AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT made as of the 1ST day of
January, 2005, by and between XXXXXXXXXXX EQUITY FUND, INC. (formerly
known as Xxxxxxxxxxx Total Return Fund, Inc.)(hereinafter the "Fund"),
and OPPENHEIMERFUNDS, INC. (hereinafter the "Manager"):
WHEREAS, the Fund is an open-end, diversified investment company
registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940, as
amended (the "Investment Company Act") and the Manager is a registered
investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, it is agreed by and between the
parties, as follows:
1. GENERAL PROVISION.
The Fund hereby employs the Manager and the Manager hereby
undertakes to act as the investment adviser of the Fund and to perform
for the Fund such other duties and functions as are hereinafter set
forth. The Manager shall, in all matters, give to the Fund and its
Board of Directors the benefit of its best judgment, effort, advice
and recommendations and shall, at all times conform to, and use its
best efforts to enable the Fund to conform to (i) the provisions of
the Investment Company Act and any rules and regulations thereunder;
(ii) any other applicable provisions of state or federal law; (iii)
the provisions of the Certificate of Incorporation and By-Laws of the
Fund as amended from time to time; (iv) policies and determinations of
the Board of Directors of the Fund; (v) the fundamental policies and
investment restrictions of the Fund as reflected in its registration
statement under the Investment Company Act and the Fund's By-Laws, or
as such policies may, from time to time, be amended by the Fund's
shareholders; and (vi) the Prospectus of the Fund in effect from time
to time. The appropriate officers and employees of the Manager shall
be available upon reasonable notice for consultation with any of the
Directors and officers of the Fund with respect to any matters dealing
with the business and affairs of the Fund including the valuation of
any of the Fund's portfolio securities which are either not registered
for public sale or not being traded on any securities market.
2. INVESTMENT MANAGEMENT.
(a) The Manager shall, subject to the direction and control by the
Fund's Board of Directors (i) regularly provide investment advice and
recommendations to the Fund with respect to its investments,
investment policies and the purchase and sale of securities; (ii)
supervise continuously the investment program of the Fund and the
composition of its portfolio and determine what securities shall be
purchased or sold by the Fund; and (iii) arrange, subject to the
provisions of paragraph "6" hereof, for the purchase of securities and
other investments for the Fund and the sale of securities and other
investments held in the portfolio of the Fund. The Manager shall also
conduct investigations and research in the securities field and
furnish to the Fund's Board of Directors statistical and other
factual information and reports on industries, businesses or
corporations, to assist the Manager and the Fund's Board of Directors
in furthering the investment policies of the Fund; and the Manager
shall compile, for its use and that of the Fund, and furnish to the
Fund's Board of Directors, information and advice on economic and
business trends, and render such other complete investment management
services as may be necessary or appropriate to effectuate the
investment of the resources of the Fund through the acquisition,
holding and disposition of portfolio securities.
(b) Provided that the Fund shall not be required to pay any
compensation other than as provided by the terms of this Agreement and
subject to the provisions of paragraph 6 hereof, the Manager may
obtain investment information, research or assistance from any other
person, firm or corporation to supplement, update or otherwise improve
its investment management services.
(c) So long as it shall have acted with due care and in good
faith, the Manager shall not be liable for any loss sustained by
reason of any investment, the adoption of any investment policy, or
the purchase, sale or retention of any security irrespective of
whether the determinations of the Manager relative thereto shall have
been based, wholly or partly, upon the investigation or research of
any other individual, firm or corporation believed by it to be
reliable. Nothing herein contained shall, however, be construed to
protect the Manager against any liability to the Fund or its
shareholders by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the manager or any
officer thereof from acting as investment adviser or performing
management services for any other person, firm or corporation and
shall not in any way limit or restrict the Manager or any of its
directors, officers, shareholders or employees from buying, selling or
trading any securities for its or their own account or for the account
of others for whom it or they may be acting, provided that such
activities will not adversely affect or otherwise impair the
performance by the Manager of its duties and obligations under this
Agreement, nor adversely affect the Fund.
