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 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 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; 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)
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
Xxxxxx X. Xxxx
Vice President and Secretary
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chairman, President and Chief
Executive Officer
