EXHIBIT d(3)
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT made this 15th day of July, 1999, by and between INVESCO Funds
Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Capital
Management, Inc. ("ICM"), a Delaware corporation.
WITNESSETH:
WHEREAS, INVESCO Stock Funds, Inc. (the "Company")) is engaged in business as
a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") and has one class of shares (the "Shares"), which is
divided into six or more series (the "Series"), each representing an interest in
a separate portfolio of investments; and
WHEREAS, the Shares of the Company have, in fact, been divided into separate
Series, one such Series being the INVESCO Value Equity Fund (the "Fund") such
Series having separate a portfolio of investments; and
WHEREAS, INVESCO and ICM are engaged principally in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with the
Company (the "INVESCO Investment Advisory Agreement"), pursuant to which INVESCO
is required to provide investment advisory services to the Company, and, upon
receipt of written approval of the Company, is authorized to retain other
parties to provide such services; and
WHEREAS, ICM is willing to provide investment advisory services to the
Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and ICM hereby agree as follows:
ARTICLE I
DUTIES OF ICM
INVESCO hereby employs ICM to act as investment adviser to the Company and to
furnish, or arrange for affiliates of ICM to furnish, the investment advisory
services described below, subject to the broad supervision of INVESCO and the
Board of Directors of the Company, for the period and on the terms and
conditions set forth in this Agreement. ICM hereby accepts such employment and
agrees during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein set forth for
the compensation provided for herein. ICM and its affiliates shall for all
purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
ICM hereby agrees to manage the investment operations of the Fund, subject to
the supervision of the Company's directors (the "Directors") and INVESCO.
Specifically, ICM agrees to perform the following services:
(a) to manage the investment and reinvestment of all assets, now or
hereafter acquired, by the Fund, to execute all purchases and sales of
portfolio securities and to vote all proxies of portfolio securities;
(b) to maintain a continuous investment program for the Fund, consistent
with (i) the Fund's 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 Funds, 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 Fund,
unless otherwise directed by the Directors of the Company or INVESCO, and to
execute transactions accordingly;
(d) to provide to the Fund the benefit of all of the investment analysis
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 ICM;
(e) to determine what portion of the Fund should be invested in the various
types of securities authorized for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund's action and any other rights pertaining to the Funds'
portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, ICM shall place
orders for the purchase or sale of portfolio securities with brokers or dealers
selected by ICM. In connection with the selection of such brokers or dealers and
the placing of such orders, ICM is directed at all times to obtain for the
Funds, the most favorable execution and price; after fulfilling this primary
requirement of obtaining the most favorable execution and price, ICM 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 ICM. Receipt by ICM
of any such statistical or other information and services should not be deemed
to give rise to any requirement for abatement of the advisory fee payable
pursuant to paragraph 3 hereof. ICM 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.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
ICM assumes and shall pay for maintaining the staff and personnel necessary
to perform its obligations under this Agreement, and shall also, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement.
Except to the extent expressly assumed by ICM herein and except to the extent
required by law to be paid by ICM, INVESCO and/or the Company shall pay all
costs and expenses in connection with its respective operations. Without
limiting the generality of the foregoing, such costs and expenses payable by
INVESCO or the Company, as applicable, include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Company or the Fund in connection with securities
transactions to which INVESCO, the Company or the Fund is a party or in
connection with securities owned by INVESCO, the Company or the 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 INVESCO, the Company or for the Fund;
(c) the interest on indebtedness, if any, incurred by INVESCO, the Company
or the Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by INVESCO, the Company or the 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 the Directors of the Company;
(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
Company 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's;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interests of the Company;
(l) extraordinary expenses, including fees and disbursements of counsel, in
connection with litigation by or against INVESCO, the Company or the Fund;
(m) premiums for the fidelity bond maintained by the Company pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder; and
(n) association and institute dues.
