Exhibit 13(a)
CLASS A DISTRIBUTION PLAN OF
MERCURY TARGET SELECT EQUITY FUND, INC.
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the 30th day of October, 2000, by and between
Mercury Target Select Equity Fund, Inc., a Maryland corporation (the
"Corporation") and FAM Distributors, Inc., a Delaware corporation (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 Corporation offers separate classes of shares, 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 proposes to enter into a Distribution Agreement
with the Distributor, pursuant to which the Distributor will act as the
exclusive distributor and representative of the Corporation in the offer and
sale of shares of common stock, par value $0.0001 per share of the Corporation,
including the Class A shares (the "Class A Shares") of the Corporation, to the
public; and
WHEREAS, the Corporation desires to adopt this Class A Distribution Plan
(the "Plan") pursuant to Rule 12b-1 under the Investment Company Act pursuant to
which the Corporation will pay distribution and account maintenance fees to the
Distributor with respect to the Corporation's Class A Shares; and
WHEREAS, the Directors of the Corporation have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Corporation and
its Class A shareholders.
NOW, THEREFORE, the Corporation 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:
1. The Corporation shall pay the Distributor with respect to the Class A
Shares distribution and account maintenance fees under the Plan at the end of
each month at the annual rate of 0.35% of average daily net assets of the
Corporation relating to the Class A Shares to
compensate the Distributor for providing, or arranging for the provision of,
distribution and account maintenance activities with respect to Class A
shareholders of the Corporation. Expenditures under the Plan may consist of
payments to financial intermediaries for providing sales and promotional
activities and services and maintaining accounts in connection with Class A
Shares and payment of expenses incurred in connection with such distribution and
account maintenance activities including (a) the costs of making services
available to shareholders including assistance in connection with inquiries
related to shareholder accounts and (b) the costs of sales commissions to
financial intermediaries for selling Class A Shares, compensation, sales
incentives and payments to sales and marketing personnel, and the payment of
expenses incurred in sales and promotional activities, including advertising
expenditures related to the Corporation and the cost of preparing and
distributing promotional material, or payment of the financing costs of carrying
the unreimbursed expenditures described in this paragraph. Payment of the
distribution and account maintenance fee described in this Paragraph 1 shall be
subject to any limitations set forth in any applicable regulation of the
National Association of Securities Dealers, Inc.
2. 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 distribution and account maintenance fees during such period.
3. This Plan shall not take effect 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.
4. 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 3.
5. The Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors, or by vote of a majority of the outstanding Class A voting
securities of the Corporation.
6. The Plan may not be amended to increase materially the rate of payments
provided for in Paragraph 1 hereof unless such amendment is approved by at least
a majority, as defined in the Investment Company Act, of the outstanding Class A
voting securities of the Corporation, and by the Directors of the Corporation in
the manner provided for in Paragraph 3 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval and
annual renewal in Paragraph 3 hereof.
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7. 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.
8. The Corporation shall preserve copies of the Plan and any related
agreements and all reports made pursuant to Paragraph 2 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.
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 together shall constitute one and
the same instrument.
MERCURY TARGET SELECT EQUITY FUND, INC.,
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Executive Vice President
FAM DISTRIBUTORS, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
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