conditions and trends, and the consideration of long-range investment policy now or hereafter generally available to investment advisory customers of INVESCO; (e) to determine what portion of each of the Trust's Funds should be invested in common stocks, preferred stocks, Government obligations, commercial paper, certificates of deposit, bankers' acceptances, variable amount notes, corporate debt obligations, and any other authorized securities; (f) to make recommendations as to the manner in which voting rights, rights to consent to Trust action and any other rights pertaining to each Fund's portfolio securities shall be exercised; and (g) to calculate the net asset value of each of the Funds of the Trust, as applicable, as required by the 1940 Act, subject to such procedures as may be established from time to time by the Trust's Trustees, based upon the information provided to INVESCO or by the custodian, co-custodian or sub-custodian of the Trust's assets (the "Custodian") or such other source as designated by the Trustees from time to time. With respect to execution of transactions for the Trust and for each Fund, INVESCO shall place, or arrange for the placement of, all orders for the purchase or sale of portfolio securities with brokers or dealers selected by INVESCO. In connection with the selection of such brokers or dealers and the placing of such orders, INVESCO is directed at all times to obtain for the Trust and for each Fund the most favorable execution and price; after fulfilling this primary requirement of obtaining the most favorable execution and price, INVESCO is hereby expressly authorized to consider as secondary factor in selecting brokers or dealers with which such orders may be placed whether such firms furnish statistical, research and other information or services to INVESCO. Receipt by INVESCO of any such statistical or other information and services should not be deemed to give rise to any requirement for adjustment of the advisory fee payable pursuant to paragraph 3 hereof. INVESCO may follow a policy of considering sales of shares of the Funds of the Trust as a factor in the selection of broker/dealers to execute portfolio transactions, subject to the requirements of best execution discussed above. INVESCO shall for all purposes herein provided be deemed to be an independent contractor. 2. Allocation of Costs and Expenses. INVESCO shall reimburse the Trust monthly for any salaries paid by the Trust to officers, Trustees and full-time employees of the Trust who also are officers, general partners or employees of INVESCO or its affiliates. Unless such services are the subject of a separate Administrative Service Agreement between the Trust and INVESCO or an affiliate thereof, at the Trust's request, INVESCO will furnish to the Trust, at the expense of INVESCO, such competent executive, statistical, administrative, internal accounting and clerical services as may be required in the judgment of the Trustees of the Trust. These services will include, among other things, the maintenance (but not preparation) of the Trust's and Fund's, as applicable, accounts and records, and the preparation (apart from legal and accounting costs) of all requisite corporate documents such as tax returns and reports to the Securities and Exchange Commission and Trust shareholders. INVESCO also will furnish, at INVESCO's expense, such office space, equipment and facilities as may be reasonably requested by the Trust from time to time. Except to the extent expressly assumed by INVESCO herein and except to the extent required by law to be paid by INVESCO, the Trust shall pay all cost and expenses in connection with its operations and organization. Without limiting the generality of the foregoing, such costs and expenses payable by the Trust include the following: (a) all brokers' commissions, issue and transfer taxes, and other costs chargeable to the Trust or any Fund in connection with securities transactions to which the Trust or any Fund is a party or in connection with securities owned by the Trust or any Fund; (b) the fees, charges and expenses of any independent public accountants, custodian, depository, dividend disbursing agent, dividend reinvestment agent, transfer agent, registrar, independent pricing services and legal counsel for the Trust or for any Fund; (c) the interest on indebtedness, if any, incurred by the Trust or any Fund; (d) the taxes, including franchise, income, issue, transfer, business license, and other corporate fees payable by the Trust or any Fund to federal, state, county, city, or other governmental agents; (e) the fees and expenses involved in maintaining the registration and qualification of the Trust and its shares under laws administered by the Securities and Exchange Commission or under other applicable regulatory requirements, including the preparation and printing of prospectuses and statements of additional information; (f) the compensation and expenses of its Trustees; (g) the costs of printing and distributing reports, notices of shareholders' meetings, proxy statements, dividend notices, prospectuses, statements of additional information and other communications to the Trust's shareholders, as well as all expenses of shareholders' meetings and Trustees' meetings; (h) all costs, fees or other expenses arising in connection with the organization and filing of the Trust's Declaration of Trust, including its initial registration and qualification under the 1940 Act and under the Securities Act of 1933, as amended, the initial determination of its tax status and any rulings obtained for this purpose, the initial registration and qualification of its securities under the laws of any state and the approval of the Trust's operations by any other federal or state authority; (i) the expenses of repurchasing and redeeming shares of the Trust; (j) insurance premiums; (k) the costs of designing, printing, and issuing certificates representing shares of beneficial interest of the Trust; (l) extraordinary expenses, including fees and disbursements of counsel, in connection with litigation by or against the Trust or any Fund; (m) premiums for the fidelity bond maintained by the Trust pursuant to Section 17(g) of the 1940 Act and rules promulgated thereunder; and (n) association and institute dues. 3. Compensation of INVESCO. For the services to be rendered and the charges and expenses to be assumed by INVESCO hereunder, the Trust shall pay to INVESCO an advisory fee which will be computed on a daily basis and paid as of the last day of each month, using for each daily calculation the most recently determined net asset value of each Fund of the Trust, as determined by valuations made in accordance with the Trust's procedures for calculating each Fund's net asset value. On an annual basis, the advisory fee applicable to each of the Funds shall be as follows: (a) INVESCO Value Equity Fund: 0.75% of the average net asset value of net assets up to $500 million; 0.65% of the average net asset value for net assets in excess of $500 million but not more than $1 billion; and 0.50% of the average net asset value for net assets in excess of $1 billion; (b) INVESCO Total Return Fund: 0.75% of the average net asset value of net assets up to $500 million; 0.65% of the average net asset value for net assets in excess of $500 million but not more than $1 billion; and 0.50% of the average net asset value for net assets in excess of $1 billion; and (c) INVESCO Intermediate Government Bond Fund: 0.60% of the average net asset value of net assets up to $500 million; 0.50% of the average net asset value of net assets in excess of $500 million but not more than $1 billion; and 0.40% of the average net asset value of net assets in excess of $1 billion. However, no such fee shall be paid to INVESCO with respect to any assets of the Trust or of any Fund which may be invested in any other investment company for which INVESCO serves as investment adviser. The fee provided for hereunder shall be prorated in any month in which this Agreement is not in effect for the entire month. If, in any given year, the sum of the Fund's expenses exceeds the most restrictive state imposed annual expense limitation, INVESCO will be required to reimburse such Fund for such excess expenses promptly. Interest, taxes and extraordinary items such as litigation costs are not deemed expenses for purposes of this paragraph and shall be borne by the Trust or particular Fund in any event. Expenditures, including costs incurred in connection with the purchase or sale of portfolio securities, which are capitalized in accordance with generally accepted accounting principles applicable to investment companies, are accounted for as capital items and shall not be deemed to be expenses for purposes of this paragraph. 4. Avoidance of Inconsistent Positions and Compliance with Laws. In connection with purchase or sales of securities for the investment portfolio of the Trust or of any of the Funds, neither INVESCO nor its officers or employees will act as a principal or agent for any party other than the Trust or applicable Fund or receive any commissions. INVESCO will comply with all applicable laws in acting hereunder including, without limitation, the 1940 Act; the Investment Advisers Act of 1940, as amended; and all rules and regulations duly promulgated under the foregoing. 5. Duration and Termination. This Agreement shall become effective as of the date it is approved by a majority of the outstanding voting securities of each applicable Fund of the Trust, and unless sooner terminated as hereinafter provided, shall remain in force for an initial term ending two years from the date of execution, and from year to year thereafter, but only as long as such continuance is specifically approved at least annually (i) by a vote of a majority of the outstanding voting securities of each applicable Fund of the Trust or by the Trustees of the Trust, and (ii) by a majority of the Trustees of the Trust who are not interested persons of INVESCO or the Trust by votes cast in person at a meeting called for the purpose of voting on such approval. This Agreement may, on 60 days' prior written notice, be terminated without the payment of any penalty, by the Trustees of the Trust, or by the vote of a majority of the outstanding voting securities of the Trust or of the applicable Fund, as the case may be, or by INVESCO. This Agreement shall immediately terminate in the event of its assignment, unless an order is issued by the Securities and Exchange Commission conditionally or unconditionally exempting such assignment from the provisions of Section 15(a) of the 1940 Act, in which event this Agreement shall remain in full force and effect subject to the terms and provisions of said order. In interpreting the provisions of this paragraph 5, the definitions contained in Section 2(a) of the 1940 Act and the applicable rules under the 1940 Act (particularly the definitions of "interested person," "assignment" and "vote of a majority of the outstanding voting securities") shall be applied. INVESCO agrees to furnish to the Trustees of the Trust such information on an annual basis as may reasonably be necessary to evaluate the terms of this Agreement. Termination of this Agreement shall not affect the right of INVESCO to receive payments on any unpaid balance of the compensation described in paragraph 3 earned prior to such termination. 6. Non-Exclusive Services. INVESCO shall, during the term of this Agreement, be entitled to render investment advisory services to others, including, without limitation, other investment companies with similar objectives to those of the Trust or any Fund of the Trust. INVESCO may, when it deems such to be advisable, aggregate orders for its other customers together with any securities of the same type to be sold or purchased for the Trust or any Fund in order to obtain best execution and lower brokerage commissions. In such event, INVESCO shall allocate the shares so purchased or sold, as well as the expenses incurred in the transaction, in the manner it considers to be most equitable and consistent with its fiduciary obligation to the Trust, any applicable Fund and INVESCO's other customers. 7. Liability. INVESCO shall have no liability to the Trust or any Fund or to the Trust's shareholders or creditors, for any error of judgment, mistake of law, or for any loss arising out of any investment, nor for any other act or omission, in the performance of its obligations to the Trust or any applicable Funds not involving willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties hereunder. 8. Miscellaneous Provisions. Notice. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notice. Amendments Hereof. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Trust and INVESCO, and no material amendment of this Agreement shall be effective unless approved by the vote of a majority of the outstanding voting securities of any Fund as to which such amendment is applicable; provided, however, that this paragraph shall not prevent any immaterial amendment(s) to this Agreement, which amendment(s) may be made without shareholder approval, if such amendment(s) are made with the approval of (1) the Trustees and (2) a majority of the Trustees of the Trust who are not interested persons of INVESCO or the Trust. Severability. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held illegal or made invalid by a court decision, statute, rule or otherwise, such illegality or invalidity shall not affect the validity or enforceability of the remainder of this Agreement. Headings. The headings in this Agreement are inserted for convenience and identification only and are in no way intended to describe, interpret, define or limit the size, extent or intent of this Agreement or any provision hereof. Application of Colorado Law. This Agreement and the application and interpretation hereof shall be governed exclusively by the laws of the State of Colorado. 9. Trustee and Shareholder Liability. INVESCO EXPRESSLY AGREES THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, OR IN LAW, THAT IT WILL LOOK SOLELY TO THE ASSETS OF THE TRUST FOR ANY OBLIGATIONS OF THE TRUST HEREUNDER AND NOTHING HEREIN SHALL BE CONSTRUED TO CREATE ANY PERSONAL LIABILITY OF ANY TRUSTEE OR ANY SHAREHOLDER OF THE TRUST. INVESCO EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER, OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE DECLARATION) ONLY SHALL BE LIABLE. IN WITNESS WHEREOF, INVESCO and the Trust each has caused this Agreement to be duly executed on its behalf by an officer thereunto duly authorized, the day and year first above written. INVESCO FUNDS GROUP, INC. By: /s/ Ronald L. Grooms --------------------- Senior Vice President ATTEST: /s/ Glen A. Payne - ------------------ Secretary INVESCO VALUE TRUST By: /s/ Dan J. Hesser --------------------- President ATTEST: /s/ Glen A. Payne - ----------------- Secretary EX-99.5BSUBADVAG 3 SUB-ADVISORY AGREEMENT AGREEMENT made this 28th day of February, 1997, by and between INVESCO Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO CAPITAL MANAGEMENT, INC. ("ICM"), a Delaware corporation. WITNESSETH: WHEREAS, INVESCO VALUE TRUST (the "Trust") is engaged in business as a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (hereinafter referred to as the "Investment Company Act") and has one class of shares (the "Shares"), which is divided into two or more series (the "Series"), each representing an interest in a separate portfolio of investments (the "Funds"); and WHEREAS, the Shares of the Trust have, in fact, been divided into separate Series, three such Series being the INVESCO Value Equity Fund (the "Equity Fund"), the INVESCO Intermediate Government Bond Fund (the "Bond Fund"), and the INVESCO Total Return Fund (the "Return Fund"), all such Series having separate portfolios of investments; and WHEREAS, INVESCO and ICM are engaged principally in rendering investment advisory services and are registered as investment advisers under the Investment Advisers Act of 1940; and WHEREAS, INVESCO has entered into an Investment Advisory Agreement with the Trust (the "INVESCO Investment Advisory Agreement"), pursuant to which INVESCO is required to provide investment advisory services to the Trust and the Funds of the Trust; and WHEREAS, ICM is willing to provide investment advisory services to the Adviser in connection with the Trust's operations on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, INVESCO and ICM hereby agree as follows: ARTICLE I DUTIES OF ICM INVESCO hereby employs ICM to act as investment adviser to the Adviser and to furnish, or arrange for affiliates of ICM to furnish, the investment advisory services described below, subject to the broad supervision of INVESCO and the Trust, for the period and on the terms and conditions set forth in this Agreement. ICM hereby accepts such employment and agrees during such period, at its own expense, to render, or arrange for the rendering of, such services and to assume the obligations herein set forth for the compensation provided for herein. ICM and its affiliates shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust or any Fund in any way or otherwise be deemed an agent of the Trust or any Fund of the Trust. ICM hereby agrees to manage the investment operations of the Equity Fund, Bond Fund, and Return Fund, subject to the supervision of the Trust's trustees (the "Trustees") and INVESCO. Specifically, ICM agrees to perform the following services for the Trust, INVESCO, and the Equity Fund, Bond Fund, and Return Fund: (a) to manage the investment and reinvestment of all assets, now or hereafter acquired, by the Equity Fund, Bond Fund, and Return Fund; (b) to maintain a continuous investment program for the Equity Fund, Bond Fund, and Return Fund, consistent with (i) the three Funds' and Trust's investment policies as set forth in the Trust's Declaration of Trust, Bylaws, Registration Statement, as from time to time amended, under the Investment Company Act of 1940, as amended (the "1940 Act"), and in any prospectus and/or statement of additional information of the Trust or of the three Funds, as from time to time amended and in use under the Securities Act of 1933, as amended, and (ii) the Trust's status as a regulated investment company under the Internal Revenue Code of 1986, as amended; (c) to determine what securities are to be purchased or sold for the Equity Fund, Bond Fund, and Return Fund, unless otherwise directed by the Trustees of the Trust or INVESCO, and to execute transactions accordingly; (d) to provide to the Trust and the Equity Fund, Bond Fund, and Return Fund the benefit of all of the investment analysis and research, the reviews of current economic conditions and trends, and the consideration of long-range investment policy now or hereafter generally available to investment advisory customers of ICM; (e) to determine what portion of the Equity Fund, Bond Fund, and Return Fund should be invested in the common stocks, preferred stocks, Government obligations, commercial paper, certificates of deposit, bankers' acceptances, variable amount notes, corporate debt obligations, and any other authorized securities; and (f) to make recommendations as to the manner in which voting rights, rights to consent to Trust and/or Equity Fund, Bond Fund, and Return Fund action and any other rights pertaining to the three Funds' portfolio securities shall be exercised. With respect to execution of transactions for the Trust and for the Equity Fund, Bond Fund, and Return Fund, ICM shall place orders for the purchase or sale of portfolio securities with brokers or dealers selected by ICM. In connection with the selection of such brokers or dealers and the placing of such orders, ICM is directed at all times to obtain for the three Funds, the most favorable execution and price; after fulfilling this primary requirement of obtaining the most favorable execution and price, ICM is hereby expressly authorized to consider as a secondary factor in selecting brokers or dealers with which such orders may be placed whether such firms furnish statistical, research and other information or services to ICM. Receipt by ICM of any such statistical or other information and services should not be deemed to give rise to any requirement for abatement of the advisory fee payable pursuant to paragraph 3 hereof. ICM may follow a policy of considering sales of shares of the Trust as a factor in the selection of broker-dealers to execute portfolio transactions, subject to the requirements of best execution discussed above. ARTICLE II ALLOCATION OF CHARGES AND EXPENSES ICM assumes and shall pay for maintaining the staff and personnel necessary to perform its obligations under this Agreement, and shall also, at its own expense, provide the office space, equipment and facilities necessary to perform its obligations under this Agreement. Except to the extent expressly assumed by ICM herein and except to the extent required by law to be paid by ICM, INVESCO and/or the Trust shall pay all costs and expenses in connection with its respective operations. Without limiting the generality of the foregoing, such costs and expenses payable by INVESCO or the Trust, as applicable, include the following: (a) all brokers' commissions, issue and transfer taxes, and other costs chargeable to the Trust or any Fund in connection with securities transactions to which INVESCO, the Trust or any Fund is a party or in connection with securities owned by INVESCO, the Trust or any Fund; (b) the fees, charges and expenses of any independent public accountants, custodian, depository, dividend disbursing agent, dividend reinvestment agent, transfer agent, registrar, independent pricing services, and legal counsel for INVESCO, the Trust or for any Fund; (c) the interest on indebtedness, if any, incurred by INVESCO, the Trust or any