INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Atlanta, Georgia,
by and between INVESCO FUNDS GROUP, INC. ("INVESCO"), a Delaware corporation,
and INVESCO Value Trust, an unincorporated business trust under the laws of the
Commonwealth of Massachusetts (the "Trust").
WITNESSETH:
WHEREAS, the Trust is an unincorporated business trust under the laws of the
Commonwealth of Massachusetts; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end management
investment company and has one class of shares (the "Shares"), which is divided
into two or more series, each representing an interest in a separate portfolio
of investments (such series initially being the INVESCO Value Equity Fund,
INVESCO Total Return Fund, and INVESCO Intermediate Government Bond Fund
(collectively, the "Funds")); and
WHEREAS, the Trust desires that INVESCO manage its investment operations and
INVESCO desires to manage said operations;
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. INVESCO hereby agrees to manage the
investment operations of the Funds in the Trust, subject to the supervision of
the Trust's trustees (the "Trustees"). Unless performance of these services is
the subject of a separate Administrative Service Agreement between the Trust and
INVESCO or an affiliate thereof, INVESCO agrees to perform, or arrange for the
performance of, the following specific services for the Trust and each Fund:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, by the Trust and by each Fund of the Trust;
(b) to maintain a continuous investment program for the Trust and each Fund
of the Trust, consistent with (i) the Fund's and Trust's investment policies
as set forth in the Trust's Declaration of Trust, By-laws, 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 Trust or of any Series of the Trust, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Trust'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 Trust
and for each Fund, unless otherwise directed by the Trustees of the Trust,
and to execute transactions accordingly;
(d) to provide to the Trust and to each Fund the benefit of all of the
investment analyses 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 INVESCO;
(e) to determine what portion of each of the Trust's Funds should be
invested in common stocks, preferred stocks, Government obligations,
commercial paper, certificates of deposit, bankers' acceptances, variable
amount notes, corporate debt obligations, and any other authorized
securities;
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Trust action and any other rights pertaining to each Fund's
portfolio securities shall be exercised; and
(g) to calculate the net asset value of each of the Funds of the Trust, as
applicable, as required by the 1940 Act, subject to such procedures as may be
established from time to time by the Trust's Trustees, based upon the
information provided to INVESCO or by the custodian, co-custodian or
sub-custodian of the Trust's assets (the "Custodian") or such other source as
designated by the Trustees from time to time.
With respect to execution of transactions for the Trust and for each Fund,
INVESCO shall place, or arrange for the placement of, all orders for the
purchase or sale of portfolio securities with brokers or dealers selected by
INVESCO. In connection with the selection of such brokers or dealers and the
placing of such orders, INVESCO is directed at all times to obtain for the Trust
and for each Fund the most favorable execution and price; after fulfilling this
primary requirement of obtaining the most favorable execution and price, INVESCO
is hereby expressly authorized to consider as secondary factor in selecting
brokers or dealers with which such orders may be placed whether such firms
furnish statistical, research and other information or services to INVESCO.
Receipt by INVESCO of any such statistical or other information and services
should not be deemed to give rise to any requirement for adjustment of the
advisory fee payable pursuant to paragraph 3 hereof. INVESCO may follow a policy
of considering sales of shares of the Funds of the Trust as a factor in the
selection of broker/dealers to execute portfolio transactions, subject to the
requirements of best execution discussed above.
INVESCO shall for all purposes herein provided be deemed to be an independent
contractor.
2. Allocation of Costs and Expenses. INVESCO shall reimburse the Trust monthly
for any salaries paid by the Trust to officers, Trustees and full-time employees
of the Trust who also are officers, general partners or employees of INVESCO or
its affiliates. Unless such services are the subject of a separate
Administrative Service Agreement between the Trust and INVESCO or an affiliate
thereof, at the Trust's request, INVESCO will furnish to the Trust, at the
expense of INVESCO, such competent executive, statistical, administrative,
internal accounting and clerical services as may be required in the judgment
of the Trustees of the Trust. These services will include, among other things,
the maintenance (but not preparation) of the Trust's and Fund's, as applicable,
accounts and records, and the preparation (apart from legal and accounting
costs) of all requisite corporate documents such as tax returns and reports to
the Securities and Exchange Commission and Trust shareholders. INVESCO also will
furnish, at INVESCO's expense, such office space, equipment and facilities as
may be reasonably requested by the Trust from time to time.
Except to the extent expressly assumed by INVESCO herein and except to the
extent required by law to be paid by INVESCO, the Trust shall pay all cost and
expenses in connection with its operations and organization. Without limiting
the generality of the foregoing, such costs and expenses payable by the Trust
include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Trust or any Fund in connection with securities
transactions to which the Trust or any Fund is a party or in connection with
securities owned by the Trust or any Fund;
(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 or for any Fund;
(c) the interest on indebtedness, if any, incurred by the Trust or any
Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Trust or any Fund 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 its shares under laws administered by the
Securities and Exchange Commission or under other applicable regulatory
requirements, including the preparation and printing of prospectuses and
statements of additional information;
(f) the compensation and expenses of its Trustees;
(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 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 or state authority;
(i) the expenses of repurchasing and redeeming shares of the Trust;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interest of the Trust;
(l) extraordinary expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Trust or any Fund;
(m) premiums for the fidelity bond maintained by the Trust pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder; and
(n) association and institute dues.
