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THE GALAXY FUND
("GALAXY")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI-CLASS SYSTEM
I. INTRODUCTION
On February 23, 1995, the Securities and Exchange Commission (the
"Commission") promulgated Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), which permits the creation and operation of a
multi-class distribution structure without the need to obtain an exemptive order
under Section 18 of the 1940 Act. Rule 18f-3, which became effective on April 3,
1995, requires an investment company to file with the Commission a written plan
specifying all of the differences among the classes, including the various
services offered to shareholders, the different distribution arrangements for
each class, the methods for allocating expenses relating to those differences
and any conversion features or exchange privileges. On May 25, 1995, the Board
of Trustees of Galaxy authorized Galaxy to operate its multi-class distribution
structure in compliance with Rule 18f-3. On October 10, 1995, Galaxy filed a
Plan pursuant to Rule 18f-3 for operation of a multi-class system (the "Prior
Plan"), which had been approved by the Board of Trustees of Galaxy on September
7, 1995, with the Commission. Prior to the filing of the Prior Plan, Galaxy
operated a multi-class distribution structure pursuant to an exemptive order
granted by the Commission on February 19, 1992. The Amended and Restated Plan
pursuant to Rule 18f-3 for operation of a multi-class system presented herewith,
which was approved by the Board of Trustees of Galaxy on May 25, 2000,
supersedes the Prior Plan and any subsequent Plans pursuant to Rule 18f-3
approved by the Board of Trustees of Galaxy prior to May 25, 2000.
II. ATTRIBUTES OF CLASSES
A. GENERALLY
EQUITY FUNDS
Galaxy shall offer (a) six classes of shares -- Retail A Shares, Retail
B Shares, Prime A Shares, Prime B Shares, BKB Shares and Trust Shares -- in the
Asset Allocation Fund, Growth and Income Fund and International Equity Fund, (b)
five classes of shares -- Retail A Shares, Retail B Shares, Prime A Shares,
Prime B Shares and Trust Shares -- in the Equity Value Fund, Equity Growth Fund,
Equity Income Fund, Small Company Equity Fund, Small Cap Value Fund, Strategic
Equity Fund and Pan Asia Fund, (c) four classes of shares -- Retail A Shares,
Retail B Shares, BKB Shares and Trust Shares -- in the Growth Fund II, and (d)
three
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classes of shares -- Retail A Shares, Retail B Shares and Trust Shares -- in the
MidCap Equity Fund (each a "Fund" and collectively, the "Equity Funds").
BOND FUNDS
Galaxy shall offer (a) six classes of shares -- Retail A Shares, Retail
B Shares, Prime A Shares, Prime B Shares, BKB Shares and Trust Shares -- in the
Short-Term Bond Fund, Intermediate Government Income Fund and High Quality Bond
Fund, (b) five classes of shares -- Retail A Shares, Retail B Shares, Prime A
Shares, Prime B Shares and Trust Shares -- in the Tax-Exempt Bond Fund, (c)
three classes of shares -- Retail A Shares, BKB Shares and Trust Shares -- in
the Intermediate Tax-Exempt Bond Fund, Connecticut Intermediate Municipal Bond
Fund, Massachusetts Intermediate Municipal Bond Fund and Rhode Island Municipal
Bond Fund, and (d) two classes of shares -- Retail A Shares and Trust Shares --
in the Corporate Bond Fund, New Jersey Municipal Bond Fund, New York Municipal
Bond Fund, Connecticut Municipal Bond Fund and Massachusetts Municipal Bond Fund
(each a "Fund" and collectively, the "Bond Funds").
MONEY MARKET FUNDS
Galaxy shall offer (a) four classes of shares -- Retail A Shares,
Retail B Shares, BKB Shares and Trust Shares -- in the Money Market Fund, (b)
three classes of shares -- Retail A Shares, BKB Shares and Trust Shares -- in
the Tax-Exempt Fund and U.S. Treasury Fund, (c) two classes of shares -- Retail
A Shares and Trust Shares -- in the Government Fund, and (d) two classes of
shares -- Retail A Shares and Prime Shares -- in the Connecticut Municipal Money
Market Fund, Massachusetts Municipal Money Market Fund and New York Municipal
Money Market Fund (each a "Fund" and collectively, the "Money Market Funds").
