SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Services, Inc. ("ISI"), a Georgia corporation, and INVESCO CAPITAL MANAGEMENT,
INC., a Delaware corporation (the "Sub-Adviser").
WITNESSETH:
WHEREAS, INVESCO Advisor Funds, Inc. (the "Fund"), 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") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, ISI and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, ISI has entered into an Investment Advisory Agreement with the Fund
(the "ISI Investment Advisory Agreement"), pursuant to which ISI is required to
provide investment and advisory services to the Fund's series, and, upon receipt
of written approval of the Fund, is authorized to retain companies which are
affiliated with ISI to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services to
five of the Fund's seven series (the INVESCO Advisor Equity Portfolio, the
INVESCO Advisor Income Portfolio, the INVESCO Advisor Flex Portfolio, the
INVESCO Advisor International Value Portfolio and the INVESCO Advisor Cash
Management Portfolio series, hereinafter referred to as the "Series"), on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, ISI and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
ISI hereby employs the Sub-Adviser to act as investment adviser to the Fund
and to furnish the investment advisory services described below, subject to the
broad supervision of ISI and the Board of Directors of the Fund, for the period
and on the terms and conditions set forth in this Agreement. The Sub-Adviser
hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund. The Sub-Adviser
hereby agrees to manage the investment operations of the Fund's Series, subject
to the supervision of the Fund's directors (the "Directors") and ISI.
Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolios securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, and in any
Prospectus and/or Statement of Additional Information of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Fund'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 Fund's
Series, unless otherwise directed by the Directors of the Fund or ISI, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analysis and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the Fund to obtain prompt
and reliable execution at the most favorable price obtainable. In assigning an
execution or negotiating the commission to be paid therefor, the Sub-Adviser is
authorized to consider the full range and quality of a broker's services which
benefit the Fund, including but not limited to research and analytical
capabilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by
brokers through which the Sub-Adviser effects securities transactions on behalf
of the Fund may be used by the Sub-Adviser in servicing all of its accounts, and
not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for execution of any negotiated
transaction, the Sub-Adviser shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated commission rate for such
transaction, or to select any broker solely on the basis of its purported or
"posted" commission rate for such transaction, provided, however, that the
Sub-Adviser shall consider such "posted" commission rates, if any, together with
any other information available at the time as to the level of commissions known
to be charged on comparable transactions by other qualified brokerage firms, as
well as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund. Fund transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Sub-Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, 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
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, ISI and/or the Fund shall pay all costs and expenses in
connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, ISI shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund's Series, as determined by a
valuation made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the
following annual rates: 0.20% of the INVESCO Advisor Equity Portfolio and the
INVESCO Advisor Flex Portfolio Series' daily net assets; 0.10% of the INVESCO
Advisor Income Portfolio and INVESCO Advisor Cash Management Portfolio Series'
daily net assets; and the following for the INVESCO Advisor International Value
Portfolio Series: 0.35% on the first $50 million of assets, 0.30% on the next
$50 million of assets and 0.25% on daily net assets in excess of $100 million.
During any period when the determination of the Series' net asset value is
suspended by the Directors of the Fund, the net asset value of a share of the
Fund's Series 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. However, no
such fee shall be paid to the Sub-Adviser with respect to any assets of the
Fund's Series which may be invested in any other investment company for which
the Sub-Adviser serves as investment adviser or sub adviser. The fee provided
for hereunder shall be prorated in any month in which this Agreement is not in
effect for the entire month. The Sub-Adviser shall be entitled to receive fees
hereunder only for such periods as the ISI Investment Advisory Agreement remains
in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, ISI and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund's Series, neither the Sub-Adviser nor any of its
directors, officers or employees will either act as a principal or agent for any
party other than the Fund's Series or receive any commissions. The Sub-Adviser
will comply with all applicable laws in acting hereunder including, without
limitation, the Investment Company Act; the Investment Advisers Act of 1940, as
amended; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding voting
securities of the Fund's Series, shall become effective as of the date so
written above, and shall remain in force for an initial term of two years from
the date of execution, and from year to year thereafter until its termination in
accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund's
Series, and (ii) a majority of those Directors 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 ISI, by the Fund by vote of the Directors of the Fund or by vote of
a majority of the outstanding voting securities of the Fund's Series, or by the
Sub-Adviser. A termination by ISI or the Sub-Adviser shall require sixty days'
written notice to the other party and to the Fund, and a termination by the Fund
shall require such notice to each of the parties. This Agreement shall
automatically terminate in the event of its assignment to the extent required by
the Investment Company Act and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund 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 the Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Article
III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and ISI.
In addition, no amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Directors of the Fund, including a majority
of the Directors 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 amendment, and (2) the vote of a majority of the outstanding voting
securities of any of the Fund's Series as to which such amendment is applicable
(other than an amendment which can be effective without shareholder approval
under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, 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 IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Georgia and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Georgia, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
MISCELLANEOUS
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.
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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
INVESCO SERVICES, INC.
/s/ Xxxxxxx X. Xxxxxx
By:--------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
---------------------
Secretary
INVESCO CAPITAL MANAGEMENT,
INC.
/s/ Xxxxx X. Xxxxxx
By:--------------------------
President
ATTEST:
/s/ Xxxxxxxxxx Xxxxxx
---------------------
Asst. Secretary
