INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 23rd day of August, 2000, in Denver, Colorado,
by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO Counselor Series Funds, Inc., a Maryland Corporation
(the "Company").
W I T N E S S E T H :
- - - - - - - - - - -
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 an open-end management
investment company, consisting of diversified and non-diversified portfolios,
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 specified in Schedule A (each a
"Fund" and, collectively, the "Funds"); and
WHEREAS, the Company desires that the Adviser manage its investment
operations and 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 Company's 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's Funds, and to execute all
purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Company's Funds,
consistent with (i) the Funds' investment policies as set forth in the
Company'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 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's Funds, unless otherwise directed by the Directors of the
Company, and to execute transactions accordingly;
(d) to provide to the Company's Funds 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 Company's Funds should be invested in
the various types of securities authorized for purchase by the Funds;
and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Company action and any other rights pertaining to
the Funds' securities shall be exercised.
With respect to execution of transactions for the Company's Funds, the Adviser
is authorized to employ such brokers or dealers as may, in the Adviser's best
judgment, implement the policy of the Company 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
Company, 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 Company 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 Company. 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 Company 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 Company.
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 Company
(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 Company and the Adviser). These services shall include, but not
be limited to: supplying the Company with officers, clerical staff and
other employees, if any, who are necessary in connection with the Company'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
Company'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 Company), 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 Company
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 Company under this Agreement shall be the property of the
Company and, upon request therefor, the Adviser shall surrender to the
Company 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 Company 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 Company in connection with securities transactions
to which the Company is a party or in connection with securities owned
by the Company's Funds;
(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;
(c) the interest on indebtedness, if any, incurred by the Company;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Company 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;
(f) the compensation and expenses of its independent Directors, and the
compensation of any employees and officers of the Company 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 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, state, or foreign authority;
(i) the expenses of repurchasing and redeeming shares of the Company's
Funds;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Company's Funds;
(l) extraordinary expenses, including fees and disbursements of Company
counsel, in connection with litigation by or against the Company;
(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 third parties, as insured
thereunder);
(n) association and institute dues;
(o) the expenses of distributing shares of the Company but only if and to
the extent permissible under a plan of distribution adopted by the
Company pursuant to Rule 12b-1 of the Investment Company Act of 1940;
and
(p) all fees paid by the Company for administrative, recordkeeping, and
sub-accounting services under the Administrative Services Agreement
between the Company and the Adviser dated August 1, 2001.
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 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.
5. Compensation of The Adviser. For the advisory services assumed by the
Adviser under this Agreement, the Company shall pay to the Adviser the fees
set forth on Schedule B.
6. AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH LAWS. In connection
with purchases or sales of securities for the Company's Funds, neither the
Adviser nor its officers or employees will act as a principal or agent for
any party other than the Company's Funds 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 Company's Funds, 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 Company's Funds 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.
This Agreement may, on 60 days' prior written notice, be terminated without
the payment of any penalty, by the Directors of the Company, or by the vote
of a majority of the outstanding voting securities of the Company's Funds,
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 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 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 Company's Funds. 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's Funds 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's Funds 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 Company 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 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 of
the Company's Funds 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 Maryland. To the extent that the applicable laws of
the State of Maryland, 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 COUNSELOR SERIES FUNDS, INC.
ATTEST:
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------
/s/ Xxxx X. Xxxxx Xxxx X. Xxxxxxxxxx
----------------- Chairman of the
Xxxx X. Xxxxx Board of Directors
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------
/s/ Xxxx X. Xxxxx Xxxx X. Xxxxxxxxxx
----------------- Chairman of the
Xxxx X. Xxxxx Board of Directors
Secretary
INVESTMENT ADVISORY
SCHEDULE A
REGISTERED
INVESTMENT
COMPANY FUNDS EFFECTIVE DATE
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INVESCO COUNSELOR SERIES FUNDS, INC.(1) August 23, 2000
Advantage Fund
Global Growth Fund(2) November 29, 2000
Advantage Global Heath(3)
Sciences Fund May 15, 2001
Mid-Cap Growth Fund(4) September 28, 2001
(1) Amended November 8, 2000 - On November 8, 2000, the name of the
INVESCO Advantage Series Funds, Inc. was changed to INVESCO
Counselor Series Funds, Inc. Therefore, all references to
INVESCO Advantage Series Funds, Inc. should be changed to INVESCO
Counselor Series Funds Inc.
