SERVICE PLAN AND AGREEMENT
BETWEEN
XXXXXXXXXXX ENTERPRISE FUND AND
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT dated the 7th day of November, 1995, by and between
XXXXXXXXXXX ENTERPRISE FUND (the "Fund") and XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
(the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class A Shares
described in the Fund's registration statement as of the date this Plan takes
effect, contemplated by and to comply with Article III, Section 26 of the Rules
of Fair Practice of the National Association of Securities Dealers, pursuant to
which the Fund will reimburse the Distributor for a portion of its costs
incurred in connection with the personal service and the maintenance of
shareholder accounts ("Accounts") that hold Class A Shares (the "Shares") of
such series and class of the Fund. The Fund may be deemed to be acting as
distributor of securities of which it is the issuer, pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act"), according to the
terms of this Plan. The Distributor is authorized under the Plan to pay
"Recipients," as hereinafter defined, for rendering services and for the
maintenance of Accounts. Such Recipients are intended to have certain rights as
third-party beneficiaries under this Plan.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other financial
institution which: (i) has rendered services in connection with the
personal service and maintenance of Accounts; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning such service; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the
foregoing, a majority of the Fund's Board of Trustees (the "Board")
who are not "interested persons" (as defined in the 0000 Xxx) and who
have no direct or indirect financial interest in the operation of this
Plan or in any agreements relating to this Plan (the "Independent
Trustees") may remove any broker, dealer, bank or other institution as
a Recipient, whereupon such entity's rights as a third party
beneficiary hereof shall terminate.
(b) (b)"Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
brokerage or other customers, or investment advisory or other clients
of such Recipient and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed
owned by more than one Recipient for purposes of this Plan. In the
event that two entities would otherwise qualify as Recipients as to
the same Shares, the Recipient which is the dealer of record on the
Fund's books shall be deemed the Recipient as to such Shares for
purposes of this Plan.
3. Payments for Distribution Assistance.
(a) Under the Plan, the Fund will make payments to the Distributor, within
forty-five (45) days of the end of each calendar quarter, in the
amount of the lesser of: (i) .0625% (.25% on an annual basis) of the
average during the calendar quarter of the aggregate net asset value
of the Shares computed as of the close of each business day, or (ii)
the Distributor's actual expenses under the Plan for that quarter of
the type approved by the Board. The Distributor will use such fee
received from the Fund in its entirety to reimburse itself for
payments to Recipients and for its other expenditures and costs of the
type approved by the Board incurred in connection with the personal
service and maintenance of Accounts including, but not limited to, the
services described in the following paragraph. The Distributor may
make Plan payments to any "affiliated person" (as defined in the 0000
Xxx) of the Distributor if such affiliated person qualifies as a
Recipient.
The services to be rendered by the Distributor and Recipients in
connection with the personal service and the maintenance of Accounts
may include, but shall not be limited to, the following: answering
routine inquiries from the Recipient's customers concerning the Fund,
providing such customers with information on their investment in
shares, assisting in the establishment and maintenance of accounts or
sub-accounts in the Fund, making the Fund's investment plans and
dividend payment options available, and providing such other
information and customer liaison services and the maintenance of
Accounts as the Distributor or the Fund may reasonably request. It may
be presumed that a Recipient has provided services qualifying for
compensation under the Plan if it has Qualified Holdings of Shares to
entitle it to payments under the Plan. In the event that either the
Distributor or the Board should have reason to believe that,
notwithstanding the level of Qualified Holdings, a Recipient may not
be rendering appropriate services, then the Distributor, at the
request of the Board, shall require the Recipient to provide a written
report or other information to verify that said Recipient is providing
appropriate services in this regard. If the Distributor still is not
satisfied, it may take appropriate steps to terminate the Recipient's
status as such under the Plan, whereupon such entity's rights as a
third-party beneficiary hereunder shall terminate.
Payments received by the Distributor from the Fund under the Plan will
not be used to pay any interest expense, carrying charge or other
financial costs, or allocation of overhead of the Distributor, or for
any other purpose other than for the payments described in this
Section 3. The amount payable to the Distributor each quarter will be
reduced to the extent that reimbursement payments otherwise
permissible under the Plan have not been authorized by the Board of
Trustees for that quarter. Any unreimbursed expenses incurred for any
quarter by the Distributor may not be recovered in later periods.