Fund; (d) the taxes, including franchise, income, issue, transfer, business license, and other corporate fees payable by INVESCO, the Trust or any Fund to federal, state, county, city, or other governmental agents; (e) the fees and expenses involved in maintaining the registration and qualification of the Trust and of its shares under laws administered by the Securities and Exchange Commission or under other applicable regulatory requirements, including the preparation and printing of prospectuses and statements of additional information; (f) the compensation and expenses of the Trustees of the Trust; (g) the costs of printing and distributing reports, notices of shareholders' meetings, proxy statements, dividend notices, prospectuses, statements of additional information and other communications to the Trust's shareholders, as well as all expenses of shareholders' meetings and Trustees' meetings; (h) all costs, fees or other expenses arising in connection with the organization and filing of the Trust's Declaration of Trust, including its initial registration and qualification under the 1940 Act and under the Securities Act of 1933, as amended, the initial determination of its tax status and any rulings obtained for this purpose, the initial registration and qualification of its securities under the laws of any state and the approval of the Trust's operations by any other federal or state authority; (i) the expenses of repurchasing and redeeming shares of the Trust; (j) insurance premiums; (k) the costs of designing, printing, and issuing certificates representing shares of beneficial interests of the Trust; (l) extraordinary expenses, including fees and disbursements of counsel, in connection with litigation by or against INVESCO, the Trust or any Fund; (m) premiums for the fidelity bond maintained by the Trust pursuant to Section 17(g) of the 1940 Act and rules promulgated thereunder; and (n) association and institute dues. ARTICLE III COMPENSATION OF ICM For the services rendered, the facilities furnished and expenses assumed by ICM, INVESCO shall pay to ICM an annual fee, computed on a daily basis and paid on a monthly basis, using for each daily calculation the most recently determined net asset value of the Equity Fund, Bond Fund, and Return Fund, as determined by valuation made in accordance with the three Funds' procedures for calculating their net asset value as described in the Prospectus and/or Statement of Additional Information. On an annual basis, the advisory fee to ICM shall be as follows: 0.20% of the Equity Fund's and Return Fund's, and 0.16% of the Bond Fund's, average net asset value up to $500 million; 0.17% of the Equity Fund's and Return Fund's, and 0.13% of the Bond Fund's, average net asset value in excess of $500 million but not more than $1 billion; and 0.13% of the Equity Fund's and Return Fund's, and 0.11% of the Bond Fund's, average net asset value in excess of $1 billion. During any period when the determination of a Fund's net asset value is suspended by the Trustees of the Trust, the net asset value of a share of that Fund as of the last business day prior to such suspension shall, for the purpose of this Article III, be deemed to be the net asset value at the close of each succeeding business day until it is again determined. ARTICLE IV LIMITATION OF LIABILITY OF ICM ICM shall not be liable for any error of judgment, mistake of law or for any loss arising out of any investment or for any act or omission in the performance of sub-advisory services rendered with respect to the Trust or, in particular, the Equity Fund, Bond Fund, and Return Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties hereunder. As used in this Article IV, ICM shall include any affiliates of ICM performing services contemplated hereby and directors, officers, partners and employees of ICM and such affiliates. ARTICLE V ACTIVITIES OF ICM The services of ICM to the Trust are not to be deemed to be exclusive, ICM and any person controlled by or under common control with ICM (for purposes of this Article V referred to as "affiliates") being free to render services to others. It is understood that trustees, officers, employees and shareholders of the Trust are or may become interested in ICM and its affiliates, as directors, officers, employees and shareholders or otherwise and that directors, officers, partners, employees and shareholders of ICM and its affiliates are or may become interested in the Trust as trustees, officers and employees, and that ICM, INVESCO, and the trustees, officers, employees and shareholders of INVESCO and its affiliates may become interested in the Trust as a shareholder or otherwise. ARTICLE VI AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH THE LAWS In connection with purchases or sales of securities for the investment portfolio of the Trust or of the Equity Fund, Bond Fund, and Return Fund, neither ICM nor any of its directors, officers, partners or employees will act as a principal or agent for any party other than the Trust or the three Funds, as applicable, or receive any commissions. ICM will comply with all applicable laws in acting hereunder including, without limitation, the 1940 Act; the Investment Advisers Act of 1940, as amended; and all rules and regulations duly promulgated under the foregoing. ARTICLE VII DURATION AND TERMINATION OF THIS AGREEMENT This Agreement shall become effective as of the date it is approved by a majority of the outstanding voting securities of the Equity Fund, Bond Fund, and Return Fund, and shall remain in force for an initial term of two years from the date of execution, and from year to year thereafter, but only so long as such continuance is specifically approved at least annually by (i) the trustees of the Trust, or by the vote of a majority of the outstanding voting securities of the Equity Fund, Bond Fund, and Return Fund, and (ii) a majority of those trustees who are not parties to this Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval. This Agreement may be terminated at any time, without the payment of any penalty, by INVESCO, the Trustees of the Trust or by vote of the majority of the outstanding voting securities of the Equity Fund, Bond Fund, and Return Fund, or by ICM, on sixty days' written notice to the applicable party(ies). This Agreement shall automatically terminate in the event of its assignment or in the event of the termination of the INVESCO Investment Advisory Agreement. ARTICLE VIII AMENDMENTS OF THIS AGREEMENT No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by ICM and INVESCO, and no material amendment of this Agreement shall be effective until approved by the vote of a majority of the outstanding voting securities of any Fund as to which such amendment is applicable; provided, however, that this paragraph shall not prevent any immaterial amendment(s) to this Agreement, which amendment(s) are made with the approval of (1) the Trustees and (2) a majority of the Trustees of the Trust who are not interested persons of INVESCO, ICM or the Trust. ARTICLE IX DEFINITIONS OF CERTAIN TERMS The terms "vote of a majority of the outstanding voting securities," "assignments," "affiliated person" and "interested person," when used in this Agreement, shall have the respective meanings specified in the Investment Company Act and the Rules and Regulations thereunder, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under said Act. ARTICLE X GOVERNING LAW This Agreement shall be construed in accordance with the laws of the State of Colorado and the applicable provisions of the Investment Company Act. To the extent that the applicable laws of the State of Colorado, or any of the provisions herein, conflict with the applicable provisions of the Investment Company Act, the latter shall control. ARTICLE XI PERSONAL LIABILITY ICM EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER, OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE DECLARATION) ONLY SHALL BE LIABLE. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. INVESCO FUNDS GROUP, INC. By: /s/ Dan J. Hesser ---------------------------- President ATTEST: /s/ Glen A. Payne - ----------------- Secretary INVESCO CAPITAL MANAGEMENT, INC. By: /s/ Frank M. Bishop ---------------------------- President ATTEST: /s/ Glen A. Payne - ----------------- Secretary EX-99.6ADISTAG 4 DISTRIBUTION AGREEMENT THIS AGREEMENT is made this 28th day of February, 1997 between INVESCO VALUE TRUST, a Massachusetts business trust (the "Fund"), and INVESCO FUNDS GROUP, INC., a Delaware corporation (the "Underwriter"). W I T N E S S E T H: WHEREAS, the Fund is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as a diversified, open-end management investment company and currently has one class of shares (the "Shares") which is divided into three series, and which may be divided into additional series (the "Series"), each representing a beneficial interest in a separate portfolio of investments, and it is in the interest of the Fund to offer the Shares for sale continuously; and WHEREAS, the Underwriter is engaged in the business of selling shares of investment companies either directly to investors or through other securities dealers; and WHEREAS, the Fund and the Underwriter wish to enter into an agreement with each other with respect to the continuous offering of the Shares of each Series in order to promote growth of the Fund and facilitate the distribution of the Shares; NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows: 1. The Fund hereby appoints the Underwriter its agent for the distribution of Shares of each Series in jurisdictions wherein such Shares legally may be offered for sale; provided, however, that the Fund in its absolute discretion may (a) issue or sell Shares of each Series directly to purchasers, or (b) issue or sell Shares of a particular Series to the shareholders of any other Series or to the shareholders of any other investment company, for which the Underwriter or any affiliate thereof shall act as exclusive distributor, who wish to exchange all or a portion of their investment in Shares of such Series or in shares of such other investment company for the Shares of a particular Series. Notwithstanding any other provision hereof, the Fund may terminate, suspend or withdraw the offering of Shares whenever, in its sole discretion, it deems such action to be desirable. The Fund reserves the right to reject any subscription in whole or in part for any reason. 2. The Underwriter hereby agrees to serve as agent for the distribution of the Shares and agrees that it will use its best efforts with reasonable promptness to sell such part of the authorized Shares remaining unissued as from time to time shall be effectively registered under the Securities Act of 1933, as amended (the "1933 Act"), at such prices and on such terms as hereinafter set forth, all subject to applicable federal and state securities laws and regulations. Nothing herein shall be construed to prohibit the Underwriter from engaging in other related or unrelated businesses. 3. In addition to serving as the Fund's agent in the distribution of the Shares, the Underwriter shall also provide to the holders of the Shares certain maintenance, support or similar services ("Shareholder Services"). Such services shall include, without limitation, answering routine shareholder inquiries regarding the Fund, assisting shareholders in considering whether to change dividend options and helping to effectuate such changes, arranging for bank wires, and providing such other services as the Fund may reasonably request from time to time. It is expressly understood that the Underwriter or the Fund may enter into one or more agreements with third parties pursuant to which such third parties may provide the Shareholder Services provided for in this paragraph. Nothing herein shall be construed to impose upon the Underwriter any duty or expense in connection with the services of any registrar, transfer agent or custodian appointed by the Fund, the computation of the asset value or offering price of Shares, the preparation and distribution of notices of meetings, proxy soliciting material, annual and periodic reports, dividends and dividend notices, or any other responsibility of the Fund. 4. Except as otherwise specifically provided for in this Agreement, the Underwriter shall sell the Shares directly to purchasers, or through qualified broker-dealers or others, in such manner, not inconsistent with the provisions hereof and the then effective Registration Statement of the Fund under the 1933 Act (the "Registration Statement") and related Prospectus (the "Prospectus") and Statement of Additional Information ("SAI") of the Fund as the Underwriter may determine from time to time; provided that no broker-dealer or other person shall be appointed or authorized to act as agent of the Fund without the prior consent of the directors (the "Directors") of the Fund. The Underwriter will require each broker-dealer to conform to the provisions hereof and of the Registration Statement (and related Prospectus and SAI) at the time in effect under the 1933 Act with respect to the public offering price of the Shares of any Series. The Fund will have no obligation to pay any commissions or other remuneration to such broker-dealers. 5. The Shares of each Series offered for sale or sold by the Underwriter shall be offered or sold at the net asset value per share determined in accordance with the then current Prospectus and/or SAI relating to the sale of the Shares of the appropriate Series except as departure from such prices shall be permitted by the then current Prospectus and/or SAI of the Fund, in accordance with applicable rules and regulations of the Securities and Exchange Commission. The price the Fund shall receive for the Shares of each Series purchased from the Fund shall be the net asset value per share of such Share, determined in accordance with the Prospectus and/or SAI applicable to the sale of the Shares of such Series. 6. Except as may be otherwise agreed to by the Fund, the Underwriter shall be responsible for issuing and delivering such confirmations of sales made by it pursuant to this Agreement as may be required; provided, however, that the Underwriter or the Fund may utilize the services of other persons or entities believed by it to be competent to perform such functions. Shares shall be registered on the transfer books of the Fund in such names and denominations as the Underwriter may specify. 7. The Fund will execute any and all documents and furnish any and all information which may be reasonably necessary in connection with the qualification of the Shares for sale (including the qualification of the Fund as a broker-dealer where necessary or advisable) in such states as the Underwriter may reasonably request (it being understood that the Fund shall not be required without its consent to comply with any requirement which in the opinion of the Directors of the Fund is unduly burdensome). The Underwriter, at its own expense, will effect all qualifications of itself as broker or dealer, or otherwise, under all applicable state or Federal laws required in order that the Shares may be sold in such states or jurisdictions as the Fund may reasonably request. 8. The Fund shall prepare and furnish to the Underwriter from time to time the most recent form of the Prospectus and/or SAI of the Fund and/or of each Series of the Fund. The Fund authorizes the Underwriter to use the Prospectus and/or SAI, in the forms furnished to the Underwriter from time to time, in connection with the sale of the Shares of the Fund and/or of each Series of the Fund. The Fund will furnish to the Underwriter from time to time such information with respect to the Fund, each Series, and the Shares as the Underwriter may reasonably request for use in connection with the sale of the Shares. The Underwriter agrees that it will not use or distribute or authorize the use, distribution or dissemination by broker-dealers or others in connection with the sale of the Shares any statements, other than those contained in a current Prospectus and/or SAI of the Fund or applicable Series, except such supplemental literature or advertising as shall be lawful under Federal and state securities laws and regulations, and that it will promptly furnish the Fund with copies of all such material. 9. The Underwriter will not make, or authorize any broker-dealers or others to make any short sales of the Shares of the Fund or otherwise make any sales of the Shares unless such sales are made in accordance with a then current Prospectus and/or SAI relating to the sale of the applicable Shares. 10. The Underwriter, as agent of and for the account of the Fund, may cause the redemption or repurchase of the Shares at such prices and upon such terms and conditions as shall be specified in a then current Prospectus and/or SAI. In selling, redeeming or repurchasing the Shares for the account of the Fund, the Underwriter will in all respects conform to the requirements of all state and federal laws and the Rules of Fair Practice of the National Association of Securities Dealers, Inc., relating to such sale, redemption or repurchase, as the case may be. The Underwriter will observe and be bound by all the provisions of the Articles of Incorporation or Bylaws of the Fund and of any provisions in the Registration Statement, Prospectus and SAI, as such may be amended or supplemented from time to time, notice of which shall have been given to the Underwriter, which at the time in any way require, limit, restrict or prohibit or otherwise regulate any action on the part of the Underwriter. 11. (a) The Fund shall indemnify, defend and hold harmless the Underwriter, its officers and directors and any person who controls the Underwriter within the meaning of the 1933 Act, from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any attorney fees incurred in connection therewith) which the Underwriter, its officers and directors or any such controlling person, may incur under the federal securities laws, the common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in the Registration Statement or any related Prospectus and/or SAI or arising out of or based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Notwithstanding the foregoing, this indemnity agreement, to the extent that it might require indemnity of the Underwriter or any person who is an officer, director or controlling person of the Underwriter, shall not inure to the benefit of the Underwriter or officer, director or controlling person thereof unless a court of competent jurisdiction shall determine, or it shall have been determined by controlling precedent, that such result would not be against public policy as expressed in the federal securities laws and in no event shall anything contained herein be so construed as to protect the Underwriter against any liability to the Fund, the Directors or the Fund's shareholders to which the Underwriter would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. This indemnity agreement is expressly conditioned upon the Fund's being notified of any action brought against the Underwriter, its officers or directors or any such controlling person, which notification shall be given by letter or by telegram addressed to the Fund at its principal address in Denver, Colorado and sent to the Fund by the person against whom such action is brought within ten (10) days after the summons or other first legal process shall have been served upon the Underwriter, its officers or directors or any such controlling person. The failure to notify the Fund of any such action shall not relieve the Fund from any liability which it may have to the person against whom such action is brought by reason of any such alleged untrue statement or omission otherwise than on account of the indemnity agreement contained in this paragraph. The Fund shall be entitled to assume the defense of any suit brought to enforce such claim, demand, or liability, but in such case the defense shall be conducted by counsel chosen by the Fund and approved by the Underwriter, which approval shall not be unreasonably withheld. If the Fund elects to assume the defense of any such suit and retain counsel approved by the Underwriter, the defendant or defendants in such suit shall bear the fees and expenses of an additional counsel obtained by any of them. Should the Fund elect not to assume the defense of any such suit, or should the Underwriter not approve of counsel chosen by the Fund, the Fund will reimburse the Underwriter, its officers and directors or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by the Underwriter or them. In addition, the Underwriter shall have the right to employ counsel to represent it, its officers and directors and any such controlling person who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriter against the Fund hereunder if in the reasonable judgment of the Underwriter it is advisable for the Underwriter, its officers and directors or such controlling person to be represented by separate counsel, in which event the reasonable fees and expenses of such separate counsel shall be borne by the Fund. This indemnity agreement and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect and shall survive the delivery of any of the Shares as provided in this Agreement. This indemnity agreement shall inure exclusively to the benefit of the Underwriter and its successors, the Underwriter's officers and directors and their respective estates and any such controlling person and their successors and estates. The Fund shall promptly notify the Underwriter of the commencement of any litigation or proceeding against it in connection with the issue and sale of the Shares. (b) The Underwriter agrees to indemnify, defend and hold harmless the Fund, its Directors and any person who controls the Fund within the meaning of the 