AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED ADVISORY AGREEMENT, made the 1ST day of August, 2007,
by and between Xxxxxxxxxxx Equity Income Fund, Inc. (formerly named Xxxxxxxxxxx
Quest Capital Value Fund, Inc.), a Maryland corporation (hereinafter referred to
as the "Company"), and OppenheimerFunds, Inc. (hereinafter referred to as
"OFI").
WHEREAS, the Company is an open-end, diversified management investment
company registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and OFI is an investment adviser registered as such with the
Commission under the Investment Advisers Act of 1940;
WHEREAS, the Company desires that OFI shall act as its investment adviser
pursuant to this Amended and Restated Agreement, which amends and restates the
January 1, 2005, agreement by and between the Company and OFI;
WHEREAS, the Fund and OFI agreed, per a resolution adopted by the Fund's
Board of Directors at its February 5, 2007 meeting, to adopt the fee schedule
shown in Schedule A of this Agreement;
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 Provisions:
The Company hereby employs OFI and OFI hereby undertakes to act as the
investment adviser of the Company, and to perform for the Company such other
duties and functions for the period and on such terms as set forth in this
Agreement. OFI shall, in all matters, give to the Company and its Board of
Directors (the "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 Company to conform to (i) the provisions of the Investment Company
Act and any rules or regulations thereunder; (ii) any other applicable
provisions of state or Federal law; (iii) the provisions of the Articles of
Incorporation and By-Laws of the Company as amended from time to time; (iv)
policies and determinations of the Directors; (v) the fundamental policies and
investment restrictions as reflected in the registration statement of the
Company under the Investment Company Act or as such policies may, from time to
time, be amended and (vi) the Prospectus and Statement of Additional Information
in effect from time to time. The appropriate officers and employees of OFI shall
be available upon reasonable notice for consultation with any of the Directors
and officers of the Company with respect to any matters dealing with the
business and affairs of the Company including the valuation of portfolio
securities of the Company which are either not registered for public sale or not
traded on any securities market.
2. Investment Management:
(a) OFI shall, subject to the direction and control by the Directors, (i)
regularly provide investment advice and recommendations to the Company with
respect to the investments, investment policies and the purchase and sale of
securities; (ii) supervise continuously the investment program of the Company
and the composition of its portfolio and determine what securities shall be
purchased or sold by the Company; and (iii) arrange, subject to the provisions
of paragraph 7 hereof, for the purchase of securities and other investments by
the Company and the sale of securities and other investments held in the
Company's portfolio.
(b) Provided that the Company shall not be required to pay any compensation
for services under this Agreement other than as provided by the terms of the
Agreement and subject to the provisions of paragraph 7 hereof, OFI 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) Provided that nothing herein shall be deemed to protect OFI from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under this
Agreement, OFI shall not be liable for any loss sustained by reason of good
faith errors or omissions in connection with any matters to which this Agreement
relates.
(d) Nothing in this Agreement shall prevent OFI or any entity controlling,
controlled by or under common control with OFI or any officer thereof from
acting as investment adviser for any other person, firm or corporation or in any
way limit or restrict OFI or any of its directors, officers, stockholders 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 OFI of its duties and obligations under this Agreement.
3. Other Duties of OFI:
OFI shall, at its own expense, provide and supervise the activities of all
administrative and clerical personnel as shall be required to provide effective
corporate administration for the Company, 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; composition of periodic reports with
respect to operations of the Company for its shareholders; composition of proxy
materials for meetings of the Company's shareholders; and the composition of
such registration statements as may be required by Federal and state securities
laws for continuous public sale of Shares of the Company. OFI shall, at its own
cost and expense, also provide the Company with adequate office space,
facilities and equipment. OFI shall, at its own expense, provide such officers
for the Company as the Board of Directors may request.
4. Allocation of Expenses:
All other costs and expenses of the Company not expressly assumed by OFI
under this Agreement, or to be paid by OppenheimerFunds Distributor, Inc., the
distributor of the shares of the Company, shall be paid by the Company,
including, but not limited to: (i) interest, taxes and governmental fees; (ii)
brokerage commissions and other expenses incurred in acquiring or disposing of
the portfolio securities and other investments; (iii) insurance premiums for
fidelity and other coverage requisite to its operations; (iv) compensation and
expenses of its Directors other than those affiliated with OFI; (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 under Federal and state securities laws of Shares
of the Company for public sale; (x) expenses of printing and mailing reports,
notices and proxy materials to shareholders of the Company; (xi) except as noted
above, all other expenses incidental to holding meetings of the Company's
shareholders; and (xii) such extraordinary non-recurring expenses as may arise,
including litigation, affecting the Company and any legal obligation which the
Company may have to indemnify its officers and Directors with respect thereto.
Any officers or employees of OFI or any entity controlling, controlled by, or
under common control with OFI who also serve as officers, Directors or employees
of the Company shall not receive any compensation from the Company for their
services.
5. Compensation of OFI:
The Company agrees to pay OFI and OFI 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 total net asset value
of the Company as of the close of each business day and payable monthly at the
annual rate set forth on Schedule A hereto.
