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SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a
Colorado corporation (the "Advisor"), and Trinity Investment Management
Corporation, a Pennsylvania Corporation (the "Subadvisor"), as of the date
set forth below.
RECITAL
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WHEREAS, Xxxxxxxxxxx Trinity Large Cap Growth Fund (the "Fund") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company;
WHEREAS, the Advisor is registered under the Investment Advisors Act of
1940, as amended (the "Advisors Act"), as an investment advisor and engages
in the business of acting as an investment advisor;
WHEREAS, the Subadvisor is registered under the Advisors Act as an
investment advisor and engages in the business of acting as an investment
advisor;
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
as of December 17, 1998 with the Fund (the "Investment Advisory Agreement"),
pursuant to which the Advisor acts as investment advisor with respect to the
Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement,
the Advisor has retained and wishes to continue to retain the Subadvisor for
purposes of rendering investment advisory services to the Advisor in
connection with the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which are
hereby acknowledged, the parties hereto agree as follows:
I. Appointment and Obligations of the Subadvisor.
The Advisor hereby appoints the Subadvisor to render, to the Advisor
with respect to the Fund, investment research and advisory services as set
forth below in Section II, under the supervision of the Advisor and subject
to the approval and direction of the Fund's Board of Trustees (the "Board"),
and the Subadvisor hereby accepts such appointment, subject to the terms and
conditions contained herein. The Subadvisor shall, for all purposes herein,
be deemed an independent contractor and shall not have, unless otherwise
expressly provided or authorized, any authority to act for or represent the
Advisor or the Fund in any way or otherwise to serve as or be deemed an agent
of the Fund.
II. Duties of the Subadvisor and the Advisor.
A. Duties of the Subadvisor.
The Subadvisor shall regularly provide investment advice with respect
to the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments
or other property comprising the assets of the Fund, and in furtherance
thereof, the Subadvisor's duties shall include:
1. Obtaining and evaluating pertinent information about
significant developments and economic, statistical and financial
data, domestic, foreign or otherwise, whether affecting the
economy generally or the Fund, and whether concerning the
individual issuers whose securities are included in the Fund's
investment portfolio or the activities in which such issuers
engage, or with respect to securities which the Subadvisor
considers desirable for inclusion in the Fund's investment
portfolio;
2. Determining which securities shall be purchased, sold or
exchanged by the Fund or otherwise represented in the Fund's
investment portfolio and regularly reporting thereon to the
Advisor and, at the request of the Advisor, to the Board;
3. Formulating and implementing continuing programs for the
purchases and sales of the securities of such issuers and
regularly reporting thereon to the Advisor and, at the request of
the Advisor, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to
the Subadvisor necessary to carry into effect such investment
program, including the placing of purchase and sale orders, and
making appropriate reports thereon to the Advisor and the Board.
B. Duties of the Advisor.
The Advisor shall retain responsibility for, among other things,
providing the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadvisor to so
comply, the Advisor shall monitor the investment program
maintained by the Subadvisor for the Fund to ensure that
the Fund's assets are invested in compliance with this
Agreement and the Fund's Registration Statement, as
currently in effect from time to time; and
2. The Advisor shall oversee matters relating to Fund
promotion, including, but not limited to, marketing
materials and the Subadvisor's reports to the Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadvisor.
1. Organization. The Subadvisor is now, and will continue to
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be, a corporation duly formed and validly existing under the laws
of its jurisdiction of formation, fully authorized to enter into
this Agreement and carry out its duties and obligations hereunder.
2. Registration. The Subadvisor is registered as an
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investment advisor with the Securities and Exchange Commission
(the "SEC") under the Advisors Act, and is registered or licensed
as an investment advisor under the laws of all jurisdictions in
which its activities require it to be so registered or licensed,
except where the failure to be so licensed would not have a
material adverse effect on the Subadvisor. The Subadvisor shall
maintain such registration or license in effect at all times
during the term of this Agreement.
3. Best Efforts. The Subadvisor at all times shall provide
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its best judgment and effort to the Advisor and the Fund in
carrying out its obligations hereunder.
