AMENDED AND RESTATED
Distribution and Service Plan and Agreement
with
OppenheimerFunds Distributor, Inc.
For Class C Shares of
Xxxxxxxxxxx Balanced Fund
This Amended and Restated Distribution and Service Plan and Agreement
(the "Plan") is dated as of the 18th day of February, 2004, by and between
Xxxxxxxxxxx Balanced Fund (the "Fund") and OppenheimerFunds Distributor, Inc.
(the "Distributor"). This Amended and Restated Distribution and Service Plan
and Agreement replaces the Distribution and Service Plan and Agreement for
Class C shares dated February 12, 1998.
1. The Plan. This Plan is the Fund's written distribution and service plan
for Class C shares of the Fund (the "Shares"), designed to comply with the
provisions of Rule 12b-1 as it may be amended from time to time (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"). Pursuant to this
Plan the Fund will compensate the Distributor for its services in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The terms and provisions of this Plan
shall be interpreted and defined in a manner consistent with the provisions
and definitions contained in (i) the Fund's Xxxxxxxxxxxx Xxxxxxxxx, (xx) xxx
0000 Xxx, (xxx) the Rule, (iv) Rule 2830 of the Conduct Rules of the National
Association of Securities Dealers, Inc., or any applicable amendment or
successor to such rule (the "NASD Conduct Rules") and (v) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution to which the Fund is subject under any order on which the Fund
relies, issued at any time by the U.S. Securities and Exchange Commission
("SEC").
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with
such information as the Distributor shall reasonably request to answer such
questions as may arise concerning the sale of Shares; and (iii) has been
selected by the Distributor to receive payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board
of Trustees who are not "interested persons" (as defined in the 0000 Xxx) of
the Fund and who have no direct or indirect financial interest in the
operation of this Plan or in any agreement relating to this Plan.
(c) "Customers" shall mean such brokerage or other customers or
investment advisory or other clients of a Recipient, and/or accounts as to
which such Recipient provides administrative support services or is a
custodian or other fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
Recipient's Customers, but in no event shall any such Shares be deemed owned
by more than one Recipient for purposes of this Plan. In the event that more
than one person or entity would otherwise qualify as Recipients as to the
same Shares with respect to the payment of the Asset-Based Sales Charge
and/or Service Fee (defined below), the Recipient which is the dealer of
record on the Fund's books as determined by the Distributor shall be deemed
the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) Payments to the Distributor. In consideration of the payments made
by the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution services to the Fund. Such
services include distribution assistance and administrative support services
rendered in connection with Shares (1) sold in purchase transactions, (2)
issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant
to a plan of reorganization to which the Fund is a party. If the Board
believes that the Distributor may not be rendering appropriate distribution
assistance or administrative support services in connection with the sale of
Shares, then the Distributor, at the request of the Board, shall provide the
Board with a written report or other information to verify that the
Distributor is providing appropriate services in this regard. For such
services, the Fund will make the following payments to the Distributor:
(i) Administrative Support Service Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of up to 0.25% on an annual basis of the average during that
calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee
payments received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render
as described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). The
Fund may make payments of an "Asset-Based Sales Charge" of up to 0.0625% per
month (0.75% on an annual basis) of the average during the month of the
aggregate net asset value of Shares computed as of the close of each business
day. Such Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor for providing distribution assistance in
connection with the sale of Shares.
