AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the 1st day of January, 2005, by and between Xxxxxxxxxxx Quest for
Value Funds, a Massachusetts business trust (hereinafter referred to as the "Company"), and
OppenheimerFunds, Inc. (hereinafter referred to as "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 Quest Balanced 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 this Amended and Restated Investment Advisory Agreement
(the "Agreement");
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set
forth, it is agreed by and between the parties, as follows:
General Provisions.
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.
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.
1
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.
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.
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 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 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.
Compensation of OFI.
The Company 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 total net asset value of the Series of the Company
as of the close of each business day and payable monthly at the annual rate for the Series
set forth on Schedule A hereto.
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.
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 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 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.
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.
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.
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).
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.
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 Quest for Value Funds,
for its Series,
Xxxxxxxxxxx Quest Balanced Value Fund
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Secretary
OppenheimerFunds, Inc.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman, President & Chief Executive Officer
Schedule A
to
Investment Advisory Agreement
between
Xxxxxxxxxxx Quest For Value Funds
and
OppenheimerFunds, Inc.
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Name of Series Annual Fee as a Percentage of Daily Total
Net Assets
==================== ============================================
==================== ============================================
Xxxxxxxxxxx Quest 0.80% of the first $1 billion of net assets
Balanced Value Fund 0.76% of the next $2 billion of net assets
0.71% of the next $1 billion of net assets
0.66% of the next $1 billion of net assets
0.60% of the next $1 billion of net assets
0.55% of the next $1 billion of net assets
0.50% of net assets over $7 billion
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