4. Other Covenants. The Subadvisor further agrees that:
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a. it will use the same skill and care in providing such
services as it uses in providing services to other
accounts for which it has investment management
responsibilities;
b. it will not make loans to any person to purchase or
carry units of beneficial interest in the Fund or
make loans to the Fund;
c. it will report regularly to the Fund and to the
Advisor and will make appropriate persons available
for the purpose of reviewing with representatives of
the Advisor on a regular basis the management of the
Fund, including, without limitation, review of the
general investment strategy of the Fund, economic
considerations and general conditions affecting the
marketplace;
d. as required by applicable laws and regulations, it
will maintain books and records with respect to the
Fund's securities transactions and it will furnish to
the Advisor and to the Board such periodic and
special reports as the Advisor or the Board may
reasonably request;
e. it will treat confidentially and as proprietary
information of the Fund all records and other
information relative to the Fund, and will not use
records and information for any purpose other than
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Fund or when so requested
by the Fund or required by law or regulation;
f. it will, on a continuing basis and at its own
expense, (1) provide the distributor of the Fund (the
"Distributor") with assistance in the distribution
and marketing of the Fund in such amount and form as
the Advisor may reasonably request from time to time,
and (2) use its best efforts to cause the portfolio
manager or other person or persons who manage or are
responsible for overseeing the management of the
Fund's portfolio (the "Portfolio Manager") to provide
marketing and distribution assistance to the
Distributor, including, without limitation,
conference calls, meetings and road trips, provided
that each Portfolio Manager shall not be required to
devote more than 10% of his or her time to such
marketing and distribution activities;
g. it will use its reasonable best efforts (i) to retain
the services of the Portfolio Manager who manages the
portfolio of the Fund, from time to time and (ii) to
promptly obtain the services of a Portfolio Manager
acceptable to the Advisor if the services of the
Portfolio Manager are no longer available to the
Subadvisor;
h. it will, from time to time, assure that each
Portfolio Manager is acceptable to the Advisor;
i. it will obtain the written approval of the Advisor
prior to designating a new Portfolio Manager;
provided, however, that, if the services of a
Portfolio Manager are no longer available to the
Subadvisor due to circumstances beyond the reasonable
control of the Subadvisor (e.g., voluntary
resignation, death or disability), the Subadvisor may
designate an interim Portfolio Manager who (a) shall
be reasonably acceptable to the Advisor and (b) shall
function for a reasonable period of time until the
Subadvisor designates an acceptable permanent
replacement; and
j. it will promptly notify the Advisor of any impending
change in Portfolio Manager, portfolio management or
any other material matter that may require disclosure
to the Board, shareholders of the Fund or dealers,
including but not limited to, any change in the
methodologies underlying the Subadvisor's proprietary
valuation models.
B. Representations, Warranties and Covenants of the Advisor.
1. Organization. The Advisor is now, and will continue to be,
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duly organized and in good standing under the laws of its state
of incorporation, fully authorized to enter into this Agreement
and carry out its duties and obligations hereunder.
2. Registration. The Advisor is registered as an investment
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advisor with the SEC under the Advisors Act, and is registered or
licensed as an investment advisor under the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Advisor shall maintain such
registration or license in effect at all times during the term of
this Agreement.
3. Best Efforts. The Advisor at all times shall provide its
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best judgment and effort to the Fund in carrying out its
obligations hereunder.
IV. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Subadvisor
shall at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
B. the provisions of the registration statement of the Fund, as the
same may be amended from time to time, under the Securities Act
of 1933, as amended, and the 1940 Act;
C. the provisions of the Fund's Declaration of Trust or other
governing document, as amended from time to time;
D. the provisions of the By-laws of the Fund, as amended from time
to time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or
instructions adopted or issued by the Fund or the Advisor from
time to time.
The Advisor shall promptly notify the Subadvisor of any changes or
amendments to the provisions of B., C., D. and F. above when such changes or
amendments relate to the obligations of the Subadvisor.
V. Control by the Board.
Any investment program undertaken by the Subadvisor pursuant to this
Agreement, as well as any other activities undertaken by the Subadvisor with
respect to the Fund, shall at all times be subject to any directives of the
Advisor and the Board.
