Exhibit 15(b)
DISTRIBUTION SERVICES AGREEMENT (RULE 12b-1 PLAN)
This Distribution Services Agreement (the "Plan") is adopted by The
HomeState Group (the "Fund"), a Pennsylvania Common Law Trust organized under
the Investment Company Act of 1940 (the "Act") as an open-end mutual fund,
with respect to the distribution of its shares of the HomeState Select
Opportunities Fund (the "Shares") by Xxxxxx Square Distributor, Inc., the
principal underwriter and distributor for the Fund (the "Distributor").
WITNESSETH:
WHEREAS, the Fund is an open-end management company,; and
WHEREAS, it has been proposed that the Fund make payments to the
Distributor out of the Fund's net assets for distribution services rendered to
the Fund; and
WHEREAS, the Fund intends to distribute its Shares in accordance with
Rule 12b-1 under the Act and desires to adopt a distribution plan pursuant to
such rule; and
WHEREAS, the Fund's Board of Trustees at a meeting held on November 21,
1996, in considering whether the Fund should adopt and implement a written
plan, has evaluated such information as it deemed necessary to make an
informed determination as to whether a written plan should be adopted and
implemented and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets of the Fund for such purposes
and has determined that there is a reasonable likelihood that adoption and
implementation of a plan will benefit the Fund and is shareholders.
NOW, THEREFORE, the Fund hereby adopts a distribution plan in accordance
with Rule 12b-1 under the Act, having the following terms and conditions:
1. The Distributor shall pay all costs and expenses incurred in
connection with (i) advertising and marketing the Shares; (ii) payments of
servicing fees to one or more securities dealers (which may include the
Distributor itself but only to the extent necessary to reimburse the
Distributor for its costs and expenses incurred in connection with such
servicing), financial institutions or other industry professionals, such as
investment advisers, accountants, and estate planning firms (individually, a
"Service Organization"), in respect of the average daily net asset value of
the Shares owned by shareholders for whom the Service Organization is the
dealer of record or holder of record and with whom the Service Organization
has a servicing relationship pursuant to the Fund's related Rule 12b-1 Service
Agreement; (iii) printing any Prospectuses, Statements of Additional
Information, or reports prepared for the Distributor's use in connection with
the offering of the Fund's Shares (except those used for regulatory purposes
or for distribution to existing shareholders); and (iv) with implementing and
operating this Plan.
2. Each of the Fund's respective series will reimburse the Distributor
as appropriate for its out-of-pocket costs and expenses described in Section
(1) on a monthly basis at an annual rate of not more than .35% of such Series
net assets as of the close of the last business day of the month. To
determine the maximum amount of the costs and expenses reimburseable
hereunder, the value of the Fund's net assets shall be computed in the manner
specified in the Fund's Prospectus and/or Statement of Additional Information
for the determination of the net asset value of the Shares. The Distributor
may incur additional unreimbursed costs and expense in connection with the
distribution of Shares and may utilize its capital or any other resources to
pay for such costs and expenses.
3. The Fund shall, from time to time, furnish or otherwise make
available to the Distributor such financial reports, proxy statements, and
other information relating to the business and affairs of the Fund as the
Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
4. Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Declaration of Trust, or any applicable statutory
or regulatory requirement to which it is subject or by which it is bound, or
relieve or deprive the Board of Trustees of the Fund of the responsibility for
and control of the conduct of the affairs of the Fund.
5. This Plan shall become effective when executed following approval by
a vote of at least a majority of the outstanding voting securities of the Fund
and by a vote of the Trustees of the Fund and of those Trustees who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the Plan or in any agreements relating to the Plan (the
"Independent Trustees), cast in person at a meeting called for the purpose of
voting on the Plan.
6. This Plan shall remain in effect until June 30, 1997 and for
successive annual periods of twelve months each thereafter; provided, however,
that such continuance is subject to approval annually by a vote of the
Trustees of the Fund and of the Independent Trustees cast in person at a
meeting called for the purpose of voting on this Plan. If such annual
approval is not obtained, the Plan shall expire twelve months after the date
of the last approval. This Plan may be amended at any time by the Board of
Trustees; provided that (a) any amendment to increase materially the amount to
be spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding Shares, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph.
7. This Plan may be terminated as to any Series at any time, without
the payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting securities of
such Series, and shall automatically terminate in the event of its assignment.
8. Nothing herein contained shall prohibit the Distributor or any
"affiliated person" of the Distributor to act as distributor for other
persons, firms, or corporations or to engage in other business activities.
9. Neither the Distributor nor any of its employees or agents is
authorized to make any representations concerning the Shares except those
contained in the Prospectus, Statement of Additional Information, or such
supplemental sales literature as the Fund may approve.
10. The Distributor shall be required to use its best efforts in
rendering distribution services but shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Fund's distribution agreement with the Distributor
relates except a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of the Distributor in the performance of its duties as
Distributor of from reckless disregard by the Distributor of its obligations
and duties under such distribution agreement.
11. The Distributor shall provide the Fund, for review by the Fund's
Board of Trustees, and the Directors shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such expenditures were made. Such written report shall be in a form
satisfactory to the Fund and shall supply all information necessary for the
Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
12. While this Plan is in effect, the selection and nomination of
Independent Trustees shall be committed to the discretion of such Independent
Trustees.
13. The Fund shall preserve copies of this Plan, any related agreements,
and all reports made pursuant to Section 11 hereof for a period of not less
than six years from the date of this Plan, or any such agreement or report, as
the case may be, the first two years, in an easily accessible place.
14. In the event that the Fund establishes additional classes of shares
evidencing interests in other series with respect to which it desires the Plan
to apply, it shall notify the Distributor in writing. If the Distributor is
willing to act hereunder it shall notify the Fund in writing whereupon such
series shall become a series hereunder and the compensation payable by such
new series to the Distributor will be as agreed in writing at the time.
Payments made by a series to the Distributor pursuant to this Plan must be to
reimburse the Distributor for reimbursable costs and expenses incurred in
connection with the distribution of such series shares only.
15. If any provision of this Plan shall be held or made invalid by a
court decision statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
16. For the purposes of this Plan, the terms "interested persons,"
"assignment," "affiliated person" and "majority of the outstanding voting
securities" are used as defined in the Act.
IN WITNESS WHEREOF, this Plan has been executed by the Fund effective as
of February 1, 1997.
THE HOMESTATE GROUP
By: ____________________
President
Attest: ________________
Secretary