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
class), certain related rights and certain shareholder services. More
particularly, the Retail A Shares, the Retail B Shares, the Prime A Shares, the
Prime B Shares, the BKB Shares, the Prime Shares and/or the Trust Shares of each
Fund shall represent interests in the same portfolio of investments of the
particular Fund, and shall be identical in all respects, except for: (a) the
impact of (i) expenses assessed to a class pursuant to the Shareholder Services
Plan, Distribution and Services Plan or Distribution Plan adopted for that
class, (ii) transfer agency expenses, and (iii) any other incremental expenses
identified from time to time that should be properly allocated to one class so
long as any changes in expense allocations are reviewed and approved by a vote
of the Board of Trustees, including a majority of the independent Trustees; (b)
the fact that (i) the Retail A Shares (other than Retail A Shares of the Pan
Asia Fund) shall vote separately on any matter submitted to holders of Retail A
Shares that pertains to the Shareholder Services Plan adopted for that class;
(ii) the Retail A Shares of the Pan Asia Fund shall vote separately on any
matter submitted to holders of Retail A Shares of such Fund that pertains to the
Distribution Plan adopted for that class of that Fund; (iii) the Retail B Shares
shall vote separately on any matter submitted to holders of Retail B Shares that
pertains to the Distribution and Services Plan adopted for that class; (iv) the
Prime A Shares shall vote separately on any matter submitted to holders of Prime
A Shares that pertains to the Distribution Plan adopted for that class; (v) the
Prime B Shares shall vote separately on any
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matter submitted to holders of Prime B Shares that pertains to the Distribution
and Services Plan adopted for that class; (vi) the Prime Shares shall vote
separately on any matter submitted to holders of Prime Shares that pertains to
the Distribution and Services Plan adopted for that class; (vii) the BKB Shares
shall vote separately on any matter submitted to holders of BKB Shares that
pertains to the Shareholder Services Plan adopted for that class; (viii) the
Trust Shares shall vote separately on any matter submitted to holders of Trust
Shares that pertains to the Shareholder Services Plan adopted for that class;
and (ix) each class shall vote separately on any matter submitted to
shareholders that pertains to the class expenses borne by that class; (c) the
exchange privileges of each class of shares; (d) the designation of each class
of shares; and (e) the different shareholder services relating to a class of
shares.
B. DISTRIBUTION ARRANGEMENTS, EXPENSES AND SALES CHARGES
1. EQUITY FUNDS
RETAIL A SHARES
Retail A Shares of the Equity Funds shall be offered to individuals or
corporations who submit a purchase application to Galaxy, purchasing directly
either for their own accounts or for the accounts of others ("Direct Investors")
and shall be offered to FIS Securities, Inc., Fleet Brokerage Securities, Inc.,
Fleet Securities, Inc., Fleet Enterprises, Inc., FleetBoston Financial
Corporation, its affiliates, their correspondent banks and other qualified
banks, savings and loan associations and broker-dealers ("Institutions") who
purchase the shares on behalf of their customers ("Customers") who are the
beneficial owners of the shares.
Retail A Shares of the Equity Funds shall be subject to a front-end
sales charge which shall not initially exceed 3.75% of the offering price of
Retail A Shares of those Funds (subject to the reductions and exemptions
described in the prospectus and Statement of Additional Information ("SAI") for
such Shares). When the aggregate offering price of Retail A Shares of the Equity
and Bond Funds purchased by an investor qualifies the investor to purchase such
Retail A Shares without payment of a front-end sales charge, a contingent
deferred sales charge of 1% may be imposed if such Retail A Shares are redeemed
within one year of purchase.
Retail A Shares of the Equity Funds (other than the Pan Asia Fund)
shall further be subject to a fee payable pursuant to the Shareholder Services
Plan adopted for that class of up to .25% (on an annualized basis) of the
average daily net asset value of Retail A Shares beneficially owned by Customers
of Institutions. Services provided by Institutions for such fee may include: (a)
aggregating and processing purchase and redemption requests and placing net
purchase and redemption orders with the distributor; (b) processing dividend
payments from an Equity Fund; (c) providing sub-accounting with respect to
Retail A Shares or the information necessary for sub-accounting; and (d)
providing periodic mailings to Customers.
Retail A Shares of the Equity Funds (other than the Pan Asia Fund)
shall further be subject to a separate fee payable pursuant to the same
Shareholder Services Plan adopted for that class of up to .25% (on an annualized
basis) of the average daily net asset value
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of Retail A Shares beneficially owned by Customers of Institutions. Services
provided by Institutions for such separate fee may include: (a) providing
Customers with information as to their positions in Retail A Shares; (b)
responding to Customer inquiries; and (c) providing a service to invest the
assets of Customers in Retail A Shares.
Galaxy shall initially limit the total fees payable by Retail A Shares
of the Equity Funds (other than the Pan Asia Fund) pursuant to the Shareholder
Services Plan adopted for that class to an amount which shall not initially
exceed .30% (on an annualized basis) of the average daily net asset value of
Retail A Shares beneficially owned by Customers of Institutions.
Retail A Shares of the Pan Asia Fund shall be further subject to a fee
payable pursuant to the Distribution Plan adopted for that class of that Fund
for distribution expenses, which shall not initially exceed .30% (on an
annualized basis) of the average daily net asset value of such Fund's
outstanding Retail A Shares.
RETAIL B SHARES
Retail B Shares of the Equity Funds shall be offered to Direct
Investors and to Institutions who purchase the shares on behalf of Customers who
are the beneficial owners of the shares.
Retail B Shares of the Equity Funds, if redeemed within six years of
purchase, shall be subject to a contingent deferred sales charge which shall not
initially exceed 5.0% of the original purchase price or redemption proceeds,
whichever is lower (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares).
Retail B Shares of the Equity Funds shall be further subject to a fee
payable pursuant to the Distribution and Services Plan adopted for that class
(a) for distribution expenses, which shall not initially exceed .65% (on an
annualized basis) of the average daily net asset value of the Equity Funds'
respective outstanding Retail B Shares, (b) for shareholder liaison services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Retail B Shares of the respective Equity Funds
that are owned of record or beneficially by customers of securities dealers,
brokers, financial institutions or other industry professionals ("Service
Organizations") that provide shareholder liaison services with respect to such
customers' Retail B Shares, and (c) for administrative support services, which
shall not initially exceed .25% (on an annualized basis) of the average daily
net assets attributable to Retail B Shares of the respective Equity Funds that
are owned of record or beneficially by customers of Service Organizations that
provide administrative support services with respect to such customers' Retail B
Shares.