VI. Books and Records.
The Subadvisor agrees that all records which it maintains for the Fund
on behalf of the Advisor are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Advisor any of such records upon
request. The Subadvisor further agrees to preserve for the periods
prescribed by applicable laws, rules and regulations all records required to
be maintained by the Subadvisor on behalf of the Advisor under such
applicable laws, rules and regulations, or such longer period as the Advisor
may reasonably request from time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadvisor, to the extent appropriate, in consultation with
the Advisor, shall place all orders for the purchase and sale of portfolio
securities for the Fund with brokers or dealers selected by the Subadvisor,
which may include, to the extent permitted by the Advisor and the Fund,
brokers or dealers affiliated with the Subadvisor. The Subadvisor shall use
its best efforts to seek to execute portfolio transactions at prices that are
advantageous to the Fund and at commission rates that are reasonable in
relation to the benefits received.
B. Selection of Broker-Dealers.
With respect to the execution of particular transactions, the
Subadvisor may, to the extent permitted by the Advisor and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadvisor
exercises investment discretion. The Subadvisor is authorized to pay a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund that is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Subadvisor determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities that the Subadvisor has with
respect to accounts over which it exercises investment discretion. The
Advisor, Subadvisor and the Board shall periodically review the commissions
paid by the Fund to determine, among other things, if the commissions paid
over representative periods of time were reasonable in relation to the
benefits received.
C. Soft Dollar Arrangements.
The Subadvisor may enter into "soft dollar" arrangements through
the agency of third parties on behalf of the Advisor. Soft dollar
arrangements for services may be entered into in order to facilitate an
improvement in performance in respect of the Subadvisor's service to the
Advisor with respect to the Fund. The Subadvisor makes no direct payments
but instead undertakes to place business with broker-dealers who in turn pay
third parties who provide these services. Soft dollar transactions will be
conducted on an arm's-length basis, and the Subadvisor will secure best
execution for the Advisor. Any arrangements involving soft dollars and/or
brokerage services shall be effected in compliance with Section 28(e) of the
Securities Exchange Act of 1934, as amended, and the policies that the
Advisor and the Board may adopt from time to time. The Subadvisor agrees to
provide reports to the Advisor as necessary for purposes of providing
information on these arrangements to the Board.
VIII. Compensation.
A. Amount of Compensation. The Advisor shall pay the Subadvisor, as
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compensation for services rendered hereunder, from its own
assets, an annual fee, payable monthly, as follows: 0.25% of the
first $150 million of aggregate annual net assets of the Fund,
0.17% of the next $350 million, and 0.14% of average annual net
assets in excess of $500 million.
B. Calculation of Compensation. Except as hereinafter set forth,
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compensation under this Agreement shall be calculated and accrued
on the same basis as the advisory fee paid to the Advisor by the
Fund (i.e., computed on the average net assets of the Fund as of
the close of business each day). If this Agreement becomes
effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that
part of the month this Agreement is in effect shall be prorated
in a manner consistent with the calculation of the fees set forth
above.
C. Payment of Compensation: Subject to the provisions of this
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paragraph, payment of the Subadvisor's compensation for the
preceding month shall be made by the Advisor within 15 days after
the end of the preceding month.
D. Reorganization of the Fund. If the Fund is reorganized with
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another investment company for which the Subadvisor does not
serve as an investment advisor or subadvisor, and the Fund is the
surviving entity, the subadvisory fee payable under this section
shall be adjusted in an appropriate manner as the parties may
agree.
IX. Allocation of Expenses.
The Subadvisor shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged
in providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other
than an assignment resulting solely by action of the Advisor or an affiliate
thereof, the Subadvisor shall be responsible for payment of all costs and
expenses incurred by the Advisor and the Fund relating thereto, including,
but not limited to, reasonable legal, accounting, printing and mailing costs
related to obtaining approval of Fund shareholders.
X. Non-Exclusivity.
The services of the Subadvisor with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadvisor shall be free to
render investment advisory and administrative or other services to others
(including other investment companies) and to engage in other activities. It
is understood and agreed that officers or trustees of the Subadvisor may
serve as officers or trustees of the Advisor or of the Fund; that officers or
trustees of the Advisor may serve as officers or directors of the Subadvisor
to the extent permitted by law; and that the officers and directors of the
Subadvisor are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies provided it is permitted by applicable law and
does not adversely affect the Fund.
XI. Term.
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XII.A
and XII.B hereof and approval by the Fund's initial shareholder, for a period
of two years from the date hereof.
