AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
BETWEEN
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
AND
XXXXXXXXXXX/QUEST FOR VALUE FAMILY OF FUNDS
FOR CLASS A SHARES OF
SMALL CAPITALIZATION FUND
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the
"Plan") dated the ___ day of ____, 1995, by and between XXXXXXXXXXX/QUEST FOR
VALUE FAMILY OF FUNDS (the "Trust") for the account of its SMALL CAPITALIZATION
FUND (the "Fund") and XXXXXXXXXXX FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution plan for Class
A shares of the Fund (the "Shares"), contemplated by Rule 12b-1 (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"), pursuant to which the
Fund will compensate the Distributor for its services incurred in connection
with the distribution of Shares, and the personal service and maintenance of
shareholder accounts that hold Shares ("Accounts"). The Fund may act as
distributor of securities of which it is the issuer, pursuant to the Rule,
according to the terms of this Plan. The Distributor is authorized under the
Plan to pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor (the "NASD
Rules of Fair Practice") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution, to which the Fund is
subject under any order on which the Fund relies, issued at any time by the
Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan. Notwithstanding the foregoing,
a majority of the Trust's Board of Trustees (the "Board") who are not
"interested persons" (as defined in the 0000 Xxx) and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
relating to this Plan (the "Independent Trustees") may
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remove any broker, dealer, bank or other person or entity as a Recipient,
whereupon such person's or entity's rights as a third-party beneficiary hereof
shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or custodian
or co-fiduciary or co-custodian (collectively, the "Customers"), but in no event
shall any such Shares be deemed owned by more than one Recipient for purposes of
this Plan. In the event that more than one person or entity would otherwise
qualify as Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall be deemed
the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) The Fund will make payments to the Distributor (i) within forty-five
(45) days of the end of each calendar quarter, in the aggregate amount of
0.0625% (0.25% on an annual basis) of the average during the calendar quarter of
the aggregate net asset value of the Shares computed as of the close of each
business day (the "Service Fee"), plus (ii) within ten (10) days of the end of
each month, in the aggregate 0.020833% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the Shares
computed as of the close of each business day (the "Asset-Based Sales Charge").
Such Service Fee payments received from the Fund will compensate the Distributor
and Recipients for providing administrative support services with respect to
Accounts. Such Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution assistance
in connection with the sale of Shares.
The administrative support services in connection with the Accounts to be
rendered by Recipients may include, but shall not be limited to, the following:
answering routine inquiries concerning the Fund, assisting in establishing and
maintaining accounts or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment options
available, and providing such other information and services in connection with
the rendering of personal services and/or the maintenance of Accounts, as the
Distributor or the Fund may reasonably request.
The distribution assistance in connection with the sale of Shares to be
rendered by the Distributor and by Recipients may include, but shall not be
limited to, the following: distributing sales literature and prospectuses other
than those furnished to current holders of the Fund's Shares ("Shareholders"),
and providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares to entitle it to payments under the Plan. In the
event that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not be
rendering appropriate distribution assistance in connection with the sale of
Shares or administrative support
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services for the Accounts, then the Distributor, at the request of the Board,
shall require the Recipient to provide a written report or other information to
verify that said Recipient is providing appropriate distribution assistance
and/or services in this regard. If the Distributor or the Board of Trustees
still is not satisfied, either may take appropriate steps to terminate the
Recipient's status as such under the Plan, whereupon such Recipient's rights as
a third-party beneficiary hereunder shall terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares, computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make service fee
payments ("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed (i) 0.25% of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (ii) 0.0625% (0.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day, constituting Qualified Holdings owned
beneficially or of record by the Recipient or by its Customers for a period of
more than one (1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to Recipients that
are, or may be, imposed by Article III, Section 26, of the NASD Rules of Fair
Practice. In the event Shares are redeemed less than one year after the date
such Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee Payments,
based on the ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of the preceding
sentence may, at the Distributor's sole option, be made more often than
quarterly, and sooner than the end of the calendar quarter. In addition, the
Distributor may make asset-based sales charge payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar quarter, at a
rate not to exceed 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed as of the
close of each business day, constituting Qualified Holdings owned beneficially
or of record by the Recipient or its Customers. However, no such service fee or
asset-based sales charge payments (collectively, the "Recipient Payments") shall
be made to any Recipient for any such quarter in which its Qualified Holdings
do not equal or exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a majority of the
Independent Trustees.
