EX-99.B(o)gsmcp
UNITED GOVERNMENT SECURITIES FUND, INC.
MULTIPLE CLASS PLAN PURSUANT TO RULE 18f-3
This Multiple Class Plan ("Plan") pursuant to Rule 18f-3 under the
Investment Company Act of 1940, as amended ("1940 Act"), sets forth the
multiple class structure for United Government Securities Fund, Inc.
("Fund"). This multiple class structure was approved by the Board of
Directors of the Fund on February 8, 1995, under an order of exemption
issued by the Securities and Exchange Commission on January 11, 1995.
Subsequent to such approval, Rule 18f-3 under the 1940 Act was adopted. It
was determined that the Fund operate under Rule 18f-3, and this Plan was
adopted pursuant to Rule 18f-3. This Plan describes the classes of shares
of stock of the Fund -- Class A shares and Class Y shares -- offered to the
public on or after July 31, 1995 ("Implementation Date").
General Description of the Classes:
Class A Shares. Class A shares will be sold to the general public
subject to an initial sales charge. The maximum sales charge is 4.25% of
the amount invested and declines to 0% based on discounts for volume
purchases. The initial sales charge is waived for certain eligible
purchasers.
Class A shares also will be subject to a service fee charged pursuant
to a Service Plan adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule
12b-1") that provides for a maximum fee of .25% of the average annual net
assets of the Class A shares of the Fund. All of the shares of the Fund
issued pursuant to a Fund prospectus effective prior to the Implementation
Date and that are outstanding on the Implementation Date will be designated
as Class A shares.
Class B Shares. Class B shares will be sold subject to a contingent
deferred sales charge, which will be imposed on redemption proceeds. The
maximum contingent deferred sales charge will be 5.0% and will decline 1%
per year after the first full calendar year after investment to 0% after
seven years, as follows: in the first year, the contingent deferred sales
charge will be 5%; in the second year, 4%; in the third and fourth years,
3%; in the fifth year, 2%; in the sixth year, 1%; and in the seventh year,
0%. Class B shares will also be subject to distribution and service fees
charged pursuant to a Distribution and Service Plan adopted pursuant to
Rule 12b-1 that provides for a maximum service fee of 0.25% and a maximum
distribution fee of 0.75% of the average annual net assets of the Class B
shares of the Fund. Class B shares convert automatically into Class A
shares in the eighth year held.
Class C Shares. Class C shares will be sold without an initial sales
charge and will be subject to a contingent deferred sales charge of 1% if
the shares are redeemed within twelve months of purchase. Class C shares
will be subject to distribution and service fees charged pursuant to a
Distribution and Service Plan adopted pursuant to Rule 12b-1 that provides
for a maximum service fee of 0.25% and a maximum distribution fee of 0.75%
of the average annual net assets of the Class C shares of the Fund.
Class Y Shares. Class Y shares will be sold without an initial sales
charge and without a Rule 12b-1 fee. Class Y shares are designed for
institutional investors and will be available for purchase by: (i)
participants of employee benefit plans established under section 403(b) or
section 457, or qualified under section 401, including 401(k) plans, of the
Internal Revenue Code of 1986 ("Code"), when the plan has 100 or more
eligible employees and holds the shares in an omnibus account on the Fund's
records; (ii) banks, trust institutions, investment fund administrators and
other third parties investing for their own accounts or for the accounts of
their customers where such investments for customer accounts are held in an
omnibus account on the Fund's records; (iii) government entities or
authorities and corporations whose investment within the first twelve
months after initial investment is $10 million or more; and (iv) certain
retirement plans and trusts for employees and sales representatives of
Waddell & Reed, Inc. and its affiliates.
Expense Allocations of Each Class:
In addition to the difference with respect to 12b-1 fees, Class A,
Class B and Class C shares differ from Class Y shares of the Fund with
respect to the applicable shareholder servicing fees. Class A, Class B and
Class C shares, respectively, pay a monthly shareholder servicing fee of
$1.0208 for each Class A, Class B or Class C shareholder account which was
in existence during the prior month, plus $0.30 for each Class A, Class B
or Class C account on which a dividend or distribution had a record date in
that month. Class Y shares pay a monthly shareholder servicing fee equal
to one-twelfth of .15 of 1% of the average daily net Class Y assets for the
preceding month.
Each Class may also pay a different amount of the following other
expenses:
(a) stationery, printing, postage and delivery expenses related
to preparing and distributing materials such as shareholder reports,
prospectuses, and proxy statements to current shareholders of a
specific Class of shares;
(b) Blue Sky registration fees incurred by a specific Class of
shares;
(c) SEC registration fees incurred by a specific Class of
shares;
(d) expenses of administrative personnel and services required
to support the shareholders of a specific Class of shares;
(e) Directors' fees or expenses incurred as a result of issues
relating to a specific Class of shares;
(f) accounting expenses relating solely to a specific Class of
shares;
(g) auditors' fees, litigation expenses, and legal fees and
expenses relating to a specific Class of shares; and
(h) expenses incurred in connection with shareholders meetings
as a result of issues relating to a specific Class of shares.
These expenses may, but are not required to, be directly attributed
and charged to a particular Class. The shareholder servicing fees and
other expenses listed above that are attributed and charged to a particular
Class are borne on a pro rata basis by the outstanding shares of that
Class.
Certain expenses that may be attributable to the Fund, but not a
particular Class, are allocated based on the relative daily net assets of
that Class.
Exchange Privileges:
Class A shares of the Fund may be exchanged for Class A shares of any
other fund in the United Group of Mutual Funds.
Class B shares of the Fund may be exchanged for Class B shares of any
other fund in the United Group of Mutual Funds.
Class C shares of the Fund may be exchanged for Class C shares of any
other fund in the United Group of Mutual Funds.
Class Y shares of the Fund may be exchanged for Class Y shares of any
other fund in the United Group of Mutual Funds.
These exchange privileges may be modified or terminated by the Fund,
and exchanges may only be made into funds that are legally registered for
sale in the investor's state of residence.
Additional Information:
This Plan is qualified by and subject to the terms of the then current
prospectus for the applicable Class after the Implementation Date;
provided, however, that none of the terms set forth in any such prospectus
shall be inconsistent with the terms of the Classes contained in this Plan.
The prospectus for each Class contains additional information about that
Class and the Fund's multiple class structure.
Adopted: June 1, 1995
As Amended: December 5, 1995, Effective: January 9, 1996
As Amended: February 10, 1999, Effective: September 1, 1999
As Amended: May 17, 2000, Effective: June 30, 2000