6. Use of Name "Xxxxxxxxxxx":
OFI hereby grants to the Company a royalty-free, non-exclusive license to
use the name "Xxxxxxxxxxx" in the name of the Company for the duration of this
Agreement and any extensions or renewals thereof. To the extent necessary to
protect OFI's rights to the name "Xxxxxxxxxxx" under applicable law, such
license shall allow OFI to inspect, subject to control by the Company's Board,
control the nature and quality of services offered by the Company under such
name and may, upon termination of this Agreement, be terminated by OFI, in which
event the Company 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 Company or otherwise. The name "Xxxxxxxxxxx" may be used or licensed by
OFI in connection with any of its activities, or licensed by OFI to any other
party.
7. Portfolio Transactions and Brokerage:
(a) OFI is authorized, in arranging the purchase and sale of the portfolio
securities of the Company, to employ or deal with such members of securities or
commodities 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 security price obtainable) of the portfolio
transactions of the Company as well as to obtain, consistent with the provisions
of subparagraph (c) of this paragraph 7, the benefit of such investment
information or research as will be of significant assistance to the performance
by OFI of its investment management functions.
(b) OFI shall select broker-dealers to effect the portfolio transactions of
the Company 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 OFI 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 portfolio transactions of the Company by participating therein
for its own account; the importance to the Company 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 Company.
(c) OFI shall have discretion, in the interest of the Company, to allocate
brokerage on the portfolio transactions of the Company to broker-dealers, other
than an affiliated broker-dealer, qualified to obtain best execution of such
transactions 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
Company and/or other accounts for which OFI or its affiliates exercise
"investment discretion" (as that term is defined in Section 3(a)(35) of the
Securities Exchange Act of 1934) and to cause the Company to pay such
broker-dealers a commission for effecting a portfolio transaction for the
Company 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 OFI 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 overall responsibilities of OFI or its affiliates with
respect to accounts as to which they exercise investment discretion. In reaching
such determination, OFI 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, OFI shall be prepared to show that all commissions were
allocated for purposes contemplated by this Agreement and that the total
commissions paid by the Company over a representative period selected by the
Company's Directors were reasonable in relation to the benefits to the Company.
(d) OFI 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 Company for effecting
its portfolio transactions to the extent consistent with the interests and
policies of the Company as established by the determinations of the Board of
Directors of the Company and the provisions of this paragraph 7.
(e) The Company recognizes that an affiliated broker-dealer: (i) may act as
one of the Company's regular brokers for the Company so long as it is lawful for
it so to act; (ii) may be a major recipient of brokerage commissions paid by the
Company; and (iii) may effect portfolio transactions for the Company thereof
only if the commissions, fees or other remuneration received or to be received
by it are determined in accordance with procedures contemplated by any rule,
regulation or order adopted under the Investment Company Act for determining the
permissible level of such commissions.
8. Duration:
This Agreement will take effect on the date first set forth above. Unless
earlier terminated pursuant to paragraph 9 hereof, this Agreement shall remain
in effect from year to year, so long as such continuance shall be approved at
least annually by the Company's Board of Directors, including the vote of the
majority of the Directors of the Company who are not parties to this Agreement
or "interested persons" (as defined in the Investment Company Act) 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" (as defined in the Investment
Company Act) of the outstanding voting securities of the Company, and by such a
vote of the Company's Board of Directors.
9. Termination:
This Agreement may be terminated (i) by OFI at any time without penalty
upon sixty days' written notice to the Company (which notice may be waived by
the Company); or (ii) by the Company at any time without penalty upon sixty
days' written notice to OFI (which notice may be waived by OFI) provided that
such termination by the Company shall be directed or approved by the vote of a
majority of all of the Directors of the Company then in office or by the vote of
the holders of a "majority" of the outstanding voting securities of the Company
(as defined in the Investment Company Act).
10. Assignment or Amendment:
This Agreement may not be amended, or the rights of OFI hereunder 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 Company. This Agreement shall automatically
and immediately terminate in the event of its "assignment," as defined in the
Investment Company Act.
11. Definitions:
The terms and provisions of the Agreement shall be interpreted and defined
in a manner consistent with the provisions and definitions contained in the
Investment Company Act.
Xxxxxxxxxxx Equity Income Fund, Inc.
Attest:
/s/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxxxx Xxxx X. Xxxxxx, President
OppenheimerFunds, Inc.
Attest: /s/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxxxx
Xxxxxxxx X. Xxxxxxxx Xxxx Xxxxxxxxxx, President
Schedule A
to
Investment Advisory Agreement
between
Xxxxxxxxxxx Equity Income Fund, Inc.
and
OppenheimerFunds, Inc.
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Annual Fee as a Percentage of Average Annual Net Assets
--------------------------------------------------------
--------------------------------------------------------
0.70% of the first $400 million of average annual net
assets;
0.68% of the next $400 million of average annual net
assets;
0.65% of the next $400 million of average annual net
assets;
0.60% of the next $400 million of average annual net
assets;
0.55% of the next $400 million of average annual net
assets; and
0.50% of average annual net assets in excess of $2
billion.
