EXHIBIT 15.7
CLASS A DISTRIBUTION PLAN
OF
XXXXX TWENTY-FIVE FUND
(A SERIES OF XXXXX FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN is executed as of the 18th day of December, 1997 by
and between Xxxxx Funds, Inc., a Minnesota corporation (the "Company"), for and
on behalf of Xxxxx Twenty-Five Fund (the "Fund"), a separately managed series of
the Company, and U.S. Growth Investments, Inc., a Minnesota corporation (the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Company is engaged 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 Distributor 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 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 Fund in the offer and sale of Class A
shares of common stock, par value $.01 per share (the "Class A shares"), of the
Fund to the public; and
WHEREAS, the Fund desires to adopt this Class A Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee to the Distributor with
respect to the Fund's Class A shares; and
WHEREAS, the Directors of the Company have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class A shareholders.
NOW, THEREFORE, the Company, for and on behalf of the Fund, hereby adopts,
and the Distributor hereby 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 Fund shall pay Distributor 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 Class A shares to compensate the Distributor and
securities firms with which the Distributor enters into related agreements
pursuant to paragraph 3 hereof ("Sub-Agreements") for account maintenance
activities with respect to Class A shareholders of the Fund.
2. Payments made pursuant to the Plan will be imposed directly against
the assets of the Fund relating to the Class A shares.
3. The Fund hereby authorizes the Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraph 1 hereof. The Distributor may reallocate all or a
portion of its
account maintenance fee to such Securities Firms as compensation for the
above-mentioned activities and services. Such Sub-Agreements shall provide that
the Securities Firms shall provide the Distributor with such information as is
reasonably necessary to permit the Distributor to comply with the reporting
requirements set forth in paragraph 4 hereof.
4. The Distributor 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-1 regarding the disbursement of the
account maintenance fee during such period.
5. The 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 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 the 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 and such
related agreements.
6. 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 5.
7. 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 Fund.
8. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein 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 Fund, and by the Directors of the Company in
the manner provided for in paragraph 5 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval and
annual renewal in paragraph 5 hereof.
9. 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
Company shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 4 hereof, for a period of not less
than six years from the date of the Plan, or the agreements or such 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.
XXXXX FUNDS, INC.
By:
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Title:
U.S. GROWTH INVESTMENTS, INC.
By:
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Title:
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