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EXHIBIT 5(b)(1)
AIM EQUITY FUNDS, INC.
(AIM Charter Fund)
(AIM Constellation Fund)
(AIM Xxxxxxxxxx Fund)
MASTER SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 28th day of February, 1997, by and
between A I M Advisors, Inc., a Delaware corporation (the "Advisor") and A I M
Capital Management, Inc., a Texas corporation (the "Sub-Advisor").
RECITALS
WHEREAS, AIM Equity Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end,
diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940 (the "Advisers Act"), as amended, as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Sub-Advisor is registered under the Advisers Act, as
amended, as an investment advisor and engages in the business of acting as an
investment advisor;
WHEREAS, the Company's charter authorizes the Board of Directors of the
Company to classify or reclassify authorized but unissued shares of the
Company, and as of the date of this Agreement, the Company's Board of Directors
has authorized the issuance of six series of shares representing interests in
six investment portfolios: AIM Aggressive Growth Fund, AIM Blue Chip Fund, AIM
Capital Development Fund, AIM Charter Fund, AIM Constellation Fund and AIM
Xxxxxxxxxx Fund (such series, together with any future series, are collectively
referred to herein as the "Portfolios");
WHEREAS, the Advisor has entered into a Master Investment Advisory
Agreement of even date herewith with the Company (the "Investment Advisory
Agreement"), pursuant to which the Advisor shall act as investment advisor with
respect to the Portfolios; and
WHEREAS, pursuant to Section 3 ("Delegation of Responsibilities") of
the Investment Advisory Agreement, the Advisor wishes to retain the Sub-Advisor
for purposes of rendering advisory services to the Advisor in connection with
the AIM Constellation Fund, AIM Xxxxxxxxxx Fund, and AIM Charter Fund (the
"Funds"), upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Advisor. The Advisor hereby appoints the
Sub-Advisor to render investment research and advisory services to the Advisor
with respect to the Funds, under the supervision of the Advisor and subject to
the approval and direction of the Company's Board of
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Directors, and the Sub-Advisor hereby accepts such appointment, all subject to
the terms and conditions contained herein.
2. Investment Analysis. The duties of the Sub-Advisor shall include:
(a) obtaining and evaluating pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally
or the Funds, and whether concerning the individual issuers whose
securities are included in the Funds or the activities in which such
issuers engage, or with respect to securities which the Sub-Advisor
considers desirable for inclusion in the Funds' investment portfolios;
(b) determining which issuers and securities shall be
represented in the Funds' investment portfolios and regularly reporting
thereon to the Advisor and, at the request of the Advisor, to the
Company's Board of Directors; and
(c) formulating and implementing continuing programs for the
purchases and sales of the securities of such issuers and regularly
reporting thereon to the Advisor and, at the request of the Advisor, to
the Company's Board of Directors.
3. Control by Board of Directors. Any investment program undertaken
by the Sub-Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Advisor with respect to the Funds, shall at all times be
subject to any directives of the Board of Directors of the Company.
4. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Advisor shall at all times conform
to:
(a) all applicable provisions of the 1940 Act and the Advisers
Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Company, as the same may be amended from time to time, under the
Securities Act of 1933 and the 1940 Act;
(c) the provisions of the corporate charter of the Company, as
the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, as the same
may be amended from time to time; and
(e) any other applicable provisions of state or federal law.
5. Compensation. The Advisor shall pay to the Sub-Advisor, as
compensation for services rendered hereunder to a Fund, an annual fee, payable
monthly, equal to 50% of the fee received by the Advisor from the Company with
respect to such Fund pursuant to the Investment Advisory Agreement.
6. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of its shares shall be
borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, auditing, or governmental fees, the cost of
preparing share
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certificates, custodian, transfer and shareholder service agent costs, expenses
of issue, sale, redemption and repurchase of shares, expenses of registering
and qualifying shares for sale, expenses relating to directors and shareholder
meetings, the cost of preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by the Company on behalf of
the Funds in connection with membership in investment company organizations and
the cost of printing copies of the prospectuses and statements of additional
information distributed to the Funds' shareholders.
7. Non-Exclusivity. The services of the Sub-Advisor to the Advisor
with respect to the Company and the Funds are not deemed to be exclusive, and
the Sub-Advisor shall be free to render investment advisory and administrative
or other services to others (including other investment companies) and to
engage in other activities. It is understood and agreed that officers and
directors of the Sub-Advisor may serve as officers or directors of the Advisor
or of the Company, and that officers or directors of the Advisor or of the
Company may serve as officers or directors of the Sub-Advisor to the extent
permitted by law; and that the officers and directors of the Sub-Advisor are
not prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.
8. Term and Approval. This Agreement shall become effective with
respect to a Fund if approved by the shareholders of such Fund, and if so
approved, this Agreement shall thereafter continue in force and effect until
February 28, 1999, and may be continued from year to year thereafter, provided
that the continuation of the Agreement is specifically approved at least
annually:
(a)(i) by the Company's Board of Directors or (ii) by the vote
of "a majority of the outstanding voting securities" of such Fund (as
defined under Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who
are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of a party to this Agreement (other than as Company
directors), by votes cast in person at a meeting specifically called
for such purpose.
9. Termination. This Agreement may be terminated as to any Fund at
any time, without the payment of any penalty, by vote of the Company's Board of
Directors or by vote of a majority of such Fund's outstanding voting
securities, or by the Advisor, or by the Sub-Advisor on sixty (60) days'
written notice to the other party and to the Company. The notice provided for
herein may be waived by either party. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
10. Liability of Sub-Advisor and Indemnification. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Advisor or any of its
officers, directors or employees, the Sub-Advisor shall not be subject to
liability to the Advisor for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.
11. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice, with a copy to the Company. Until
further notice, it is agreed that the address of the Company, that of
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the Advisor and that of the Sub-Advisor shall be Eleven Xxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000.
12. Questions of Interpretation. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act or the Advisers Act shall be
resolved by reference to such term or provision of the 1940 Act or the Advisers
Act and to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued pursuant
to said Acts. In addition, where the effect of a requirement of the 1940 Act
or the Advisers Act reflected in any provision of this Agreement is revised by
rule, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers as of the
day and year first written above.
A I M ADVISORS, INC.
Attest:
/s/ XXXXX X. XXXX By: /s/ XXXXXX X. XXXXXX
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Assistant Secretary President
(SEAL)
A I M CAPITAL MANAGEMENT, INC.
Attest:
/s/ XXXXXX X. XXXX By: /s/ XXXX X. XXXX
---------------------------------- ----------------------------------
Assistant Secretary President
(SEAL)
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