Exhibit m.2
Rule 12b-1 Distribution Plan
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Class B Shares
RULE 12b-1 DISTRIBUTION PLAN
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This distribution plan (the "Rule 12b-1 Distribution Plan" or
the "Plan") has been adopted by the Class B shareholders of Phoenix-Goodwin
California Tax Exempt Bonds, Inc.(the "Fund"), a Maryland Corporation, on May
16, 2000, pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "Act").
W H E R E A S:
The Fund is an open-end management investment company and is
registered as such under the Act. The Fund has a multi-class distribution system
that allows the Fund to offer investors the option of purchasing shares of
separate share classes. This Plan governs only the Class B Shares of the Fund.
The Fund may, from time to time, distribute shares of each class of the Fund
through a contractual arrangement (the "Distribution Agreement") with a
principal distributor for such class of shares duly qualified to act on behalf
of the Fund in such capacity (any such principal distributor, the "Principal
Distributor"), it being understood that the Fund may change the Principal
Distributor for any class of shares from time to time. The Board of Directors,
including a majority of the Qualified Directors (as defined in paragraph 5
herein), has determined to adopt the Plan. In voting to approve the Plan, the
Directors have determined, in the exercise of their reasonable business judgment
and in light of their fiduciary duty, that there is a reasonable likelihood that
this Plan will benefit the Class B Shares of the Fund with respect to which this
Plan will be effective and its shareholders.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. The Fund shall pay to each Principal Distributor of Class B
Shares its "Allocable Portion," as hereinafter defined, of the distribution fee
allowable under the Rules of Conduct of NASD Regulation, Inc. (the "Rules of
Conduct") in respect of such Class of Shares, consisting of a distribution fee
at the rate of three quarters of one percent (0.75%) per annum of the average
daily net asset value of such Class of Shares (the "Distribution Fee") and a
service fee at a rate of one quarter of one percent (0.25%) of the average daily
net asset value of such Class of Shares of the Fund. For purposes of applying
the limitation set forth in the Rules of Conduct on the maximum amount of the
Distribution Fee payable in respect of the Class B Shares, the Fund hereby
elects to add to six and one quarter percent (6.25%) of the issue price of the
Class B Shares, or such other percentage as may be proscribed in such Rules of
Conduct, interest thereon at the rate of prime plus one percent per annum. A
contingent deferred sales charge ("CDSC") also shall be payable by the holders
of Class B Shares in the case of early redemption of such Class B Shares.
2. The amounts set forth in paragraph 1 of this Plan shall be
paid for the Principal Distributor's services and expenses as distributor of the
Class B Shares of the Fund and
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may be spent by the Principal Distributor, in its discretion, on, among other
things, compensation to and expenses (including overhead and telephone expenses)
of account executives or other employees of the Principal Distributor or of
other broker-dealers who engage in or support distribution of shares; printing
of prospectuses and reports for other than existing shareholders; advertising;
preparation, printing and distribution of sales literature; and allowances to
other broker-dealers.
3. Any Distribution Agreement in respect of Class B Shares may
provide that: (I) the Principal Distributor in respect of such Distribution
Agreement will be deemed to have fully earned its Allocable Portion of the
Distribution Fee payable in respect of Class B Shares upon the sale of each
"Initial Issue Commission Share" (as hereinafter defined) taken into account in
determining such Principal Distributor's Allocable Portion of such Distribution
Fee; (II) except as provided in (III) below, the Fund's obligation to pay such
Principal Distributor its Allocable Portion of the Distribution Fee payable in
respect of the Class B Shares shall be absolute and unconditional and shall not
be subject to dispute, offset, counterclaim or any defense whatsoever (it being
understood that such provision is not a waiver of the Fund's right to pursue
such Principal Distributor and enforce such claims against the assets of such
Principal Distributor other than its right to the Distribution Fees and CDSCs in
respect of the Class B Shares); (III) the Fund's obligation to pay such
Principal Distributor its Allocable Portion of the Distribution Fee payable in
respect of the Class B Shares shall not be terminated or modified except to the
extent required by a change in the Act or the Rules of Conduct enacted or
promulgated after June 1, 2000 (a "Change-in-Applicable-Law"), or in connection
with a "Complete Termination" (as hereinafter defined) of this Plan in respect
of the Class B Shares; (IV) the Fund will not waive or change any CDSC in
respect of the Class B Shares, except as provided in the Fund's Prospectus or
statement of additional information without the consent of the Principal
Distributor (or its assigns); (V) except to the extent required by a
Change-in-Applicable-Law, neither the termination of such Principal
Distributor's role as principal distributor of the Class B Shares, nor the
termination of such Distribution Agreement nor the termination of this Plan will
terminate such Principal Distributor's right to its Allocable Portion of the
CDSCs in respect of Class B Shares sold prior to such termination; (VI) except
