INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 20th day of November, 2003, in Houston, Texas,
by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and AIM Sector Funds, a Delaware statutory trust (the "Trust").
W I T N E S S E T H :
WHEREAS, the Trust is a statutory trust organized under the laws of the
state of Delaware; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and
currently has eight series of shares [which are divided into six classes], which
may be divided into additional series [and classes], each representing an
interest in a separate portfolio of investments specific in Schedule A (each a
"Fund" and, collectively, the "Funds"); and
WHEREAS, the Trust 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 Trust's Funds, subject to the terms
of this Agreement and to the supervision of the Trust's trustees (the
"Trustees"). The Adviser agrees to perform, or arrange for the
performance of, the following specific services for the Trust:
(a) to manage the investment and reinvestment of all the assets, now
or hereafter acquired, of the Trust's Funds, and to execute all
purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Trust's
Funds, consistent with (i) the Funds' investment policies as set
forth in the Trust's Agreement and Declaration of Trust, Bylaws,
and Registration Statement, as from time to time amended, under
the 1940 Act, as amended (the "1940 Act"), and in any prospectus
and/or statement of additional information of the Trust, 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;
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(c) to determine what securities are to be purchased or sold for the
Trust's Funds, unless otherwise directed by the Trustees of the
Trust, and to execute transactions accordingly;
(d) to provide to the Trust'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 Trust'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 Trust action and any other rights
pertaining to the Funds' securities shall be exercised.
With respect to execution of transactions for the Trust'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 Trust to
obtain prompt and reliable execution at the most favorable price
obtainable. In assigning an execution or negotiating the commission
to be paid therefore, the Adviser is authorized to consider the full
range and quality of a broker's services which benefit the Trust,
including but not limited to research and analytical capabilities,
responsibility 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 Trust 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 Trust. 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 Trust 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 Trust.
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 Trust (except those associated with the preparation and
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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 Trust and the
Adviser). These services shall include, but not be limited to:
supplying the Trust with officers, clerical staff and other
employees, if any, who are necessary in connection with the Trust'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 Trust'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
Trust, except insofar as the assistance of independent accounts 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 Trust
pursuant to Rule 31a-1(b)(4), (5), (9), and (10) under the 1940 Act.
All books and records prepared and maintained by the Adviser for the
Trust under this Agreement shall be the property of the Trust and,
upon request therefore, the Adviser shall surrender to the Trust 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 Trust 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 Trust in connection with securities
transactions to which the Trust is a party or in connection with
securities owned by the Trust'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 Trust;
(c) the interest on indebtedness, if any, incurred by the Trust;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Trust
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Trust and of its shares under laws
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administered by the Securities and Exchange Commission or under
other applicable regulatory requirements;
(f) the compensation and expenses of its independent Trustees, and
the compensation of any employees and officers of the Trust 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 Trust's shareholders, as well as all
expenses of shareholders' meetings and Trustees' meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Trust's Agreement and Declaration
of Trust, 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 Trust's operations by any other federal,
state, or foreign authority;
(i) the expenses of repurchasing and redeeming shares of the Trust's
Funds;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Trust's Funds;
(l) extraordinary expenses, including fees and disbursements of
Trust counsel, in connection with litigation by or against the
Trust;
(m) premiums for the fidelity bond maintained by the Trust 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 Trust but only if and
to the extent permissible under a plan of distribution adopted
by the Trust pursuant to Rule 12b-1 of the 1940 Act; and
(p) all fees paid by the Trust for administrative, recordkeeping,
and sub-accounting services under the Administrative Services
Agreement between the Trust and the Adviser dated June 1, 2000.
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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 Trust, 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 Trust 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 Trust's
Funds, neither the Adviser nor its officers or employees will act as
a principal or agent for any party other than the Trust'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 Trust'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 Trust's Funds or by the
Trustees, and (ii) by a majority of the Trustees who are not
interested persons of the Adviser or the Trust 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 Trustees, or by the vote
of a majority of the outstanding voting securities of the Trust'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 Trustees such information on an
annual basis as may reasonably be necessary to evaluate the terms of
this Agreement.
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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 Trust'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 Trust'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 Trust'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 Trust and the Adviser. In addition, no
amendment to this Agreement shall be effective unless approved by (i)
the vote of a majority of the Trustees, including a majority of the
Trustees 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 (ii) the vote of a majority of the
outstanding voting securities of any of the Trust'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 Delaware. To the extent that the applicable
laws of the State of Delaware, or any of the provisions herein,
conflict with applicable provisions of the 1940 Act, the latter shall
control.
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IN WITNESS WHEREOF, the Adviser and the Trust each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, on the date first above written.
AIM SECTOR FUNDS
ATTEST:
By:
--------------------
Xxxxxx X. Xxxxxx
President
-------------------
Xxxxx X. Xxxxxx
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:
-------------------------
Xxxxxxx X. Xxxxxxxxxx
President
-----------------
Xxxx X. Xxxxx
Secretary
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INVESTMENT ADVISORY
SCHEDULE A
REGISTERED
INVESTMENT
COMPANY FUNDS EFFECTIVE DATE
AIM Sector Funds
INVESCO Energy Fund November 20, 2003
INVESCO Financial Services Fund November 20, 2003
INVESCO Gold & Precious Metals Fund November 20, 2003
INVESCO Health Sciences Fund November 20, 2003
INVESCO Leisure Fund November 20, 2003
INVESCO Technology Fund November 20, 2003
INVESCO Telecommunications Fund November 20, 2003
INVESCO Utilities Fund November 20, 2003
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INVESTMENT ADVISORY
SCHEDULE B
For the services to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Trust 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
each Fund, as determined by valuations made in accordance with the Fund's
procedures for calculating its net asset value as described in each Fund's
Prospectus and/or Statement of Additional Information. On an annual basis, the
advisory fee applicable to each Fund shall be computed at the following annual
rates:
INVESCO Energy Fund
INVESCO Financial Services Fund
INVESCO Gold & Precious Metals Fund
INVESCO Health Sciences Fund
INVESCO Leisure Fund
INVESCO Technology Fund
INVESCO Utilities Fund
0.75% of the first $350 million of each Fund's average net assets;
0.65% of the next $350 million of each Fund's average net assets;
0.55% of each Fund's average net assets from $700 million;
0.45% of each Fund's average net assets from $2 billion;
0.40% of each Fund's average net assets from $4 billion;
0.375% of each Fund's average net assets from $6 billion; and
0.35% of each Fund's average net assets over $8 billion.
INVESCO Telecommunications Fund
0.65% on the first $500 million of the Fund's average net assets;
0.55% on the next $500 million of the Fund's average net assets;
0.45% of the Fund's average net assets from $1 billion;
0.40% of the Fund's average net assets from $4 billion;
0.375% of the Fund's average net assets from $6 billion; and
0.35% of the Fund's average net assets from $8 billion.
No such fee shall be paid to the Adviser with respect to any assets of the Funds
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 the Funds 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.
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