A majority of the Independent Trustees may at any time or from time to time
decrease and thereafter adjust the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the
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rates set forth above, and/or direct the Distributor to increase or decrease the
Minimum Holding Period or the Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings or Minimum Holding
Period, if any, and the rates of Recipient Payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice within thirty
(30) days after any change in these provisions. Inclusion of such provisions or
a change in such provisions in a revised current prospectus shall constitute
sufficient notice. The Distributor may make Plan payments to any "affiliated
person" (as defined in the 0000 Xxx) of the Distributor if such affiliated
person qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination of such amounts under the limits to which the
Distributor is, or may become, subject under Article III, Section 26, of the
NASD Rules of Fair Practice. The distribution assistance and administrative
support services to be rendered by the Distributor in connection with the Shares
may include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity that sells
Shares, and\or paying such persons Advance Service Fee Payments in advance of,
and\or greater than, the amount provided for in Section 3(b) of this Agreement;
(ii) paying compensation to and expenses of personnel of the Distributor who
support distribution of Shares by Recipients; (iii) obtaining financing or
providing such financing from its own resources, or from an affiliate, for
interest and other borrowing costs of the Distributor's unreimbursed expenses
incurred in rendering distribution assistance and administrative support
services to the Fund; (iv) paying other direct distribution costs, including
without limitation the costs of sales literature, advertising and prospectuses
(other than those furnished to current Shareholders) and state "blue sky"
registration expenses; and (v) providing any service rendered by the Distributor
that a Recipient may render pursuant to part (a) of this Section 3. Such
services include distribution assistance and administrative support services
rendered in connection with Shares acquired (i) by purchase, (ii) in exchange
for shares of another investment company for which the Distributor serves as
distributor or sub-distributor, or (iii) pursuant to a plan of reorganization to
which the Fund is a party. In the event that the Board should have reason to
believe that the Distributor may not be rendering appropriate distribution
assistance or administrative support services in connection with the sale of
Shares, then the Distributor, at the request of the Board, shall provide the
Board with a written report or other information to verify that the Distributor
is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by Xxxxxxxxxxx
Management Corporation ("OMC") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OMC), from its own resources, from Asset-Based
Sales Charge payments or from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any payment whatsoever to
any person or entity other than directly to the Distributor. In no event shall
the amounts to be paid to the Distributor exceed the rate of fees to be paid by
the Fund to the Distributor set forth in paragraph (a) of this Section 3.
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4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Trust who
are not "interested persons" of the Fund or the Trust ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees. Nothing
herein shall prevent the Disinterested Trustees from soliciting the views or the
involvement of others in such selection or nomination if the final decision on
any such selection and nomination is approved by a majority of the incumbent
Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Trust
shall provide at least quarterly a written reports to the Trust's Board for its
review, detailing services rendered in connection with the distribution of the
Shares, the amount of all payments made and the purpose for which the payments
were made. The reports shall be provided quarterly and shall state whether all
provisions of Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 0000
Xxx) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Amended
and Restated Plan has been approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called on June 22, 1995 for the purpose of
voting on this Plan, and shall take effect after approval by Class A
shareholders of the Fund, at which time it shall replace the Fund's Plan and
Agreement of Distribution for the Shares made as of April 28, 1988 as amended as
of December 30, 1988, August 14, 1990, October 18, 1990, August 23, 1991 and
September 1, 1993. Unless terminated as hereinafter provided, it shall continue
in effect from year to year from the date first set forth above or as the Board
may otherwise determine only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent Trustees
cast in person at a meeting called for the purpose of voting on such
continuance. This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class A Shareholders, in the manner
described above, and all material amendments must be approved by a vote of the
Board and of the Independent Trustees. This Plan may be terminated at any time
by vote of a majority of the Independent Trustees or by the vote of the holders
of a "majority" (as defined in the 0000 Xxx) of the Fund's outstanding voting
securities of the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor is entitled to
payment from the Fund of all or a portion of the Service Fee and/or the Asset-
Based Sales Charge in respect of Shares sold prior to the effective date of such
termination.
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8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Trust and the Fund under this Plan are
not binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that it has
notice of the provisions of the Declaration of Trust of the Fund disclaiming
shareholder and Trustee liability for acts or obligations of the Trust and the
Fund.
XXXXXXXXXXX/QUEST FOR VALUE FAMILY OF FUNDS
On Behalf of SMALL CAPITALIZATION FUND
By: ____________________________________
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
By:____________________________________
Xxxxxx X. Xxxxxxx
Executive Vice President
OFMI/family.cap
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