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CLASS A 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 A 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 A shares of common
stock, par value $0.10 per share (the "Class A shares"), of the Fund to the
public; and
WHEREAS, the Fund desires to adopt this Class A 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 to PFD
with respect to the Fund's Class A shares; and
WHEREAS, the Directors of the Fund 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 A shares of the Fund to compensate PFD and securities
firms with which PFD enters into related agreements pursuant to Paragraph 2
hereof (collectively, the "Sub-Agreements") for providing account maintenance
activities and services with respect to Class A 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 A 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 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 Paragraph 1 hereof. PFD 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-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 3 hereof.
3. 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 during such period.
4. 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 A voting securities of the Fund.
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
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 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 hereof.
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
provided for in Paragraph 1 hereof 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 Fund 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
Fund shall be committed to the discretion of the Directors who are not
interested persons.
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10. The Fund shall preserve copies of the 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 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 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 A 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 A shares of common stock, par value
$0.10 per share (the "Class A shares"), of the Fund; and
WHEREAS, PFD and the Fund have entered into a Class A 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 A shares for providing account maintenance
activities and services with respect to Class A shares of the Fund; and
WHEREAS, PFD desires the Securities Firm to perform certain account
maintenance activities and services, including assistance in connection with
inquiries related to shareholder accounts, for the Fund's Class A 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 A 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. As compensation for the account maintenance activities and services
performed by the Securities Firm under this Agreement, PFD shall pay the
Securities Firm an account maintenance fee at the end of each calendar month in
an amount agreed upon by the parties 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 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 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 business 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
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3. 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 during such period referred to in Paragraph 3 of the Plan.
4. 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.
5. 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 5 hereof.
6. 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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