INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 30th day of August, 2002, in Denver, Colorado,
by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO Manager 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 and currently has one series of shares which is divided into
three classes, which may be divided into additional series and classes,
representing an interest in a separate portfolio of investments specific 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
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 ("Brokers") 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 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 1940 Act;
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 June 1,
2000, as amended August 30, 2002.
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, and (ii) by a majority of the Directors 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, 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 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, 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 Company 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 MANAGER SERIES FUNDS, INC.
ATTEST:
By:/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
/s/ Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxxxxx
---------------------- President & COO
Xxxx X. Xxxxx
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
/s/ Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxxxxx
----------------------- Vice President
Xxxx X. Xxxxx
Secretary
INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
REGISTERED
INVESTMENT
COMPANY FUNDS EFFECTIVE DATE
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INVESCO MANAGER SERIES FUNDS, INC. August 30, 2002
Multi-Sector Fund
INVESTMENT ADVISORY AGREEMENT
SCHEDULE B
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 Multi-Sector Fund, as determined by valuations made in accordance with
the INVESCO Multi-Sector Fund's procedures for calculating its net asset value
as described in the Prospectus and/or Statement of Additional Information. The
advisory fee to the Adviser shall be computed an annual rate of 0.75% of the
INVESCO Multi-Sector Fund's daily average net assets.
No such fee shall be paid to the Adviser with respect to any assets of the
INVESCO Multi-Sector Fund 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 the INVESCO
Multi-Sector 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 section.
