5
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of January, 2005, by and between
XXXXXXXXXXX CALIFORNIA MUNICIPAL FUND (hereinafter referred to as the
"Fund"), and OPPENHEIMERFUNDS, INC. (hereinafter referred to as "OFI").
WHEREAS, the Fund is an open-end, non-diversified series 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 a registered investment adviser;
WHEREAS, this Agreement amends and restates the Investment Advisory
Agreement dated October 22, 1990, by and between the Fund and OFI;
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 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 are hereinafter set forth. OFI shall, in all matters, give
to the Fund and its Board of 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 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 Board of Trustees of the Fund;
(v) the fundamental policies and investment restrictions of the Fund as
reflected in its registration statement under the Investment Company Act or
as such policies may, from time to time, be amended by the Fund's
shareholders; 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 securities 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 Fund's Board
of Trustees, (i) regularly provide investment advice and recommendations to
the Fund with respect to its investments, investment policies and the
purchase and sale of securities; (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 Fund's portfolio.
(b) Provided that the Fund shall not be required to pay any
compensation other than as provided by the terms of this 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.
(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 officer thereof
from acting as investment adviser for any other person, firm or corporation
and shall not in any way limit or restrict OFI or any of its directors,
officers, stockholders or employees from buying, selling or trading any
securities 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
securities and state 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. OFI shall, at its own expense,
provide officers for the Fund as the Fund's Board may request.
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
and taxes; (ii) brokerage commissions; (iii) insurance premiums for fidelity
and other coverage requisite to its operations; (iv) compensation and
expenses of its trustees other than those associated or 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 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 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 may
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 fee computed on the
aggregate net asset value of the Fund as of the close of each business day
and payable monthly at the following annual rates:
.60% of the first $200 million of net assets;
.55% of the next $100 million;
.50% of the next $200 million;
.45% of the next $250 million;
.40% of the next $250 million; and
.35% of the net assets in excess of $1 billion.
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. To the extent necessary to
protect OFI's rights to the name "Xxxxxxxxxxx" under applicable law, such
license shall allow the Manager to inspect and, subject to control by the
Fund'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
OFI, in which event the Fund shall promptly take whatever action may be
necessary to change its name and the name of the Fund and discontinue any
further use of the name "Xxxxxxxxxxx" in the name of the Fund or otherwise.
The name "Xxxxxxxxxxx" may be used by OFI in connection with any of its
activities, or licensed by OFI to any other party.
7. Portfolio Transaction and Brokerage.
(a) OFI is authorized, in arranging the purchase and sale of the Fund's
portfolio securities, 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
Fund's portfolio transactions 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 of its investment management functions.
(b) OFI shall select broker-dealers to effect the Fund's portfolio
transactions 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 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 Fund's portfolio transactions 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 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 shall have discretion, in the interest of the Fund, to
allocate brokerage on the Fund's portfolio transactions 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
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 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 with respect to the accounts as to which they exercise investment
discretion. In reaching such determination, OFI 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 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 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 its Board of
Trustees of the Fund and the provisions of this paragraph 7.
(e) The Fund recognizes that an affiliated broker (i) may act as one
of the Fund's regular brokers 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 for determining 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 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 Liability.
OFI understands and agrees that the obligations of the Fund under this
Agreement are not binding upon any Trustee or shareholder 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 liability for acts or obligations of the Fund.
10. Termination.
This Agreement may be terminated (i) by OFI at any time without penalty
upon giving the Fund sixty days' written notice (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 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 this Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
Xxxxxxxxxxx California Municipal 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