3. OTHER DUTIES OF THE MANAGER.
The Manager shall, at its own expense, provide and supervise the
activities of all executive, administrative and clerical personnel as
shall be required to provide effective corporate administration for
the Fund, including the compilation and maintenance of such records
with respect to its operations as may reasonably be required; the
preparation and filing of such reports with respect thereto as shall
be required by the Commission, and the laws of any state, territory or
possession of the United States or any foreign country; composition
of periodic reports with respect to its operations for the
shareholders of the Fund; composition of proxy materials for meetings
of the Fund's shareholders; and the composition of such registration
statements as may be required by federal securities laws and the laws
of any state, territory or possession of the United States or any
foreign country for continuous public sale of shares of the Fund. The
Manager shall, at its own cost and expense, provide such officers for
the Fund as the Fund's Board may request and shall also provide the
Fund's Directors, at their request, with adequate office space, and
normal office equipment and secretarial assistance as may be necessary
for them to perform their functions as such, and the Manager shall, at
its own cost and expense, calculate the daily net asset value of the
Fund's shares and maintain the Fund's general accounting books and
records. The cost and expenses of the Manager set forth in this
paragraph 3 do not include the transfer agent and other costs and
expenses set forth in paragraph 4 following.
4. ALLOCATION OF EXPENSES TO THE FUND.
All other costs and expenses not expressly assumed by the Manager
under this Agreement, or to be paid by the General Distributor of the
shares of the Fund, shall be paid by the Fund, including but not
limited to (i) interest and taxes; (ii) brokerage commissions; (iii)
insurance premiums on fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its Directors except as
qualified further in this paragraph 4; (v) legal and audit expenses;
(vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) expenses incident to
the issuance of its shares against payment therefor by or on behalf of
the subscribers thereto; (ix) fees and expenses, other than as
hereinabove provided, incident to the registration of the Fund's
shares for public sale under federal securities laws or the laws of
any state, territory or possession of the United States or any foreign
country; (x) expenses of printing and mailing reports and notices and
proxy material to shareholders of the Fund; (xi) except as noted in
paragraph 3 hereof, all other expenses incidental to holding meetings
of the Fund's shareholders; and (xii) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the Fund and
the legal obligation or right which the Fund may have to indemnify its
officers and Directors with respect thereto unless the Fund has the
right to recover said indemnity payments from the Manager. Any
officers or employees of the Manager or any entity controlling,
controlled by or under common control with the Manager who may also
serve as officers, Directors or employees of the Fund shall not
receive any compensation by the Fund for their services.
5. COMPENSATION OF THE MANAGER.
The Fund agrees to pay the Manager and the Manager agrees to
accept as full compensation for the performance of all functions and
duties on its part to be performed pursuant to the provisions hereof,
a fee computed on the net asset value of the Fund as of the close of
each business day and payable monthly at the following annual rates:
.75% of the first $100 million of net assets;
.70% of the next $100 million;
.65% of the next $100 million;
.60% of the next $100 million;
.55% of the next $100 million;
.50% of net assets in excess of $500 million.
6. PORTFOLIO TRANSACTIONS AND BROKERAGE.
(a) The Manager will render all services for the Fund in
connection with placing orders with brokers and dealers for the
purchase, sale or trade of securities for the Fund's portfolio.
(b) The Manager is authorized, in arranging the purchase and sale
of the Fund's portfolio securities, to employ or deal with such
members of securities exchanges, brokers or dealers (hereinafter
"broker-dealers"), including "affiliated" broker-dealers (as that term
is defined in the Investment Company Act), as may, in its best
judgment, implement the policy of the Fund to obtain, at reasonable
expense, the "best execution" (prompt and reliable execution at the
most favorable securities price obtainable) of the Fund's portfolio
transactions as well as to obtain, consistent with provisions of
subparagraph (c) of this paragraph 6, the benefit of such investment
information or research as will be of significant assistance to the
performance by the Manager of its investment management functions.
(c) The Manager shall select broker-dealers to effect the Fund's
portfolio transactions on the basis of its estimate of their ability
to obtain best execution of particular and related portfolio
transactions. The abilities of a broker-dealer to obtain best
execution of particular portfolio transaction(s) will be judged by the
Manager on the basis of all relevant factors and considerations
including, insofar as feasible, the execution capabilities required by
the transaction or transactions; the ability and willingness of the
broker-dealer to facilitate the Fund's portfolio transactions by,
participating therein for its own account; the importance to the Fund
of speed, efficiency or confidentiality; the broker-dealer's apparent
familiarity with sources from or to whom particular securities might
be purchased or sold; as well as any other matters relevant to the
selection of a broker-dealer for particular and related transactions
of the Fund.
