SUB-ITEM 77Q1(e)
SHORT-TERM INVESTMENTS CO.
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 1st day of June, 2000, by and between
Short-Term Investments Co., a Maryland corporation (the "Company") with respect
to its series of shares shown on the Schedule A attached hereto, as the same
may be amended from time to time, and A I M Advisors, Inc., a Delaware
corporation (the "Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "l940 Act"), as an open-end, diversified management
investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), as an investment advisor and engages
in the business of acting as an investment advisor;
WHEREAS, the Company's Articles of Incorporation (the "Charter")
authorizes the Board of Directors of the Company (the "Board of Directors") to
create separate series of shares of common stock of the Company, and as of the
date of this Agreement, the Board of Directors has created two separate series
portfolios (such portfolios and any other portfolios hereafter added to the
Company being referred to collectively herein as the "Funds"); and
WHEREAS, the Company and the Advisor desire to enter into an agreement
to provide for investment advisory services to the Funds 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 of which is
hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for
the Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Directors. The Advisor shall give the
Company and the Funds the benefit of its best judgment, efforts and facilities
in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the
economy generally or the Funds, and whether concerning the
individual issuers whose securities are included in the
assets of the Funds or the activities in which such issuers
engage, or with respect to securities which the Advisor
considers desirable for inclusion in the Funds' assets;
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(c) determine which issuers and securities shall be represented
in the Funds' investment portfolios and regularly report
thereon to the Board of Directors;
(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and
regularly report thereon to the Board of Directors; and
(e) take, on behalf of the Company and the Funds, all actions
which appear to the Company and the Funds necessary to
carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including but not
limited to the placing of orders for the purchase and sale
of securities for the Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to
provide the following services in connection with the securities lending
activities of each Fund: (a) oversee participation in the securities lending
program to ensure compliance with all applicable regulatory and investment
guidelines; (b) assist the securities lending agent or principal (the "Agent")
in determining which specific securities are available for loan; (c) monitor
the Agent to ensure that securities loans are effected in accordance with the
Advisor's instructions and with procedures adopted by the Board of Directors;
(d) prepare appropriate periodic reports for, and seek appropriate approvals
from, the Board of Directors with respect to securities lending activities; (e)
respond to Agent inquiries; and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in
connection with securities lending activities of each Fund, a lending Fund
shall pay the Advisor a fee equal to 25% of the net monthly interest or fee
income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to
delegate any or all of its rights, duties and obligations under this Agreement
to one or more sub-advisors, and may enter into agreements with sub-advisors,
and may replace any such sub-advisors from time to time in its discretion, in
accordance with the 1940 Act, the Advisers Act, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from time to
time or are interpreted from time to time by the staff of the Securities and
Exchange Commission ("SEC"), and if applicable, exemptive orders or similar
relief granted by the SEC and upon receipt of approval of such sub-advisors by
the Board of Directors and by shareholders (unless any such approval is not
required by such statutes, rules, regulations, interpretations, orders or
similar relief).
5. Independent Contractors. The Advisor and any sub-advisors 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 Company in any way or otherwise be deemed to be an agent of
the Company.
6. Control by Board of Directors. Any investment program undertaken
by the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Funds, shall at all times be subject
to any directives of the Board of Directors.
7. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
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(a) all applicable provisions of the 1940 Act and the Advisers
Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Company, 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 Charter, as the same may be amended
from time to time;
(d) the provisions of the by-laws of the Company, as the same
may be amended from time to time; and
(e) any other applicable provisions of state, federal or
foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Funds, broker-dealer selection,
and negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a
security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into
consideration: the best net price available; the
reliability, integrity and financial condition of the
broker-dealer; the size of and the difficulty in executing
the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the
Funds on a continuing basis. Accordingly, the price to the
Funds in any transaction may be less favorable than that
available from another broker-dealer if the difference is
reasonably justified by other aspects of the fund execution
services offered.
(c) Subject to such policies as the Board of Directors may from
time to time determine, the Advisor shall not be deemed to
have acted unlawfully or to have breached any duty created
by this Agreement or otherwise solely by reason of its
having caused the Funds to pay a broker or dealer that
provides brokerage and research services to the Advisor an
amount of commission for effecting a fund investment
transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that
such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by
such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall
responsibilities with respect to a particular Fund, other
Funds of the Company, and to other clients of the Advisor
as to which the Advisor exercises investment discretion.
The Advisor is further authorized to allocate the orders
placed by it on behalf of the Funds to such brokers and
dealers who also provide research or statistical material,
or other services to the Funds, to the Advisor, or to any
sub-advisor. Such allocation shall be in such amounts and
proportions as the Advisor shall determine and the Advisor
will report on said allocations regularly to the Board of
Directors indicating the brokers to whom such allocations
have been made and the basis therefor.
