INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the ____ day of ________, 1998, by and between XXXXXXXXXXX
LARGE CAP VALUE FUND (the "Fund") and OPPENHEIMERFUNDS, INC.("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 an investment adviser registered as such with the
Commission under the Investment Advisors Act of 1940;
WHEREAS, the Fund desires that OFI shall act as its investment adviser pursuant
to 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 Provision.
(a) 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 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 portfolio securities 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 and sale of securities and other
investments for 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 "8" 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.
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(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 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 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 assistance in the supervision 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 operation of the Fund 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.
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 and notices and
proxy materials to shareholders of the Fund; (xi) except as noted above, all
other expenses incidental to holding regular annual meetings of the Fund's
shareholders; and (xii) such extraordinary non-recurring expenses as may arise,
including litigation, affecting the Fund and any obligation 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,
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a management fee computed on the aggregate net assets of the Fund as of the
close of each business day and payable monthly at the following annual rates:
.75% of the first $200 million of aggregate net assets;
.72% of the next $200 million of aggregate net assets;
.69% of the next $200 million of aggregate net assets;
.66% of the next $200 million of aggregate net assets;
.60% of the next $700 million of aggregate net assets;
.58% of the next $1.0 billion of aggregate net assets; and
.56% of aggregate net assets in excess of $2.5 billion.
6. Use of Name "Xxxxxxxxxxx."
OFI hereby grants the Fund a royalty-free, nonexclusive license to use the
name "Xxxxxxxxxxx" 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 "Xxxxxxxxxxx" in the name of the Fund 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 Fund's
portfolio securities, to employ or deal with such members of securities
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 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
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defined in Section 28(e)(3) of the Securities Exchange Act of 1934) for the Fund
and/or other accounts for which OFI 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 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 OFI's overall responsibilities with respect to the
accounts as to which it exercises 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 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 of 1940 for determining the permissible level of such
commissions.
(f) Subject to the foregoing provisions of this paragraph "7" OFI may also
consider sales of shares of the Fund and other investment companies managed 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 set forth above. Unless
earlier terminated pursuant to paragraph 9 hereof, this Agreement shall remain
in effect until two years from the date of execution hereof, and hereafter will
continue in effect 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.
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9. Termination.
(a) 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 of the outstanding voting securities of the Fund.
(b) 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 defined in the
Investment Company Act.
10. Shareholder Liability.
OFI understands and agrees 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.
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.
Xxxxxxxxxxx Large Cap Value Fund
By:________________________________
Xxxxxx X. Xxxxxxx, Secretary
OppenheimerFunds, Inc.
By:________________________________
Xxxxxx X. Xxxxxxx
Executive Vice President &
General Counsel
