Exhibit 13(b)
CLASS 2 DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN made as of the 11th day of March, 2003, by and between
each of the investment companies listed on Exhibit A, as such Exhibit may be
amended from time to time (each, a "Fund," and, collectively, the "Funds"),
severally and not jointly, and Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated, a Delaware corporation ("MLPF&S").
W I T N E S S E T H:
WHEREAS, the Fund intends to engage in business as a no-load, open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and
WHEREAS, MLPF&S is a securities firm engaged in the business of selling
shares of investment companies to investors; and
WHEREAS, each Fund proposes to enter into a Distribution Agreement with
MLPF&S, pursuant to which MLPF&S will act as the exclusive distributor and
representative of each Fund in the offer and sale of shares of each Fund,
including the Class 2 shares (the "Class 2 Shares") of each Fund, to the public;
and
WHEREAS, each Fund desires to adopt this Class 2 Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act pursuant to
which each Fund will pay an account maintenance fee and a distribution fee to
MLPF&S with respect to the Fund's Class 2 Shares; and
WHEREAS, the Trustees of each Fund have determined that there is a
reasonable likelihood that adoption of the Plan will benefit each Fund and its
Class 2 shareholders.
NOW, THEREFORE, each Fund hereby adopts, and MLPF&S hereby agrees to the
terms of, the Plan in accordance with Rule 12b-1 under the Investment Company
Act on the following terms and conditions:
1. The Fund shall pay MLPF&S with respect to the Class 2 Shares of each
Fund an account maintenance fee under the Plan at the end of each month at the
annual rate of average daily net assets of such Fund accounts specified in
Exhibit B, to compensate MLPF&S for providing, or arranging for the provision
of, account maintenance activities with respect to Class 2 Shareholders of the
Fund. Such activities and services will relate to account maintenance activities
relating to Class 2 Shares of the Fund and the sale, promotion and marketing of
the Class 2 Shares of the Fund. Expenditures under the Plan may consist of the
costs of making services available to Class 2 shareholders incurred in
connection with such account maintenance activities (including assistance in
connection with inquiries related to shareholder accounts).
2. The Fund shall pay MLPF&S with respect to Class 2 Shares of each Fund
a distribution fee under the Plan at the end of each month at the annual rate of
average daily net assets of such Fund specified in Exhibit B to compensate
MLPF&S for providing, or arranging for the provision of, sales and promotional
activities and services. Such activities and services will relate to the sale,
promotion and marketing of the Class 2 Shares of each Fund. Such expenditures
may consist of sales commissions to financial intermediaries for selling Class 2
Shares, compensation, sales incentives and payments to sales and marketing
personnel, and the payment of expenses incurred in its sales and promotional
activities (including advertising expenditures related to the Fund and the costs
of preparing and distributing promotional materials). The distribution fee may
also be used to pay the financing costs of carrying the unreimbursed
expenditures described in this Paragraph 2. Payment of the distribution fee
described in this Paragraph 2 shall be subject to any limitations set forth in
any applicable regulation of the National Association of Securities Dealers,
Inc.
3. MLPF&S shall provide each Fund for review by the Board of 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 account
maintenance fee and distribution fee during such period. The report shall
include an itemization of the distribution and account maintenance expenses
incurred by MLPF&S in respect of the Fund, the purpose of such expenditures and
a description of the benefits derived by the Fund therefrom.
4. In the event that the aggregate payments received by MLPF&S under the
Distribution Agreement in any fiscal year of the Fund shall exceed the amount of
the distribution and account maintenance expenditures of MLPF&S in respect of
the Fund in such fiscal year, MLPF&S shall be required to reimburse the Fund the
amount of such excess.
5. This Plan shall not take effect with respect to a Fund until it has
been approved, together with any related agreements, 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 this 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 Plan and such
related agreements.
6. The 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 Plan in paragraph 5 hereof.
7. The Plan may be terminated at any time with respect to any Fund by
vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority of the
outstanding Class 2 voting securities of the applicable Fund.
8. The Plan may not be amended to increase materially the rate of
payments provided for in Paragraphs 1 or 2 hereof with respect to any Fund
unless such amendment is approved by at least a majority, as defined in the
Investment Company Act, of the outstanding Class 2 voting securities of the
applicable Fund, and by the Trustees of the Fund in the manner provided for in
Paragraph 5 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in Paragraph 5
hereof.
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9. While the Plan is in effect with respect to any Fund, the selection
and nomination of 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.
10. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to Paragraph 3 hereof, for a period of not less
than six years from the date of the Plan, or the date of such agreement or
report, as the case may be, the first two years in an easily accessible place.
11. The Declaration of Trust establishing each Fund, 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 of the Fund 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 a Fund shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of a Fund, but
the trust property only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first above written.
EACH OF THE INVESTMENT COMPANIES LISTED
ON EXHIBIT A ATTACHED HERETO
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: Vice President and Treasurer
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxx Xxxxx
------------------------------------
Title: First Vice President
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Exhibit A
WCMA Money Fund
WCMA Government Securities Fund
WCMA Tax-Exempt Fund
WCMA Treasury Fund
Exhibit B
Class 2 Distribution Fees
Account
Name of Fund Maintenance Fee Distribution Fee
------------ --------------- ----------------
WCMA Money Fund ....................... 0.25% 0.43%
WCMA Government Securities Fund ....... 0.25% 0.43%
WCMA Tax-Exempt Fund .................. 0.25% 0.43%
WCMA Treasury Fund .................... 0.25% 0.43%