The distribution assistance services to be rendered by the
Distributor in connection with the Shares may include, but shall not be
limited to, the following: (i) paying sales commissions to any broker,
dealer, bank or other person or entity that sells Shares, and/or paying such
persons "Advance Service Fee Payments" (as defined below) in advance of,
and/or in amounts greater than, the amount provided for in Section 3(b) of
this Agreement; (ii) paying compensation to and expenses of personnel of the
Distributor who support distribution of Shares by Recipients; (iii) obtaining
financing or providing such financing from its own resources, or from an
affiliate, for the interest and other borrowing costs of the Distributor's
unreimbursed expenses incurred in rendering distribution assistance and
administrative support services to the Fund; and (iv) paying other direct
distribution costs, including without limitation the costs of sales
literature, advertising and prospectuses (other than those prospectuses
furnished to current holders of the Fund's shares ("Shareholders")) and state
"blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the
Plan to pay Recipients (1) distribution assistance fees for rendering
distribution assistance in connection with the sale of Shares and/or (2)
service fees for rendering administrative support services with respect to
Accounts. However, no such payments shall be made to any Recipient for any
quarter in which its Qualified Holdings do not equal or exceed, at the end of
such quarter, the minimum amount ("Minimum Qualified Holdings"), if any, that
may be set from time to time by a majority of the Independent Trustees. All
fee payments made by the Distributor hereunder are subject to reduction or
chargeback so that the aggregate service fee payments and Advance Service Fee
Payments do not exceed the limits on payments to Recipients that are, or may
be, imposed by the NASD Conduct Rules. The Distributor may make Plan payments
to any "affiliated person" (as defined in the 0000 Xxx) of the Distributor if
such affiliated person qualifies as a Recipient or retain such payments if
the Distributor qualifies as a Recipient.
In consideration of the services provided by Recipients, the
Distributor shall make the following payments to Recipients:
(i) Service Fee. In consideration of administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed 0.25% on an annual basis of the average during the calendar quarter of
the aggregate net asset value of Shares, computed as of the close of each
business day, constituting Qualified Holdings owned beneficially or of record
by the Recipient or by its Customers for a period of more than the minimum
period (the "Minimum Holding Period"), if any, that may be set from time to
time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (A) "Advance Service Fee
Payments" at a rate not to exceed 0.25% of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close
of business on the day such Shares are sold, constituting Qualified Holdings,
sold by the Recipient during that quarter and owned beneficially or of record
by the Recipient or by its Customers, plus (B) service fee payments at a rate
not to exceed 0.25% on an annual basis of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close
of each business day, constituting Qualified Holdings owned beneficially or
of record by the Recipient or by its Customers for a period of more than one
(1) year. At the Distributor's sole option, Advance Service Fee Payments may
be made more often than quarterly, and sooner than the end of the calendar
quarter. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated to and will repay the
Distributor on demand a pro rata portion of such Advance Service Fee
Payments, based on the ratio of the time such Shares were held to one (1)
year.
The administrative support services to be rendered by Recipients
in connection with the Accounts may include, but shall not be limited to, the
following: answering routine inquiries concerning the Fund, assisting in the
establishment and maintenance of accounts or sub-accounts in the Fund and
processing Share redemption transactions, making the Fund's investment plans
and dividend payment options available, and providing such other information
and services in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably
request.
(ii) Distribution Assistance Fee (Asset-Based Sales Charge)
Payments. Irrespective of whichever alternative method of making service fee
payments to Recipients is selected by the Distributor, in addition the
Distributor shall make distribution assistance fee payments to each Recipient
quarterly, within forty-five (45) days after the end of each calendar
quarter, at a rate not to exceed 0.1875% (0.75% on an annual basis) of the
average during the calendar quarter of the aggregate net asset value of
Shares computed as of the close of each business day constituting Qualified
Holdings owned beneficially or of record by the Recipient or its Customers
for a period of more than one (1) year. Alternatively, at its sole option,
the Distributor may make distribution assistance fee payments to a Recipient
quarterly, at the rate described above, on Shares constituting Qualified
Holdings owned beneficially or of record by the Recipient or its Customers
without regard to the 1-year holding period described above. Distribution
assistance fee payments shall be made only to Recipients that are registered
with the SEC as a broker-dealer or are exempt from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to,
the following: distributing sales literature and prospectuses other than
those furnished to current Shareholders, providing compensation to and paying
expenses of personnel of the Recipient who support the distribution of Shares
by the Recipient, and providing such other information and services in
connection with the distribution of Shares as the Distributor or the Fund may
reasonably request.
