------------------------------------------------------------------------------
Exhibit 23 (0)
Rule 18f-3 Plan
------------------------------------------------------------------------------
CNI CHARTER FUNDS
MULTIPLE CLASS PLAN
This Multiple Class Plan (this "Plan"), dated ___________________, 1999, is
required by Securities and Exchange Commission Rule 18f-3 promulgated under the
Investment Company Act of 1940, as amended (the "1940 Act").
This Plan shall govern the terms and conditions under which CNI Charter
Funds (the "Trust") may issue separate classes of shares representing interests
in the series of the Trust (each a "Fund" and together the "Funds") listed on
APPENDIX A. To the extent that a subject matter herein is covered by the
Trust's Agreement and Declaration of Trust or Bylaws, the Agreement and
Declaration of Trust and Bylaws will control in the event of any inconsistencies
with the descriptions herein.
SECTION 1. RIGHTS AND OBLIGATIONS.
Except as set forth herein, all classes of shares issued by a Fund shall
have identical voting, dividend, liquidation and other rights, preferences,
powers, restrictions, limitations, qualifications, designations, and terms and
conditions. The only differences among the various classes of shares relate
solely to the following: (a) each class may be subject to different class
expenses and sales charges as discussed under Section 3 of this Plan; (b) each
class may bear a different identifying designation; (c) each class has exclusive
voting rights with respect to matters solely affecting such class (except as set
forth in Section 6 below); (d) each class may have different exchange
privileges; and (e) each class may provide for the automatic conversion of that
class into another class.
SECTION 2. CLASSES OF SHARES AND DESIGNATION THEREOF.
Each Fund may offer any or all of the following classes of shares:
(a) CLASS A SHARES. "Class A Shares" will be offered with no sales
charges or transactions fees. Class A Shares will be subject to a Rule
12b-1 distribution fee of up to an annual rate of 0.50% and an ongoing
shareholder servicing fee of up to an annual rate of 0.25 % of average
daily net assets attributable to the Class A Shares. Class A Shares do not
automatically convert into shares of any other class.
(b) CLASS S SHARES. "Class S Shares" will be offered with no sales
charges or transactions fees. Class S Shares will be subject to a Rule
12b-1 distribution fee of up to an annual rate of 0.50% and an ongoing
shareholder servicing fee of up to an annual rate of 0.25 % of average
daily net assets attributable to the Class S Shares. Class S Shares do not
automatically convert into shares of any other class.
1
(c) INSTITUTIONAL CLASS SHARES. "Institutional Class Shares" will be
offered with no sales charges or transactions fees. Institutional Class
Shares will not be subject to a Rule 12b-1 distribution fee but will be
subject to a shareholder servicing fee of up to an annual rate of 0.25% of
average daily net assets attributable to the Institutional Class Shares.
Institutional Class Shares do not automatically convert into shares of any
other class.
SECTION 3. ALLOCATION OF EXPENSES.
(a) CLASS EXPENSES. Each class of shares may be subject to different
class expenses consisting of: (1) front-end sales charges or contingent
deferred sales charges; (2) Rule 12b-1 plan distribution fees and
shareholder service fees, if applicable to a particular class; (3) transfer
agency and other recordkeeping costs to the extent allocated to a
particular class; (4) Securities and Exchange Commission ("SEC") and blue
sky registration fees incurred separately by a particular class; (5)
litigation or other legal expenses relating solely to a particular class;
(6) printing and postage expenses related to the preparation and
distribution of class-specific materials such as shareholder reports,
prospectuses and proxies to shareholders of a particular class; (7)
expenses of administrative personnel and services as required to support
the shareholders of a particular class; (8) audit or accounting fees or
expenses relating solely to a particular class; (9) Trustee fees and
expenses incurred as a result of issues relating solely to a particular
class and (10) any other expenses subsequently identified that should be
properly allocated to a particular class, which shall be approved by the
Board of Trustees; (collectively, the "Class Expenses").
(b) OTHER EXPENSES. Except for the Class Expenses discussed above (which
will be allocated to the appropriate class), all expenses incurred by each
Fund will be allocated to each class of shares on the basis of the net
asset value of each class to the net asset value of the Trust or the Fund,
as the case may be.
(c) WAIVERS AND REIMBURSEMENTS OF EXPENSES. City National Bank (the
"Manager") and any provider of services to the Funds may waive or reimburse
the expenses of a particular class or classes, provided, however, that such
waiver shall not result in cross-subsidization between classes.
SECTION 4. ALLOCATION OF INCOME.
The Funds will allocate income and realized and unrealized capital gains
and losses based on the relative net assets of each class of shares.
SECTION 5. EXCHANGE PRIVILEGES.
