INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 23rd day of August, 2000, in Denver, Colorado,
by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO Advantage Series Funds, Inc., a Maryland Corporation
(the "Company").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company is a corporation organized under the laws of the State
of Maryland; and
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), as a non-diversified, open-end
management investment company and currently has one class of shares which is
divided into series(the "Shares"), which may be divided into additional series,
each representing an interest in a separate portfolio of investments specific in
Schedule A (each a "Fund" and, collectively, the "Funds"); and
WHEREAS, the Company desires that the Adviser manage its investment
operations and provide certain other services, and the Adviser desires to manage
said operations and to provide such other services;
NOW, THEREFORE, in consideration of these premises and 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 Company's Funds, subject to the
terms of this Agreement and to the supervision of the Company's
directors (the "Directors"). The Adviser agrees to perform, or
arrange for the performance of, the following specific services for
the Company:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Company's Funds, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Company's
Funds, consistent with (i) the Funds' 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 Company, 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 Company's Funds, unless otherwise directed by the
Directors of the Company, and to execute transactions
accordingly;
(d) to provide to the Company's Funds 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 Company's Funds should be
invested in the various types of securities authorized for
purchase by the Funds; and
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Company action and any other
rights pertaining to the Funds' securities shall be exercised.
With respect to execution of transactions for the Company's Funds,
the Adviser is authorized to employ such brokers or dealers as may,
in the Adviser's best judgment, implement the policy of the Company
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 Company,
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 Adviser effects securities transactions on behalf
of the Company 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 Company. 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
Company 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 Company.
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 Company (except those associated with the
preparation and maintenance of certain required books and records,
and recordkeeping and administrative functions relating to employee
benefit and retirement plans, which services and facilities are
provided under a separate Administrative Services Agreement between
the Company and the Adviser). These services shall include, but
not be limited to: supplying the Company with officers, clerical
staff and other employees, if any, who are necessary in connection
with the Company's operations; furnishing office space, facilities,
equipment, and supplies; providing personnel and facilities required
to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Company's operations; preparation
and review of required documents, reports and filings by the
Adviser's in-house legal and accounting staff (including the
prospectus, statement of additional information, proxy statements,
shareholder reports, tax returns, reports to the SEC, and other
corporate documents of the Company), 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 Company pursuant to Rule 31a-1(b)(4),
(5), (9), and (10) under the Investment Company Act of 1940. All
books and records prepared and maintained by the Adviser for the
Company under this Agreement shall be the property of the Company
and, upon request therefor, the Adviser shall surrender to the
Company 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 Company shall pay all of
the costs and expenses associated with its operations and
activities, except those expressly assumed by the Adviser under this
Agreement, including but not limited to:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Company in connection with securities
transactions to which the Company is a party or in connection
with securities owned by the Company's Funds;
(b) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent,
dividend reinvestment agent, transfer agent, registrar,
independent pricing services and legal counsel for the
Company;
(c) the interest on indebtedness, if any, incurred by the Company;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the
Company to federal, state, county, city, or other governmental
agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Company and of its shares under laws
administered by the Securities and Exchange Commission or
under other applicable regulatory requirements;
(f) the compensation and expenses of its independent Directors,
and the compensation of any employees and officers of the
Company who are not employees of the Adviser or one of its
affiliated companies and compensated as such;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices,
prospectuses, statements of additional information and other
communications to the Company's shareholders, as well as all
expenses of shareholders' meetings and Directors' meetings;
(h) all costs, fees or other expenses arising in connection
with the organization and filing of the Company's Articles
of Incorporation, including its initial registration and
qualification under the 1940 Act and under the Securities Act
of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial
registration and qualification of its securities under the
laws of any state and the approval of the Company's operations
by any other federal, state, or foreign authority;
(i) the expenses of repurchasing and redeeming shares of the
Company's Funds;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Company's
Funds;
(l) extraordinary expenses, including fees and disbursements
of Company counsel, in connection with litigation by or
against the Company;
(m) premiums for the fidelity bond maintained by the Company
pursuant to Section 17(g) of the 1940 Act and rules
promulgated thereunder (except for such premiums as may be
allocated to third parties, as insured thereunder);
(n) association and institute dues;
(o) the expenses of distributing shares of the Company but only if
and to the extent permissible under a plan of distribution
adopted by the Company pursuant to Rule 12b-1 of the
Investment Company Act of 1940; and
(p) all fees paid by the Company for administrative,
recordkeeping, and sub-accounting services under the
Administrative Services Agreement between the Company and the
Adviser dated August 1, 2000.
