AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of January, 2005, by and between XXXXXXXXXXX
TOTAL RETURN BOND FUND (the "Fund"), and OPPENHEIMERFUNDS, INC. ("OFI").
WHEREAS, the Fund is 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"), and
OFI is a registered investment adviser;
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 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
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 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 any of the Fund's portfolio
securities 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 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 the 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 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.
4. Allocation of Expenses.
All other costs and expenses not expressly assumed by OFI under this
Agreement, or to be paid by the General 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) 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 obligation which the Fund 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 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 management fee computed on the aggregate net assets of the
Fund as of the close of each business day and payable monthly at the following
rates: 0.50% of the first $250 million of average annual net assets of the Fund;
0.475% of the next $500 million; and 0.45% of average annual net assets in excess
of $750 million.
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. 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 its name and discontinue any further use
of the name "Xxxxxxxxxxx" in the name of the Fund 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.
(a) OFI 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 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 and 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 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 the overall responsibilities of OFI and its investment advisory
affiliates with respect to the accounts as to which they exercise 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 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 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 Fund 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 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.
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 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. 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 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 this Agreement shall be interpreted and defined
in a manner consistent with the provisions and definitions of the Investment
Company Act.
XXXXXXXXXXX TOTAL RETURN BOND FUND
By: /s/Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Secretary
OPPENHEIMERFUNDS, INC.
By: /s/Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman, President and Chief Executive Officer
