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Exhibit m
AMENDED AND RESTATED
SERVICE PLAN
SERVICE PLAN, dated as of August 8, 1997, amended and restated
effective as of January 4, 1999 and further amended and restated as of September
5, 2000, of CitiFunds(R) Tax Free Income Trust, a Massachusetts business trust
(the "Trust"), with respect to shares of beneficial interest of its series
CitiSM National Tax Free Income Fund (formerly, "CitiFunds National Tax Free
Income Portfolio"),CitiSM New York Tax Free Income Fund (formerly, "CitiFunds
New York Tax Free Income Portfolio") and CitiSM California Tax Free Income Fund
(formerly, "CitiFunds California Tax Free Income Portfolio") and any other
series of the Trust adopting this plan (the "Series"). This Plan relates solely
to (i) shares of beneficial interest of the Series that are not divided into
Classes and (ii) shares of beneficial interest of each of the Series that are
divided into Classes which are designated "Citi Shares" (formerly, "Class A"
shares) ("Shares").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Trust's shares of beneficial interest are divided into
separate series representing interests in separate funds of securities and other
assets;
WHEREAS, the Trust intends to distribute Shares in accordance with Rule
12b-1 under the 1940 Act, and wishes to adopt this Plan as a plan of
distribution pursuant to Rule 12b-1;
WHEREAS, the Trust desires to engage Salomon Smith Barney Inc., a New
York corporation, to provide certain distribution services for the Trust (the
"Distributor"); and
WHEREAS, the Trust desires to enter into a distribution agreement (in
such form as may from time to time be approved by the Board of Trustees of the
Trust in the manner specified in Rule 12b-1) with the Distributor, whereby the
Distributor will provide facilities and personnel and render services to the
Trust in connection with the offering and distribution of the Shares (the
"Distribution Agreement"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Non-Interested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Trust and the
shareholders of the Series, have approved this Plan by votes cast at a meeting
called for the purpose of voting hereon and on any agreements related hereto;
NOW, THEREFORE, the Trust hereby adopts this Plan as a plan of
distribution in accordance with Rule 12b-1 under the 1940 Act, with the terms of
the Plan being as follows:
1. Distribution and Servicing Activities. Subject to the
supervision of the Trustees of the Trust, the Trust may:
(a) engage, directly or indirectly, in any activities
primarily intended to result in the sale of Shares of the Series, which
activities may include, but are not limited to (i) payments to the
Trust's Distributor for distribution services, (ii) payments to
securities dealers, financial institutions (which may include banks)
and others in respect of the sale of Shares of the Series, (iii)
payments for advertising, marketing or other promotional activity, and
(iv) payments for preparation, printing, and distribution of
prospectuses and statements of additional information and reports of
the Trust for recipients other than regulators and existing
shareholders of the Trust; and
(b) make payments, directly or indirectly, to the Trust's
Distributor, securities dealers, financial institutions (which may
include banks) and others for providing personal service and/or the
maintenance of shareholder accounts.
The Trust is authorized to engage in the activities listed above either
directly or through other persons with which the Trust has entered into
agreements related to this Plan.
2. Sales Charges. It is understood that, under certain circumstances,
an initial sales charge may be paid by investors who purchase Shares of each
Series, and the Series may pay to the Distributor, securities dealers, financial
institutions (including banks) and others, or the Series may permit such persons
to retain, as the case may be, such sales charge as partial compensation for
their services in connection with the sale of Shares. It is also understood
that, under certain circumstances, each Series or the Distributor may impose
certain deferred sales charges in connection with the repurchase of Shares of
such Series, and the Series may pay to the Distributor, securities dealers,
financial institutions (including banks) and others, or the Series may permit
such persons to retain, as the case may be, all or any portion of such deferred
sales charges.
3. Maximum Expenditures. The expenditures to be made by the Trust
pursuant to this Plan and the basis upon which payment of such expenditures will
be made shall be determined by the Trustees of the Trust, but in no event may
such expenditures exceed an amount calculated at the rate of 0.25% per annum of
the average daily net assets of the Shares of each Series. Payments pursuant to
this Plan may be made directly by the Trust to the Distributor or to other
persons with which the Trust has entered into agreements related to this Plan.
For purposes of determining the fees payable under this Plan, the value of each
Series' average daily net assets shall be computed in the manner specified in
the applicable Series' then current prospectus and statement of additional
information.
4. Trust's Expenses. The Trust shall pay all expenses of its
operations, including the following, and such expenses shall not constitute
expenditures under this Plan: organization costs of each Series; compensation of
Trustees; governmental fees; interest charges; loan commitment fees; taxes;
membership dues in industry associations allocable to the Trust; fees and
expenses of independent auditors, legal counsel and any transfer agent,
distributor, shareholder servicing agent, registrar or dividend disbursing agent
of the Trust; expenses of issuing and redeeming shares of beneficial interest
and servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing prospectuses, statements of additional information, shareholder
reports, notices, proxy statements and reports to governmental officers and
commissions and to existing shareholders of the Series; expenses connected with
the execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Series,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of the Series (including
but not limited to the fees of independent pricing services); expenses of
meetings of shareholders; expenses relating to the issuance, registration and
qualification of shares of beneficial interest; and such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Trust may be a party and the legal obligation which
the Trust may have to indemnify its Trustees and officers with respect thereto.
5. Term and Termination. (a) Unless terminated as herein provided, this
Plan shall continue in effect until August 4, 2001 and shall continue in effect
for successive periods of one year, but only so long as each such continuance is
specifically approved by votes of a majority of both the Trustees of the Trust
and the Non-Interested Trustees, cast in person at a meeting called for the
purpose of voting on such approval.
(b) This Plan may be terminated at any time with respect to any Series
by a vote of a majority of the Non-Interested Trustees or by a vote of a
majority of the outstanding voting securities, as defined in the 1940 Act, of
Shares of the applicable Series.
6. Amendments. This Plan may not be amended to increase materially the
maximum expenditures permitted by Section 3 hereof unless such amendment is
approved by a vote of the majority of the outstanding voting securities, as
defined in the 1940 Act, of Shares of the applicable Series, and no material
amendment to this Plan shall be made unless approved in the manner provided for
annual renewal of this Plan in Section 5(a) hereof.
7. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of the Non-Interested Trustees of the Trust shall
be committed to the discretion of such Non-Interested Trustees.
8. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees of the Trust and the Trustees shall review quarterly a written report
of the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
9. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant to Section 8 hereof, for a
period of not less than six years from the date of this Plan. Any such related
agreement or such reports for the first two years will be maintained in an
easily accessible place.
10. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts and the provisions
of the 1940 Act.
