EXHIBIT d(4)
SHORT-TERM INVESTMENTS CO.
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this ____ day of __________, ____, 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
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regarding 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 and signed 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.
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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:
_______________________________ By:__________________________________
Assistant Secretary President
(SEAL)
Attest: A I M Advisors, Inc.
______________________________ By:__________________________________
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 May 25, 2000
Prime Portfolio May 25, 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