Galaxy shall initially limit the total fees payable by Retail B Shares
of the Equity Funds for shareholder liaison services and administrative support
services pursuant to the Distribution and Services Plan adopted for that class
to an amount not to exceed .30% (on an annualized basis) of the average daily
net asset value of Retail B Shares owned of record or beneficially by customers
of Service Organizations.
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Shareholder liaison services provided under the Distribution and
Services Plan means "personal service and/or the maintenance of shareholder
accounts" within the meaning of the Conduct Rules of the National Association of
Securities Dealers, Inc. ("NASD"), such as responding to customer inquiries and
providing information on their investments.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) transfer agent and
subtransfer agent services for beneficial owners of Retail B Shares; (b)
aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing sub-accounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME A SHARES
Prime A Shares of the Equity Funds shall be offered through selected
broker-dealers to individual or institutional customers.
Prime A Shares of the Equity Funds shall be subject to a front-end
sales charge which shall not initially exceed 5.50% of the offering price of
Prime A Shares of those Funds (subject to the reductions and exemptions
described in the prospectus and SAI for such Shares). When the aggregate
offering price of Prime A Shares of the Equity and Bond Funds purchased by an
investor qualifies the investor to purchase such Prime A Shares without payment
of a front-end sales charge, a contingent deferred sales charge of 1% may be
imposed if such Prime A Shares are redeemed within one year of purchase.
Prime A Shares of the Equity Funds shall further be subject to a fee
payable pursuant to the Distribution Plan adopted for that class for
distribution expenses, which shall not initially exceed .30% (on an annualized
basis) of the average daily net asset value of the Equity Funds' respective
outstanding Prime A Shares.
PRIME B SHARES
Prime B Shares of the Equity Funds shall be offered through selected
broker-dealers to individual or institutional customers.
Prime B Shares of the Equity Funds, if redeemed within six years of
purchase, shall be subject to a contingent deferred sales charge which shall not
initially exceed 5.0% of the original purchase price or redemption proceeds,
whichever is lower (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares).
Prime B Shares of the Equity Funds shall be further subject to a fee
payable pursuant to the Distribution and Services Plan adopted for that class
(a) for distribution expenses, which shall not initially exceed .75% (on an
annualized basis) of the average daily net
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asset value of the Equity Funds' respective outstanding Prime B Shares, (b) for
shareholder liaison services, which shall not initially exceed .25% (on an
annualized basis) of the average daily net assets attributable to Prime B Shares
of the respective Equity Funds that are owned of record or beneficially by
customers of securities dealers, brokers, financial institutions or other
industry professionals ("Service Organizations") that provide shareholder
liaison services with respect to such customers' Prime B Shares, and (c) for
administrative support services, which shall not initially exceed .25% (on an
annualized basis) of the average daily net assets attributable to Prime B Shares
of the respective Equity Funds that are owned of record or beneficially by
customers of Service Organizations that provide administrative support services
with respect to such customers' Prime B Shares.
Galaxy shall initially limit the total fees payable by Prime B Shares
of the Equity Funds for shareholder liaison services and administrative support
services pursuant to the Distribution and Services Plan adopted for that class
to an amount not to exceed .25% (on an annualized basis) of the average daily
net asset value of Prime B Shares owned of record or beneficially by customers
of Service Organizations.
Shareholder liaison services provided under the Distribution and
Services Plan means "personal service and/or the maintenance of shareholder
accounts" within the meaning of the Conduct Rules of the NASD, such as
responding to customer inquiries and providing information on their investments.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) transfer agent and
subtransfer agent services for beneficial owners of Prime B Shares; (b)
aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Prime B Shares; (d)
processing dividend payments; (e) providing subaccounting services for Prime B
Shares held beneficially; (f) forwarding shareholder communications, such as
proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
BKB SHARES
BKB Shares of the Equity Funds shall be issued to retail shareholders
of corresponding portfolios of the Boston 1784 Funds (the "1784 Funds") in
connection with the reorganization of the 1784 Funds into Galaxy (the
"Galaxy/1784 Reorganization"). Following the Galaxy/1784 Reorganization, BKB
Shares of the Equity Funds shall be available for purchase only by those
shareholders who received BKB Shares in the Galaxy/1784 Reorganization.
BKB Shares of the Equity Funds shall not be subject to a sales charge.
BKB Shares of the Equity Funds shall be subject to a fee payable
pursuant to the Shareholder Services Plan adopted for that class for shareholder
liaison services, which shall not initially exceed .25% (on an annualized basis)
of the average daily net asset value of BKB Shares beneficially owned by
Customers of Institutions. Services provided by Institutions for such fee may
include: (a) providing Customers with information as to their positions in BKB
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Shares; (b) responding to Customer inquiries; and (c) providing a service to
invest the assets of Customers in BKB Shares.
