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Exhibit m(1)
AMENDED AND RESTATED
DISTRIBUTION PLAN
DISTRIBUTION PLAN, dated as of August 20, 1985 and amended and restated
effective as of May 5, 2000, of CitiFunds Tax Free Reserves, a Massachusetts
business trust (the "Fund"). This Plan relates solely to shares of beneficial
interest of the Fund that are designated "Class N" ("Shares").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered under the Investment Company Act of 1940
(collectively with the rules and regulations promulgated thereunder, the "1940
Act"); and
WHEREAS, the Fund intends to distribute the Shares of the Fund in
accordance with Rule 12b-1 under the 1940 Act ("Rule 12b-1"), and desires to
adopt this Distribution Plan (the "Plan") as a plan of distribution pursuant to
such Rule; and
WHEREAS, the Fund desires to engage CFBDS, Inc., a Massachusetts
corporation, to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Fund desires to enter into a distribution agreement (in
such form as may from time to time be approved by the Board of Trustees of the
Fund in the manner specified in Rule 12b-1) with the Distributor, whereby the
Distributor will provide facilities and personnel and render services to the
Fund in connection with the offering and distribution of the Shares (the
"Distribution Agreement"); and
WHEREAS, the Board of Trustees, in considering whether the Fund should
adopt and implement this Plan, has evaluated such information as it deemed
necessary to an informed determination as to whether this Plan should be adopted
and implemented and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets of the Fund for such purposes,
and has determined that there is a reasonable likelihood that the adoption and
implementation of this Plan will benefit the Fund and its shareholders.
NOW, THEREFORE, the Board of Trustees hereby adopts this Plan for the
Fund as a plan for distribution in accordance with Rule 12b-1, on the following
terms and conditions:
1. As specified in the Distribution Agreement, the Distributor shall
provide facilities, personnel and a program with respect to the offering and
sale of the Shares to customers of financial institutions which have entered
into shareholder servicing agreements with the Fund. Among other things, the
Distributor shall be responsible for all expenses of printing (excluding
typesetting) and distributing prospectuses to prospective shareholders and
providing such other related services as are reasonably necessary in connection
therewith.
2. The Distributor shall bear all distribution-related expenses
described in paragraph 1, including, without limitation, the compensation of
personnel necessary to provide such services and all costs of travel, office
expenses (including rent and overhead), equipment, printing, delivery and
mailing costs.
3. As consideration for all services performed and expenses incurred in
the performance of its obligation under the Distribution Agreement, except in
connection with print or electronic media advertising, the Fund shall pay the
Distributor a distribution fee (the "Basic Distribution Fee") periodically at an
annual rate of 0.10% of the Funds average daily net assets for its then-current
fiscal year. The Fund shall pay the Distributor an additional fee at an annual
rate not to exceed 0.10% of the Fund's average daily net assets for its
then-current fiscal year in anticipation of, or as reimbursement for, expenses
incurred by the Distributor in connection with print or electronic media
advertising in connection with the sale of Shares.
4. The Fund shall pay all fees and expenses of any independent auditor,
legal counsel, administrator, transfer agent, custodian, shareholder servicing
agent, registrar or dividend disbursing agent of the Fund; expenses of
distributing and redeeming Shares and servicing shareholder accounts; expenses
of preparing, printing and mailing prospectuses, shareholder reports, notices,
proxy statements and reports to governmental officers and commissions and to
shareholders of the Fund, except that the Distributor shall be responsible for
the expenses of printing (excluding typesetting) and distributing prospectuses
to prospective shareholders as provided in paragraphs 1 and 2 hereof; expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; expenses of calculating the net asset value of
Shares; expenses of shareholder meetings; and expenses relating to the issuance,
registration and qualification of Shares.
5. Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Articles of Incorporation or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Fund.
6. This Plan shall become effective upon (a) approval by a vote of at
least a majority of the outstanding voting securities of the Fund, and (b)
approval by a vote of the Board of Trustees and vote of a majority of the
Trustees who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan (the "Qualified Trustees"), such votes to be cast in person
at a meeting called for the purpose of voting on this Plan.
7. This Plan shall continue in effect indefinitely; provided, however,
that such continuance is subject to annual approval by a vote of the Board of
Trustees and a majority of the Qualified Trustees, such votes to be cast in
person at a meeting called for the purpose of voting on continuance of this
Plan. If such annual approval is not obtained, this Plan shall expire on the
date which is 15 months after the date of the last approval.
8. This Plan may be amended at any time by the Board of Trustees of the
Fund, provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon approval by
a vote of a majority of the outstanding voting securities of the Fund, and (b)
any material amendment of this Plan shall be effective only upon approval by a
vote of the Board of Trustees and a majority of the Qualified Directors, such
votes to be cast in person at a meeting called for the purpose of voting on such
amendment. This Plan may be terminated at any time by vote of a majority of the
Qualified Trustees or by a vote of a majority of the outstanding voting
securities of the Fund.
9. The Fund and the Distributor each shall provide the Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended under the Plan and the purposes for which such
expenditures were made.
10. While this Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not interested persons of the Fund.
11. For the purposes of this Plan, the terms, interested persons and
majority of the outstanding voting securities are used as defined in the 1940
Act. In addition, for purposes of determining the fees payable to the
Distributor, the value of the Fund's net assets shall be computed in the manner
specified in the Fund's then-current prospectus for computation of the net asset
value of the Fund's Shares.
12. The Fund shall preserve copies of this Plan, and each agreement
related hereto and each report referred to in paragraph 9 hereof (collectively,
the "Records") for a period of six years from the end of the fiscal year in
which such Record was made and each such Record shall be kept in an easily
accessible place for the first two years of said record-keeping.
13. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
14. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
