THE VICTORY PORTFOLIOS
AMENDED AND RESTATED
RULE 18f-3 MULTI-CLASS PLAN
I. Introduction.
Pursuant to Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), the following sets forth the method for allocating
fees and expenses among each class of shares of the various series (each series
a "Fund") of The Victory Portfolios (the "Trust") that issue multiple classes of
shares, whether now existing or subsequently established (the "Multi-Class
Funds"). In addition, this Rule 18f-3 Multi-Class Plan (the "Plan") sets forth
the shareholder servicing arrangements, distribution arrangements, conversion
features, exchange privileges, and other shareholder services of each class of
shares of the Multi-Class Funds.
The Trust is an open-end series investment company registered
under the 1940 Act, the shares of which are registered on Form N-1A under the
Securities Act of 1933, as amended, and the 1940 Act (Registration Nos. 33-8982
and 811-4851). Upon the effective date of this Plan, the Trust hereby elects to
offer multiple classes of shares of the Multi-Class Funds pursuant to the
provisions of Rule 18f-3 under the 1940 Act and this Plan. This Plan does not
make any material changes to the general class arrangements and expense
allocations previously approved by the Board of Trustees of the Trust (the
"Board").
The Trust currently consists of the following 37 separate Funds:
Balanced Fund Limited Term Income Fund
Convertible Securities Fund Maine Municipal Bond Fund (Short-Term)
Diversified Stock Fund Maine Municipal Bond Fund (Intermediate)
Equity Income Fund Michigan Municipal Bond Fund
Established Value Fund National Municipal Bond Fund
Federal Money Market Fund National Municipal Bond Fund
Financial Reserves Fund (Short-Intermediate)
Fund for Income National Municipal Bond Fund (Long)
Gradison Government Reserves Fund Nasdaq-100 Index Fund
Growth Fund New York Tax-Free Fund
Institutional Money Market Fund Ohio Municipal Bond Fund
Intermediate Income Fund Ohio Municipal Money Market Fund
International Growth Fund Prime Obligations Fund
Investment Quality Bond Fund Real Estate Investment Fund
Lakefront Fund Small Company Opportunity Fund
LifeChoice Conservative Investor Fund Special Value Fund
LifeChoice Moderate Investor Fund Stock Index Fund
LifeChoice Growth Investor Fund Tax-Free Money Market Fund
U.S. Government Obligations Fund
Value Fund
The Funds are authorized to issue the following classes of shares
representing interests in the same underlying portfolio of assets of the
respective Fund:
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The Multi-Class Funds The Non-Multi-Class Funds
Class A, Class B and Class G Shares Class A Shares
----------------------------------- --------------
Balanced Fund Equity Income Fund
Diversified Stock Fund Financial Reserves Fund
International Growth Fund LifeChoice Conservative Investor Fund
National Municipal Bond Fund LifeChoice Growth Investor Fund
New York Tax-Free Fund LifeChoice Moderate Investor Fund
Special Value Fund Lakefront Fund
Limited Term Income Fund
Class A Shares and Class G Shares Maine Municipal Bond Fund (Short-Term)
--------------------------------- Maine Municipal Bond Fund (Intermediate)
Convertible Securities Fund Michigan Municipal Bond Fund
Established Value Fund National Municipal Bond Fund
Fund for Income (Short-Intermediate)
Growth Fund National Municipal Bond Fund (Long)
Intermediate Income Fund Ohio Municipal Money Market Fund
Investment Quality Bond Fund Prime Obligations Fund
Nasdaq-100 Index Fund Tax-Free Money Market Fund
Ohio Municipal Bond Fund
Real Estate Investment Fund
Small Company Opportunity Fund Investor Shares and Select Shares
Stock Index Fund ---------------------------------
Value Fund Federal Money Market Fund
Institutional Money Market Fund
U.S. Government Obligations Fund
Class G Shares
--------------
Gradison Government Reserves Fund
II. Class Arrangements.
The following summarizes the front-end sales charges, contingent
deferred sales charges, Rule 12b-1 distribution fees, shareholder servicing
fees, conversion features, exchange privileges, and other shareholder services
applicable to each particular class of shares of the Funds. Additional details
regarding such fees and services are set forth in each Fund's current Prospectus
and Statement of Additional Information.
