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STATE FARM MUTUAL FUND TRUST
State Farm Equity Fund
State Farm Small Cap Equity Fund
State Farm International Equity Fund
State Farm S&P 500 Index Fund
State Farm Small Cap Index Fund
State Farm International Index Fund
State Farm Equity and Bond Fund
State Farm Bond Fund
State Farm Tax Advantaged Bond Fund
State Farm Money Market Fund
DISTRIBUTION PLAN
CLASS A SHARES
October, 2000
ARTICLE I. THE PLAN
This Distribution Plan (the "Plan") sets forth the terms and
conditions on which State Farm Mutual Fund Trust (the "Trust") on behalf of
State Farm Equity Fund, State Farm Small Cap Equity Fund, State Farm
International Equity Fund, State Farm S&P 500 Index Fund, State Farm Small Cap
Index Fund, State Farm International Index Fund, State Farm Equity and Bond
Fund, State Farm Bond Fund, State Farm Tax Advantaged Bond Fund, State Farm
Money Market Fund (each, a "Fund," and collectively, the "Funds"), each a series
of the Trust, and on behalf of class A shares of each such Fund (hereinafter,
the "Class A shares"), will, after the effective date hereof, pay certain
amounts to State Farm VP Management Corp. (the "Distributor") in connection with
the provision by the Distributor of certain services to the Funds and their
Class A shareholders, as set forth herein. Such payments by a Fund may, under
Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act"), be deemed to constitute the financing of distribution by a Fund of
its Class A shares. This Plan describes all material aspects of such financing
as contemplated by the Rule and shall be administered and interpreted, and
implemented and continued, in a manner consistent with the Rule.
ARTICLE II. DISTRIBUTION EXPENSES
Each Fund shall pay to the Distributor a fee in the amount specified
in Article III hereof. Such fee may be spent by the Distributor on any
activities or expenses primarily intended to result in the sale of Class A
shares of the Funds, including, but not limited to the payment of Distribution
Expenses (as defined below). Distribution Expenses include, but are not limited
to, (a) payment of initial and ongoing commissions and other payments to
registered representatives or others who sell each Fund's shares; (b)
compensation to employees of the Distributor; (c) compensation to and expenses,
including overhead such as communications and telephone, training, supplies,
photocopying and similar types of expenses, of the Distributor incurred in the
printing and mailing or other dissemination of all prospectuses and statements
of additional
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information; and (d) the costs of preparation, printing and mailing of
reports used for sales literature and related expenses, advertisements and
other distribution-related expenses (including personnel, travel and office
expenses and equipment of the Distributor). Distribution Expenses also
include fees paid by the Distributor to related and unrelated entities for
marketing and distribution services, including any of the services listed in
this paragraph.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by each Fund, other than the Equity and
Bond Fund and the Money Market Fund, pursuant to this Plan, and the basis upon
which such expenditures will be made, shall be determined by each such Fund,
and, in no event shall such expenditures exceed 0.25% of the average daily net
asset value of the Class A shares of any such Fund. Average daily net assets
shall be determined in accordance with the Trust's prospectus as from time to
time in effect. Since it is a fund-of-funds and it will pay for such
expenditures at the Equity Fund level and the Bond Fund level, no expenditure
shall be made on behalf of the Equity and Bond Fund. The expenditure to be made
by the Money Market Fund pursuant to this Plan, and the basis upon which such
expenditure will be made, shall be determined by that Fund, and, in no event
shall such expenditure exceed 0.15% of the average daily net assets of that
Fund. All such expenditures shall be calculated and accrued daily and paid
quarterly or at such other intervals as the Board of Trustees of the Trust shall
determine. In the event the Distributor is not fully reimbursed for payments
made or other expenses incurred by it under this Plan, the Distributor shall be
entitled to carry forward such expenses to subsequent fiscal years for
submission to the Class A shares of the applicable Fund for payment, subject
always to the annual maximum expenditures set forth in this Article III;
provided, however, that nothing herein shall prohibit or limit the Board of
Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article VIII hereof. While no Fund is liable for unreimbursed
distribution expenses, in the event of discontinuation or termination of this
Plan as to any Fund(s), the Board of Trustees may consider the appropriateness
of having the Class A shares of such Fund(s) reimburse the Distributor for the
then outstanding carry forward amounts plus interest thereon to the extent
permitted by applicable law.
