EXHIBIT M
FORM OF
NORTHERN FUNDS
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN
This Distribution and Service Plan (the "Plan") has been adopted by
the Board of Trustees of Northern Funds in accordance with Rule 12b-1 under the
Investment Company Act of 1940 (the "Act").
Section 1. Upon the recommendation of Northern Funds Distributors,
LLC, the distributor of Northern Funds, any officer of Northern Funds is
authorized to execute and deliver, in the name and on behalf of Northern Funds,
written agreements based on the form attached hereto as Appendix A or any other
form duly approved by the Board of Trustees ("Agreements") with securities
dealers, financial institutions and other industry professionals that are
shareholders or dealers of record or which have a servicing relationship with
the beneficial owners of Shares of Northern Funds ("Shareholder Organizations").
Pursuant to such Agreements, Shareholder Organizations shall provide
distribution and support services as set forth therein to their clients who
acquire and beneficially own Shares of any Fund offered by Northern Funds in
consideration of a fee, computed monthly in the manner set forth in the
Agreements, at an annual rate of up to .25% of the average daily net asset value
of the Shares beneficially owned by such clients. The Northern Trust Company
and its affiliates are eligible to become Shareholder Organizations and to
receive fees under this Plan.
Section 2. The co-administrators of Northern Funds shall monitor
the arrangements pertaining to Northern Funds' Agreements with Shareholder
Organizations in accordance with the terms of their co-administration agreement
with Northern Funds. Northern Funds Distributors, LLC shall not, however, be
obliged by this Plan to recommend, and Northern Funds shall not be obliged to
execute, any Agreement with any qualifying Shareholder Organization.
Section 3. So long as this Plan is in effect, the co-
administrators shall provide to Northern Funds' Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to this Plan and the purposes for which such expenditures were
made.
Section 4. This Plan shall become effective immediately with
respect to each particular Fund upon the approval of the Plan (and the form of
Agreement attached hereto) by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Act, of Northern Funds and have no direct or indirect financial interest in the
operation of this Plan or in any Agreement related to this Plan (the
"Disinterested Trustees"), pursuant to a vote cast in person at a meeting called
for the purpose of voting on the approval of this Plan (and form of Agreement).
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Section 5. Unless sooner terminated, this Plan shall continue
until March 31, 2001 and thereafter shall continue automatically for successive
annual periods provided such continuance is approved at least annually in the
manner set forth in Section 4(a).
Section 6. This Plan may be amended at any time with respect to
any Fund by the Board of Trustees, provided that (a) any amendment to increase
materially the costs (whether for distribution or any other purpose) which such
Fund may bear pursuant to this Plan shall be effective only upon the favorable
vote of a majority (as defined in the Act) of the outstanding Shares of such
Fund, and (b) any material amendment of the terms of this Plan shall become
effective only upon the approvals set forth in Section 4(a).
Section 7. This Plan is terminable at any time with respect to any
Fund by (a) vote of a majority of the Disinterested Trustees, or (b) vote of a
majority (as defined in the Act) of the Shares of such Fund.
Section 8. While this Plan is in effect, the selection and
nomination of those Trustees who are not "interested persons" (as defined in the
Act) of Northern Funds shall be committed to the discretion of such non-
interested Trustees.
Section 9. All expenses incurred by Northern Funds with respect to
the Shares of a particular Fund in connection with Agreements and the
implementation of this Plan shall be borne entirely by such Fund.
Section 10. This Plan was originally adopted by Northern Funds as
of April 1, 1994 and most recently reapproved as of May 2, 2000.
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Appendix A
DISTRIBUTION AND SERVICING AGREEMENT
Gentlemen:
We wish to enter into this Distribution and Servicing Agreement
("Agreement") with you concerning the provision of distribution services (and,
to the extent provided below, support services) to your clients ("Clients") who
may from time to time acquire and beneficially own shares of any Fund ("Shares")
offered by Northern Funds.
The terms and conditions of this Agreement are as follows:
Section 1. You will provide reasonable assistance in connection
with the distribution of Shares to Clients as requested from time to time by our
distributor, which assistance may include forwarding sales literature and
advertising provided by our distributor for Clients. In addition, you agree to
provide one or more of the following support services to Clients who may from
time to time acquire and beneficially own Shares: (i) processing dividend and
distribution payments from us on behalf of Clients; (ii) providing information
periodically to Clients showing their positions in Shares; (iii) arranging for
bank wires; (iv) responding to Client inquiries relating to the services
performed by you; (v) providing subaccounting with respect to Shares
beneficially owned by Clients or the information to us necessary for
subaccounting; (vi) if required by law, forwarding shareholder communications
from us (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Clients; (vii)
assisting in processing purchase, exchange and redemption requests from Clients
and in placing such orders with our service contractors; (viii) assisting
Clients in changing dividend options, account designations and addresses; and
(ix) providing such other similar services as we may reasonably request to the
extent you are permitted to do so under applicable statutes, rules and
regulations.
Section 2. You will provide such office space and equipment,
telephone facilities and personnel (which may be any part of the space,
equipment and facilities currently used in your business, or any personnel
employed by you) as may be reasonably necessary or beneficial in order to
provide the aforementioned assistance and services to Clients.
