Exhibit 13 (b)
DISTRIBUTION PLAN
FOR CLASS III SHARES OF
XXXXXXX XXXXX SERIES FUND, INC.
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the ___ day of__________, 2004, by and
between XXXXXXX XXXXX SERIES FUND, INC., a Maryland corporation (the "Company")
on behalf of each of its series listed on Exhibit A as such Schedule may be
amended from time to time (the "Portfolios") and FAM DISTRIBUTORS, INC., a
Delaware corporation ("FAMD").
W I T N E S S E T H:
WHEREAS, the Company engages 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 Company (the "Directors") are authorized to
establish separate series relating to separate portfolios of securities, and the
Directors have established and designated the Portfolios as series of the
Company; and
WHEREAS, each of the Portfolios may offer one or more separate classes of
shares of common stock, par value $.10 per share; and
WHEREAS, FAMD 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 Company, on behalf of the Portfolios, has entered into a
Distribution Agreement with FAMD, pursuant to which FAMD acts as the exclusive
distributor and representative of the Company in the offer and sale of shares of
the common stock, par value $0.10 per share, of each Portfolio, including the
Class III shares (the Class III Shares"); and
WHEREAS, the Company on behalf of each Portfolio desires to adopt this
Distribution Plan (the "Plan") pursuant to rule 12b-1 under the Investment
Company Act, pursuant to which each Portfolio will pay a distribution fee to, or
at the direction of, FAMD in connection with the distribution of the Class III
shares of each Portfolio (the "Class III Shares"); and
WHEREAS, Class III Shares of the Portfolios are sold to the separate
accounts ("Separate Accounts") of various insurance companies (the
"Participating Insurance Companies") that issue variable annuity or variable
life contracts (the "Contracts"); and
1
WHEREAS, the Directors of the Company have determined that there is
reasonable likelihood that adoption of this Plan will benefit the Company and
its Class III shareholders.
NOW, THEREFORE, the Company hereby adopts, and the Distributor xxxxxx
agrees to the terms of, this Plan in accordance with Rule 12b-1 under the
Investment Company Act on the following terms and conditions:
1. The Company hereby authorizes FAMD to arrange for the Company to enter
into Sub-Agreements substantially in the form attached hereto with Participating
Insurance Companies. Such Sub-Agreement shall provide that the Participating
Insurance Companies shall provide FAMD with such information as is reasonably
necessary to permit FAMD to comply with the reporting requirements set forth in
Paragraph 3 hereof.
2. Upon effectiveness of this Plan with respect to the Class III Shares of
a Portfolio, the Company, on behalf of such Portfolio, shall pay to each of the
Participating Insurance Companies a distribution fee under the Plan at the end
of each month equal to 0.25% of the average daily net asset value of the Class
III Shares of such Portfolio held by such Participating Insurance Company. Such
distribution fee shall be paid to the Participating Insurance Companies as
compensation for providing distribution related services to the Portfolios'
shareholders, including, but not limited to the following:
(a) printing and mailing of prospectuses relating to the Portfolios,
statements of additional information, any supplements thereto and
shareholder reports for [existing and] prospective Contract holders;
(b) services relating to the development, preparation, printing and
mailing of Company advertisements, sales literature and other
promotional materials describing and/or relating to the Portfolios
and including materials intended for use within the Participating
Insurance Company, or for broker-dealer only use or retail use;
(c) holding seminars and sales meetings designed to promote the
distribution of the Class III Shares of the Portfolios;
(d) obtaining information and providing explanations to Contract holders
regarding the investment objectives and policies and other
information about the Company and the Portfolios, including the
performance of the Portfolios;
(e) training sales personnel regarding the Company and the Portfolios;
(f) compensating sales personnel in connection with the allocation of
cash values and premiums of the Contract holders to the Company;
(g) providing personal services and/or maintenance of the accounts of
the Contract holders with respect to Class III Shares of the
Portfolios attributable to such accounts; and
2
(h) financing any other activity that the Company's Board of Directors
determines is primarily intended to result in the sale of the Class
III Shares.
3. Only distribution expenditures properly attributable to the sale of
Class III Shares of a Portfolio will be used to justify any fee paid by the
Company with respect to that Portfolio pursuant to this Plan, and, to the extent
that such expenditures relate to more than one Portfolio, the expenditures will
be allocated between or among the affected Portfolios in a manner deemed
appropriate by the Board of Directors of the Company.
4. FAMD shall provide the Company for review by the Board of Directors,
and the Directors shall review, at least quarterly, a written report complying
with the requirements of Rule 12b-1 regarding the disbursement of the
distribution fee during such period.
5. This Plan shall not take effect until it has been approved, together
with the provisions of any related agreements, by votes of a majority of both
(a) the Directors of the Company and (b) those Directors of the Company who are
not "interested persons" of the Company, 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 "Rule 12b-1 Directors"), cast in
person at a meeting or meetings called for the purpose of voting on this Plan
and such related agreements.
6. This Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in Paragraph 4.
7. This Plan may be terminated with respect to a Portfolio at any time by
vote of a majority of the Rule 12b-1 Directors or by vote of a majority of the
outstanding Class III voting securities of that Portfolio.
8. This Plan may not be amended to increase materially the rate of
distribution payments provided for in Paragraph 2 hereof unless such amendment
is approved in the manner provided for initial approval in Paragraph 4 hereof
and by a vote of at least a majority, as defined in the Investment Company Act,
of the outstanding Class III voting securities of each Portfolio affected by the
amendment, and no material amendment to the Plan shall be made unless approved
in the manner provided for approval and annual renewal of Paragraph 4 hereof.
