INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 20th day of October 0000, Xxxxxx, Xxxxxxxx, by
and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware corporation,
and INVESCO Variable Investment Funds, 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 has one class of shares (the "Shares"), which is divided
into eight series, each representing an interest in a separate portfolio of
investments (such series being the INVESCO VIF-Industrial Income Portfolio,
INVESCO-VIF Total Return Portfolio, INVESCO VIF-High Yield Portfolio, INVESCO
VIF-Utilities Portfolio, INVESCO VIF-Dynamics Portfolio, INVESCO VIF-Small
Company Growth Portfolio, INVESCO VIF-Health Sciences Portfolio and INVESCO VIF-
Technology Portfolio (the "Portfolios")); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and the Adviser 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. The Adviser hereby agrees to manage
the investment operations of the Fund and its 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 and the Portfolios of
the Fund;
(b) to maintain a continuous investment program for the Fund and
each Portfolio of the Fund, consistent with (i) the Fund's and
each Portfolio's investment policies as set forth in the
Fund's 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 or any Portfolio 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 and its Portfolios, unless otherwise directed by the
Directors of the Fund, and to execute transactions
accordingly;
(d) to provide to the Fund and the Portfolios of the 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 the
Adviser;
(e) to determine what portion of the Fund and each Portfolio of
the Fund 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 Fund and/or Portfolio action and
any other rights pertaining to the Fund's portfolio securities
shall be exercised; and
(g) to calculate the net asset value of the Fund and each
Portfolio, as applicable, as required by the 1940 Act, subject
to such procedures as may be established from time to time by
the Fund's Directors, based upon the information provided to
the Adviser by the Fund or by the custodian, co-custodian or
sub-custodian of the Fund's or any of the Portfolios' assets
(the "Custodian") or such other source as designated by the
Directors from time to time.
With respect to execution of transactions for the Fund and for the
Portfolios, the Adviser shall place, or arrange for the placement
of, all orders for the purchase or sale of portfolio securities with
brokers or dealers selected by the Adviser. In connection with the
selection of such brokers or dealers and the placing of such orders,
the Adviser is directed at all times to obtain for the Fund and the
Portfolios the most favorable execution and price; after fulfilling
this primary requirement of obtaining the most favorable execution
and price, the Adviser is hereby expressly authorized to consider as
a 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 the Adviser. Receipt
by the Adviser 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 4
hereof. The Adviser may follow a policy of considering sales of
variable annuity or variable life insurance contracts for which the
Fund serves as an investment vehicle as a factor in the selection of
broker/dealers to execute portfolio transactions, subject to the
requirements of best execution discussed above.
The Adviser shall for all purposes herein provided be deemed to be
an independent contractor.
2. Allocation of Costs and Expenses. The Adviser shall reimburse the
Fund monthly for any salaries paid by the Fund to officers,
Directors, and full-time employees of the Fund who also are
officers, general partners or employees of the Adviser or its
affiliates. Except for such subaccounting, recordkeeping, and
administrative services which are to be provided by the Adviser to
the Fund under the Administrative Services Agreement between the
Fund and the Adviser dated October 20, 1993, which was approved on
October 20, 1993, by the Fund's board of directors, including all of
the independent directors, at the Fund's request the Adviser shall
also furnish to the Fund, at the expense of the Adviser, such
competent executive, statistical, administrative, internal
accounting and clerical services as may be required in the judgment
of the Directors of the Fund. These services will include, among
other things, the maintenance (but not preparation) of the Fund's
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
Fund shareholders. The Adviser also will furnish, at the Adviser's
expense, such office space, equipment and facilities as may be
reasonably requested by the Fund from time to time.
Except to the extent expressly assumed by the Adviser herein and
except to the extent required by law to be paid by the Adviser, the
Fund shall pay all costs and expenses in connection with the
operations and organization of the Fund. Without limiting the
generality of the foregoing, such costs and expenses payable by the
Fund include the following:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Fund and any Portfolio in connection
with securities transactions to which the Fund or any
Portfolio is a party or in connection with securities owned by
the Fund or any Portfolio;
(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 or
for any Portfolio;
(c) the interest on indebtedness, if any, incurred by the Fund or
any Portfolio;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund
or any Portfolio 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, including the
preparation and printing of prospectuses and statements of
additional information;
(f) the compensation and expenses of its Directors;
(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;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund;
(l) extraordinary expenses, including fees and disbursements of
Fund counsel, in connection with litigation by or against the
Fund or any Portfolio;
(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
the Adviser as an insured thereunder);
(n) association and institute dues; and
(o) the expenses, if any, of distributing shares of the Fund paid
by the Fund pursuant to a Plan and Agreement of Distribution
adopted under Rule 12b-1 of the Investment Company Act of
1940.
