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 Strategic Portfolios, Inc., a Maryland Corporation (the
"Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of the State
of the State of Maryland; and
WHEREAS, the Fund 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 which is divided into three
series (the "Shares"), each representing an interest in a separate portfolio of
investments (such series initially being the INVESCO European Fund, the INVESCO
Pacific Basin Fund and the INVESCO International Growth Fund (the
"Portfolios")); and
WHEREAS, the Fund 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 Fund's three Portfolios, subject to the terms of
this Agreement and to the supervision of the Fund's directors (the "Directors").
The Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Fund's three Portfolios;
(b) to maintain a continuous investment program for the Fund's
Portfolios, consistent with (i) the Portfolios' investment policies as set
forth in the Fund'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 Fund or any Portfolio of the
Fund, as from time to time amended and in use under the Securities Act of
1933, as amended, and (ii) the Fund'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's Portfolios, unless otherwise directed by the Directors of the Fund,
and to execute transactions accordingly;
(d) to provide to the Fund's Portfolios 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 Fund's Portfolios 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 and/or Portfolio action and any other rights
pertaining to the Portfolios' securities shall be exercised.
With respect to execution of transactions for the Fund's Portfolios, the
Adviser is authorized to employ such brokers or dealers as may, in the Adviser's
best judgment, implement the policy of the Fund 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
Fund, 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 Fund 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 Fund. In the selection of a broker or dealer for
execution of any negotiated 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 Fund 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 Fund.
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 Fund (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 Fund and the Adviser).
These services shall include, but not be limited to: supplying the Fund with
officers, clerical staff and other employees, if any, who are necessary in
connection with the Fund'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 Fund'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 Fund), 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 Fund 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 Fund under this
Agreement shall be the property of the Fund and, upon request therefor, the
Adviser shall surrender to the Fund 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 Fund 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 taxex, and other costs
chargeable to the Fund in connection with securities transactions to which
the Fund is a party or in connection with securities owned by the Fund's
Portfolios;
(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 Fund;
(c) the interest on indebtedness, if any, incurred by the Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by 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 Fund 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 Fund 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 Fund'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 Fund'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 Fund's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Fund's
Portfolios;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interest of the Fund's Portfolios;
(l) extraordinary expenses, including fees and disbursements of Fund
counsel, in connection with litigation by or against the Fund;
(m) premiums for the fidelity bond maintained by the Fund 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;
(o) the expenses, if any, of distributing shares of the Fund but only if
and to the extent permissible under a plan of distribution adopted by the Fund
pursuant to Rule 12b 1 of the Investment Company Act of 1940; and
(p) all fees paid by the Fund for administrative, recordkeeping, and
sub-accounting services under the Administrative Services Agreement between the
Fund and the Adviser dated April 30, 1991.
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 Fund, 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 services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund 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 each of the Fund's Portfolios, as determined by
valuations made in accordance with the Fund's procedure for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Adviser shall be computed at the following
annual rates: 0.75% of a Portfolio's daily net assets up to $350 million; 0.65%
of a Portfolio's daily net assets in excess of $350 million but not more than
$700 million; and 0.55% of a Portfolio's daily net assets in excess of $700
million. During any period when the determination of the Fund's net asset value
is suspended by the Directors of the Fund, 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 Paragraph 5, 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 Fund's Portfolios 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 Portfolio's expenses exceeds the most
restrictive state imposed annual expense limitation, the Adviser will be
required to reimburse that Portfolio 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 Fund or
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 paragraph.
6. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolio of
the Fund's Portfolios, neither the Adviser nor its officers or employees, will
act as a principal or agent for any party other than the Fund's three Portfolios
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 Fund's Portfolios, 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 Fund's Portfolios or by the
Directors of the Fund, and (ii) by a majority of the Directors of the Fund who
are not interested persons of the Adviser or the Fund 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 Fund, or by the vote
of a majority of the outstanding voting securities of the Fund's Portfolios, 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 Fund 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 Fund's Portfolios. 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 Fund's
Portfolios 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 Fund's Portfolios 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
Fund 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
Fund, 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 Fund's Portfolios 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 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 Fund 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 STRATEGIC PORTFOLIOS, INC.
ATTEST:
By: /s/ Xxx X. Xxxxxx
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/s/ Xxxx X. Xxxxx President
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Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxx
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/s/ Xxxx X. Xxxxx Senior Vice President
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Secretary