2
A class of shares of a Fund may be exchanged only for the same class of
shares of another Fund. All exchanges will be subject to such conditions as may
be imposed from time to time as disclosed in APPENDIX B.
SECTION 6. AUTOMATIC CONVERSIONS.
At this time, no class of shares will convert automatically into any other
class of shares. Any future implementation of this conversion feature is
subject to the continuing availability of a ruling or regulations of the
Internal Revenue Service, or of an opinion of counsel or tax adviser, stating
that the conversion of one class of shares to another does not constitute a
taxable event under federal income tax law. The conversion feature may be
suspended if such a ruling, regulation or opinion is not available.
SECTION 7. EFFECTIVE WHEN APPROVED.
This Plan shall not take effect until a majority of the Trustees of the
Trust, including a majority of the Trustees who are not interested persons of
the Trust, find that the Plan, as proposed and including the expense
allocations, is in the best interests of each class individually and the Trust
as a whole.
SECTION 8. AMENDMENTS.
This Plan may not be amended to materially change the provisions of this
Plan unless such amendment is approved in the manner specified in Section 7
above.
3
APPENDIX A TO
MULTIPLE CLASS PLAN
OF
CNI CHARTER FUNDS
MULTIPLE CLASS FUNDS
FUNDS
CNI Charter Money Market Fund
CNI Charter Government Fund
CNI Charter California Tax-Exempt Fund
0
XXXXXXXX X TO
MULTIPLE CLASS PLAN
OF
CNI CHARTER FUNDS
EXCHANGE PRIVILEGES
SECTION 1. TERMS AND CONDITIONS OF EXCHANGES.
Shareholders of the Funds discussed herein may participate in exchanges as
described below. An exchange is permitted only in the following circumstances:
(a) if two Funds offer more than one class of shares, the exchange must be
between the same class of shares (E.G., Class A Shares of one Fund cannot
be exchanged for Class S Shares of another Fund, nor can Class A Shares of
one Fund be exchanged for Class S Shares of that same Fund);
(b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the Fund acquired through
such exchange;
(c) the shares of the Fund acquired through exchange must be qualified for
sale in the state in which the shareholder resides;
(d) the exchange must be made between accounts having identical
registrations and addresses;
(e) the full amount of the purchase price for the shares being exchanged
must have already been received by the Fund;
(f) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or
Form W-9 (certifying exempt status) must have been received by the Fund;
(g) newly acquired shares (through either an initial or subsequent
investment) are held in an account for at least ten days, and all other
shares are held in an account for at least one day, prior to the exchange;
and
(h) certificates (if any) representing shares must be returned before
shares can be exchanged.
Because excessive exchanges can harm a Fund's performance, the Funds
reserve the right to terminate, either temporarily or permanently, exchange
privileges of any shareholder who makes more than four exchanges out of any one
Fund during a twelve-month period and to
5
refuse an exchange into a Fund from which a shareholder has redeemed shares
within the previous 90 days (accounts under common ownership or control and
accounts with the same taxpayer identification number will be counted
together. This limit may be modified for accounts in certain institutional
retirement plans to conform to plan exchange limits and U.S. Department of
Labor regulations (for those limits, see plan materials). The Funds reserve
the right to refuse exchanges by any person or group if, in the Manager's
judgment, a Fund would be unable effectively to invest the money in
accordance with its investment objective and policies, or would otherwise be
potentially adversely affected. A shareholder's exchanges may be restricted
or refused if a Fund receives, or the Manager anticipates, simultaneous
orders affecting significant portions of that Fund's assets and, in
particular, a pattern of exchanges coinciding with a "market timing"
strategy. Although the Funds attempt to provide prior notice to affected
shareholders when it is reasonable to do so, they may impose these
restrictions at any time. The Funds reserve the right to terminate or modify
the exchange privileges of Fund shareholders in the future.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY SUCH FUNDS OR BY THE MANAGER OR DISTRIBUTOR AT
ANY TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares to be exchanged will be redeemed at their net asset value as
determined at the close of business on the day that an exchange request in
proper form is received, as described in the applicable prospectus. Exchange
requests received after the required time will result in the redemption of
shares at their net asset value as determined at the close of business on the
next business day.
In the event of unusual market conditions, a Fund reserves the right to
reject any exchange request if, in the judgment of the Manager, the number of
requests or the total value of the shares that are the subject of the exchange
are likely to place a material burden on a Fund. For example, the number of
exchanges by investment managers making market-timing exchanges may be limited.
SECTION 2. FEES.
There is no fee for exchanges among the Funds.
SEE THE APPLICABLE PROSPECTUS FOR MORE INFORMATION ABOUT SHARE EXCHANGES.
6
