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 FUNDS, INC. (hereinafter referred to as
the "Corporation"), and OPPENHEIMERFUNDS, INC. (hereinafter referred to as
"OFI").
WHEREAS, the Corporation is an open-end, non-diversified series
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;
and
WHEREAS, XXXXXXXXXXX MAIN STREET FUND (the "Fund") is a series of the
Corporation having a separate portfolio, investment policies and investment
restrictions;
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.
The Corporation 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 Corporation's Board of Directors 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
Articles of Incorporation and By-Laws of the Corporation as amended from time to
time; (iv) policies and determinations of the Board of Directors of the
Corporation; (v) the fundamental policies and investment restrictions of the
Fund as reflected in the Corporation'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 Corporation 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 Directors and officers of the Corporation with
respect to any matters dealing with the business and affairs of the Corporation
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
Corporation's Board of Directors, (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.
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(b) Provided that the Corporation 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
Corporation as the Corporation'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 General Distributor of the shares of
the Fund, shall be paid by the Corporation, 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 directors 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
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 Corporation may have (on behalf of the Fund) to indemnify its officers
and directors with respect
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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, directors
or employees of the Corporation shall not receive any compensation from the
Corporation for their services. The expenses with respect to any two or more
series of the Corporation shall be allocated in proportion to the net assets of
the respective series except where allocations of direct expenses can be made.
5. COMPENSATION OF OFI.
The Corporation agrees to pay OFI on behalf of the Fund 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 0.65% of the first $200 million of net
assets, 0.60% of the next $150 million, 0.55% of the next $150 million and 0.45%
of net assets in excess of $500 million.
6. USE OF NAME "MAIN STREET."
OFI hereby grants to the Corporation a royalty-free, non-exclusive
license to use the name "Main Street" in the name of the Corporation 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 "Main Street" under
applicable law, such license shall allow OFI to inspect and, subject to control
by the Corporation's Board, control the nature and quality of services offered
by the Corporation under such name. Such license may, upon termination of this
Agreement, be terminated by OFI, in which event the Corporation 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 "Main Street" in the name of
the Corporation or the Fund or otherwise. The name "Main Street" 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 or
commodities 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
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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 an affiliated broker-dealer, 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 or 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 Corporation 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 or its 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
purposes contemplated by this Agreement and that the total commissions paid by
the Corporation over a representative period selected by the Corporation's
directors 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
Directors of the Corporation and the provisions of this paragraph 7.
(e) The Corporation 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
Corporation; 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
remain in effect until two years from the date of execution hereof, and
thereafter will continue in effect from year to year, so long as such
continuance shall be approved at least annually by the Corporation's Board of
Directors, including the vote of the majority of the Directors of the
Corporation who are not parties to this Agreement or "interested persons" (as
defined in the Investment Company Act) of any such
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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 Corporation's Board of Directors.
9. TERMINATION.
This Agreement may be terminated: (i) by OFI at any time without
penalty upon sixty days' written notice to the Corporation (which notice may be
waived by the Corporation); or (ii) by the Corporation 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 Corporation shall be directed or
approved by the vote of a majority of all of the directors of the Corporation
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," as defined in the
Investment Company Act.
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 FUNDS, INC.
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 & Chief Executive Officer
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