Master Investment Advisory Agreement - Aef

MASTER INVESTMENT ADVISORY AGREEMENT


THIS AGREEMENT is made this 28th day of February, 1997, by and between AIM Equity Funds, Inc., a Maryland corporation (the "Company"), 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 Company is registered under the Investment Company Act of 1940, as amended (the "1940 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 Company's charter authorizes the Board of Directors of the Company to classify or reclassify authorized but unissued shares of the Company, and as of the date of this Agreement, the Company's Board of Directors has authorized the issuance of six series of shares representing interests in six investment portfolios (such portfolios and any other portfolios hereafter added to the Company being referred to individually herein as a "Fund," collectively as the "Funds"); and


WHEREAS, the Company 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 Company's Board of Directors. The Advisor shall give the Company 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 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


2
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 Company's Board of Directors; and


(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly
report thereon to the Company's Board of Directors;


and take, on behalf of the Company and the Funds, all actions which appear to the Company 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 the approval of the Board of Directors and the shareholders of the Funds, 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 Directors. 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 Directors of the Company.


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
Company, 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 corporate charter of the Company,
as the same may be amended from time to time;


(d) the provisions of the by-laws of the Company, 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. The Advisor's primary consideration in effecting a security transaction will be to obtain execution at the most favorable price. 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 portfolio execution services offered. Subject to such policies as the Board of Directors may from time to time determine, the Advisor shall not be deemed to have acted unlawfully


2 3 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 portfolio 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 Company, and to other clients of the Advisor as to which the Advisor exercises investment ...