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AMENDED AND RESTATED
SHAREHOLDER SERVICING PLAN AND AGREEMENT
AMENDED AND RESTATED SHAREHOLDER SERVICING PLAN AND AGREEMENT made as
of the 5th day of November, 1996 by and between Xxxxxxx Xxxxx U.S.A. Government
Reserves, a Massachusetts business trust (the "Fund"), and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, a Delaware corporation ("MLPF&S").
WHEREAS, the Fund is a no-load open-end investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), which operates as a money market fund;
WHEREAS, MLPF&S acts as a dealer selling shares of the Fund to its
customers and substantially all of the shareholders of the Fund are MLPF&S
customers who maintain their Fund accounts through MLPF&S (such accounts being
referred to herein as the "MLPF&S Fund Accounts");
WHEREAS, MLPF&S provides a variety of administrative and operational
services to MLPF&S Fund Accounts including processing shareholder orders and
administering MLPF&S Fund Accounts (such services being referred to as "MLPF&S
Administrative Services") which are being provided pursuant to the management
arrangements between the Fund and Xxxxxxx Xxxxx Asset Management, L.P. ("MLAM");
WHEREAS, MLPF&S account executives and other personnel spend
substantial amounts of time providing shareholder services to existing and
prospective MLPF&S Fund Accounts, including furnishing information as to the
status of such MLPF&S Fund Accounts and handling purchase and redemption orders
for Fund shares, for which they receive no compensation (such services being
referred to herein as "MLPF&S Shareholder Services and Activities");
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WHEREAS, pursuant to a Shareholder Servicing Plan and Agreement (the
"Plan") made as of December 30, 1988 with MLPF&S and continued annually
thereafter, pursuant to the provisions of Rule 12b-1 under the Investment
Company Act, the Trustees of the Fund have determined that the Fund should make
direct payments to MLPF&S for distribution to its financial consultants and
other directly involved MLPF&S personnel as compensation for the MLPF&S
Shareholder Services and Activities and that such payments should be in addition
to the management compensation being paid to MLAM;
WHEREAS, the Trustees of the Fund have determined that the Fund should
make direct payments to MLPF&S for distribution to its account executives and
other directly involved Xxxxxxx Xxxxx personnel as compensation for the MLPF&S
Shareholder Services and Activities and that such payments should be in addition
to the management compensation being paid to MLAM;
WHEREAS, the Fund desires to adopt this Amended and Restated
Shareholder Servicing Plan and Agreement (referred to herein as the "Amended
Plan", which term shall be deemed to include the Plan when the context requires)
in the manner and on the terms and conditions hereinafter set forth, which
Amended Plan must be adopted pursuant to Rule 12b-1 under the Investment Company
Act because the services for which compensation is to be provided under the
Amended Plan may include services associated with the distribution of Fund
shares;
WHEREAS, MLPF&S desires to enter into the Amended Plan on said terms
and conditions; and
WHEREAS, the Trustees of the Fund have determined that there is a
reasonable likelihood that adoption of the Amended Plan will benefit the Fund
and its shareholders:
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NOW, THEREFORE, the Fund hereby adopts the Amended Plan in accordance
with Rule 12b-1 under the Investment Company Act and the parties hereto enter
into this agreement on the following terms and conditions:
1. The Fund is hereby authorized to utilize its assets to make
payments to MLPF&S pursuant to the Amended Plan to compensate MLPF&S
account executives and other directly involved MLPF&S personnel for
providing the MLPF&S Shareholder Services and Activities with respect
to MLPF&S Fund Accounts.
2. The Fund shall pay MLPF&S a fee at the end of each month at
the annual rate of 0.125% of the average daily net asset value of the
MLPF&S Fund Accounts. MLPF&S is obligated to expend the entire amount
of the fee for compensation, including incentives and bonuses, to
MLPF&S account executives and other directly involved MLPF&S personnel
(the "Plan Expenditures"). The fee is for direct personal services and
is not to be considered compensation for the MLPF&S Administrative
Services.
3. MLPF&S shall provide the Fund for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the
disbursement of the fee for Plan Expenditures during such period. The
report shall include an itemization of the Plan Expenditures made by
MLPF&S and the purpose of such Plan Expenditures.
4. In the event that the aggregate payments received by MLPF&S
under the Amended Plan in any year shall exceed the Plan Expenditures
in such fiscal year, MLPF&S shall be required to reimburse the Fund the
amount of such excess.
5. MLPF&S will use its best efforts in rendering and causing
its employees to render services to the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations hereunder, MLPF&S shall not be liable
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to the Fund or any of its shareholders for any error of judgment or
mistake of law or for any act of omission or for any losses sustained
by the Fund or its shareholders.
6. Nothing contained in the Amended Plan shall prevent MLPF&S
or any affiliated person of MLPF&S from performing services similar to
those to be performed hereunder for any other person, firm or
corporation or for its or their own accounts or for the accounts of
others.
7. The Amended Plan shall not take effect until it has been
approved by votes of a majority of both (a) the Trustees of the Fund
and (b) those Trustees of the Fund who are not "interested persons" of
the Fund, as defined in the Investment Company Act, and have no direct
or indirect financial interest in the operation of the Amended Plan or
any agreements related to it (the "Rule 12b-1 Trustees"), cast in
person at a meeting or meetings called for the purpose of voting on the
Amended Plan.
8. The Amended Plan shall continue in effect for so long as
such continuance is specifically approved at least annually in the
manner provided for approval of the Amended Plan in Paragraph 7.
9. The Amended Plan may be terminated at any time by vote of a
majority of the Rule 12b-1 Trustees or by vote of a majority of the
outstanding voting securities of the Fund.
10. The Amended Plan may not be amended to increase materially
the fee provided for in Paragraph 2 unless and until such amendment is
approved in the manner provided for in Paragraph 7 and approved by a
vote of at least a majority, as defined in the Investment Company Act,
of the outstanding voting securities of the Fund, and no other material
amendment to the Amended Plan shall be made unless approved in the
manner provided for in Paragraph 7.
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11. While the Amended Plan is in effect, the selection and
nomination of the Trustees who are not interested persons, as defined
in the Investment Company Act, of the Fund shall be committed to the
discretion of the Trustees who are not interested persons.
12. The Fund shall preserve copies of the Plan and the Amended
Plan and any related agreements and all reports made pursuant to
Paragraph 3, for a period of not less than six years from the date of
the Amended Plan, or the agreements or such report, as the case may be,
the first two years in an easily accessible place.
13. The Declaration of Trust establishing Xxxxxxx Xxxxx U.S.A.
Government Reserves, dated July 29, 1982, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides
that the name "Xxxxxxx Xxxxx U.S.A. Government Reserves" refers to the
Trustees under the Declaration collectively as Trustees, but not as
individuals or personally; and no Trustee, shareholder, officer,
employee or agent of Xxxxxxx Xxxxx U.S.A. Government Reserves shall be
held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim of
said Xxxxxxx Xxxxx U.S.A. Government Reserves, but the Trust Property
(as defined in the Declaration) only shall be liable.
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WHEREAS, the parties hereto have executed and delivered this
Shareholder Servicing Plan and Agreement as of the date first above written.
XXXXXXX XXXXX, U.S.A. GOVERNMENT RESERVES
By /s/ Xxxxxx X. Xxxxxxx
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxx Xxxxxx
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