SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC. AND
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
FOR CLASS 2 SHARES OF
XXXXXXXXXXX GLOBAL SECURITIES FUND
SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day of May, 1998, by and
between XXXXXXXXXXX VARIABLE ACCOUNT FUNDS (the ATrust@)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 2 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 (AAccounts@)
that hold Class 2 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.
4
(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 a 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 24, 1998 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, 1998. Unless
terminated as hereinafter provided, it shall continue in effect until October
31, 1999 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 2. This Plan may not be amended to
increase materially the amount of payments to be made without approval of the
Class 2 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
Xxxxxx X. Xxxx
Assistant Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxxx X. Xxxx
Xxxxxxxxx X. Xxxx
Vice President and Secretary
OFMI\60712b