(c) A majority of the Independent Trustees may at any time or from time
to time (i) increase or decrease the rate of fees to be paid to the
Distributor or to any Recipient, but not to exceed the maximum rates set
forth above, and/or (ii) direct the Distributor to increase or decrease any
Minimum Holding Period, any maximum period set by a majority of the
Independent Trustees during which fees will be paid on Shares constituting
Qualified Holdings owned beneficially or of record by a Recipient or by its
Customers (the "Maximum Holding Period"), or Minimum Qualified Holdings. The
Distributor shall notify all Recipients of any Minimum Qualified Holdings,
Maximum Holding Period and Minimum Holding Period that are established and
the rate of payments hereunder applicable to Recipients, and shall provide
each Recipient with written notice within thirty (30) days after any change
in these provisions. Inclusion of such provisions or a change in such
provisions in a supplement or amendment to or revision of the prospectus or
Statement of Additional Information of the Fund shall constitute sufficient
notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are
subject to reduction or elimination under the limits that apply to such fees
under the NASD Conduct Rules relating to sales of shares of open-end funds.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include
profits derived from the advisory fee it receives from the Fund), or (ii) by
the Distributor (a subsidiary of OFI), from its own resources, from
Asset-Based Sales Charge payments or from the proceeds of its borrowings, in
either case, in the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it
has Qualified Holdings of Shares that entitle it to payments under the Plan.
If either the Distributor or the Board believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering appropriate
distribution assistance in connection with the sale of Shares or
administrative support services for Accounts, then the Distributor, at the
request of the Board, shall require the Recipient to provide a written report
or other information to verify that said Recipient is providing appropriate
distribution assistance and/or services in this regard. If the Distributor or
the Board of Trustees still is not satisfied after the receipt of such
report, either may take appropriate steps to terminate the Recipient's status
as a Recipient under the Plan, whereupon such Recipient's rights as a
third-party beneficiary hereunder shall terminate. Additionally, in their
discretion a majority of the Fund's Independent Trustees at any time may
remove any broker, dealer, bank or other person or entity as a Recipient,
whereupon such person's or entity's rights as a third-party beneficiary
hereof shall terminate. Notwithstanding any other provision of this Plan,
this Plan does not obligate or in any way make the Fund liable to make any
payment whatsoever to any person or entity other than directly to the
Distributor. The Distributor has no obligation to pay any Service Fees or
Distribution Assistance Fees to any Recipient if the Distributor has not
received payment of Service Fees or Distribution Assistance Fees from the
Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be
committed to the discretion of the incumbent Disinterested Trustees. Nothing
herein shall prevent the incumbent Disinterested Trustees from soliciting the
views or the involvement of others in such selection or nomination as long as
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the
aggregate amount of all payments made under this Plan and the purpose for
which the payments were made. The reports shall be provided quarterly, and
shall state whether all provisions of Section 3 of this Plan have been
complied with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as defined
in the 0000 Xxx) of the Fund's outstanding voting Class C shares; (ii) such
termination shall be on not more than sixty days' written notice to any other
party to the agreement; (iii) such agreement shall automatically terminate in
the event of its "assignment" (as defined in the 1940 Act); (iv) such
agreement shall go into effect when approved by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose of
voting on such agreement; and (v) such agreement shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the
purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Amended
and Restated Plan has been approved by a vote of the Board and its
Independent Trustees and replaces the Fund's prior Distribution and Service
Plan and Agreement for Class C shares. Unless terminated as hereinafter
provided, it shall continue in effect until renewed by the Board in
accordance with the Rule and thereafter from year to year or as the Board may
otherwise determine but only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on such
continuance.
This Plan may not be amended to increase materially the amount of
payments to be made under this Plan, without approval of the Class C
Shareholders at a meeting called for that purpose and all material amendments
must be approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by a vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 0000 Xxx) of the Fund's outstanding Class C voting shares. In
the event of such termination, the Board and its Independent Trustees shall
determine whether the Distributor shall be entitled to payment from the Fund
of all or a portion of the Service Fee and/or the Asset-Based Sales Charge in
respect of Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not binding
upon any Trustee or shareholder of the Fund personally, but bind only the
Fund and the Fund's property. The Distributor 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.
Xxxxxxxxxxx Balanced Fund
By: /s/ Xxxx X. Xxx
---------------
Xxxx X. Xxx, Assistant Secretary
OppenheimerFunds Distributor, Inc.
By: /s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx, President