XII. Renewal.
Following the expiration of its initial two-year term, the Agreement
shall continue in full force and effect from year to year, provided that such
continuance is specifically approved:
A. at least annually (1) by the Board or by the vote of a majority
of the Fund's outstanding voting securities (as defined in
Section 2(a)(42) of the 1940 Act), and (2) by the affirmative
vote of a majority of the Trustees who are not parties to this
Agreement or interested persons of a party to this Agreement
(other than as a Trustee of the Fund), by votes cast in person at
a meeting specifically called for such purpose; or
B. by such method required by applicable law, rule or regulation
then in effect.
XIII. Termination.
A. Termination by the Fund and the Subadvisor. This Agreement may
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be terminated at any time, without the payment of any penalty, by
vote of the Board or by vote of a majority of the Fund's
outstanding voting securities or the Subadvisor, on sixty (60)
days' written notice. The notice provided for herein may be
waived by the party required to be notified.
B. Assignment. This Agreement shall automatically terminate in the
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event of its "assignment," as defined in Section 2 (a) (4) of the
1940 Act. In the event of an assignment that occurs solely due
to the change in control of the Subadvisor (provided that no
condition exists that permits, or, upon the consummation of the
assignment, will permit, the termination of this Agreement by the
Advisor pursuant to Section XIII. C. hereof), the Advisor and the
Subadvisor, at the sole expense of the Subadvisor, shall use
their reasonable best efforts to obtain shareholder approval of a
successor Subadvisory Agreement on substantially the same terms
as contained in this Agreement.
C. Termination by the Advisor. The Advisor may terminate this
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Agreement without penalty and without the payment of any fee or
penalty, immediately after giving written notice, upon the
occurrence of any of the following events:
1. Any of the Subadvisor, their respective partners,
subsidiaries, affiliates, directors, officers, employees or
agents engages in an action or omits to take an action that
would cause the Subadvisor to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were not to
grant an exemptive order under Section 9(c) thereof or that
would constitute grounds for the SEC to deny, revoke or
suspend the registration of the Subadvisor as an investment
advisor with the SEC; or
2. The Subadvisor breaches the representations contained in
Paragraph III.A.4.i. of this Agreement or any other
material provision of this Agreement, and any such breach
is not cured within a reasonable period of time after
notice thereof from the Advisor to the Subadvisor.
D. Transactions in Progress upon Termination. The Advisor and
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Subadvisor will cooperate with each other to ensure that
portfolio or other transactions in progress at the date of
termination of this Agreement shall be completed by the Advisor
in accordance with the terms of such transactions, and to this
end the Subadvisor shall provide the Advisor with all necessary
information and documentation to secure the implementation
thereof.
XIV. Liability of the Subadvisor.
In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadvisor or any of its officers, directors or employees, the Subadvisor
shall not be subject to liability to the Advisor for any act or omission in
the course of, or connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of any security.
XV. Notices.
Any notice or other communication required or that may be given
hereunder shall be in writing and shall be delivered personally, telecopied,
sent by certified, registered or express mail, postage prepaid or sent by
national next-day delivery service and shall be deemed given when so
delivered personally or telecopied, or if mailed, two days after the date of
mailing, or if by next-day delivery service, on the business day following
delivery thereto, as follows or to such other location as any party notifies
any other party:
A. If to the Advisor, to:
OppenheimerFunds, Inc.
0000 Xxxxx Xxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
Telecopier: (000)000-0000
B. If to the Subadvisor, to:
Trinity Investment Management Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
President
Telecopier: (000)000-0000
XVI. Questions of Interpretation.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State
of New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the 1940
Act shall be resolved by reference to such term or provision of the 1940 Act
and to interpretations thereof, if any, by the United States Courts or, in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC issued pursuant to the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is revised by rule, regulation or order of the
SEC, such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
XVII. Form ADV - Delivery.
The Advisor hereby acknowledges that it has received from the
Subadvisor a copy of the Subadvisor's Form ADV, Part II as currently filed,
at least 48 hours prior to entering into this Agreement and that it has read
and understood the disclosures set forth in the Subadvisor's Form ADV, Part
II.
XVIII. Miscellaneous.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
XIX. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 12th day of
October, 2001.
OPPENHEIMERFUNDS, INC.
By: _____________________
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Xxxxxx X. Xxxxxxx
Executive Vice President
TRINITY INVESTMENT MANAGEMENT CORPORATION
By:______________________
Xxxxxxx X. Xxxxxx
Chief Executive Officer
775TRGrow_SubAdvisAgree(101201).doc
