EXHIBIT (m)6
XXXXX STREET FUNDS, INC.
DISTRIBUTION AGREEMENT
CLASS C SHARES
NOVEMBER 6, 2003
ARTICLE I. THE AGREEMENT
This Distribution Agreement (the "Agreement") sets forth the terms and
conditions on which Xxxxx Street Funds, Inc. (the "Company"), on behalf of Small
Cap Growth Stock Fund, Aggressive Growth Stock Fund, International Equity Fund,
Growth Stock Fund, Index 400 Stock Fund, Large Cap Core Stock Fund, Index 500
Stock Fund, Asset Allocation Fund, High Yield Bond Fund, Municipal Bond Fund and
Select Bond Fund (the "Funds" individually, a "Fund"), each a series of the
Company, and on behalf of Class C shares of each such Fund (hereinafter, the
"Class C shares"), will, after the effective date hereof, pay certain amounts to
Northwestern Mutual Investment Series, LLC (the "Distributor") in connection
with the provision by the Distributor of certain services to the Funds and their
Class C shareholders, as set forth herein. Such payments by a Fund may, under
Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act"), be deemed to constitute the financing of distribution by a Fund of
its Class C shares. This Agreement describes all material aspects of such
financing as contemplated by the Rule and shall be administered and interpreted,
and implemented and contained, in a manner consistent with the Rule.
ARTICLE II. DISTRIBUTION EXPENSES
Each Fund shall pay to the Distributor a fee in the amount specified in
Article III hereof. Such fee may be spent by the Distributor on any activities
or expenses primarily intended to result in the sale of Class C shares of the
Funds, including, but not limited to, the payment of Distribution Expenses (as
defined below). Distribution Expenses include, but are not limited to (a)
payment of initial and ongoing commissions and other payments to registered
representatives or others who sell each Fund's shares; (b) compensation to
employees of the Distributor; (c) compensation to and expenses, including
overhead such as communications and telephone, training, supplies, photocopying
and similar types of expenses, of the Distributor incurred in the printing and
mailing or other dissemination of all prospectuses and statements of additional
information; (d) the costs of preparation, printing and mailing of reports used
for sales literature and related expenses, advertisements and other
distribution-related expenses (including personnel expenses of the Distributor).
Distribution Expenses also include fees paid by the Distributor to related and
unrelated entities for marketing and distribution services including any of the
services listed in this paragraph.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by each Fund pursuant to this Agreement, and
the basis upon which such expenditures will be made, shall be determined by each
Fund, and, in no event shall such expenditures exceed 0.75% of the average daily
net asset value of the Class C shares of any Fund (determined in accordance with
each Fund's prospectus as from time to time in effect). All such expenditures
shall be calculated and accrued daily and paid quarterly or at such other
intervals as the Board of Directors of the Company shall determine. In the event
the Distributor is not fully reimbursed for payments made or other expenses
incurred by it under this Agreement, the Distributor shall be entitled to carry
forward such expenses to subsequent fiscal years for submission to the Class C
shares of the applicable Fund for payment, subject always to the annual maximum
expenditures set forth in this Article III; provided, however, that nothing
herein shall prohibit or limit the Directors from terminating this Agreement and
all payments hereunder at any time pursuant to Article VIII hereof. While no
Fund is liable for unreimbursed distribution expenses, in the event of
discontinuation or termination of this Agreement as to any Fund(s), the Board
may consider the appropriateness of having the Class C shares of such Fund(s)
reimburse the Distributor for the then outstanding carryforward amounts plus
interest thereon to the extent permitted by applicable law.
ARTICLE IV. EXPENSES BORNE BY THE FUNDS
Notwithstanding any other provision of this Agreement, the Company, each
Fund and its administrator may bear the respective expenses to be borne by them
under any administrative services agreement, as from time to time in effect
under the Company's current prospectus. Except as otherwise contemplated by this
Agreement, the Company and each Fund shall not, directly or indirectly, engage
in financing any activity which is primarily intended to result in the sale of
shares of any Fund.
It is recognized that the costs of distributing each Fund's shares may
exceed the sum of all sales charges collected on sales of Fund shares and
reimbursements made by the Fund pursuant to Article III of this Agreement. In
view of this, if and to the extent that any investment management and
administration fees paid by a Fund might be considered as indirectly financing
any activity which is primarily intended to result in the sale of the Fund's
shares, the payment by that Fund of such fees hereby is authorized under this
Agreement.
ARTICLE V. APPROVAL BY BOARD OF DIRECTORS
This Agreement shall not take effect with respect to a Fund until it has
been approved, together with any related agreements, by votes cast in person at
a meeting called for the purpose of voting on this Agreement and any such
related agreements, of a majority of both (i) the Directors of the Company and
(ii) those Directors who are not "interested persons" of the Company and have no
direct or indirect financial interest in the operation of this Agreement or any
agreements related to it (the "Independent Directors").
ARTICLE VI. CONTINUANCE
This Agreement and any related agreement shall continue in effect
indefinitely, provided such continuance is specifically approved at least
annually in the manner provided for in Article V.
ARTICLE VII. INFORMATION
The Distributor shall provide the Board of Directors, and the Board of
Directors, and, in particular, the Independent Directors, shall review, in the
exercise of their fiduciary duties, at least quarterly, a written report of the
amounts expended with respect to the Class C shares of each Fund by the
Distributor under this Agreement and the Underwriting Agreement and the purposes
for which such expenditures were made.
ARTICLE VIII. TERMINATION
This Agreement may be terminated with respect to any Fund (a) at any tine
by vote of a majority of the Independent Directors, or a majority of the
applicable Fund's outstanding voting Class C shares, or (b) by the Distributor
on 60 days' notice in writing to the applicable Fund(s).
(a) Termination or discontinuance of the Agreement with respect to the
Class C shares of one Fund shall not affect the continued effectiveness of this
Agreement with respect to the Class C shares of any other Fund.
ARTICLE IX. AMENDMENTS
This Agreement may not be amended to increase materially the maximum
amount of the fees payable by any Fund hereunder without the approval of a
majority of the outstanding voting Class C shares of the applicable Fund. No
material amendment to the Agreement shall, in any event, be effective unless it
is approved by the Board of Directors in the same manner as is provided for in
Article V.
ARTICLE X. PRESERVATION OF DOCUMENTS
The Company shall preserve copies of this Agreement (including any
amendments thereto) and any related agreements and all reports made to the Board
for a period of not less than six years from the date of this Agreement, the
first two years in an easily accessible place.
ARTICLE XI. LIMITATION OF LIABILITY
No series of the Company shall be responsible for the obligations of any
other series of the Company.
ARTICLE XII. SELECTION OF DIRECTORS
While this Agreement is in effect, the selection and nomination of
Directors who are not interested persons of the Company shall be committed to
the discretion of the Directors who are not interested persons of the Company.
ARTICLE XIII. DEFINED TERMS
As used in this Agreement, the term "majority of the outstanding voting
Class C shares" shall have the same meaning as the phrase "majority of the
outstanding voting securities" has in the Act, and the phrase "interested
person" shall have the same meaning as that phrase has in the Act.
IN WITNESS WHEREOF, the parties have executed this Distribution Agreement
effective as of the 6th day of November, 2003, in Milwaukee, Wisconsin.
` XXXXX STREET FUNDS, INC.
By:
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[Name]
[Title]
NORTHWESTERN MUTUAL INVESTMENT
SERVICES, LLC, a Wisconsin limited
liability company
By:
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[Name]
[Title]
