Exhibit 13(b)
CLASS B DISTRIBUTION PLAN OF
MERCURY QA STRATEGY SERIES, INC.
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the ___ day of February, 2000, by and between
Mercury QA Strategy Series, Inc., a Maryland corporation (the "Corporation"), on
behalf of each of its series listed on Appendix A attached hereto, as such
Appendix may be amended from time to time (each, a "Fund," and together the
"Funds"), and Mercury Funds Distributor, a division of Princeton Funds
Distributor, Inc., a Delaware corporation (the "Distributor").
WITNESSETH:
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WHEREAS, the Corporation intends to engage in business as an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and
WHEREAS, the Directors of the Corporation (the "Directors") are authorized
to establish separate series relating to separate portfolios of securities, each
of which may offer separate classes of shares; and
WHEREAS, the Directors have established each Fund as a series of the
Corporation; and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Corporation on behalf of each Fund proposes to enter into a
Class B Shares Distribution Agreement with the Distributor, pursuant to which
the Distributor will act as the exclusive distributor and representative of each
Fund in the offer and sale of Class B shares of common stock, par value $0.0001
per share (the "Class B Shares"), of each Fund to the public; and
WHEREAS, the Corporation on behalf of each Fund desires to adopt this Class
B Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Investment
Company Act pursuant to which the Corporation on behalf of each Fund will pay an
account maintenance fee and a distribution fee to the Distributor with respect
to such Fund's Class B Shares; and
WHEREAS, the Directors of the Corporation have determined that there is a
reasonable likelihood that adoption of the Plan will benefit each Fund and its
Class B shareholders.
NOW, THEREFORE, the Corporation on behalf of each Fund hereby adopts, and
the Distributor hereby agrees to the terms of, the Plan in accordance with Rule
12b-1 under the Investment Company Act on the following terms and conditions:
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1. The Corporation shall pay the Distributor with respect to each Fund's
Class B Shares an account maintenance fee under the Plan at the end of each
month at the annual rate of 0.25% of average daily net assets of such Fund
relating to the Class B Shares of such Fund to compensate the Distributor and
securities firms with which the Distributor enters into related agreements
pursuant to Paragraph 3 hereof ("Sub-Agreements") for providing account
maintenance activities with respect to Class B shareholders of such Fund.
Expenditures under the Plan may consist of payments to financial consultants for
maintaining accounts in connection with Class B Shares of a Fund and payment of
expenses incurred in connection with such account maintenance activities
including the costs of making services available to shareholders including
assistance in connection with inquiries related to shareholder accounts.
2. The Corporation shall pay the Distributor with respect to each Fund's
Class B Shares a distribution fee under the Plan at the end of each month at the
annual rate of 0.75% of average daily net assets of such Fund relating to Class
B Shares of such Fund to compensate the Distributor and the securities firms
with which the Distributor enters into related Sub-Agreements for providing
sales and promotional activities and services. Such activities and services will
relate to the sale, promotion and marketing of the Class B Shares of such Fund.
Such expenditures may consist of sales commissions to financial consultants for
selling Class B Shares of a Fund, compensation, sales incentives and payments to
sales and marketing personnel, and the payment of expenses incurred in its sales
and promotional activities, including advertising expenditures related to the
Fund and the costs of preparing and distributing promotional materials. The
distribution fee may also be used to pay the financing costs of carrying the
unreimbursed expenditures described in this paragraph 2. Payment of the
distribution fee described in this Paragraph 2 shall be subject to any
limitations set forth in any applicable regulation of the National Association
of Securities Dealers, Inc.
3. The Corporation hereby authorizes the Distributor to enter into Sub-
Agreements with certain securities firms ("Securities Firms"), including Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, to provide compensation to such
Securities Firms for activities and services of the type referred to in
Paragraphs 1 and 2 hereof. The Distributor may reallocate all or a portion of
its account maintenance fee or distribution fee to such Securities Firms as
compensation for the above-mentioned activities and services. Such Sub-Agreement
shall provide that the Securities Firms shall provide the Distributor with such
information as is reasonably necessary to permit the Distributor to comply with
the reporting requirements set forth in Paragraph 4 hereof.
4. The Distributor shall provide the Corporation for review by the
Directors, and the Directors shall review at least quarterly, a written report
complying with the requirements of Rule 12b-l under the Investment Company Act
regarding the disbursement of the account maintenance fee and the distribution
fee during such period.
5. This Plan shall not take effect until it has been approved, together
with any related agreements, by votes of a majority of both (a) the Directors
and (b) those Directors who are not "interested persons" of the Corporation, as
defined in the Investment Company Act, and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
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"Rule 1 2b- 1 Directors"), cast in person at a meeting or meetings called for
the purpose of voting on the Plan and such related agreements.
6. The Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in Paragraph 5.
7. The Plan maybe terminated with respect to any or all of the Funds at
any time by vote of a majority of the Rule I 2b-1 Directors, or by vote of a
majority of the outstanding Class B voting securities of the appropriate Fund or
Funds.