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 Company,
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 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 advisory services assumed
by the Adviser under this Agreement, the Company shall pay to the
Adviser the fees set forth on Schedule B.
6. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the Company's
Funds, neither the Adviser nor its officers or employees will act as
a principal or agent for any party other than the Company's Funds or
receive any commissions. The Adviser will comply with all applicable
laws in acting hereunder including, without limitation, the 1940
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 shall become effective as
of the date it is approved by a majority of the outstanding voting
securities of the Company's Funds, 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 Company's
Funds or by the Directors of the Company, and (ii) by a majority
of the Directors of the Company who are not interested persons of
the Adviser or the Company 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 Company,
or by the vote of a majority of the outstanding voting securities of
the Company's Funds, 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 Securities and Exchange
Commission conditionally or unconditionally exempting such
assignment from the provisions of Section 15(a) of the 1940 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 1940 Act and the applicable rules under the 1940
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 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
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 Company's Funds.
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 Company's Funds 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 Company's Funds and the Adviser's other
customers.
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 Company 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 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
any of the Company's Funds 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 Maryland. To the extent that the applicable
laws of the State of Maryland, or any of the provisions herein,
conflict with applicable provisions of the 1940 Act, the latter
shall control.
IN WITNESS WHEREOF, the Adviser and the Company 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 ADVANTAGE SERIES FUNDS, INC.
ATTEST:
By:/s/ Xxxx X. Xxxxxxxxxx
----------------------
/s/ Xxxx X. Xxxxx Xxxx X. Xxxxxxxxxx
----------------- President & Chairman of the Board
Xxxx X. Xxxxx of Directors
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:/s/ Xxxx X. Xxxxxxxxxx
----------------------
/s/ Xxxx X. Xxxxx Xxxx X. Xxxxxxxxxx
----------------- President & Chief Executive Officer
Xxxx X. Xxxxx
Secretary
INVESTMENT ADVISORY
SCHEDULE A
REGISTERED
INVESTMENT
COMPANY FUNDS EFFECTIVE DATE
--------------------------------------------------------------------------------
INVESCO Advantage Series Funds, Inc.(1) August 23, 2000
Advantage Fund
Global Growth Fund(2) November 29, 2000
Advantage Global Health
Sciences Fund(3) May 15, 2001
(1) Amended November 8, 2000 - On November 8, 2000, the name of the INVESCO
Advantage Series Funds, Inc. was changed to INVESCO Counselor Series
Funds, Inc. Therefore, all references to INVESCO Advantage Series Funds,
Inc. should be changed to INVESCO Counselor Series Funds, Inc.
(2) Amended November 29, 2000.
(3) Amended May 15, 2001.
INVESTMENT ADVISORY
SCHEDULE B
INVESCO ADVANTAGE FUND
INVESCO ADVANTAGE GLOBAL HEALTH SCIENCES FUND(2)
For the services to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Company 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 the
INVESCO Advantage Fund, the INVESCO Advantage Global Health Sciences Fund, and
the INVESCO Advantage Technology/Telecommunications Fund (individually referred
to as a "Portfolio"), as determined by valuations made in accordance with each
Portfolio's procedures for calculating its net asset value as described in each
Portfolio's current Prospectus and/or Statement of Additional Information. The
advisory fee to the Adviser shall be computed at an annual rate of 1.50% of each
Portfolio's daily average net assets (the "Base Fee"). This Base Fee will be
adjusted, on a monthly basis (i) upward at the rate of 0.20%, on a pro rata
basis, for each percentage point by which the investment performance of each
Portfolio exceeds the sum of 2.00% and the investment record of the Xxxxxxx 3000
Index for the INVESCO Advantage Fund, the Xxxxxx Xxxxxxx Health Care Product
Index for the INVESCO Advantage Global Health Sciences Fund, and the Xxxxxxx
Xxxxx 100 Technology Index for the INVESCO Advantage
Technology/Telecommunications Fund (the "Index" or "Indexes"), or (ii) downward
at the rate of 0.20%, on a pro rata basis, for each percentage point by which
the investment record of the applicable Index less 2.00% exceeds the investment
performance of each Portfolio. The maximum or minimum adjustment, if any, will
be 1.00% annually. Therefore, the maximum annual fee payable to the Adviser will
be 2.50% of average daily net assets and the minimum annual fee will be 0.50% of