1933 Act, from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any attorney fees incurred in connection therewith) which the Fund, its Directors or any such controlling person may incur under the Federal securities laws, the common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its Directors or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any alleged untrue statement of a material fact contained in information furnished in writing by the Underwriter to the Fund specifically for use in the Registration Statement or any related Prospectus and/or SAI or shall arise out of or be based upon any alleged omission to state a material fact in connection with such information required to be stated in the Registration Statement or the related Prospectus and/or SAI or necessary to make such information not misleading and (b) any alleged act or omission on the Underwriter's part as the Fund's agent that has not been expressly authorized by the Fund in writing. Notwithstanding the foregoing, this indemnity agreement, to the extent that it might require indemnity of the Fund or any Director or controlling person of the Fund, shall not inure to the benefit of the Fund or Director or controlling person thereof unless a court of competent jurisdiction shall determine, or it shall have been determined by controlling precedent, that such result would not be against public policy as expressed in the federal securities laws and in no event shall anything contained herein be so construed as to protect any Director of the Fund against any liability to the Fund or the Fund's shareholders to which the Director would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence or reckless disregard of the duties involved in the conduct of his office. This indemnity agreement is expressly conditioned upon the Underwriter's being notified of any action brought against the Fund, its Directors or any such controlling person, which notification shall be given by letter or telegram addressed to the Underwriter at its principal office in Denver, Colorado, and sent to the Underwriter by the person against whom such action is brought, within ten (10) days after the summons or other first legal process shall have been served upon the Fund, its Directors or any such controlling person. The failure to notify the Underwriter of any such action shall not relieve the Underwriter from any liability which it may have to the person against whom such action is brought by reason of any such alleged untrue statement or omission otherwise than on account of the indemnity agreement contained in this paragraph. The Underwriter shall be entitled to assume the defense of any suit brought to enforce such claim, demand, or liability, but in such case the defense shall be conducted by counsel chosen by the Underwriter and approved by the Fund, which approval shall not be unreasonably withheld. If the Underwriter elects to assume the defense of any such suit and retain counsel approved by the Fund, the defendant or defendants in such suit shall bear the fees and expenses of an additional counsel obtained by any of them. Should the Underwriter elect not to assume the defense of any such suit, or should the Fund not approve of counsel chosen by the Underwriter, the Underwriter will reimburse the Fund, its Directors or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by the Fund or them. In addition, the Fund shall have the right to employ counsel to represent it, its Directors and any such controlling person who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Fund against the Underwriter hereunder if in the reasonable judgment of the Fund it is advisable for the Fund, its Directors or such controlling person to be represented by separate counsel, in which event the reasonable fees and expenses of such separate counsel shall be borne by the Underwriter. This indemnity agreement and the Underwriter's representations and warranties in this Agreement shall remain operative and in full force and effect and shall survive the delivery of any of the Shares as provided in this Agreement. This indemnity agreement shall inure exclusively to the benefit of the Fund and its successors, the Fund's Directors and their respective estates and any such controlling person and their successors and estates. The Underwriter shall promptly notify the Fund of the commencement of any litigation or proceeding against it in connection with the issue and sale of the Shares. 12. The Fund will pay or cause to be paid (a) expenses (including the fees and disbursements of its own counsel) of any registration of the Shares under the 1933 Act, as amended, (b) expenses incident to the issuance of the Shares, and (c) expenses (including the fees and disbursements of its own counsel) incurred in connection with the preparation, printing and distribution of the Fund's Prospectuses, SAIs, and periodic and other reports sent to holders of the Shares in their capacity as such. The Underwriter shall prepare and provide necessary copies of all sales literature subject to the Fund's approval thereof. 13. This Agreement shall become effective as of the date it is approved by a majority vote of the Directors of the Fund, as well as a majority vote of the Directors who are not "interested persons" (as defined in the Investment Company Act) of the Fund, and shall continue in effect for an initial term expiring February 28, 1998, and from year to year thereafter, but only so long as such continuance is specifically approved at least annually (a)(i) by a vote of the Directors of the Fund or (ii) by a vote of a majority of the outstanding voting securities of the Fund, and (b) by a vote of a majority of the Directors of the Fund who are not "interested persons," as defined in the Investment Company Act, of the Fund cast in person at a meeting for the purpose of voting on this Agreement. Either party hereto may terminate this Agreement on any date, without the payment of a penalty, by giving the other party at least 60 days' prior written notice of such termination specifying the date fixed therefor. In particular, this Agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the members of the Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund on not more than 60 days' written notice to the Underwriter. Without prejudice to any other remedies of the Fund provided for in this Agreement or otherwise, the Fund may terminate this Agreement at any time immediately upon the Underwriter's failure to fulfill any of the obligations of the Underwriter hereunder. 14. The Underwriter expressly agrees that, notwithstanding anything to the contrary herein, or in any applicable law, it will look solely to the assets of the Fund for any obligations of the Fund hereunder and nothing herein shall be construed to create any personal liability on the part of any Director or any shareholder of the Fund. 15. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this Section 15, the definition of "assignment" contained in the Investment Company Act shall be applied. 16. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notice. 17. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Fund and the Underwriter and, if applicable, approved in the manner required by the Investment Company Act. 18. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held illegal or made invalid by a court decision, statute, rule or otherwise, such illegality or invalidity shall not affect the validity or enforceability of the remainder of this Agreement. 19. This Agreement and the application and interpretation hereof shall be governed exclusively by the laws of the State of Colorado. IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this Agreement to be executed on its behalf by an officer thereunto duly authorized and the Underwriter has caused its corporate seal to be affixed as of the day and year first above written. INVESCO VALUE TRUST ATTEST: By: /s/ Dan J. Hesser ----------------------- /s/ Glen A. Payne Dan J. Hesser - ------------------------ President Glen A. Payne Secretary INVESCO FUNDS GROUP, INC. ATTEST: By: /s/ Ronald L. Grooms /s/ Glen A. Payne ---------------------- - ------------------------ Ronald L. Grooms Glen A. Payne Senior Vice President Secretary EX-99.6BDISTAG 5 DISTRIBUTION AGREEMENT THIS AGREEMENT is made this 30th day of September, 1997 between INVESCO VALUE TRUST, a Massachusetts business trust (the "Fund"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation (the "Underwriter"). W I T N E S S E T H: WHEREAS, the Fund is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as a diversified, open-end management investment company and currently has one class of shares (the "Shares") which is divided into three series, and which may be divided into additional series (the "Series"), each representing a beneficial interest in a separate portfolio of investments, and it is in the interest of the Fund to offer the Shares for sale continuously; and WHEREAS, the Underwriter is engaged in the business of selling shares of investment companies either directly to investors or through other securities dealers; and WHEREAS, the Fund and the Underwriter wish to enter into an agreement with each other with respect to the continuous offering of the Shares of each Series in order to promote growth of the Fund and facilitate the distribution of the Shares; NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows: 1. The Fund hereby appoints the Underwriter its agent for the distribution of Shares of each Series in jurisdictions wherein such Shares legally may be offered for sale; provided, however, that the Fund in its absolute discretion may (a) issue or sell Shares of each Series directly to purchasers, or (b) issue or sell Shares of a particular Series to the shareholders of any other Series or to the shareholders of any other investment company, for which the Underwriter or any affiliate thereof shall act as exclusive distributor, who wish to exchange all or a portion of their investment in Shares of such Series or in shares of such other investment company for the Shares of a particular Series. Notwithstanding any other provision hereof, the Fund may terminate, suspend or withdraw the offering of Shares whenever, in its sole discretion, it deems such action to be desirable. The Fund reserves the right to reject any subscription in whole or in part for any reason. 2. The Underwriter hereby agrees to serve as agent for the distribution of the Shares and agrees that it will use its best efforts with reasonable promptness to sell such part of the authorized Shares remaining unissued as from time to time shall be effectively registered under the Securities Act of 1933, as amended (the "1933 Act"), at such prices and on such terms as hereinafter set forth, all subject to applicable federal and state securities laws and regulations. Nothing herein shall be construed to prohibit the Underwriter from engaging in other related or unrelated businesses. 3. In addition to serving as the Fund's agent in the distribution of the Shares, the Underwriter shall also provide to the holders of the Shares certain maintenance, support or similar services ("Shareholder Services"). Such services shall include, without limitation, answering routine shareholder inquiries regarding the Fund, assisting shareholders in considering whether to change dividend options and helping to effectuate such changes, arranging for bank wires, and providing such other services as the Fund may reasonably request from time to time. It is expressly understood that the Underwriter or the Fund may enter into one or more agreements with third parties pursuant to which such third parties may provide the Shareholder Services provided for in this paragraph. Nothing herein shall be construed to impose upon the Underwriter any duty or expense in connection with the services of any registrar, transfer agent or custodian appointed by the Fund, the computation of the asset value or offering price of Shares, the preparation and distribution of notices of meetings, proxy soliciting material, annual and periodic reports, dividends and dividend notices, or any other responsibility of the Fund. 4. Except as otherwise specifically provided for in this Agreement, the Underwriter shall sell the Shares directly to purchasers, or through qualified broker-dealers or others, in such manner, not inconsistent with the provisions hereof and the then effective Registration Statement of the Fund under the 1933 Act (the "Registration Statement") and related Prospectus (the "Prospectus") and Statement of Additional Information ("SAI") of the Fund as the Underwriter may determine from time to time; provided that no broker-dealer or other person shall be appointed or authorized to act as agent of the Fund without the prior consent of the directors (the "Directors") of the Fund. The Underwriter will require each broker-dealer to conform to the provisions hereof and of the Registration Statement (and related Prospectus and SAI) at the time in effect under the 1933 Act with respect to the public offering price of the Shares of any Series. The Fund will have no obligation to pay any commissions or other remuneration to such broker-dealers. 5. The Shares of each Series offered for sale or sold by the Underwriter shall be offered or sold at the net asset value per share determined in accordance with the then current Prospectus and/or SAI relating to the sale of the Shares of the appropriate Series except as departure from such prices shall be permitted by the then current Prospectus and/or SAI of the Fund, in accordance with applicable rules and regulations of the Securities and Exchange Commission. The price the Fund shall receive for the Shares of each Series purchased from the Fund shall be the net asset value per share of such Share, determined in accordance with the Prospectus and/or SAI applicable to the sale of the Shares of such Series. 6. Except as may be otherwise agreed to by the Fund, the Underwriter shall be responsible for issuing and delivering such confirmations of sales made by it pursuant to this Agreement as may be required; provided, however, that the Underwriter or the Fund may utilize the services of other persons or entities believed by it to be competent to perform such functions. Shares shall be registered on the transfer books of the Fund in such names and denominations as the Underwriter may specify. 7. The Fund will execute any and all documents and furnish any and all information which may be reasonably necessary in connection with the qualification of the Shares for sale (including the qualification of the Fund as a broker-dealer where necessary or advisable) in such states as the Underwriter may reasonably request (it being understood that the Fund shall not be required without its consent to comply with any requirement which in the opinion of the Directors of the Fund is unduly burdensome). The Underwriter, at its own expense, will effect all qualifications of itself as broker or dealer, or otherwise, under all applicable state or Federal laws required in order that the Shares may be sold in such states or jurisdictions as the Fund may reasonably request. 8. The Fund shall prepare and furnish to the Underwriter from time to time the most recent form of the Prospectus and/or SAI of the Fund and/or of each Series of the Fund. The Fund authorizes the Underwriter to use the Prospectus and/or SAI, in the forms furnished to the Underwriter from time to time, in connection with the sale of the Shares of the Fund and/or of each Series of the Fund. The Fund will furnish to the Underwriter from time to time such information with respect to the Fund, each Series, and the Shares as the Underwriter may reasonably request for use in connection with the sale of the Shares. The Underwriter agrees that it will not use or distribute or authorize the use, distribution or dissemination by broker-dealers or others in connection with the sale of the Shares any statements, other than those contained in a current Prospectus and/or SAI of the Fund or applicable Series, except such supplemental literature or advertising as shall be lawful under Federal and state securities laws and regulations, and that it will promptly furnish the Fund with copies of all such material. 9. The Underwriter will not make, or authorize any broker-dealers or others to make any short sales of the Shares of the Fund or otherwise make any sales of the Shares unless such sales are made in accordance with a then current Prospectus and/or SAI relating to the sale of the applicable Shares. 10. The Underwriter, as agent of and for the account of the Fund, may cause the redemption or repurchase of the Shares at such prices and upon such terms and conditions as shall be specified in a then current Prospectus and/or SAI. In selling, redeeming or repurchasing the Shares for the account of the Fund, the Underwriter will in all respects conform to the requirements of all state and federal laws and the Rules of Fair Practice of the National Association of Securities Dealers, Inc., relating to such sale, redemption or repurchase, as the case may be. The Underwriter will observe and be bound by all the provisions of the Articles of Incorporation or Bylaws of the Fund and of any provisions in the Registration Statement, Prospectus and SAI, as such may be amended or supplemented from time to time, notice of which shall have been given to the Underwriter, which at the time in any way require, limit, restrict or prohibit or otherwise regulate any action on the part of the Underwriter. 11. (a) The Fund shall indemnify, defend and hold harmless the Underwriter, its officers and directors and any person who controls the Underwriter within the meaning of the 1933 Act, from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any attorney fees incurred in connection therewith) which the Underwriter, its officers and directors or any such controlling person, may incur under the federal securities laws, the common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in the Registration Statement or any related Prospectus and/or SAI or arising out of or based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Notwithstanding the foregoing, this indemnity agreement, to the extent that it might require indemnity of the Underwriter or any person who is an officer, director or controlling person of the Underwriter, shall not inure to the benefit of the Underwriter or officer, director or controlling person thereof unless a court of competent jurisdiction shall determine, or it shall have been determined by controlling precedent, that such result would not be against public policy as expressed in the federal securities laws and in no event shall anything contained herein be so construed as to protect the Underwriter against any liability to the Fund, the Directors or the Fund's shareholders to which the Underwriter would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. This indemnity agreement is expressly conditioned upon the Fund's being notified of any action brought against the Underwriter, its officers or directors or any such controlling person, which notification shall be given by letter or by telegram addressed to the Fund at its principal address in Denver, Colorado and sent to the Fund by the person against whom such action is brought within ten (10) days after the summons or other first legal process shall have been served upon the Underwriter, its officers or directors or any such controlling person. The failure to notify the Fund of any such action shall not relieve the Fund from any liability which it may have to the person against whom such action is brought by reason of any such alleged untrue statement or omission otherwise than on account of the indemnity agreement contained in this paragraph. The Fund shall be entitled to assume the defense of any suit brought to enforce such claim, demand, or liability, but in such case the defense shall be conducted by counsel chosen by the Fund and approved by the Underwriter, which approval shall not be unreasonably withheld. If the Fund elects to assume the defense of any such suit and retain counsel approved by the Underwriter, the defendant or defendants in such suit shall bear the fees and expenses of an additional counsel obtained by any of them. Should the Fund elect not to assume the defense of any such suit, or should the Underwriter not approve of counsel chosen by the Fund, the Fund will reimburse the Underwriter, its officers and directors or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by the Underwriter or them. In addition, the Underwriter shall have the right to employ counsel to represent it, its officers and directors and any such controlling person who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriter against the Fund hereunder if in the reasonable judgment of the Underwriter it is advisable for the Underwriter, its officers and directors or such controlling person to be represented by separate counsel, in which event the reasonable fees and expenses of such separate counsel shall be borne by the Fund. This indemnity agreement and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect and shall survive the delivery of any of the Shares as provided in this Agreement. This indemnity agreement shall inure exclusively to the benefit of the Underwriter and its successors, the Underwriter's officers and directors and their respective estates and any such controlling person and their successors and estates. The Fund shall promptly notify the Underwriter of the commencement of any litigation or proceeding against it in connection with the issue and sale of the Shares. (b) The Underwriter agrees to indemnify, defend and hold harmless the Fund, its Directors and any person who controls the Fund within the meaning of the 1933 Act, from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any