AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT made as of the
1st day of January, 2000, by and between OPPENHEIMER CAPITAL APPRECIATION FUND
(hereinafter referred to as the "Fund") and OPPENHEIMERFUNDS, INC. (hereinafter
referred to as "OFI").
WHEREAS, the Fund 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 a registered investment adviser;
WHEREAS, the Fund (formerly named Oppenheimer Target Fund) and OFI
(formerly named Oppenheimer Management Corporation) entered into an Investment
Advisory Agreement dated June 20, 1991;
WHEREAS, the Fund and OFI agreed, per a resolution of the Fund's
Board of Trustees adopted December 14, 1996, to reduce the Fund's management fee
on assets in excess of $1.5 billion; and further agreed, per a resolution of the
Fund's Board of Trustees adopted December 10, 1998, to reduce the Fund's
management fee on assets in excess of $2.5 billion; and further agreed, per a
resolution of the Fund's Board of Trustees adopted December 9, 1999, to reduce
the Fund's management fee on assets in excess of $4.5 billion;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, it is agreed by and between the parties to
amend and restate the Investment Advisory Agreement, as follows:
1. General Provision.
The Fund hereby employs OFI and OFI 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. OFI shall, in all matters, give to the
Fund and its Board of Trustees 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 or regulations thereunder; (ii) any other applicable
provisions of state or federal law; (iii) the provisions of the Declaration of
Trust and By-Laws of the Fund as amended from time to time; (iv) policies and
determinations of the Board of Trustees of the Fund; (v) the fundamental
policies and investment restrictions of the Fund as reflected in its
registration statement under the Investment Company Act or as such policies may,
from time to time, be amended by the Fund's shareholders; and (vi) the
Prospectus and Statement of Additional Information of the Fund 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 Trustees 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) OFI shall, subject to the direction and control by the Fund's
Board of Trustees, (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 "7" 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.
(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 "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) Nothing in this Agreement shall prevent OFI or any officer
thereof from acting as investment adviser for any other person, firm or
corporation and shall not 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 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; 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 for
continuous public sale of shares of the Fund. OFI shall, at its own cost and
expense, also provide the Fund with adequate office space, facilities and
equipment.
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.
4. Allocation of Expenses.
All other costs and expenses not expressly assumed by OFI 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) premiums for fidelity and other insurance
coverage requisite to its operations; (iv) compensation and expenses of its
trustees other than those associated or 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 securities laws of shares of the Fund
for public sale; (x) expenses of printing and mailing reports, notices and proxy
materials to shareholders of the Fund; (xi) except as noted above, 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 which the Fund may have to indemnify
its officers and trustees with respect thereto. Any officers or employees of OFI
or any entity controlling, controlled by or under common control with OFI, who
may also serve as officers, trustees or employees of the Fund shall not receive
any compensation by the Fund for their services.
5. Compensation of OFI.
The Fund 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 management fee computed on the total net
assets of the Fund as of the close of each business day and payable monthly at
the following annual rates:
.75% on the first $200 million of total net assets; .72% on the next $200
million of total net assets; .69% on the next $200 million of total net
assets; .66% on the next $200 million of total net assets; .60% on the
next $700 million of total net assets; .58% on the next $1.0 billion of
total net assets; .56% on the next $2.0 billion of total net assets; and
.54% on total net assets in excess of $4.5 billion
6. Use of Name "Oppenheimer."
OFI hereby grants to the Fund a royalty-free, non-exclusive license
to use the name "Oppenheimer" in the name of the Fund for the duration of this
Agreement and any extensions or renewals thereof. Such license may, upon
termination of this Agreement, be terminated by OFI, 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 "Oppenheimer" in the name of the Fund or
otherwise. The name "Oppenheimer" 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
Fund's portfolio securities, to employ or deal with such members of securities
or commodities exchanges, brokers or dealers, including "affiliated"
broker-dealers (as that term is defined in the Investment Company Act)
(hereinafter "broker-dealers"), 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 Fund's portfolio transactions 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 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 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 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.
(c) OFI shall have discretion, in the interests of the Fund, to
allocate brokerage on the Fund's portfolio transactions to broker-dealers other
than affiliated broker-dealers, 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
Fund and/or other accounts for which OFI and 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 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 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 and its investment advisory affiliates with respect to
the 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 the purposes contemplated by this Agreement and that the total
commissions paid by the Fund over a representative period selected by the Fund's
trustees were reasonable in relation to the benefits to the Fund.
(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 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
Trustees and the provisions of this paragraph "7".
(e) The Fund recognizes that an affiliated broker-dealer (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 by any rule, regulation or order adopted
under the Investment Company Act for determining the permissible level of such
commissions.
(f) Subject to the foregoing provisions of this paragraph "7", OFI
may also consider sales of Fund shares and shares of other investment companies
advised by OFI or its affiliates as a factor in the selection of broker-dealers
for the Fund's portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth above
and will continue in effect until December 31, 2000, and thereafter, from year
to year, so long as such continuance shall be approved at least annually by the
Fund's Board of Trustees including the vote of the majority of the Trustees of
the Fund 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 Fund and by such a vote of the Fund's Board of
Trustees.
9. Termination.
This Agreement may be terminated (i) by OFI at any time without
penalty upon giving the Fund 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 OFI (which notice may be waived by OFI) provided that
such termination by the Fund shall be directed or approved by the vote of a
majority of all of the trustees of the Fund then in office or by the vote of the
holders of a "majority" (as defined in the Investment Company Act) of the
outstanding voting securities of the Fund.
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 Fund; this Agreement shall automatically
and immediately terminate in the event of its assignment (as that term is
defined in the Investment Company Act).
11. Disclaimer of Shareholder Liability.
OFI understands that the obligations of the Fund under this
Agreement are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. OFI represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder liability for acts or obligations of the Fund.
12. 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.
XXXXXXXXXXX CAPITAL
APPRECIATION FUND
By:
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Xxxxxx X.
Xxxxxxx, Secretary
OPPENHEIMERFUNDS,
INC.
By:
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Xxxxxxxxx X. Xxxx, Vice President
& Secretary
