1
EXHIBIT d(9)
AIM DENT DEMOGRAPHIC TRENDS FUND
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of March, 1999,
by and between A I M Advisors, Inc., a Delaware corporation (the "Adviser"), and
X.X. Xxxx Advisors, Inc., a Delaware corporation (the "Sub-Adviser").
RECITALS
WHEREAS, AIM Dent Demographic Trends Fund (the "Fund") is a series of
AIM Equity Funds, Inc. (the "Company"), a Maryland corporation registered under
the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end,
diversified management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Sub-Adviser has applied for registration under the
Advisers Act as an investment adviser to enable it to engage in the business of
acting as an investment adviser;
WHEREAS, the Adviser expects to enter into an investment advisory
agreement with the Fund (the "Investment Advisory Agreement") pursuant to which
the Adviser will act as investment adviser with respect to the Fund; and
WHEREAS, the Adviser wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser in connection with the Fund upon the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints the Sub-Adviser
to render investment research and advisory services to the Adviser with
respect to the Fund under the supervision of the Adviser, and the
Sub-Adviser hereby accepts such appointment, all subject to the terms and
conditions contained herein. The Sub-Adviser shall use its best judgment,
efforts and facilities in rendering its services as investment adviser.
2. Advisory Services. The duties of the Sub-Adviser shall be limited to
the following:
(a) Rendering investment research and advisory services to the
Adviser with respect to the Fund, under the supervision of the
Adviser and subject to the approval and direction of the Board of
Directors of the Fund;
2
(b) Analyzing and recommending appropriate industry and sector
allocations and weightings for the Fund's investment portfolio, in
accordance with the philosophies of Xxxxx X. Xxxx, Xx. ("Xx.
Xxxx") concerning industry and sector allocations based on
demographic principles. The duties of the Sub-Adviser shall not
include selection of specific securities within the recommended
industry or sectors for purchase or sale.
(c) Providing, on a monthly basis, recommendations of the
appropriate industry and sector allocations and weightings for the
Fund. The Sub-Adviser, at its sole and absolute discretion, may
elect to make such recommendations more frequently based on market
conditions. The Sub-Adviser shall make Xx. Xxxx available for
discussions with respect to industry and sector allocations and
weightings of the Fund upon reasonable request by the Adviser.
(d) Providing written materials concerning industry and sector
allocations and weightings for the Fund to the Board of Directors
of the Company upon request by the Board of Directors.
(e) Making Xx. Xxxx available to speak at promotional meetings
on 25 days selected by mutual agreement of the Adviser and
Sub-Adviser. Xx. Xxxx may agree, at his sole discretion, to appear
at more than one meeting on any day upon request by the Adviser.
(f) Making Xx. Xxxx available, upon request by the Adviser
and subject to Xx. Xxxx'x availability, for telephone conference
calls intended to educate persons involved in distribution of the
Fund's shares on the investment principles of the Fund and for
other educational and promotional activities not requiring travel.
3. Control by Board of Directors. Any investment program recommended by
the Sub-Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser with respect to the Fund, shall at all times
be subject to any directives of the Board of Directors of the Fund.
4. Compliance with Applicable Requirements. Prior to performing any
services under this Agreement the Sub-Adviser shall have become a registered
investment adviser under the Advisers Act. In carrying out its obligations
under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and Advisers Act and any
rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the
same may be amended from time to time, under the Securities Act of 1933
and the 1940 Act;
(c) the provisions of the corporate charter and by-laws of the Fund,
as the same may be amended from time to time; and
(d) any other applicable provisions of state and federal law.
2
3
5. Compensation. The Adviser shall pay the Sub-Adviser, as compensation
for services rendered hereunder, an amount per annum equal to 4% of the fee
received by the Adviser under the Investment Advisory Agreement. The Adviser
will begin payment of such fees when the net asset value of the Fund has
reached $50 million, and the fee will be paid on a monthly basis thereafter.