attorney fees incurred in connection therewith) which the Fund, its Directors or any such controlling person may incur under the Federal securities laws, the common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its Directors or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any alleged untrue statement of a material fact contained in information furnished in writing by the Underwriter to the Fund specifically for use in the Registration Statement or any related Prospectus and/or SAI or shall arise out of or be based upon any alleged omission to state a material fact in connection with such information required to be stated in the Registration Statement or the related Prospectus and/or SAI or necessary to make such information not misleading and (b) any alleged act or omission on the Underwriter's part as the Fund's agent that has not been expressly authorized by the Fund in writing. Notwithstanding the foregoing, this indemnity agreement, to the extent that it might require indemnity of the Fund or any Director or controlling person of the Fund, shall not inure to the benefit of the Fund or Director or controlling person thereof unless a court of competent jurisdiction shall determine, or it shall have been determined by controlling precedent, that such result would not be against public policy as expressed in the federal securities laws and in no event shall anything contained herein be so construed as to protect any Director of the Fund against any liability to the Fund or the Fund's shareholders to which the Director would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence or reckless disregard of the duties involved in the conduct of his office. This indemnity agreement is expressly conditioned upon the Underwriter's being notified of any action brought against the Fund, its Directors or any such controlling person, which notification shall be given by letter or telegram addressed to the Underwriter at its principal office in Denver, Colorado, and sent to the Underwriter by the person against whom such action is brought, within ten (10) days after the summons or other first legal process shall have been served upon the Fund, its Directors or any such controlling person. The failure to notify the Underwriter of any such action shall not relieve the Underwriter from any liability which it may have to the person against whom such action is brought by reason of any such alleged untrue statement or omission otherwise than on account of the indemnity agreement contained in this paragraph. The Underwriter shall be entitled to assume the defense of any suit brought to enforce such claim, demand, or liability, but in such case the defense shall be conducted by counsel chosen by the Underwriter and approved by the Fund, which approval shall not be unreasonably withheld. If the Underwriter elects to assume the defense of any such suit and retain counsel approved by the Fund, the defendant or defendants in such suit shall bear the fees and expenses of an additional counsel obtained by any of them. Should the Underwriter elect not to assume the defense of any such suit, or should the Fund not approve of counsel chosen by the Underwriter, the Underwriter will reimburse the Fund, its Directors or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by the Fund or them. In addition, the Fund shall have the right to employ counsel to represent it, its Directors and any such controlling person who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Fund against the Underwriter hereunder if in the reasonable judgment of the Fund it is advisable for the Fund, its Directors or such controlling person to be represented by separate counsel, in which event the reasonable fees and expenses of such separate counsel shall be borne by the Underwriter. This indemnity agreement and the Underwriter's representations and warranties in this Agreement shall remain operative and in full force and effect and shall survive the delivery of any of the Shares as provided in this Agreement. This indemnity agreement shall inure exclusively to the benefit of the Fund and its successors, the Fund's Directors and their respective estates and any such controlling person and their successors and estates. The Underwriter shall promptly notify the Fund of the commencement of any litigation or proceeding against it in connection with the issue and sale of the Shares. 12. The Fund will pay or cause to be paid (a) expenses (including the fees and disbursements of its own counsel) of any registration of the Shares under the 1933 Act, as amended, (b) expenses incident to the issuance of the Shares, and (c) expenses (including the fees and disbursements of its own counsel) incurred in connection with the preparation, printing and distribution of the Fund's Prospectuses, SAIs, and periodic and other reports sent to holders of the Shares in their capacity as such. The Underwriter shall prepare and provide necessary copies of all sales literature subject to the Fund's approval thereof. 13. This Agreement shall become effective as of the date it is approved by a majority vote of the Directors of the Fund, as well as a majority vote of the Directors who are not "interested persons" (as defined in the Investment Company Act) of the Fund, and shall continue in effect for an initial term expiring September, 1998, and from year to year thereafter, but only so long as such continuance is specifically approved at least annually (a)(i) by a vote of the Directors of the Fund or (ii) by a vote of a majority of the outstanding voting securities of the Fund, and (b) by a vote of a majority of the Directors of the Fund who are not "interested persons," as defined in the Investment Company Act, of the Fund cast in person at a meeting for the purpose of voting on this Agreement. Either party hereto may terminate this Agreement on any date, without the payment of a penalty, by giving the other party at least 60 days' prior written notice of such termination specifying the date fixed therefor. In particular, this Agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the members of the Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund on not more than 60 days' written notice to the Underwriter. Without prejudice to any other remedies of the Fund provided for in this Agreement or otherwise, the Fund may terminate this Agreement at any time immediately upon the Underwriter's failure to fulfill any of the obligations of the Underwriter hereunder. 14. The Underwriter expressly agrees that, notwithstanding anything to the contrary herein, or in any applicable law, it will look solely to the assets of the Fund for any obligations of the Fund hereunder and nothing herein shall be construed to create any personal liability on the part of any Director or any shareholder of the Fund. 15. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this Section 15, the definition of "assignment" contained in the Investment Company Act shall be applied. 16. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notice. 17. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Fund and the Underwriter and, if applicable, approved in the manner required by the Investment Company Act. 18. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held illegal or made invalid by a court decision, statute, rule or otherwise, such illegality or invalidity shall not affect the validity or enforceability of the remainder of this Agreement. 19. This Agreement and the application and interpretation hereof shall be governed exclusively by the laws of the State of Colorado. IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this Agreement to be executed on its behalf by an officer thereunto duly authorized and the Underwriter has caused its corporate seal to be affixed as of the day and year first above written. INVESCO VALUE TRUST ATTEST: By: /s/ Dan J. Hesser /s/ Glen A. Payne ------------------------ - ----------------- Dan J. Hesser Secretary President INVESCO DISTRIBUTORS, INC. ATTEST: By: Ronald L. Grooms /s/ Glen A. Payne ----------------------- - ----------------- Ronald L. Grooms Secretary Senior Vice President EX-99.7DEFBENPLAG 6 DEFINED BENEFIT DEFERRED COMPENSATION PLAN FOR NON-INTERESTED DIRECTORS AND TRUSTEES The registered, open-end management investment companies referred to on Schedule A as the Schedule may hereafter be revised by the addition and deletion of investment companies (the "Funds") have adopted this Defined Benefit Deferred Compensation Plan ("Plan") for the benefit of those directors and trustees of the Funds who are not interested directors or trustees thereof as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent Directors"). 1. Eligibility Each Independent Director who has served as such ("Eligible Service") on the boards of any of the Funds and their predecessor and successor entities, if any, or as an Independent Director of the now-defunct investment management company known as FG Series for an aggregate of at least five years at the time of his Service Termination Date (as defined in paragraph 2) will be entitled to receive benefits under the Plan. An Independent Director's period of Eligible Service commences on the date of election to the board of directors or trustees of any one or more of the Funds ("Board"). Hereafter, references in this Plan to Independent Directors shall be deemed to include only those Directors who have met the Eligible Service requirement for Plan participation. 2. Service Termination and Service Termination Date a. Service Termination. Service Termination means termination of service (other than by disability or death) of an Independent Director which results from the Director's having reached his Service Termination Date. b. Service Termination Date. An Independent Director's Service Termination Date is normally the last day of the calendar quarter in which such Director's seventy-second birthday occurs. A majority of the Board of a Fund may annually extend a Director's Service Termination Date for a maximum period of three years, through the date not later than the last day of the calendar quarter in which such Director's seventy-fifth birthday occurs. As used in this Plan unless otherwise stipulated, Service Termination Date shall mean an Independent Director's normal Service Termination Date, or the Director's extended Service Termination Date, whichever may be applicable to the Independent Director. 3. Defined Payments and Benefit a. Payments. If an Independent Director's Service Termination Date occurs on a date not later than the last day of the calendar quarter in which such Director's seventy-fourth birthday occurs, the Independent Director will receive four quarterly payments during the first twelve months subsequent to his Service Termination Date (the "First Year Retirement Payments"), with each payment to be equal to 25 percent of the annual basic retainer payable by each Fund to the Independent Director on his Service Termination Date (excluding any fees relating to attending meetings or chairing committees). b. Benefit. Commencing with the first anniversary of the Service Termination Date of any Independent Director who has received the First Year Retirement Payments, and commencing as of the Service Termination Date of an Independent Director whose Service Termination Date is subsequent to the date of the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the Independent Director will receive, for the remainder of his life, a benefit (the "Benefit"), payable quarterly, with each quarterly payment to be equal to 10 percent of the annual basic retainer payable by each Fund to the Independent Director on his Service Termination Date (excluding any fees relating to attending meetings or chairing committees). c. Death Provisions. If an Independent Director's service as a Director is terminated because of his death subsequent to the last day of the calendar quarter in which such Director's seventy-second birthday occurred and prior to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurs, the designated beneficiary of the Independent Director shall receive the First Year Retirement Payments and shall, commencing with the quarter following the quarter in which the last First Year Retirement Payment is made, receive the Benefit for a period of ten years, with quarterly payments to be made to the designated beneficiary. If an Independent Director's service as a Director is terminated because of his death prior to the last day of the calendar quarter in which such Director's seventy-second birthday occurs or subsequent to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the designated beneficiary of the Independent Director shall receive the Benefit for a period of ten years, with quarterly payments to be made to the designated beneficiary commencing in the first quarter following the Director's death. d. Disability Provisions. If an Independent Director's service as a Director is terminated because of his disability subsequent to the last day of the calendar quarter in which such Director's seventy-second birthday occurred and prior to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurs, the Independent Director shall receive the First Year Retirement Payments and shall, commencing with the quarter following the quarter in which the last First Year Retirement Payment is made, receive the Benefit for the remainder of his life, with quarterly payments to be made to the disabled Independent Director. If the disabled Independent Director should die before the First Year Retirement Payments are completed and before forty quarterly Benefit payments are made, such payments will continue to be made to the Independent Director's designated beneficiary until the aggregate of the First Year Retirement Payments and forty quarterly Benefit payments have been made to the disabled Independent Director and the Director's designated beneficiary. If an Independent Director's service as a Director is terminated because of his disability prior to the last day of the calendar quarter in which such Director's seventy-second birthday occurs or subsequent to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the Independent Director shall receive the Benefit for the remainder of his life, with quarterly payments to be made to the disabled Independent Director commencing in the first quarter following the Director's termination for disability. If the disabled Independent Director should die before forty quarterly payments are made, payments will continue to be made to the Independent Director's designated beneficiary until the aggregate of forty quarterly payments has been made to the disabled Independent Director and the Director's designated beneficiary. e. Death of Independent Director and Beneficiary. If the Independent Director and his designated beneficiary should die before the First Year Retirement Payments and/or a total of forty quarterly Benefit payments are made, the remaining value of the Independent Director's First Year Retirement Payments and/or Benefit shall be determined as of the date of the death of the Independent Director's designated beneficiary and shall be paid to the estate of the designated beneficiary in one lump sum or in periodic payments, with the determinations with respect to the value of the First Year Retirement Payments and/or Benefit and the method and frequency of payment to be made by the Committee (as defined in paragraph 8.a.) in its sole discretion. 4. Designated Beneficiary The beneficiary referred to in paragraph 3 may be designated or changed by the Independent Director without the consent of any prior beneficiary on a form provided by the Committee (as defined in paragraph 8.a.) and delivered to the Committee before the Independent Director's death. If no such beneficiary shall have been designated, or if no designated beneficiary shall survive the Independent Director, the value or remaining value of the Independent Director's First Year Retirement Payments and/or Benefit shall be determined as of the date of the death of the Independent Director by the Committee and shall be paid as promptly as possible in one lump sum to the Independent Director's estate. 5. Disability An Independent Director shall be deemed to have become disabled for the purposes of paragraph 3 if the Committee shall find on the basis of medical evidence satisfactory to it that the Independent Director is disabled, mentally or physically, as a result of an accident or illness, so as to be prevented from performing each of the duties which are incumbent upon an Independent Director in fulfilling his responsibilities as such. 6. Time of Payment The First Year Retirement Payments and/or the Benefit for each year will be paid in quarterly installments that are as nearly equal as possible. 7. Payment of First Year Retirement Payments and/or Benefit: Allocation of Costs Each Fund is responsible for the payment of the amount of the First Year Retirement Payments and/or Benefit applicable to the Fund, as well as its proportionate share of all expenses of administration of the Plan, including without limitation all accounting and legal fees and expenses and fees and expenses of any Actuary. The obligations of each Fund to pay such First Year Retirement Payments and/or Benefit and expenses will not be secured or funded in any manner, and such obligations will not have any preference over the lawful claims of each Fund's creditors and shareholders. To the extent that the First Year Retirement Payments and/or Benefit is paid by more than one Fund, such costs and expenses will be allocated among such Funds in a manner that is determined by the Committee to be fair and equitable under the circumstances. To the extent that one or more of such Funds consist of one or more separate portfolios, such costs and expenses allocated to any such Fund will thereafter be allocated among such portfolios by the Board of the Fund in a manner that is determined by such Board to be fair and equitable under the circumstances. 8. Administration a. The Committee. Any question involving entitlement to payments under or the administration of the Plan will be referred to a four-person committee (the "Committee") composed of three Independent Directors designated by all of the Independent Directors of the Funds and one director of the Funds who is not an Independent Director, designated by the non-Independent Directors. Except as otherwise provided herein, the Committee will make all interpretations and determinations necessary or desirable for the Plan's administration, and such interpretations and determinations will be final and conclusive. Committee members will be elected annually. b. Powers of the Committee. The Committee will represent and act on behalf of the Funds in respect of the Plan and, subject to the other provisions of the Plan, the Committee may adopt, amend or repeal bylaws or other regulations relating to the administration of the Plan, the conduct of the Committee's affairs, its rights or powers, or the rights or powers of its members. The Committee will report to the Independent Directors and to the Boards of the Funds from time to time on its activities in respect of the Plan. The Committee or persons designated by it will cause such records to be kept as may be necessary for the administration of the Plan. 9. Miscellaneous Provisions a. Rights Not Assignable. Other than as is specifically provided in paragraph 3, the right to receive any payment under the Plan is not transferable or assignable, and nothing in the Plan shall create any benefit, cause of action, right of sale, transfer, assignment, pledge, encumbrance, or other such right in any heirs or the estate of any Independent Director. b. Amendment, etc. The Committee, with the concurrence of the Board of any Fund, may as to the specific Fund at any time amend or terminate the Plan or waive any provision of the Plan; provided, however, that subject to the limitations imposed by paragraph 7, no amendment, termination or waiver will impair the rights of an Independent Director to receive the payments which would have been made to such Independent Director had there been no such amendment, termination, or waiver. c. No Right to Reelection. Nothing in the Plan will create any obligation on the part of the Board of any Fund to nominate any Independent Director for reelection. d. Consulting. Subsequent to his Service Termination Date, an Independent Director may render such services for any Fund, for such compensation, as may be agreed upon from time to time by such Independent Director and the Board of the Fund which desires to procure such services. e. Effectiveness. The Plan will be effective for all Independent Directors who have Service Termination Dates occurring on and after October 20, 1993. Periods of Eligible Service shall include periods commencing prior and subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will become effective as to that Fund on the date when the Committee determines that any regulatory approval or advice that may be necessary or appropriate in connection with the Plan have been obtained. Adopted October 20, 1993. Amended October 19, 1994. Amended May 1, 1996, effective July 1, 1996. SCHEDULE A TO DEFINED BENEFIT DEFERRED COMPENSATION PLAN FOR NON-INTERESTED DIRECTORS AND TRUSTEES INVESCO Diversified Funds, Inc. INVESCO Dynamics Fund, Inc. INVESCO Emerging Opportunity Funds, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO Strategic Portfolios, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Value Trust INVESCO Variable Investment Funds, Inc. The INVESCO Advisor Funds, Inc. INVESCO Treasurer's Series Trust EX-99.8BDATAACCESS 7 DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT AGREEMENT between each Fund listed on Appendix A, (individually a "Customer" and collectively, the "Customers") and State Street Bank and Trust Company ("State Street"). PREAMBLE WHEREAS, State Street has been appointed as custodian of certain assets of each Customer pursuant to a certain Custodian Agreement (the "Custodian Agreement") for each of the respective Customers; WHEREAS, State Street has developed and utilizes proprietary accounting and other systems, including State Street's proprietary Multicurrency HORIZON(R) Accounting System, in its role as custodian of each Customer, and maintains certain Customer- related data ("Customer Data") in databases under the control and ownership of State Street (the "Data Access Services"); and WHEREAS, State Street makes available to each Customer certain Data Access Services solely for the benefit of the Customer, and intends to provide additional services, consistent with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the parties agree as follows: 1. SYSTEM AND DATA ACCESS SERVICES a. System. Subject to the terms and conditions of this Agreement, State Street hereby agrees to provide each Customer with access to State Street's Multicurrency HORIZON(R) Accounting System and the other information systems (collectively, the "System") as described in Attachment A, on a remote basis for the purpose of obtaining reports, solely on computer hardware, system software and telecommunication links, as listed in Attachment B (the "Designated Configuration") of the Customer, or certain third parties approved by State Street that serve as investment advisors or investment managers (the "Investment Advisor") or independent auditors (the "Independent Auditors") of a Customer and solely with respect to the Customer or on any designated substitute or back-up equipment configuration with State Street's written consent, such consent not to be unreasonably withheld. b. Data Access Services. State Street agrees to make available to each Customer the Data Access Services subject to the terms and conditions of this Agreement and data access operating standards and procedures as may be issued by State Street from time to time. The ability of each Customer to originate electronic instructions to State Street on behalf of each Customer in order to (i) effect the transfer or movement of cash or securities held under custody by State Street or (ii) transmit accounting or other information (such transactions are referred to herein as "Client Originated Electronic Financial Instructions"), and (iii) access data for the purpose of reporting and analysis, shall be deemed to be Data Access Services for purposes of this Agreement. c. Additional Services. State Street may from time to time agree to make available to a Customer additional Systems that are not described in the attachments to this Agreement. In the absence of any other written agreement concerning such additional systems, the term "System" shall include, and this Agreement shall govern, a Customer's access to and use of any additional System made available by State Street and/or accessed by the Customer. 