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Section 3. Neither you nor any of your officers, employees or
agents are authorized to make any representations concerning us or the Shares
except those contained in our then current prospectuses and statements of
additional information for Shares, copies of which will be supplied by us to
you, or in such supplemental literature or advertising as may be authorized by
us in writing.
Section 4. For all purposes of this Agreement you will be deemed
to be an independent contractor, and will have no authority to act as agent for
us in any matter or in any respect. By your written acceptance of this
Agreement, you agree to and do release, indemnify and hold us harmless from and
against any and all direct or indirect liabilities or losses resulting from
requests, directions, actions or inactions of or by you or your officers,
employees or agents regarding your responsibilities hereunder or the purchase,
redemption, transfer or registration of Shares (or orders relating to the same)
by or on behalf of Clients. You and your employees will, upon request, be
available during normal business hours to consult with us or our designees
concerning the performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities
provided by you hereunder, we will pay to you, and you will accept as full
payment therefor, a fee at the annual rate of _______% of the average daily net
asset value of the Shares beneficially owned by your Clients for whom you are
the dealer of record or holder of record or with whom you have a servicing
relationship (the "Clients' Shares"), which fee will be computed daily and
payable monthly. For purposes of determining the fees payable under this
Section 5, the average daily net asset value of the Clients' Shares will be
computed in the manner specified in our Registration Statement (as the same is
in effect from time to time) in connection with the computation of the net asset
value of Shares for purposes of purchases and redemptions. The fee rate stated
above may be prospectively increased or decreased by us, in our sole discretion,
at any time upon notice to you. Further, we may, in our discretion and without
notice, suspend or withdraw the sale of Shares, including the sale of Shares to
you for the account of any Client or Clients. All fees payable by Northern
Funds under this Agreement with respect to the Shares of a particular Fund shall
be borne by, and be payable entirely out of the assets allocable to, said
Shares; and no other class of Shares of any other Fund offered by Northern Funds
shall be responsible for such fees.
Section 6. Any person authorized to direct the disposition of
monies paid or payable by us pursuant to this Agreement will provide to our
Board of Trustees, and our Trustees will review, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made. In addition, you will furnish us or our designees with such
information as we or they may reasonably request (including, without limitation,
periodic certifications confirming the provision to Clients of the services
described herein), and will otherwise cooperate with us and our designees
(including, without limitation, any auditors designated by us), in connection
with the preparation of reports to our Board of Trustees concerning this
Agreement and the monies paid or payable by us pursuant hereto, as well as any
other reports or filings that may be required by law.
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Section 7. We may enter into other similar Agreements with any
other person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you
represent, warrant and agree that: (i) the compensation payable to you
hereunder, together with any other compensation you receive from Clients for
services contemplated by this Agreement, will not be excessive or unreasonable
under the laws and instruments governing your relationships with Clients; and
(ii) you will provide to Clients a schedule of any fees that you may charge to
them relating to the investment of their assets in Shares. In addition, you
understand that this Agreement has been entered into pursuant to Rule 12b-l
under the Investment Company Act of 1940 (the "Act"), and is subject to the
provisions of said Rule, as well as any other applicable rules or regulations
promulgated by the Securities and Exchange Commission.
Section 9. This Agreement will become effective on the date a
fully executed copy of this Agreement is received by us or our designee. Unless
sooner terminated, this Agreement will continue until the next March 31, and
thereafter will continue automatically for successive annual periods provided
such continuance is specifically approved at least annually by us in the manner
described in Section 12. This Agreement is terminable with respect to the
Shares of any Fund, without penalty, at any time by us (which termination may be
by a vote of a majority of the Disinterested Trustees as defined in Section 12
or by vote of the holders of a majority of the outstanding Shares of such Fund)
or by you upon notice to the other party hereto. This Agreement will also
terminate automatically in the event of its assignment (as defined in the Act).
Section 10. All notices and other communications to either you or
us will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address stated herein.
Section 11. This Agreement will be construed in accordance with the
laws of the State of Illinois.
Section 12. This Agreement has been approved by vote of a majority
of (i) our Board of Trustees and (ii) those Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in the operation of the Distribution and
Service Plan adopted by us or in any agreement related thereto cast in person at
a meeting called for the purpose of voting on such approval ("Disinterested
Trustees"). This Agreement is executed by or on behalf of the Trust and the
obligations hereunder are not binding upon any of the Trustees, Officers or
Shareholders of the Trust individually but are binding only upon the Trust and
its assets and property. All obligations of the Trust under this Agreement
shall apply only on a Fund by Fund basis, and the assets of one Fund shall not
be liable for the obligations of another Fund. The Trust's Agreement and
Declaration of Trust is on file with the Trust.
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If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, c/o The Northern Trust Company, 50 South LaSalle Street, Chicago,
Illinois, 60675.
Very truly yours,
NORTHERN FUNDS
Date: By:
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(Authorized Officer)
Accepted and Agreed to:
Date: By:
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(Authorized Officer)
