INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 2nd day of May, Denver, Colorado, by and
between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware corporation, and
INVESCO Specialty 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 a diversified, open-end
management investment company and has one class of shares (the "Shares"), which
is divided into two series, each representing an interest in a separate
portfolio of investments (such series initially being the INVESCO Worldwide
Capital Goods Fund and INVESCO Worldwide Communications 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 subaccounting, 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 each Fund shall be computed at the following
annual rate: 0.65% of the first $500 million of the 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.
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
expiring April 30, 1996, 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.
ATTEST:
By: /s/ Xxx X. Xxxxxx
------------------------
/s/ Xxxx X. Xxxxx Xxx X. Xxxxxx
----------------- President
Xxxx X. Xxxxx
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxx
------------------------
/s/ Xxxx X. Xxxxx Xxxxxx X. Xxxxxx,
----------------- Senior Vice President
Xxxx X. Xxxxx
Secretary
