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EXHIBIT d(1)(c)
AIM SPECIAL OPPORTUNITIES FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 4th day of November, 1999, by and between AIM
Special Opportunities Funds, a Delaware business trust (the "Trust") with
respect to its series of shares shown on the Appendix A attached hereto, as the
same may be amended from time to time, and A I M Advisors, Inc., a Delaware
corporation (the "Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "l940 Act"), as an open-end, diversified management investment
company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Trust's Amended and Restated Agreement and Declaration of
Trust (the "Declaration of Trust") authorizes the Board of Trustees of the Trust
(the "Board of Trustees") to create separate series of shares of beneficial
interest in the Trust, and as of the date of this Agreement, the Board of
Trustees has created three separate series portfolios (such portfolios and any
other portfolios hereafter added to the Trust being referred to collectively
herein as the "Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to
provide for investment advisory services to 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 of which is hereby
acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the
Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Trustees. The Advisor shall give the Trust
and the Funds the benefit of its best judgment, efforts and facilities in
rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether
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affecting the economy generally or the Funds, and whether concerning the
individual issuers whose securities are included in the assets of the Funds
or the activities in which such issuers engage, or with respect to
securities which the Advisor considers desirable for inclusion in the
Funds' assets;
(c) determine which issuers and securities shall be represented in
the Funds' investment portfolios and regularly report thereon to the Board
of Trustees;
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Board of Trustees;
and take, on behalf of the Trust and the Funds, all actions which appear to the
Trust and the Funds necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including but not limited to
the placing of orders for the purchase and sale of securities for the Funds.
3. Delegation of Responsibilities. Subject to compliance with all
applicable provisions of the 1940 Act, any rules and regulations adopted
thereunder, and any exemptive orders issued by the Securities and Exchange
Commission, the Advisor may delegate to a sub-advisor certain of its duties
enumerated in Section 2 hereof, provided that the Advisor shall continue to
supervise the performance of any such sub-advisor.
4. Control by Board of Trustees. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Funds, shall at all times be subject to any
directives of the Board of Trustees.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the 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 Trust, 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 Declaration of Trust, as the same may be
amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
6. Broker-Dealer Relationships. The Advisor is responsible for decisions
to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates.
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(a) The Advisor's primary consideration in effecting a security
transaction will be to obtain execution at the most favorable price.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in executing
the order; and the value of the expected contribution of the broker-dealer
to the investment performance of the Funds on a continuing basis.
Accordingly, the price to the Funds in any transaction may be less
favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the fund execution services
offered.
(c) Subject to such policies as the Board of Trustees may from time
to time determine, the Advisor shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise solely
by reason of its having caused the Funds to pay a broker or dealer that
provides brokerage and research services to the Advisor an amount of
commission for effecting a fund investment transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if the Advisor determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to a particular Fund, other Funds of the
Trust, and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to
allocate the orders placed by it on behalf of the Funds to such brokers and
dealers who also provide research or statistical material, or other
services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the
Board of Trustees indicating the brokers to whom such allocations have been
made and the basis therefor.
(d) In making decisions regarding broker-dealer relationships, the
Advisor may take into consideration the recommendations of any sub-advisor
appointed to provide investment research or advisory services in connection
with the Funds, and may take into consideration any research services
provided to such sub-advisor by broker-dealers.
7. Compensation. The compensation that each Fund shall pay the Advisor is
set forth in Appendices B and C attached hereto.
8. Expenses of the Funds. All of the ordinary business expenses incurred
in the operations of the Funds and the offering of their 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, accounting, auditing, or governmental fees, the cost
of preparing share 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
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preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Trust on behalf of the Funds in connection with
membership in investment company organizations and the cost of printing copies
of prospectuses and statements of additional information distributed to the
Funds' shareholders.
9. Services to Other Companies or Accounts. The Trust understands that
the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Trust has no objection to the Advisor so
acting, provided that whenever the Trust and one or more other investment
companies or accounts managed or advised by the Advisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company and account.
The Trust recognizes that in some cases this procedure may adversely affect the
size of the positions obtainable for the Funds.
10. Non-Exclusivity. The Trust understands that the persons employed by
the Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature. The Trust
further understands and agrees that officers or directors of the Advisor may
serve as officers or directors of the Trust, and that officers or directors of
the Trust may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the 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.
11. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Appendix A attached hereto.
