AMENDED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS C 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 C 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 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 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)(i) below.
(ii) Distribution Assistance Fees (Asset-Basad 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
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"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
prospectus (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 h 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 shall 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 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
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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,
in addition the Distributor shall make distribution service fee
payments to each Recipient quarterly, within forty-five (45) days
after the end of each calendar quarter, at a rate not to exceed
0.1875% (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 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
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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. 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
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 (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, 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 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 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. If either
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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.
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 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. An 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 C 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
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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 a meeting called on February
25, 1997, for the purpose of voting on this Plan, and shall take
effect as of the date first set forth above, at which time it shall
replace the Fund's Distribution and Service Plan for the Shares
dated August 4, 1995. Unless terminated as hereinafter provided,
it shall continue in effect until October 31, 1997 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 C Shareholders in the manner described above, 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 C 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 Equity Income Fund
By:________________________________
OppenheimerFunds Distributor, Inc.
By:________________________________
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