AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the 1st day of January, 2005,
by and between OPPENHEIMER MAIN STREET SMALL CAP 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 an investment adviser registered as such with the
Commission under the Investment Advisors Act of 1940;
WHEREAS, the Fund desires that OFI shall act as its investment adviser
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 Provisions.
(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 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
portfolio securities 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
and sale of securities and other investments for 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 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 assistance in the supervision 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 operation of the Fund 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) compensation and
expenses of its trustees other than those associated or 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 herein above provided, incident to the registration under federal
securities laws of shares of the Fund for public sale; (x) expenses of
printing and mailing reports and notices and proxy materials to shareholders
of the Fund; (xi) except as noted above, all other expenses incidental to
holding regular annual meetings of the Fund's shareholders; and (xii) such
extraordinary non-recurring expenses as may arise, including litigation,
affecting the Fund and any obligation 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 by 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 annual rates:
0.75% of the first $200 million of aggregate net assets;
0.72% of the next $200 million of aggregate net assets;
0.69% of the next $200 million of aggregate net assets;
0.66% of the next $200 million of aggregate net assets;
0.60% of aggregate net assets in excess of $800 million.
6. Use of Name "Xxxxxxxxxxx."
OFI hereby grants the Fund a royalty-free, nonexclusive 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 purchase and sale of the
Fund's portfolio securities, to employ or deal with such members of
securities 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 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 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 of 1940 for determining the
permissible level of such commissions.
8. Duration.
This Agreement will take effect on the date 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.
(a) 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 of the outstanding voting securities
of the Fund.
(b) 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.
10. Shareholder Liability.
OFI understands and agrees 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 Trustee and shareholder liability for acts or obligations of the
Fund.
11. 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 Main Street Small Cap Fund
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Vice President & Secretary
OppenheimerFunds, Inc.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chairman, President & Chief Executive
Officer
