EXHIBIT (m)(2)
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DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
OF
MORGAN KEEGAN SELECT FUND, INC.
FOR
CLASS A SHARES OF
MORGAN KEEGAN CORE EQUITY FUND
MORGAN KEEGAN UTILITY FUND
MORGAN KEEGAN SELECT FINANCIAL FUND
AND MORGAN KEEGAN SELECT CAPITAL GROWTH FUND
WHEREAS, Morgan Keegan Select Fund, Inc. ("Fund") is registered as an
open-end, diversified management investment company under the Investment Company
Act of 1940, as amended ("1940 Act") and has distinct series of shares of common
stock; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Class A shares of
the Morgan Keegan Core Equity Fund, the Morgan Keegan Utility Fund, the Morgan
Keegan Select Financial Fund and the Morgan Keegan Select Capital Growth Fund
(each a "Series"); and
WHEREAS, the Fund has entered into an Underwriting Agreement with Morgan
Keegan & Company, Inc. ("Morgan Keegan") pursuant to which Morgan Keegan has
agreed to serve as Distributor of the Class A shares of each Series of the Fund;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the Class
A shares of each Series in accordance with Rule 12b-1 under the 1940 Act.
1. A. The following Series of the Fund are authorized to pay to
Morgan Keegan, as compensation for Morgan Keegan's services as Distributor of
the Series' Class A shares, distribution fees (on an annualized basis) of the
average daily net assets of the Series' Class A shares. Such fees shall be
calculated and accrued daily and paid monthly or at such other intervals as the
Board shall determine as set forth below:
Morgan Keegan Select Financial Fund: 0.25 %
Morgan Keegan Select Capital Growth
Fund: 0.25 %
B. The following Series of the Fund are authorized to pay to
Morgan Keegan, as compensation for Morgan Keegan's services to shareholders of
the Series' Class A shares, a service fee (on an annualized basis) of the
average daily net assets of the Series' Class A shares. Such fee shall be
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calculated and accrued daily and paid monthly or at such other intervals as the
Board shall determine as set forth below:
Morgan Keegan Core Equity Fund 0.25%
Morgan Keegan Utility Fund 0.25%
Morgan Keegan Select Financial Fund: 0.25 %
Morgan Keegan Select Capital Growth
Fund:
0.25 %
C. Any series hereafter established is authorized to pay to Morgan
Keegan, as compensation for Morgan Keegan's services as Distributor of the
series' Class C shares, distribution and service fees in the amounts to be
agreed upon in a written distribution fee addendum to this Plan ("Distribution
Fee Addendum") executed by the Fund on behalf of such series. All such
Distribution Fee Addenda shall provide that they are subject to all terms and
conditions of this Plan.
D. The distribution and service fees payable hereunder are payable
without regard to the aggregate amount that may be paid over the years, provided
that, so long as the limitations set forth in Article III, Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
("NASD") remain in effect and apply to distributors or dealers in the Fund's
shares, the amounts paid hereunder shall not exceed those limitations, including
permissible interest.
E. Any Series may pay a distribution or service fee to Morgan
Keegan at a lesser rate than the fees specified above, as agreed upon by the
Board and Morgan Keegan and as approved in the manner specified in Paragraph 8
of this Plan.
2. Morgan Keegan may spend the fees it receives pursuant to paragraph 1
of this Plan and/or its other resources on any activities or expenses primarily
intended to result in the sale of the Fund's shares or the servicing and
maintenance of shareholder accounts, including but not limited to, compensation
to investment executives or other employees of Morgan Keegan, and independent
dealers; compensation to and expenses, including overhead and telephone
expenses, of employees who engage in or support distribution of shares or who
service shareholder accounts; printing of prospectuses, statements of additional
information and reports for other than existing shareholders; and preparation,
printing and distribution of sales literature and advertising materials. The
amount of the fees payable by the Fund to Morgan Keegan under paragraph 1 hereof
is not related directly to expenses incurred by Morgan Keegan in serving as
Distributor, and this paragraph 2 neither obligates the Fund to reimburse Morgan
Keegan for such expenses nor obligates Morgan Keegan to incur shareholder
servicing expenses equal to or in excess of the fees it receives.
