INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, in Denver,
Colorado, by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO Strategic Portfolios, 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 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 (the Energy
Portfolio, Environmental Services Portfolio, Financial Services Portfolio, Gold
Portfolio, Health Sciences Portfolio, Leisure Portfolio, Technology Portfolio,
and Utilities Portfolio); and
WHEREAS, the Fund desires that the Adviser manage its investment
operations and to 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 Fund's Portfolios, 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 Portfolios, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund's
Portfolios, consistent with (i) the Portfolios' 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 (the "1940 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 Portfolios, unless otherwise directed by the
Directors of the Fund, and to execute transactions
accordingly;
(d) to provide to the Fund's Portfolios 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 Portfolios 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 Portfolios' securities shall be exercised.
With respect to execution of transactions for the Fund's Portfolios,
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, 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.
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 (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 Fund and the Adviser). 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; providing personnel and facilities required
to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Fund'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 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 of 1940. 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 Fund 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 Fund in connection with securities
transactions to which the Fund is a party or in connection
with securities owned by the Fund's Portfolios;
(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 Fund;
(c) the interest on indebtedness, if any, incurred by the Fund;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the
registration and qualification of the Fund 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 Fund
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 Fund'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 Fund'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 Fund's
operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the
Fund's Portfolios;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund's
Portfolios;
(l) extraordinary expenses, including fees and disbursements of
Fund counsel, in connection with litigation by or against
the Fund;
(m) premiums for the fidelity bond maintained by the Fund 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 Fund but only if
and to the extent permissible under a plan of distribution
adopted by the Fund pursuant to Rule 12b-1 of the Investment
Company Act of 1940; and
(p) all fees paid by the Fund for administrative, recordkeeping,
and sub-accounting services under the Administrative Services
Agreement between the Fund and the Adviser dated April 30,
1991.
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 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 Portfolios, 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 a Portfolio's daily net assets up to $350
million; 0.65% of a Portfolio's daily net assets in excess of $350
million but not more than $700 million; and 0.55% of a Portfolio's
daily net assets in excess of $700 million. 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.
However, no such fee shall be paid to the Adviser with respect to
any assets of the Fund's Portfolios 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 Portfolio's expenses exceeds the
state-imposed annual expense limitation to which the Fund is
subject, the Adviser will be required to reimburse that Portfolio
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 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 paragraph.
6. Avoidance of Inconsistent Positions and Compliance with Laws.
In connection with purchases or sales of securities for the
investment portfolio of the Fund's Portfolios, neither the
Adviser nor its officers or employees will act as a principal or
agent for any party other than the Fund's Portfolios 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 Fund's Portfolios, 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 Portfolios 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 Portfolios, 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 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 Portfolios. 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 Portfolios 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 Portfolios 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 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 Portfolios 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 Colorado. To the extent that the applicable
laws of the State of Colorado, 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 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 STRATEGIC PORTFOLIOS, INC.
ATTEST:
By:_________________________________
Xxx X. Xxxxxx
_________________________________ President
Xxxx X. Xxxxx
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:________________________________
Xxx X. Xxxxxx
_________________________________ President
Xxxx X. Xxxxx
Secretary