(d) The Manager shall have discretion, in the interests of the
Fund, to allocate brokerage on the Fund's portfolio transactions to
broker-dealers, other than an affiliated broker-dealer, qualified to
obtain best execution of such transactions and who provide "brokerage
and/or research services" (as such services are defined in Section 28
(e) (3) of the Securities Exchange Act of 1934) for the Fund and/or
other accounts for which the Manager exercises "investment discretion"
(as that term is defined in Section 3 (a) (35) of the Securities
Exchange Act of 1934) and to cause the Fund to pay such broker-dealers
a commission for effecting a portfolio transaction for the Fund that
is in excess of the amount of commission another broker-dealer
adequately qualified to effect such transaction would have charged for
effecting that transaction, if the Manager determines, in good faith,
that such commission is reasonable in relation to the value of the
brokerage and/or research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the Manager's
overall responsibilities with respect to the accounts as to which it
exercises investment discretion. In reaching such determination, the
Manager will not be required to place or attempt to place a specific
dollar value on the brokerage and/or research services provided or
being provided by such broker-dealer. In demonstrating that such
determinations were made in good faith, the Manager shall be prepared
to show that all commissions were allocated for purposes contemplated
by this Agreement and that the total commissions paid by the Fund over
a representative period selected by the Fund's Directors were
reasonable in relation to the benefits to the Fund.
(e) The Manager shall have no duty or obligation to seek advance
competitive bidding for the most favorable commission rate applicable
to any particular portfolio transactions or to select any
broker-dealer on the basis of its purported or "posted" commission
rate but will, to the best of its ability, endeavor to be aware of the
current level of the charges of eligible broker-dealers and to
minimize the expense incurred by, the Fund for effecting its portfolio
transactions to the extent consistent with the interests and policies
of the Fund as established by the determinations of its Board of
Directors and the provisions of this paragraph 6.
(f) The Fund recognizes that an affiliated broker (i) may act as
one of the Fund's regular brokers so long as it is lawful for it so to
act; (ii) may be a major recipient of brokerage commissions paid by
the Fund, and (iii) may effect portfolio transactions for the Fund
only if the commissions, fees or other remuneration received or to be
received by it are determined in accordance with procedures
contemplated in any rule, regulation or order adopted under the
Investment Company Act for determining the permissible level of such
commissions.
7. USE OF NAME "XXXXXXXXXXX".
The Manager hereby grants to the Fund a royalty-free,
non-exclusive license to use the name "Xxxxxxxxxxx" in the name of the
Fund for the duration of this Agreement and any extensions or renewals
thereof. To the extent necessary to protect the Manager's rights to
the name "Xxxxxxxxxxx" under applicable law, such license shall allow
the Manager to inspect and, subject to control by the Fund's Board,
control the nature and quality of services offered by the Fund under
such name. Such license may, upon termination of this Agreement, be
terminated by the Manager, in which event the Fund shall promptly take
whatever action may be necessary to change its name and discontinue
any further use of the name "Xxxxxxxxxxx" in the name of the Fund or
otherwise. The name "Xxxxxxxxxxx" may be used by the Manager in
connection with any of its activities, or licensed by the Manager to
any other party.
8. DURATION.
This Agreement will take effect on the date first set forth above
and shall continue in effect from year to year, so long as such
continuance shall be approved at least annually by the Fund's Board of
Directors, including the vote of a majority of the Directors of the
Fund 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, or by the holders of a majority of the
outstanding voting securities of the Fund and by such a vote of the
Fund's Board of Directors.
9. TERMINATION.
This Agreement may be terminated (i) by the Manager at any time
without penalty by giving sixty days' written notice (which notice may
be waived by the Fund); or (ii) by the Fund at any time without
penalty upon sixty days' written notice to the Manager (which notice
may be waived by the Manager), provided that such termination by the
Fund shall be directed or approved by the Board of Directors of the
Fund or by the vote of the holders of a majority of the outstanding
voting securities of the Fund.
10. ASSIGNMENT OR AMENDMENT.
This Agreement may not be amended or the rights of the Manager
thereunder sold, transferred, pledged or otherwise in any manner
encumbered without the affirmative vote or written consent of the
holders of the majority of the outstanding voting securities of the
Fund; this Agreement shall automatically and immediately terminate in
the event of its assignment.
11. DEFINITIONS.
The terms and provisions of this Agreement shall be interpreted
and defined in a manner consistent with the provisions and definitions
of the Investment Company Act and other applicable laws.
XXXXXXXXXXX EQUITY, INC.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx
Vice President &
Secretary
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxx X. Xxxxxx
__________________________
Xxxx X. Xxxxxx
Chairman, President &
Chief Executive Officer