9. While this Plan is in effect, the selection and nomination of Directors
who are not interested persons, as defined in the Investment Company Act, of the
Company shall be committed to the discretion of the Directors who are not
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made pursuant to Paragraph 3 hereof, for a period of
not less than six years from the date of this Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
3
IN WITNESS WHEREOF, the parties hereto have executed this Distribution
Plan as of the date first above written.
XXXXXXX XXXXX SERIES FUND, INC.
By: _______________________________
Name:
Title:
FAM DISTRIBUTORS, INC.
By: _______________________________
Name:
Title:
4
FORM OF DISTRIBUTION PLAN SUB-AGREEMENT
XXXXXXX XXXXX SERIES FUND, INC. (the "Company") and ______________________
(the "Insurance Company") mutually agree to the arrangements set forth in this
Agreement (the "Agreement") dated as of _________________.
WHEREAS, the Company is an open-end investment company registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act");
and
WHEREAS, the Insurance Company issues variable life insurance policies
and/or variable annuity contracts (the "Contracts"); and
WHEREAS, amounts invested in the Contracts by Contract holders are
deposited in separate accounts of the Insurance Company which in turn purchase
Class III Shares of one or more of the Portfolios, each of which is an
investment option offered by the Contracts; and
WHEREAS, the Insurance Company will provide certain services to the
Contract holders; and
WHEREAS, the Insurance Company desires to be compensated for providing
such services to the Contract holders.
NOW, THEREFORE, the parties agree as follows:
1. Services. The Insurance Company shall provide the services listed below
in respect of the Class III Shares of the Portfolios held by the Insurance
Company's separate accounts. Such services include, but are not limited to, the
following:
(a) printing and mailing of Company prospectuses, statements of
additional information, any supplements thereto and shareholder reports
for [existing and] prospective Contract holders;
(b) services relating to the development, preparation, printing and
mailing of Company advertisements, sales literature and other promotional
materials describing and/or relating to the Company and including
materials intended for use within the Insurance Company, or for
broker-dealer only use of retail use;
(c) holding seminars and sales meetings designed to promote the
distribution of the Class III Shares of the Portfolios;
(d) obtaining information and providing explanations to Contract
holders regarding the investment objectives and policies and other
information about the Company and the Portfolios, including the
performance of the Portfolios;
(e) training sales personnel regarding the Company and the
Portfolios;
(f) compensating sales personnel in connection with the allocation
of cash values and premiums of the Contract holders to the Company;
5
providing personal services and/or maintenance of the accounts of Contract
holders with respect to Class III Shares of the Portfolios attributable to
such accounts;
(g) financing any other activity that the Company's Board of
Directors determines is primarily intended to result in the sale of the
Class III Shares.
2. Distribution Fee Payments. The Company agrees to pay, with respect to
each Portfolio, to the Insurance Company at the end of each month an amount
equal to 0.25% of the average daily net asset value of the Class III Shares of
such Portfolio held by the Insurance Company separate accounts during that
month.
The Insurance Company shall provide FAM DISTRIBUTORS, INC. ("FAMD"), at
least quarterly, such information as reasonably requested by FAMD to enable FAMD
to comply with the reporting requirements of Rule 12b-1 of the Investment
Company Act ("Rule 12b-1") regarding the disbursement of the distribution fee
during such period referred to in Paragraph 3 of the Distribution Plan entered
into by the Company and FAMD pursuant to Rule 12b-1 (the "Plan").
3. Termination. This Agreement may be terminated with respect to a
Portfolio at any time, without the payment of any penalty, by vote of a majority
of the members of the Board of Directors of the Company who are not "interested
persons" of the Company, as defined in the Investment Company Act, and have no
direct or indirect financial interest in the operation of the Company or a
majority of the outstanding voting securities of the Portfolio on not more that
60 days' written notice to the Insurance Company.
4. Amendment. This Agreement may be amended only upon mutual agreement of
the parties hereto in writing.
5. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered.
(a) To the Company c/x Xxxxxxx Xxxxx Investment Management, L.P. at 000
Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, attention: General Counsel;
and
(b) To the Insurance Company, at ________________________, attention:
______________________________.
6. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their transferees, successors and assigns. The benefits of
and the right to enforce this Agreement shall accrue to the parties and their
transferees, successors and assigns.
(b) Assignment. Neither this Agreement nor any of the rights, obligations
or liabilities of either party hereto shall be assigned without the written
consent of the other party.
(c) Intended Beneficiaries. Nothing in this Agreement shall be construed
to give any person or entity other than the parties hereto any legal or
equitable claim, right or
6
remedy. Rather, this Agreement is intended to be for the sole and exclusive
benefit of the parties hereto.
(d) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall deemed an original but
all of which shall together constitute one and the same instrument.
(e) Applicable Law. This Agreement shall be interpreted, construed, and
enforced in accordance with the laws of the State of New York, without reference
to the conflict of law principles thereof.
(f) Severability. If any portion of this Agreement shall be found to be
invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but shall
have the same force and effect as if the invalid or unenforceable portion had
not been inserted.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXXX XXXXX SERIES FUND, INC.
By: _______________________________
Name:
Title:
[INSURANCE COMPANY]
By: _______________________________
Name:
Title:
8
Exhibit A
Mercury Low Duration Portfolio
Mercury Global SmallCap Portfolio
Mercury Equity Dividend Portfolio
Mercury Mid Cap Value Opportunities Portfolio
Mercury Small Cap Index Portfolio
Mercury International Index Portfolio
9