BKB Shares of the Equity Funds shall be subject to a separate fee
payable pursuant to the same Shareholder Services Plan adopted for that class
for administrative support for services, which shall not initially exceed .25%
(on an annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions. Services provided by
Institutions for such separate fee may include: (a) aggregating and processing
purchase and redemption requests and placing net purchase and redemption orders
with the distributor; (b) processing dividend payments from an Equity Fund; (c)
providing sub-accounting with respect to BKB Shares or the information necessary
for sub-accounting; and (d) providing periodic mailings to Customers.
Galaxy shall initially limit the total fees payable by BKB Shares of
the Equity Funds pursuant to the Shareholder Services Plan adopted for that
class to an amount which shall not initially exceed .30% (on an annualized
basis) of the average daily net asset value of BKB Shares beneficially owned by
Customers of Institutions.
TRUST SHARES
Trust Shares of the Equity Funds shall be offered to investors
maintaining qualified accounts at bank and trust institutions, including
subsidiaries of FleetBoston Financial Corporation and to participants in
employer-sponsored defined contribution plans. Trust Shares of the International
Equity Fund also shall be offered to clients, members and employees of Oechsle
International Advisors, LLC, the sub-adviser to that Fund.
Trust Shares of the Equity Funds shall not be subject to a sales charge
and shall not initially be subject to the shareholder servicing fee payable
pursuant to the Shareholder Services Plan adopted but not yet implemented with
respect to that class.
2. BOND FUNDS
RETAIL A SHARES
Retail A Shares of the Bond Funds shall be offered to Direct Investors
and shall be offered to Institutions who purchase shares on behalf of Customers.
As of the date of filing of this Plan with the Commission, Retail A Shares of
the Corporate Bond Fund shall not initially be offered to investors.
Retail A Shares of the Bond Funds shall be subject to a front-end sales
charge which shall not initially exceed 3.75% of the offering price of Retail A
Shares of those Funds (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares). When the aggregate offering price of Retail
A Shares of the Equity and Bond Funds purchased by an investor qualifies the
investor to purchase such Retail A Shares without payment of a front-end sales
charge, a contingent deferred sales charge of 1% may be imposed if such Retail A
Shares are redeemed within one year of purchase.
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Retail A Shares of the Bond Funds shall further be subject to a fee
payable pursuant to the Shareholder Services Plan adopted for that class of up
to .15% (on an annualized basis) of the average daily net asset value of Retail
A Shares beneficially owned by Customers of Institutions. Services provided by
Institutions for such fee may include: (a) aggregating and processing purchase
and redemption requests and placing net purchase and redemption orders with the
distributor; (b) processing dividend payments from a Bond Fund; (c) providing
sub-accounting with respect to Retail A Shares or the information necessary for
sub-accounting; and (d) providing periodic mailings to Customers.
Retail A Shares of the Bond Funds shall further be subject to a
separate fee payable pursuant to the same Shareholder Services Plan adopted for
that class of up to .15% (on an annualized basis) of the average daily net asset
value of Retail A Shares beneficially owned by Customers of Institutions.
Services provided by Institutions for such separate fee may include: (a)
providing Customers with information as to their positions in Retail A Shares;
(b) responding to Customer inquiries; and (c) providing a service to invest the
assets of Customers in Retail A Shares.
Galaxy shall initially limit the total fees payable by Retail A Shares
of the Bond Funds pursuant to the Shareholder Services Plan adopted for that
class to an amount which shall not initially exceed .15% (on an annualized
basis) of the average daily net asset value of Retail A Shares beneficially
owned by Customers of Institutions.
RETAIL B SHARES
Retail B Shares of the Bond Funds shall be offered to Direct Investors
and to Institutions who purchase the shares on behalf of Customers who are the
beneficial owners of the shares.
Retail B Shares of the Bond Funds, if redeemed within six years of
purchase, shall be subject to a contingent deferred sales charge which shall not
initially exceed 5.0% of the original purchase price or redemption proceeds,
whichever is lower (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares).
Retail B Shares of the Bond Funds shall be further subject to a fee
payable pursuant to the Distribution and Services Plan adopted for that class
(a) for distribution expenses, which shall not initially exceed .65% (on an
annualized basis) of the average daily net asset value of the Bond Funds'
respective outstanding Retail B Shares, (b) for shareholder liaison services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Retail B Shares of the respective Bond Funds
that are owned of record or beneficially by customers of securities dealers,
brokers, financial institutions or other industry professionals ("Service
Organizations") that provide shareholder liaison services with respect to such
customers' Retail B Shares, and (c) for administrative support services, which
shall not initially exceed .25% (on an annualized basis) of the average daily
net assets attributable to Retail B Shares of the respective Bond Funds that are
owned of record or beneficially by
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customers of Service Organizations that provide administrative support services
with respect to such customers' Retail B Shares.
Galaxy shall initially limit the total fees payable by Retail B Shares
of the Bond Funds for shareholder liaison services and administrative support
services pursuant to the Distribution and Services Plan adopted for that class
to an amount not to exceed .15% (on an annualized basis) of the average daily
net asset value of Retail B Shares owned of record or beneficially by customers
of Service Organizations.
Shareholder liaison services provided under the Distribution and
Services Plan means "personal service and/or the maintenance of shareholder
accounts" within the meaning of the Conduct Rules of the NASD, such as
responding to customer inquiries and providing information on their investments.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) transfer agent and
subtransfer agent services for beneficial owners of Retail B Shares; (b)
aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing subaccounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME A SHARES
Prime A Shares of the Bond Funds shall be offered through selected
broker-dealers to individual or institutional customers.