A. Class A Shares:
1. Maximum Initial Sales Load: 5.75% (of the offering
price). Exceptions: Fund for Income and Limited Term
Income Fund have an initial sales charge of 2.00% (of
the offering price). Additional Exceptions: Financial
Reserves Fund, LifeChoice Conservative Investor Fund,
LifeChoice Growth Investor Fund, LifeChoice Moderate
Investor Fund, Ohio Municipal Money Market Fund, Prime
Obligations Fund, and Tax-Free Money Market Fund have no
sales charge.
2. Contingent Deferred Sales Charge: None.
3. Rule 12b-1 Distribution Fees: None. Exceptions: Class
A Shares of the Balanced Fund, Convertible Securities
Fund, Diversified Stock Fund, Established Value Fund,
Financial Reserves Fund, Fund for Income, Growth Fund,
Institutional Money Market Fund, Intermediate Income
Fund, International Growth Fund, Investment Quality Bond
Fund,
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Lakefront Fund, LifeChoice Conservative Investor Fund,
LifeChoice Moderate Investor Fund, LifeChoice Growth
Investor Fund, Limited Term Income Fund, National
Municipal Bond Fund, Nasdaq-100 Index Fund, New York
Tax-Free Fund, Ohio Municipal Bond Fund, Ohio Municipal
Money Market Fund, Real Estate Investment Fund, Small
Company Opportunity Fund, Special Value Fund, Stock Index
Fund and Value Fund each have a Rule 12b-1 Plan pursuant
to which no fees are paid.
4. Shareholder Servicing Fees: Up to 0.25% per annum of
average daily net assets. Exceptions: Financial
Reserves Fund, Nasdaq-100 Index Fund and Stock Index
Fund do not have shareholder servicing plans or fees.
5. Conversion Features: None.
6. Exchange Privileges: Class A shares may be exchanged
with Class A shares of other Funds without incurring a
sales charge. However, exchanges made into a Fund with
a higher sales charge require payment of the
percentage-point difference between the higher and lower
sales charges. For example, investors that exchange
Class A shares from the Fund for Income or the Limited
Term Income Fund to purchase Class A shares of a Fund
with a 5.75% sales charge would pay the 3.75% difference
in sales charge. Class A shares may be exchanged with
Investor Class shares or Select Class shares of Federal
Money Market Fund, Institutional Money Market Fund, and
U.S. Government Obligations Fund without incurring a
sales charge.
7. Other Shareholder Services: As provided in the Fund's
Prospectus. These services do not differ from those
applicable to Class B shares.
B. Class B Shares:
1. Initial Sales Load: None
2. Contingent Deferred Sales Charge ("CDSC"): 5% in the
first year, declining to 1% in the sixth year, and
eliminated thereafter. The CDSC is based on the
original purchase cost of investment or the net asset
value of the shares at the time of redemption, whichever
is lower.
3. Rule 12b-1 Distribution Fees: 0.75% per annum of the
average daily net assets.
4. Shareholder Servicing Fees: Up to 0.25% per annum of
the average daily net assets.
5. Conversion Features: Class B shares convert
automatically to Class A shares eight years after
purchase, based on relative net asset values of the two
classes. Class B shares acquired by the reinvestment of
dividends and distributions are included in the
conversion.
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6. Exchange Privileges: Class B shares may be exchanged
with Class B shares of other Funds without incurring a
sales charge.
7. Other Shareholder Services: As provided in the Fund's
Prospectus. These services do not differ from those
applicable to Class A shares.
C. Investor Shares:
1. Maximum Initial Sales Load: None.
2. CDSC: None.
3. Rule 12b-1 Distribution Fees: Federal Money Market
Fund, Institutional Money Market Fund and U.S.
Government Obligations Fund each have a Rule 12b-1 Plan
pursuant to which no fees are paid.
