INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, as made the 28th day of February, 1997, by and between
INVESCO SERVICES, INC. (the "Adviser"), a Georgia corporation, and INVESCO
Advisor Funds, Inc., a Maryland corporation (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of the State of
Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and is divided into seven series (the "Shares"), and which
may be divided into additional series, each representing an interest in a
separate portfolio of investments (such series as are presently structured being
designated as the INVESCO Advisor Equity Portfolio, INVESCO Advisor Income
Portfolio, INVESCO Advisor Flex Portfolio, INVESCO Advisor MultiFlex Portfolio,
INVESCO Advisor Real Estate Portfolio, INVESCO Advisor International Value
Portfolio and INVESCO Advisor Cash Management Portfolio, hereinafter referred to
as the "Series"); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and provide it with certain other services, and the Adviser desires to manage
said operations and to provide such other services;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Investment Management Services. The Adviser hereby agrees to manage the
investment operations of the Fund's Series, subject to the terms of this
Agreement and to the supervision of the Fund's directors (the "Directors"). The
Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(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 portfolio 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, as amended
(hereinafter referred to as the "Investment Company 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 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, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analyses 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
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 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 Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the
Adviser is authorized to employ such brokers or dealers as may, in the 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 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 Adviser effects securities transactions on behalf of the Fund may be
used by the Adviser in servicing all of its accounts, and not all such services
may be used by the Adviser in connection with the Fund. In the selection of a
broker or dealer for execution of any negotiated transaction, the 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 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 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 Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
2. Other Services and Facilities. The Adviser shall, in addition, supply at
its own expense all supervisory and administrative services and facilities
necessary in connection with the day-to-day operations of the Fund's Series
(except those associated with the preparation and maintenance of certain
required books and records and certain sub-accounting services, which services
and facilities are provided under separate Accounting Services, Transfer Agency
and Administrative Services Agreements between the Adviser and FPS Services,
Inc., and those operational services which are necessary for the day-to-day
operations of the Fund's Series, which services are provided under a separate
Operating Services Agreement dated February 28, 1997, between the Fund and the
Adviser (the "Operating Services Agreement")). These services shall include, but
not be limited to: supplying the Fund with officers, clerical staff and other
employees, if any, who are necessary in connection with the Fund's operations;
furnishing office space, facilities, equipment, and supplies; conducting
periodic compliance reviews of the Fund's operations; preparation and review of
certain required documents, reports and filings (including required reports to
the Securities and Exchange Commission (the "SEC"), and other corporate
documents of the Fund), except insofar as the assistance of independent
accountants or attorneys is necessary or desirable; supplying basic telephone
service and other utilities; and preparing and maintaining the books and records
required to be prepared and maintained by the Fund pursuant to Rule 31a-1(b)(4),
(5), (9), and (10) under the Investment Company Act. All books and records
prepared and maintained by the Adviser for the Fund under this Agreement shall
be the property of the Fund and, upon request therefor, the Adviser shall
surrender to the Fund such of the books and records so requested.
3. Payment of Costs and Expenses. The Adviser shall bear the costs and
expenses of all personnel, facilities, equipment and supplies reasonably
necessary to provide the services required to be provided by the Adviser under
this Agreement. The Adviser shall pay all of the costs and expenses associated
with the Fund's operations and activities, except those expressly assumed by the
Fund under this Agreement, which shall consist of:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund in connection with securities transactions to which
the Fund is a party or in connection with securities owned by the Fund's
Series;
(b) the interest on indebtedness, if any, incurred by the Fund;
(c) extraordinary expenses, including unexpected franchise or income taxes,
or business license and other corporate fees (not including SEC and state
securities registration fees) that are not anticipated which the Fund will be
required to pay to federal, state, county, city, or other governmental
agents, and fees and disbursements of Fund counsel in connection with
litigation by or against the Fund;
(d) the expenses of distributing shares of the Fund but only if and to the
extent permissible under a plan of distribution adopted by the Fund pursuant
to Rule 12b-1 under the Investment Company Act; and
(e) all fees paid by the Fund for operational services which are necessary
for the day-to-day operations of the Fund's Series under the Operating
Services Agreement.
4. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the
Adviser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of written
approval of the Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this Agreement,
and further provided that all costs and expenses associated with the providing
of services by any such companies or employees and required by this Agreement to
be borne by the Adviser shall be borne by the Adviser or its affiliated
companies.