(d) With respect to one or more Funds, to the extent the
Advisor does not delegate trading responsibility to one or
more sub-advisors, in making decisions regarding
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broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor
appointed to provide investment research or advisory
services in connection with the Funds, and may take into
consideration any research services provided to such
sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the
1940 Act, the Securities Exchange Act of 1934, and rules
and regulations thereunder, as such statutes, rules and
regulations are amended from time to time or are
interpreted from time to time by the staff of the SEC, any
exemptive orders issued by the SEC, and any other
applicable provisions of law, the Advisor may select
brokers or dealers with which it or the Funds are
affiliated.
9. Compensation. The compensation that each Fund shall pay the
Advisor is set forth in Schedule B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or 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 Company on behalf of the Funds in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Company understands
that the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Company has no objection to the Advisor
so acting, provided that whenever the Company and one or more other investment
companies or accounts managed or advised by the Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and
account. The Company recognizes that in some cases this procedure may adversely
affect the size of the positions obtainable and the prices realized for the
Funds.
12. Non-Exclusivity. The Company understands that the persons
employed by the Advisor to assist in the performance of the Advisor's duties
under this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict the
right of the Advisor or any affiliate of the Advisor to engage in and devote
time and attention to other businesses or to render services of whatever kind
or nature. The Company further understands and agrees that officers or
directors of the Advisor may serve as officers or directors of the Company, and
that officers or directors of the Company may serve as officers or directors of
the Advisor to the extent permitted by law; and that the officers and directors
of the Advisor are not prohibited from engaging in any other business activity
or from rendering services to any other person, or from serving as partners,
officers, directors or Directors of any other firm or Company, including other
investment advisory companies.
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13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Schedule A attached
hereto. If so approved, this Agreement shall thereafter continue in force and
effect until June 30, 2001, and may be continued from year to year thereafter,
provided that the continuation of the Agreement is specifically approved at
least annually:
(a) (i) by the Board of Directors or (ii) by the vote of "a
majority of the outstanding voting securities" of such Fund
(as defined in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who
are not parties to this Agreement or "interested persons"
(as defined in the 0000 Xxx) of a party to this Agreement
(other than as Company directors), by votes cast in person
at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Company
or as to any one or more of the Funds at any time, without the payment of any
penalty, by vote of the Board of Directors or by vote of a majority of the
outstanding voting securities of the applicable Fund, or by the Advisor, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. 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 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective
unless it is in writing andsigned by the party against which enforcement of the
amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations
or duties hereunder on the part of the Advisor or any of its officers,
directors or employees, the Advisor shall not be subject to liability to the
Company or to the Funds or to any shareholder of the Funds 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. Any liability of the Advisor to one Fund shall not automatically
impart liability on the part of the Advisor to any other Fund. No Fund shall be
liable for the obligations of any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as
provided by applicable law, the obligations of or arising out of this Agreement
are not binding upon any of the shareholders of the Company individually but
are binding only upon the assets and property of the Company and that the
shareholders shall be entitled, to the fullest extent permitted by applicable
law, to the same limitation on personal liability as shareholders of private
corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company and that of the Advisor shall be 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
19. Questions of Interpretation. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or
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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 United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC 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 SEC, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. Subject to the foregoing, this Agreement shall be governed by and
construed in accordance with the laws (without reference to conflicts of law
provisions) of the State of Texas.
20. License Agreement. The Company shall have the non-exclusive
right to use the name "AIM" to designate any current or future series of shares
only so long as A I M Advisors, Inc. serves as investment manager or advisor to
the Company with respect to such series of shares.
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.
Short-Term Investments Co.
(a Maryland corporation)
Attest:
/s/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------- ---------------------
Assistant Secretary President
(SEAL)
Attest: A I M Advisors, Inc.
/s/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------- ---------------------
Assistant Secretary President
(SEAL)
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SCHEDULE A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
------------ ------------------------------------
Liquid Assets Portfolio June 1, 2000
Prime Portfolio June 1, 2000
A-1
SCHEDULE B
COMPENSATION TO THE ADVISOR
The Company shall pay the Advisor, out of the assets of a Fund, as
full compensation for all services rendered, an advisory fee for such Fund set
forth below. Such fee shall be calculated by applying the following annual
rates to the average daily net assets of such Fund for the calendar year
computed in the manner used for the determination of the net asset value of
shares of such Fund.
LIQUID ASSETS PORTFOLIO
NET ASSETS ANNUAL RATE
---------- -----------
All Assets ............................................ 0.15%
PRIME PORTFOLIO
NET ASSETS ANNUAL RATE
---------- -----------
First $100 million............................................ 0.20%
Over $100 million to $200 million............................. 0.15%
Over $200 million to $300 million............................. 0.10%
Over $300 million to $1.5 billion............................. 0.06%
Over $1.5 billion ............................................ 0.05%
B-1