If so approved, this Agreement shall thereafter continue in force and effect
until June 30, 2001, 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 Board of Trustees or (ii) by the vote of "a majority
of the outstanding voting securities" of such Fund (as defined in Section
2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the trustees 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 Trust trustees), by votes
cast in person at a meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated as to the Trust or as to
any one or more of the Funds at any time, without the payment of any penalty, by
vote of the Board of Trustees or by vote of a majority of the outstanding voting
securities of the applicable Fund, or
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by the Advisor, on sixty (60) days' written notice to the other party. The
notice provided for herein may be waived by the party entitled to receipt
thereof. 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.
13. Liability of Advisor. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Advisor or any of its officers, directors or employees, the
Advisor shall not be subject to liability to the Trust or to the Funds or to any
shareholder of the Funds 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.
14. Liability of Shareholders. Notice is hereby given that, as provided by
applicable law, the obligations of or arising out of this Agreement are not
binding upon any of the shareholders of the Trust individually but are binding
only upon the assets and property of the Trust and that the shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the same
limitation on personal liability as shareholders of private corporations for
profit.
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Trust and that of the Advisor shall be 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
16. 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 the 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. Subject to
the foregoing, this Agreement shall be governed by and construed in accordance
with the laws (without reference to conflicts of law provisions) of the State of
Texas.
17. License Agreement. The Trust shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or advisor to the Trust
with respect to such series of shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
AIM Special Opportunities Funds
(a Delaware business trust)
Attest:
/s/ XXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXX
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Assistant Secretary President
(SEAL)
Attest: A I M Advisors, Inc.
/s/ P. XXXXXXXX XXXXX By: /s/ XXXXXX X. XXXXXX
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Assistant Secretary President
(SEAL)
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APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
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AIM Large Cap Opportunities Fund December 30, 1999
AIM Mid Cap Opportunities Fund January 1, 2000
AIM Small Cap Opportunities Fund January 1, 0000
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COMPENSATION TO THE ADVISOR
AIM LARGE CAP OPPORTUNITIES FUND
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The Trust shall pay the Advisor, out of the assets of AIM Large Cap
Opportunities Fund ("Large Cap"), as full compensation for all services rendered
and all facilities furnished to Large Cap hereunder, a management fee consisting
of the sum of a Base Fee and a Performance Adjustment (whether positive or
negative), computed and paid monthly. If the Advisor shall serve for less than
the whole of any period specified herein, the compensation payable to the
Advisor with respect to Large Cap shall be prorated.
The Base Fee shall be at an annual rate of 1.50% of Large Cap's average
daily net assets. In computing the amount of the Base Fee, the Base Fee shall be
applied against Large Cap's average daily net assets computed over the month for
which the Base Fee is paid. The Trust shall pay the Advisor the Base Fee
beginning on the Effective Date for Large Cap, as set forth in Appendix A.
The Performance Adjustment shall be calculated by (i) subtracting the
Investment Record of the Large Cap Benchmark Index, as set forth in Appendix C,
from the Investment Performance of a Class A share of Large Cap over the
Performance Period, (ii) subtracting 2.00% from the number obtained in (i) if
such number is positive, or adding 2.00% if such number is negative, and (iii)
multiplying the number obtained in (ii) (whether positive or negative) by 0.20%.
In computing the amount of the Performance Adjustment, the Performance
Adjustment shall be applied against Large Cap's average daily net assets
computed over the Performance Period. The Performance Adjustment shall not
exceed 1.00% per annum. The Trust shall pay the Advisor the Performance
Adjustment beginning in the thirteenth month following the Effective Date for
Large Cap, so that for the first twelve months following the Effective Date for
Large Cap the Advisor shall receive only the Base Fee.
As used herein, the term "Performance Period" shall mean the twelve month
period ending on the last day of the month immediately preceding the monthly
computation called for herein and the terms "Investment Record" and "Investment
Performance" shall have the meanings set forth in Rule 205-1 of the Advisers
Act. The average daily net asset value of Large Cap shall be determined in the
manner set forth in the Declaration of Trust and registration statement of the
Trust, as amended from time to time.
AIM MID CAP OPPORTUNITIES FUND
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The Trust shall pay the Advisor, out of the assets of AIM Mid Cap
Opportunities Fund ("Mid Cap"), as full compensation for all services rendered
and all facilities furnished to Mid Cap hereunder, a management fee consisting
of the sum of a Base Fee and a Performance Adjustment (whether positive or
negative), computed and paid monthly. If the Advisor shall
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serve for less than the whole of any period specified herein, the compensation
payable to the Advisor with respect to Mid Cap shall be prorated.
The Base Fee shall be at an annual rate of 1.50% of Mid Cap's average daily
net assets. In computing the amount of the Base Fee, the Base Fee shall be
applied against Mid Cap's average daily net assets computed over the month for
which the Base Fee is paid. The Trust shall pay the Advisor the Base Fee
beginning on the Effective Date for Mid Cap, as set forth in Appendix A.