4. Shareholder Servicing Fees: None.
5. Conversion Features: None.
6. Exchange Privileges: Investor shares may be exchanged with
Investor shares of other Funds at relative net asset
value. Investor shares may be exchanged with Class A
shares of other Funds; however, such exchanges require
payment of the sales charge applicable to the other Fund's
Class A shares.
7. Other Shareholder Services: As provided in the Fund's
Prospectus.
D. Select Shares:
1. Maximum Initial Sales Load: None.
2. CDSC: None.
3. Rule 12b-1 Distribution Fees: None. Exceptions:
Federal Money Market Fund, Institutional Money Market
Fund and U.S. Government Obligations Fund each has a
Rule 12b-1 Plan pursuant to which no fees are paid.
4. Shareholder Servicing Fees: Up to 0.25% per annum of
the average daily net assets.
5. Conversion Features: None.
6. Exchange Privileges: Select shares may be exchanged with
Select shares of other Funds at relative net asset value.
Select shares may be exchanged with Class A shares of
other Funds; however, such exchanges require payment of
the sales charge applicable to the other Fund's Class A
shares.
7. Other Shareholder Services: As provided in the Fund's
Prospectus.
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E. Class G Shares
1. Maximum Initial Sales Load: None.
2. CDSC: None.
3. Rule 12b-1 Distribution Fees: Small Company Opportunity
Fund, Diversified Stock Fund, International Growth Fund,
Established Value Fund, Value Fund, Growth Fund, Special
Value Fund, Balanced Fund, Convertible Securities Fund,
and Real Estate Investment Fund: up to 0.50% per annum
of average daily net assets (of which 0.25% is
designated for shareholder servicing); Fund For Income,
Ohio Municipal Bond Fund, Intermediate Income Fund,
Investment Quality Bond Fund, National Municipal Bond
Fund and New York Tax-Free Bond Fund: up to 0.25% per
annum of average daily net assets (designated for
shareholder servicing); Gradison Government Reserves
Fund: up to 0.10% per annum of average daily net assets
(designated for shareholder servicing); Class G shares
of the Nasdaq-100 Index Fund and the Stock Index Fund
have a Rule 12b-1 Plan pursuant to which no fees are
paid.
4. Shareholder Servicing Fees: None; except that Class G
shares of each of the Nasdaq-100 Index Fund and the
Stock Index Fund bear a shareholder servicing fee of up
to 0.25% per annum of its average daily net assets.
5. Conversion Features: None.
6. Exchange Privileges: Class G shares may be exchanged
with Class G shares, Select shares, or any single class
money market fund shares of a Victory Fund without
paying a sales charge. Shareholders who own Class G
shares as of the time of the reorganization of the
Gradison Funds with certain series of the Trust can
exchange into Class A shares of any Victory Fund that
does not offer Class G shares without paying a sales
charge.
7. Other Shareholder Services: As provided in the Fund's
Prospectus.
III. Allocation of Expenses.
Pursuant to Rule 18f-3 under the 1940 Act, the Trust shall
allocate to each class of shares in a Multi-Class Fund (i) any fees and expenses
incurred by the Trust in connection with the distribution of such class of
shares (other than with respect to the money market Funds) under a distribution
plan adopted for such class of shares pursuant to Rule 12b-1 under the 1940 Act
("Rule 12b-1 Fees") and (ii) any fees and expenses incurred by the Trust under a
shareholder servicing plan in connection with the provision of shareholder
services to the holders of such class of shares ("Service Plan Fees"). In
addition, pursuant to Rule 18f-3, the Trust may allocate the following fees and
expenses (the "Class Expenses") to a particular class of shares in a single
Multi-Class Fund:
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1. transfer agent fees identified by the transfer agent as
being attributable to such class of shares;
2. printing and postage expenses related to preparing and
distributing materials such as shareholder reports,
prospectuses, reports, and proxies to current
shareholders of such class of shares or to regulatory
agencies with respect to such class of shares;
3. blue sky registration or qualification fees incurred by
such class of shares;
4. Securities and Exchange Commission registration fees
incurred by such class of shares;
5. the expense of administrative personnel and services
(including, but not limited to, those of a fund accountant
or dividend paying agent charged with calculating net
asset values or determining or paying dividends) as
required to support the shareholders of such class of
shares;
6. litigation or other legal expenses relating solely to
such class of shares;
7. fees of the Board incurred as result of issues relating
to such class of shares;
8. independent accountants' fees relating solely to such
class of shares; and
9. shareholder meeting expenses for meetings of a
particular class.
