DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class N Shares of
Xxxxxxxxxxx Transition 2025 Fund
This Distribution and Service Plan and Agreement (the "Plan") is dated as of
the 14th day of February, 2008, by and between Xxxxxxxxxxx Transition 2025 Fund
(the "Fund"), and OppenheimerFunds Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan
for Class N 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 which
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 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 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, 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 may make payments in the
aggregate amount of up to 0.0625% (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).
Within ten (10) days of the end of each month, the Fund will make payments in
the aggregate amount of up to 0.02083% (0.25% 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 (the "Asset-Based Sales Charge"). 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 may 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 may
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 0.0625%
(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 0.0625% (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, the Distributor may, at
its sole option, 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 0.0625% (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 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 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 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 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
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 N 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 Plan has
been approved by a vote of the Board and of its Independent Trustees cast in
person at a meeting called on February 14, 2008 for the purpose of voting on
this Plan and shall take effect as of the date first set forth above. 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 N
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 N 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 shareholder and
Trustee liability for acts or obligations of the Fund.
Xxxxxxxxxxx Transition 2025 Funds
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Secretary
OppenheimerFunds Distributor, Inc
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President and Director
