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CLASS B DISTRIBUTION PLAN
OF
MERCURY FOCUS TWENTY FUND, INC.
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the day of 2000, by and between
Mercury Focus Twenty Fund, Inc., a Maryland corporation (the "Fund"), and
Princeton Funds Distributor, Inc., a Delaware corporation ("PFD").
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, PFD 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 proposes to enter into a Class B Shares Distribution
Agreement with PFD, pursuant to which PFD will act as the exclusive distributor
and representative of the Fund in the offer and sale of Class B shares of common
stock, par value $0.10 per share (the "Class B shares"), of the Fund to the
public; and
WHEREAS, the Fund desires to adopt this Class B Shares Distribution Plan
(the "Plan") pursuant to Rule 12b-1 under the Investment Company Act ("Rule
12b-1"), pursuant to which the Fund will pay an account maintenance fee and a
distribution fee to PFD with respect to the Fund's Class B shares; and
WHEREAS, the Directors of the Fund (the "Directors") have determined that
there is a reasonable likelihood that adoption of the Plan will benefit the Fund
and its shareholders.
WHEREAS, the Fund is a "feeder" fund that invests all of its assets in
Master Focus Twenty Trust which has the same investment objective and policies
as the Fund. All investments will be made at the Trust level. This structure is
sometimes called a "master/feeder" structure. The Fund's investment results will
correspond directly to the investment results of the Trust. For simplicity, this
Distribution Plan uses the term "Fund" to include the Trust.
NOW, THEREFORE, the Fund hereby adopts, and PFD hereby agrees to the terms
of the Plan in accordance with Rule 12b-1 on the following terms and conditions:
1. The Fund shall pay PFD 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 B shares of the Fund to compensate PFD and securities
firms with which PFD enters into related agreements pursuant to Paragraph 3
hereof (collectively, the "Sub-Agreements") for providing account maintenance
activities and services with respect to Class B shareholders of the Fund.
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Expenditures under the Plan may consist of payments to financial consultants for
maintaining accounts in connection with Class B shares of the Fund and payment
of expenses incurred in connection with such account maintenance activities and
services including the costs of making services available to shareholders such
as assistance in connection with inquiries related to shareholder accounts.
2. The Fund shall pay PFD 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 B shares of the Fund to compensate PFD and securities firms
with which PFD enters into related Sub-Agreements 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. 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 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 Fund hereby authorizes PFD to enter into Sub-Agreements with
certain securities firms (collectively, the "Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in Paragraphs 1 and 2 hereof. PFD may reallocate all or a portion of
its account maintenance fee or 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 PFD with such information
as is reasonably necessary to permit PFD to comply with the reporting
requirements set forth in Paragraph 4 hereof.
4. PFD shall provide the Fund for review by the Board of Directors of the
Fund, 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 the distribution fee during such period.
5. The 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.
6. 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
and (b) those Directors who are not "interested persons" of the 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.
7. 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
the Plan in Paragraph 6 hereof.
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8. 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.
9. This Plan may not be amended to increase materially the rate of
payments provided for herein unless such amendment is approved by at least a
majority, as defined in the Investment Company Act, of the outstanding Class B
voting securities of the Fund, and by the Directors in the manner provided for
in Paragraph 6 hereof, and no material amendment to the Plan shall be made
unless approved in the manner provided for approval and annual renewal in
Paragraph 6 hereof.
10. 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.
11. The Fund shall preserve copies of this 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 this 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 Distribution
Plan as of the date first above written.
MERCURY FOCUS TWENTY FUND, INC.
By:
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Name:
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Title:
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PRINCETON FUNDS DISTRIBUTOR, INC.
By:
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Name:
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Title:
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CLASS B SHARES DISTRIBUTION PLAN SUB-AGREEMENT
AGREEMENT made as of the day of 2000, by and between Princeton
Funds Distributor, Inc., a Delaware corporation ("PFD"), and
___________________________, a _____________ corporation (the "Securities
Firm").
W I T N E S S E T H :
WHEREAS, PFD has entered into an agreement with Mercury Focus Twenty 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, par value
$0.10 per share (the "Class B shares"), of the Fund; and
WHEREAS, PFD and the Fund have entered into a Class B Shares Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Act"), pursuant to which PFD receives an account
maintenance fee from the Fund at the annual rate of 0.25% of average daily net
assets of the Fund relating to Class B shares for providing account maintenance
activities and services with respect to the Class B shares of the Fund and a
distribution fee from the Fund at the annual rate of 0.75% of average daily net
assets of the Fund relating to Class B shares for providing sales and
promotional activities and services with respect to the distribution of Class B
shares of the Fund; and
WHEREAS, PFD desires the Securities Firm to perform certain account
maintenance activities and 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 account maintenance activities and
services with respect to the Class B shares of the Fund and incur expenditures
in connection with such activities and services of the types referred to in
Paragraph 1 of the Plan.
2. The Securities Firm shall provide sales and promotional activities with
respect to the sale of the Class B shares of the Fund and incur distribution
expenditures of the types referred to in Paragraph 2 of the Plan.
3. As compensation for its activities and services performed under this
Agreement, PFD shall pay the Securities Firm an account maintenance fee and a
distribution fee at the end of each calendar month in an amount agreed upon by
the parties hereto, and as set forth in a schedule attached hereto, but in any
event not in excess of the amount permitted by the Plan. Such amounts will be
based on the dollar amount of Fund shares which are owned of record by the
Securities Firm as nominee for its customers or which are owned by those
customers of the Securities Firm whose records, as maintained by the Fund or its
agents, designate the Securities Firm as the customer's dealer of record. Any
such payments shall be in addition to the selling
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concession, if any, allowed to the Securities Firm pursuant to a separate
agreement with PFD. No such fee will be paid to the Securities Firm with respect
to shares purchased by the Securities Firm and redeemed by the Fund or by us as
agent within seven days after the dates of confirmation of such purchase. PFD
has no obligation to make such payments and the Securities Firm hereby waives
such payments until PFD receives monies therefor from the Fund.
4. The Securities Firm shall provide PFD, at least quarterly, such
information as reasonably requested by PFD to enable PFD to comply with the
reporting requirements of Rule 12b-1 regarding the disbursement of the account
maintenance fee and the distribution fee during such period referred to in
Paragraph 4 of the Plan.
5. This 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 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 this
Agreement.
6. This 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 6 of the Plan.
7. This 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 addition, this Agreement may be
terminated at any time, without penalty, with respect to the Plan on not more
than 60 days nor less than 30 days written notice delivered or mailed by
registered mail, postage prepaid, to the other party.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PRINCETON FUNDS DISTRIBUTOR, INC.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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