average daily net assets. During the first twelve months of operation, the
management fee will be charged at the base fee of 1.50% with no performance
adjustment. During any period when the determination of each Portfolio's net
asset value is suspended by the Directors of the Company, the net asset value of
a share of that Portfolio as of the last business day prior to such suspension
shall be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
In determining the fee adjustment, if any, applicable during any month, INVESCO
will compare the investment performance of the Class A Shares of each Portfolio
for the twelve-month period ending on the last day of the prior month (the
"Performance Period") to the investment record of the applicable Index during
the Performance Period. The investment performance of each Portfolio will be
determined by adding together (i) the change in the net asset value of the Class
A Shares during the Performance Period, (ii) the value of cash distributions
made by the applicable Portfolio to holders of Class A Shares to the end of the
Performance Period, and (iii) the value of capital gains per share, if any, paid
on undistributed realized long-term capital gains accumulated to the end of the
Performance Period, and will be expressed as a percentage of the net asset value
per share of the Class A Shares at the beginning of the Performance Period. The
investment record of the applicable Index will be determined by adding together
(i) the change in the level of the Index during the Performance Period and (ii)
the value, computed consistently with the Index, of cash distributions made by
companies whose securities comprise the Index accumulated to the end of the
Performance Period, and will be expressed as a percentage of the Index at the
beginning of such Period.
After it determines any fee adjustment, INVESCO will determine the dollar amount
of additional fees or fee reductions to be accrued for each day of a month by
multiplying the fee adjustment by the average daily net assets of the Class A
Shares of each Portfolio during the Performance Period and dividing that number
by the number of days in the Performance Period. The management fee, as
adjusted, is accrued daily and paid monthly.
If the Directors determine at some future date that another securities index is
more representative of the composition of the INVESCO Advantage Fund than is the
Xxxxxxx 3000 Index, or the Xxxxxx Xxxxxxx Health Care Product Index for INVESCO
Advantage Global Health Sciences Fund, or the Xxxxxxx Xxxxx 100 Technology Index
for INVESCO Advantage Technology/Telecommuniocations Fund, the Directors may
change the securities index used to compute the fee adjustment. If the Directors
do so, the new securities index (the "New Index") will be applied prospectively
to determine the amount of the fee adjustment. The Index will continue to be
used to determine the amount of the fee adjustment for that part of the
Performance Period prior to the effective date of the New Index. A change in the
Index will be submitted to shareholders for their approval unless the SEC
determines that shareholder approval is not required.
However, no such fee shall be paid to the Adviser with respect to any assets of
each Portfolio 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.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for purposes of this section and shall be borne by each Portfolio 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 section.
INVESCO GLOBAL GROWTH FUND(1)
For the services to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Company shall pay to the Adviser an advisory fee
which will be computed on a daily basis and paid as of the last day of each
month, using for each daily calculation the most recently determined net asset
value of the INVESCO Global Growth Fund, as determined by valuations made in
accordance with the INVESCO Global Growth Fund's procedure for calculating its
net asset value as described in the INVESCO Global Growth Fund's Prospectus
and/or Statement of Additional Information. As full compensation for its
advisory services to the INVESCO Global Growth Fund, the Adviser receives a
monthly fee from the Fund. The fee is calculated at the annual rate of 1.00% of
the INVESCO Global Growth Fund's average net assets.
During any period when the determination of the net asset value is suspended by
the Directors of the Company, the net asset value of a share of the INVESCO
Global Growth Fund as of the last business day prior to such suspension shall 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 Adviser
with respect to any assets of the INVESCO Global Growth Fund 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.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for the purposes of calculating the fee and shall be borne by the
Company in any event. Expenditures, including costs incurred in connection with
the purchase or sale of the INVESCO Global Growth Fund 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 calculating the fee. 1.00% of the
Fund's average net assets.
(1) Amended November 29, 2000.
(2) Amended May 15, 2001.
