EX-99.(N) 9 d320621dex99n.htm AMENDED AND RESTATED RULE 18F-3 PLAN Amended and Restated Rule 18f-3 Plan

THE ARBITRAGE FUNDS

AMENDED AND RESTATED RULE 18f-3 MULTI-CLASS PLAN

 

I.

Introduction.

Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the “1940 Act”), this Rule 18f-3 Multi-Class Plan (the “Plan”) sets forth the method for allocating fees and expenses among each class of shares in the separate investment portfolios (the “Funds”) of The Arbitrage Funds (the “Trust”). In addition, the Plan sets forth the Rule 12b-1 fees, exchange privileges and other shareholder services applicable to each class of shares of the Funds.

The Trust is an open-end series investment company registered under the 1940 Act, the shares of which are registered on Form N-1A under the Securities Act of 1933. The Trust hereby elects to offer multiple classes of shares of the Funds pursuant to the provisions of Rule 18f-3 and the Plan. Appendix A, as it may be amended from time to time, lists the Funds that have approved the Plan and the classes of each such Fund. Each such Fund that has authorized the issuance of multiple classes of shares is referred to as a “Multi-Class Fund” hereunder.

 

II.

Allocation of Expenses.

A. Mandatory Class Expenses. Pursuant to Rule 18f-3, the Trust allocates to each class of shares of a Multi-Class Fund any fees and expenses incurred by the Fund under a Rule 12b-1 plan in connection with the distribution of shares that benefit the holders of such class of shares.

B. Discretionary Class Expenses. In addition, pursuant to Rule 18f-3, the Trust may allocate the following fees and expenses to a particular class of shares of a Multi-Class Fund:

(i) transfer agent fees identified by the transfer agent as being attributable to such class of shares;

(ii) printing and postage expenses related to preparing and distributing materials such as shareholder reports, notices, prospectuses, reports, and proxies to current shareholders of that class or to regulatory agencies with respect to such class of shares;

(iii) blue sky notification or other filing fees incurred with respect to such class of shares;

(iv) Securities and Exchange Commission registration fees incurred with respect to such class of shares;

(v) the expense of administrative personnel and services (including, but not limited to, those of a portfolio accountant, custodian or dividend paying agent charged with calculating net asset values or determining or paying dividends) as required to support the shareholders of such class of shares;

(vi) litigation or other legal expenses incurred with respect to such class of shares;

(vii) fees of the Trust’s Trustees incurred with respect to matters affecting such class of shares;

(viii) independent accountants’ fees incurred with respect to such class of shares; and


(ix) any other fees and expenses, not including advisory or custodial fees or other expenses related to the management of the Fund’s assets, incurred with respect to such class of shares.

For all purposes under this Plan, fees and expenses incurred “with respect to” a class of shares are those fees and expenses that are actually incurred in a different amount by the class or that relate to a different kind or degree of services provided to the class. Any decision to treat expenses referenced in this Subsection B as class expenses and any subsequent changes to such decision will be reviewed and approved by the Board of Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust.

C. Relative Net Asset Value Allocation. Income, realized and unrealized capital gains and losses, and any expenses of a Multi-Class Fund not allocable to a particular class of the Fund pursuant to this Plan shall be allocated to each class of the Fund based upon the relative net asset value of that class in relation to the aggregate net asset value of the Fund. In certain cases, a service provider for a Multi-Class Fund may waive or reimburse all or a portion of the expenses of a specific class of shares of the Multi-Class Fund. The Board of Trustees will monitor any such waivers or reimbursements to ensure that they do not generate inappropriate cross-subsidization between classes.

 

III.

Class Arrangements.

The following summarizes the Rule 12b-1 fees, exchange privileges and other shareholder services applicable to a particular class of shares of the Multi-Class Funds. Appendix A sets forth the actual 12b-1 fees of each class of shares of each Multi-Class Fund. Additional details and restrictions regarding such fees and services are set forth in the relevant Fund’s current Prospectus and Statement of Additional Information.

A. Class R Shares -- Multi-Class Funds

1. Maximum Initial Sales Charge: None

2. Contingent Deferred Sales Charge: None

3. Maximum Annual Rule 12b-1 Fee: Not to exceed 0.25% of average daily net assets attributable to Class R shares, as further specified in Appendix A

4. Maximum Annual Shareholder Servicing Fee: None

5. Conversion Features: A holder of Class R shares that qualifies as a purchaser of Class I shares may convert such Class R shares to Class I shares based on the relative net asset values of the two Classes on the conversion date.

6. Exchange Privileges: As described in the current prospectus for each Fund

B. Class I Shares -- Multi-Class Funds

1. Maximum Initial Sales Charge: None

2. Contingent Deferred Sales Charge: None

3. Maximum Annual Rule 12b-1 Fee: None

 

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4. Maximum Annual Shareholder Servicing Fee: None

5. Conversion Features: None

6. Exchange Privileges: As described in the current prospectus for each Fund

C. Class C Shares -- Multi-Class Funds

1. Maximum Initial Sales Charge: None

2. Contingent Deferred Sales Charge: 1%

3. Maximum Annual Rule 12b-1 Fee: Not to exceed 1.00% of average daily net assets attributable to Class R shares, as further specified in Appendix A

4. Maximum Annual Shareholder Servicing Fee: None

5. Conversion Features: None.

6. Exchange Privileges: As described in the current prospectus for each Fund

 

IV.

Board Review.

The Board of Trustees of the Trust shall review the Plan as it deems necessary. Prior to any material amendment(s) to the Plan with respect to any Multi-Class Fund’s shares, the Trust’s Board of Trustees, including a majority of the Trustees that are not interested persons of the Trust, shall find that the Plan, as proposed to be amended (including any proposed amendments to the method of allocating class and/or fund expenses), is in the best interest of each class of shares of the Fund individually and the Fund as a whole. In considering whether to approve any proposed amendment(s) to the Plan, the Trustees of the Trust shall request and evaluate such information as they consider reasonably necessary to evaluate the proposed amendment(s) to the Plan.

Amended and Restated Effective: May 31, 2012

 

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APPENDIX A

(As amended and restated effective as of May 31, 2012)

 

Multi Class Funds

  

Maximum Initial

Sales Charge

  

Maximum CDSC

  

Maximum Rule

12b-1 Fee

 

1. The Arbitrage Fund

        

Class R

   None    None    0.25%

Class I

   None    None    None

Class C

   None    1.00%    1.00%

2. Arbitrage Event Driven Fund

        

Class R

   None    None    0.25%

Class I

   None    None    None

Class C

   None    1.00%    1.00%