AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of January, 2005, by and between XXXXXXXXXXX
PRINCIPAL PROTECTED TRUST II (the "Trust"), and OPPENHEIMERFUNDS, INC.
("OFI").
WHEREAS, the Trust is an open-end series 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;
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act") as an open-end management investment
company and may issue shares of common stock in separately designated series
representing separate funds with their own investment objectives, policies
and purposes; and
WHEREAS, the Trust desires that OFI shall act as its investment adviser with
respect to the Xxxxxxxxxxx Principal Protected Main Street Fund II(R)(the
"Fund") series 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 Trust hereby employs OFI and OFI hereby undertakes to act as the
investment adviser of the Fund and to perform for the Trust on behalf of the
Fund such other duties and functions as are hereinafter set forth. OFI shall,
in all matters, give to the Trust 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 Trust as
amended from time to time; (iv) policies and determinations of the Board of
Trustees of the Trust; (v) the fundamental policies and investment
restrictions of the Fund as reflected in the Trust'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 Trust
with respect to any matters dealing with the business and affairs of the
Trust including the valuation of the portfolio securities of the Fund 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 Trust'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 Trust 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
or 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 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. OFI shall, at its own expense,
provide such officers for the Trust as the Trust's Board 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 Trust, 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 legal obligation which the Trust 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 Trust shall not receive any compensation from the Trust for their
services.
5. Compensation of OFI and Expense Reimbursement by OFI.
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 each Fund of the Trust as of the close of each business
day and payable monthly at the annual rate for each Fund set forth on
Schedule A hereto. The Trust's obligation under this paragraph will become
effective following the close of the "Offering Period," as defined in the
Fund's prospectus.
OFI shall reimburse the Fund for the amount of normal operating
expenses (other than extraordinary expenses) paid by Xxxxxxxxxxx Xxxx Xxxxxx
Fund relating to the Fund's assets invested in Xxxxxxxxxxx Xxxx Xxxxxx Fund
during the payment period.
6. Use of Name "Xxxxxxxxxxx" and of the name "Main Street."
OFI hereby grants to the Trust a royalty-free, non-exclusive license to
use the name "Xxxxxxxxxxx" or the name "Main Street" in the name of the Trust
and 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" or the name "Main Street" under applicable law, such license
shall allow OFI to inspect, and subject to control by the Trust's Board,
control the name and quality of services offered by the Fund under either
such name. Such license 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 the name of the Fund and
discontinue any further use of the name "Xxxxxxxxxxx" or the name "Main
Street" in the name of the Trust or the Fund or otherwise. The name
"Xxxxxxxxxxx" or the name "Main Street" 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 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 Trust 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
Trust; 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 will
continue 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 Trust 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 Trust'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 Trust under this Agreement
are not binding upon any Trustee or shareholder of the Trust or Fund
personally, but bind only the Trust, but only with respect to the Fund's
property. OFI represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming trustee or shareholder
liability for acts or obligations of the Trust.
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 Principal Protected Trust II
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
Schedule A
To
Investment Advisory Agreement
Between
Xxxxxxxxxxx Principal Protected Trust II
and
OppenheimerFunds, Inc.
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Name of Series Annual Fee as a Percentage of
Daily Total Net Assets
============================== ==================================
============================== ==================================
Xxxxxxxxxxx Principal 0.50% per annum of average
Protected Main Street Fund II annual net assets of the Fund.
The investment advisory fee
shall be reduced to 0.40% per
annum of average annual net
assets of the Fund in any month
during the Warranty Period (as
defined in the Fund's
prospectus) following a month
where the Fund's average daily
investment in equity securities
(including shares of Xxxxxxxxxxx
Main Street Fund) is less than
10% of net assets.
_______________________________________
The investment advisory fee
shall be reduced to 0.25% of
average annual net assets of the
Fund if 100% of the Fund's
assets are irreversibly invested
in debt securities; and in that
case OFI will reduce its
management fee to the extent
necessary so that total annual
operating expenses of the Fund
(other than Extraordinary
Expenses and other expenses such
as litigation costs) are limited
to 1.30% for Class A shares,
2.05% for Class B shares and
2.05% for Class C shares (except
that the advisory fee shall not
be reduced below zero and shall
not require OFI to subsidize
expenses in excess of the amount
that its fee would have
otherwise been).
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