Prime A Shares of the Bond Funds shall be subject to a front-end sales
charge which shall not initially exceed 4.75% of the offering price of Prime A
Shares of those Funds (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares). When the aggregate offering price of Prime
A Shares of the Equity and Bond Funds purchased by an investor qualifies the
investor to purchase such Prime A Shares without payment of a front-end sales
charge, a contingent deferred sales charge of 1% may be imposed if such Prime A
Shares are redeemed within one year of purchase.
Prime A Shares of the Bond Funds shall further be subject to a fee
payable pursuant to the Distribution Plan adopted for that class for
distribution expenses, which shall not initially exceed .30% (on an annualized
basis) of the average daily net asset value of the Bond Funds' respective
outstanding Prime A Shares.
PRIME B SHARES
Prime B Shares of the Bond Funds shall be offered through selected
broker-dealers to individual or institutional customers.
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Prime B Shares of the Bond Funds, if redeemed within six years of
purchase, shall be subject to a contingent deferred sales charge which shall not
initially exceed 5.0% of the original purchase price or redemption proceeds,
whichever is lower (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares).
Prime B Shares of the Bond Funds shall be further subject to a fee
payable pursuant to the Distribution and Services Plan adopted for that class
(a) for distribution expenses, which shall not initially exceed .75% (on an
annualized basis) of the average daily net asset value of the Bond Funds'
respective outstanding Prime B Shares, (b) for shareholder liaison services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Prime B Shares of the respective Bond Funds
that are owned of record or beneficially by customers of securities dealers,
brokers, financial institutions or other industry professionals ("Service
Organizations") that provide shareholder liaison services with respect to such
customers' Prime B Shares, and (c) for administrative support services, which
shall not initially exceed .25% (on an annualized basis) of the average daily
net assets attributable to Prime B Shares of the respective Bond Funds that are
owned of record or beneficially by customers of Service Organizations that
provide administrative support services with respect to such customers' Prime B
Shares.
Galaxy shall initially limit the total fees payable by Prime B Shares
of the Bond Funds for shareholder liaison services and administrative support
services pursuant to the Distribution and Services Plan adopted for that class
to an amount not to exceed .25% (on an annualized basis) of the average daily
net asset value of Prime B Shares owned of record or beneficially by customers
of Service Organizations.
Shareholder liaison services provided under the Distribution and
Services Plan means "personal service and/or the maintenance of shareholder
accounts" within the meaning of the Conduct Rules of the NASD, such as
responding to customer inquiries and providing information on their investments.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) transfer agent and
subtransfer agent services for beneficial owners of Prime B Shares; (b)
aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Prime B Shares; (d)
processing dividend payments; (e) providing subaccounting services for Prime B
Shares held beneficially; (f) forwarding shareholder communications, such as
proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
BKB SHARES
BKB Shares of the Bond Funds shall be issued to retail shareholders of
corresponding portfolios of the 1784 Funds in connection with the Galaxy/1784
Reorganization. Following the Galaxy/1784 Reorganization, BKB Shares of the Bond
Funds shall be available for purchase only by those shareholders who received
BKB Shares in the Galaxy/1784 Reorganization.
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BKB Shares of the Bond Funds shall not be subject to a sales charge.
BKB Shares of the Bond Funds shall be subject to a fee payable pursuant
to the Shareholder Services Plan adopted for that class for shareholder liaison
services, which shall not initially exceed .15% (on an annualized basis) of the
average daily net asset value of BKB Shares beneficially owned by Customers of
Institutions. Services provided by Institutions for such fee may include: (a)
providing Customers with information as to their positions in BKB Shares; (b)
responding to Customer inquiries; and (c) providing a service to invest the
assets of Customers in BKB Shares.
BKB Shares of the Bond Funds shall further be subject to a separate fee
payable pursuant to the same Shareholder Services Plan adopted for that class
for administrative support services, which shall not initially exceed .15% (on
an annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions. Services provided by
Institutions for such separate fee may include: (a) aggregating and processing
purchase and redemption requests and placing net purchase and redemption orders
with the distributor; (b) processing dividend payments from a Bond Fund; (c)
providing sub-accounting with respect to BKB Shares or the information necessary
for sub-accounting; and (d) providing periodic mailings to Customers.
Galaxy shall initially limit the total fees payable by BKB Shares of
the Bond Funds pursuant to the Shareholder Services Plan adopted for that class
to an amount which shall not initially exceed .15% (on an annualized basis) of
the average daily net asset value of BKB Shares beneficially owned by Customers
of Institutions.
TRUST SHARES
Trust Shares of the Bond Funds shall be offered to investors
maintaining qualified accounts at bank and trust institutions, including
subsidiaries of FleetBoston Corporation and, with respect to each Bond Fund
other than the tax-exempt Bond Funds, to participants in employer-sponsored
defined contribution plans. Trust Shares of the Corporate Bond Fund shall also
be offered to Direct Investors and to Institutions who purchase shares on behalf
of Customers. As of the date of filing of this Plan with the Commission, Trust
Shares of the Rhode Island Municipal Bond Fund shall not initially be offered to
investors.
Trust Shares of the Bond Funds shall not be subject to a sales charge
and shall not initially be subject to the shareholder servicing fee payable
pursuant to the Shareholder Services Plan adopted but not yet implemented with
respect to that class.
