SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC. AND
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
FOR CLASS 4 SHARES OF
XXXXXXXXXXX GLOBAL SECURITIES FUND
SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day of May, 2004, by
and between XXXXXXXXXXX VARIABLE ACCOUNT FUNDS (the A Trust) for the account
of its XXXXXXXXXXX GLOBAL SECURITIES FUND (the "Fund") and OPPENHEIMERFUNDS
DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class 4
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 (A Accounts) that hold Class 4 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 "Insurance Company
Recipients," as hereinafter defined, for rendering services and for the
maintenance of Accounts. Such Insurance Company 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) "Insurance Company Recipient" shall mean any
insurance company or affiliate thereof 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 Trust'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
institution as a Insurance Company Recipient, whereupon such entity's rights
as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Insurance Company Recipient,
all Shares owned beneficially or of record by: (i) such Insurance Company
Recipient, (ii) such clients of such Insurance Company Recipient and/or
accounts as to which such Insurance Company Recipient is a fiduciary or
custodian or co-fiduciary or co-custodian (collectively, the "Customers"), or
(iii) separate accounts created or sponsored by such Insurance Company
Recipient or its affiliate, but in no event shall any such Shares be deemed
owned by more than one Insurance Company Recipient for purposes of this
Plan. In the event that two entities would otherwise qualify as Insurance
Company Recipients as to the same Shares, the Insurance Company Recipient
which is the dealer of record on the Fund's books shall be deemed the
Insurance Company 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,
in the amount of the lesser of: (i) .0625% (.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. The Distributor will use such fee received from the
Fund in its entirety to reimburse itself for payments to Insurance Company
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 an Insurance Company Recipient.
The services to be rendered by the Distributor and Insurance Company
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 Insurance Company 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 Insurance Company
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
Insurance Company Recipient may not be rendering appropriate services, then
the Distributor, at the request of the Board, shall require the Insurance
Company Recipient to provide a written report or other information to verify
that said Insurance Company Recipient is providing appropriate services in
this regard. If the Distributor still is not satisfied, it may take
appropriate steps to terminate the Insurance Company 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 will be reduced to the extent that reimbursement
payments otherwise permissible under the Plan have not been authorized by the
Board for that quarter. 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 Insurance Company Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter,
at a rate not to exceed .0625% (.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 Insurance Company Recipient or by its
Customers. However, no such payments shall be made to any Insurance Company
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, to be set from time to time by a majority of the
Independent Trustees. 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 Insurance Company 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 Insurance Company Recipients of the Minimum Qualified
Holdings and the rate of payments hereunder applicable to Insurance Company
Recipients, and shall provide each Insurance Company 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 Insurance Company 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 from
Xxxxxxxxxxx Variable Account Funds), 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 Trust who are not "interested persons" of the
Fund or the Trust 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 Trust shall
provide at least quarterly a written report to the Trust's Board for its
review, detailing the amount of all payments made pursuant to this Plan, the
identity of the Insurance Company 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 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 February 23, 2004 for the purpose of voting on this Plan,
and shall take effect on the later of (i) the date that Shares are first
issued to OppenheimerFunds, Inc. or any other person, or (ii) May 1, 2004.
Unless terminated as hereinafter provided, it shall continue in effect until
October 31, 2005 and 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
4. This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class 4 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 Trust 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 Trust and
the Fund.
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
on behalf of XXXXXXXXXXX GLOBAL SECURITIES FUND
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Assistant Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx
Vice President and Secretary
