INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 28th day of May 2003, by and between XXXXXXXXXXX
INTERNATIONAL LARGE-CAP CORE TRUST (the "Trust"), and OPPENHEIMERFUNDS, INC.
("OFI").
WHEREAS, the Trust is an open-end 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, the Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act") as an open-end management investment
company and may issue shares of common stock in separately designated series
representing separate funds with their own investment objectives, policies
and purposes; and
WHEREAS, the Trust desires that OFI shall act as its investment adviser with
respect to the Xxxxxxxxxxx International Large-Cap Core Fund (the "Fund")
series 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 Provision.
The Trust 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 Trust as amended from time to
time; (iv) policies and determinations of the Board of Trustees of the Trust;
(v) the fundamental policies and investment restrictions of the Fund as
reflected in the Trust's 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 Trust with respect to any
matters dealing with the business and affairs of the Trust including the
valuation of the portfolio securities of the Fund which are either not
registered for public sale or not being traded on any securities market.
2. Investment Management.
(a) OFI shall, subject to the direction and control by the Trust'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 portfolio of the Fund.
(b) Provided that the Trust 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, 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 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 for
its 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 and under the Investment Advisers Act of 1940.
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 its operations for the shareholders of the
Fund; 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 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 such officers for the Trust as the Trust'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 Trust, including, but not limited to (i) interest
and taxes; (ii) brokerage commissions; (iii) premiums for fidelity and other
insurance coverage requisite to its operations; (iv) the fees and expenses of
its Trustees; (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 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 Trust may have on behalf of the Fund 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 Trust shall not receive any compensation from the Trust for their
services.
5. 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 each Fund of the Trust as of the close of each business
day and payable monthly at the annual rate for each Fund set forth on
Schedule A hereto.
6. Use of Name "Xxxxxxxxxxx."
OFI hereby grants to the Trust a royalty-free, non-exclusive license to
use the name "Xxxxxxxxxxx" in the name of the Trust and 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 OFI to inspect, and subject to
control by the Trust's Board, control the name and quality of services
offered by the Fund under either such name. Such license may, upon
termination of this Agreement, be terminated by OFI, in which event the Trust
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 Trust or 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 Transactions and Brokerage.
(a) OFI (and any Sub-Advisor) is authorized, in arranging the Fund's
portfolio transactions, to employ or deal with such members of securities or
commodities exchanges, brokers or dealers, including "affiliated" broker
dealers (as that term is defined in the Investment Company Act) (hereinafter
"broker-dealers"), 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 may 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
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 (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 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 (and any Sub-Advisor) shall have discretion, in the interests
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 23(e)(3) of the Securities Exchange
Act of 1934) for the Fund and/or other accounts for which OFI and its
affiliates (and 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 and its investment advisory affiliates
(and any Sub-Advisor) with respect to the 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 the 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
its Board of Trustees and the provisions of this paragraph "7."
(e) The Trust recognizes that an affiliated broker-dealer (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
Trust; 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.
(f) Subject to the foregoing provisions of this paragraph "7", OFI (and
any Sub-Advisor) may also consider sales of Fund shares and shares of other
investment companies managed by OFI or its affiliates as a factor in the
selection of broker-dealers for the Fund's portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to paragraph 9 hereof, this Agreement
shall remain in effect for two years from the date of execution hereof, and
thereafter will continue in effect from year to year, so long as such
continuance shall be approved at least annually by the Trust's Board of
Trustees, including the vote of the majority of the trustees of the Trust 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 Trust's Board of Trustees.
9. 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" (as defined in the Investment Company Act) of the
outstanding voting securities of the Fund.
10. Assignment or Amendment.
This Agreement may not be amended without the affirmative vote or
written consent of the holders of a "majority" of the outstanding voting
securities of the Fund, and shall automatically and immediately terminate in
the event of its "assignment," as defined in the Investment Company Act.
11. Disclaimer of Shareholder Liability.
OFI understands that the obligations of the Trust under this Agreement
are not binding upon any Trustee or shareholder of the Trust or Fund
personally, but bind only the Trust, but only with respect to the Fund's
property. OFI represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming trustee or shareholder
liability for acts or obligations of the Trust.
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 International Large-Cap Core Trust
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx, Secretary
OppenheimerFunds, Inc.
