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EXHIBIT 5(a)
AIM INVESTMENT PORTFOLIOS, INC.
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
AIM INVESTMENT PORTFOLIOS, INC.
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between AIM Investment Portfolios,
Inc., a Maryland Corporation ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company,
and intends to offer for public sale shares of AIM Dollar Fund, a series of the
Company's shares of common stock; and
WHEREAS the Company hereafter may establish additional series of its
shares of common stock (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager
and administrator to furnish certain investment advisory, portfolio management
and administration services to the Company and the Funds, and Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in
this Contract. Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Duties as Investment Manager.
(a) Subject to the supervision of the Company's Board of Directors
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers
it will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation
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Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who sell shares of the Funds or provide the Funds or
Adviser's other clients with research, analysis, advice and similar services.
Adviser may pay to brokers and dealers, in return for research and analysis, a
higher commission or spread than may be charged by other brokers and dealers,
subject to Adviser's determining in good faith that such commission or spread
is reasonable in terms either of the particular transaction or of the overall
responsibility of Adviser to the Funds and its other clients and that the total
commissions or spreads paid by each Fund will be reasonable in relation to the
benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to Adviser or any affiliated person
thereof except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
Adviser simultaneously places orders to purchase or sell the same security on
behalf of a Fund and one or more other accounts advised by Adviser, such orders
will be allocated as to price and amount among all such accounts in a manner
believed to be equitable to each account. The Company recognizes that in some
cases this procedure may adversely affect the results obtained for each Fund.
(c) Adviser will oversee the maintenance of all books and records
with respect to the securities transactions of the Funds, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Company are
the property of the Company, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Company
and which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. Duties as Administrator. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services, except
as hereinafter set forth; provided, however, that nothing herein contained
shall be deemed to relieve or deprive the Board of its responsibility for
control of the conduct of the affairs of the Funds.
(b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns
and required reports with or to the Fund's shareholders, the Securities and
Exchange Commission and other appropriate federal or state regulatory
authorities.
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(d) Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.
4. Further Duties. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Delegation of Adviser's Duties as Investment Manager and Administrator.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. Services Not Exclusive. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Adviser, who may also be a Director, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
7. Expenses.
(a) During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Adviser, incurred in its operations and
the offering of its shares.
(b) Expenses borne by each Fund will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection
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with the issuance, sale or repurchase of the Fund's shares of common stock;
(viii) fees and salaries payable to the Company's Directors who are not parties
to this Contract or interested persons of any such party ("Independent
Directors"); (ix) all expenses incurred in connection with the Independent
Directors' services, including travel expenses; (x) taxes (including any income
or franchise taxes) and governmental fees; (xi) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (xii)
any costs, expenses or losses arising out of a liability of or claim for
damages or other relief asserted against the Company or the Fund for violation
of any law; (xiii) interest charges; (xiv) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent
Directors; (xv) charges of custodians, transfer agents, pricing agents and
other agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
costs of preparing share certificates; (xviii) expenses of setting in type,
printing and mailing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports, notices and proxy
materials for existing shareholders; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Directors, employees and agents) incurred by the Company or the Fund;
(xx) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xxi) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxii) the cost of investment company literature and other
publications provided by the Company to its Directors and officers; and (xxiii)
costs of mailing, stationery and communications equipment.
(c) All general expenses of the Company and joint expenses of the
Funds shall be allocated among each Fund on a basis deemed fair and equitable
by Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.
(e) The payment or assumption by Adviser of any expense of the
Company or any Fund that Adviser is not required by this Contract to pay or
assume shall not obligate Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of such Fund as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of such Fund.
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(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on
or before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.
9. Limitation of Liability of Adviser and Indemnification. Adviser shall not
be liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in
the performance by Adviser of its duties or from reckless disregard by Adviser
of its obligations and duties under this Contract. Any person, even though also
an officer, partner, employee, or agent of Adviser, who may be or become an
officer, Director, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
10. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract
shall continue in effect for two years from the above written date. Thereafter,
if not terminated, with respect to each Fund this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a
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vote of a majority of the outstanding voting securities of the Fund on sixty
days' written notice to Adviser or by Adviser at any time, without the payment
of any penalty, on sixty days' written notice to the Company. Termination of
this Contract with respect to one Fund shall not affect the continued
effectiveness of this Contract with respect to any other Fund. This Contract
will automatically terminate in the event of its assignment.
11. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. Governing Law. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. License Agreement. The Company 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 adviser to the Company
with respect to such series of shares.
14. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be
affected thereby. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities,"
"interested person," "assignment," "broker," "dealer," "investment adviser,"
"national securities exchange," "net assets," "prospectus," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. Where the effect of a requirement
of the 1940 Act reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
Attest: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ AIM INVESTMENT PORTFOLIOS, INC.
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▇▇▇▇▇▇▇ ▇. Silver
Assistant Secretary By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President and
Assistant Secretary
Attest: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ A I M ADVISORS, INC.
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
AIM INVESTMENT PORTFOLIOS, INC.
The Company shall pay the Adviser, out of the assets of a Fund, as
full compensation for all services rendered and all facilities furnished
hereunder, a management fee for such Fund set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.
AIM DOLLAR FUND
ANNUAL RATE
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0.50% of net
assets