AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT made as of the 1st day
of September, 2007 by and between Xxxxxxxxxxx Quest for Value Funds, (the
"Company"), and OppenheimerFunds, Inc. ("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, Xxxxxxxxxxx Small- & Mid- Cap Value Fund is a separately
capitalized Series (the "Series") of the shares of beneficial interest to be
issued by the Company ("Shares") pursuant to the Company's registration
statement;
WHEREAS, the Company desires that OFI shall act as its investment adviser
with respect to the Series pursuant to Amended and Restated Investment Advisory
Agreement dated January 1, 2006, as further amended and restated on September 1,
2007;
WHEREAS, the Company and OFI agreed, per a resolution of the Series' Board
of Trustees dated August 13, 2007 to reduce the Series' management fee effective
September 1, 2007 to the following annual rates that decline as the Series'
assets grow: 0.80% of the first $400 million of average annual net assets of the
Series, 0.75% of the next $400 million, 0.60% of the next $1.2 billion, 0.58% of
the next $4.0 billion and 0.56% of average annual net assets over $6.0 billion;
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.
The Company hereby employs OFI and OFI hereby undertakes to act as the
investment adviser of the Company in connection with, and for the benefit of,
the Series (including any Series hereafter created) and to perform for the
Company such other duties and functions in connection with the Series 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 Trustees (the "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 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 Declaration of Trust and By-Laws of the Company as amended
from time to time; (iv) policies and determinations of the Trustees; (v) the
fundamental policies and investment restrictions of the Series 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 of the Series 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 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 Trustees, (i)
regularly provide investment advise and recommendations to the Company with
respect to the investments, investment policies and the purchase and sale of
securities and other investments for the Series; (ii) supervise continuously the
investment program of the Series and the composition of its portfolio and
determine what securities shall be purchased or sold by; and (iii) arrange,
subject to the provisions of paragraph 7 hereof, for the purchase of securities
and other investments for the Series and the sale of securities and other
investments held in the portfolio of the Series.
(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 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 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 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 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 Series for its shareholders; composition of proxy
materials for meetings of the Series' 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 Series. OFI shall, at its own cost
and expense, also provide the Company with adequate office space, facilities and
equipment. OFI shall, at its own expenses, provide such officers for the Company
as the Board of Trustees may request.
4. Allocation of Expenses.
All other costs and expenses of the Series of the Company not expressly
assumed by OFI under this Agreement, or to be paid by the Distributor of the
Shares of the Series, shall be paid by the Company on behalf of the Series,
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 Series; (iii) insurance
premiums for fidelity and other coverage requisite to its operations; (iv)
compensation and expenses of its Trustees 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 therefore 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 Series for public sale; (x) expenses of
printing and mailing reports, notices and proxy materials to shareholders of the
Company and the Series; (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 or any Series thereof and any legal obligation which the
Company or the Series, 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 also serve as officers,
Trustees or employees of the Company shall not receive any compensation from the
Company or the Series for their services.
5. Compensation of OFI.
The Series 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 aggregate net asset
value of the Series as of the close of each business day and payable monthly at
the following annual rate:
0.80% of the first $400 million of aggregate net assets,
0.75% of the next $400 million,
0.60% of the next $1.2 billion,
0.58% of the next $4.0 billion,
0.56% of aggregate net assets over $6.0 billion.
6. Use of Name "Xxxxxxxxxxx" or "Quest For Value".
OFI hereby grants to the Company a royalty-free, non-exclusive license to
use the name "Xxxxxxxxxxx" or "Quest For Value" 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" or "Quest For
Value" under applicable law, such license shall allow OFI to inspect and,
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" or "Quest For Value" in the name of the
Company or otherwise. The name "Xxxxxxxxxxx" and "Quest For Value" 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 (and any Sub Advisor) is authorized, in arranging the purchase and
sale of the portfolio securities and other investments of the Series 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 Series 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 Series 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 (and any Sub Advisor) of its
(their) investment management functions.
(b) OFI (and any Sub Advisor) shall select broker-dealers to effect the
portfolio transactions of the Series 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 (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 Series by participating therein for its own
account; the importance to the Series 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 Series.
(c) OFI (and any Sub Advisor) shall have discretion, in the interest of the
Company and the Series, to allocate brokerage on the portfolio transactions of
the Series to broker-dealers, other than an 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 Series and/or other accounts for which
OFI 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 Company or the Series to pay such broker-dealers a commission
for effecting a portfolio transaction for the Company or the Series 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 (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 OFI or its affiliates (or any Sub
Advisor) with respect to accounts as to which they exercise investment
discretion. In reaching such determination, OFI (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, OFI (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 Company and the Series over a representative period selected by the
Company's Trustees were reasonable in relation to the benefits to the Company
and the Series.
(d) OFI (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 Company and the
Series for effecting its portfolio transactions to the extent consistent with
the interests and policies of the Company and the Series as established by the
determinations of the Board of Trustees 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 or the Series thereof so
long as it is lawful for it so to act; (ii) may be a major recipient of
brokerage commissions paid by the Company or a Series thereof; and (iii) may
effect portfolio transactions for the Company or the Series 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 to be within 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 10 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 Trustees, including the vote of the
majority of the Trustees 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, or the Series
thereof, and by such a vote of the Company's Board of Trustees.
9. Disclaimer of Shareholder or Trustee Liability.
OFI understands and agrees that the obligations of the Company under this
Agreement are not binding upon any shareholder or Trustee of the Company
personally, but bind only the Company and the Company's property; OFI represents
that it has notice of the provisions of the Declaration of Trust of the Company
disclaiming shareholder or Trustee liability for acts or obligations of the
Company.
10. 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 Trustees 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).
11. 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.
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.
Xxxxxxxxxxx Small- & Mid- Cap Value Fund
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Secretary
OppenheimerFunds, Inc.
By: /s/ Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxxxx
President