By:/s/Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx, Senior Vice President
and General Counsel
Schedule A
To
Investment Advisory Agreement
Between
Xxxxxxxxxxx International Large-Cap Core Trust
and
OppenheimerFunds, Inc.
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Name of Series Annual Fee as a Percentage of
Daily Total Net Assets
============================== ==================================
============================== ==================================
Xxxxxxxxxxx International 0.85% of the first $500 million
Large-Cap Core Fund of aggregate net assets;
0.75% of the next $500 million;
and
0.70% of aggregate net assets
over $1 billion.
------------------------------ ----------------------------------
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a
Colorado corporation (the "Adviser"), and OFI Institutional Asset Management,
Inc., a New York Corporation (the "Subadviser"), as of the date set forth
below.
RECITAL
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WHEREAS, Oppenheimer International Large-Cap Core 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 Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages
in the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
as of May 28, 2003 with the Fund (the "Investment Advisory Agreement"),
pursuant to which the Adviser acts as investment adviser with respect to the
Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement,
the Adviser has retained and wishes to continue to retain the Subadviser for
purposes of rendering investment advisory services to the Adviser 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 Subadviser.
The Adviser hereby appoints the Subadviser to render, to the Adviser
with respect to the Fund, investment research and advisory services as set
forth below in Section II, under the supervision of the Adviser and subject
to the approval and direction of the Fund's Board of Trustees (the "Board"),
and the Subadviser hereby accepts such appointment, subject to the terms and
conditions contained herein. The Subadviser 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
Adviser or the Fund in any way or otherwise to serve as or be deemed an agent
of the Fund.
II. Duties of the Subadviser and the Adviser.
A. Duties of the Subadviser.
The Subadviser 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 Subadviser'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 Subadviser
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
Adviser and, at the request of the Adviser, 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 Adviser and, at the request of
the Adviser, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to
the Subadviser necessary to carry into effect such investment
program, including the placing of purchase and sale orders, and
making appropriate reports thereon to the Adviser and the Board.
B. Duties of the Adviser.
The Adviser 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 Subadviser to so
comply, the Adviser shall monitor the investment program
maintained by the Subadviser 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 Adviser shall oversee matters relating to Fund
promotion, including, but not limited to, marketing
materials and the Subadviser's reports to the Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadviser.
1. Organization. The Subadviser is now, and will continue to
------------
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 Subadviser is registered as an
------------
investment adviser with the Securities and Exchange Commission
(the "SEC") under the Advisers Act, and is registered or licensed
as an investment adviser 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 Subadviser. The Subadviser shall
maintain such registration or license in effect at all times
during the term of this Agreement.
3. Best Efforts. The Subadviser at all times shall provide
-------------
its best judgment and effort to the Adviser and the Fund in
carrying out its obligations hereunder.
4. Other Covenants. The Subadviser further agrees that:
---------------
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
Adviser and will make appropriate persons available
for the purpose of reviewing with representatives of
the Adviser 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 Adviser and to the Board such periodic and
special reports as the Adviser 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 Adviser 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 Adviser if the services of the
Portfolio Manager are no longer available to the
Subadviser;
h. it will, from time to time, assure that each
Portfolio Manager is acceptable to the Adviser;
i. it will obtain the written approval of the Adviser
prior to designating a new Portfolio Manager;
provided, however, that, if the services of a
Portfolio Manager are no longer available to the
Subadviser due to circumstances beyond the reasonable
control of the Subadviser (e.g., voluntary
resignation, death or disability), the Subadviser may
designate an interim Portfolio Manager who (a) shall
be reasonably acceptable to the Adviser and (b) shall
function for a reasonable period of time until the
Subadviser designates an acceptable permanent
replacement; and
j. it will promptly notify the Adviser 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 Subadviser's proprietary
valuation models.
B. Representations, Warranties and Covenants of the Adviser.
1. Organization. The Adviser is now, and will continue to be,
------------
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 Adviser is registered as an investment
------------
adviser with the SEC under the Advisers Act, and is registered or
licensed as an investment adviser under the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Adviser shall maintain such
registration or license in effect at all times during the term of
this Agreement.
3. Best Efforts. The Adviser at all times shall provide its
-------------
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 Subadviser
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 Adviser from
time to time.