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3. MONEY MARKET FUNDS
RETAIL A SHARES
Retail A Shares of the Money Market Funds shall be offered to Direct
Investors and shall be offered to Institutions who purchase shares on behalf of
Customers.
Retail A Shares of the Money Market Funds shall not be subject to a
sales charge.
Retail A Shares of the Money Market Funds shall be subject to a
shareholder servicing fee payable pursuant to the Shareholder Services Plan
adopted for that class of up to .25% (on an annualized basis) of the average
daily net asset value of the Retail A Shares beneficially owned by Customers of
Institutions.
Services provided by Institutions for such fee may include: (a)
aggregating and processing purchase and redemption requests and placing net
purchase and redemption orders with Galaxy's distributor; (b) processing
dividend payments from a Money Market Fund; (c) providing Customers with
information as to their position in BKB Shares; (d) providing sub-accounting
with respect to Retail A Shares or the information necessary for sub-accounting;
and (e) providing periodic mailings to Customers.
Galaxy shall initially limit the shareholder servicing fee payable by
Retail A Shares of the Money Market Funds pursuant to the Shareholder Services
Plan adopted for that class to an amount which shall not initially exceed .10%
(on an annualized basis) of the average daily net asset value of Retail A Shares
beneficially owned by Customers of Institutions.
RETAIL B SHARES
Retail B Shares of the Money Market Fund shall be offered to Direct
Investors and to Institutions who purchase the shares on behalf of Customers who
are the beneficial owners of the shares.
Retail B Shares of the Money Market Fund, if redeemed within six years
of purchase, shall be subject to a contingent deferred sales charge which shall
not initially exceed 5.0% of the original purchase price or redemption proceeds,
whichever is lower (subject to the reductions and exemptions described in the
prospectus and SAI for such Shares).
Retail B Shares of the Money Market Fund shall be further subject to a
fee payable pursuant to the Distribution and Services Plan adopted for that
class (a) for distribution expenses, which shall not initially exceed .65% (on
an annualized basis) of the average daily net asset value of the Money Market
Fund's outstanding Retail B Shares, (b) for shareholder liaison services, which
shall not initially exceed .05% (on an annualized basis) of the average daily
net assets attributable to Retail B Shares of the Money Market Fund that are
owned of record or beneficially by customers of securities dealers, brokers,
financial institutions or other industry
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<PAGE>
professionals ("Service Organizations") that provide shareholder liaison
services with respect to such customers' Retail B Shares, and (c) for
administrative support services, which shall not initially exceed .05% (on an
annualized basis) of the average daily net assets attributable to Retail B
Shares of the Money Market Fund that are owned of record or beneficially by
customers of Service Organizations that provide administrative support services
with respect to such customers' Retail B Shares.
Shareholder liaison services provided under the Distribution and
Services Plan means "personal service and/or the maintenance of shareholder
accounts" within the meaning of the Conduct Rules of the NASD, such as
responding to customer inquiries and providing information on their investments.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) transfer agent and
subtransfer agent services for beneficial owners of Retail B Shares; (b)
aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing sub-accounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME SHARES
Prime Shares of the Money Market Funds shall be offered through
selected broker-dealers to individual or institutional customers.
Prime Shares of the Money Market Funds shall not be subject to a sales
charge.
Prime Shares of the Money Market Funds will be subject to a fee payable
pursuant to the Distribution and Services Plan adopted for that class (a) for
distribution expenses, which shall not initially exceed .75% (on an annualized
basis) of the average daily net asset value of the Money Market Funds'
respective outstanding Prime Shares, and (b) for administrative support
services, which shall not initially exceed .25% (on an annualized basis) of the
average daily net assets attributable to Prime Shares of the respective Money
Market Funds that are owned of record or beneficially by customers of Service
Organizations that provide administrative support services with respect to such
customers' Prime Shares.
Administrative support services provided under the Distribution and
Services Plan may include, but are not limited to, (a) processing dividend and
distribution payments; (b) providing beneficial owners with statements showing
their positions in Prime Shares; (c) arranging for bank wires; (d) responding to
routine inquiries from beneficial owners concerning their investments in Prime
Shares; (e) providing subaccounting services for Prime Shares; (f) forwarding
shareholder communications, such as proxies, shareholder reports, dividends and
tax notices, and updating prospectuses to beneficial owners; and (g) aggregating
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<PAGE>
and processing purchase and redemption orders and placing net purchase and
redemption orders for beneficial owners.
BKB SHARES
BKB Shares of the Money Market Funds shall be issued to retail
shareholders of corresponding portfolios of the 1784 Funds in connection with
the Galaxy/1784 Reorganization. Following the Galaxy/1784 Reorganization, BKB
Shares of the Money Market Funds shall be available for purchase only by those
shareholders who received BKB Shares in the Galaxy/1784 Reorganization.
BKB Shares of the Money Market Funds shall not be subject to a sales
charge.
BKB Shares of the Money Market Funds shall be subject to a fee payable
pursuant to the Shareholder Services Plan adopted for that class for shareholder
liaison and/or administrative support services, which shall not initially exceed
.25% (on an annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions.