3. This Plan shall not take effect with respect to the Class A shares
of any Series until it has been approved, together with any related agreements,
by votes of a majority of both (a) the Board and (b) those directors of the Fund
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who are not "interested persons" of the Fund, as defined in the 1940 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; and until the directors who approve the Plan with respect to
such Series' Class A shares have, in the exercise of reasonable business
judgment and in light of their fiduciary duties under state law and under
Sections 36(a) and (b) of the 1940 Act, concluded that there is a reasonable
likelihood that the plan will benefit the company and its shareholders.
4. This Plan shall continue in effect for a period of one year from the
date of execution of this Plan and shall continue in full force and effect
thereafter for successive periods of up to one year, for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in paragraph 3.
5. Any person authorized to direct the disposition of monies paid or
payable by any Series pursuant to this Plan or any related agreement shall
provide to the Fund's Board of Directors and the Board shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made. Morgan Keegan shall submit only information
regarding amounts expended for "service activities," as defined in paragraph 6,
to the Board in support of the service fee payable hereunder.
6. For purposes of this Plan, "distribution activities" shall mean any
activities in connection with Morgan Keegan's performance of its obligations
under the Underwriting Agreement that are not deemed "service activities." As
used herein, "distribution activities" also includes sub-accounting or
recordkeeping services provided by an entity if the entity is compensated,
directly or indirectly, by the Series or Morgan Keegan for such services. Such
entity may also be paid a service fee if it provides appropriate services.
Nothing in the foregoing is intended to or shall cause there to be any
implication that compensation for such services must be made only pursuant to a
plan of distribution under Rule 12b-1. "Service activities" shall mean
activities covered by the definition of "service fee" contained in amendments to
Article III, Section 26(d) of the NASD's Rules of Fair Practice that became
effective July 7, 1993, including the provision by Morgan Keegan of personal,
continuing services to investors in the Fund's shares. Overhead and other
expenses of Morgan Keegan related to its "distribution activities" or "service
activities," including telephone and other communications expenses, may be
included in the information regarding amounts expended for such distribution or
service activities, respectively.
7. This Plan may be terminated with respect to the Class A shares of
any Series at any time by vote of a majority of the Rule 12b-1 Directors or by
vote of a majority of the "outstanding voting securities" (as defined in the
1940 Act). The fees set forth in paragraph 1 hereof will be paid by the Fund to
Morgan Keegan unless and until either the Plan or Underwriting Agreement is
terminated or not renewed. If either the Plan or Underwriting Agreement is
terminated or not renewed, expenses incurred by Morgan Keegan in connection with
providing services thereunder in excess of the fees specified in paragraph 1
hereof which Morgan Keegan has received or accrued through the termination date
are the sole responsibility and liability of Morgan Keegan, and are not
obligations of the Fund.
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8. This Plan may not be amended with respect to the Class A shares of
any Series to increase materially the amount of service fees provided for in
paragraph 1 hereof unless such amendment is approved by a vote of a majority of
the outstanding voting securities of the Class A shares of any Series, and no
material amendment to the Plan shall be made with respect to the Class A shares
of any Series unless such amendment is approved in the manner provided for
approval and annual renewal in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
directors of the Fund who are not interested persons of the Fund, as defined in
the 1940 Act, shall be committed to the discretion of the directors who are
themselves not interested persons of the Fund, as defined in the 1940 Act.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 5 hereof for a period of
not less than six years from the date of this Plan, the first two years in an
easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan as of the date and
year set forth below:
Date: August 21, 2000 MORGAN KEEGAN SELECT FUND, INC.
By: ______________________________
Name:
Title:
Attest:
By: ______________________________
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