8. The Plan may not be amended to increase materially the rate of payments
provided for herein unless such amendment is approved by at least a majority, as
defined in the Investment Company Act, of the outstanding Class B voting
securities of the Fund with respect to which the Plan is being amended, and by
the Directors in the manner provided for in Paragraph 5 hereof, and no material
amendment to the Plan shall be made unless approved in the manner provided for
approval and annual renewal in Paragraph 5 hereof.
9. While the Plan is in effect, the selection and nomination of Directors
who are not interested persons, as defined in the Investment Company Act, of the
Corporation shall be committed to the discretion of the Directors who are not
interested persons.
10. The Corporation shall preserve copies of the Plan and any related
agreements and all reports made pursuant to Paragraph 4 hereof, for a period of
not less than six years from the date of the Plan, or the date of such agreement
or report, as the case maybe, the first two years in an easily accessible place.
11. The provisions of the Plan are severable for each Fund and whenever
Rule 1 2b- 1 under the Investment Company Act provides for any action to be
taken with respect to the Plan, such action shall be taken separately for each
Fund affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first above written. This Agreement may be executed by the parties hereto
on any number of counterparts, all of which shall constitute one and the same
instrument.
MERCURY QA STRATEGY SERIES, INC.
on behalf of each Fund
By_______________________________
Title:
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By_______________________________
Title:
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APPENDIX A
NAME OF FUND
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Mercury QA Strategy Growth and Income Fund
Mercury QA Strategy Long-Term Growth Fund
Mercury QA Strategy All-Equity Fund
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CLASS B SHARES DISTRIBUTION PLAN SUB-AGREEMENT
AGREEMENT made as of the __ day of February, 2000 by and between Mercury
Funds Distributor, a division of Princeton Funds Distributor, Inc., a Delaware
corporation (the "Distributor"), and Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated, a Delaware corporation ("Securities Firm").
WITNESSETH:
WHEREAS, the Distributor has entered into an agreement with Mercury QA
Strategy Series, Inc. a Maryland corporation (the "Corporation") on behalf of
each of its series listed in such Agreement (each, a "Fund," and together, the
"Funds"), pursuant to which it acts as the exclusive distributor for the sale of
Class B shares of common stock, par value $0.0001 per share (the "Class B
Shares") of each Fund; and
WHEREAS, the Distributor and the Corporation have entered into a Class B
Shares Distribution Plan (the "Plan") pursuant to Rule 12b-l under the
Investment Company Act of 1940, as amended (the "Act") pursuant to which the
Distributor receives an account maintenance fee from the Corporation, on behalf
of each Fund, at the annual rate of 0.25% of average daily net assets of each
such Fund relating to such Fund's Class B Shares for account maintenance
activities and services with respect to such Class B Shares and a distribution
fee from the Corporation, on behalf of each Fund, at the annual rate of 0.75% of
average daily net assets of such Fund relating to Class B Shares of such Fund
for providing sales and promotional activities and services with respect to the
distribution of Class B Shares of such Fund; and
WHEREAS, the Distributor desires the Securities Firm to perform certain
account maintenance activities and sales and promotional activities and
services, including assistance in connection with inquiries related to
shareholder accounts, for each Fund's Class B shareholders and the Securities
Firm is willing to perform such activities and services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereby agree as follows:
1. The Securities Firm shall provide account maintenance activities and
services with respect to the Class B Shares of each Fund and incur expenditures
in connection with such activities and services, of the types referred to in
Paragraph 1 of the Plan.
2. The Securities Firm shall provide sales and promotional activities and
services with respect to the sale of the Class B Shares of each Fund and incur
distribution expenditures of the types referred to in Paragraph 2 of the Plan.
3. As compensation for its activities and services performed under this
Agreement, the Distributor shall pay the Securities Firm an account maintenance
fee and a distribution fee at the end of each calendar month in an amount agreed
upon by the parties hereto.
4. The Securities Firm shall provide the Distributor, at least quarterly,
such information as reasonably requested by the Distributor to enable the
Distributor to comply with the reporting requirements of Rule 12b-1 under the
Act regarding the disbursement of the account maintenance fee and the
distribution fee during such period referred to in Paragraph 4 of the Plan.
5. This Agreement shall not take effect until it has been approved by
votes of a majority of both (a) the Board of Directors of the Corporation (the
"Directors") and (b) those Directors who are not "interested persons" of the
Corporation, as defined in the Act, and have no direct or indirect financial
interest in the operation of the Plan, this Agreement or any agreements related
to the Plan or this Agreement, cast in person at a meeting or meetings called
for the purpose of voting on this Agreement.
6. This Agreement shall continue in effect for as long as such continuance
is specifically approved at least annually in the manner provided for approval
of the Plan in Paragraph 5 of the Plan.
7. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Plan or any amendment to
the Plan that requires such termination.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written. This Agreement may be executed by
the parties hereto on any number of counterparts, all of which shall constitute
one and the same instrument.
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By __________________________________
Name:
Title:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By __________________________________
Name:
Title:
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