ARTICLE III
COMPENSATION OF ICM
For the services rendered, the facilities furnished and expenses assumed by
ICM, INVESCO shall pay to ICM an annual fee, computed on a daily basis and paid
on a monthly basis, using for each daily calculation the most recently
determined net asset value of the Fund, as determined by valuation determined in
accordance with the Fund's procedures for calculating its net asset value as
described in the Prospectus and/or Statement of Additional Information. On an
annual basis, the advisory fee to ICM shall be as follows: 0.30% on the first
$500 million of the Fund's average net assets, 0.26% on the next $500 million of
the Fund's average net assets, 0.20% of the Fund's average net assets from $1
billion, 0.18% of the Fund's average net assets from $2 billion, 0.16% of the
Fund's average net assets from $4 billion, 0.15% of the Fund's average net
assets from $6 billion and 0.14% of the Fund's average net assets from $8
billion. During any period when the determination of the Fund's net asset value
is suspended by the Directors of the Company, the net asset value of a share of
the Fund as of the last business day prior to such suspension shall, for the
purpose of this Article III, be deemed to be the net asset value at the close of
each succeeding business day until it is again determined.
ARTICLE IV
LIMITATION OF LIABILITY OF ICM
ICM shall not be liable for any error of judgment, mistake of law or for any
loss arising out of any investment or for any act or omission in the performance
of sub-advisory services rendered with respect to the Company or, in particular,
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Article IV, ICM shall include any
affiliates of ICM performing services contemplated hereby and directors,
officers, partners and employees of ICM and such affiliates.
ARTICLE V
ACTIVITIES OF ICM
The services of ICM to the Company are not to be deemed to be exclusive, ICM and
any person controlled by or under common control with ICM (for purposes of this
Article V referred to as "affiliates") being free to render services to others.
It is understood that directors, officers, employees and shareholders of the
Company are or may become interested in ICM and its affiliates, as directors,
officers, employees and shareholders or otherwise and that directors, officers,
partners, employees and shareholders of ICM and its affiliates are or may become
interested in the Company as directors, officers and employees, and that ICM,
INVESCO, and the directors, officers, employees and shareholders of INVESCO and
its affiliates may become interested in the Company as a shareholder or
otherwise.
ARTICLE VI
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH THE LAWS
In connection with purchases or sales of securities for the investment portfolio
of the Company or of the Fund, neither ICM nor any of its directors, officers,
partners or employees will act as a principal or agent for any party other than
the Company or the Fund, as applicable, or receive any commissions. ICM 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.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund, and shall remain in
force for an initial term of two years from the date of execution, and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the directors of the Company, or by the vote
of a majority of the outstanding voting securities of the Fund, and (ii) a
majority of those 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 approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Directors of the Company or by vote of the majority of
the outstanding voting securities of the Fund, or by ICM, on sixty days' written
notice to the applicable party(ies). This Agreement shall automatically
terminate in the event of its assignment or in the event of the termination of
the INVESCO Investment Advisory Agreement.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by ICM and
INVESCO, and no material amendment of this Agreement shall be effective until
approved by the vote of a majority of the outstanding voting securities of the
Fund as to which such amendment is applicable; provided, however, that this
paragraph shall not prevent any immaterial amendment(s) to this Agreement, which
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 INVESCO, ICM
or the Company.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities,"
"assignments," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
PERSONAL LIABILITY
The Sub Adviser agrees to use its best efforts and judgement and due care
in carrying out its duties under this Agreement provided however that the Sub
Adviser shall not be liable to INVESCO for any loss suffered by INVESCO or the
fund advised in connection with the subject matter of this Agreement unless such
loss arises from the willful misfeasance, bad faith or negligence in the
performance of the Sub-Adviser's duties and subject and without prejudice to the
foregoing. INVESCO hereby undertakes to indemnify and to keep indemnified the
Sub Adviser from and against any and all liabilities, obligations, losses,
damages, suits and expenses which may be incurred by or asserted against the Sub
Adviser for which it is responsible pursuant to Article I hereof provided always
that the Sub-Adviser shall send to INVESCO as soon as possible all claims,
letters, summonses, writs or documents which it receives from third parties and
provide whatever information and assistance INVESCO may require and no liability
of any sort shall be admitted and no undertaking shall be given nor shall any
offer, promise or payment be made or legal expenses incurred by the Sub Adviser
without written consent of INVESCO who shall be entitled if it so desires to
take over and conduct in the name of the Sub Adviser the defense of any action
or to prosecute any claim for indemnity or damages or otherwise against any
third party.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx
President
ATTEST:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Secretary
INVESCO CAPITAL MANAGEMENT, INC.
By: -------------------------
President
ATTEST:
-------------------------
Secretary