as provided in the Fund's Prospectus and statement of additional information,
until such Principal Distributor has been paid its Allocable Portion of the
Distribution Fees in respect of the Class B Shares, the Fund will not adopt a
plan of liquidation in respect of the Fund without the consent of such Principal
Distributor (or its assigns); and (VII) such Principal Distributor may sell and
assign its rights to its Allocable Portion of the Distribution Fees and CDSCs
(but not such Principal Distributor's obligations to the Fund under the
Distribution Agreement) to raise funds to make the expenditures related to the
distribution of Class B Shares and in connection therewith, upon receipt of
notice of such sale and assignment, the Fund shall pay to the purchaser or
assignee such portion of the Principal Distributor's Allocable Portion of the
Distribution Fees in respect of the Class B Shares so sold or assigned. For
purposes of this Plan, the term "Allocable Portion" means, in respect of
Distribution Fees payable in respect of the Class B Shares as applied to any
Principal Distributor, the portion of such Distribution Fees and CDSCs allocated
to such Principal Distributor in accordance with the Allocation Schedule (as
hereinafter defined). For purposes of this Plan, the term "Complete Termination"
of this Plan means a termination of this Plan involving the cessation of
payments of Distribution Fees hereunder in
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respect of Class B Shares and the cessation of payments of distribution fees
pursuant to every other rule 12b-1 plan of the Fund for every future class of
shares which, in the good faith determination of the Board of Directors of the
Fund, has substantially similar economic characteristics to the Class B Shares
taking into account the total sales charge, contingent deferred sales charge and
other similar charges, it being understood that the existing Class A Shares do
not have substantially similar economic characteristics to the Class B Shares.
For purposes of this Plan, the term "Allocation Schedule" means, in respect of
the Class B Shares, a schedule which shall be approved in the same manner as
this Plan as contemplated by Section 5 hereof for assigning to each Principal
Distributor of Class B Shares the portion of the total Distribution Fees payable
by the Fund in respect of the Class B Shares which has been earned by such
Principal Distributor, which shall be attached to and become a part of any
Distribution Agreement in respect of Class B Shares. For purposes of clause (I)
of the first sentence of this Section 3, the term "Initial Issue Commission
Share" shall mean, a Class B Share which is a Commission Share issued under
circumstances other than in connection with a permitted free exchange with
another fund. For purposes of the foregoing definition a "Commission Share"
shall mean each Class B Share which is issued under circumstances which would
normally give rise to an obligation of the holder of such Class B Share to pay a
CDSC upon redemption of such Share, including, without limitation, any Class B
Share issued in connection with a permitted free exchange, and any such Class B
Share shall not cease to be a Commission Share prior to the redemption
(including a redemption in connection with a permitted free exchange) or
conversion even though the obligation to pay the CDSC shall have expired or
conditions for thereof still exist.
4. This Plan shall not take effect until it has been approved
by a vote of at least a majority (as defined in the Act) of the outstanding
voting securities of Class B Shares of the Fund.
5. This Plan shall become effective with respect to the Class
B Shares upon approval, together with any related agreements, by a majority vote
of both (i) the Board of Directors and (ii) those Directors who are not
"interested persons" of the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Qualified Directors"), cast in person at a meeting called
for the purpose of voting on this Plan and such related agreements.
6. This Plan shall continue in effect for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in paragraph 5 herein.
7. In each year that this Plan remains in effect, any person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to this Plan or any related agreement shall prepare and furnish to the
Board and the Board shall review, at least quarterly, written reports, complying
with the requirements of Rule 12b-1 under the Act, of the amounts expended under
this Plan and purposes for which such expenditures were made.
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8. This Plan may be terminated at any time with respect to the
Class B Shares by a majority vote of the Qualified Directors or by vote of a
majority of the outstanding voting securities of Class B Shares.
9. This Plan may not be amended in order to increase
materially the amount of distribution expenses provided for in paragraph 1
herein unless such amendment is approved by a majority (as defined in the Act)
of the outstanding voting securities of Class B Shares and no material amendment
to this Plan shall be made unless approved in the manner provided in paragraph 5
herein.
10. While this Plan shall be in effect, the selection and
nomination of Directors who are not interested persons of the Fund (as defined
in the Act) shall be committed to the discretion of the Directors then in office
who are not interested persons of the Fund.
The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 7 herein, for a period of
not less than six years from the date of this Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
The Articles of Incorporation of the Fund, as amended, are on
file with the Department of Assessments and Taxation.
