AMENDED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
XXXXXXXXXXX EQUITY INCOME FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated
the 16th day of July, 1997, by and between Xxxxxxxxxxx Equity
Income 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 B shares of the Fund (the "Shares"),
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 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 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
ccounts as to which such Recipient provides administrative support
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 assistance services to the Fund. Such services
include distribution assistance and administrative support services
rendered in connection with Shares acquired (1) by purchase, (2) in
exchange for shares of another investment company for which the
Distributor serves as distributor or subdistributor, or (3)
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 Fees. Within forty-five
(45) days of the end of each calendar quarter, the Fund will make
payments in the aggregate amount of 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)(ii) 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 0.0625% (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 (the
2 "Asset-Based Sales Charge") outstanding for no more than six years"Asset-Based
Sales Charge") outstanding for no more than six years (the "Maximum Holding
Period"). 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 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 such 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.
(i) Service Fee. In consideration of the 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 0.0625% (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
3
record 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:
(i) "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 (ii) 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, the 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 Fees: (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever
alternative method of making service fee payments to Recipients is
selected by the Distributor, in addition the Distributor may make
distribution service fee payments to a 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 no more than six years and for
any minimum period that the Distributor may establish. Such
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
4
prospectuses other than those furnished to current Shareholders,
providing compensation to and 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 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 direct the Distributor to increase or
decrease (the "Maximum 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, if any, 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 revised current prospectus
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 of the NASD
Conduct Rules.
(e) 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, from Asset-Based Sales Charge payments or from the
proceeds of its borrowings.
(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. 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
after the receipt of such report, either may take the 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
5
majority of the Fund's Independent Trustees at any time may remove
any broker, dealer, bank or other person or entity as a Recipient,
where upon 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.
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 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 Fund shall provide written reports to the Fund's Board for its
review, detailing services rendered in connection with the
distribution of the Shares, 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 Class B voting 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 its
Independent Trustees cast in person at meetings called on February
25, 1997 and April 29, 1997, for the purpose of voting on this
Plan, and shall take effect after being approved by Class B
shareholders of the Fund, at which time it shall replace the Fund's
Distribution and Service Plan for the Shares dated February 23,
1994. Unless terminated as hereinafter provided, it shall continue
6