Services provided by Institutions for such fee may include: (a)
aggregating and processing purchase and redemption requests and placing net
purchase and redemption orders with the distributor; (b) processing dividend
payments from a Money Market Fund; (c) providing Customers with information as
to their position in BKB Shares; (d) providing sub-accounting with respect to
BKB Shares or the information necessary for sub-accounting; and (e) providing
periodic mailings to Customers.
Galaxy shall initially limit the fees payable by BKB Shares of the
Money Market Funds pursuant to the Shareholder Services Plan adopted for that
class to an amount which shall not initially exceed .10% (on an annualized
basis) of the average daily net asset value of BKB Shares beneficially owned by
Customers of Institutions.
TRUST SHARES
Trust Shares of the Money Market Funds shall be offered to investors
maintaining qualified accounts at bank and trust institutions, including
subsidiaries of FleetBoston Corporation, and with respect to each Money Market
Fund other than the Tax-Exempt Fund, to participants in employer-sponsored
defined contribution plans.
Trust Shares of the Money Market Funds shall not be subject to a sales
charge and shall not initially be subject to the shareholder servicing fee
payable pursuant to the Shareholder Services Plan adopted but not yet
implemented with respect to that class.
-14-
<PAGE>
C. EXCHANGE PRIVILEGES
RETAIL A SHARES
Holders of Retail A Shares generally shall be permitted to exchange
their Retail A Shares in a Fund for Retail A Shares of other Funds of Galaxy
or shares of other funds advised by Fleet Investment Advisors Inc. or its
affiliates in which the shareholders maintain an existing account. No
additional sales charge will be incurred when exchanging Retail A Shares of a
Fund for Retail A Shares of another Fund that imposes a sales charge. Galaxy
shall not initially charge any exchange fee.
RETAIL B SHARES
Holders of Retail B Shares generally shall be permitted to
exchange their Retail B Shares in a Fund for Retail B Shares of other Funds of
Galaxy without paying any exchange fee or contingent deferred sales charge at
the time the exchange is made.
PRIME A SHARES
Holders of Prime A Shares generally shall be permitted to
exchange their Prime A Shares in a Fund for Prime A Shares of other Funds of
Galaxy. No additional sales charge will be incurred when exchanging Prime A
Shares of a Fund for Prime A Shares of another Fund. Galaxy shall not initially
charge any exchange fee.
PRIME B SHARES
Holders of Prime B Shares generally shall be permitted to
exchange their Prime B Shares in a Fund for Prime B Shares of other Funds of
Galaxy without paying any exchange fee or contingent deferred sales charge at
the time the exchange is made.
BKB SHARES
Holders of BKB Shares generally shall be permitted to exchange
their BKB Shares in a Fund for BKB Shares of other Funds of Galaxy. Galaxy shall
not initially charge any exchange fee.
PRIME SHARES
Galaxy shall not initially offer an exchange privilege to
holders of Prime Shares.
TRUST SHARES
Galaxy shall not initially offer an exchange privilege to
holders of Trust Shares.
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<PAGE>
D. CONVERSION FEATURES
RETAIL A SHARES
Galaxy shall not initially offer a conversion feature to
holders of Retail A Shares.
RETAIL B SHARES
Retail B Shares acquired by purchase generally shall convert
automatically to Retail A Shares, based on relative net asset value, six years
after the beginning of the calendar month in which the Shares were purchased.
Retail B Shares acquired through a reinvestment of dividends
or distributions generally shall convert automatically to Retail A Shares, based
on relative net asset value, at the earlier of (a) six years after the beginning
of the calendar month in which the reinvestment occurred or (b) the date of the
most recently purchased Retail B Shares that were not acquired through
reinvestment of dividends or distributions.
PRIME A SHARES
Galaxy shall not initially offer a conversion feature to
holders of Prime A Shares.
PRIME B SHARES
Prime B Shares acquired by purchase generally shall convert
automatically to Prime A Shares, based on relative net asset value, eight years
after the beginning of the calendar month in which the Shares were purchased.
Prime B Shares acquired through a reinvestment of dividends or
distributions generally shall convert automatically to Prime A Shares, based on
relative net asset value, at the earlier of (a) eight years after the beginning
of the calendar month in which the reinvestment occurred or (b) the date of the
most recently purchased Prime B Shares that were not acquired through
reinvestment of dividends or distributions.
BKB SHARES
BKB Shares generally shall convert to Retail A Shares, based
on relative net asset value, one year after the date of the Galaxy/1784
Reorganization, provided that Galaxy's Board of Trustees has determined that
such conversion is in the best interest of the holders of BKB Shares.
PRIME SHARES
Galaxy shall not initially offer a conversion feature to
holders of Prime Shares.
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<PAGE>
TRUST SHARES
Galaxy shall not initially offer a conversion feature to
holders of Trust Shares.
E. SHAREHOLDER SERVICES
1. RETIREMENT PLANS
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Galaxy shall initially make Retail A Shares, Retail B Shares
and BKB Shares of the Funds (other than the tax-exempt Funds) available for
purchase in connection with the following tax-deferred prototype retirement
plans: individual retirement accounts, simplified employee pension plans,
multi-employee retirement plans and Keogh plans.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially make Prime A Shares, Prime B
Shares, Prime Shares or Trust Shares of the Funds available for purchase in
connection with any retirement plans.
