SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a Colorado
corporation (the "Adviser"), and Trinity Investment Management Corporation, a
Pennsylvania Corporation (the "Subadviser"), as of the date
set forth below.
RECITAL
WHEREAS, Xxxxxxxxxxx Trinity Value Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Adviser has entered into an Investment Advisory Agreement as
of August 5, 1999 with the Fund (the "Investment Advisory Agreement"), pursuant
to which the Adviser acts as investment adviser with respect to the Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement, the
Adviser has retained and wishes to continue to retain the Subadviser for
purposes of rendering investment advisory services to the Adviser in connection
with the Fund 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 are hereby
acknowledged, the parties hereto agree as follows:
I. Appointment and Obligations of the Subadviser.
The Adviser hereby appoints the Subadviser to render, to the Adviser with
respect to the Fund, investment research and advisory services as set forth
below in Section II, under the supervision of the Adviser and subject to the
approval and direction of the Fund's Board of Trustees (the "Board"), and the
Subadviser hereby accepts such appointment, subject to the terms and conditions
contained herein. The Subadviser shall, for all purposes herein, be deemed an
independent contractor and shall not have, unless otherwise expressly provided
or authorized, any authority to act for or represent the Adviser or the Fund in
any way or otherwise to serve as or be deemed an agent of the Fund.
II. Duties of the Subadviser and the Adviser.
A. Duties of the Subadviser.
The Subadviser shall regularly provide investment advice with respect to
the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Fund, and in furtherance thereof,
the Subadviser's duties shall include:
1. Obtaining and evaluating pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Fund, and whether concerning the individual issuers whose securities
are included in the Fund's investment portfolio or the activities in
which such issuers engage, or with respect to securities which the
Subadviser considers desirable for inclusion in the Fund's
investment portfolio;
2. Determining which securities shall be purchased, sold or
exchanged by the Fund or otherwise represented in the Fund's
investment portfolio and regularly reporting thereon to the Adviser
and, at the request of the Adviser, to the Board;
3. Formulating and implementing continuing programs for the
purchases and sales of the securities of such issuers and regularly
reporting thereon to the Adviser and, at the request of the Adviser,
to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to the
Subadviser necessary to carry into effect such investment program,
including the placing of purchase and sale orders, and making
appropriate reports thereon to the Adviser and the Board.
B. Duties of the Adviser.
The Adviser shall retain responsibility for, among other things, providing
the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadviser to so
comply, the Adviser shall monitor the investment program
maintained by the Subadviser for the Fund to ensure that the
Fund's assets are invested in compliance with this Agreement
and the Fund's Registration Statement, as currently in effect
from time to time; and
2. The Adviser shall oversee matters relating to Fund promotion,
including, but not limited to, marketing materials and the
Subadviser's reports to the Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadviser.
1. Organization. The Subadviser is now, and will continue to be, a
corporation duly formed and validly existing under the laws of its
jurisdiction of formation, fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder.
2. Registration. The Subadviser is registered as an investment
adviser with the Securities and Exchange Commission (the "SEC")
under the Advisers Act, and is registered or licensed as an
investment adviser under the laws of all jurisdictions in which its
activities require it to be so registered or licensed, except where
the failure to be so licensed would not have a material adverse
effect on the Subadviser. The Subadviser shall maintain such
registration or license in effect at all times during the term of
this Agreement.
3. Best Efforts. The Subadviser at all times shall provide its best
judgment and effort to the Adviser and the Fund in carrying out its
obligations hereunder.