2. NO USE OF THIRD PARTY SOFTWARE State Street and each Customer acknowledge that in connection with the Data Access Services provided under this Agreement, each Customer will have access, through the Data Access Services, to Customer Data and to functions of State Street's proprietary systems; provided, however that in no event will the Customer have direct access to any third party systems- level software that retrieves data for, stores data from, or otherwise supports the System. 3. LIMITATION ON SCOPE OF USE a. Designated Equipment; Designated Location. The System and the Data Access Services shall be used and accessed solely on and through the Designated Configuration at the offices of a Customer or the Investment Advisor or Independent Auditor located in Denver, Colorado ("Designated Location"). b. Designated Configuration; Trained Personnel. State Street shall be responsible for supplying, installing and maintaining the Designated Configuration at the Designated Location. State Street and each Customer agree that each will engage or retain the services of trained personnel to enable both State Street and the Customer to perform their respective obligations under this Agreement. State Street agrees to use commercially reasonable efforts to maintain the System so that it remains serviceable, provided, however, that State Street does not guarantee or assure uninterrupted remote access use of the System. c. Scope of Use. Each Customer will use the System and the Data Access Services only for the processing of securities transactions, the keeping of books of account for the Customer and accessing data for purposes of reporting and analysis. Each Customer shall not, and shall cause its employees and agents not to (i) permit any third party to use the System or the Data Access Services, (ii) sell, rent, license or otherwise use the System or the Data Access Services in the operation of a service bureau or for any purpose other than as expressly authorized under this Agreement, (iii) use the System or the Data Access Services for any fund, trust or other investment vehicle without the prior written consent of State Street, (iv) allow access to the System or the Data Access Services through terminals or any other computer or telecommunications facilities located outside the Designated Locations, (v) allow or cause any information (other than portfolio holdings, valuations of portfolio holdings, and other information reasonably necessary for the management or distribution of the assets of the Customer) transmitted from State Street's databases, including data from third party sources, available through use of the System or the Data Access Services to be redistributed or retransmitted to another computer, terminal or other device for other than use for or on behalf of the Customer or (vi) modify the System in any way, including without limitation, developing any software for or attaching any devices or computer programs to any equipment, system, software or database which forms a part of or is resident on the Designated Configuration. d. Other Locations. Except in the event of an emergency or of a planned System shutdown, each Customer's access to services performed by the System or to Data Access Services at the Designated Location may be transferred to a different location only upon the prior written consent of State Street. In the event of an emergency or System shutdown, each Customer may use any back-up site included in the Designated Configuration or any other back-up site agreed to by State Street, which agreement will not be unreasonably withheld. Each Customer may secure from State Street the right to access the System or the Data Access Services through computer and telecommunications facilities or devices complying with the Designated Configuration at additional locations only upon the prior written consent of State Street and on terms to be mutually agreed upon by the parties. e. Title. Title and all ownership and proprietary rights to the System, including any enhancements or modifications thereto, whether or not made by State Street, are and shall remain with State Street. f. No Modification. Without the prior written consent of State Street, a Customer shall not modify, enhance or otherwise create derivative works based upon the System, nor shall the Customer reverse engineer, decompile or otherwise attempt to secure the source code for all or any part of the System. g. Security Procedures. Each Customer shall comply with data access operating standards and procedures and with user identification or other password control requirements and other security procedures as may be issued from time to time by State Street for use of the System on a remote basis and to access the Data Access Services. Each Customer shall have access only to the Customer Data and authorized transactions agreed upon from time to time by State Street and, upon notice from State Street, the Customer shall discontinue remote use of the System and access to Data Access Services for any security reasons cited by State Street; provided, that, in such event, State Street shall, for a period not less than 180 days (or such other shorter period specified by the Customer) after such discontinuance, assume responsibility to provide accounting services under the terms of the Custodian Agreement. h. Inspections. State Street shall have the right to inspect the use of the System and the Data Access Services by the Customer and the Investment Advisor to ensure compliance with this Agreement. The on-site inspections shall be upon prior written notice to Customer and the Investment Advisor and at reasonably convenient times and frequencies so as not to result in an unreasonable disruption of the Customer's or the Investment Advisor's business. 4. PROPRIETARY INFORMATION a. Proprietary Information. Each Customer acknowledges and State Street represents that the System and the databases, computer programs, screen formats, report formats, interactive design techniques, documentation and other information made available to the Customer by State Street as part of the Data Access Services and through the use of the System constitute copyrighted, trade secret, or other proprietary information of substantial value to State Street. Any and all such information provided by State Street to each Customer shall be deemed proprietary and confidential information of State Street (hereinafter "Proprietary Information"). Each Customer agrees that it will hold such Proprietary Information in confidence and secure and protect it in a manner consistent with its own procedures for the protection of its own confidential information and to take appropriate action by instruction or agreement with its employees who are permitted access to the Proprietary Information to satisfy its obligations hereunder. Each Customer further acknowledges that State Street shall not be required to provide the Investment Advisor or the Investment Auditor with access to the System unless it has first received from the Investment Advisor of the Investment Auditor an undertaking with respect to State Street's Proprietary Information in the form of Attachment C and/or Attachment C-1 to this Agreement. Each Customer shall use all commercially reasonable efforts to assist State Street in identifying and preventing any unauthorized use, copying or disclosure of the Proprietary Information or any portions thereof or any of the logic, formats or designs contained therein. b. Cooperation. Without limitation of the foregoing, each Customer shall advise State Street immediately in the event the Customer learns or has reason to believe that any person to whom the Customer has given access to the Proprietary Information, or any portion thereof, has violated or intends to violate the terms of this Agreement, and each Customer will, at its expense, co- operate with State Street in seeking injunctive or other equitable relief in the name of the Customer or State Street against any such person. c. Injunctive Relief. Each Customer acknowledges that the disclosure of any Proprietary Information, or of any information which at law or equity ought to remain confidential, will immediately give rise to continuing irreparable injury to State Street inadequately compensable in damages at law. In addition, State Street shall be entitled to obtain immediate injunctive relief against the breach or threatened breach of any of the foregoing undertakings, in addition to any other legal remedies which may be available. d. Survival. The provisions of this Section 4 shall survive the termination of this Agreement. 5. LIMITATION ON LIABILITY a. Limitation on Amount and Time for Bringing Action. Each Customer agrees any liability of State Street to the Customer or any third party arising out of State Street's provision of Data Access Services or the System under this Agreement shall be limited to the amount paid by the Customer for the preceding 24 months for such services. In no event shall State Street be liable to the Customer or any other party for any special, indirect, punitive or consequential damages even if advised of the possibility of such damages. No action, regardless of form, arising out of this Agreement may be brought by the Customer more than two years after the Customer has knowledge that the cause of action has arisen. b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE LIABLE TO THE CUSTOMER OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES WHICH MAY ARISE FROM THE CUSTOMER'S ACCESS TO THE SYSTEM OR USE OF INFORMATION OBTAINED THEREBY. c. Third-Party Data. Organizations from which State Street may obtain certain data included in the System or the Data Access Services are solely responsible for the contents of such data, and State Street shall have no liability for claims arising out of the contents of such third-party data, including, but not limited to, the accuracy thereof. d. Regulatory Requirements. As between State Street and each Customer, the Customer shall be solely responsible for the accuracy of any accounting statements or reports produced using the Data Access Services and the System and the conformity thereof with any requirements of law. e. Force Majeure. Neither State Street or a Customer shall be liable for any costs or damages due to delay or nonperformance under this Agreement arising out of any cause or event beyond such party's control, including without limitation, cessation of services hereunder or any damages resulting therefrom to the other party, or the Customer as a result of work stoppage, power or other mechanical failure, computer virus, natural disaster, governmental action, or communication disruption. 6. INDEMNIFICATION Each Customer agrees to indemnify and hold State Street harmless from any loss, damage or expense including reasonable attorney's fees, (a "loss") suffered by State Street arising from (i) the negligence or willful misconduct in the use by the Customer of the Data Access Services or the System, including any loss incurred by State Street resulting from a security breach at the Designated Location or committed by the Customer's employees or agents or the Investment Advisor or the Independent Auditor of the Customer and (ii) any loss resulting from incorrect Client Originated Electronic Financial Instructions. State Street shall be entitled to rely on the validity and authenticity of Client Originated Electronic Financial Instructions without undertaking any further inquiry as long as such instruction is undertaken in conformity with security procedures established by State Street from time to time. 7. FEES Fees and charges for the use of the System and the Data Access Services and related payment terms shall be as set forth in the Custody Fee Schedule in effect from time to time between the parties (the "Fee Schedule"). Any tariffs, duties or taxes imposed or levied by any government or governmental agency by reason of the transactions contemplated by this Agreement, including, without limitation, federal, state and local taxes, use, value added and personal property taxes (other than income, franchise or similar taxes which may be imposed or assessed against State Street) shall be borne by each Customer. Any claimed exemption from such tariffs, duties or taxes shall be supported by proper documentary evidence delivered to State Street. 8. TRAINING, IMPLEMENTATION AND CONVERSION a. Training. State Street agrees to provide training, at a designated State Street training facility or at the Designated Location, to the Customer's personnel in connection with the use of the System on the Designated Configuration. Each Customer agrees that it will set aside, during regular business hours or at other times agreed upon by both parties, sufficient time to enable all operators of the System and the Data Access Services, designated by the Customer, to receive the training offered by State Street pursuant to this Agreement. b. Installation and Conversion. State Street shall be responsible for the technical installation and conversion ("Installation and Conversion") of the Designated Configuration. Each Customer shall have the following responsibilities in connection with Installation and Conversion of the System: (i) The Customer shall be solely responsible for the timely acquisition and maintenance of the hardware and software that attach to the Designated Configuration in order to use the Data Access Services at the Designated Location. (ii) State Street and the Customer each agree that they will assign qualified personnel to actively participate during the Installation and Conversion phase of the System implementation to enable both parties to perform their respective obligations under this Agreement. 9. SUPPORT During the term of this Agreement, State Street agrees to provide the support services set out in Attachment D to this Agreement. 10. TERM OF AGREEMENT a. Term of Agreement. This Agreement shall become effective on the date of its execution by State Street and shall remain in full force and effect until terminated as herein provided. b. Termination of Agreement. Any party may terminate this Agreement (i) for any reason by giving the other parties at least one-hundred and eighty days' prior written notice in the case of notice of termination by State Street to the Customer or thirty days' notice in the case of notice from the Customer to State Street of termination; or (ii) immediately for failure of the other party to comply with any material term and condition of the Agreement by giving the other party written notice of termination. In the event the Customer shall cease doing business, shall become subject to proceedings under the bankruptcy laws (other than a petition for reorganization or similar proceeding) or shall be adjudicated bankrupt, this Agreement and the rights granted hereunder shall, at the option of State Street, immediately terminate with notice to the Customer. Termination of this Agreement with respect to any given Customer shall in no way affect the continued validity of this Agreement with respect to any other Customer. This Agreement shall in any event terminate as to any Customer within 90 days after the termination of the Custodian Agreement applicable to such Customer. c. Termination of the Right to Use. Upon termination of this Agreement for any reason, any right to use the System and access to the Data Access Services shall terminate and the Customer shall immediately cease use of the System and the Data Access Services. Immediately upon termination of this Agreement for any reason, the Customer shall return to State Street all copies of documentation and other Proprietary Information in its possession; provided, however, that in the event that either State Street or the Customer terminates this Agreement or the Custodian Agreement for any reason other than the Customer's breach, State Street shall provide the Data Access Services for a period of time and at a price to be agreed upon by State Street and the Customer. 