AMENDED DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
XXXXXXXXXXX MAIN STREET CALIFORNIA MUNICIPAL FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 23rd day of
February, 1994, by and between XXXXXXXXXXX MAIN STREET FUNDS, INC. (the
"Corporation") on behalf of XXXXXXXXXXX MAIN STREET CALIFORNIA MUNICIPAL FUND
(the "Fund"), a series of the Corporation, and XXXXXXXXXXX FUNDS DISTRIBUTOR,
INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class B 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 a portion of its costs
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 (a)
distribution assistance in connection with the sale of Shares and/or (b)
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) Rule 2830 of the Conduct Rules of the National
Association of Securities Dealers, Inc., or any applicable amendment or
successor to such rule (the "NASD Conduct Rules"), 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 United States 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 service with respect to Shares held by Customers (defined below)
of the Recipient;
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(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 foregoing, a majority of the Trust's Board of
Directors (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 Directors") may remove any broker, dealer, bank or other
person or entity as a Recipient, whereupon such entity's rights as a
third-party beneficiary hereunder 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 brokerage
or other customers or investment advisory or other clients of such
Recipient 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 two entities would
otherwise qualify as Recipients as to the same Shares, the Recipient which
is the dealer of record on the Fund's books 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, (i) within forty-five
(45) days of the end of each calendar quarter, in the aggregate amount 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) within ten (10)
days of the end of each month, in the aggregate amount of 0.0625% (0.75%
on an annual basis) of the average during the month of the aggregate net
asset value of Shares computed as of the close of each business day (the
"Asset-Based Sales Charge") outstanding for six years or less (the
"Maximum Holding Period"). Such Service Fee payments received from the
Fund will compensate the Distributor and Recipients for providing
administrative support services of the type approved by the Board 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 inquires
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concerning the Fund, assisting in the establishment and maintenance of
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 the Distributor and 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 of the Fund
may reasonably 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 or 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 either the Distributor or
the Board still is not satisfied, it may take appropriate steps to
terminate the Recipient's status as such under the Plan, whereupon such
entity'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 Directors.
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
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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 Rule 2830 of the Conduct Rules. However, no such
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 Directors. 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 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.
(c) A majority of the Independent Trustees may at any time or from time to
time increase or 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
Maximum Holding Period, the Minimum Holding Period or the Minimum
Qualified Holdings. The Distributor shall notify all Recipients of the
Minimum Qualified Holdings, Maximum Holding Period or Minimum Holding
Period, if any, and the rate of 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.
(d) The Distributor is entitled to retain from the payments described in
Section 3(a) the aggregate amount of (i) the Service Fee on Shares
outstanding for less than the Minimum Holding Period, plus (ii) the
Asset-Based Sales Charge on Shares outstanding for not more than the
Maximum Holding Period, in each case computed as of the close of each
business day during that period and subject to reduction or elimination of
such amounts under the limits to which the Distributor is,
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or may become, subject under Rule 2830 of the NASD Conduct
Rules. Such amount is collectively referred to as the
"Quarterly Limitation."
The distribution assistance and administrative support services in
connection with the sale of Shares to be rendered by the Distributor 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
sells 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 Plan; (ii) paying compensation to and expenses of personnel of the
Distributor who support distribution of Shares by Recipients; (iii) paying
of or reimbursing the Distributor for interest and other borrowing costs
on unreimbursed Carry Forward Expenses (as hereafter defined) at the rate
paid by the Distributor or, if such amounts are financed by the
Distributor from its own resources or by an affiliate, at the rate of 1%
per annum above the prime rate (which shall mean the most preferential
interest rate on corporate loans at large U.S. money center commercial
banks) then being reported in the Eastern edition of the Wall Street
Journal (or if such prime rate is no longer so reported, such other rate
as may be designated from time to time by the Distributor with the
approval of the Independent Directors); (iv) other direct distribution
costs of the type approved by the Board, 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) any service rendered by the Distributor that a Recipient
may render pursuant to part (a) of this Section 3.
The Distributor's costs of providing the above-mentioned services are
hereinafter collectively referred to as "Distribution and Service Costs."
"Carry Forward Expenses" are Distribution and Service Costs that are not
paid in the quarter in which they arise because they exceed the Quarterly
Limitation. In the event that the Board should have reason to believe that
the Distributor may not be rendering appropriate distribution assistance
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.
(e) The excess in any quarter of (i) the Quarterly Limitation plus any
contingent deferred sales charge ("CDSC") payments recovered by the
Distributor on the proceeds of redemption of Shares over (ii) Distribution
and Service Costs during that quarter, shall be applied in the following
order of priority: first to interest on unreimbursed Carry Forward
Expenses,
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second to reduce any unreimbursed Carry Forward Expenses, third to reduce
Distribution and Service Costs during that quarter, and fourth to reduce
the Asset-Based Sales Charge payments by the Fund to the Distributor in
that quarter. Carry Forward Expenses shall be carried forward by the Fund
until payment can be made under the Quarterly Limitation.
(f) Under the Plan, payments may be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") 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 OFI), from its own resources, from
Asset-Based Sales Charge payments or from its borrowings.
4. Selection and Nomination of Directors. While this Plan is in effect, the
selection and nomination of those persons to be Directors of the Fund who are
not "interested persons" of the Fund ("Disinterested Directors") shall be
committed to the discretion of such Disinterested Directors. Nothing herein
shall prevent the Disinterested Directors 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 Directors.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing
distribution expenditures properly attributable to the Shares, including the
amount of all payments made pursuant to this Plan, the identity of the Recipient
of each such payment, the amount paid to the Distributor, and the Distribution
and Service Costs and Carry Forward Expenses for that period. The report shall
state whether all provisions of Section 3 of this Plan have been complied with.
The Distributor shall annually certify to the Board the amount of its total
expenses incurred that year and its total expenses incurred in prior years and
not previously recovered with respect to the distribution of Shares in
conjunction with the Board's annual review of the continuation of the Plan.
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
Directors 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 Directors 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
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a vote of the Board and its Independent Directors cast in person at a meeting
called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Board and its Independent Directors cast in person at
a meeting called on February 23, 1994 for the purpose of voting on this Plan,
and replaces the Fund's Distribution and Service Plan and Agreement dated
October 25, 1993. Unless terminated as hereinafter provided, it shall continue
in effect year to year thereafter 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 Directors 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 B Shareholders, in the manner described above, and all material amendments
must be approved by a vote of the Board and of the Independent Directors. This
Plan may be terminated at any time by vote of a majority of the Independent
Directors 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 Directors shall determine
whether the Distributor is entitled to payment from the Fund of all Carry
Forward Expenses and related costs properly incurred in respect of Shares sold
prior to the effective date of such termination, and whether the Fund shall
continue to make payment to the Distributor in the amount the Distributor is
entitled to retain under part (d) of Section 3 hereof, until such time as the
Distributor has been reimbursed for all such amounts by the Fund, by retaining
CDSC payments, or by a combination of both.
XXXXXXXXXXX MAIN STREET FUNDS, INC.
on behalf of XXXXXXXXXXX MAIN STREET
CALIFORNIA MUNICIPAL FUND
By:_________________________________
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
By:__________________________________
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