The Performance Adjustment shall be calculated by (i) subtracting the
Investment Record of the Mid Cap Benchmark Index, as set forth in Appendix C,
from the Investment Performance of a Class A share of Mid Cap over the
Performance Period, (ii) subtracting 2.00% from the number obtained in (i) if
such number is positive, or adding 2.00% if such number is negative, and (iii)
multiplying the number obtained in (ii) (whether positive or negative) by 0.20%.
In computing the amount of the Performance Adjustment, the Performance
Adjustment shall be applied against Mid Cap's average daily net assets computed
over the Performance Period. The Performance Adjustment shall not exceed 1.00%
per annum. The Trust shall pay the Advisor the Performance Adjustment beginning
in the thirteenth month following the Effective Date for Mid Cap, so that for
the first twelve months following the Effective Date for Mid Cap the Advisor
shall receive only the Base Fee.
As used herein, the term "Performance Period" shall mean the twelve month
period ending on the last day of the month immediately preceding the monthly
computation called for herein and the terms "Investment Record" and "Investment
Performance" shall have the meanings set forth in Rule 205-1 of the Advisers
Act. The average daily net asset value of Mid Cap shall be determined in the
manner set forth in the Declaration of Trust and registration statement of the
Trust, as amended from time to time.
AIM SMALL CAP OPPORTUNITIES FUND
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The Trust shall pay the Advisor, out of the assets of AIM Small Cap
Opportunities Fund ("Small Cap"), as full compensation for all services rendered
and all facilities furnished to Small Cap hereunder, a management fee consisting
of the sum of a Base Fee and a Performance Adjustment (whether positive or
negative), computed and paid monthly. If the Advisor shall serve for less than
the whole of any period specified herein, the compensation payable to the
Advisor with respect to Small Cap shall be prorated.
The Base Fee shall be at an annual rate of 1.00% of Small Cap's average
daily net assets. In computing the amount of the Base Fee, the Base Fee shall be
applied against Small Cap's average daily net assets computed over the month for
which the Base Fee is paid. The Trust shall pay the Advisor the Base Fee
beginning on the Effective Date for Small Cap, as set forth in Appendix A.
The Performance Adjustment shall be calculated by (i) subtracting the
Investment Record of the Small Cap Benchmark Index, as set forth in Appendix C,
from the Investment Performance of a Class A share of Small Cap over the
Performance Period, (ii) subtracting
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2.00% from the number obtained in (i) if such number is positive, or adding
2.00% if such number is negative, and (iii) multiplying the number obtained in
(ii) (whether positive or negative) by 0.15%. In computing the amount of the
Performance Adjustment, the Performance Adjustment shall be applied against
Small Cap's average daily net assets computed over the Performance Period. The
Performance Adjustment shall not exceed 0.75% per annum. The Trust shall pay the
Advisor the Performance Adjustment beginning in the thirteenth month following
the Effective Date for Small Cap, so that for the first twelve months following
the Effective Date for Small Cap the Advisor shall receive only the Base Fee.
As used herein, the term "Performance Period" shall mean the twelve month
period ending on the last day of the month immediately preceding the monthly
computation called for herein and the terms "Investment Record" and "Investment
Performance" shall have the meanings set forth in Rule 205-1 of the Advisers
Act. The average daily net asset value of Small Cap shall be determined in the
manner set forth in the Declaration of Trust and registration statement of the
Trust, as amended from time to time.
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AIM LARGE CAP OPPORTUNITIES FUND
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The Large Cap Benchmark Index shall be the S&P 500--Registered Trademark--
Index.
AIM MID CAP OPPORTUNITIES FUND
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The Mid Cap Benchmark Index shall be the S&P MidCap 400 Index.
AIM SMALL CAP OPPORTUNITIES FUND
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The Small Cap Benchmark Index shall be the Xxxxxxx 2000--Registered Trademark--
Index.
From time to time, the Board of Trustees, by the affirmative vote of the
trustees voting in person, including the affirmative vote of a majority of the
trustees who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of a party to this Agreement, may determine that
another securities index is a more appropriate benchmark than the respective
Benchmark Index above for purposes of evaluating the performance of a Fund. In
such event, after thirty days' written notice to the Advisor, a successor index
(the "Successor Index") may be substituted for a Fund's Benchmark Index in
prospectively calculating the Performance Adjustment for that Fund. However, the
calculation of that portion of the Performance Adjustment attributable to any
portion of the Performance Period prior to the adoption of the Successor Index
will still be based upon the Fund's performance compared to its former Benchmark
Index.
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