AMENDED AND RESTATED
SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class A Shares of
Xxxxxxxxxxx Convertible Securities Fund, a series of
Bond Fund Series
This Amended and Restated SERVICE PLAN AND AGREEMENT (the "Plan") is dated as
of the 6th day of October, 2005, by and between Xxxxxxxxxxx Convertible
Securities Fund (the "Fund"), a series of Bond Fund Series and
OppenheimerFunds Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class A
Shares described in the Fund's registration statement as of the date this
Plan takes effect, contemplated by and to comply with Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers, Inc.,
pursuant to which the Fund will reimburse the Distributor for a portion of
its costs incurred in connection with the personal service and maintenance of
shareholder accounts ("Accounts") that hold Class A Shares (the "Shares") of
the Fund. The Fund may be deemed to be acting as distributor of securities
of which it is the issuer, pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act"), according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering services and for the maintenance of
Accounts. Such Recipients are intended to have certain rights as third-party
beneficiaries under this Plan.
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
institution which: (i) has rendered services in connection with the
personal service and maintenance of Accounts; (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 such service; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Fund's Board of Trustees (the "Board") who
are not "interested persons" (as defined in the 0000 Xxx) and who have
no direct or indirect financial interest in the operation of this Plan
or in any agreements relating to this Plan (the "Independent Trustees")
may remove any broker, dealer, bank or other institution as a
Recipient, whereupon such entity's rights as a third-party beneficiary
hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
brokerage or other customers, or investment advisory or other clients
of such Recipient and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "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 two entities would otherwise qualify as Recipients as to the same
Shares, the Recipient which is the dealer of record on the Fund's books
shall be deemed the Recipient as to such Shares for purposes of this
Plan.
3. Payments.
(a) Under the Plan, the Fund will make payments to the Distributor,
within forty-five (45) days of the end of each calendar quarter or at such
other interval as deemed appropriate by the Distributor, in the amount of the
lesser of: (i) 0.25% on an annual basis of the average during the calendar
quarter of the aggregate net asset value of the Shares, computed as of the
close of each business day, or (ii) the Distributor's actual expenses under
the Plan for that quarter of the type approved by the Board. Notwithstanding
the foregoing, the Fund will not make payments to the Distributor in excess
of the amount the Distributor pays to Recipients. The Distributor will use
such fee received from the Fund in its entirety to reimburse itself for
payments to Recipients and for its other expenditures and costs of the type
approved by the Board incurred in connection with the personal service and
maintenance of Accounts including, but not limited to, the services described
in the following paragraph. 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.
The services to be rendered by the Distributor and Recipients in
connection with the personal service and the maintenance of Accounts may
include, but shall not be limited to, the following: answering routine
inquiries from the Recipient's customers concerning the Fund, providing such
customers with information on their investment in Shares, assisting in the
establishment and maintenance of accounts or sub-accounts in the Fund, making
the Fund's investment plans and dividend payment options available, and
providing such other information and customer liaison services and the
maintenance of Accounts as the Distributor or the Fund may reasonably
request. It may be presumed that a Recipient has provided services
qualifying for compensation under the Plan if it has Qualified Holdings of
Shares to entitle it to payments under the Plan. In the event that either
the Distributor or the Board should have reason to believe that,
notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate services, 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 services
in this regard. If the Distributor still is not satisfied, it may take
appropriate steps to terminate the Recipient's status as such under the Plan,
whereupon such entity's rights as a third-party beneficiary hereunder shall
terminate.
Payments received by the Distributor from the Fund under the Plan will
not be used to pay any interest expense, carrying charges or other financial
costs, or allocation of overhead by the Distributor, or for any other purpose
other than for the payments described in this Section 3. The amount payable
to the Distributor each quarter or other period will be reduced to the extent
that reimbursement payments otherwise permissible under the Plan have not
been authorized by the Board for that period. Any unreimbursed expenses
incurred for any quarter by the Distributor may not be recovered in later
periods.
(b) The Distributor shall make payments to any Recipient quarterly or at
such other interval as deemed appropriate by the Distributor, within
forty-five (45) days of the end of each calendar quarter or such other
period, 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 the Shares
computed as of the close of each business day, of Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers. However, no
such payments shall be made to any Recipient for any such quarter in which
its Qualified Holdings do not equal or exceed, at the end of such period, the
minimum amount ("Minimum Qualified Holdings"), if any, to 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 or at such other
interval as deemed appropriate by the Distributor, within forty-five (45)
days of the end of each calendar quarter or such other period: (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.
A majority of the Independent Trustees may at any time or from time to
time increase or decrease and thereafter adjust the rate of fees to be paid
to the Distributor or to any Recipient, but not to exceed the rate set forth
above, and/or increase or decrease the number of shares constituting Minimum
Qualified Holdings. The Distributor shall notify all Recipients of the
Minimum Qualified Holdings 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 revised current prospectus
shall constitute sufficient notice.
(c) Under the Plan, payments may 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.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection or replacement of Independent Trustees and the nomination of those
persons to be Trustees of the Fund who are not "interested persons" of the
Fund shall be committed to the discretion of the Independent Trustees.
Nothing herein shall prevent the Independent Trustees from soliciting the
views or the involvement of others in such selection or nomination if the
final decision on any such selection and nomination is approved by a majority
of the incumbent Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide at least quarterly a written report to the Fund's Board for its
review, detailing the amount of aggregate payments made pursuant to this Plan
and the purposes for which the payments were made. The report shall state
whether all provisions of Section 3 of this Plan have been complied with.
The Distributor shall annually certify to the Board the amount of its total
expenses incurred that year with respect to the personal service and
maintenance of Accounts in conjunction with the Board's annual review of the
continuation of the Plan.
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 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 securities of the Class, on
not more than sixty days written notice to any other party to the agreement;
(ii) such agreement shall automatically terminate in the event of its
"assignment" (as defined in the 1940 Act); (iii) it 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
(iv) it 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 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 Plan has
been approved by a vote of the Independent Trustees cast in person at a
meeting called on October 6, 2005 for the purpose of voting on this Plan.
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 thereafter or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by the Board and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. This Plan may be terminated at any
time by 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 voting securities of Class A. This Plan may not be amended to
increase materially the amount of payments to be made without approval of the
Class A Shareholders, in the manner described above, and all material
amendments must be approved by a vote of the Board and of the Independent
Trustees.
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
shareholder and Trustee liability for acts or obligations of the Fund.
Xxxxxxxxxxx Convertible Securities Fund,
a series of
Bond Fund Series
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx, Secretary
OppenheimerFunds Distributor, Inc.
By: /s/ Xxxxx Xxxx
Xxxxx Xxxx, President