3. Compensation of INVESCO. For the services to be rendered and the charges
and expenses to be assumed by INVESCO hereunder, the Trust shall pay to INVESCO
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 of the Trust, as determined by valuations made in
accordance with the Trust's procedures for calculating each Fund's net asset
value. On an annual basis, the advisory fee applicable to each of the Funds
shall be as follows:
(a) INVESCO Value Equity Fund: 0.75% of the average net asset value of net
assets up to $500 million; 0.65% of the average net asset value for net
assets in excess of $500 million but not more than $1 billion; and 0.50% of
the average net asset value for net assets in excess of $1 billion;
(b) INVESCO Total Return Fund: 0.75% of the average net asset value of net
assets up to $500 million; 0.65% of the average net asset value for net
assets in excess of $500 million but not more than $1 billion; and 0.50% of
the average net asset value for net assets in excess of $1 billion; and
(c) INVESCO Intermediate Government Bond Fund: 0.60% of the average net
asset value of net assets up to $500 million; 0.50% of the average net asset
value of net assets in excess of $500 million but not more than $1 billion;
and 0.40% of the average net asset value of net assets in excess of $1
billion.
However, no such fee shall be paid to INVESCO with respect to any assets of
the Trust or of any Fund which may be invested in any other investment company
for which INVESCO 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 the Fund's expenses exceeds the most
restrictive state imposed annual expense limitation, INVESCO will be required to
reimburse such Fund 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 the Trust or particular Fund 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.
4. Avoidance of Inconsistent Positions and Compliance with Laws. In connection
with purchase or sales of securities for the investment portfolio of the Trust
or of any of the Funds, neither INVESCO nor its officers or employees will act
as a principal or agent for any party other than the Trust or applicable Fund or
receive any commissions. INVESCO 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.
5. Duration and Termination. This Agreement shall become effective as of the
date it is approved by a majority of the outstanding voting securities of each
applicable Fund of the Trust, 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 each applicable Fund of the
Trust or by the Trustees of the Trust, and (ii) by a majority of the Trustees of
the Trust who are not interested persons of INVESCO 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 of the Trust, or by the vote of a
majority of the outstanding voting securities of the Trust or of the applicable
Fund, as the case may be, or by INVESCO. 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
5, 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.
INVESCO agrees to furnish to the Trustees of the Trust 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 INVESCO to receive
payments on any unpaid balance of the compensation described in paragraph 3
earned prior to such termination.
6. Non-Exclusive Services. INVESCO 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 or any Fund of the Trust. INVESCO 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 or any Fund in order to obtain
best execution and lower brokerage commissions. In such event, INVESCO 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 obligation to the Trust, any applicable Fund and INVESCO's
other customers.
7. Liability. INVESCO shall have no liability to the Trust or any Fund or to
the Trust's shareholders or creditors, for any error of judgment, mistake of
law, or for any loss arising out of any investment, nor for any other act or
omission, in the performance of its obligations to the Trust or any applicable
Funds not involving willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties hereunder.
8. 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 changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Trust and INVESCO, and no material amendment of this Agreement shall be
effective unless approved by the vote of a majority of the outstanding voting
securities of any Fund as to which such amendment is applicable; provided,
however, that this paragraph shall not prevent any immaterial amendment(s) to
this Agreement, which amendment(s) may be made without shareholder approval, if
such amendment(s) are made with the approval of (1) the Trustees and (2) a
majority of the Trustees of the Trust who are not interested persons of INVESCO
or the Trust.
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.
Application of Colorado Law. This Agreement and the application and
interpretation hereof shall be governed exclusively by the laws of the State of
Colorado.
9. Trustee and Shareholder Liability.
INVESCO EXPRESSLY AGREES THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, OR IN LAW, THAT IT WILL LOOK SOLELY TO THE ASSETS OF THE TRUST FOR ANY
OBLIGATIONS OF THE TRUST HEREUNDER AND NOTHING HEREIN SHALL BE CONSTRUED TO
CREATE ANY PERSONAL LIABILITY OF ANY TRUSTEE OR ANY SHAREHOLDER OF THE TRUST.
INVESCO EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE
INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO
VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER,
OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL
LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE
SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE
AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE
DECLARATION) ONLY SHALL BE LIABLE.
IN WITNESS WHEREOF, INVESCO and the Trust each has caused this Agreement to be
duly executed on its behalf by an officer thereunto duly authorized, the day and
year first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Senior Vice President
ATTEST:
/s/ Xxxx X. Xxxxx
------------------
Secretary
INVESCO VALUE TRUST
By: /s/ Xxx X. Xxxxxx
---------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-----------------
Secretary
