DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
FOR CLASS C SHARES OF
XXXXXXXXXXX CALIFORNIA TAX-EXEMPT FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day of
November, 1995, by and between XXXXXXXXXXX CALIFORNIA TAX-EXEMPT
FUND
(the "Fund") and XXXXXXXXXXX FUNDS DISTRIBUTOR, INC. (the
"Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class C 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
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foregoing, a majority of the Fund'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 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, within forty-five (45)
days of the end of each calendar quarter, in the aggregate amount (i) 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) 0.1875% (0.75% 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 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
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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
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 shall 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 0.1875% (0.75% on an annual basis)
of the average during the calendar quarter of the
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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 for a period of more than one (1) year.
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 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
sell 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 the 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 (ii) 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
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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.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of those persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("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 Fund
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shall provide written reports to the Fund'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.
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7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Trustees cast in person at a
meeting called on March 16, 1995 for the purpose of voting on this Plan, and
takes effect as of the date first set forth above. 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 C
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.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of 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 Fund.
XXXXXXXXXXX CALIFORNIA TAX-EXEMPT FUND
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Assistant Secretary
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx, Vice President
and Secretary
OFMI/790C
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