2. CHECKWRITING PRIVILEGE
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES - MONEY MARKET
FUNDS
Galaxy shall initially offer a checkwriting privilege to
holders of Retail A Shares, Retail B Shares and/or BKB Shares of the Money
Market Funds. A charge for use of the checkwriting privilege may be imposed by
Galaxy.
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES - EQUITY FUNDS
AND BOND FUNDS
Galaxy shall not initially offer a checkwriting privilege to
holders of Retail A Shares, Retail B Shares or BKB Shares of the Equity or Bond
Funds.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer a checkwriting privilege to
holders of Prime A Shares, Prime B Shares, Prime Shares or Trust Shares.
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<PAGE>
3. AUTOMATIC INVESTMENT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and Retail B
Shares) and all investors (with respect to BKB Shares) shall initially be
offered an automatic investment program whereby a Direct Investor (with respect
to Retail A Shares and Retail B Shares) or an investor (with respect to BKB
Shares) generally may purchase Retail A Shares, Retail B Shares and/or BKB
Shares, as the case may be, of a Fund on a monthly or quarterly basis by having
a specific amount of money debited from his/her account at a financial
institution.
Galaxy shall not initially offer an automatic investment
program to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer an automatic investment
program to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust
Shares.
4. SYSTEMATIC WITHDRAWAL PLAN
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and Retail B
Shares) and all investors (with respect to BKB Shares) shall initially be
offered a systematic withdrawal plan which, in general, shall permit a Direct
Investor (with respect to Retail A Shares and Retail B Shares) or an investor
(with respect to BKB Shares) to automatically redeem Retail A Shares, Retail B
Shares and/or BKB Shares, as the case may be, on a monthly, quarterly,
semi-annual or annual basis.
Galaxy shall not initially offer a systematic withdrawal plan
to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer a systematic withdrawal plan
to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust Shares.
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<PAGE>
5. COLLEGE INVESTMENT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and Retail B
Shares) and all investors (with respect to BKB Shares) shall initially be
offered a college investment program whereby a Direct Investor (with respect to
Retail A Shares and Retail B Shares) or an investor (with respect to BKB Shares)
may purchase Retail A Shares, Retail B Shares and/or BKB Shares of a Fund as a
means to finance a college savings plan.
Galaxy shall not initially offer a college investment program
to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer a college investment program
to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust Shares.
6. DIRECT DEPOSIT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and Retail B
Shares) and all investors (with respect to BKB Shares) receiving social security
benefits shall initially be eligible for a direct deposit program whereby a
Direct Investor (with respect to Retail A Shares and Retail B Shares) or an
investor (with respect to BKB Shares) generally may purchase Retail A Shares,
Retail B Shares and/or BKB Shares of a Fund by having social security payments
automatically deposited into his or her Fund account.
Galaxy shall not initially offer a direct deposit program to
Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer a direct deposit program to
holders of Prime A Shares, Prime B Shares, Prime Shares or Trust Shares.
7. INFORMATION SERVICES
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Holders of Retail A Shares, Retail B Shares and BKB Shares
shall initially be able to obtain Fund performance and investment information 24
hours a day, 7 days a week by telephoning the Galaxy Information Center - 24
Hour Information Service.
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<PAGE>
Galaxy shall initially offer Direct Investors (with respect to
Retail A Shares and Retail B Shares) and all investors (with respect to BKB
Shares) a Voice Response System which, in general, will provide a Direct
Investor (with respect to Retail A Shares and Retail B Shares) or an investor
(with respect to BKB Shares) with automated telephone access to Fund and account
information and the ability to make telephone exchanges and redemptions. Galaxy
shall not initially offer Customers of Institutions a voice response system.
Galaxy shall initially offer Direct Investors (with respect to
Retail A Shares and Retail B Shares) and all investors (with respect to BKB
Shares) a Galaxy Shareholder Services telephone number which, in general, will
provide a Direct Investor (with respect to Retail A Shares and Retail B Shares)
or an investor (with respect to BKB Shares) with account information and recent
exchange transaction information. Galaxy shall not initially offer Customers of
Institutions a shareholder services telephone number.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall initially offer holders of Prime A Shares, Prime
B Shares, Prime Shares and Trust Shares a telephone number to call for
applications and information concerning initial purchases and current
performance and a telephone number to call for additional purchases,
redemptions, exchanges and other shareholder services.
Galaxy shall initially offer holders of Trust Shares in the
Corporate Bond Fund the information services described for Retail Shares.
8. PAYROLL DEDUCTION PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and Retail B
Shares) and all investors (with respect to BKB Shares) shall initially be
offered a payroll deduction program whereby a Direct Investor (with respect to
Retail A Shares and Retail B Shares) or an investor (with respect to BKB Shares)
may purchase Retail A Shares, Retail B Shares and/or BKB Shares of a Fund each
pay period by having a specific amount of money debited from his/her paycheck.
Galaxy shall not initially offer a payroll deduction program
to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND TRUST SHARES
Galaxy shall not initially offer a payroll deduction program
to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust Shares.
-20-
<PAGE>
F. METHODOLOGY FOR ALLOCATING EXPENSES AMONG CLASSES
Class-specific expenses of a Fund shall be allocated to the
specific class of shares of that Fund. Non-class-specific expenses of a Fund
shall be allocated in accordance with Rule 18f-3(c) under the 1940 Act.
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