Class Expenses, Rule 12b-1 Fees, and Service Plan Fees are the
only expenses allocated to the classes disproportionately. The Class Expenses
allocated to each share of a class during a year may differ from the Class
Expenses allocated to each share of any other class by up to 50 basis points of
the average daily net asset value of the class of shares with the smallest
average daily net asset value.
The initial determination of fees and expenses that will be
allocated by the Trust to a particular class of shares and any subsequent
changes thereto will be reviewed by the Board and approved by a vote of the
Board including a majority of the Trustees who are not interested persons of the
Trust. The Board will monitor conflicts of interest among the classes and agree
to take any action necessary to eliminate conflicts.
Income, realized and unrealized capital gains and losses, and any
expenses of a Fund not allocated to a particular class of such Fund by this Plan
shall be allocated to each class of such Fund on the basis of the relative net
assets (settled shares), as defined in Rule 18f-3, of that class in relation to
the net assets of such Fund.
Income, realized and unrealized capital gains and losses, and any
expenses of a non-money market Fund not allocated to a particular class of any
such Fund pursuant to this Plan shall be allocated to each class of the Fund on
the basis of the net asset value of that class in relation to the net asset
value of the Fund.
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Any dividends and other distributions on shares of a class will
differ from dividends and other distributions on shares of other classes only as
a result of the allocation of Class Expenses, Rule 12b-1 Fees, Service Plan
Fees, and the effects of such allocations.
A Fund's investment adviser will waive or reimburse its
management fee in whole or in part only if the fee is waived or reimbursed to
all shares of the Fund in proportion to their relative average daily net asset
values. The investment adviser, and any entity related to the investment
adviser, who charges a fee for a Class Expense will waive or reimburse that fee
in whole or in part only if the revised fee more accurately reflects the
relative costs of providing to each class the service for which the Class
Expense is charged.
IV. Board Review.
The Board shall review this Plan as frequently as it deems
necessary. Prior to any material amendment(s) to this Plan, the Board, including
a majority of the Trustees that are not interested persons of the Trust, shall
find that the Plan, as proposed to be amended (including any proposed amendments
to the method of allocating Class Expenses and/or Fund expenses), is in the best
interest of each class of shares of a Multi-Class Fund individually and the Fund
as a whole. In considering whether to approve any proposed amendment(s) to the
Plan, the Board shall request and evaluate such information as it considers
reasonably necessary to evaluate the proposed amendment(s) to the Plan. Such
information shall address the issue of whether any waivers or reimbursements of
advisory or administrative fees could be considered a cross-subsidization of one
class by another and other potential conflicts of interest between classes.
In making its initial determination to approve this Plan, the
Board has focused on, among other things, the relationship between or among the
classes and has examined potential conflicts of interest among classes
(including those potentially involving a cross-subsidization between classes)
regarding the allocation of fees, services, waivers and reimbursements of
expenses, and voting rights. The Board has evaluated the level of services
provided to each class and the cost of those services to ensure that the
services are appropriate and the allocation of expenses is reasonable. In
approving any subsequent amendments to this Plan, the Board shall focus on and
evaluate such factors as well as any others it deems necessary.
Adopted May 24, 1995; Effective June 5, 1995
Amended and Restated:
December 6, 1995; December 11, 1998;
February 14, 1996; February 23, 1999;
May 31, 1996; May 11, 1999;
February 19, 1997; August 17, 1999;
October 2, 1997; December 1, 1999;
December 3, 1997; February 23, 2000;
August 28, 1998; May 23, 2000
