EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the 4th day of January, 1996, by and between ROCHESTER FUND
SERIES, a Massachusetts business trust (the "Trust"), and XXXXXXXXXXX MANAGEMENT
CORPORATION (hereinafter referred to as "OMC").
WHEREAS, the Fund is an open-end, non-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 OMC is an investment adviser registered as such with the
Commission under the Investment Advisers Act of 1940;
WHEREAS, THE BOND FUND FOR GROWTH (the "Fund") is one portfolio of the
Trust;
WHEREAS, the Fund has Shares of beneficial interest to be issued by the
Fund ("Shares") pursuant to the Fund's registration statement;
WHEREAS, the Fund desires that OMC 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 PROVISIONS:
The Trust hereby employs OMC and OMC hereby undertakes to act as the
investment adviser of the Fund in connection with, and for the benefit of, the
Fund and to perform for the Fund such other duties and functions in connection
with the Fund for the period and on such terms as set forth in this Agreement.
OMC shall, in all matters, give to the Trust and its Board of Trustees (the
"Trustees") the benefit of its best judgement, effort, advice and
recommendations and
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shall, at all times conform to, and use its best efforts to enable the Fund to
conform to (i) the provisions of the Investment Fund 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 Trust
as amended from time to time; (iv) policies and determinations of the Trustees;
(v) the fundamental policies and investment restrictions of the Fund as
reflected in the registration statement of the Trust 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 of the Fund in effect from
time to time. The appropriate officers and employees of OMC shall be available
upon reasonable notice for consultation with any of the Trustees and officers of
the Trust with respect to any matters dealing with the business and affairs of
the Trust including the valuation of portfolio securities of the Fund which are
either not registered for public sale or not traded on any securities market.
2. INVESTMENT MANAGEMENT:
(a) OMC shall, subject to the direction and control by the Trustees, (i)
regularly provide investment advise and recommendations to the Fund with respect
to the investments, investment policies and the purchase and sale of securities
and other investments for the Fund; (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 Trust 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, OMC may obtain
investment information, research or
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assistance from any other person, firm or corporation to supplement, update or
otherwise improve its investment management services including entering into
sub-advisory agreements with other affiliated or unaffiliated registered
investment advisors to obtain specialized services.
(c) Provided that nothing herein shall be deemed to protect OMC 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, OMC 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 OMC or any entity controlling,
controlled by or under common control with OMC or any officer thereof from
acting as investment adviser for any other person, firm or corporation or in any
way limit or restrict OMC or any of its directors, officers, stockholders or
employees from buying, selling or trading any securities or other investments
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 OMC of its duties and obligations under this
Agreement.
3. OTHER DUTIES OF OMC:
OMC 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
operations of the Fund for its shareholders; composition of proxy materials for
meetings of the Fund's shareholders; and the composition of such registration
statements as may be
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required by Federal and state securities laws for continuous public sale of
Shares of the Fund. OMC shall, at its own cost and expense, also provide the
Trust with adequate office space, facilities and equipment. OMC shall, at its
own expenses, provide such officers for the Trust as the Board of Trustees may
request.
4. ALLOCATION OF EXPENSES:
All other costs and expenses of the Fund not expressly assumed by OMC under
this Agreement, or to be paid by the Distributor of the Shares of the Fund,
shall be paid by the Fund, 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 of the
Fund; (iii) insurance premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its Trustees other than those
affiliated with OMC; (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 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 any legal
obligation which the Trust may have to indemnify its officers and Trustees with
respect thereto. Any officers or employees of OMC (or any entity controlling,
controlled by, or under common control with OMC) who also serve as officers,
Trustees or employees of the Fund shall not receive any compensation
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from the Fund thereof for their services.
5. COMPENSATION OF OMC:
The Trust agrees to pay OMC and OMC 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 Fund as of the close of each business day and payable monthly at the
annual rate for each Series set forth on Schedule A hereto.