11. MISCELLANEOUS a. Assignment; Successors. This Agreement and the rights and obligations of each Customer and State Street hereunder shall not be assigned by any party without the prior written consent of the other parties, except that State Street may assign this Agreement to a successor of all or a substantial portion of its business, or to a party controlling, controlled by, or under common control with State Street. b. Survival. All provisions regarding indemnification, warranty, liability and limits thereon, and confidentiality and/or protection of proprietary rights and trade secrets shall survive the termination of this Agreement. c. Entire Agreement. This Agreement and the attachments hereto constitute the entire understanding of the parties hereto with respect to the Data Access Services and the use of the System and supersedes any and all prior or contemporaneous representations or agreements, whether oral or written, between the parties as such may relate to the Data Access Services or the System, and cannot be modified or altered except in a writing duly executed by the parties. This Agreement is not intended to supersede or modify the duties and liabilities of the parties hereto under the Custodian Agreement or any other agreement between the parties hereto except to the extent that any such agreement specifically refers to the Data Access Services or the System. No single waiver or any right hereunder shall be deemed to be a continuing waiver. d. Severability. If any provision or provisions of this Agreement shall be held to be invalid, unlawful, or unenforce able, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired. e. Governing Law. This Agreement shall be interpreted and construed in accordance with the internal laws of The Commonwealth of Massachusetts without regard to the conflict of laws provisions thereof. IN WITNESS WHEREOF, each of the undersigned Funds severally has caused this Agreement to be duly executed in its name and through its duly authorized officer as of the date hereof. STATE STREET BANK AND TRUST COMPANY By: /s/ Donald E. Logue --------------------------- Title: Executive Vice President --------------------------- Date: ___________________________ EACH FUND LISTED ON APPENDIX A By: /s/ Glen A. Payne -------------------------- Title: Secretary -------------------------- Date: May 19, 1997 -------------------------- APPENDIX A INVESCO FUNDS INVESCO Diversified Funds, Inc. INVESCO Small Company Value Fund INVESCO Dynamics Fund, Inc. INVESCO Dynamics Fund, Inc. INVESCO Emerging Opportunity Funds, Inc. INVESCO Small Company Growth Fund INVESCO Worldwide Emerging Markets Fund INVESCO Growth Fund, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO High Yield Fund INVESCO Select Income Fund INVESCO Short-Term Bond Fund INVESCO U.S. Government Bond Fund INVESCO Industrial Income Fund, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO European Fund INVESCO International Growth Fund INVESCO Pacific Basin Fund INVESCO Money Market Funds, Inc. INVESCO Cash Reserves Fund INVESCO Tax-Free Money Fund INVESCO U.S. Government Money Fund INVESCO Multiple Asset Funds, Inc. INVESCO Balanced Fund INVESCO Multi-Asset Allocation Fund INVESCO Specialty Funds, Inc. INVESCO Asian Growth Fund INVESCO European Small Company Fund INVESCO Latin American Growth Fund INVESCO Realty Fund INVESCO Worldwide Capital Goods Fund INVESCO Worldwide Communications Fund INVESCO Strategic Portfolios, Inc. Energy Portfolio Environmental Services Portfolio Financial Services Portfolio Gold Portfolio Health Sciences Portfolio Leisure Portfolio Technology Portfolio Utilities Portfolio INVESCO Tax-Free Income Funds, Inc. INVESCO Tax-Free Intermediate Bond Fund INVESCO Tax-Free Long-Term Bond Fund INVESCO Treasurer's Series Trust INVESCO Treasurer's Money Market Reserve Fund INVESCO Treasurer's Prime Reserve Fund INVESCO Treasurer's Special Reserve Fund INVESCO Treasurer's Tax-Exempt Reserve Fund INVESCO Value Trust INVESCO Intermediate Government Bond Fund INVESCO Total Return Fund INVESCO Value Equity Fund INVESCO Variable Investment Funds, Inc. INVESCO VIF-Dynamics Portfolio INVESCO VIF-Health Sciences Portfolio INVESCO VIF-High Yield Portfolio INVESCO VIF-Industrial Income Portfolio INVESCO VIF-Small Company Growth Portfolio INVESCO VIF-Technology Portfolio INVESCO VIF-Total Return Portfolio INVESCO VIF-Utilities Portfolio INVESCO VIF-Growth Portfolio* *Effective May 1, 1997. ATTACHMENT A Multicurrency HORIZON(R) Accounting System System Product Description I. The Multicurrency HORIZON(R) Accounting System is designed to provide lot level portfolio and general ledger accounting for SEC and ERISA type requirements and includes the following services: 1) recording of general ledger entries; 2) calculation of daily income and expense; 3) reconciliation of daily activity with the trial balance, and 4) appropriate automated feeding mechanisms to (i) domestic and international settlement systems, (ii) daily, weekly and monthly evaluation services, (iii) portfolio performance and analytic services, (iv) customer's internal computing systems and (v) various State Street provided information services products. II. GlobalQuest(R) GlobalQuest(R) is designed to provide customer access to the following information maintained on The Multicurrency HORIZON(R) Accounting System: 1) cash transactions and balances; 2) purchases and sales; 3) income receivables; 4) tax refund receivables; 5) daily priced positions; 6) open trades; 7) settlement status; 8) foreign exchange transactions; 9) trade history; and 10) daily, weekly and monthly evaluation services. III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the ability to (i) generate reports using information maintained on the Multicurrency HORIZON(R) Accounting System which may be viewed or printed at the customer's location; (ii) extract and download data from the Multicurrency HORIZON(R) Accounting System; and (iii) access previous day and historical data. The following information which may be accessed for these purposes: 1) holdings; 2) holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger and 7) cash. ATTACHMENT B Designated Configuration ATTACHMENT C Undertaking The undersigned understands that in the course of its employment as Investment Advisor to each of the Funds (individually a, "Customer" , collectively, the "Customers") it will have access to State Street Bank and Trust Company's ("State Street") Multicurrency HORIZON Accounting System and other information systems (collectively, the "System"). The undersigned acknowledges that the System and the databases, computer programs, screen formats, report formats, interactive design techniques, documentation, and other information made available to the Undersigned by State Street as part of the Data Access Services provided to the Customer and through the use of the System constitute copyrighted, trade secret, or other proprietary information of substantial value to State Street. Any and all such information provided by State Street to the Undersigned shall be deemed proprietary and confidential information of State Street (hereinafter "Proprietary Information"). The Undersigned agrees that it will hold such Proprietary Information in confidence and secure and protect it in a manner consistent with its own procedures for the protection of its own confidential information and to take appropriate action by instruction or agreement with its employees who are permitted access to the Proprietary Information to satisfy its obligations hereunder. The Undersigned will not attempt to intercept data, gain access to data in transmission, or attempt entry into any system or files for which it is not authorized. It will not intentionally adversely affect the integrity of the System through the introduction of unauthorized code or data, or through unauthorized deletion. Upon notice by State Street for any reason, any right to use the System and access to the Data Access Services shall terminate and the Undersigned shall immediately cease use of the System and the Data Access Services. Immediately upon notice by State Street for any reason, the Undersigned shall return to State Street all copies of documentation and other Proprietary Information in its possession. By: /s/ Glen A. Payne --------------------- Title: Secretary --------------------- Date: May 19, 1997 --------------------- ATTACHMENT D Support During the term of this Agreement, State Street agrees to provide the following on-going support services: a. Telephone Support. The Customer Designated Persons may contact State Street's HORIZON(R) Help Desk and Customer Assistance Center between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for the purpose of obtaining answers to questions about the use of the System, or to report apparent problems with the System. From time to time, the Customer shall provide to State Street a list of persons, not to exceed five in number, who shall be permitted to contact State Street for assistance (such persons being referred to as "the Customer Designated Persons"). b. Technical Support. State Street will provide technical support to assist the Customer in using the System and the Data Access Services. The total amount of technical support provided by State Street shall not exceed 10 resource days per year. State Street shall provide such additional technical support as is expressly set forth in the fee schedule in effect from time to time between the parties (the "Fee Schedule"). Technical support, including during installation and testing, is subject to the fees and other terms set forth in the Fee Schedule. c. Maintenance Support. State Street shall use commercially reasonable efforts to correct system functions that do not work according to the System Product Description as set forth on Attachment A in priority order in the next scheduled delivery release or otherwise as soon as is practicable. d. System Enhancements. State Street will provide to the Customer any enhancements to the System developed by State Street and made a part of the System; provided that, sixty (60) days prior to installing any such enhancement, State Street shall notify the Customer and shall offer the Customer reasonable training on the enhancement. Charges for system enhancements shall be as provided in the Fee Schedule. State Street retains the right to charge for related systems or products that may be developed and separately made available for use other than through the System. e. Custom Modifications. In the event the Customer desires custom modifications in connection with its use of the System, the Customer shall make a written request to State Street providing specifications for the desired modification. Any custom modifications may be undertaken by State Street in its sole discretion in accordance with the Fee Schedule. f. Limitation on Support. State Street shall have no obligation to support the Customer's use of the System: (1) for use on any computer equipment or telecommunication facilities which does not conform to the Designated Configuration or (ii) in the event the Customer has modified the System in breach of this Agreement. EX-99.9ATRANSAGCYAG 8 TRANSFER AGENCY AGREEMENT AGREEMENT made as of this 28th day of February, 1997, between INVESCO VALUE TRUST, a Massachusetts business trust, having its principal office and place of business at 7800 East Union Avenue, Denver, Colorado 80237 (hereinafter referred to as the "Fund") and INVESCO FUNDS GROUP, INC., a Delaware corporation, having its principal place of business at 7800 East Union Avenue, Denver, Colorado 80237 (hereinafter referred to as the "Transfer Agent"). WITNESSETH: That for and in consideration of mutual promises hereinafter set forth, the Fund and the Transfer Agent agree as follows: 1. Definitions. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings: (a) "Authorized Person" shall be deemed to include the President, any Vice President, the Secretary, Treasurer, or any other person, whether or not any such person is an officer or employee of the Fund, duly authorized to give Oral Instructions and Written Instructions on behalf of the Fund as indicated in a certification as may be received by the Transfer Agent from time to time; (b) "Certificate" shall mean any notice, instruction or other instrument in writing, authorized or required by this Agreement to be given to the Transfer Agent, which is actually received by the Transfer Agent and signed on behalf of the Fund by any two officers thereof; (c) "Commission" shall have the meaning given it in the 1940 Act; (d) "Custodian" refers to the custodian of all of the securities and other moneys owned by the Fund; (e) "Oral Instructions" shall mean verbal instructions actually received by the Transfer Agent from a person reasonably believed by the Transfer Agent to be an Authorized Person; (f) "Prospectus" shall mean the currently effective prospectus relating to the Fund's Shares registered under the Securities Act of 1933; (g) "Shares" refers to the shares of beneficial interest of the Fund; (h) "Shareholder" means a record owner of Shares; (i) "Written Instructions" shall mean a written communication actually received by the Transfer Agent where the receiver is able to verify with a reasonable degree of certainty the authenticity of the sender of such communication; and (j) The "1940 Act" refers to the Investment Company Act of 1940 and the Rules and Regulations thereunder, all as amended from time to time. 2. Representation of Transfer Agent. The Transfer Agent does hereby represent and warrant to the Fund that it has an effective registration statement on SEC Form TA-1 and, accordingly, has duly registered as a transfer agent as provided in Section 17A(c) of the Securities Exchange Act of 1934. 3. Appointment of the Transfer Agent. The Fund hereby appoints and constitutes the Transfer Agent as transfer agent for all of the Shares of the Fund authorized as of the date hereof, and the Transfer Agent accepts such appointment and agrees to perform the duties herein set forth. If the Trustees of the Fund hereafter reclassify the Shares, by the creation of one or more additional series or otherwise, the Transfer Agent agrees that it will act as transfer agent for the Shares so reclassified on the terms set forth herein. 4. Compensation. (a) The Fund will initially compensate the Transfer Agent for its services rendered under this Agreement in accordance with the fees set forth in the Fee Schedule annexed hereto and incorporated herein. (b) The parties hereto will agree upon the compensation for acting as transfer agent for any series of Shares hereafter designated and established at the time that the Transfer Agent commences serving as such for said series, and such agreement shall be reflected in a Fee Schedule for that series, dated and signed by an authorized officer of each party hereto, to be attached to this Agreement. (c) Any compensation agreed to hereunder may be adjusted from time to time by attaching to this Agreement a revised Fee Schedule, dated and signed by an authorized officer of each party hereto, and a certified copy of the resolution of the Trustees of the Fund authorizing such revised Fee Schedule. (d) The Transfer Agent will bill the Fund as soon as practicable after the end of each calendar month, and said billings will be detailed in accordance with the Fee Schedule for the Fund. The Fund will promptly pay to the Transfer Agent the amount of such billing. 5. Documents. In connection with the appointment of the Transfer Agent, the Fund shall, on or before the date this Agreement goes into effect, file with the Transfer Agent the following documents: (a) A certified copy of the Declaration of Trust of the Fund, including all amendments thereto, as then in effect; (b) A certified copy of the Bylaws of the Fund, as then in effect; (c) Certified copies of the resolutions of the Trustees authorizing this Agreement and designating Authorized Persons to give instructions to the Transfer Agent; (d) A specimen of the certificate for Shares of the Fund in the form approved by the Trustees, with a certificate of the Secretary of the Fund as to such approval; (e) All account application forms and other documents relating to Shareholder accounts; (f) A certified list of Shareholders of the Fund with the name, address and tax identification number of each Shareholder, and the number of Shares held by each, certificate numbers and denominations (if any certificates have been issued), lists of any accounts against which stops have been placed, together with the reasons for said stops, and the number of Shares redeemed by the Fund; (g) Copies of all agreements then in effect between the Fund and any agent with respect to the issuance, sale, or cancellation of Shares; and (h) An opinion of counsel for the Fund with respect to the validity of the Shares. 6. Further Documentation. The Fund will also furnish from time to time the following documents: (a) Each resolution of the Trustees authorizing the original issue of Shares; (b) Each Registration Statement filed with the Commission, and amendments and orders with respect thereto, in effect with respect to the sale of Shares of the Fund; (c) A certified copy of each amendment to the Declaration of Trust and the Bylaws of the Fund; (d) Certified copies of each resolution of the Trustees designating Authorized Persons to give instructions to the Transfer Agent; (e) Certificates as to any change in any officer, trustee, or Authorized Person of the Fund; (f) Specimens of all new certificates for Shares accompanied by the Fund's resolutions of the Trustees approving such forms; and (g) Such other certificates, documents or opinions as may mutually be deemed necessary or appropriate for the Transfer Agent in the proper performance of its duties. 7. Certificates for Shares and Records Pertaining Thereto. (a) At the expense of the Fund, the Transfer Agent shall maintain an adequate supply of blank share certificates to meet the Transfer Agent's requirements therefor. Such share certificates shall be properly signed by facsimile. The Fund agrees that, notwithstanding the death, resignation, or removal of any officer of the Fund whose signature appears on such certificates, the Transfer Agent may continue to countersign certificates which bear such signatures until otherwise directed by the Fund. (b) The Transfer Agent agrees to prepare, issue and mail certificates as requested by the Shareholders for Shares of the Fund in accordance with the instructions of the Fund and to confirm such issuance to the Shareholder and the Fund or its designee. (c) The Fund hereby authorizes the Transfer Agent to issue replacement share certificates in lieu of certificates which have been lost, stolen or destroyed, without any further action by the Trustees or any officer of the Fund, upon receipt by the Transfer Agent of properly executed affidavits or lost certificate bonds, in form satisfactory to the Transfer Agent, with the Fund and the Transfer Agent as obligees under any such bond. (d) The Transfer Agent shall also maintain a record of each certificate issued, the number of Shares represented thereby and the holder of record. The Transfer Agent shall further maintain a stop transfer record on lost and/or replaced certificates. (e) The Transfer Agent may establish such additional rules and regulations governing the transfer or registration of certificates for Shares as it may deem advisable and consistent with such rules and regulations generally adopted by transfer agents. 8. Sale of Fund Shares. (a) Whenever the Fund or its authorized agent shall sell or cause to be sold any Shares, the Fund or its authorized agent shall provide or cause to be provided to the Transfer Agent information including: (i) the number of Shares sold, trade date, and price; (ii) the amount of money to be delivered to the Custodian for the sale of such Shares; (iii) in the case of a new account, a new account application or sufficient information to establish an account. (b) The Transfer Agent will, upon receipt by it of a check or other payment identified by it as an investment in Shares of the Fund and drawn or endorsed to the Transfer Agent as agent for, or identified as being for the account of, the Fund, promptly deposit such check or other payment to the appropriate account postings necessary to reflect the investment. The Transfer Agent will notify the Fund, or its designee, and the Custodian of all purchases and related account adjustments. (c) Upon receipt of the notification required under paragraph (a) hereof and the notification from the Custodian that such money has been received by it, the Transfer Agent shall issue to the purchaser or his authorized agent such Shares as he is entitled to receive, based on the appropriate net asset value of the Fund's Shares, determined in accordance with applicable federal law or regulation, as described in the Prospectus for the Fund. In issuing Shares to a purchaser or his authorized agent, the Transfer Agent shall be entitled to rely upon the latest written directions, if any, previously received by the Transfer Agent from the purchaser or his authorized agent concerning the delivery of such Shares. (d) The Transfer Agent shall not be required to issue any Shares of the Fund where it has received Written Instructions from the Fund or written notification from any appropriate federal or state authority that the sale of the Shares of the Fund has been suspended or discontinued, and the Transfer Agent shall be entitled to rely upon such Written Instructions or written notification. (e) Upon the issuance of any Shares of the Fund in accordance with the foregoing provision of this Article, the Transfer Agent shall not be responsible for the payment of any original issue or other taxes required to be paid by the Fund in connection with such issuance. 9. Returned Checks. In the event that any check or other order for the payment of money is returned unpaid for any reason, the Transfer Agent will: (i) give prompt notice of such return to the Fund or its designee; (ii) place a stop transfer order against all Shares issued or held on deposit as a result of such check or order; (iii) in the case of any Shareholder who has obtained redemption checks, place a stop payment order on the checking account on which such checks are issued; and (iv) take such other steps as the Transfer Agent may, in its discretion, deem appropriate or as the Fund or its designee may instruct. 10. Redemptions. (a) Redemptions By Mail or In Person. Shares of the Fund will be redeemed upon receipt by the Transfer Agent of: (i) a written request for redemption, signed by each registered owner exactly as the Shares are registered; (ii) certificates properly endorsed for any Shares for which certificates have been issued; (iii) signature guarantees to the extent required by the Transfer Agent as described in the Prospectus for the Fund; and (iv) any additional documents required by the Transfer Agent for redemption by corporations, executors, administrators, trustees and guardians. (b) Wire Orders or Telephone Redemptions. The Transfer Agent will, consistent with procedures which may be established by the Fund from time to time for redemption by wire or telephone, upon receipt of such a wire order or telephone redemption request, redeem Shares and transmit the proceeds of such redemption to the redeeming Shareholder as directed. All wire or telephone redemptions will be subject to such additional requirements as may be described in the Prospectus for the Fund. Both the Fund and the Transfer Agent reserve the right to modify or terminate the procedures for wire order or telephone redemptions at any time. (c) Processing Redemptions. Upon receipt of all necessary information and documentation relating to a redemption, the Transfer Agent will issue to the Custodian an advice setting forth the number of Shares of the Fund received by the Transfer Agent for redemption and that such shares are valid and in good form for redemption. The Transfer Agent shall, upon receipt of the moneys paid to it by the Custodian for the redemption of Shares, pay such moneys to the Shareholder, his authorized agent or legal representative. 11. Transfers and Exchanges. The Transfer Agent is authorized to review and process transfers of Shares of the Fund and to the extent, if any, permitted in the Prospectus for the Fund, exchanges between the Fund and other mutual funds advised by INVESCO Funds Group, Inc., on the records of the Fund maintained by the Transfer Agent. If Shares to be transferred are represented by outstanding certificates, the Transfer Agent will, upon surrender to it of the certificates in proper form for transfer, and upon cancellation thereof, countersign and issue new certificates for a like number of Shares and deliver the same. If the Shares to be transferred are not represented by outstanding certificates, the Transfer Agent will, upon an order therefor by or on behalf of the registered holder thereof in proper form, credit the same to the transferee on its books. If Shares are to be exchanged for Shares of another mutual fund, the Transfer Agent will process such exchange in the same manner as a redemption and sale of Shares, except that it may in its discretion waive requirements for information and documentation. 