AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
This AMENDED AND RESTATED AGREEMENT is made as of the 1st day of
January, 2005, by and between XXXXXXXXXXX STRATEGIC INCOME FUND (hereinafter
referred to as the "Fund"), and OPPENHEIMERFUNDS, INC. (hereinafter referred to
as "OFI").
WHEREAS, the Fund, an 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"), desires that OFI, a registered investment adviser; and
WHEREAS, the Fund desires that OFI shall act as its investment adviser
pursuant to this Amended and Restated Agreement, which amends and restates the
October 22, 1990 agreement 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.
(a) 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 the Fund's 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 the Fund'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 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
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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 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 and state 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 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, 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 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 therefore 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 (on
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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 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 annual rate of .075% of the first $200 million of average annual net
assets; 0.72% of the next $200 million; 0.69% of the next $200 million; 0.66% of
the next $200 million; 0.60% of the next $200 million; and 0.50% of average
annual 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 OFI 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.
Such license 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 their respective names 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 TRANSACTIONS 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
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;
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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 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 28(e)(3) of the Securities Exchange Act of 1934) for the
Fund and/or other accounts for which OFI exercises "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 OFI's overall responsibilities with respect to the
accounts as to which it exercises 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 the Board of
Trustees and the provisions of this paragraph "7."
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 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. TERMINATION.
This Agreement may be terminated: (i) by OFI 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 OFI (which notice may be waived by OFI)
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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).
10. 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."
11. DISCLAIMER OF SHAREHOLDER LIABILITY.
OFI understands 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.
12. DEFINITIONS.
The terms and provisions of the Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
XXXXXXXXXXX STRATEGIC INCOME FUND
By: /s/Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Vice President and Secretary
OPPENHEIMERFUNDS, INC.
By: /s/Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman, President and Chief Executive
Officer