4. Other Covenants. The Subadviser further agrees that:
a. it will use the same skill and care in providing such
services as it uses in providing services to other
accounts for which it has investment management
responsibilities;
b. it will not make loans to any person to purchase or
carry units of beneficial interest in the Fund or
make loans to the Fund;
c. it will report regularly to the Fund and to the
Adviser and will make appropriate persons available
for the purpose of reviewing with representatives of
the Adviser on a regular basis the management of the
Fund, including, without limitation, review of the
general investment strategy of the Fund, economic
considerations and general conditions affecting the
marketplace;
d. as required by applicable laws and regulations, it will
maintain books and records with respect to the Fund's
securities transactions and it will furnish to the
Adviser and to the Board such periodic and special
reports as the Adviser or the Board may reasonably
request;
e. it will treat confidentially and as proprietary
information of the Fund all records and other
information relative to the Fund, and will not use
records and information for any purpose other than
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Fund or when so requested
by the Fund or required by law or regulation;
f. it will, on a continuing basis and at its own
expense, (1) provide the distributor of the Fund (the
"Distributor") with assistance in the distribution
and marketing of the Fund in such amount and form as
the Adviser may reasonably request from time to time,
and (2) use its best efforts to cause the portfolio
manager or other person or persons who manage or are
responsible for overseeing the management of the
Fund's portfolio (the "Portfolio Manager") to provide
marketing and distribution assistance to the
Distributor, including, without limitation,
conference calls, meetings and road trips, provided
that each Portfolio Manager shall not be required to
devote more than 10% of his or her time to such
marketing and distribution activities;
g. it will use its reasonable best efforts (i) to retain
the services of the Portfolio Manager who manages the
portfolio of the Fund, from time to time and (ii) to
promptly obtain the services of a Portfolio Manager
acceptable to the Adviser if the services of the
Portfolio Manager are no longer available to the
Subadviser;
h. it will, from time to time, assure that each
Portfolio Manager is acceptable to the Adviser;
i. it will obtain the written approval of the Adviser
prior to designating a new Portfolio Manager;
provided, however, that, if the services of a
Portfolio Manager are no longer available to the
Subadviser due to circumstances beyond the reasonable
control of the Subadviser (e.g., voluntary
resignation, death or disability), the Subadviser may
designate an interim Portfolio Manager who (a) shall
be reasonably acceptable to the Adviser and (b) shall
function for a reasonable period of time until the
Subadviser designates an acceptable permanent
replacement; and
j. it will promptly notify the Adviser of any impending
change in Portfolio Manager, portfolio management or any
other material matter that may require disclosure to the
Board, shareholders of the Fund or dealers, including
but not limited to, any change in the methodologies
underlying the Subadviser's proprietary valuation
models.
B. Representations, Warranties and Covenants of the Adviser.
1. Organization. The Adviser is now, and will continue to be, duly
organized and in good standing under the laws of its state of
incorporation, fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
2. Registration. The Adviser is registered as an investment adviser
with the SEC under the Advisers Act, and is registered or licensed
as an investment adviser under the laws of all jurisdictions in
which its activities require it to be so registered or licensed. The
Adviser shall maintain such registration or license in effect at all
times during the term of this Agreement.
3. Best Efforts. The Adviser at all times shall provide its
best judgment and effort to the Fund in carrying out its
obligations hereunder.
IV. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Subadviser shall
at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
B. the provisions of the registration statement of the Fund, as the
same may be amended from time to time, under the Securities Act
of 1933, as amended, and the 1940 Act;
C. the provisions of the Fund's Declaration of Trust or other
governing document, as amended from time to time;
D. the provisions of the By-laws of the Fund, as amended from time
to time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or
instructions adopted or issued by the Fund or the Adviser from
time to time.
The Adviser shall promptly notify the Subadviser of any changes or
amendments to the provisions of B., C., D. and F. above when such changes or
amendments relate to the obligations of the Subadviser.
V. Control by the Board.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
VI. Books and Records.
The Subadviser agrees that all records which it maintains for the Fund on
behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods prescribed by
applicable laws, rules and regulations all records required to be maintained by
the Subadviser on behalf of the Adviser under such applicable laws, rules and
regulations, or such longer period as the Adviser may reasonably request from
time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadviser, to the extent appropriate, in consultation with the
Adviser, shall place all orders for the purchase and sale of portfolio
securities for the Fund with brokers or dealers selected by the Subadviser,
which may include, to the extent permitted by the Adviser and the Fund, brokers
or dealers affiliated with the Subadviser. The Subadviser shall use its best
efforts to seek to execute portfolio transactions at prices that are
advantageous to the Fund and at commission rates that are reasonable in relation
to the benefits received.
