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EXHIBIT 5(i)
SUB-ADVISORY AGREEMENT
AGREEMENT made this 4th day of August, 1997, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Global Asset
Management Limited, a Bermuda company (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, AIM Advisor Funds, Inc. (the "Fund"), is engaged in business
as a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under
the Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with
the Fund (the "AIM Investment Advisory Agreement"), pursuant to which AIM is
required to provide investment and advisory services to the Fund's series, and,
upon receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to one of those Fund's series, the AIM Advisor International Value
Fund, hereinafter referred to as the "Series"), on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the
Series and to furnish the investment advisory services described below, subject
to the broad supervision of AIM and the Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at
its own expense, to render such services and to assume the obligations herein
set forth for the compensation provided for herein. The Sub-Adviser shall for
all purposes herein be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized herein, shall have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund. The Sub-Adviser hereby agrees to manage the investment operations of the
Fund's Series, subject to the supervision of the Fund's directors (the
"Directors") and AIM. Specifically, the Sub-Adviser agrees to perform the
following services:
(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 portfolios securities;
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(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, 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 or
AIM, and to execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analysis 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
Sub-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 Series; 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
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-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 Sub-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 Sub-Adviser effects securities transactions on behalf
of the Fund may be used by the Sub-Adviser in servicing all of its accounts,
and not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for execution of any negotiated
transaction, the Sub-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
Sub-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 Sub-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 Sub-Adviser may consider
the sale of Fund shares by a broker or dealer in selecting among qualified
broker-dealers.
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ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities
necessary to perform its obligations under this Agreement. Except to the extent
expressly assumed by the Sub-Adviser herein and except to the extent required
by law to be paid by the Sub-Adviser, AIM and/or the Fund shall pay all costs
and expenses in connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses
assumed by the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, 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 Fund's Series,
as determined by a valuation 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 Sub-Adviser shall
be computed at the annual rates indicated in Schedule A hereto. During any
period when the determination of the Series' net asset value is suspended by
the Directors of the Fund, the net asset value of a share of the Fund's Series
as of the last business day prior to such suspension shall, for the purpose of
this Article III, 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 Sub-Adviser with respect to any assets of the Fund's
Series which may be invested in any other investment company for which the
Sub-Adviser serves as investment adviser or sub adviser. The fee provided for
hereunder shall be prorated in any month in which this Agreement is not in
effect for the entire month. The Sub-Adviser shall be entitled to receive fees
hereunder only for such periods as the AIM Investment Advisory Agreement
remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to
be exclusive, the Sub-Adviser and any person controlled by or under common
control with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
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ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund's Series, neither the Sub-Adviser nor any of its
directors, 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
Sub-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.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding
voting securities of the Series, shall become effective as of the date so
written above, and shall remain in force for an initial term of two years from
the date of execution, and from year to year thereafter until its termination
in accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund's
Series, and (ii) a majority of those 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 approval.
This Agreement may be terminated as to any services at any time,
without the payment of any penalty, by AIM, by the Fund by vote of the
Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Fund's Series, or by the Sub-Adviser. A termination by AIM or
the Sub-Adviser shall require sixty days' written notice to the other party and
to the Fund, and a termination by the Fund shall require such notice to each of
the parties. This Agreement shall automatically terminate in the event of its
assignment to the extent required by the Investment Company Act and the rules
thereunder.
The Sub-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
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged,
but may only be modified by an instrument in writing signed by the Sub-Adviser
and AIM. 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
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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).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Texas and the applicable provisions of the Investment Company Act. To
the extent that the applicable laws of the State of Texas, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
MISCELLANEOUS
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.
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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
A I M ADVISORS, INC.
By: /s/ XXXXXX X. XXXXXX
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President
ATTEST:
/s/ XXXXXX X. XXXX
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Assistant Secretary
INVESCO GLOBAL ASSET MANAGEMENT
LIMITED
By: /s/ ILLEGIBLE
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Director
ATTEST:
/s/ ILLEGIBLE
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Assistant Secretary
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SCHEDULE A
TO
IGAM SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M
Advisors, Inc. and INVESCO Global Asset Management Limited ("IGAM"), fees
payable thereunder to IGAM shall be calculated by applying the following annual
rates to the average daily net assets of the indicated Series:
SERIES ANNUAL FEE RATE
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AIM Advisor International Value Fund 0.35% on assets to $50 million;
0.30% on assets over $50 million to $100
million;
0.25% on assets in excess of $100
million.
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