DISTRIBUTION AND
SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC. AND
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
FOR SERVICE SHARES OF
XXXXXXXXXXX VALUE FUND/VA
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan")
dated the 22nd day of October 2002, by and between
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS (the "Trust") for the
account of its XXXXXXXXXXX VALUE FUND/VA (the "Fund") and
OPPENHEIMERFUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written
-----------
distribution and service plan for its Service 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 compensate the Distributor for its services
in connection with the distribution of Shares, and the
personal service and maintenance of shareholder accounts
("Accounts") that hold Service 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 and for
distributing Service Shares. 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
person or entity which: (i) has rendered assistance
(whether direct, administrative, or both) in the
distribution of Shares and/or 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/or the sale of Shares;
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 provides
administrative services and/or 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 Distributor shall determine which
Insurance Company Recipient 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 (.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 (the "Service Fee"), provided, however, that the
Distributor may, in its sole discretion, reduce that
payment level from time to time. The Distributor will
use such fee received from the Fund in its entirety
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 two paragraphs. 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 an
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, an 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.
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 insurance
company, broker, dealer, bank or other person or
entity that directly or indirectly sells Shares; (ii)
paying compensation to and expenses of personnel of
the Distributor who support distribution of Shares by
Insurance Company 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 direct and indirect holders of the Fund's
shares ("Shareholders").
(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 (0.25% 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,
provided, however, that the Distributor may, in its
sole discretion, reduce that payment level from time
to time. 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 (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 under this Plan, and the
purposes 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 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
Service Shares, 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
October 22, 2002 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) December 1, 2002. Unless terminated
as hereinafter provided, it shall continue in effect until
October 31, 2003 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 Service 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 in respect of Shares
sold prior to the effective date of such termination. This
Plan may not be amended to increase materially the amount
of payments to be made without approval of the Service
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 Trust or 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 VALUE FUND/VA
By: _________________________
Xxxxx X. Xxxxxxx
Vice President
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:___________________________
Xxxxxxxx Xxxx
Vice President
