SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO CAPITAL
MANAGEMENT, INC. ("ICM"), a Delaware corporation.
WITNESSETH:
WHEREAS, INVESCO VALUE TRUST (the "Trust") 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 two or more series (the "Series"), each representing an interest in
a separate portfolio of investments (the "Funds"); and
WHEREAS, the Shares of the Trust have, in fact, been divided into separate
Series, three such Series being the INVESCO Value Equity Fund (the "Equity
Fund"), the INVESCO Intermediate Government Bond Fund (the "Bond Fund"), and the
INVESCO Total Return Fund (the "Return Fund"), all such Series having separate
portfolios 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
Trust (the "INVESCO Investment Advisory Agreement"), pursuant to which INVESCO
is required to provide investment advisory services to the Trust and the Funds
of the Trust; and
WHEREAS, ICM is willing to provide investment advisory services to the Adviser
in connection with the Trust's operations 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 Adviser 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
Trust, 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 Trust or any Fund in
any way or otherwise be deemed an agent of the Trust or any Fund of the Trust.
ICM hereby agrees to manage the investment operations of the Equity Fund, Bond
Fund, and Return Fund, subject to the supervision of the Trust's trustees (the
"Trustees") and INVESCO. Specifically, ICM agrees to perform the following
services for the Trust, INVESCO, and the Equity Fund, Bond Fund, and Return
Fund:
(a) to manage the investment and reinvestment of all assets, now or
hereafter acquired, by the Equity Fund, Bond Fund, and Return Fund;
(b) to maintain a continuous investment program for the Equity Fund, Bond
Fund, and Return Fund, consistent with (i) the three Funds' and Trust's
investment policies as set forth in the Trust's Declaration of Trust, Bylaws,
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 Trust or of the three
Funds, as from time to time amended and in use under the Securities Act of
1933, as amended, and (ii) the Trust'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 Equity
Fund, Bond Fund, and Return Fund, unless otherwise directed by the Trustees
of the Trust or INVESCO, and to execute transactions accordingly;
(d) to provide to the Trust and the Equity Fund, Bond Fund, and Return 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 Equity Fund, Bond Fund, and Return
Fund should be invested in the common stocks, preferred stocks, Government
obligations, commercial paper, certificates of deposit, bankers' acceptances,
variable amount notes, corporate debt obligations, and any other authorized
securities; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Trust and/or Equity Fund, Bond Fund, and Return Fund action and
any other rights pertaining to the three Funds' portfolio securities shall be
exercised.
With respect to execution of transactions for the Trust and for the Equity
Fund, Bond Fund, and Return 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 three 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 Trust 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 Trust 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
Trust, as applicable, include the following:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Trust or any Fund in connection with securities
transactions to which INVESCO, the Trust or any Fund is a party or in
connection with securities owned by INVESCO, the Trust 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 INVESCO, the Trust or for any Fund;
(c) the interest on indebtedness, if any, incurred by INVESCO, the Trust or
any Fund;
(d) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by INVESCO, the Trust 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 Trust 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 Trustees of the Trust;
(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 Trust's
shareholders, as well as all expenses of shareholders' meetings and Trustees'
meetings;
(h) all costs, fees or other expenses arising in connection with the
organization and filing of the Trust's Declaration of Trust, 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 Trust's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the Trust;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates representing
shares of beneficial interests of the Trust;
(l) extraordinary expenses, including fees and disbursements of counsel, in
connection with litigation by or against INVESCO, the Trust or any Fund;
(m) premiums for the fidelity bond maintained by the Trust 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 Equity Fund, Bond Fund, and Return Fund, as
determined by valuation made in accordance with the three Funds' procedures for
calculating their 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: 0.20% of the Equity Fund's and Return Fund's, and 0.16% of
the Bond Fund's, average net asset value up to $500 million; 0.17% of the Equity
Fund's and Return Fund's, and 0.13% of the Bond Fund's, average net asset value
in excess of $500 million but not more than $1 billion; and 0.13% of the Equity
Fund's and Return Fund's, and 0.11% of the Bond Fund's, average net asset value
in excess of $1 billion. During any period when the determination of a Fund's
net asset value is suspended by the Trustees of the Trust, the net asset value
of a share of that 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 Trust or, in particular,
the Equity Fund, Bond Fund, and Return 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 Trust 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 trustees, officers, employees and shareholders of the
Trust 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 Trust as trustees, officers and employees, and that ICM,
INVESCO, and the trustees, officers, employees and shareholders of INVESCO and
its affiliates may become interested in the Trust 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 Trust or of the Equity Fund, Bond Fund, and Return 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 Trust or the three Funds, 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 Equity Fund, Bond Fund, and
Return 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 trustees of
the Trust, or by the vote of a majority of the outstanding voting securities of
the Equity Fund, Bond Fund, and Return Fund, and (ii) a majority of those
trustees 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 Trustees of the Trust or by vote of the majority of the
outstanding voting securities of the Equity Fund, Bond Fund, and Return 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 any
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 Trustees and (2) a majority
of the Trustees of the Trust who are not interested persons of INVESCO, ICM or
the Trust.
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
ICM EXPRESSLY ACKNOWLEDGES THAT THE DECLARATION OF TRUST ESTABLISHING THE
INVESCO VALUE TRUST, DATED JULY 9, 1987, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME INVESCO
VALUE TRUST REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT AS INDIVIDUALS OR PERSONALLY; AND NO TRUSTEE, SHAREHOLDER,
OFFICER, EMPLOYEE OR AGENT OF INVESCO VALUE TRUST SHALL BE HELD TO ANY PERSONAL
LIABILITY, NOR SHALL RESORT BE HAD TO THEIR PRIVATE PROPERTY FOR THE
SATISFACTION OF ANY OBLIGATION OR CLAIM OR OTHERWISE, IN CONNECTION WITH THE
AFFAIRS OF SAID INVESCO VALUE TRUST, BUT THE "TRUST PROPERTY" (AS DEFINED IN THE
DECLARATION) ONLY SHALL BE LIABLE.
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/ Xxx X. Xxxxxx
----------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-----------------
Secretary
INVESCO CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
President
ATTEST:
/s/ Xxxx X. Xxxxx
-----------------
Secretary