3. 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.
4 . 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
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 Portfolio of the Fund, as determined by valuations
made in accordance with the Fund's procedure for calculating the
Portfolios' net asset value as described in the Fund's Prospectus
and/or Statement of Additional Information. On an annual basis the
advisory fee applicable to each Portfolio shall be as follows: For
the INVESCO VIF-Industrial Income Portfolio and the INVESCO VIF-
Total Return Portfolio, the advisory fee is computed at the annual
rate of 0.75% of the first $500 million of the Portfolio's average
net assets; 0.65% of the next $500 million of the Portfolio's
average net assets; and 0.55% of the Portfolio's average net assets
in excess of $1 billion. For the INVESCO VIF - High Yield Portfolio
and the INVESCO VIF - Utilities Portfolio, the advisory fee is
computed at the annual rate of 0.60% of the first $500 million of
the Portfolio's average net assets; 0.55% of the next $500 million
of the Portfolio's average net assets; and 0.45% of the Portfolio's
average net assets in excess of $1 billion.
During any period when the determination of the Portfolios' net
asset value is suspended by the Directors of the Fund, the net asset
value of a share of the Portfolios as of the last business day prior
to such suspension shall, for the purpose of this Paragraph 4, 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
or any Portfolio thereof 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
most restrictive state imposed annual expense limitation (if, and to
the extent that, any such limitation is applicable to the Fund), the
Adviser will be required to reimburse the 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 the Fund or such 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.
5. Avoidance of Inconsistent Positions and Compliance with Laws.
In connection with purchases or sales of securities for the
investment portfolio of the Fund or any Portfolio, neither the
Adviser nor its officers or employees will act as a principal or
agent for any party other than the Fund or any Portfolio 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.
6. 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 Portfolios of the Fund, and unless sooner
terminated as hereinafter provided, shall remain in force for an
initial term expiring April 30, 1995, 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 Portfolios of the Fund 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. In the event of the disapproval of this
Agreement, or of the continuation hereof, by the shareholders of a
particular Portfolio (or by the Directors of the Fund as to a
particular Portfolio), the parties intend that such disapproval
shall be effective only as to such Portfolio, and that such
disapproval shall not affect the validity or effectiveness of the
approval of this Agreement, or of the continuation hereof, by the
shareholders of any other Portfolio (or by the Directors, including
a majority of the disinterested Directors) as to such other
Portfolio; in such case, this Agreement shall be deemed to have been
validly approved or continued, as the case may be, as to such other
Portfolio.
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 or, with respect to a particular Portfolio, by a majority
of the outstanding voting securities of that Portfolio, 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 6,
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 4 earned prior to such
termination.
7. 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 or any Portfolio of the
Fund. 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 or
any Portfolio 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 or any
Portfolio and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Fund or any
Portfolio or to the Fund'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 Fund or any Portfolio not involving willful
misfeasance, bad faith, gross negligence or reckless disregard of
its obligations and duties hereunder.
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 changed,
waived, discharged or terminated orally, but only by an instrument
in writing signed by the Fund and the Adviser, and no material
amendment of 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 Portfolio
of the Fund affected by such amendment; 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
Directors and (2) a majority of the Directors of the Fund who are
not interested persons of the Adviser or the Fund. In the event of
the disapproval of an amendment of this Agreement by the
shareholders of a particular Portfolio (or by the Directors of the
Fund as to a particular Portfolio), the parties intend that such
disapproval shall be effective only as to such Portfolio, and that
such disapproval shall not affect the validity or effectiveness of
the approval of the amendment by the shareholders of any other
Portfolio (or by the Directors, including a majority of the
disinterested Directors) as to such other Portfolio; in such case,
this Agreement shall be deemed to have been validly amended as to
such other Portfolio.
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 and the applicable provisions of
the 1940 Act. 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, the
day and year first above written.
INVESCO VARIABLE INVESTMENT FUNDS, INC.
ATTEST:
By:/s/ Xxx X. Xxxxxx
--------------------------
Xxx X. Xxxxxx
/s/ Xxxx X. Xxxxx President
--------------------
Xxxx X. Xxxxx
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxx Senior Vice President
--------------------
Xxxx X. Xxxxx
Secretary
