AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the 1st day of January, 2005, by and between BOND FUND
SERIES, formerly known as ROCHESTER FUND SERIES, (hereinafter referred to as
the "Trust"), and OPPENHEIMERFUNDS, INC., formerly known as XXXXXXXXXXX
MANAGEMENT CORPORATION (hereinafter referred to as "OFI").
WHEREAS, the Fund is an open-end, non-diversified management investment
company registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and OFI is an investment adviser registered as such with the
Commission under the Investment Advisers Act of 1940;
WHEREAS, XXXXXXXXXXX CONVERTIBLE SECURITIES FUND (the "Fund") is one
portfolio of the Trust; and
WHEREAS, the Fund has Shares of beneficial interest to be issued by the
Fund ("Shares") pursuant to the Fund's registration statement;
WHEREAS, the Fund desires that OFI shall act as its investment adviser
pursuant to this Agreement, which amends and restates the Investment Advisory
Agreement dated January 4, 1996 by and between the Trust 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 Provisions:
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The Trust hereby employs OFI and OFI hereby undertakes to act as
the investment adviser of the Fund in connection with, and for the benefit
of, the Fund and to perform for the Fund such other duties and functions in
connection with the Fund for the period and on such terms as set forth in
this Agreement. OFI shall, in all matters, give to the Trust and its Board
of Trustees (the "Trustees") the benefit of its best judgment, effort, advice
and recommendations and shall, at all times conform to, and use its best
efforts to enable the Fund to conform to (i) the provisions of the Investment
Fund 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 Trustees; (v) the fundamental policies and
investment restrictions of the Fund as reflected in the registration
statement of the Trust under the Investment Company Act or as such policies
may, from time to time, be amended and (vi) the Prospectus and Statement of
Additional Information of the 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 portfolio securities of the Fund which are
either not registered for public sale or not traded on any securities market.
2. Investment Management:
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(a) OFI shall, subject to the direction and control by the
Trustees, (i) regularly provide investment advise and recommendations to the
Fund with respect to the investments, investment policies and the purchase
and sale of securities and other investments for the Fund; (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 for services under this Agreement other than as provided by the
terms of the Agreement and subject to the provisions of paragraph 7 hereof,
OFI may obtain investment information, research or assistance from any other
person, firm or corporation to supplement, update or otherwise improve its
investment management services including entering into sub-advisory
agreements with other affiliated or unaffiliated registered investment
advisors to obtain specialized services.
(c) Provided that nothing herein shall be deemed to protect OFI
from willful misfeasance, bad faith or gross negligence in the performance of
its duties, or reckless disregard of its obligations and duties under this
Agreement, OFI shall not be liable for any loss sustained by reason of good
faith errors or omissions in connection with any matters to which this
Agreement relates.
(d) Nothing in this Agreement shall prevent OFI or any entity
controlling, controlled by or under common control with OFI or any officer
thereof from acting as investment adviser for any other person, firm or
corporation or in any way limit or restrict OFI or any of its directors,
officers, stockholders or employees from buying, selling or trading any
securities or other investments for its or their own account or for the
account of others for whom it or they may be acting, provided that such
activities will not adversely affect or otherwise impair the performance by
OFI of its duties and obligations under this Agreement.
3. Other Duties of OFI:
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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
and state securities laws for continuous public sale of Shares of the Fund.
OFI shall, at its own cost and expense, also provide the Trust with adequate
office space, facilities and equipment. OFI shall, at its own expenses,
provide such officers for the Trust as the Board of Trustees 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, taxes and governmental fees; (ii) brokerage commissions and other
expenses incurred in acquiring or disposing of the portfolio securities and
other investments of the Fund; (iii) insurance premiums for fidelity and
other coverage requisite to its operations; (iv) compensation and expenses of
its Trustees other than those affiliated with OFI; (v) legal and audit
expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its Shares; (viii) expenses incident to the
issuance of its Shares against payment therefor by or on behalf of the
subscribers thereto; (ix) fees and expenses, other than as hereinabove
provided, incident to the registration under Federal and state securities
laws of Shares of the 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 to indemnify its officers and Trustees
with respect thereto. Any officers or employees of OFI (or any entity
controlling, controlled by, or under common control with OFI) who also serve
as officers, Trustees or employees of the Fund shall not receive any
compensation from the Fund thereof for their services.
5. Compensation of OFI:
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The Trust agrees to pay OFI and OFI agrees to accept as full
compensation for the performance of all functions and duties on its part to
be performed pursuant to the provisions hereof, a fee computed on the total
net asset value of the Fund as of the close of each business day and payable
monthly at the annual rate for each Series 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 or 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 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 Trust shall promptly take
whatever action may be necessary to change its name and discontinue any
further use of the name "Xxxxxxxxxxx" in the name of the Trust or otherwise.