(b) The Distributor shall make payments to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate
not to exceed .0625% (.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of the Shares
computed as of the close of each business day of Qualified Holdings
(excluding Shares acquired in reorganizations with investment
companies for which Xxxxxxxxxxx Management Corporation or an affiliate
acts as investment adviser and which have not adopted a distribution
plan at the time of reorganization with the Fund). However, no such
payments shall be made to any Recipient for any such quarter in which
its Qualified Holdings do not equal or exceed, at the end of such
quarter, the minimum amount ("Minimum Qualified Holdings"), if any, to
be set from time to time by a majority of the Independent Trustees. A
majority of the Independent Trustees may at any time or from time to
time increase or decrease and thereafter adjust the rate of fees to be
paid to the Distributor or to any Recipient, but not to exceed the
rate set forth above, and/or increase or decrease the number of shares
constituting Minimum Qualified Holdings. The Distributor shall notify
all Recipients of the Minimum Qualified Holdings and the rate of
payments hereunder applicable to Recipients, and shall provide each
such Recipient with written notice within thirty (30) days after any
change in these provisions. Inclusion of such provisions or a change
in such provisions in a revised current prospectus shall be sufficient
notice.
(c) Under the Plan, payments may be made to Recipients: (i) by Xxxxxxxxxxx
Management Corporation ("OMC") from its own resources (which may
include profits derived from the advisory fee it receives from the
Fund), or (ii) by the Distributor (a subsidiary of OMC), from its own
resources.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection or replacement of Independent Trustees and the nomination of those
persons to be Trustees of the Fund who are not "interested persons" of the Fund
shall be committed to the discretion of the Independent Trustees. Nothing herein
shall prevent the Independent Trustees from soliciting the views or the
involvement of others in such selection or nomination if the final decision on
any such selection and nomination is approved by a majority of the incumbent
Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide at least quarterly a written report to the Fund's Board for its review,
detailing the amount of all payments made pursuant to this Plan, the identity of
the Recipient of each such payment, and the purposes for which the payments were
made. The report shall state whether all provisions of Section 3 of this Plan
have been complied with. The Distributor shall annually certify to the Board the
amount of its total expenses incurred that year with respect to the personal
service and maintenance of Accounts in conjunction with the Board's annual
review of the continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 0000
Xxx) of the Fund's outstanding Shares of the Class, on not more than sixty days
written notice to any other party to the agreement; (ii) such agreement shall
automatically terminate in the event of its "assignment" (as defined in the 1940
Act); (iii) it shall go into effect when approved by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose of
voting on such agreement; and (iv) it shall, unless terminated as herein
provided, continue in effect from year to year only so long as such continuance
is specifically approved at least annually by the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on such
continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Independent Trustees cast in person at a meeting
called on May 4, 1995 for the purpose of voting on this Plan, and shall take
effect on the date that the Fund's Registration Statement is declared effective
by the Securities and Exchange Commission. Unless terminated as hereinafter
provided, it shall continue in effect until December 31, 1995 and from year to
year thereafter or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by the Board and its
Independent Trustees cast in person at a meeting called for the purpose of
voting on such continuance. This Plan may be terminated at any time by vote of a
majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the 0000 Xxx) of the Fund's outstanding voting
securities of
the Class. This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class A Shareholders, in the manner
described above, and all material amendments must be approved by a vote of the
Board and of the Independent Trustees.
8. Shareholder and Trustee Liability Disclaimer. The Distributor understands and
agrees that the obligations of the Fund under this Plan are not binding upon any
shareholder or Trustee of the Fund personally, but only the Fund and the Fund's
property. The Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder and Trustee liability
for acts or obligations of the Fund.
XXXXXXXXXXX ENTERPRISE FUND
By: /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Secretary
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxxx X. Xxxx
Xxxxxxxxx X. Xxxx, Vice President &
Secretary
