INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of the ____ day of ________, 2001, by and between
XXXXXXXXXXX CONCENTRATED GROWTH FUND, a Massachusetts business trust
(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 an investment adviser registered as such with the
Commission under the Investment Advisers 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 Provisions: ------------------
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 set forth in this Agreement. OFI shall, in all matters, give to the Fund and
its Board of Trustees (the "Trustees") the benefit of its best judgement,
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 Trustees; (v) the fundamental policies and
investment restrictions of the Fund as reflected in the registration statement
of the Fund 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 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 the Fund 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 advice and recommendations to the Company 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 and
sale of securities and other investments for the Fund. (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 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 required by Federal and state 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 of the Fund not expressly assumed by OFI 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 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 herein above 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 thereof and any 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 also serve as officers,
Trustees or employees of the Fund shall not receive any compensation from 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 aggregate net assets of
the Fund as of the close of each business day and payable monthly at the annual
rate of 0.75% of aggregate net assets up to $200 million; 0.72% of the next $200
million of assets; 0.69% of the next $200 million of assets and 0.66% of assets
over $600 million.
6. Use of Name "Xxxxxxxxxxx": -------------------------
OFI hereby grants to the Fund a royalty-free, non-exclusive 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 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 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 (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
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 OFI (and any Sub Advisor) of its investment
management functions.
(b) OFI (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 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 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) OFI (and any Sub Advisor) shall have discretion, in the interest of the
Fund, to allocate brokerage on the portfolio transactions of the Fund 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 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 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 (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 Fund over a representative period selected by the Fund's
Trustees were reasonable in relation to the benefits to the Fund.
(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 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 Fund 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 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 to be within the permissible
level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7, OFI (and any Sub
Advisor) may also consider sales of Shares of the Fund, and the other funds
advised by OFI 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 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. Disclaimer of Shareholder or -------------------------------- Trustee
Liability: -----------------
OFI 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 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 or
Trustee liability for acts or obligations of the Fund.
10. Termination. -----------
This Agreement may be terminated (i) by OFI at any time without penalty upon
sixty days' written notice to the Fund (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 (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 CONCENTRATED GROWTH FUND
By:
------------------------------------------
Xxxxxx X. Xxxxxxx, Secretary
Attest:
By:______________________________
Xxxxxx X. Xxxx, Assistant
Secretary
OPPENHEIMERFUNDS, INC.
By:__________________________________________
Xxxxxx X. Xxxxxxx
Executive Vice President
Attest:
By:_____________________________
Xxxxxx X. Xxxx, Assistant
Secretary
