AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class M Shares of
Xxxxxxxxxxx Convertible Securities Fund, a Series
of Bond Fund Series
This Amended and Restated distribution and 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 (the "Trust"), and OppenheimerFunds Distributor, Inc. (the
"Distributor").
1. The Plan. This Plan is the Fund's written distribution and service
plan for Class M Shares of the Fund which, prior to March 11, 1996, were
designated as Class A Shares of the Fund, (the "Shares"). This Plan is
contemplated by 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 which the Fund will reimburse 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 1940 Act, (ii) the Rule,
(iii) 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 (iv) 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 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 director 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, 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 Services and Distribution Assistance
Fees (Asset-Based Sales Charge). Within forty-five (45) days of the end of
each calendar quarter, the Fund will make payments in an amount which shall
be the lesser of (1) 0.0625% (0.25% on an annual basis) of the average during
the period of the aggregate net asset value of the Shares computed as of the
close of each business day or (2) the Distributor's actual expenses under the
Plan for that quarter of the type approved by the Board (the "Service Fee"),
plus (ii) within ten (10) days of the end of each month, in an amount which
shall be the lesser of (1) 0.0417% (0.50% 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, or (2) the Distributor's actual expenses
under the Plan for that quarter of the type approved by the Board (the
"Asset-Based Sales Charge"). Such Service Fee payments received from the
Fund will compensate the Distributor for administrative support services with
respect to Accounts. The administrative support services in connection with
the Accounts to be rendered by Recipients 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.
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
period 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. 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, mor 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.
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, the Distributor shall make service fee
payments to that 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 other period, at a rate not to exceed 0.0625% (0.25%
on an annual basis) of the average during the period 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, 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, within forty-five (45) days
of the end of each calendar quarter or at such other interval as deemed
appropriate by the Distributor: (A) "Advance Service Fee Payments" at a rate
not to exceed 0.25% of the average during the calendar quarter or other
period 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 period and owned beneficially or of record
by the Recipient or by its Customers, plus (B) service fee payments at a rate
not t exceed 0.0625% (0.25% on an annual basis) of the average during the
period 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.
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 Fees (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 may make distribution assistance 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 other period, at a rate not to exceed 0.125% (0.50% on an annual basis) of
the average during the period 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.
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 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 direct the Distributor to increase or decrease the Minimum
Holding Period, any Minimum Holding Period or any 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 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 to which the Distributor
is, or may become, subject under the NASD Conduct Rules.
(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 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 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,
either may take appropriate steps to terminate the Recipient's status as such
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 those persons to be Trustees of the Trust who
are not "interested persons" of the Trust ("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 nominations 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 Trust
shall provide at least quarterly a written report to the Fund's Board for its
review, detailing the amount of all payments made pursuant to this Plan, the
identity of the Recipient of each such payment, 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 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 securities of the Class, on
not more than sixty days written notice to any other party to the agreement;
(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 of the
Independent Trustees and replaces the Fund's prior Amended and Restated
Distribution and Service Plan for Class M shares. Unless terminated as
hereinafter provided, it shall continue in effect from year to year from the
date first set forth above or as the Board may otherwise determine 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 without approval of the Class M Shareholders, in the
manner described above, 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 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 M voting securities.
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 of the Trust 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 Trust
disclaiming shareholder and Trustee liability for acts or obligations of the
Fund.
Xxxxxxxxxxx Convertible Securities Fund, a
Series of Bond Fund Series
/s/ Xxxxxx X. Xxxx
By:_________________________________
Xxxxxx X. Xxxx, Secretary
OppenheimerFunds Distributor, Inc.
/s/ Xxxxx X. Xxxx
By: _____________________________________
Xxxxx X. Xxxx, President
