Exhibit A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 5th day of June, 1995, by and between
OPPENHEIMER INTERNATIONAL BOND FUND (hereinafter referred to as the
"Fund"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter
referred to as "OMC").
WHEREAS, the Fund is a 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 OMC is an
investment adviser registered as such with the Commission under the
Investment Advisors Act of 1940;
WHEREAS, the Fund desires that OMC shall act as its investment
adviser pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, it is agreed by and between the
parties, as follows:
1. General Provision.
The Fund hereby employs OMC and OMC 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. OMC
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 OMC shall be available upon
reasonable notice for consultation with any of the Trustees and
officers of the Fund with respect to any matters dealing with the
business and affairs of the Fund including the valuation of
portfolio securities of the Fund which are either not registered
for public sale or not traded on any securities market.
2. Investment Management.
(a) OMC 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 for services under this Agreement other than as
provided by the terms of this Agreement and subject to the
provisions of paragraph 7 hereof, OMC 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
OMC 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, OMC 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 OMC or any
officer thereof from acting as investment adviser for any other
person, firm or corporation or in any way limit or restrict OMC 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 OMC of its duties and
obligations under this Agreement.
3. Other Duties of OMC.
OMC shall, at its own expense, provide and supervise the
activities of all administrative and clerical personnel as shall be
required to provide effective corporate administration for the
Fund, including the compilation and maintenance of such records
with respect to its operations as may reasonably be required; the
preparation and filing of such reports with respect thereto as
shall be required by the Commission; composition of periodic
reports with respect to operations of the Fund for its
shareholders; composition of proxy materials for meetings of the
Fund's shareholders; and the composition of such registration
statements as may be required by Federal and state securities laws
for continuous public sale of shares of the Fund. OMC shall, at
its own cost and expense, also provide the Fund with adequate
office space, facilities and equipment. OMC shall, at its own
expense, provide such officers for the Fund as the Board of
Trustees may request.
4. Allocation of Expenses.
All other costs and expenses of the Fund not expressly assumed
by OMC 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 affiliated with OMC; (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 OMC or any entity controlling, controlled by or under
common control with OMC who also serve as officers, trustees or
employees of the Fund shall not receive any compensation from the
Fund for their services.
5. Compensation of OMC.
The Fund agrees to pay OMC and OMC 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 shares of the Fund
as of the close of each business day and payable monthly at the
following annual rate:
.75% of the first $200 million of net assets;
.72% of the next $200 million;
.69% of the next $200 million;
.66% of the next $200 million;
.60% of the next $200 million; and
.50% of net assets in excess of $1 billion.
6. Use of Name "Oppenheimer."
OMC hereby grants to the Fund a royalty-free, non-exclusive
license to use the name "Oppenheimer" in the name of the Fund for
the duration of this Agreement and any extensions or renewals
thereof. To the extent necessary to protect OMC's rights to the
name "Oppenheimer" under applicable law, such license shall allow
OMC 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
OMC, in which event the Fund shall promptly take whatever action
may be necessary to change its name and discontinue any further use
of the name "Oppenheimer" in the name of the Fund or otherwise.
The name "Oppenheimer" may be used or licensed by OMC in connection
with any of its activities, or licensed by OMC to any other party.
7. Portfolio Transactions and Brokerage.
(a) OMC 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 OMC of
its investment management functions.
(b) OMC 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 OMC 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) OMC shall have discretion, in the interests of the Fund,
to allocate brokerage on the Fund's portfolio transactions to
broker-dealers, other than an affiliated broker-dealer, 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 OMC 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 OMC 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 OMC or its affiliates with respect to the
accounts as to which they exercise investment discretion. In
reaching such determination, OMC 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,
OMC 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) OMC shall have no duty or obligation to seek advance
competitive bidding for the most favorable commission rate
applicable to any particular portfolio transactions or to select
any broker-dealer on the basis of its purported or "posted"
commission rate but will, to the best of its ability, endeavor to
be aware of the current level of the charges of eligible
broker-dealers and to minimize the expense incurred by the Fund for
effecting its portfolio transactions to the extent consistent with
the interests and policies of the Fund as established by the
determinations of the Board of Trustees of the Fund and the
provisions of this paragraph 7.
(e) The Fund recognizes that an affiliated broker-dealer: (i)
may act as one of the Fund's regular brokers for the Fund so long
as it is lawful for it so to act; (ii) may be a major recipient of
brokerage commissions paid by the Fund; and (iii) may effect
portfolio transactions for the Fund only if the commissions, fees
or other remuneration received or to be received by it are
determined in accordance with procedures contemplated by any rule,
regulation or order adopted under the Investment Company Act for
determining the permissible level of such commissions.
(f) Subject to the foregoing provisions of this paragraph 7,
OMC may also consider sales of shares of the Fund and the other
funds advised by OMC and its affiliates as a factor in the
selection of broker-dealers for its portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth
above. Unless earlier terminated pursuant to paragraph 10 hereof,
this Agreement shall remain in effect until December 31, 1996, and
thereafter will continue 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 or Trustee Liability.
OMC understands and agrees that the obligations of the Fund
under this Agreement are not binding upon any shareholder or
Trustee of the Fund personally, but bind only the Fund and the
Fund's property; OMC represents that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming
shareholder or Trustee liability for acts or obligations of the
Fund.
10. Termination.
This Agreement may be terminated (i) by OMC at any time
without penalty upon sixty days' written notice to the Fund (which
notice may be waived by the Fund); or (ii) by the Fund at any time
without penalty upon sixty days' written notice to OMC (which
notice may be waived by OMC) 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 OMC
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 the Agreement shall be interpreted
and defined in a manner consistent with the provisions and
definitions contained in the Investment Company Act.
OPPENHEIMER INTERNATIONAL BOND FUND
Attest:
/s/ Mitchell J. Lindauer /s/ Robert G. Zack
Mitchell J. Lindauer Robert G. Zack
Assistant Secretary
OPPENHEIMER MANAGEMENT CORPORATION
Attest:
/s/ Katherine P. Feld /s/ Andrew J. Donohue
Katherine P. Feld Andrew J. Donohue
Executive Vice President