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 Specialty Funds, Inc., a Maryland corporation (the
"Company").
WITNESSETH:
WHEREAS, the Company is a corporation organized under the laws of the State
of Maryland; and
WHEREAS, the Company 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 five series, each representing an interest in a separate
portfolio of investments (such series initially being the INVESCO Worldwide
Capital Goods Fund, INVESCO Worldwide Communications Fund, INVESCO European
Small Company Fund, INVESCO Latin American Growth Fund, and INVESCO Asian Growth
Fund (individually, the "Fund" and collectively, the "Funds")); and
WHEREAS, the Company 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 Company and its Funds, subject to the terms of this
Agreement and to the supervision of the Company's directors (the "Directors").
The Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Company:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Company and the Funds of the Company;
(b) to maintain a continuous investment program for the Company and each
Fund of the Company, consistent with (i) the Company's and each Fund's
investment policies as set forth in the Company'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 Company or any Fund of the Company, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Company'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
Company and its Funds, unless otherwise directed by the Directors of the
Company, and to execute transactions accordingly;
(d) to provide to the Company and the Funds of the Company 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 Company and each Fund of the Company
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 Company and/or Fund action and any other rights
pertaining to the Company's portfolio securities shall be exercised; and
(g) to calculate the net asset value of the Company and each Fund, as
applicable, as required by the 1940 Act, subject to such procedures as may be
established from time to time by the Company's Directors, based upon the
information provided to the Adviser by the Company or by the custodian,
co-custodian or sub-custodian of the Company's or any of the Funds' assets
(the "Custodian") or such other source as designated by the Directors from
time to time.
With respect to execution of transactions for the Company and for the
Funds, 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
Company and the Funds 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 shares of the Company 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
Company monthly for any salaries paid by the Company to officers, Directors, and
full time employees of the Company who also are officers, general partners or
employees of the Adviser or its affiliates. Except for such sub-accounting,
recordkeeping, and administrative services which are to be provided by the
Adviser to the Company under the Administrative Services Agreement between the
Company and the Adviser dated May 2, 1994, which was approved on April 20, 1994,
by the Company's board of directors, including all of the independent directors,
at the Company's request the Adviser shall also furnish to the Company, 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 Company. These services will include, among other things,
the maintenance (but not preparation) of the Company'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 Company shareholders. The Adviser also will furnish, at
the Adviser's expense, such office space, equipment and facilities as may be
reasonably requested by the Company 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 Company shall pay all
costs and expenses in connection with the operations and organization of the
Company. Without limiting the generality of the foregoing, such costs and
expenses payable by the Company include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Company and any Fund in connection with securities
transactions to which the Company or any Fund is a party or in connection
with securities owned by the Company 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 Company or for any Fund;
(c) the interest on indebtedness, if any, incurred by the Company or any
Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Company 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 Company 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
Company'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 Company'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 Company's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Company;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of common stock of the Company;
(l) extraordinary expenses, including fees and disbursements of Company
counsel, in connection with litigation by or against the Company or any Fund;
(m) premiums for the fidelity bond maintained by the Company 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 Company paid by
the Company 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 Company, 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 Company 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 Fund of the Company, as determined
by valuations made in accordance with the Company's procedure for calculating
the Funds' net asset value as described in the Company's Prospectus and/or
Statement of Additional Information. The advisory fee to the Adviser with
respect to the INVESCO Worldwide Capital Goods Fund and INVESCO Worldwide
Communications Fund shall be computed at the following annual rate: 0.65% of the
first $500 million of each Fund's average net assets, 0.55% of the Fund's
average net assets in excess of $500 million but not more than $1 billion, and
0.45% of the Fund's average net assets in excess of $1 billion. The advisory fee
to the Adviser with respect to the INVESCO European Small Company Fund, INVESCO
Latin American Growth Fund and INVESCO Asian Growth Fund shall be computed at
the following annual rate: 0.75% of the first $500 million of each Fund's
average net assets, 0.65% of the next $500 million of each Fund's average net
assets and 0.55% of each Fund's average net assets over $1 billion.
During any period when the determination of the Funds' net asset value is
suspended by the Directors of the Company, the net asset value of a share of the
Funds 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 Company or any
Fund 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 Fund's expenses exceeds the most
restrictive state imposed annual expense limitation, the Adviser will be
required to reimburse the 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 Company or such 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.
5. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolio of
the Company or any Fund, neither the Adviser nor its officers or employees will
act as a principal or agent for any party other than the Company or any Fund 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 Funds of the Company, and unless sooner terminated as hereinafter provided,
shall remain in force for an initial term of 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 Funds of the Company or by
the Directors of the Company, and (ii) by a majority of the Directors of the
Company who are not interested persons of the Adviser or the Company 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 Fund (or by the Directors of the
Company as to a particular Fund), the parties intend that such disapproval shall
be effective only as to such Fund, 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 Fund (or by the Directors,
including a majority of the disinterested Directors) as to such other Fund; in
such case, this Agreement shall be deemed to have been validly approved or
continued, as the case may be, as to such other Fund.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by a majority of the Directors of the Company, or by
the vote of a majority of the outstanding voting securities of the Company or,
with respect to a particular Fund, by a majority of the outstanding voting
securities of that Fund, 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 Company 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 Company or any Fund of the Company. 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
Company or any Fund 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 Company or any Fund and the Adviser's other customers.
8. Liability. The Adviser shall have no liability to the Company or any
Fund or to the Company'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 Company or any
Fund 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 Company 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 Company, 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 Fund of the Company
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 Company
who are not interested persons of the Adviser or the Company. In the event of
the disapproval of an amendment of this Agreement by the shareholders of a
particular Fund (or by the Directors of the Company as to a particular Fund),
the parties intend that such disapproval shall be effective only as to such
Fund, and that such disapproval shall not affect the validity or effectiveness
of the approval of the amendment by the shareholders of any other Fund (or by
the Directors, including a majority of the disinterested Directors) as to such
other Fund; in such case, this Agreement shall be deemed to have been validly
amended as to such other Fund.
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 Company 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 SPECIALTY FUNDS, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-------------------------------
Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Senior Vice President
ATTEST:
/s/ Xxxx X. Xxxxx
-------------------------------
Secretary