B. Selection of Broker-Dealers.
With respect to the execution of particular transactions, the
Subadviser may, to the extent permitted by the Adviser and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadviser
exercises investment discretion. The Subadviser is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund that is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities that
the Subadviser has with respect to accounts over which it exercises investment
discretion. The Adviser, Subadviser and the Board shall periodically review the
commissions paid by the Fund to determine, among other things, if the
commissions paid over representative periods of time were reasonable in relation
to the benefits received.
C. Soft Dollar Arrangements.
The Subadviser may enter into "soft dollar" arrangements through the
agency of third parties on behalf of the Adviser. Soft dollar arrangements for
services may be entered into in order to facilitate an improvement in
performance in respect of the Subadviser's service to the Adviser with respect
to the Fund. The Subadviser makes no direct payments but instead undertakes to
place business with broker-dealers who in turn pay third parties who provide
these services. Soft dollar transactions will be conducted on an arm's-length
basis, and the Subadviser will secure best execution for the Adviser. Any
arrangements involving soft dollars and/or brokerage services shall be effected
in compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and the policies that the Adviser and the Board may adopt from time to
time. The Subadviser agrees to provide reports to the Adviser as necessary for
purposes of providing information on these arrangements to the Board.
VIII. Compensation.
A. Amount of Compensation. The Adviser shall pay the Subadviser, as
compensation for services rendered hereunder, from its own assets,
an annual fee, payable monthly, as follows: 0.25% of the first $150
million of aggregate annual net assets of the Fund, 0.17% of the
next $350 million, and 0.14% of average annual net assets in excess
of $500 million.
B. Calculation of Compensation. Except as hereinafter set forth,
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compensation under this Agreement shall be calculated and accrued
on the same basis as the advisory fee paid to the Adviser by the
Fund (i.e., computed on the average net assets of the Fund as of
the close of business each day). If this Agreement becomes
effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that
part of the month this Agreement is in effect shall be prorated
in a manner consistent with the calculation of the fees set forth
above.
C. Payment of Compensation: Subject to the provisions of this
paragraph, payment of the Subadviser's compensation for the
preceding month shall be made by the Adviser within 15 days after
the end of the preceding month.
D. Reorganization of the Fund. If the Fund is reorganized with another
investment company for which the Subadviser does not serve as an
investment adviser or subadviser, and the Fund is the surviving
entity, the subadvisory fee payable under this section shall be
adjusted in an appropriate manner as the parties may agree.
IX. Allocation of Expenses.
The Subadviser shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged in
providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other than an
assignment resulting solely by action of the Adviser or an affiliate thereof,
the Subadviser shall be responsible for payment of all costs and expenses
incurred by the Adviser and the Fund relating thereto, including, but not
limited to, reasonable legal, accounting, printing and mailing costs related to
obtaining approval of Fund shareholders.
X. Non-Exclusivity.
The services of the Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser shall be free to render
investment advisory and administrative or other services to others (including
other investment companies) and to engage in other activities. It is understood
and agreed that officers or trustees of the Subadviser may serve as officers or
trustees of the Adviser or of the Fund; that officers or trustees of the Adviser
may serve as officers or directors of the Subadviser to the extent permitted by
law; and that the officers and directors of the Subadviser are not prohibited
from engaging in any other business activity or from rendering services to any
other person, or from serving as partners, officers, directors or trustees of
any other firm or trust, including other investment advisory companies provided
it is permitted by applicable law and does not adversely affect the Fund.
XI. Term.
This Agreement shall become effective at the close of business on the date
hereof and shall remain in force and effect, subject to Paragraphs XII.A and
XII.B hereof and approval by the Fund's initial shareholder, for a period of two
years from the date hereof.
