SUB ADVISORY AGREEMENT
AGREEMENT made this 30th day of January, 1998, by and between INVESCO
Fund Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Asset
Management Limited, a United Kingdom corporation ("the Sub Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO INTERNATIONAL FUNDS, INC. (the "Company") 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 series, each representing an interest in a separate portfolio of
investments, with one such series being designated the INVESCO Emerging Markets
Fund (the "Fund"); and
WHEREAS, INVESCO and the Sub Adviser are engaged in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, the Sub-Adviser is a member of the Investment Management
Regulatory Organization ("IMRO") in the United Kingdom and as such is regulated
by IMRO in the conduct of its business; further the Sub-Adviser shall provide
services to INVESCO as a "Business Investor" as defined under the Rules of IMRO
and as such certain rules designed for the protection of private customers shall
not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB ADVISER
INVESCO hereby employs the Sub Adviser to act as investment adviser to
the Company and to furnish the investment advisory services described below,
subject to the broad supervision of
INVESCO and Board of Directors of the Company, 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 Company
in any way or otherwise be deemed an agent of the Company.
The Sub Adviser hereby agrees to manage the investment operations of
the Fund, subject to the supervision of the Company's directors (the
"Directors") and INVESCO. 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, and to execute all
purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund,
consistent with (i) the 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 Investment Company Act of 1940, as
amended (the "1940 Act"), 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 Company'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, unless otherwise directed by the Directors of
the Company or INVESCO, and to execute transactions accordingly;
(d) to provide to the 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 the Sub
Adviser;
(e) to determine what portion of the Fund should be
invested in the various types of securities authorized for
purchase by the Fund; 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 Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, 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, 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.
The Sub-Adviser may recommend transactions in which it has directly or
indirectly a material interest, in unregulated collective investment schemes
including any operated or advised by the Sub-Adviser or in margined
transactions. Advice on investments may extend to investments not traded or
exchanges recognized or designated by the Securities and Investments Board.
Both parties acknowledge that the advice given under this Agreement may
involve liabilities in one currency matched by assets in another currency and
that accordingly movements in rates of exchange may have a separate effect,
unfavorable as well as favorable on the gain or loss experienced on an
investment.
In carrying out its duties hereunder, the Sub-Adviser shall comply with
all instructions of INVESCO in connection therewith such instructions may be
given by letter, telex, telephone or facsimile by any Director or Officer of
INVESCO or by any other person authorized by INVESCO.
Any instructions which appear to conflict with the terms of this
Agreement may be confirmed by the Sub-Adviser with INVESCO prior to execution.
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, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Fund.
ARTICLE III
COMPENSATION OF THE SUB ADVISER
For the services rendered, facilities furnished, and expenses assumed
by the Sub Adviser, INVESCO 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, 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 with respect to
the Fund shall be computed at the annual rate of 0.333% of the Fund's daily net
assets up to $500 million; 0.2833% of the Fund's daily net assets in excess of
$500 million but not more than $1 billion; and 0.25% of each Fund's daily net
assets in excess of $1 billion. During any period when the determination of the
Fund's net asset value is suspended by the Directors of the Company, the net
asset value of a share of the 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. However, no such fee shall be paid to the Sub Adviser with respect
to any assets of the Fund 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 INVESCO 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, INVESCO 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
portfolios of the Fund, neither the Sub Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Fund or receive any commissions. The Sub Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; the Rules and Regulations of
IMRO; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
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 Fund. Thereafter, this
Agreement 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 Company, or
by the vote of a majority of the outstanding voting securities of the Fund, 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 INVESCO, the Fund by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Sub Adviser. A termination by INVESCO or the Sub Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company 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 of 1940 and the Rules thereunder.
The Sub Adviser agrees to furnish to the Directors of the Company 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
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and due
care in carrying out its duties under this Agreement provided however that the
Sub-Adviser shall not be liable to INVESCO for any loss suffered by INVESCO or
the Fund advised in connection with the subject matter of this Agreement unless
such loss arises from the willful misfeasance, bad faith or negligence in the
performance of the Sub-Adviser's duties and subject and without prejudice to the
foregoing. INVESCO hereby undertakes to indemnify and to keep indemnified the
Sub-Adviser from and against any and all liabilities, obligations, losses,
damages, suits and expenses which may be incurred by or asserted against the
Sub-Adviser for which it is responsible pursuant to Article I hereof provided
always that the Sub-Adviser shall send to INVESCO as soon as possible all
claims, letters, summonses, writs or documents which it receives from third
parties and provide whatever information and assistance INVESCO may require and
no liability of any sort shall be admitted and no undertaking shall be given nor
shall any offer, promise or payment be made or legal expenses incurred by the
Sub-Adviser without written consent of INVESCO who shall be entitled if it so
desires to take over and conduct in the name of the Sub-Adviser the defense of
any action or to prosecute any claim for indemnity or damages or otherwise
against any third party.
ARTICLE VIII
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
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
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 the Fund (other than an amendment which can be
effective without shareholder approval under applicable law).
ARTICLE IX
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 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
MISCELLANEOUS
Advice. Any recommendation or advice given by the Sub-Adviser to
INVESCO hereunder shall be given in writing or by mail, telex, telefacsimile or
by telephone, such telephone advice to be confirmed by mail, telex,
telefacsimile or in writing to such place as INVESCO shall from time to time
require; further the Sub-Adviser shall be free to telephone INVESCO as it sees
fit in the performance of its duties.
Complaints. The Sub-Adviser has in operation a written procedure for
the proper handling of complaints from clients; if the matter of complaint
cannot be resolved to INVESCO's satisfaction, INVESCO has the right of recourse
to IMRO.
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 FUNDS GROUP, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ Xxx X. Xxxxxx
------------------------ ---------------------------------
Xxxx X. Xxxxx, Secretary Xxx X. Xxxxxx, President
INVESCO ASSET MANAGEMENT
LIMITED
ATTEST:
By: /s/ Tristan Hillgrath
/s/ Xxxxxx Xxxxxxx -------------------------------------
------------------------ Tristan Hillgrath
Xxxxxx Xxxxxxx Chief Executive Officer
Secretary