The Adviser shall promptly notify the Subadviser 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 Subadviser.
V. Control by the Board.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
VI. Books and Records.
The Subadviser agrees that all records which it maintains for the Fund
on behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods
prescribed by applicable laws, rules and regulations all records required to
be maintained by the Subadviser on behalf of the Adviser under such
applicable laws, rules and regulations, or such longer period as the Adviser
may reasonably request from time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadviser, to the extent appropriate, in consultation with
the Adviser, shall place all orders for the purchase and sale of portfolio
securities for the Fund with brokers or dealers selected by the Subadviser,
which may include, to the extent permitted by the Adviser and the Fund,
brokers or dealers affiliated with the Subadviser. The Subadviser 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
Subadviser may, to the extent permitted by the Adviser 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 Subadviser
exercises investment discretion. The Subadviser 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 Subadviser 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 Subadviser has with
respect to accounts over which it exercises investment discretion. The
Adviser, Subadviser 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 Subadviser may enter into "soft dollar" arrangements through
the agency of third parties on behalf of the Adviser. Soft dollar
arrangements for services may be entered into in order to facilitate an
improvement in performance in respect of the Subadviser's service to the
Adviser with respect to the Fund. The Subadviser 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 Subadviser will secure best
execution for the Adviser. 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
Adviser and the Board may adopt from time to time. The Subadviser agrees to
provide reports to the Adviser as necessary for purposes of providing
information on these arrangements to the Board.
VIII. Compensation.
A. Amount of Compensation. The Adviser shall pay the Subadviser, as
----------------------
compensation for services rendered hereunder, from its own
assets, a fee, payable monthly, equal to 30% of the investment
advisory fee collected by the Adviser from the Fund during the
period.
B. Calculation of Compensation. Except as hereinafter set forth,
-----------------------------
compensation under this Agreement shall be calculated and accrued
on the same basis as the advisory fee paid to the Adviser by the
Fund (i.e., computed on the aggregate 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
-------------------------
paragraph, payment of the Subadviser's compensation for the
preceding month shall be made by the Adviser within 15 days after
the end of the preceding month.
D. Reorganization of the Fund. If the Fund is reorganized with
----------------------------
another investment company for which the Subadviser does not
serve as an investment adviser or subadviser, 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 Subadviser 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 Adviser or an affiliate
thereof, the Subadviser shall be responsible for payment of all costs and
expenses incurred by the Adviser 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 Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser 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 Subadviser may
serve as officers or trustees of the Adviser or of the Fund; that officers or
trustees of the Adviser may serve as officers or directors of the Subadviser
to the extent permitted by law; and that the officers and directors of the
Subadviser 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 Subadviser. 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 Subadviser, 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 Subadviser (provided that no
condition exists that permits, or, upon the consummation of the
assignment, will permit, the termination of this Agreement by the
Adviser pursuant to Section XIII. C. hereof), the Adviser and the
Subadviser, at the sole expense of the Subadviser, 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 Adviser. The Adviser may terminate this
-----------------------------
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 Subadviser, their respective partners,
subsidiaries, affiliates, directors, officers, employees or
agents engages in an action or omits to take an action that
would cause the Subadviser 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 Subadviser as an investment
adviser with the SEC; or
2. The Subadviser 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 Adviser to the Subadviser.
D. Transactions in Progress upon Termination. The Adviser and
---------------------------------------------
Subadviser 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 Adviser
in accordance with the terms of such transactions, and to this
end the Subadviser shall provide the Adviser with all necessary
information and documentation to secure the implementation
thereof.
XIV. Liability of the Subadviser.
In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadviser or any of its officers, directors or employees, the Subadviser
shall not be subject to liability to the Adviser 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 Adviser, to:
OppenheimerFunds, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
Executive Vice President and General Counsel
Telecopier: (000) 000-0000
B. If to the Subadviser, to:
OFI Institutional Asset Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Senior Vice 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 Adviser hereby acknowledges that it has received from the
Subadviser a copy of the Subadviser'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 Subadviser'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 28th day of May
2003.
OPPENHEIMERFUNDS, INC.
By:/s/Xxxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxx
Senior Vice President and General Counsel
OFI INSTITUTIONAL ASSET MANAGEMENT, INC.
By:/s/Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
Senior Vice President