XII. Renewal.
Following the expiration of its initial two-year term, the Agreement shall
continue in full force and effect from year to year, provided that such
continuance is specifically approved:
A. at least annually (1) by the Board or by the vote of a majority of
the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and (2) by the affirmative vote of a
majority of the Trustees who are not parties to this Agreement or
interested persons of a party to this Agreement (other than as a
Trustee of the Fund), by votes cast in person at a meeting
specifically called for such purpose; or
B. by such method required by applicable law, rule or regulation
then in effect.
XIII. Termination.
A. Termination by the Fund and the Subadviser. This Agreement may be
terminated at any time, without the payment of any penalty, by vote
of the Board or by vote of a majority of the Fund's outstanding
voting securities or the Subadviser, on sixty (60) days' written
notice. The notice provided for herein may be waived by the party
required to be notified.
B. Assignment. This Agreement shall automatically terminate in the
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event of its "assignment," as defined in Section 2 (a) (4) of the
1940 Act. In the event of an assignment that occurs solely due
to the change in control of the Subadviser (provided that no
condition exists that permits, or, upon the consummation of the
assignment, will permit, the termination of this Agreement by the
Adviser pursuant to Section XIII. C. hereof), the Adviser and the
Subadviser, at the sole expense of the Subadviser, shall use
their reasonable best efforts to obtain shareholder approval of a
successor Subadvisory Agreement on substantially the same terms
as contained in this Agreement.
C. Termination by the Adviser. The Adviser may terminate this Agreement
without penalty and without the payment of any fee or penalty,
immediately after giving written notice, upon the occurrence of any
of the following events:
1. Any of the Subadviser, their respective partners,
subsidiaries, affiliates, directors, officers, employees or
agents engages in an action or omits to take an action that
would cause the Subadviser to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were not to
grant an exemptive order under Section 9(c) thereof or that
would constitute grounds for the SEC to deny, revoke or
suspend the registration of the Subadviser as an investment
adviser with the SEC; or
2. The Subadviser breaches the representations contained in
Paragraph III.A.4.i. of this Agreement or any other material
provision of this Agreement, and any such breach is not cured
within a reasonable period of time after notice thereof from
the Adviser to the Subadviser.
D. Transactions in Progress upon Termination. The Adviser and
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Subadviser will cooperate with each other to ensure that
portfolio or other transactions in progress at the date of
termination of this Agreement shall be completed by the Adviser
in accordance with the terms of such transactions, and to this
end the Subadviser shall provide the Adviser with all necessary
information and documentation to secure the implementation
thereof.
XIV. Liability of the Subadviser.
In the absence of willful misfeasance, bad faith, negligence or reckless
disregard of obligations or duties hereunder on the part of the Subadviser or
any of its officers, directors or employees, the Subadviser shall not be subject
to liability to the Adviser for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
XV. Notices.
Any notice or other communication required or that may be given hereunder
shall be in writing and shall be delivered personally, telecopied, sent by
certified, registered or express mail, postage prepaid or sent by national
next-day delivery service and shall be deemed given when so delivered personally
or telecopied, or if mailed, two days after the date of mailing, or if by
next-day delivery service, on the business day following delivery thereto, as
follows or to such other location as any party notifies any other party:
A. If to the Adviser, to:
OppenheimerFunds, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
Telecopier: 212-321-1159
B. If to the Subadviser, to:
Trinity Investment Management Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
President
Telecopier: (000)000-0000
XVI. Questions of Interpretation.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
XVII. Form ADV - Delivery.
The Adviser hereby acknowledges that it has received from the Subadviser a
copy of the Subadviser's Form ADV, Part II as currently filed, at least 48 hours
prior to entering into this Agreement and that it has read and understood the
disclosures set forth in the Subadviser's Form ADV, Part II.
XVIII. Miscellaneous.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
XIX. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 16th day of August,
1999.
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxxxx X.Xxxxxxx
Xxxxxx X. Xxxxxxx
Executive Vice President
TRINITY INVESTMENT MANAGEMENT CORPORATION
By:_/s/ Xxxxx Xxxx
Xxxxx Xxxx
President
ADVISORY\TRINVALUE_SUB
