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EXHIBIT 13(c)
CLASS C DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the date set forth on Schedule A attached
hereto, by and between the Corporation named on Schedule A, a Maryland
corporation (the "Corporation"), on behalf of each of its series listed on
Schedule A, as such Schedule may be amended from time to time (each a "Fund,"
and collectively, the "Funds"), and the division of Princeton Funds
Distributor, Inc., a Delaware corporation, named on Schedule A (the
"Distributor).
W I T N E S S E T H:
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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
financial intermediaries, including, without limitation, brokers, dealers,
retirement plans, financial consultants, registered investment advisers and
mutual fund supermarkets ("financial intermediaries"); and
WHEREAS, the Corporation on behalf of the Funds proposes to enter into a
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 shares of common stock of each Fund, including the Class C
shares (the "Class C Shares") of each Fund, to the public; and
WHEREAS, the Corporation on behalf of each Fund desires to adopt this
Class C Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act pursuant to which each Fund will pay an account
maintenance fee and a distribution fee to the Distributor with respect to the
Fund's Class C 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 C shareholders.
NOW, THEREFORE, the Corporation on behalf of each Fund hereby adopts, and
the Distributor xxxxxx 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 the Class C
Shares of each Fund 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 the Fund
relating to the Class C Shares to compensate the Distributor for providing, or
arranging for the provision of, account maintenance activities with respect to
Class C shareholders of the Fund. Expenditures under the Plan may consist of
payments to financial intermediaries for maintaining accounts in connection
with Class C Shares 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 Class C
Shares of each Fund 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 the Fund relating to
Class C Shares of the Fund to compensate the Distributor for providing, or
arranging for the provision of, sales and promotional activities and services.
Such activities and services will relate to the sale, promotion and marketing
of the Class C Shares of each Fund. Such expenditures may consist of sales
commissions to financial intermediaries for selling Class C Shares,
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 Distributor shall provide the Corporation 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 account maintenance fee and distribution fee during such period.
4. This Plan shall not take effect with respect to a Fund until it has
been approved by votes of a majority of both (a) the Directors of the
Corporation and (b) those Directors of the Corporation 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 "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan.
5. The Plan shall continue in effect with respect to a Fund for so long
as such continuance is specifically approved at least annually in the manner
provided for approval of the Plan in Paragraph 4.
6. The Plan may be terminated at any time with respect to any Fund by
vote of a majority of the Rule 12b-1 Directors, or by vote of a majority of the
outstanding Class C voting securities of the applicable Fund.
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7. The Plan may not be amended to increase materially the rate of payments
provided for in Paragraph I hereof with respect to any Fund unless such
amendment is approved by at least a majority, as defined in the Investment
Company Act, of the outstanding Class C voting securities of the applicable
Fund, and by the Directors of the Corporation in the manner provided for in
Paragraph 4 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in Paragraph 4
hereof.
8. While the Plan is in effect with respect to any Fund, 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.
9. The Corporation shall preserve copies of the 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 the Plan, or the date of such
agreement or report, as the case may be, the first two years in an easily
accessible place.
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IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first above written.
MERCURY QA STRATEGY SERIES, INC.,
on behalf of each of its series listed on Exhibit A
By /s/ illegible
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Title: President
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By /s/ illegible
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Title: Vice President
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SCHEDULE A
CORPORATION: Mercury QA Strategy Series, Inc.
DATE: May 12, 2000
FUNDS: Mercury QA Strategy Growth and Income Fund
Mercury QA Strategy Long-Term Growth Fund
Mercury QA Strategy All-Equity Fund
DIVISION OF PRINCETON FUNDS DISTRIBUTOR, INC.: Mercury Funds Distributor
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