12. Right to Seek Assurances. The Transfer Agent reserves the right to refuse to transfer or redeem Shares until it is satisfied that the requested transfer or redemption is legally authorized, and it shall incur no liability for the refusal, in good faith, to make transfers or redemptions which the Transfer Agent, in its judgment, deems improper or unauthorized, or until it is satisfied that there is no basis for any claims adverse to such transfer or redemption. The Transfer Agent may, in effecting transfers, rely upon the provisions of the Uniform Act for the Simplification of Fiduciary Security Transfers or the Uniform Commercial Code, as the same may be amended from time to time, which in the opinion of legal counsel for the Fund or of its own legal counsel protect it in not requiring certain documents in connection with the transfer or redemption of Shares of the Fund, and the Fund shall indemnify the Transfer Agent for any act done or omitted by it in reliance upon such laws or opinions of counsel to the Fund or of its own counsel. 13. Distributions. (a) The Fund will promptly notify the Transfer Agent of the declaration of any dividend or distribution. The Fund shall furnish to the Transfer Agent a resolution of the Trustees of the Fund certified by the Secretary authorizing the declaration of dividends and authorizing the Transfer Agent to rely on Oral Instructions or a Certificate specifying the date of the declaration of such dividend or distribution, the date of payment thereof, the record date as of which Shareholders entitled to payment shall be determined, the amount payable per share to Shareholders of record as of that date, and the total amount payable to the Transfer Agent on the payment date. (b) The Transfer Agent will, on or before the payable date of any dividend or distribution, notify the Custodian of the estimated amount of cash required to pay said dividend or distribution, and the Fund agrees that, on or before the mailing date of such dividend or distribution, it shall instruct the Custodian to place in a dividend disbursing account funds equal to the cash amount to be paid out. The Transfer Agent, in accordance with Shareholder instructions, will calculate, prepare and mail checks to, or (where appropriate) credit such dividend or distribution to the account of, Fund Shareholders, and maintain and safeguard all underlying records. (c) The Transfer Agent will replace lost checks upon receipt of properly executed affidavits and maintain stop payment orders against replaced checks. (d) The Transfer Agent will maintain all records necessary to reflect the crediting of dividends which are reinvested in Shares of the Fund. (e) The Transfer Agent shall not be liable for any improper payments made in accordance with the resolution of the Trustees of the Fund. (f) If the Transfer Agent shall not receive from the Custodian sufficient cash to make payment to all Shareholders of the Fund as of the record date, the Transfer Agent shall, upon notifying the Fund, withhold payment to all Shareholders of record as of the record date until such sufficient cash is provided to the Transfer Agent. 14. Other Duties. In addition to the duties expressly provided for herein, the Transfer Agent shall perform such other duties and functions as are set forth in the Fee Schedules(s) hereto from time to time. 15. Taxes. It is understood that the Transfer Agent shall file such appropriate information returns concerning the payment of dividends and capital gain distributions with the proper federal, state and local authorities as are required by law to be filed by the Fund and shall withhold such sums as are required to be withheld by applicable law. 16. Books and Records. (a) The Transfer Agent shall maintain records showing for each investor's account the following: (i) names, addresses, tax identifying numbers and assigned account numbers; (ii) numbers of Shares held; (iii) historical information regarding the account of each Shareholder, including dividends paid and date and price of all transactions on a Shareholder's account; (iv) any stop or restraining order placed against a Shareholder's account; (v) information with respect to withholdings in the case of a foreign account; (vi) any capital gain or dividend reinvestment order, plan application, dividend address and correspondence relating to the current maintenance of a Shareholder's account; (vii) certificate numbers and denominations for any Shareholders holding certificates; and (viii) any information required in order for the Transfer Agent to perform the calculations contemplated or required by this Agreement. (b) Any records required to be maintained by Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act. Such records may be inspected by the Fund at reasonable times. The Transfer Agent may, at its option at any time, and shall forthwith upon the Fund's demand, turn over to the Fund and cease to retain in the Transfer Agent's files, records and documents created and maintained by the Transfer Agent in performance of its services or for its protection. At the end of the six-year retention period, such records and documents will either be turned over to the Fund, or destroyed in accordance with the Fund's authorization. 17. Shareholder Relations. (a) The Transfer Agent will investigate all Shareholder inquiries related to Shareholder accounts and respond promptly to correspondence from Shareholders. (b) The Transfer Agent will address and mail all communications to Shareholders or their nominees, including proxy material and periodic reports to Shareholders. (c) In connection with special and annual meetings of Shareholders, the Transfer Agent will prepare Shareholder lists, mail and certify as to the mailing of proxy materials, process and tabulate returned proxy cards, report on proxies voted prior to meetings, and certify to the Secretary of the Fund Shares to be voted at meetings. 18. Reliance by Transfer Agent; Instructions. (a) The Transfer Agent shall be protected in acting upon any paper or document believed by it to be genuine and to have been signed by an Authorized Person and shall not be held to have any notice of any change of authority of any person until receipt of written certification thereof from the Fund. It shall also be protected in processing Share certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of the Fund and the proper countersignature of the Transfer Agent. (b) At any time the Transfer Agent may apply to any Authorized Person of the Fund for Written Instructions, and, at the expense of the Fund, may seek advice from legal counsel for the Fund, with respect to any matter arising in connection with this Agreement, and it shall not be liable for any action taken or not taken or suffered by it in good faith in accordance with such Written Instructions or with the opinion of such counsel. In addition, the Transfer Agent, its officers, agents or employees, shall accept instructions or requests given to them by any person representing or acting on behalf of the Fund only if said representative is known by the Transfer Agent, its officers, agents or employees, to be an Authorized Person. The Transfer Agent shall have no duty or obligation to inquire into, nor shall the Transfer Agent be responsible for, the legality of any act done by it upon the request or direction of Authorized Persons of the Fund. (c) Notwithstanding any of the foregoing provisions of this Agreement, the Transfer Agent shall be under no duty or obligation to inquire into, and shall not be liable for: (i) the legality of the issue or sale of any Shares of the Fund, or the sufficiency of the amount to be received therefor; (ii) the legality of the redemption of any Shares of the Fund, or the propriety of the amount to be paid therefor; (iii) the legality of the declaration of any dividend by the Fund, or the legality of the issue of any Shares of the Fund in payment of any stock dividend; or (iv) the legality of any recapitalization or readjustment of the Shares of the Fund. 19. Standard of Care and Indemnification. (a) The Transfer Agent may, in connection with this Agreement, employ agents or attorneys in fact, and shall not be liable for any loss arising out of or in connection with its actions under this Agreement so long as it acts in good faith and with due diligence, and is not negligent or guilty of any willful misconduct. (b) The Fund hereby agrees to indemnify and hold harmless the Transfer Agent from and against any and all claims, demands, expenses and liabilities (whether with or without basis in fact or law) of any and every nature which the Transfer Agent may sustain or incur or which may be asserted against the Transfer Agent by any person by reason of, or as a result of: (i) any action taken or omitted to be taken by the Transfer Agent in good faith in reliance upon any Certificate, instrument, order or stock certificate believed by it to be genuine and to be signed, countersigned or executed by any duly Authorized Person, upon the Oral Instructions or Written Instructions of an Authorized Person of the Fund or upon the opinion of legal counsel for the Fund or its own counsel; or (ii) any action taken or omitted to be taken by the Transfer Agent in connection with its appointment in good faith in reliance upon any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended or repealed. However, indemnification hereunder shall not apply to actions or omissions of the Transfer Agent or its directors, officers, employees or agents in cases of its own gross negligence, willful misconduct, bad faith, or reckless disregard of its or their own duties hereunder. 20. Affiliation Between Fund and Transfer Agent. It is understood that the trustees, officers, employees, agents and Shareholders of the Fund, and the officers, directors, employees, agents and shareholders of the Fund's investment adviser, INVESCO Funds Group, Inc. (the "Adviser"), are or may be interested in the Transfer Agent as directors, officers, employees, agents, shareholders, or otherwise, and that the directors, officers, employees, agents or shareholders of the Transfer Agent may be interested in the Fund as trustees, officers, employees, agents, shareholders, or otherwise, or in the Adviser as officers, directors, employees, agents, shareholders or otherwise. 21. Term. (a) This Agreement shall become effective on February 28, 1997 after approval by vote of a majority (as defined in the 1940 Act) of the Fund's Trustees, including a majority of the Trustees who are not interested persons of the Fund (as defined in the 1940 Act), and shall continue in effect for an initial term expiring February 28, 1998 and from year to year thereafter, so long as such continuance is specifically approved at least annually both: (i) by either the Trustees or the vote of a majority of the outstanding voting securities of the Fund; and (ii) by a vote of the majority of the Trustees who are not interested persons of the Fund (as defined in the 1940 Act) cast in person at a meeting called for the purpose of voting upon such approval. (b) Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall not be less than 60 days after the date of receipt of such notice. In the event such notice is given by the Fund, it shall be accompanied by a resolution of the Trustees, certified by the Secretary, electing to terminate this Agreement and designating a successor transfer agent. 22. Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties with the formality of this Agreement, and (i) authorized or approved by the resolution of the Trustees, including a majority of the Trustees of the Fund who are not interested persons of the Fund as defined in the 1940 Act, or (ii) authorized and approved by such other procedures as may be permitted or required by the 1940 Act. 23. Subcontracting. The Fund agrees that the Transfer Agent may, in its discretion, subcontract for certain of the services to be provided hereunder; provided, however, that the transfer agent will be liable to the Fund for any loss arising out of or in connection with the actions of any subcontractor, if the subcontractor fails to act in good faith and with due diligence or is negligent or guilty of any willful misconduct. 24. Miscellaneous. (a) Any notice and other instrument in writing, authorized or required by this Agreement to be given to the Fund or the Transfer Agent, shall be sufficiently given if addressed to that party and mailed or delivered to it at its office set forth below or at such other place as it may from time to time designate in writing. To the Fund: INVESCO Value Trust Post Office Box 173706 Denver, Colorado 80217-3706 Attention: Dan J. Hesser, President To the Transfer Agent: INVESCO Funds Group, Inc. Post Office Box 173706 Denver, Colorado 80217-3706 Attention: Ronald L. Grooms, Senior Vice President (b) This Agreement shall not be assignable and in the event of its assignment (in the sense contemplated by the 1940 Act), it shall automatically terminate. (c) This Agreement shall be construed in accordance with the laws of the State of Colorado. (d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers thereunder duly authorized and their respective corporate seals to be hereunto affixed, as of the day and year first above written. INVESCO VALUE TRUST By: /s/ Dan J. Hesser --------------------- Dan J. Hesser, President ATTEST: /s/ Glen A. Payne - ------------------------ Glen A. Payne, Secretary INVESCO FUNDS GROUP, INC. By: /s/ Ronald L. Grooms -------------------- Ronald L. Grooms, Senior Vice President ATTEST: /s/ Glen A. Payne - ------------------------ Glen A. Payne, Secretary FEE SCHEDULE for Services Pursuant to Transfer Agency Agreement, dated February 28, 1997, between INVESCO Value Trust (the "Fund") and INVESCO Funds Group, Inc. as Transfer Agent (the "Agreement"). The following fee schedule shall apply to the INVESCO Intermediate Government Bond Fund, a series of the Fund: Account Maintenance Charges. Fees are based on an annual charge set forth below per shareholder account or omnibus account participant for account maintenance, as described in the Agreement. This charge, in the amount of $26.00 per shareholder account per year, or in the case of omnibus accounts that are invested in the Fund, $26.00 per participant in such accounts per year, is billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge is made for an account in the month that it opens or closes, as well as in each month which the account remains open, regardless of the account balance. Expenses. The Fund shall not be liable for reimbursement to the Transfer Agent of expenses incurred by it in the performance of services pursuant to the Agreement, provided, however, that nothing herein or in the Agreement shall be construed as affecting in any manner any obligations assumed by the Fund with respect to expense payment or reimbursement pursuant to a separate written agreement between the Fund and the Transfer Agent or any affiliate thereof. The following fee schedule shall apply to the INVESCO Value Equity Fund and INVESCO Total Return Fund, two series of the Fund: Account Maintenance Charges. Fees are based on an annual charge set forth below per shareholder account or omnibus account participant for account maintenance, as described in the Agreement. This charge, in the amount of $20.00 per shareholder account per year, or in the case of omnibus accounts that are invested in the Fund, $20.00 per participant in such accounts per year, is billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge is made for an account in the month that it opens or closes, as well as in each month which the account remains open, regardless of the account balance. Expenses. The Fund shall not be liable for reimbursement to the Transfer Agent of expenses incurred by it in the performance of services pursuant to the Agreement, provided, however, that nothing herein or in the Agreement shall be construed as affecting in any manner any obligations assumed by the Fund with respect to expense payment or reimbursement pursuant to a separate written agreement Effective this 28th day of February, 1997. INVESCO VALUE TRUST By: /s/ Dan J. Hesser ------------------ Dan J. Hesser, President ATTEST: /s/ Glen A. Payne - ------------------------ Glen A. Payne, Secretary INVESCO FUNDS GROUP, INC. By: /s/ Ronald L. Grooms -------------------- Ronald L. Grooms, ATTEST: Senior Vice President /s/ Glen A. Payne - ------------------------ Glen A. Payne, Secretary EX-99.9BADMINSERVAG 9 ADMINISTRATIVE SERVICES AGREEMENT AGREEMENT made as of the 28th day of February, 1997, in Denver, Colorado, by and between INVESCO VALUE TRUST, a Massachusetts business trust (the "Fund"), and INVESCO FUNDS GROUP, INC., a Delaware corporation (hereinafter referred to as "INVESCO"). WHEREAS, the Fund is engaged in business as an open-end management investment company, is registered as such under the Investment Company Act of 1940, as amended (the "Act"), and is authorized to issue shares representing beneficial interests in the following separate portfolios of investments: (1) INVESCO Intermediate Government Bond Fund, 2) INVESCO Total Return Fund, and (3) INVESCO Value Equity Fund (the "Portfolios"); and WHEREAS, INVESCO is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of acting as investment adviser and providing certain other administrative, sub-accounting and recordkeeping services to certain investment companies, including the Fund; and WHEREAS, the Fund desires to retain INVESCO to render certain administrative, sub-accounting and recordkeeping services (the "Services") in the manner and on the terms and conditions hereinafter set forth; and WHEREAS, INVESCO desires to be retained to perform such services on said terms and conditions; NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the Fund and INVESCO agree as follows: 1. The Fund hereby retains INVESCO to provide, or, upon receipt of written approval of the Fund arrange for other companies, including affiliates of INVESCO, to provide to the Portfolios: A) such sub-accounting and recordkeeping services and functions as are reasonably necessary for the operation of the Portfolios. Such services shall include, but shall not be limited to, preparation and maintenance of the following required books, records and other documents: (1) journals containing daily itemized records of all purchases and sales, and receipts and deliveries of securities and all receipts and disbursements of cash and all other debits and credits, in the form required by Rule 31a-1(b)(1) under the Act; (2) general and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, in the form required by Rules 31a-1(b)(2)(i) - (iii) under the Act; (3) a securities record or ledger reflecting separately for each portfolio security as of trade date all "long" and "short" positions carried by the Portfolios for the account of the Portfolios, if any, and showing the location of all securities long and the off-setting position to all securities short, in the form required by Rule 31a-1(b)(3) under the Act; (4) a record of all portfolio purchases or sales, in the form required by Rule 31a-1(b)(6) under the Act; (5) a record of all puts, calls, spreads, straddles and all other options, if any, in which the Portfolios have any direct or indirect interest or which the Portfolios have granted or guaranteed, in the form required by Rule 31a-1(b)(7) under the Act; (6) a record of the proof of money balances in all ledger accounts maintained pursuant to this Agreement, in the form required by Rule 31a- 1(b)(8) under the Act; and (7) price make-up sheets and such records as are necessary to reflect the determination of the Portfolios' net asset value. The foregoing books and records shall be maintained and preserved by INVESCO in accordance with and for the time periods specified by applicable rules and regulations, including Rule 31a-2 under the Act. All such books and records shall be the property of the Fund and, upon request therefor, INVESCO shall surrender to the Fund such of the books and records so requested; and B) such sub-accounting, recordkeeping and administrative services and functions, which shall be furnished by a wholly-owned subsidiary of INVESCO, as are reasonably necessary for the operation of Portfolio shareholder accounts maintained by certain retirement plans and employee benefit plans for the benefit of participants in such plans. Such services and functions shall include, but shall not be limited to: (1) establishing new retirement plan participant accounts; (2) receipt and posting of weekly, bi-weekly and monthly retirement plan contributions; (3) allocation of contributions to each participant's individual Portfolio account; (4) maintenance of separate account balances for each source of retirement plan money (i.e., Company, Employee, Voluntary, Rollover) invested in the Portfolios; (5) purchase, sale, exchange or transfer of monies in the retirement plan as directed by the relevant party; (6) distribution of monies for participant loans, hardships, terminations, death or disability payments; (7) distribution of periodic payments for retired participants; (8) posting of distributions of interest, dividends and long-term capital gains to participants by the Portfolios; (9) production of monthly, quarterly and/or annual statements of all Portfolio activity for the relevant parties; (10) processing of participant maintenance information for investment election changes, address changes, beneficiary changes and Qualified Domestic Relations Orders; (11) responding to telephone and written inquiries concerning Portfolio investments, retirement plan provisions and compliance issues; (12) performing discrimination testing and counseling employers on cure options on failed tests; (13) preparation of 1099R and W2P participant IRS tax forms; (14) preparation of, or assisting in the preparation of, 5500 Series tax forms, Summary Plan Descriptions and Determination Letters; and (15) reviewing legislative and IRS changes to keep the retirement plan in compliance with applicable law. 2. INVESCO shall, at its own expense, maintain such staff and employ or retain such personnel and consult with such other persons as it shall from time to time determine to be necessary or useful to the performance of its obligations under this Agreement. Without limiting the generality of the foregoing, such staff and personnel shall be deemed to include officers of INVESCO and persons employed or otherwise retained by INVESCO to provide or assist in providing the Services to the Portfolios. 