(2) Amended November 29, 2000
(3) Amended May 15, 2001
(4) Amended September 28, 2001
INVESTMENT ADVISORY
SCHEDULE B
INVESCO ADVANTAGE FUND
INVESCO ADVANTAGE GLOBAL HEALTH SCIENCES FUND(2)
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 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
INVESCO Advantage Fund and the INVESCO Advantage Global Health Sciences Fund,
(individually referred to as a "Portfolio"), as determined by valuations made in
accordance with each Portfolio's procedures for calculating its net asset value
as described in each Portfolio's current Prospectus and/or Statement of
Additional Information. The advisory fee to the Adviser shall be computed at an
annual rate of 1.50% of each Portfolio's daily average net assets (the "Base
Fee"). This Base Fee will be adjusted, on a monthly basis (i) upward at the rate
of 0.20%, on a pro rata basis, for each percentage point by which the investment
performance of each Portfolio exceeds the sum of 2.00% and the investment record
of the Xxxxxxx 3000 Index for the INVESCO Advantage Fund and the Xxxxxx Xxxxxxx
Health Care Product Index for the INVESCO Advantage Global Health Sciences Fund
(the "Index" or "Indexes"), or (ii) downward at the rate of 0.20%, on a pro rata
basis, for each percentage point by which the investment record of the
applicable Index less 2.00% exceeds the investment performance of each
Portfolio. The maximum or minimum adjustment, if any, will be 1.00% annually.
Therefore, the maximum annual fee payable to the Adviser will be 2.50% of
average daily net assets and the minimum annual fee will be 0.50% of average
daily net assets. During the first twelve months of operation, the management
fee will be charged at the base fee of 1.50% with no performance adjustment.
During any period when the determination of each Portfolio's net asset value is
suspended by the Directors of the Company, the net asset value of a share of
that Portfolio as of the last business day prior to such suspension shall be
deemed to be the net asset value at the close of each succeeding business day
until it is again determined.
In determining the fee adjustment, if any, applicable during any month, INVESCO
will compare the investment performance of the Class A Shares of each Portfolio
for the twelve-month period ending on the last day of the prior month (the
"Performance Period") to the investment record of the applicable Index during
the Performance Period. The investment performance of each Portfolio will be
determined by adding together (i) the change in the net asset value of the Class
A Shares during the Performance Period, (ii) the value of cash distributions
made by the applicable Portfolio to holders of Class A Shares to the end of the
Performance Period, and (iii) the value of capital gains per share, if any, paid
on undistributed realized long-term capital gains accumulated to the end of the
Performance Period, and will be expressed as a percentage of the net asset value
per share of the Class A Shares at the beginning of the Performance Period. The
investment record of the applicable Index will be determined by adding together
(i) the change in the level of the Index during the Performance Period and (ii)
the value, computed consistently with the Index, of cash distributions made by
companies whose securities comprise the Index accumulated to the end of the
Performance Period, and will be expressed as a percentage of the Index at the
beginning of such Period.
After it determines any fee adjustment, INVESCO will determine the dollar amount
of additional fees or fee reductions to be accrued for each day of a month by
multiplying the fee adjustment by the average daily net assets of the Class A
Shares of each Portfolio during the Performance Period and dividing that number
by the number of days in the Performance Period. The management fee, as
adjusted, is accrued daily and paid monthly.
If the Directors determine at some future date that another securities index is
more representative of the composition of the INVESCO Advantage Fund than is the
Xxxxxxx 3000 Index or the Xxxxxx Xxxxxxx Health Care Product Index for INVESCO
Advantage Global Health Sciences Fund, the Directors may change the securities
index used to compute the fee adjustment. If the Directors do so, the new
securities index (the "New Index") will be applied prospectively to determine
the amount of the fee adjustment. The Index will continue to be used to
determine the amount of the fee adjustment for that part of the Performance
Period prior to the effective date of the New Index. A change in the Index will
be submitted to shareholders for their approval unless the SEC determines that
shareholder approval is not required.
However, no such fee shall be paid to the Adviser with respect to any assets of
each Portfolio 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.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for purposes of this section and shall be borne by each 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 section.
INVESCO GLOBAL GROWTH FUND(1)
INVESCO MID-CAP GROWTH FUND(3)
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 the INVESCO Global Growth Fund and the INVESCO Mid-Cap Growth Fund
(individually referred to as a "Portfolio"), as determined by valuations made in
accordance with each Portfolio's procedure for calculating its net asset value
as described in each Portfolio's Prospectus and/or Statement of Additional
Information. As full compensation for its advisory services to the INVESCO
Global Growth Fund and INVESCO Mid-Cap Growth Fund, the Adviser receives a
monthly fee from each Portfolio. The fee is calculated at the annual rate of
1.00% of each Portfolio's average net assets.
During any period when the determination of each Portfolio's net asset value is
suspended by the Directors of the Company, the net asset value of a share of
that Portfolio as of the last business day prior to such suspension shall 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 each Portfolio 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.
Interest, taxes and extraordinary items such as litigation costs are not deemed
expenses for the purposes of calculating the fee and shall be borne by the
Company in any event. Expenditures, including costs incurred in connection with
the purchase or sale of the each Portfolio's 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 calculating the fee; 1.00% of each Portfolio's
average net assets.
(1) Amended November 29, 2000.
(2) Amended May 15, 2001.
(3) Amended September 28, 2001.
