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THE GALAXY FUND
("GALAXY")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI-CLASS SYSTEM
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I. INTRODUCTION
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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 September 7, 2000,
supersedes the Prior Plan and any subsequent Plans pursuant to Rule 18f-3
approved by the Board of Trustees of Galaxy prior to September 7, 2000.
II. ATTRIBUTES OF CLASSES
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A. GENERALLY
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EQUITY FUNDS
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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, Pan Asia Fund, New Economy Fund and REIT
Fund, (c) four classes of shares -- Retail A Shares, Retail B Shares, BKB Shares
and Trust Shares -- in
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the Growth Fund II, and (d) three 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
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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 and High Yield Fund, (c) four classes of shares -- Retail A Shares,
Retail B 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, (d) three
classes of shares -- Retail A Shares, Retail B Shares and Trust Shares -- in the
New York Municipal Bond Fund, Connecticut Municipal Bond Fund and Massachusetts
Municipal Bond Fund, and (e) two classes of shares -- Retail A Shares and Trust
Shares -- in the Corporate Bond Fund and New Jersey Municipal Bond Fund (each a
"Fund" and collectively, the "Bond Funds").
MONEY MARKET FUNDS
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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
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Distribution Plan adopted for that class; (v) the Prime B Shares shall vote
separately on any 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
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1. EQUITY FUNDS
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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
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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 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 5.00% 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% (.35%
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with respect to the Pan Asia Fund) (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
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).
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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 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
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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 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
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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
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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 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
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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 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
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Prime B Shares of the Bond Funds shall be offered
through selected broker-dealers to individual or institutional customers.
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.
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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.
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.
-11-
<PAGE>
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
-12-
<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
-13-
<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.
-15-
<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.
-16-
<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.
-17-
<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.
-18-
<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.
-19-
<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.
-21-