3. INVESCO shall, at its own expense, provide such office space, facilities and equipment (including, but not limited to, computer equipment, communication lines and supplies) and such clerical help and other services as shall be necessary to provide the Services to the Portfolios. In addition, INVESCO may arrange on behalf of the Fund to obtain pricing information regarding the Portfolios' investment securities from such company or companies as are approved by a majority of the Fund's board of directors; and, if necessary, the Fund shall be financially responsible to such company or companies for the reasonable cost of providing such pricing information. 4. The Fund will, from time to time, furnish or otherwise make available to INVESCO such information relating to the business and affairs of the Portfolios as INVESCO may reasonably require in order to discharge its duties and obligations hereunder. 5. For the services rendered, facilities furnished, and expenses assumed by INVESCO under this Agreement, the Fund shall pay to INVESCO a $10,000 per year per Portfolio base fee, plus an additional fee, computed on a daily basis and paid on a monthly basis. For purposes of each daily calculation of this additional fee, the most recently determined net asset value of each Portfolio, as determined by a valuation made in accordance with the Fund's procedure for calculating each Portfolio's net asset value as described in the Portfolios' Prospectus and/or Statement of Additional Information, shall be used. The additional fee to INVESCO under this Agreement shall be computed at the annual rate of 0.015% of each Portfolio's daily net assets as so determined. During any period when the determination of a Portfolio's net asset value is suspended by the directors of the Fund, the net asset value of a share of that Portfolio as of the last business day prior to such suspension shall, for the purpose of this Paragraph 5, be deemed to be the net asset value at the close of each succeeding business day until it is again determined. 6. INVESCO will permit representatives of the Fund including the Fund's independent auditors to have reasonable access to the personnel and records of INVESCO in order to enable such representatives to monitor the quality of services being provided and the level of fees due INVESCO pursuant to this Agreement. In addition, INVESCO shall promptly deliver to the board of directors of the Fund such information as may reasonably be requested from time to time to permit the board of directors to make an informed determination regarding continuation of this Agreement and the payments contemplated to be made hereunder. 7. This Agreement shall remain in effect until no later than February 28, 1998 and from year to year thereafter provided such continuance is approved at least annually by the vote of a majority of the directors of the Fund who are not parties to this Agreement or "interested persons" (as defined in the Act) of any such party, which vote must be cast in person at a meeting called for the purpose of voting on such approval; and further provided, however, that (a) the Fund may, at any time and without the payment of any penalty, terminate this Agreement upon thirty days written notice to INVESCO; (b) the Agreement shall immediately terminate in the event of its assignment (within the meaning of the Act and the Rules thereunder) unless the Board of Directors of the Fund approves such assignment; and (c) INVESCO may terminate this Agreement without payment of penalty on sixty days written notice to the Fund. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postage pre-paid, to the other party at the principal office of such party. 8. This Agreement shall be construed in accordance with the laws of the State of Colorado and the applicable provisions of the Act. To the extent the applicable law of the State of Colorado or any of the provisions herein conflict with the applicable provisions of the Act, the latter shall control. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written. INVESCO VALUE TRUST By: /s/ Dan J. Hesser ---------------------- ATTEST: Dan J. Hesser President /s/ Glen A. Payne - ----------------- Glen A. Payne Secretary INVESCO FUNDS GROUP, INC. By: /s/ Ronald L. Grooms ---------------------- ATTEST: Ronald L. Grooms Senior Vice President /s/ Glen A. Payne - ----------------- Glen A. Payne Secretary EX-99.11CONSENT 10 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Prospectuses and Statement of Additional Information constituting parts of this Post-Effective Amendment No. 21 to the registration statement on Form N-1A (the "Registration Statement") of our report dated October 8, 1997, relating to the financial statements and financial highlights appearing in the August 31, 1997 Annual Report to Shareholders of INVESCO Value Trust, which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the heading "Financial Highlights" in the Prospectuses and under the headings "Independent Accountants" and "Financial Statements" in the Statement of Additional Information. /s/ Price Waterhouse LLP - ------------------------- Price Waterhouse LLP Denver, Colorado October 28, 1997 EX-99.15PLAGOFDIST 11 PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1 PLAN AND AGREEMENT made as of 28th day of October, 1997, by and between INVESCO VALUE TRUST, a Massachusetts business trust (hereinafter called the "Company"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation ("INVESCO"). WHEREAS, the Company engages in business as an open-end management investment company, and is registered as such under the Investment Company Act of 1940, as amended (the "Act"); and WHEREAS, the Company desires to finance the distribution of its shares of INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund in accordance with this Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Act (the "Plan and Agreement"); and WHEREAS, INVESCO desires to be retained to perform services in accordance with such Plan and Agreement and on said terms and conditions; and WHEREAS, this Plan and Agreement has been approved by a vote of the board of directors of the Company, including a majority of the directors who are not interested persons of the Company, as defined in the Act, and who have no direct or indirect financial interest in the operation of this Plan and Agreement (the "Disinterested Directors") cast in person at a meeting called for the purpose of voting on this Plan and Agreement; NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in accordance with the requirements of Rule 12b-1 under the Act, and provide and agree as follows: 1. The Plan is defined as those provisions of this document by which the Company adopts a Plan pursuant to Rule 12b-1 under the Act and authorizes payments as described herein. The Agreement is defined as those provisions of this document by which the Company retains INVESCO to provide distribution services beyond those required by the General Distribution Agreement between the parties, as are described herein. The Company may retain the Plan notwithstanding termination of the Agreement. Termination of the Plan will automatically terminate the Agreement. The Company is hereby authorized to utilize the assets of the Company to finance certain activities in connection with distribution of the Company's shares. 2. Subject to the supervision of the board of directors, the Company hereby retains INVESCO to promote the distribution of shares of the Company by providing services and engaging in activities beyond those specifically required by the Distribution Agreement between the Company and INVESCO and to provide related services. The activities and services to be provided by INVESCO hereunder shall include one or more of the following: (a) the payment of compensation (including trail commissions and incentive compensation) to securities dealers, financial institutions and other organizations, which may include INVESCO-affiliated companies, that render distribution and administrative services in connection with the distribution of the Company's shares; (b) the printing and distribution of reports and prospectuses for the use of potential investors in the Company; (c) the preparing and distributing of sales literature; (d) the providing of advertising and engaging in other promotional activities, including direct mail solicitation, and television, radio, newspaper and other media advertisements; and (e) the providing of such other services and activities as may from time to time be agreed upon by the Company. Such reports and prospectuses, sales literature, advertising and promotional activities and other services and activities may be prepared and/or conducted either by INVESCO's own staff, the staff of INVESCO-affiliated companies, or third parties. 3. INVESCO hereby undertakes to use its best efforts to promote sales of shares of the Company to investors by engaging in those activities specified in paragraph (2) above as may be necessary and as it from time to time believes will best further sales of such shares. 4. The Company is hereby authorized to expend, out of its assets, on a monthly basis, and shall pay INVESCO to such extent, to enable INVESCO at its discretion to engage over a rolling twelve-month period (or the rolling twenty-four month period specified below) in the activities and provide the services specified in paragraph (2) above, an amount computed at an annual rate of .25 of 1% of the average daily net assets of the Company during the month. INVESCO shall not be entitled hereunder to payment for overhead expenses (overhead expenses defined as customary overhead not including the costs of INVESCO's personnel whose primary responsibilities involve marketing of the INVESCO Funds). Payments by the Company hereunder, for any month, may be used to compensate INVESCO for: (a) activities engaged in and services provided by INVESCO during the rolling twelve-month period in which that month falls, or (b) to the extent permitted by applicable law, for any month during the first twenty-four months following the Company's commencement of operations, activities engaged in and services provided by INVESCO during the rolling twenty-four month period in which that month falls, and any obligations incurred by INVESCO in excess of the limitation described above shall not be paid for out of Fund assets. The Company shall not be authorized to expend, for any month, a greater percentage of its assets to pay INVESCO for activities engaged in and services provided by INVESCO during the rolling twenty-four month period referred to above than it would otherwise be authorized to expend out of its assets to pay INVESCO for activities engaged in and services provided by INVESCO during the rolling twelve-month period referred to above, and the Company shall not be authorized to expend, for any month, a greater percentage of its assets to pay INVESCO for activities engaged in and services provided by INVESCO pursuant to the Plan and Agreement than it would otherwise have been authorized to expend out of its assets to reimburse INVESCO for expenditures incurred by INVESCO pursuant to the Plan and Agreement as it existed prior to February 5, 1997. No payments will be made by the Company hereunder after the date of termination of the Plan and Agreement. 5. To the extent that obligations incurred by INVESCO out of its own resources to finance any activity primarily intended to result in the sale of shares of the Company, pursuant to this Plan and Agreement or otherwise, may be deemed to constitute the indirect use of Company assets, such indirect use of Company assets is hereby authorized in addition to, and not in lieu of, any other payments authorized under this Plan and Agreement. 6. The Treasurer of INVESCO shall provide to the board of directors of the Company, at least quarterly, a written report of all moneys spent by INVESCO on the activities and services specified in paragraph (2) above pursuant to the Plan and Agreement. Each such report shall itemize the activities engaged in and services provided by INVESCO to a Fund as authorized by the penultimate sentence of paragraph (4) above. Upon request, but no less frequently than annually, INVESCO shall provide to the board of directors of the Company such information as may reasonably be required for it to review the continuing appropriateness of the Plan and Agreement. 7. This Plan and Agreement shall each become effective immediately upon approval by a vote of a majority of the outstanding voting securities of the Company as defined in the Act, and shall continue in effect until October 28, 1998 unless terminated as provided below. Thereafter, the Plan and Agreement shall continue in effect from year to year, provided that the continuance of each is approved at least annually by a vote of the board of directors of the Company, including a majority of the Disinterested Directors, cast in person at a meeting called for the purpose of voting on such continuance. The Plan may be terminated at any time, without penalty, by the vote of a majority of the Disinterested Directors or by the vote of a majority of the outstanding voting securities of the Company. INVESCO, or the Company, by vote of a majority of the Disinterested Directors or of the holders of a majority of the outstanding voting securities of the Company, may terminate the Agreement under this Plan, without penalty, upon 30 days' written notice to the other party. In the event that neither INVESCO nor any affiliate of INVESCO serves the Company as investment adviser, the agreement with INVESCO pursuant to this Plan shall terminate at such time. The board of directors may determine to approve a continuance of the Plan, but not a continuance of the Agreement, hereunder. 8. So long as the Plan remains in effect, the selection and nomination of persons to serve as directors of the Company who are not "interested persons" of the Company shall be committed to the discretion of the directors then in office who are not "interested persons" of the Company. However, nothing contained herein shall prevent the participation of other persons in the selection and nomination process, provided that a final decision on any such selection or nomination is within the discretion of, and approved by, a majority of the directors of the Company then in office who are not "interested persons" of the Company. 9. This Plan may not be amended to increase the amount to be spent by the Company hereunder without approval of a majority of the outstanding voting securities of the Company. All material amendments to the Plan and to the Agreement must be approved by the vote of the board of directors of the Company, including a majority of the Disinterested Directors, cast in person at a meeting called for the purpose of voting on such amendment. 10. To the extent that this Plan and Agreement constitutes a Plan of Distribution adopted pursuant to Rule 12b-1 under the Act it shall remain in effect as such, so as to authorize the use by the Company of its assets in the amounts and for the purposes set forth herein, notwithstanding the occurrence of an "assignment," as defined by the Act and the rules thereunder. To the extent it constitutes an agreement with INVESCO pursuant to a plan, it shall terminate automatically in the event of such "assignment." Upon a termination of the agreement with INVESCO, the Company may continue to make payments pursuant to the Plan only upon the approval of a new agreement under this Plan and Agreement, which may or may not be with INVESCO, or the adoption of other arrangements regarding the use of the amounts authorized to be paid by the Funds hereunder, by the Company's board of directors in accordance with the procedures set forth in paragraph 7 above. 11. The Company shall preserve copies of this Plan and Agreement and all reports made pursuant to paragraph 6 hereof, together with minutes of all board of directors meetings at which the adoption, amendment or continuance of the Plan were considered (describing the factors considered and the basis for decision), for a period of not less than six years from the date of this Plan and Agreement, or any such reports or minutes, as the case may be, the first two years in an easily accessible place. 12. This Plan and Agreement shall be construed in accordance with the laws of the State of Colorado and applicable provisions of the Act. To the extent the applicable laws of the State of Colorado, or any provisions herein, conflict with the applicable provisions of the Act, the latter shall control. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan and Agreement on the 28th day of October, 1997. INVESCO VALUE TRUST By: /s/ Dan J. Hesser ------------------------ Dan J. Hesser, President ATTEST: /s/ Glen A. Payne ------------------------ Glen A. Payne, Secretary INVESCO DISTRIBUTORS, INC. By: /s/ Ronald L. Grooms ----------------------- Ronald L. Grooms, Senior Vice President ATTEST: /s/ Glen A. Payne ------------------------ Glen A. Payne, Secretary EX-27.FDSVEF 12
6 1 VALUE EQUITY FUND YEAR AUG-31-1997 AUG-31-1997 266169020 368386557 1991455 44838 448905 370871755 0 0 1106135 1106135 0 249058417 13063984 8994532 17483 0 18472183 0 102217537 369765620 6243692 931093 (50896) 3077733 4046156 20055067 57254344 77309411 0 4071368 5507949 0 20198347 16506962 378067 169719962 42661 3925099 0 0 2250039 0 3111846 295775389 22.24 0.35 6.62 0.35 0.56 0.00 28.30 1 0 0
EX-27.FDSIGBF 13
6 2 INTERMEDIATE GOVERNMENT BOND FUND YEAR AUG-31-1997 AUG-31-1997 44417906 44725120 570892 18270 3581 45317863 0 0 877195 877195 0 44705750 3572904 3246858 0 0 (572296) 0 307214 44440668 0 2833739 0 448444 2385295 126618 348594 475212 0 2385295 0 0 2132651 1985434 178829 4492164 0 (503430) 0 0 268593 0 615314 44686922 12.30 0.66 0.14 0.66 0.00 0.00 12.44 1 0 0
EX-27.FDSTRF 14
6 3 TOTAL RETURN FUND YEAR AUG-31-1997 AUG-31-1997 1436182395 1833030425 17234822 122756 479725 1850867728 0 0 5273623 5273623 0 1430960585 66466489 45674707 106017 0 17679473 0 396848030 1845594105 23898737 33302056 (548396) 12155818 44496579 20361309 269713544 290074853 0 44405999 4314901 0 39163785 20216862 1844859 813442947 11343 3552441 0 0 9140227 0 12323091 1418260790 22.60 0.77 5.26 0.77 0.09 0.00 27.77 1 0 0
EX-99.POASOLL 15 POWER OF ATTORNEY The person executing this Power of Attorney hereby appoints Edward F. O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute and to file such Registration Statements under federal and state securities laws and such Post-Effective Amendments to such Registration Statements of the hereinafter described entities as such attorney-in-fact, or either of them, may deem appropriate: INVESCO Diversified Funds, Inc. INVESCO Dynamics Fund, Inc. INVESCO Emerging Opportunity Funds, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO Strategic Portfolios, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Value Trust INVESCO Variable Investment Funds, Inc. This Power of Attorney, which shall not be affected by the disability of the undersigned, is executed and effective as of the 4th day of June, 1997. /s/ Larry Soll ------------------------- Larry Soll STATE OF WASHINGTON ) ) COUNTY OF SAN JUAN ) SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Larry Soll, as a director or trustee of each of the above-described entities, this 4th day of June, 1997. Mary Paulette Weaver -------------------- Notary Public My Commission Expires: 1-27-99 ------- EX-99.POAGRAMM 16 POWER OF ATTORNEY The person executing this Power of Attorney hereby appoints Edward F. O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute and to file such Registration Statements under federal and state securities laws and such Post-Effective Amendments to such Registration Statements of the hereinafter described entities as such attorney-in-fact, or either of them, may deem appropriate: INVESCO Capital Appreciation Funds, Inc. INVESCO Diversified Funds, Inc. INVESCO Emerging Opportunity Funds, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO Strategic Portfolios, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Value Trust INVESCO Variable Investment Funds, Inc. This Power of Attorney, which shall not be affected by the disability of the undersigned, is executed and effective as of the 25th day of August, 1997. /s/ Wendy L. Gramm ------------------------------------------ Wendy L. Gramm STATE OF District of ) Columbia ) COUNTY OF ) SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by Wendy L. Gramm, as a director or trustee of each of the above-described entities, this 25th day of August, 1997. /s/ Margaret Foster ------------------------------------------ Notary Public My Commission Expires: Feb. 14, 2000 ------------- -----END PRIVACY-ENHANCED MESSAGE-----