The name "Xxxxxxxxxxx" may be used or licensed by OFI in connection with any
of its activities, or licensed by OFI to any other party.
7. Portfolio Transactions and Brokerage:
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(a) OFI (and any Sub Advisor) is authorized, in arranging the
purchase and sale of the portfolio securities and other investments of the
Fund to employ or deal with such members of securities or commodities
exchanges, brokers or dealers (hereinafter "broker-dealers"), including
"affiliated" broker-dealers (as that term is defined in the Investment
Company Act), as may, in its best judgment, implement the policy of the Fund
to obtain, at reasonable expense, the "best execution" (prompt and reliable
execution at the most favorable security price obtainable) of the portfolio
transactions of the Fund as well as to obtain, consistent with the provisions
of subparagraph (c) of this paragraph 7, the benefit of such investment
information or research as will be of significant assistance to the
performance by OFI (and any Sub Advisor) of its (their) investment management
functions.
(b) OFI (and any Sub Advisor) shall select broker-dealers to
effect the portfolio transactions of the Fund on the basis of its estimate of
their ability to obtain best execution of particular and related portfolio
transactions. The abilities of a broker-dealer to obtain best execution of
particular portfolio transaction(s) will be judged by OFI (or any Sub
Advisor) on the basis of all relevant factors and considerations including,
insofar as feasible, the execution capabilities required by the transaction
or transactions; the ability and willingness of the broker-dealer to
facilitate the portfolio transactions of the Fund 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 or other investments might be purchased or
sold; as well as any other matters relevant to the selection of a
broker-dealer for particular and related transactions of the Fund.
(c) OFI (and any Sub Advisor) shall have discretion, in the
interests of the Fund, to allocate brokerage on the portfolio transactions of
the Fund 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
OFI or its affiliates (or any Sub Advisor) exercise "investment discretion"
(as that term is defined in Section 3(a)(35) of the Securities Exchange Act
of 1934) and to cause the 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 or its affiliates (or any
Sub Advisor) with respect to accounts as to which they exercise investment
discretion. In reaching such determination, OFI (or any Sub Advisor) will
not be required to place or attempt to place a specific dollar value on the
brokerage and/or research services provided or being provided by such
broker-dealer. In demonstrating that such determinations were made in good
faith, OFI (and any Sub Advisor) shall be prepared to show that all
commissions were allocated for purposes contemplated by this Agreement and
that the total commissions paid by the 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 the Board of Trustees of the Trust 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 renumeration received or to
be received by it are determined in accordance with procedures contemplated
by any rule, regulation or order adopted under the Investment Company Act to
be within the permissible level of such commissions.
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 Trust'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 Fund 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 Fund 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:
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OFI 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 Trust and the Trust's property; OFI represents
that it has notice of the provisions of the Declaration of Trust of the Trust
disclaiming shareholder or Trustee liability for acts or obligations of the
Trust.
10. Termination.
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This Agreement may be terminated (i) by OFI at any time without
penalty upon sixty days' written notice to the Trust (which notice may be
waived by the Trust); or (ii) by the Trust 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 Trust shall be directed or approved by
the vote of a majority of all of the Trustees of the Trust then in office or
by the vote of the holders of a "majority" of the outstanding voting
securities of the Trust (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 the Agreement shall be interpreted
and defined in a manner consistent with the provisions and definitions
contained in the Investment Company Act.
13. Accounting, Administration and Recordkeeping Agreement:
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Notwithstanding any provision of this Agreement to the contrary,
OFI is not required under this Agreement to perform for the Fund any duties
or functions set forth in the Accounting, Administration and Recordkeeping
Agreement between the Fund and OFI.
BOND FUND SERIES
on behalf of
XXXXXXXXXXX CONVERTIBLE SECURITIES FUND
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------------
Xxxxxx X. Xxxx
Secretary
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------------------
Xxxx X. Xxxxxx
Chairman, President and Chief
Executive Officer
Schedule A
to
Investment Advisory Agreement
between
Bond Fund Series
on behalf of
Xxxxxxxxxxx Convertible Securities Fund
and
OppenheimerFunds, Inc.
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Annual Fee as a Percentage of Daily Total Net Assets
=======================================================
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0.625% of the first $50 million of average daily net
assets
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0.500% of the next $250 million of average daily net
assets
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0.4375% of average daily net assets over $300 million
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