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CLASS B SHARES
DISTRIBUTION PLAN
OF
XXXXXXX XXXXX FUNDAMENTAL GROWTH FUND, INC.
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the 21st day of October, 1994, by and
between Xxxxxxx Xxxxx Fundamental Growth Fund, Inc., a Maryland corporation
(the "Fund"), and Xxxxxxx Xxxxx Funds Distributor, Inc., a Delaware corporation
("MLFD").
W I T N E S S E T H:
WHEREAS, the Fund 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, MLFD 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 Fund has entered into a Distribution Agreement with MLFD,
pursuant to which MLFD acts as the exclusive distributor and representative of
the Fund in the offer and sale of Class B shares of common stock (the "Class B
shares"), of the Fund to the public; and
WHEREAS, the Fund desires to adopt this Distribution Plan pursuant to
Rule 12b-1 under the Investment Company Act, pursuant to which the Fund will
pay a distribution fee to MLFD in connection with the distribution of Class B
shares; and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its Class B shareholders;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor xxxxxx
agrees to the terms of, this Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the Investment Company Act on the following terms and
conditions:
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I. The Fund shall pay MLFD a distribution fee under the Plan at the
end of each month at the annual rate of 1.0% of average daily net asset value
of the Class B shares of the Fund to compensate MLFD and securities firms with
which MLFD enters into related agreements ("Sub-Agreements") pursuant to
Paragraph 2 hereof 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 the Fund and payments related to the furnishing of
services to Class B shareholders by sales and marketing personnel. Such
expenditures may consist of sales commissions to financial consultants for
selling Class B shares of the 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 Class B shares of the Fund, the costs of preparing and distributing
promotional materials and the costs of providing services to Class B
shareholders including assistance in connection with inquiries related to Class
B shareholder accounts. Only distribution expenditures properly attributable
to the sale of Class B shares will be used to justify any fee paid pursuant to
this Plan.
II. The Fund hereby authorizes MLFD 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 Paragraph 1. MLFD may
reallocate all or a portion of its 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 MLFD with
such information as is reasonably necessary to permit MLFD to comply with the
reporting requirements set forth in Paragraph 3 hereof.
III. MLFD shall provide the Fund 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-l regarding the disbursement of the
distribution fee during such period.
IV. This Plan shall not take effect until it has been approved by a
vote of at least a majority, as defined in the Investment Company Act, of the
outstanding Class B voting securities of the Fund.
V. 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 of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the
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Fund, 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.
VI. 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 5.
VII. This 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 B
voting securities of the Fund.
VIII. This Plan may not be amended to increase materially the rate of
distribution payments provided for in Paragraph 1 hereof unless such amendment
is approved in the manner provided for initial approval in Paragraphs 4 and 5
hereof, and no material amendment to the Plan shall be made unless approved in
the manner provided for approval and annual renewal of Paragraph 5 hereof.
IX. 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 Fund shall be committed to the discretion of the Directors who are
not interested persons.
X. The Fund 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.
IN WITNESS WHEREOF, the parties hereto have executed this Distribution
Plan as of the date first above written.
XXXXXXX XXXXX FUNDAMENTAL GROWTH FUND, INC.
By /s/ XXXXXX XXXXXX
------------------------------------------
President
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
By /s/ XXXXX X. XXXXX
------------------------------------------
President
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CLASS B SHARES
DISTRIBUTION PLAN SUB-AGREEMENT
AGREEMENT made as of the 21st day of October, 1994, by and between
Xxxxxxx Xxxxx Funds Distributor, Inc., a Delaware corporation (the
"Distributor"), and Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, a
Delaware corporation ("Securities Firm").
W I T N E S S E T H:
WHEREAS, the Distributor has entered into an agreement with Xxxxxxx
Xxxxx Fundamental Growth Fund, Inc., a Maryland corporation (the "Fund"),
pursuant to which it acts as the exclusive distributor for the sale of Class B
shares of common stock (the "Class B shares") of the Fund; and
WHEREAS, the Distributor and the Fund have entered into a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "Act") pursuant to which the Distributor receives a distribution fee
from the Fund at the annual rate of 1.0% of average daily net asset value of
the Class B shares of the Fund for providing sales and promotional activities
and services related to the distribution of Class B shares of the Fund; and
WHEREAS, the Distributor desires the Securities Firm to perform certain
sales and promotional activities and services for the Fund's Class B
shareholders, and the Securities Firm is willing to perform such services;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby agree as follows:
1. The Securities Firm shall provide sales and promotional activities
and services with respect to the sale of the Class B shares of the Fund, and
incur distribution expenditures, of the types referred to in Paragraph 1 of
the Plan.
2. As compensation for its services performed under this
Sub-Agreement, the Distributor shall pay the Securities Firm a fee at the end
of each calendar month in an amount agreed upon by the parties hereto.
3. 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 report-
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ing requirements of Rule 12b-1 regarding the disbursement of the fee during
such period referred to in Paragraph 3 of the Plan.
4. This Sub-Agreement shall not take effect until it has been approved
by votes of a majority of both (a) the Directors of the Fund and (b) those
Directors of the Fund who are not "interested persons" of the Fund, as defined
in the Act, and have no direct or indirect financial interest in the operation
of this Plan or any agreements related to it, cast in person at a meeting or
meetings called for the purpose of voting on this Agreement.
5. This Sub-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.
6. This Sub-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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
By /s/ XXXXX X. XXXXX
------------------------------------
President
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By [SIG]
------------------------------------
Vice President