5. Compensation of the Adviser. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund shall pay
to the Adviser an advisory fee which will be 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 each of the Fund's Series, as determined by
valuations 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 Adviser shall be computed at the following
annual rates: 0.75% of the daily net assets of the INVESCO Advisor Equity
Portfolio and INVESCO Advisor Flex Portfolio; 0.90% of the daily net assets of
the INVESCO Advisor Real Estate Portfolio; 1.0% of the daily net assets of the
INVESCO Advisor MultiFlex Portfolio and the INVESCO Advisor International Value
Portfolio; 0.65% of the daily net assets of the INVESCO Advisor Income
Portfolio; and 0.50% of the daily net assets of the INVESCO Advisor Cash
Management Portfolio. During any period when the determination of the Fund's net
asset value is suspended by the Directors of the Fund, 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 Paragraph 5, be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
No advisory fee shall be paid to the Adviser with respect to any assets of
the Fund's Series which may be invested in any other investment company for
which the Adviser serves as investment adviser. The fee provided for hereunder
shall be prorated in any month in which this Agreement is not in effect for the
entire month. If, in any given year, the sum of a Series' expenses exceeds the
state-imposed annual expense limitation to which the Fund is subject, the
Adviser will be required to reimburse that Series for such excess expenses
promptly. Interest, taxes and extraordinary items such as litigation costs are
not deemed expenses for purposes of this paragraph and shall be borne by that
Series in any event. Expenditures, including costs incurred in connection with
the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and shall not be deemed
to be expenses for purposes of this paragraph.
6. Avoidance of Inconsistent Positions and Compliance with Laws. In connection
with purchases or sales of securities for the investment portfolios of the
Fund's Series, neither the Adviser nor its 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 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.
7. Duration and Termination. This Agreement has been approved by a majority of
the outstanding voting securities of the Fund's Series, and shall become
effective as of the date so written above, and unless sooner terminated as
hereinafter provided, shall remain in force for an initial term ending two years
from the date of execution, and from year to year thereafter, but only as long
as such continuance is specifically approved at least annually (i) by a vote of
a majority of the outstanding voting securities of the Fund's Series or by the
Directors of the Fund, and (ii) by a majority of the Directors of the Fund who
are not interested persons of the Adviser or the Fund by votes cast in person at
a meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund's Series, as the case
may be, or by the Adviser. This Agreement shall immediately terminate in the
event of its assignment, unless an order is issued by the SEC conditionally or
unconditionally exempting such assignment from the provisions of Section 15(a)
of the Investment Company Act, in which event this Agreement shall remain in
full force and effect subject to the terms and provisions of said order. In
interpreting the provisions of this paragraph 7, the definitions contained in
Section 2(a) of the Investment Company Act and the applicable rules under the
Investment Company Act (particularly the definitions of "interested person,"
"assignment" and "vote of a majority of the outstanding voting securities")
shall be applied.
The 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 Adviser to
receive payments on any unpaid balance of the compensation described in
paragraph 5 earned prior to such termination.
8. Non-Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to others,
including, without limitation, other investment companies with similar
objectives to those of the Fund's Series. The Adviser may, when it deems such to
be advisable, aggregate orders for its other customers together with any
securities of the same type to be sold or purchased for the Fund's Series in
order to obtain best execution and lower brokerage commissions. In such event,
the Adviser shall allocate the shares so purchased or sold, as well as the
expenses incurred in the transaction, in the manner it considers to be most
equitable and consistent with its fiduciary obligations to the Fund's Series and
the Adviser's other customers. It is understood that directors, officers,
employees and shareholders of the Fund are or may become interested in the
Adviser and its affiliates, as directors, officers, employees and shareholders
or otherwise and that directors, officers, employees and shareholders of the
Adviser, INVESCO Capital Management, Inc., and their affiliates are or may
become interested in the Fund as directors, officers and employees.
9. Miscellaneous Provisions.
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.
Amendments Hereof. No provision of this Agreement may be orally changed or
discharged, but may only be modified by an instrument in writing signed by the
Fund and the Adviser. 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).
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.
Applicable Law. This Agreement shall be construed in accordance with the
laws of the State of Georgia. To the extent that the applicable laws of the
State of Georgia, or any of the provisions herein, conflict with applicable
provisions of the Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this Agreement to
be duly executed on its behalf by an officer thereunto duly authorized, on the
date first above written.
INVESCO ADVISOR FUNDS, INC.
/s/ Xxxxxx X. Xxxxxx
By:--------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-------------------------
Secretary
INVESCO SERVICES, INC.
/s/ Xxxxxxx X. Xxxxxx
By:-------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-------------------------
Secretary