6. Expenses of the Fund. All of the ordinary business expenses incurred in
the operations of the Fund and the offering of its shares shall be borne by
the Fund unless specifically provided otherwise in this Agreement. These
expenses borne by the Fund include but are not limited to brokerage
commissions, taxes, legal, auditing, governmental fees, the cost of
preparing share certificates, custodian, transfer and shareholder service
agent costs, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
directors and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by
the Fund in connection with membership in investment company organizations
and the cost of printing copies of prospectuses and statements of additional
information distributed to the Fund's shareholders.
7. Exclusivity. Sub-Adviser shall not render investment advice or similar
services directly or indirectly to any investment company that offers or has
offered its shares for sale in a public offering, other than (i) the Fund
and other investment companies that are advised or distributed by A I M
Management Group Inc. or its affiliates and (ii) unit investment trusts
identified on Exhibit A to this Agreement. It is understood and agreed that
Exhibit A may be amended from time to time by mutual agreement of the
Adviser and Sub-Adviser and that officers or directors of the Sub-Adviser
are not prohibited from engaging in any other business activity or from
rendering any other services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust,
including other investment advisory companies so long as such activity or
service is unrelated to the rendering of investment advice to investment
companies that offer or have offered their shares for sale in a public
offering.
8. Trading Practices. The Adviser and Sub-Adviser each agree to comply
with the requirement of Rule 17j-1 under the 1940 Act and that they shall
not engage in any conduct or practice prohibited by said Rule.
9. Term and Approval. This Agreement shall become effective if approved by
the shareholders of the Fund, and if so approved, this Agreement shall
thereafter continue in force and effect for two (2) years (the "Initial
Term"), and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually by
the Fund's Board of Directors.
3
4
10. Termination.
(a) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for purposes of this paragraph having the
meaning defined in Section 2(a)(4) of the 0000 Xxx.
(b) This Agreement may be terminated as follows:
(i) At any time, without the payment of any penalty, by the
vote of the Fund's Board of Directors or by vote of a majority of the
Fund's outstanding voting securities.
(ii) The Sub-Adviser terminate this Agreement if the Fund
does not commence a public offering of its shares on or before
September 30, 1999.
(iii) By either party in the event that certain Servicemark
License Agreement of even date herewith between Xxxxx X. Xxxx, Xx. and
A I M Management Group Inc. is terminated or expires.
(iv) By either party upon the occurrence of a material breach
of the terms of the Agreement by the other party that remains uncured
for a period of 30 days after notice thereof is given by the
terminating party.
(c) The party electing to terminate the Agreement under paragraph
10(b) must provide 60 days' prior written notice to the other party and to
the Fund of such election. The notice provided for herein may be waived by
either party.
11. Liability of Sub-Adviser. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Adviser or any of its officers, directors
or employees, the Sub-Adviser shall not be subject to liability to the
Adviser for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
12. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice, with a copy to the Fund. Until
further notice, it is agreed that the address of the Fund and that of the
Adviser shall be Eleven Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 and
that of the Sub-Adviser shall be X.X. Xxxx Advisors, Inc., X.X. Xxx 000,
Xxxx Xxxxx, XX 00000.
13. Questions of Interpretation; Applicable Law. Any question of
interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
or the Advisers Act shall be resolved by reference to such term or provision
of the 1940 Act or the Advisers Act and to interpretations thereof, if any,
by the
4
5
United States Courts or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision
of the Agreement is revised by rule, regulation or order of the Securities
and Exchange Commission, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
14. Dispute Resolution. [Arbitration clause to be provided]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
Attest: -----------------------------
----------------------------- By:
Assistant Secretary ---------------------------------
President
(SEAL)
X.X. Xxxx Advisors, Inc.
Attest:
----------------------------- By:
Assistant Secretary ---------------------------------
President
(SEAL)
5
6
EXHIBIT A
PERMITTED INVESTMENT COMPANY ADVISORY CLIENTS
Name of Company Sponsor
--------------- -------
Roaring 2000's Unit Investment Trusts Xxx Xxxxxx Funds, Inc.
6