1
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 Ready Assets
Trust, a Massachusetts business trust (the "Trust"), and Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, a Delaware corporation ("MLPF&S").
WHEREAS, the Trust 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 Trust to its
customers and substantially all of the shareholders of the Trust are MLPF&S
customers who maintain their Trust accounts through MLPF&S (such accounts being
referred to herein as the "MLPF&S Trust Accounts");
WHEREAS, MLPF&S provides a variety of administrative and operational
services to MLPF&S Trust Accounts including processing shareholder orders and
administering MLPF&S Trust Accounts (such services being referred to herein as
"MLPF&S Administrative Services") which are being provided pursuant to the
management arrangements between the Trust and Xxxxxxx Xxxxx Asset Management,
L.P. ("MLAM");
WHEREAS, MLPF&S Financial Consultants and other personnel spend
substantial amounts of time providing shareholder services to existing and
prospective MLPF&S Trust Accounts, including furnishing information as to the
status of such MLPF&S Trust Accounts and handling purchase and redemption orders
for Trust shares (such services being referred to herein as "MLPF&S Shareholder
Services and Activities");
2
WHEREAS, pursuant to a Shareholder Servicing Plan and Agreement made as
of August 26, 1983 with MLPF&S, as amended and restated as of April 29, 1988 (as
so amended, the "Plan") and continued annually thereafter, pursuant to the
provisions of Rule 12b-1 under the Investment Company Act, the Trustees of the
Trust have determined that the Trust 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 Trust have determined that in addition to
providing the services and activities provided in the Plan, MLPF&S in its
discretion may promote the sale, marketing and distribution of the shares of the
Trust by engaging in advertising activities in newspapers, magazines, radio,
television and other media and through direct mail solicitations and that a
portion of the aforesaid direct payments made to MLPF&S may be utilized to
reimburse MLPF&S for the costs (or a portion thereof) of preparing, running and
otherwise engaging in such advertising activities (the "Advertising
Expenditures");
WHEREAS, the Trust 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 the provisions of Paragraph 10 of the
Plan as they relate to material amendments which do not increase the fee paid
pursuant to the Plan and in accordance with Rule 12b-1 under the Investment
Company Act;
WHEREAS, MLPF&S desires to enter into the Amended Plan on said terms
and conditions; and
2
3
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of the Amended Plan will benefit the Trust
and its shareholders:
NOW, THEREFORE, the Trust hereby adopts the Amended Plan in accordance
with the requirements of Paragraph 10 of the Plan and Rule 12b-1 under the
Investment Company Act and the parties hereto enter into this agreement on the
following terms and conditions:
1. The Trust is hereby authorized to utilize its assets to
make payments to MLPF&S pursuant to the Amended Plan (i) to compensate
MLPF&S financial consultants and other directly involved MLPF&S
personnel for providing the MLPF&S Shareholder Services and Activities
with respect to MLPF&S Trust Accounts and (ii) subject to the
limitations specified in Paragraph 2, to reimburse MLPF&S for part or
all of any Advertising Expenditures incurred by MLPF&S with respect to
shares of the Trust.
2. The Trust 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 Trust Accounts. Out of such fee, MLPF&S, in its sole
discretion, may expend an amount not exceeding 0.01% of the average
daily net asset value of the MLPF&S Trust Accounts as reimbursement for
Advertising Expenditures; MLPF&S is obligated to expend the remaining
amount of the fee for compensation, including sales incentives and
bonuses, to MLPF&S financial consultants and other directly involved
MLPF&S personnel (such expenditures of the fee, including Advertising
Expenditures, being referred to as the "Plan Expenditures"). The fee is
not to be considered compensation for the MLPF&S Administrative
Services.
3
4
3. 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 Trust
the amount of such excess.
4. MLPF&S shall provide the Trust 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.
5. MLPF&S will use its best efforts in rendering and causing
its employees to render services to the Trust, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations hereunder, MLPF&S shall not be liable to the Trust
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 Trust 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 Trust
and (b) those Trustees of the Trust who are not "interested persons" of
the Trust, 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.
4
5
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 Trust.
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 Trust, and no other
material amendment to the Amended Plan shall be made unless approved in
the manner provided for approval in Paragraph 7.
11. While the Amended Plan is in effect, the selection and
nomination of Trustees who are not interested persons, as defined in
the Investment Company Act, of the Trust shall be committed to the
discretion of the Trustees who are not interested persons.
12. The Trust shall preserve copies of the Plan and the
Amended Plan and any related agreements and all reports made pursuant
to Paragraph 4, for a period of not less than six years, the first two
years in an easily accessible place.
13. The Declaration of Trust establishing Xxxxxxx Xxxxx Ready
Assets Trust, dated May 14, 1987, 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 Ready Assets Trust" refers to the
5
6
Trustees under the Declaration collectively as Trustees, but not as
individuals or personally; and no Trustee, shareholder, officer,
employee or agent of Xxxxxxx Xxxxx Ready Assets Trust 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 Ready Assets Trust, but the Trust Property (as defined in
the Declaration) only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amended and Restated Shareholder Servicing Plan and Agreement as of the date
first above written.
XXXXXXX XXXXX READY ASSETS TRUST
By /s/ Xxxxxx X. Xxxxxxx
----------------------------------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxx Xxxxxx
----------------------------------
6