ARTICLE IV. INDIRECT EXPENSES BORNE BY THE FUNDS
It is recognized that the costs of distributing each Fund's shares may
exceed the sum of all sales charges collected on sales of Fund shares and
reimbursements made by the Fund pursuant to Article III of this Plan. In view of
this, if and to the extent that any investment management, shareholder servicing
or other fees paid by a Fund might be considered as indirectly financing any
activity that is primarily intended to result in the sale of the Fund's shares,
the payment by that Fund of such fees hereby is authorized under this Plan.
Except as otherwise contemplated by this Plan, the Trust, and each
Fund shall not, directly or indirectly, engage in financing any activity that is
primarily intended to or should reasonably result in the sale of shares of any
Fund.
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ARTICLE V. APPROVAL BY BOARD OF TRUSTEES
This Plan shall not take effect with respect to a Fund until it has
been approved, together with any related agreements, by votes cast in person at
a meeting called for the purpose of voting on this Plan and any such related
agreements, of a majority of both (i) the Trustees of the Trust and (ii) those
Trustees who are not "interested persons" of the Company and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Independent Trustees"). Moreover, this Plan shall not take
effect with respect to a Fund until the day upon Fund shares are first offered
for sale to the general public.
ARTICLE VI. CONTINUANCE
This Plan and any related agreement shall continue in effect with
respect to each Fund until September 14, 2001, and shall continue thereafter in
full force and effect for successive periods of up to one year provided such
continuance is specifically approved at least annually in the manner provided
for in Article V.
ARTICLE VII. INFORMATION
The Distributor shall provide the Board of Trustees and the Board of
Trustees, and, in particular, the Independent Trustees, shall review, in the
exercise of their fiduciary duties, at least quarterly, a written report of the
amounts expended with respect to the Class A shares of each Fund by the
Distributor under this Plan and the Underwriting Agreement and the purposes for
which such expenditures were made.
ARTICLE VIII. TERMINATION
This Plan may be terminated with respect to any Fund (a) at any time
by vote of a majority of the Independent Trustees, or a majority of the
applicable Fund's outstanding voting Class A shares, or (b) by the Distributor
on 60 days' notice in writing to the applicable Fund(s).
Termination or discontinuance of the Plan with respect to the Class A
shares of one Fund shall not affect the continued effectiveness of this Plan
with respect to the Class A shares of any other Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) that, with respect to each Fund, such agreement may be terminated
at any time, without payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of a majority of the Fund's then outstanding
voting Class A shares; and
(b) that such agreement shall terminate automatically in the event
of its assignment.
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ARTICLE X. AMENDMENTS
This Plan may not be amended to increase materially the maximum amount
of the fees payable by any Fund hereunder without the approval of a majority of
the outstanding voting Class A shares of the applicable Fund. No material
amendment to the Plan shall, in any event, be effective unless it is approved by
the Board of Trustees in the same manner as is provided for in Article V.
ARTICLE XI. PRESERVATION OF DOCUMENTS
The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made to the Board of
Trustees for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
ARTICLE XII. LIMITATION OF LIABILITY
No series of the Trust shall be responsible for the obligations of
any other series of the Trust.
ARTICLE XIII. SELECTION OF TRUSTEES
While this Plan is in effect, the selection and nomination of
prospective Independent Trustees shall be committed to the discretion of the
Independent Trustees.
ARTICLE XIV. DEFINED TERMS
As used in this Plan, the terms "majority of the outstanding voting
Class A shares" shall mean the lessor of: (i) 67% or more of voting Class A
shares present, if more than 50% of the outstanding voting Class A shares are
present or represented, or (ii) more than 50% of the outstanding voting Class A
shares; and the phrase "interested person" shall have the same meaning as that
phrase has in the Act.
ARTICLE XX. PRIVACY
Neither the Distributor nor the Trust shall disclose or use nonpublic
personal information (as defined in Rule 3(t) of Regulation S-P) provided by the
other party, except as necessary to carry out the purposes for which such
information is provided, including information that is used in accordance with
Rules 14 and 15 of Regulation S-P in the ordinary course of business.
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IN WITNESS WHEREOF, the parties have executed this Distribution Plan
effective as of the 20st day of November 2000 in Bloomington, Illinois.
State Farm Mutual Fund Trust
By: /s/ Edward B. Rust, Jr.
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Name: Edward B. Rust, Jr.
Title: President
State Farm VP Management Corp.
By: /s/ Roger S. Joslin
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Name: Roger S. Joslin
Title: Senior Vice President
and Treasurer
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