6. USE OF NAME "XXXXXXXXXXX":
OMC hereby grants to the Trust a royalty-free, non-exclusive license to use
the name "Xxxxxxxxxxx" in the name of the Trust or Fund for the duration of this
Agreement and any extensions or renewals thereof. To the extent necessary to
protect OMC's rights to the name "Xxxxxxxxxxx" under applicable law, such
license shall allow OMC to inspect and, subject to control by the Trust's Board,
control the nature and quality of services offered by the Fund under such name
and may, upon termination of this Agreement, be terminated by OMC, in which
event the Trust 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 Trust or otherwise. The name "Xxxxxxxxxxx" may be used or licensed by OMC
in connection with any of its activities, or licensed by OMC to any other party.
7. PORTFOLIO TRANSACTIONS AND BROKERAGE:
(a) OMC (and any Sub Advisor) is authorized, in arranging the purchase and
sale of the portfolio securities and other investments of the Fund 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
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execution" (prompt and reliable execution at the most favorable security price
obtainable) of the portfolio transactions of the Fund 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 OMC (and any Sub Advisor) of its (their)
investment management functions.
(b) OMC (and any Sub Advisor) shall select broker-dealers to effect the
portfolio transactions of the Fund 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 OMC (or any Sub Advisor) 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 Fund 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 or other
investments 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) OMC (and any Sub Advisor) shall have discretion, in the interests of
the Fund, to allocate brokerage on the portfolio transactions of the Fund 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 Fund and/or other accounts for which OMC or its affiliates (or
any Sub Advisor) 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
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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 OMC (or
any Sub Advisor) 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 OMC or its affiliates (or any Sub Advisor) with
respect to accounts as to which they exercise investment discretion. In reaching
such determination, OMC (or any Sub Advisor) 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, OMC (and any Sub Advisor) 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) OMC (or any Sub Advisor) 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 the Board of
Trustees of the Trust 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 for the Fund 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
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the Fund only if the commissions, fees or other renumeration 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 to be within
the permissible level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7, OMC (and any
Sub Advisor) may also consider sales of Shares of the Fund and the other funds
advised by OMC and its affiliates as a factor in the selection of broker-dealers
for its portfolio transactions.
8. DURATION:
This Agreement will take effect on the date first set forth above. Unless
earlier terminated pursuant to paragraph 10 hereof, this Agreement shall remain
in effect for a period of two (2) years and thereafter from year to year, so
long as such continuance shall be approved at least annually by the Trust'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 Fund 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 Fund Act) of the outstanding voting
securities of the Fund and by such a vote of the Fund's Board of Trustees.
9. DISCLAIMER OF SHAREHOLDER OR TRUSTEE LIABILITY:
OMC understands and agrees that the obligations of the Fund under this
Agreement are not binding upon any shareholder or Trustee of the Fund
personally, but bind only the Trust and the Trust's property; OMC represents
that it has notice of the provisions of the Declaration of Trust of the Trust
disclaiming shareholder or Trustee liability for acts or obligations of the
Trust.
10. TERMINATION.
This Agreement may be terminated (i) by OMC at any time without penalty
upon sixty days' written notice to the Trust (which notice may be waived by the
Trust); or (ii) by the Trust
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at any time without penalty upon sixty days' written notice to OMC (which notice
may be waived by OMC) provided that such termination by the Trust shall be
directed or approved by the vote of a majority of all of the Trustees of the
Trust then in office or by the vote of the holders of a "majority" of the
outstanding voting securities of the Trust (as defined in the Investment Company
Act).
11. ASSIGNMENT OR AMENDMENT:
This Agreement may not be amended, or the rights of OMC 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.
12. 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.
13. ACCOUNTING, ADMINISTRATION AND RECORDKEEPING AGREEMENT:
Notwithstanding any provision of this Agreement to the contrary, OMC is not
required under this Agreement to perform for the Fund any duties or functions
set forth in the Accounting, Administration and Recordkeeping Agreement between
the Fund and OMC.
ROCHESTER FUND SERIES, on behalf of
THE BOND FUND FOR GROWTH
By: /s/ XXXXXXX X. XXXXX
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Title: Vice President
XXXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
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SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE BOND FUND FOR GROWTH
AND
XXXXXXXXXXX MANAGEMENT CORPORATION
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ANNUAL FEE AS A PERCENTAGE OF DAILY TOTAL NET ASSETS
===============================================================================
0.625% of the first $50 million of average daily net assets
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0.500% of the next $250 million of average daily net assets
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0.4375% of average daily net assets over $300 million
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